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: Criminal Appeal NO 246 of 1976.
(Appeal by Special Leave from the Judgment and Order dated 5 12 1975 of the Delhi High Court in Criminal Appeal No. 111 of 1974).
R.L. Kohli and R.C. Kohli, for the appellant.
G.L. Sanghi and M.N. Shroff, for the respondent.
The Judgment of the Court was delivered by GOSWAMI, J.
This appeal by special leave is directed against the judgment of the Delhi High Court confirming the conviction of the appellant under section 302/34, Indian Penal Code, and sentence of imprisonment for life.
144 Ashok Kumar aged about 17 years and his younger brother, Vijay Kumar, below the age of 16 years were charge sheeted for an offence under section 302/34 IPC for causing the death of Rajinder Kumar aged about 23 years.
Vijay Kumar was sent for trial under the , and is not, therefore, before us.
In June 1971 Jai Bhagwan, father of the accused, had complained to the police against the deceased, Rajinder Kumar, alleging that he had kidnapped his daughter, Saroj Kumari.
It is said that Saroj Kumari was recovered from the company of Rajinder Kumar at Ahmedabad and Rajinder Kumar was charged for offences under sections 366 and 376, Indian Penal Code, and the case was pending on the date of occurrence.
The prosecution case is that on May 22, 1973, Hukum Chand (PW 1), father of the deceased, Rajinder Kumar, was coming back from the Fountain in Chandni Chowk on H.C. Road and took a turn towards right leading to Mor Sarai when.
he saw the accused, Ashok Kumar, and his brother, Vijay Kumar, having surrounded his son Rajinder Kumar.
He also saw that Ashok Kumar caught hold of the hand of Rajinder Kumar while his younger brother stood behind him in front of the gate of Mor Sarai.
Having seen this he walked quickly and when he was at a distance of four or five paces from them he heard Ashok Kumar and his brother, Vijay Kumar.
telling Rajinder Kumar that they would avenge the kidnapping of their sister no matter whether the court might punish him or not.
Hukam Chand then saw both the brothers taking out their knives.
Accused Ashok Kumar struck a blow on the left cheek of Rajinder Kumar.
Vijay Kumar struck one blow on Rajinder Kumar which was warded off by him as a result of which his right forearm was struck by the knife on the back of his palm.
Rajinder Kumar tried to run away but was pursued by the two brothers and was overpowered.
They then gave several blows on the back of his waist, on left abdomen and on the right thigh.
As a result of these blows Rajinder Kumar fell down on the footpath on the side of the quarters of Mor Sarai.
Accused Ashok Kumar ran away towards the station along with his brother.
Hukam Chand sent for a taxi and took Rajinder Kumar in it to the Irwin Hospital where he was examined by Dr. U. Kaul (PW 12) who found the follow ing injuries on his person : 1.
Stab wound 4" x 2" left inter scapular region with surrounding surgical emphysema.
Stab left lumber region 2" x 2".
Stab left thigh 2" x 1".
Stab left cheek 2" x 2".
Stab left hand 4" x 1" on the dorsum.
Constable, Vijay Kumar, (PW 7) who was on duty at the Irwin Hospital informed the Police Station, Kotwali, about the admission of Rajinder Kumar in the Hospital.
Constable, Ram Saran (PW 145 14) made an entry in the daily diary about the report re ceived from the irwin Hospital.
He sent a copy of this report to S.I. Dewan Singh (PW 20) who proceeded to the Hospital.
When PW 20 arrived.
Rajinder Kumar was not in a position to make a statement and he recorded the statement of Hukam Chand (exhibit PW 1/A) at about 8.40 P.M. which is the first information report registered under section 307/34 IPC.
According to the Doctor the punctured injury at the left inter scapular region was sufficient to cause his death in the ordinary course of nature.
On the death of Rajinder Kumar at 11.35 P.M., the same night, the section under which the case was registered was altered to section 302 IPC and investigation proceeded accordingly.
Names of Ashok Kumar and Vijay Kumar appeared in the first information report, as the assailams.
The first information report also dis closed that there was another person, Mohar 'Singh (PW 2) with Hukam .Chand.
The accused, Ashok Kumar, was arrested on May 25, 1973, near Jat Dharamshala in Jamuna Bazar.
It is said that on the following day Ashok Kumar made a state ment before Inspector Sardar Singh, Station House Offi cer, P.S. Kotwali, Delhi (PW 21) in pursuance of which on May 28, 1973, a blood stained knife (exhibit P 7) was recov ered.
Evidence was also led by the prosecution to prove recovery of a shirt and pantaloons having stains of blood although these had already been washed from the person of the accused, Ashok Kumar, when he was arrested on May 25, 1973.
The serological report showed the origin of these stains as human blood.
At the trial not only Hukam Chand gave evidence as an eye witness, but Mohar Singh (PW 2), Rajinder Kumar Jain (PW 3) and Puran Singh (PW 4) were also produced as eye witnesses.
While PW 1, Hukam Chand, contin ued to tell his melancholy story, PWs 3 and 4 did not sup port the prosecution and were accordingly declared hostile.
It was shown in the course of their cross examination that they had earlier during the investigation made statements as eye witnesses to the occurrence.
The statements of PWs 3 and 4 which were recorded in the committing court were transferred to the record during the trial under section 288, Criminal Procedure ' Code.
In the committing court these witnesses had stated that they had seen the accused assaulting the deceased with a knife.
P.W. 2, Mohar Singh, was not examined before the committing court.
The accused denied the charge and stated that he was arrest ed by the police in Agra on May 24, 1973, and not on the following day at Jat Dhararashala as alleged by the prosecution.
After examining the evidence of the defence witnesses as well as the station diary entries about the departure of the Head Constable.
Manohar Lal and Constable Balbir Singh, to outside districts the Sessions Judge held that it was "not at all improbable" that the two policemen accompanied by Jai Bhagwan went to Agra and brought the accused from there.
The Sessions Judge also did not rely upon the disclosure statement made by the accused and also ignored the recovery of the knife as being in pursuance of that disclosure statement.
146 The Sessions Judge observed that it was very unusual in a murder case that recovery of the offending weapon was so belated.
The trial court convicted the accused on the testimony of Hukam Chand (PW 1) and accepted the evidence of PWs 3 and 4 recorded in the committing court.
Referring to PWs 3 and 4, the trial court observed as follows : "I treat the evidence of PW 3 Rajinder Kumar Jain and PW 4 Puran as substantive evidence under section 288 Cr.
P.C. I find abundant corroboration thereof in the testimo ny of PW 1 Hukam Chand.
This evidence treated as substantive evidence under section 288 Cr.
P.C. taken into consideration with the testimony of PW 1 Hukam Chand provides a complete picture by ocular evidence of what happened to the victim Rajinder Kumar on that fateful evening at the hands of Ashok accused and his brother Vijay.
I accept this part of the testimony".
With regard to the evidence of PW 1 the trial court observed as follows : "In the case before me Hukam Chand is a father of the deceased.
He admits the enmity on the part of the accused towards the deceased.
He mentioned the name of the accused in the FIR and gave complete sequence of events.
He did not lose any time.
He had no time to manufacture things so as to be incorporated in the report.
This is a strong circumstance in favour of the prosecution in this case".
The High Court, as stated earlier, confirmed the convic tion by accepting the testimony of Hukam Chand as well as the statements made by PWs 3 and 4 before the committing court in which they had clearly supported the prosecution case.
Since the accused had opportunity to cross examine the PWs 3 and 4 in the committing court the fact that he had not actually cross examined these witnesses is of no conse quence.
Apart from that during the Sessions trial their explanation was that they had made the statements before the committing court under the threat of the police.
This explanation had been rejected by both the courts.
Mr. Kohli submits that PWs 3 and 4 were not mentioned in the first information report although PW 1 mentioned,.
therein, at threeplaces about the presence of Mohar Singh (PW 2) who was not even examined before the committing court.
Since PW 2 denied having seen the occurrence, his evidence is of no assistance and the fact that he was con tradicted by his previous statement made before the police only dubs him as an unreliable witness.
147 So far as PWs 3 and 4 are concerned, we do not see much force in the contention that their names were not mentioned in the first information report.
It is possible that even if they had seen the occurence from some other point, PW 1 hastening away to the Hospital might not have, noticed them.
Besides, when S.I. Diwan Singh (PW 20) went to the place of occurrence with PW 1 (Hukarn Chand) at about 9.45 P.M. the same night he found a large crowd there.
PW 20 stated that he recorded at that time the statements of Mohar Singh (PW 2), Rajinder Kumar Jain (PW 3) and Puran Singh (PW 4).
The omission of the names of PWs 3 and 4 in the first information report lodged at 8.45 P.M. cannot, there fore, be of much significance to reject their testimony on that score.
Next, Mr. Kohli submits that the statements of PWs 3 and 4 recorded in the committing court and trans ferred under section 288, Criminal Procedure Code, is inad missible and should not be acted upon, since no specific portion of their contradictory statements had been put to them in the course of their cross examination by the public prosecutor.
We find that after drawing the attention of these two witnesses to their contradictory statements re corded by the police with regard to their having seen the assault which they denied, the entire respective state ments recorded by the committing magistrate in Hindi were read out to the witness who did not deny to have made the same but only explained that they had deposed in that manner under threat and pressure from the police.
Section 288, Criminal Procedure Code, which provides for transfer of evidence recorded in the committing court under certain circumstances, is subject, inter alia, to the provisions of section 145 of the Evidence Act, and the provisions of the latter section have been substantially complied with in this case.
Under the circumstances there is no legal infirmity about the transfer of the deposition of the two witnesses to the record of the Sessions Court under section 288, Criminal Procedure Code, and it was a legitimate use of discretion by the Sessions Judge in adopting this course.
Their evidence recorded in the committing court is substantive evidence in this case and is clearly admissible.
Rajinder Kumar Jain (PW 3) had written an inland letter which the Inspector General of Police received on January 18, 1974, complaining about the police torture in threatening him to give evidence in the court.
He was examined before the Sessions Judge on January 19, 1974, when he, for the first time, denied in court to have seen the occurrence.
He had been examined in the committing court on November 21, 1973, about six months after the occurrence when he had made no complaint about police torture and gave evidence as an eye witness to the occurrence.
The trial court was, therefore perfectly justified in not accepting the belated explanation of PWs 3 and 4 about police threat under which alone they stated that they had supported the prosecution case.
148 Although the High Court was not prepared to accept the defence case about the arrest of the accused in Agra, it is not necessary to pursue the matter further.
It is also not necessary to deal with .the recovery of the knife and the blood stained clothes about which the High Court was not prepared to accept the reasons given by the Sessions Judge for discarding that evidence.
We agree with the Sessions Judge that it was unusual for the police to delay recovery of the blood stained knife in a murder case.
But since the two courts have relied upon the evidence of the three eye witnesses, it is not necessary to consider whether the High Court was right in differing from the views of the trial court in the matter of the recovery of the knife and the clothes.
After having perused the entire evidence, we see no reason to interfere with the conviction in this case.
In the result the appeal is dismissed.
P.B.R. Appeal dismissed.
| IN-Abs | The appellant was convicted under section 302/34, Indian Penal Code and sentenced.
Statements of two witnesses recorded in the committing court were transferred to the record during trial under section 288 Cr.
P.C. and the trial court treated the evidence of these witnesses as substantive evidence.
The High Court accepted the testimony of the witnesses before the committing Court.
In appeal it was contended that the statements of wit nesses in the committing court transferred under section 288 were inadmissible in evidence and should not be acted upon, since no specific portion of their contradictory statements had been put to them in cross examination.
Dismissing the appeal, HELD: There is no legal infirmity about the transfer of deposition of the witnesses to the record of the Sessions Court under section 288 Cr.
It was a legitimate use of discretion by the Sessions Judge.
Evidence recorded in the committing court is substantive evidence in this case and is admissible.
[147 E F] Section 288 Cr.
P.C. which provides for transfer of evidence recorded in the committing court under certain circumstances is subject inter alia to the provisions of section 145 of the Evidence Act.
Provisions of the latter section have been substantially complied with in this case.
[147 E] In the instant case after drawing the attention of the witnesses to their contradictory statements recorded by the police, the statements recorded by the committing Magistrate were read out to the witnesses who did not deny have made them but only explained that they had deposed in that manner under threat and pressure from the police.
[147 D]
|
minal Appeals Nos.
241 242 of 1972.
(Appeals by Special Leave from the Judgment and Order dated 1 8 1972 of.
the Allahabad High Court in Criminal Appeal Nos.488 and 2561 of 1969).
R. K. Garg, section C. Agarwala and A. P. Gupta for the appellants.
O. P. Rana for the Respondent.
D. Mookerjee and R. K. Bhatt for the Intervener.
The Judgment of the Court was delivered by FAZAL ALI, J.
These two criminal appeals by special leave are directed against a common judgment dated 1st August, 1972 of the Allahabad High Court upholding the conviction and sentences imposed by the Sessions Judge, Bareilly on the appellants.
In Criminal Appeal No. 241 of 1972 there are seven appellants, viz., Rameshwar Dayal, Acchmal, Janmeje, Rohan, Raghunandan, Ramdas and Sudama.
In Criminal Appeal No. 242 of 1972 there are two appellants, viz., Rohtas and Sukhdev.
All the appellants were convicted under section 302/149, I.P.C. and sentenced to imprisonment for life.
Rameshwar Dayal, Achhmal Ram, Janmejaya 61 Deo, Rohtas, Sudama, Ramdas, Raghunandan and Rohan were further convicted under section 324 read with section 149 I.P.C. and sentenced to one year 's rigorous imprisonment.
Sukhdev was also convicted under section 324 whereas Rameshwar Dayal and Janmejaya Deo were convicted under section 394 I.P.C. and sentenced to four years ' rigorous imprisonment.
Rameshwar Dayal, Achhmal Ram, Janmejaya Deo, Rohtas, Sukhdeo and Sudama were further convicted under sec tion 148 I.P.C. and sentenced to 18 months ' rigorous imprisonment whereas Ramdas, Raghunandan and Rohan were convicted under section 147, I.P.C. and sentenced to one year 's rigorous imprisonment.
The High Court, on appeal, affirmed the conviction and sentences indicated above.
The unfortunate occurrence which resulted in the death of the deceased is an outcome of an outstanding enmity between the two parties.
Both the High Court and the Sessions Judge have clearly spelt out the essential features of the prosecution case and it is not necessary for us to repeat the same with all its details.
It appears that apart from the long outstanding enmity between the parties the immediate provocation for the occurrence was that proceedings under section 107/117 Cr.P.C. had been initiated by Babu Ram and Munnalal against each other and were pending in the Court of the Sub Divisional Magistrate, Faridpur.
In these proceedings a number of persons figured as parties on both sides.
9th December, 1969 was the date fixed for giving evidence in the proceedings under section 107/117 Cr.P.C. which had been initiated against the accused persons on the basis of an application given by the deceased Babu Ram.
The leader of the faction against whom the proceedings had been started was Munnalal.
Babu Ram along with his companions left for Faridpur and when he reached near the field of one Laltu Nal, he was surrounded by the appellants who were Iying in wait for him in the bushes and who on seeing the accused add his party emerged and started abusing him right and left.
Of the accused persons Rameshwar Dayal was armed with a single barrel gun, Achmal Ram with a double barrel gun, Janmejaya Deo with a country made pistol and the others were variously armed with spears, Kantas and lathes.
Rameshwar Dayal fired his gun at the deceased and Janmejaya fired another shot at the deceased from his pistol simultaneously.
Babu Ram fell down as a result of the injuries received by him.
Sukhdeo intercepted Chhoteylal when he wanted to protect his brother and inflicted a spear injury on him.
Virendra and others who were accompanying the deceased raised an alarm at which Achhmal fired a shot at them which did not hit them.
Meanwhile, Rameshwar Dayal snatched away a bag from the belt of the deceased containing his licensed revolver and cartridges and Janmejaya Deo picked, up the cloth bag in which the deceased was carrying the papers relating to the proceedings under section 107/117 Cr.P.C. which was fixed on 9th December, 1969, the day of the occurrence.
Thereafter, the. appellants made good their escape by running away towards the south.
A narrative regarding the manner in which the occurrence took place was jotted down by P.W, 1 Rajendra, son of the deceased at the spot and he carried the same to the Police Station 62 Fatehganj, a mile from the scene of the occurrence where the F.I.R. was lodged at 8 a.m. on the basis of which a case was registered against the appellants under sections 302, 394 and 324 and other provisions of the Penal Code.
The police visited the spot and after the usual investigation submitted a charge sheet against the appellants as a result of which they were put on trial by the Sessions Judge and convinced and sentenced by him as indicated above.
Two facts need special mention which have taken place during the course of investigation.
In the first place, when the Investigating Officer visited the place of occurrence he found one empty cartridge and four live cartridges at the spot.
The appellants have challenged the factum of the recovery of four live cartridges at the spot an aspect which has engaged the main attention of counsel for the appellants in this Court as well in the High Court which will be dealt with a little later.
The prosecution had examined three main eye witnesses in the case, namely, P.W.1 Rajendra, P.W.2 Mungolal Sharma and P.W.3 Chhoteylal.
The learned Sessions Judge after a very careful appraisal of the evidence and the circumstances of the case came to the clear conclusion that the case was proved against the appellants and he accordingly convicted them.
It may also be mentioned here that the Sessions Judge found as a fact in his judgment that the cartridges which were found on the spot were live cartridges though by mistake they were recorded as empty cartridges in the evidence of the Investigating Officer Muniraj Singh.
In this connection, the learned Sessions Judge while dealing with the evidence of the Investigating Officer, P.W.1 I observed as follows "He also found four live cartridges exhibit 2 of 32 bore revolver near the dead body (the word empty instead of live being wrongly written in the statement, as is shown by the memo exhibit Ka.14 prepared in respect of it after they being sealed) ".
The learned Sessions Judge further observed as follows "Further that four live cartridges said to be belonging to the deceased were found lying at the spot by the I.O. which fact is again not challenged by the defence, the prosecution has succeeded in proving that the incident occurred near the field of Laltu".
These two statements of fact made by the learned Sessions Judge in his judgment do not appear to have been challenged by the appellants in their grounds of appeal before the High Court.
Normally, this Court would not allow the parties to contest any statement of fact mentioned in the judgment unless unerring and cogent evidence is produced to draw a converse conclusion.
Neither before the High Court nor before this Court such an evidence has been suggested much less proved in the case.
63 It appears that while the appeal was pending in the High Court where the material exhibits were sent for and after the material exhibits were sent for an application was filed by the accused on 25th April, 1972 praying that in view of the fact that on inspection of the material exhibits showed that the cartridges found at the spot were not live cartridges but empty cartridges, additional evidence may be allowed to be taken by the Court to clear up the issue.
It may be noted that this application was made almost three years after the memo of appeal was filed in the High Court.
The, fact that live cartridges were found at the spot does not appear to have been controverted either before the Sessions Judge or even at the time when the appeal was filed before the High Court.
In fact, it would appear that counsel for both the parties argued the case before the Sessions Judge on the footing that the evidence showed that four live cartridges were found at the spot.
When the matter was taken up by the High Court, at the hearing the High Court examined two witnesses, viz., Mr. Hira Lal Capoor, the Sessions Judge himself and Muniraj Singh, the Investigating Officer on the question as to whether live or empty cartridges were found at the spot.
Indeed, if it was proved that empty cartridges were found at the spot, then having regard to the admitted fact that the deceased was carrying a pistol along with cartridges there may be a possibility of his having himself fired five shots on his assailants and that would naturally change the entire complexion of the case.
After the witnesses were examined by the High Court the appellants were reexamined under section 342 Cr.P.C.
Thereafter, the appellants filed an application on 25th April, 1972 praying that they may be given an opportunity to rebut the evidence of the Court witnesses summoned by the High Court.
In their application the appellants prayed for the examination of two witnesses, namely Shri section N. Mulla, Bar at Law and Shri 'Bankesh Behari Mathur, Advocate, Bareilly and also call for a docu ment, viz., the Panchayatnama Register of Police Station Fatebganj.
The High Court, however, refused to accede to the prayer of the appellants on the ground that they had got full opportunity to crossexamine the witness examined by the High Court under section 540, Cr.P.C.
One of the main points taken by the appellants in their petition for special leave was that the High Court judgment was vitiated by the failure of the High Court to give a reasonable opportunity to the appellants in order to rebut the evidence of the witnesses examined by the High Court under section 540, Cr.P.C. and this argument has been the sheet anchor of Mr. Garg, counsel for the appellants before us.
We have gone through the judgments of the two courts and have also been taken through the entire evidence.
Mr. Garg, learned counsel for the appellants submitted that if the High Court chose to summon the Sessions Judge and the Investigating Officer under Section 540 Cr.P.C. it was incumbent on it to give a reasonable opportunity to the appellants to rebut that evidence and the High Court committed a serious error of law in not summoning the witnesses Shri Mulla and Shri Mathur in spite of a prayer having been made to this effect to it.
64 We find ourselves in complete agreement with the principles adumbrated by Mr. Garg and we feel that the High Court ought to have given art opportunity to the appellants to examine the witnesses.
It was also argued that the High Court erred in examining the Sessions Judge as a witness which was a most extraordinary course.
In this connection, reliance was placed on a decision in the case of The Most Noble the Duke of Buccleuch and Queensberry and The Metropolitan Board of Works (1871 2) V English & Irish Appeal Cases 418 where Lord Chelmsford speaking for the Appeal Court observed as follows : "With respect to those who fill the office of Judge it has been felt that there are grave objections to their conduct being made the subject of cross examination and comment (to which hardly any limit could be put) in relation to proceedings before them; and, as everything which they can properly prove can be proved by others, the Courts of law dis countenance, and I think I may say prevent them being examined".
We fully agree with the rule of law laid down in the aforesaid ruling.
Judges should not be allowed to become witnesses in cases which they decide otherwise that would lead to most anomalous results and would undermine the confidence of the people in the judiciary.
A Judge has to decide the case according the evidence and the circumstances before him and it can not be allowed to fill up gaps left by the prosecution or the defence by giving statement on oath before a court of law.
If any statement of fact made by the Judge in his judgment is sought, to be, controverted the_ same should be done by the well established method of filing affidavits by counsel and getting a report from the Judge by the High Court.
It is true that under section 540 of the Criminal Procedure Code the High Court has got very wide powers to examine any witness it likes for the just decision of the case, but this power has to be exercised sparingly and only when the ends of justice so demand.
The higher the power the more careful should be its exercise.
In the case of Regina vs Gazard(1) it was held by Patteson, J. that it will be a dangerous precedent to allow a President of the Court of Record to be examined as a witness.
In this connection, Patteson, J. made the following observations : "It is a new point, but I should advise the grand jury not to examine him.
He is the present of a Court of Record, and it would be dangerous to allow such an examination, as the Judges of England might be called upon to state what occurred before them in Court".
Although in the instant case the Sessions Judge was not a Court of Record but the principles laid down by Patteson, J. would equally apply to him.
We do not mean to suggest for a moment that the High Court (1) ; 65 has no power to examine a Sessions Judge in any case whatsoever for there may be proper and suitable cases where the examination of the Sessions Judge or the trial Court may be very necessary but this must be indeed a very rare occasion where all other remedies are exhausted.
In the instant case, we feel that there was no good and cogent ground for the High Court to have examined the Sessions Judge because his evidence was not essential for a just and proper decision of the case particularly when the appellants never challenged the statements made in the judgment regarding the live cartridges either before the Sessions Judge or even in the High Court when the memo of appeal was filed before the Court.
As far as the evidence of Muniraj Singh the Investigating Officer is concerned that also was not necessary because that really amounted to allowing the prosecution to fill up gaps.
Even if we hold that the High Court was justified in exercising its discretion under section 540 Cr.P.C. the High Court committed a serious error of law in not allowing the appellants an opportunity to rebut the statement of the witnesses examined by the High Court which caused a serious prejudice to the accused.
It was argued by counsel for the State that there is no provision in the Criminal Procedure Code which requires the Court to allow the appellant an opportunity to rebut the evidence of witnesses summoned ' under section 540 Cr.P.C.
This argument, in our opinion, is based on a serious misconception of the correct approach to the cardinal principles of criminal justice.
Section 540 itself incorporates a rule of natural justice.
The accused is presumed to be innocent until he is proved guilty.
It is, therefore, manifest that where any fresh evidence is admitted against the accused the presumption of innocence is weakened and the accused in all fairness should be given an opportunity to rebut that evidence.
The right to adduce evidence in rebuttal is one of the inevitable steps in the defence of a case by the accused and a refusal of the same amounts not only to an infraction of the provisions of the Criminal Procedure Code but also of the principles of natural justice and offends the famous maxim Audi Alteram Partem.
Section 540 of the Criminal Procedure Code runs thus : "Any Court may, at any stage of any inquiry, trial or other proceeding under this Code, summon any person as a witness, or examine any person in attendance, though not summoned as a witness, or recall and re examine any person already examined, and the Court shall summon and examine or recall and re examine any such person if his evidence appears to it essential to the just decision of the case".
A careful perusal of this provision manifestly reveals that the statute has armed the Court with all the powers to do full justice between the parties and as full justice cannot be done until both the parties are properly heard, the condition of giving an opportunity to the accused to rebut any fresh evidence sought to, be adduced against him either at the trial or the appellate stage appears to us to be implicit under section 540 of the Cr.
The words " just decision of the case" would become meaningless and without any significance if a decision is to be arrived at without a sense of justice and fair play.
66 In the case of Channu Lal and Anr.vs Rex(1) the Division Bench of the Allahabad High Court ruled as follows : "Section 540, in our opinion, empowers a Court to take such evidence.
If the Court decides to take such evidence, it would be proper for the Court to re examine the accused with reference to the new evidence recorded and to give an opportunity to the accused to give such further evidence in defence, as he may be advised to do".
To the same effect is a decision of the Madras High Court in the case of Rangaswami Naicker vs Muruga Naicker(2) where Ramaswami, J. observed as follows "The only rules, which the Magistrate must bear in mind when examining court witnesses are (1) that the prosecution and the accused are both equally entitled to cross examine a court witness, and (2) that if the evidence of a court witness is prejudicial to the accused, opportunity to rebut the evidence so given must be given to the accused".
Same view has been taken by the Lahore High Court in the case of Shugan Chand and Anr.vs Emperor(3) and in the case of The Queen vs Assanoollah (4) where a Division Bench of the Court observed as follows : "In the present case, the prisoner has had no opportunity of making a defence or calling evidence, with reference to the evidence of the Moonsiff given by him when re called after the prisoner had concluded his defence.
I think, therefore, that the case has not been properly tried, and that the conviction and sentence are not legal.
It appears to me that, under section 405, we ought to quash the conviction, and order a new trial".
We find ourselves in complete agreement with the principles laid down and the observations made in the aforesaid cases which represent the correct law on the subject.
The, High Court seems to have justified the refusal to give an opportunity to the accused to rebut the evidence on the ground that Shri Mulla who was counsel representing the accused did not choose to withdraw from the appeal and that other witnesses sought to be examined by the appellants were bye standers.
These considerations are absolutely extraneous to the issue.
It was not open to the High Court to have prejudged the merits of the evidence of the witnesses sought to be examined by the defence even before their evidence was recorded.
In these circumstances, we feel that the reasons given by the High Court for not examining the witnesses suggested by the accused are wholly unsustainable in law.
(1) A.I.R. 1949 All.
(2) A.I.R. 1954 Mad. 169.
(3) A.I.R. 1925 Lahore 531.
(4) 13 S.W.R. (Crl.) 15. 67 For these reasons, therefore,.
we are clearly of the opinion that the High Court was in error in refusing the appellants an opportunity of giving evidence to rebut the evidence, of the witnesses examined by the High Court under section 540, Cr.P.C.
Normally, this error would have been sufficient to vitiate the judgment and would have required our remitting the case to the ' High Court for a fresh decision.
We however find that this is a very old case when the occurrence had taken place more than 8 years ago and the appeal in this Court has itself taken more than five years.
In these circumstances, we feel that the ends of justice do not require that the case should be sent back to the High Court which would entail further delay.
We have therefore, decided to go into the, evidence ourselves after completely excluding the evidence of the witnesses examined by the High Court under section 540, Cr.P.C. so that we base our decision only on the evidence and the circumstances that were before the Sessions Judge.
Before going into the merits we might mention a few facts which have been found against the appellants.
Both the High Court and the, Sessions Judge have believed the evidence of P.Ws. 1, 2 and 3 who proved the assault on the deceased and Chhotey Lal.
The Sessions Judge has particularly discussed all the aspects of the case very exliaustively and has combated every possible argument that was or could be advanced before him by the appellants.
Regarding P.W. 1 the High Court accepted his evidence and observed as follows : "We are satisfied that Chhoteylal (P.W. 3) was also present in the company of his brother Babu Ram when he was shot dead".
Similarly, rejecting the adverse comments made against the testimony of P.W. 2 the High Court said that "his explanation for his presence in the company of the deceased when he was shot at is quite plausible.
He is in our judgment, a thoroughly reliable witness".
Similar opinion was given by the High Court in respect of Chhotey Lal, P.W. 3 where the High Court observed as follows : "Rajendra whom we have found was present during the occurrence has supported the statement of Chhoteylal.
In the First Information Report lodged by him without any delay whatsoever it bad been mentioned that Chhoteylal had been injured by Sukhdeo with a spear wielded by him '.
Similarly, the trial Court has also accepted the evidence of these witnesses in the same terms.
We have also gone through the evidence of these three witnesses in their entirety and we find that they have given straight forward answers and their evidence has the ring of truth in it.
One of the most important circumstances which proves the prosecution case is the fact that although the main person against whom proceedings under section 107 had been initiated by the deceased was Munna Lal yet Munna Lal has not at all been made an accused in this 68 case nor has any act been attributed to him.
This is an intrinsic evidence of the fact that the prosecution had no intention of falsely implicating any person even though he may have been the greatest enemy of the deceased.
Another pertinent fact which deserves particular mention is that the F.I.R. appears to have been lodged within an hour of the occurrence and there was hardly any time for the parties to discuss or deliberate.
The F.I.R. contains a brief but full narrative of the manner in which the deceased was killed and the names of the accused persons are also mentioned therein.
It is true that some of the witnesses who have been mentioned in the F.I.R. as having accompanied the deceased have not been examined by the prosecution but that by itself in our opinion in the circumstances of the present case does not appear to be a fatal defect in the prosecution case.
This Court in the case of Dalbir Kaur & Ors.V. State of Punjab (1) said that it is manifest that what is important is not as to who were not examined but as to whether the witness who had actually been examined should be believed and while enunciating the principles on the basis of which this Court would interfere in an appeal by special leave observed as follows : "1.
That this Court would not interfere with the concurrent findings of fact based on pure appreciation of evidence even if it were to take a different view on the evidence.
That the Court will not normally enter into a reappraisement or review of the evidence, unless the assessment of the High Court is vitiated by an error of law or pro cedure or is based on error of record, misreading of evidence or is inconsistent with the evidence, for instance, where the ocular evidence is totally inconsistent with the medical evidence and so on; 3.
That the Court would not enter into credibility of the evidence with a view to ' substitute its own opinion for that of the High Court; 4.
That the Court would interfere where the High Court has arrived at a finding of fact in disregard of a judicial process, principles of natural justice or a fair hearing or has acted in violation of a mandatory provision of Jaw or procedure resulting in serious prejudice or injustice to the accused; 5.
This Court might also interfere where on the proved facts wrong inferences of law have been drawn or where the conclusions of the High Court are manifestly perverse and based on no evidence".
In the instant case, having regard to the concurrent findings of fact by the High Court and the Sessions Judge that the evidence of P.Ws. 1, 2 and 3 is worthy of credence, and after perusing the evidence we also do not see any reason why the evidence of these witnesses should be (1) ; 69 discarded.
All the three witnesses have been mentioned in the F.I.R. as being present on the scene of occurrence.
P.W. 3 has an injury which according to the doctor could not be self inflicted.
The presence of the injury on the person of Chhotey Lal is a strong corroboration of the evidence of the eye witnesses.
We shall now deal with some important contentions raised by the appellants on the merits of the case.
In the first place, great reliance was placed on the evidence of P.W. 11 the Investigating Officer who had said in his statement before the Sessions Court that he had found four empty cartridges at the spot.
Mr. Garg submitted that this admis sion of the Investing Officer knocks the bottom out of the case of the prosecution.
It was argued that if the empty cartridges were recovered from the spot as deposed to by this witness the, entire complexion of the case changes and it would appear that the prosecution had not presented the true version of the case before the Court.
We have ourselves gone through the evidence of P.W. 1 1 carefully and we find that either the witness has made some confusion regarding tile finding of four empty cartridges or the word "empty" has been wrongly recorded in the statement of the witness as is clearly found by the learned Judge in his judgment the extract of which has been quoted above.
We have already pointed out that although the trial Judie had clearly held that the word "empty" instead of "live" was wrongly written in the statement yet this statement of fact made by the Sessions Judge in his judgment was not controverted by the appellants in their memo of appeal filed in the High Court nor was any attempt made by the appellants to prove that the said statement was wrong on a point of fact either by examining counsel who bad conducted the case before the trial Court or by producing any other proof.
Furthermore, the learned Judge has clearly mentioned in his judgment that the fact that four live cartridges belonging to the deceased were found lying at the spot was not even challenged by the defence.
Even this fact was not controverted either before the Sessions Court or in the memo of appeal filed in the High Court.
Finally, the High Court itself has pointed out that Shri section N. Mulla and Shri R. K. Shangloo who had represented the appellants in the appeal in the High Court and had also appeared for the appellants before the trial Court on enquiry by the High Court whether the revolver cartridges exhibited at the trial were live or empty were not in a position to refute the statement made by the prosecutor Shri B. C. Saxena.
In this connection, the High Court observed as follows "Shri section N. Mulla and Shri R. K. Shangloo represent the appellants in Criminal Appeal No. 2561 of 1969.
Both these learned counsel had appeared on behalf of the defence before the trial court.
It was Shri Mulla who had cross examined the investigating Officer.
When we enquired from them as to whether the revolver cartridges when exhibited at the trial were live or empty neither of the two learned counsel found himself in a position to refute the statement made by Shri B. C. Saxena".
70 Shri B. C. Saxena who had appeared for the prosecution before the trial Court emphatically asserted that when the sealed packet containing Ex.2 was opened it contained four live cartridges.
Shri Saxena also asserted that during the arguments the attention of the Sessions Judge was pointedly drawn to the statement made by the Investigating Officer on which reliance has been placed by the appellants and both the parties proceeded on the footing that the cartridges were live when they were produced before the Court.
All these facts have been clearly mentioned in the judgment of the High Court.
The conduct of counsel for the appellants is fully consistent with the observations made by the Sessions Judge in his judgment that there appears to be some inadvertent mistake in recording the evidence of the Investigating Officer.
Apart from this there is overwhelming documentary evidence to show that the statement of the Investigating Officer in Court that he found four empty cartridges is factually incorrect.
To begin with there is exhibit Ka. 10 which is the panchayatnama or the inquest report prepared by the Investigating Officer himself which he proves in his evidence by stating as follows : "I reached the place of the occurrence at 9 a.m.
There I found the dead body of Babu Ram near the chak road towards the north of the field of Laltu Nal lying on the ridge at a distance of about 2 3 paces.
I had prepared the panchayatnama exhibit Ka 10".
In this inquest report it is clearly mentioned by the Investigating Officer that he had found four live cartridges.
The exact words used are "4 " The Investigating Officer does not say in his evidence that this finding of fact in the panchayatnama or the inquest report was incorrect.
The statement in the inquest report was made by the Investigating Officer soon after the occurrence and was, therefore, the earliest statement regarding a fact which he found and observed.
The earlier statement, therefore, is valuable material for testing the veracity of the witness.
In the case of Baladin & Ors.vs State of U.P. (1) it was pointed out by this Court that statements made by the prosecution witnesses before the investigating police officer being the earliest statements made by them with reference to the facts of the occurrence are valuable material for testing the veracity of the witnesses examined.
In this connection, this Court observed as follows "Statements made by prosecution witnesses before the investigating police officer being the earliest statements made by them with reference to the facts of the occurrence are valuable material for testing the veracity of the witnesses examined in court but the statements made during police investigation are not substantive evidence".
(1) A.I.R. 1956 S.C. 181.
71 Reliance was placed by the learned counsel for the appellants on this decision in support of his argument that the statements made in the inquest report were inadmissible in evidence being hit by section 162 Cr.
In the first place, the statement made by the Investigating Officer in exhibit Ka 10 is not a statement made by any witness before the police during investigation but it is a record of what the Investigating Officer himself observed and found.
Such an evidence is the direct or the primary evidence in the case and is in the eye of law the best evidence.
Unless the record is proved to be suspect and unreliable perfunctory or dishonest, there is no reason to disbelieve such a statement in the inquest report.
Reliance was also placed by counsel for the appellants in the case of Surjan and Ors.vs State of Rajasthan(1) where ibis Court observed as follows : "But the statement in the inquest report is not evidence by itself and it certainly cannot be pitted against the evi dence of the medical witness given in Court.
" This case is clearly distinguishable from the facts and circumstances of the present case.
What had happened in that case was that a description of an injury found on the head of the deceased as given by the Investigating Officer was inconsistent with the medical evidence.
This Court pointed out that where a statement in the inquest report was pitted against the medical evidence it had to yield before the opinion of the expert.
It is obvious that the description given by the Sub Inspector was merely his opinion which was not the opinion of an expert and could not, therefore, stand scrutiny before the evidence of a duly qualified expert, viz., the doctor.
This principle cannot be applied here for it does not require an expert knowledge to find out whether a live cartridge was there or not.
In these circumstances, therefore, the two cases cited by the appellants do not appear to be of any assistance to them.
Reliance was further placed on a decision of this Court in the case of Ch Rizak Ram vs Ch. J. section Chouhan ( 2) & Ors.
This case has also no application to the facts of the present case because what had happened in that case was that a statement of the witness Parmeshwari was recorded by the Investigating Officer and thumb marked was being used in a election petition.
It was held by this Court that the statement was kit by section 162, Cr.
This proposition is well settled.
Any statement made by any witness to a police officer during investigation is clearly hit by section 162 and can be used only for contradicting or corroborating the other witness and is not a substantive piece of evidence.
A statement contained in exhibit Ka 10 is not a statement of a witness at all but is a memo of what the Investigating Officer had himself found and observed at the spot and to such a case section 162 would have no application at all.
(1) A.I.R. 1956 S.C. 425.
(2) 72 Reliance was also placed on a recent decision of this Court in the case of Castano Piedade Fernandes & Anr vs Union Territory of Goa, Daman & Diu Panaji Goa(1).
This case is also wholly irrelevant to the issue in question because there the Court on a consideration of the evidence found as a fact that the panchnama was not a genuine document and did not inspire confidence.
There is no such finding by the High Court or the Sessions Judge in the instant case nor has the inquest report been shown to be unreliable or perfunctory or suspect.
Apart from the inquest report exhibit Ka 10 there is another document which throws a flood of light on this question.
Ka 18 which is the site plan prepared by the Investigating Officer at the spot from where the empty cartridges of 12 bore were recovered.
This is also a record of what the Investigating Officer himself found at the spot.
The learned counsel for the appellants submitted that the site plan was also not admissible in evidence because it was based on information derived by the Investigating Officer from the statement of witnesses during investigation.
Reliance was placed on a judgment of this Court in the case of Jit Singh vs State of Punjab(2) where this Court observed as follows "It is argued that presumably this site plan also was prepared by the Investigating Officer in accordance with the various situations pointed out to him by the witnesses.
We are afraid it is not permissible to use the site plan exhibit P.14 in the manner suggested by the counsel.
The notes in question on this site plan were statements recorded by the Police Officer in the course of investigation, and were hit by section 162 of the Code of Criminal Procedure.
These notes could be used only for the purposes of contradicting the prosecution witnesses concerned in accordance with the provisions of section 145.
Evidence Act and for no other purpose".
In our opinion, the argument of the learned counsel is based on misconception of law laid down by this Court.
What this Court has said is that the notes in question which are in the nature of a statemen, ' recorded by the Police Officer in the course of investigation would not be admissible.
There can be no quarrel with this proposition.
Note No. 4 in exhibit K 18 is not a note which is based on the information given to the Investigating Officer by the witnesses but is a memo of what he himself founded observed at the spot.
Such a statement does not fall within the four corners of section 162, Cr P.C. III fact, documents like the inquest reports, seizure lists or the site plans consist of two parts one of which is admissible and the other is inadmissible.
That part of such documents which is based on the actual observation of the witness at the spot being direct evidence in the case is clearly admissible under section 60 of (1) (2) A.T.R. 73 the Evidence Act whereas the other part which is based on information given to the Investigating Officer or on the statement recorded by him in the course of investigation is inadmissible under section 162 Cr.P.C. except for the limited purpose mentioned in that section.
For these reasons, therefore, we are of the opinion that the decision cited by the counsel for the appellants has no application to this case.
Exhibit Ka 13 is a memo relating to the recovery of the empty cartridges found at the spot by the Investigating Officer.
The title of this memo runs thus : "Memo relating to the recovery of Khokha (empty case of cartridge of 12 bore from the site in the case as offence No. 126, under sections 147/148/149/302/392/ 324 I.P.C." It appears that where an empty cartridge is mentioned it is described as Khokha whereas in the case of live cartridge the word "cartridges Kartoos" has been clearly mentioned.
exhibit Ka 13 is the seizure memo of the recovery of an empty cartridge of 12 bore which was found at the spot and which was said to have hit the deceased having been fired from the gun of one of the appellants.
It was also mentioned in this memo, that smell of the gun powder was coming out of the Khokha.
When the Investigating Officer deposed before the Sessions Judge that smell was coming out from the cartridge he was actually referring to the, empty cartridge which was recovered from the spot and which was fired from the gun of the appellants.
exhibit Ka 14 however is the seizure memo of the four live Cartridges found by the Investigating Officer at the spot, in which it is mentioned that four cartridges of 32 bore revolver are recovered.
The exact description is given thus : "Description of the Cartridge Four cartridge of 32 bore of revolver of brass cap and blacks lead Kynock 32 Sand W. engraved on the brass cop.
" It would be seen that the description of the four cartridges with brass cap on lead intact show that the cartridges were live and not empty because if the cartridges were empty then there was no question of there being any black lead in existence at the spot.
The Investigating Officer has clearly proved these documents in his evidence before the Sessions Judge and stated that he had prepared these documents.
Thus these documents having been prepared im mediately after the occurrence are undoubtedly reliable.
Having regard, therefore, to the documentary evidence and the circumstances mentioned above we find ourselves in complete agree,men*, with the view taken by the courts below that what had been recovered at the spot by the Investigating Officer were four live cartridges which had fallen at the spot when the bag of the deceased was 6 211 SC178 74 taken away by the appellants.
We are unable to find any reliable evidence to prove that the four cartridges found at the spot were empty cartridges.
The argument of the learned counsel for the appellants to the contrary must be overruled.
Great reliance was placed by the appellants on an application given by Rajendra son of the deceased before the S.D.M. Court at Bareilly informing the court that Babu Ram had been murdered.
This application is exhibit Ka 1 and was filed before the Magistrate on 9 12 1968.
It is true that in this application it was mentioned that Shri Babu Ram had been murdered but the name of the appellants nor the circumstances under which be was murdered have been mentioned.
It was argued by Mr. Garg that the absence of the names of the appellants clearly showed that the deceased was murdered by unknown persons, and, therefore, only the fact of his murder was mentioned in this application.
The argument appears to be attractive, but on closer scrutiny it is without any substance.
P.W. 1 had already rushed to the police station to lodge the F.I.R. wherein lie had narrated the facts which led to the death of the deceased.
Rajendra, son of the deceased who had been sent to Bareilly was sent for the limited purpose of informing the court regarding the death of Babu Ram.
In the proceedings under section 107 there was no occasion for mentioning the name of the assailants of Babu Ram or for detailing the circumstances under which he was killed because that was not germane for the proceedings.
In these circumstances, therefore, the absence of the name of the assailants in this application cannot put the prosecution out of Court.
Learned counsel for the appellants made certain comments against some of the witnesses which have been carefully dealt with by the Courts below.
The discrepancies relied upon by the appellants do not appear to be of great consequence and do not merit serious consideration.
On a careful consideration of the entire facts of the case we are clearly of the opinion that the prosecution case against the appellants has been proved beyond reasonable doubt and we find no reason to interfere with the judgement of the High Court upholding the conviction and the sentences passed on the appellants in both the appeals.
The result is that the appeals fail and are accordingly dismissed.
M.R. Appeals dismissed.
| IN-Abs | A long standing enmity between Baburam and Munnalal, triggered by proceedings u/s 107/117 Cr.
P.C., initiated by them against each other, resulted in an attack on Baburam 's party, by Munnalal 's party, in which Baburam died.
The appellants were convicted, inter alia, u/s 302/149 I.P.C., and sentenced to imprisonment for life.
The factum of the recovery of four live cartridges by the Investigating Officer at the spot, was challenged by the accused at the appellate stage.
The High Court examined the Sessions Judge and the Investigating Officer u/s 540 Cr.
P.C. but denied the appellants an opportunity to adduce evidence to rebut this fresh evidence.
Dismissing the appeals on merits, after completely excluding the, evidence of the witnesses examined by the High Court u/s 540 Cr.
P.C., the Court HELD: 1.
The principles on the basis of which this Court would interfere in an appeal by special leave are as follows : 1.
That this Court would not interfere with the concurrent findings of fact based on pure appreciation of evidence even if it were to take a different view on the evidence; 2.
That the Court will not normally enter into a reappraisement or review of the evidence, unless the assessment of the High Court is vitiated by an error of law or procedure or is based on error of record, misreading of evidence or is inconsistent with the evidence, for instance, where the ocular evidence is totally inconsistent with the medical evidence and so on; 3.
That the Court would not enter into credibility of the evidence with a view to substitute its own opinion for that of the High Court; 4.
That the Court would interfere where the High Court has arrived at a finding of fact in disregard of a judicial process, principles of natural justice or a fair bearing or has acted in violation of a mandatory provision of law or procedure resulting in serious prejudice or injustice to the accused; 5.
This Court might also interfere where on the proved facts wrong inferences of law have been drawn or where the conclusions of the, High Court are manifestly perverse and based on no evidence" [68C G] Dalbir Kaur and Ors.
vs State of Punjab, [1977] 1 S.C.R. 280; followed.
Judges should not be allowed to become witnesses in cases which they decide, otherwise that would lead to most anomalous results and would undermine the confidence of the people in the judiciary.
A Judge has to decide the cage according to the evidence and the circumstances before him and it cannot 60 be allowed to fill up gaps left by the prosecution or the defence by giving statement on oath before a Court of law.
Under section 540 of the Cr.
P.C. the High Court may examine the Sessions Judge or the Trial Court, when very necessary, on very rare occasions where all other remedies are exhausted.
[64D H, 65A] The Most Noble the Duke of Buccleuch and Queensberry and the Metropolitan Board of Works (1871 2) V E and 1, Appeal Cases 418; Regina vs Gazard, ; applied.
The condition of giving an opportunity to the accused to rebut any fresh evidence sought to be adduced against him either at the trial or the appellate stage, is implicit under section 540 of the Cr.
P.C. and a refusal of the same amounts not only to an infraction of the provisions of the Code, but also of the principles of natural justice, and offends the famous maxim Audi Alteram Partem.
[65 D E H] Channulal and Anr.
vs Rex, A.I.R. 1949 All. 692, Rangaswami Naicker vs Muruga Naicker, A.I.R. 1954 Mad. 169; Shugan Chand and Anr.
vs Emperor, A.I.R. 1925 Lahore 53 1; The Queen vs Assanoollah, 13 S.W.R. (Crl.) 15; approved.
Documents like the Inquest report, seizure lists or the site plans consists of two parts, one of which is admissible and the other is inadmissible.
That part of such documents which is based on the actual observation of the witness at the spot being direct evidence in the case, is clearly admissible, under section, 60 of the evidence Act, whereas the other part which is based on information given to the Investigating Officer, or on the statement recorded by him inadmissible under section 162 Cr. P.C., except for the limited purpose mentioned in that section.
[72G H, 73A] Baladin and Ors.
vs State of U.P., A.T.R. ; Surian and Ors.
vs State of Rajasthan ; Ch.
I Rizak Ram vs Ch.
J. section Chouhan and Ors.
, ; Caetano Piedade Fernandes and Anr.
vs Union Territory of Goa.
Daman and Diu, Panaji, Goa ; fit Singh State of Punjab, A.I.R., 1976 S.C. 1421; distinguished.
|
Appeal No. 1290 of 1977.
(Appeal by Special leave from the Order dated.
the 31 1 1977 of the Additional Commr.
of Sales Tax New Delhi in Appeal No. 665 of 1976 77).
AND CIVIL APPEAL NO.
1111 OF 1977 (Appeal by Special leave from the Judgment and Order dated the 17 7 1975 of the Allahabad High Court in C.M.W.P. No. 494 of 1975).
101 AND CIVIL APPEAL NO.
1352 OF 1977 (Appeal by Special Leave from the Judgment and Order dated the 30th April, 1977 of the Sales Tax Office at New Delhi).
AND CIVIL APPEAL NO.
1110 OF 1977 Appeal by Special Leave from the Judgment and Order dated the 22nd March, 1977 of the Sales Tax Officer at New Delhi in R.C. No 13754).
AND CIVIL APPEAL NO.
1085 OF 1977 (Appeal by Special Leave from the Judgment and Order dated 30 3 1977 of the Sales Tax Officer, New Delhi.) AND CIVIL APPEAL NO.
236 OF 1976 (Appeals by Special Leave from the Judgment and Orders dated the 18th December 1975 of the Sales Tax Officer, Ward No. 40, Delhi for the assessment year 1973 74 in Order No. 856A).
AND CIVIL APPEAL NO. 456 OF 1976 (Appeal by the Special Leave from the Judgment and Order dated the 16th September, 1975 of the Delhi High Court in Civil Writ No. 343 of 1975).
AND CIVIL APPEAL NO. 816 OF 1976 (Appeal by Special Leave from the Order dated the 30th June 1976 of the Addl.
Commr.
of Sales Tax, New Delhi in Appeal No. 8945 of 1975 76).
AND CIVIL APPEAL NO. 18 OF 1975 (Appeal by Special Leave from the Assessment Order No. 2667 dated the 6th September, 1974 of the Sales tax Officer, Assessing Authority, Ward No. 40, Delhi, for the year 1971 72).
AND CIVIL APPEAL NO.
1522 OF 1974 (From the Judgment and Order dated the 26th April, 1974 of the Delhi High Court in Civil Writ No. 1426 of 1973).
AND CIVIL APPEAL NO.
1526 OF 1974 102 (From the Judgment and Order dated the 26th April, 1974 of the Delhi High Court in Civil Writ No. 947 of 1973).
AND WRIT PETITIONS NOS.
166/77 & 329 OF 1975 WITH SLPs.
2522 & 2524 OF 1977 F. section Nariman (in CA 1290, 1085 & 1352) A. K. Sen (in 1111), section T. Desai (in 1110), Ravinder Narain, Talat Ansari & Balram Saingal (in CA 1290 & 1 1 1 1), Shri Narain (in CAs.
1352, 1085 & 1110) Arjun Anand for J. B. Dadachanji & Co. for the appellants in CAS.
1290, 1111, 1085, 1352, 1110 & 1526.
Shyamala Pappu, J. Ramamurthi & R. Vaigai in CAs.
236, 456/76 718 of 1975 for the appellants.
Sardar Bahadur & Bishnu Bahadur Saharya for the appellant in CA 1522 of 1974.
Yogeshwar Prasad, Rani Arora & Meera Bali for the appellant CAs.
816 & in W.P. No. 166.
G. section Chatterjee, D. P. Mukherjee & A. K. Ganguli for the Petitioners in SLPs 2522 & 2524.
K. B. Rohatgi & M. K. Garg for the petitioners in W.P. No. 329/75.
section V. Gupte Attorney General (in CAs.
1290, 1352, 816 & II 10), R. C. Chawla (in 1290 & W.P. 166 & CA 18/75) R. N. Sachthey and A. Subhashini for the respondents in C.A. Nos. 1290, 1111, 1085,1352, 1110, 236, 456, 816 of 1976, 18 of 1975, 1522 & 1526/74, W.P. Nos.
166, 329 & SLPS.
2522 & 2524/77.
The Judgment of the Court was delivered by BHAGWATI, J.
These appeals raise a short but interesting question of law relating to the interpretation of section 5(2)(a)(ii) of the Bengal Finance (Sales Tax) Act, 1941 as applied to the Union Territory of Delhi (hereinafter, for the sake of convenience referred to as Delhi).
The Act was extended to Delhi subject to certain modifications by a Notification dated 28th April, 1951 issued by the Central Government in exercise of the powers conferred by section 2 of the Part C States (Laws) Act, 1950 and it came into force in Delhi on 28th May, 1951 by virtue of a Notification issued under section 1, sub section (3) of the Act.
There have been several amendments made in the Act from time to time since the date of its application to Delhi but we are concerned in these appeals only with the assessment periods 1971 72 and 1972 73 and hence we shall confine ourselves to the relevant provisions of the Act as they stood during these assessment periods.
Section 2 enacted the definition provision and clause (c) of that section defined a 'dealer to mean any person who carries on the business of selling goods in Delhi.
Clause (g) of section 2 contained the 103 definition of 'sale '.
It was a definition in general terms and it mad,.
no reference to the situs of the sale.
It did not limit the definition to a sale inside Delhi.
There was an explanation to this clause which laid down as to when a sale or purchase shall be deemed to take place inside Delhi.
Section 4, sub section (1) provided that every dealer whose gross turnover during the year immediately preceding the commencement of the Act exceeded the taxable quantum at any time within such year shall be liable to pay tax under the Act on all sales effected after the date notified by the Chief Commissioner and sub section (2) of that section said that every dealer to whom sub section (1) does not apply, shall, if his gross turnover calculated from the commencement of any year exceeds the taxable quantum at any time within such year, be liable to pay tax under the Act, on the expiry of two months from the date on which such gross turnover first exceeds the taxable quantum, on all sales effected after such expiry.
Sub section (5) of section 4 defined 'taxable quantum ' to mean, in relation to any dealer who imports for sale any goods into Delhi or manufactures or produces any goods for sale, regardless of, the value of the goods imported, manufactured or produced, ten thousand rupees, and in relation to any other dealer, thirty thousand rupees.
Sub section (1) of section 5 provided different rates of tax, according as the goods fell within one category or another, at which the tax payable by a dealer shall be levied on his taxable turnover.
What is 'taxable turnover ' was defined in subsection (2) of section 5 to mean : "that part of a dealer 's gross turnover during any period which remains after deducting therefrom (a) his turnover during that period on (i) the sale of goods declared tax free tinder section 6; (ii) sales to a registered dealer of goods of the class or classes specified in the certificate of registration of such dealer, as being intended for resale by him, or for use by him as raw materials in the manufacture of goods for sale; and of containers or other materials for the packing of goods of the class or classes so specified for sale : Provided that in the case of such sales a declaration duly filled up and signed by the registered dealer to whom the goods are sold and containing the prescribed particulars on a prescribed from obtainable from the prescribed authority is furnished in the prescribed manner by the dealer who sells the goods.
Provided further that where any goods specified in the certificate of registration are purchased by a registered dealer as being intended for re sale by him or for use by him as raw materials in the manufacture of goods for sale, but are utilised by him for any other purpose, the price of the goods purchased shall be allowed to be deducted from the gross 104 turnover of the selling dealer but shall be included in the taxable turnover of the purchasing dealer.
(iii) Sales to a registered dealer engaged in the business of raising coal, of any goods which are shown to the satisfaction of the Commissioner to be required directly for use in connection with the raising of coal; (iv) sales to any undertaking supplying electrical energy to the public under a licence or sanction granted or deemed to have been granted under the (IX of 1910) of goods for use by it in the generations distribution of such energy; (v) Sales of goods which are shown to the satisfaction of the Commissioner to have been dispatched by, or on behalf of dealer to an address outside the (Union Territory) of Delhi; (vi) such other sales as may be prescribed;" This was the definition until 28th May, 1972, when by Finance Act, 1972 the main enactment in section 5 (2) (a) (ii) was substituted by the following provision : "(2) In this Act the expression 'taxable turnover" means that part of a dealer 's gross turnover during any period which remains after deducting therefrom (a) his turnover during that period on (i) x x x (ii) sales to a registered dealer of goods of the class or classes specified in the certificate of registration of such dealer, as being intended for re sale by him, or "for use by him as raw materials in the manufacture in the Union Territory of Delhi (hereinafter in this subclause referred to as Delhi), of goods (other than goods declared tax free under section 6) (A) for sale inside Delhi; or (B) for sale in the course of inter State trade or commerce, being a sale occasioning or effected by transfer of documents of title to such goods during the movement of such goods from Delhi; or (C) for sale in the course of export outside India being a sale occasioning the movement of such goods from Delhi, or a sale effected by transfer of documents of title to such goods effected during the movement of such goods from Delhi, to a place outside India and after the goods have crossed the customs frontiers of India; and of containers or other materials for the packing of goods of the class or classes so specified for sale;" 105 Section 7, sub section (1) laid down that no dealer shall, while being liable to pay tax under section 4, carry on business as a dealer unless he has been registered and possesses a registration certificate and subsection (3) of that section provided for grant of a certificate of regis tration to a dealer on an application being made by him under subsection (2) and said that such certificate of registration shall specify the class or classes of goods for the purposes of sub clause (ii) it clause (a) of sub section (2) of section 5.
Section 26 conferred power on the Chief Commissioner to make rules for carrying out the purposes of the Act and in exercise of this power, the Delhi Sales Tax Rules, 1951 were made by the, Chief Commissioner.
These rules prescribed not only the form of the application for registration but also the form of the certificate of registration.
Clause (3) of the form of the certificate of registration provided that the sale of the specified goods to the dealer "for purposes of manufacture" and "for re sale" will be free of tax.
This was in conformity with the requirement of section 5 (2) (a) (ii) as it stood prior to its amendment and though section 5 (2) (a) (ii) was substituted by the Finance Act of 19 72, no amendment was made in the form of the certificate of registration and it was only on 29th March, 1973 that clause (3) of the form of the certificate of registration was substituted so as to declare that the sales of the specified goods to the dealer will be free of tax when they are "for use as raw materials in the manufacture in the Union territory of Delhi of goods for sale in the, manner specified in section 5 (2) (a) (ii) or "for resale".
Similarly, the form of declaration to be furnished by the purchasing dealer in order to entitle, the dealer who has sold the goods to claim deduction of the amount in respect of such sales under section 5 (2) (ii), which was prescribed by Rule 26, was also not amended until 29th March, 1973 and it continued to be in the following terms : "Certified that the goods mentioned in the cash memo/ Bill No dated have been purchased by me/us from M/s. and are duly covered by our Registration Certificate No. dated and are required by me/us for, re sale/for use as raw materials in the manufacture of goods for sale/for use in the execution of contract.
Signature Dealer" It was only on 29th March, 1973 that the form of the declaration was substituted by amending Rule 26 so as to bring it in line with the amended section 5 (2) (a) (ii) and after the substitution it ran as follows : " Certified that the goods mentioned in the Cash Memo/ Bill No. dated have been purchased by me/us from M/s. and are duly covered by me/our registration certificate No. valid from and are required by me/us for 8 211 sci/78 106 re sale/ for use as raw material, in the manufacture in Delhi in accordance with the provisions contained in section 5 (2) (a) (ii) of the Bengal Finance (Sales Tax) Act, 1941 as in force.
in the Union Territory of Delhi, of goods for sale.
Signature. . . Dealer. . .
The Act as originally enacted ended with Section 26 but by Amending Act of 1959, Section 27 was introduced in the Act with effect from 1st October, 1959 and this section provided that nothing in the Act or under the rules shall be deemed to impose or authorise the imposition of a tax on any sale or purchase of any goods, if such sale or purchase takes place : (i) in the course of Inter state trade or commerce; (ii) outside the Union territory of Delhi, or (iii) in the course.
of import of the goods into, or export of the goods out of, the territory of India.
This section was obviously introduced with a view to bring the Act into conformity with Article 286 of the Constitution.
These are the relevant provisions of the Act in the light of which we have to decide the question of law arising in the appeals.
The assessees in all the appeals are registered dealers and during the relevant assessment periods they held certificates of registration specifying the class or classes of goods intended for resale by them or for use by them as raw materials in the manufacture of goods for sale.
The certificates of registration were in the form as it stood prior to its amendment on 29th March, 1973 and they did not specify that the resale of the goods purchased or their use as raw materials in the manufacture of goods, or the sale of manufactured goods should be inside Delhi.
There are broadly two groups in which the appeals can be.
divided for the sake of convenience.
One group consists of appeals where the assessees purchased goods of the class specified in the certificate of registration as being intended for resale by them and furnished to the dealers selling the goods declarations in the prescribed form, as it stood prior to 29th March, 1973, stating that the goods were intended for resale and thereafter resold the goods, though not within the territory of Delhi, while the other consists of appeals where the assessees purchased goods of the class specified in the certificate of registration as being intended for use by them as raw materials in the manufacture of goods for sale and furnished to the dealers selling the goods declarations in the prescribed form, as it stood prior to 29th March, 1973, stating that the goods were purchased by them for use as raw materials in the manufacture of goods for sale and thereafter used the goods purchased as law materials in the manufacture of goods, in some cases outside Delhi and in some others inside, but in the latter, sold the goods so manufactured outside Delhi.
Civil Appeals Nos.
1110 of 1977, 1111 of 1977 and 1290 of 1977 are representative appeals belonging to the first group while Civil Appeals Nos.
1526 of 1972, 1085 of 1977, and 1352 of 107 1977 are illustrative of the appeals belonging to the second group.
Some of the appears are brought by special leave directly from the orders of the assessing authority and some others from the appellate or Previsional orders.
Special leave was granted in these cases without requiring the assessees to exhaust their remedies under the Act and to approach the High Court of Delhi in the first instance, because a decision was already given by the High Court of Delhi on 26th April, 1974 in Fitwell Engineers vs Financial Commissioner of Delhi negativing the contentions of the assessees.
The view taken in the orders impugned in the appeals and accepted by the High Court of Delhi in Fitwell Engineers ' case was that for the purpose of section 5 (2) (a) (ii) and the Second Proviso, resale of the goods purchased was confined to resale inside Delhi and so also, use of the goods purchased as raw materials in the manufacture of goods and sale, of manufactured goods were required to be inside Delhi, and, therefore, if the assessees resold the :.goods outside Delhi or used them as, raw materials in manufacture outside Delhi, or even if the manufacture was inside Delhi, sold the goods manufactured, outside Delhi, there was utilisation of the goods by the assessees for a purpose other than that for which they were purchased and hence the, Second Proviso to section 5 (2) (a) (ii) was attracted and the price of the goods purchased was liable to be included in the taxable turnover of the assessees.
The question which arises for determination in the appeals is whether this view 'taken by the Taxing Authorities and approved by the High Court of Delhi in Fitwell Engineers ' case is correct and can be sustained.
We may first examine the scheme of the relevant provisions of the Act in so far as it bears on the present controversy.
Every dealer, whose gross turnover exceeds the taxable quantum is liable to pay tax on sales effected by him after a specified date and while he is liable to pay tax, he cannot carry on business unless he gets himself registered and possesses a registration certificate.
Though his liability to tax is deter mined by reference to his gross turnover, whether it exceeds the taxable quantum or not, tax is leviable on him only in respect of his taxable turnover.
*The concept of taxable turnover is different from that of gross turnover and to compute taxable turnover of a dealer, certain deductions are required to be made from his gross turnover and one of the deductions is that set out in section 5 (2) ( a) (ii).
What is Permitted to be deducted under this provision is turnover on sales by a registered dealer of goods of the class or classes specified in his certificate of registration as being intended for resale by him or for use by him as raw materials in the manufacture of goods for sale.
This deduction is allowed with reference to the intended end use of the goods, namely, that they will be resold or they will be used as raw materials in the manu facture of goods for sale, according as they are purchased for one purpose or the other.
But in view of the innumerable transactions that May be entered into by the dealers, it would be well nigh impossible for the taxing authorities to ascertain in each case whether the the goods were purchased as being intended for resale or for use as raw materials in the manufacture of goods for sale and hence the the First Proviso was enacted qualifying the substantive provision by saying that the turnover the sale covered by the terms of section 5 (2) (a) (ii).
would be 108 deductible only if "a declaration duly filled in and signed by the registered dealer to whom the goods are sold and containing the prescribed particulars on a prescribed form is furnished" by the selling dealer.
The result is that a dealer cannot get deduction in respect of the turnover of his sales falling within section 5 (2) (a) (ii) unless he furnishes a declaration containing the prescribed particulars on the prescribed form duly filled in and signed by the purchasing dealer.
The form of declaration prescribed under Rule 26 as it stood upto 29th March, 1973 contained an expression of intention of the purchasing dealer to resell the goods purchased or to use them as raw materials in the manufacture of goods for sale.
Such declaration given by the purchasing dealer to the dealer selling the goods would afford evidence that the goods were purchased by the purchasing dealer "as being intended for resale by him or for use by him as raw materials in the manufacture of goods for sale".
The dealer selling the goods would be granted deduction in respect of the sales on the strength of such declaration given by the purchasing dealer.
The requirement of such declaration as condition of deduction is clearly intended to prevent fraud and promote administrative efficiency.
[Vide Kedarnath Jute Mfg. Co. Ltd. vs Commercial Tax Officer(1).] But what would be the position if the purchasing dealer does not act according to the intention expressed by him in the declaration given to the selling dealer and in the one case, does not resell the goods and in the other, does not use them as raw materials in the manufacture of goods for sale.
The selling dealer is granted deduction in respect of the sales made by him because the goods are purchased for resale or for use as raw materials in the manufacture of goods for sale and this intended and use of the goods purchased is sought to be ensured by taking a declaration in the prescribed form from the purchasing dealer.
But if the goods are utilised by the purchasing dealer for some other purpose contrary to the intention expressed by him in the declaration, the object and purpose of giving deduction to the selling dealer would be defeated.
Even so, it would not be right to withdraw the deduction.
granted to the selling dealer because that would be penalising the selling dealer for a breach of faith committed by the purchasing dealer.
The legislative wrath should in all fairness fall on the purchasing dealer and that is why the Second Proviso has been introduced in the Act by Delhi Amendment Act 20 of 1959.
The object of the Second Proviso is to ensure that the intention expressed by the purchasing dealer in the declaration given by him is carried out and he acts in conformity with that intention.
Where the purchasing dealer gives a declaration of intention to resell the goods purchased or to use them as raw materials in the manufacture of goods for sale, he must act in accordance with that intention, because it is on the basis of that intention that deduction is allowed,to the selling dealer and if he does not carry out that intention and utilises the goods for any other purpose, it stands to reason that the tax which is lost to the Revenue by reason of deduction granted to the selling dealer should be recoverable from him, that is, the purchasing dealer.
If no deduction were granted to the selling dealer, he would be liable to (1) 16 S.T. Cases, 607.
109 pay tax on the sale made by him and ultimately the incidence of that tax would be passed on to the purchasing dealer, but by reason of deduction allowed to the selling dealer, the purchasing dealer escapes this incidence of tax and, therefore, the Second Proviso 'enacts that where the purchasing dealer acts contrary to the intention declared by him, the selling dealer shall not be penalised for the sin of the purchasing dealer and he shall continue to have his deduction, but the price of the goods purchased shall be included in the taxable turnover of the purchasing dealer.
The Second Proviso is thus intended to provide the consequence of the purchasing dealer not complying with the statement of intention expressed in the declaration given by him to the selling dealer under the First Proviso.
This is broadly the scheme and intendment of section 5 (2) (a) (ii) and its two Provisos read in the context of the other provisions of the Act.
Now, the first question that arises for consideration is whether 'resale ' in section 5 (2) (a) (ii) and the, Second Proviso means resale any where without any geographical limitation or it is confined only to resale inside Delhi.
The contention of the Revenue was that though the words "inside the Union Territory of Delhi" are not to be found in section 5 (2) (a) (ii) and the Second Proviso, they must be read in these provisions as a matter of construction and three reasons were given in support of this contention.
The first reason was that if resale outside Delhi were held to be within the terms of section 5 (2) (a) (ii) and the Second Proviso, the Union Territory of Delhi would lose tax altogether in cases where the goods were resold outside Delhi, because in that event the first sale would escape tax by reason of the deduction granted under section 5 (2) (a) (if) and the resale would also be free from tax since, it is outside Delhi and hence covered by the exempting provision contained in section 27.
The Legislature could never have intended to bring about such a result where the Union Territory of Delhi would be deprived altogether of tax.
The intention of the Legislature was to recover tax at only one point whilst the goods were in the stream of trade and the Legislature, therefore, granted deduction in respect of the first sale on the basis that it would be levying tax when the goods were resold and that postulated the requirement that the resale should be inside Delhi.
Secondly it was urged that the Legislature had no legislative competence to tax sale outside Delhi and moreover, by reason of section 27 sale outside Delhi was taken out of the purview of the Act and resale within the meaning of section 5 (2) (a) (ii) and the Second Proviso could not, therefore, possibly include resale outside Delhi.
The last argument was that the words 'by him following upon the word 'resale ' in section 5 (2) (a) (ii) and the Second Proviso clearly indicated that the resale contemplated under these provisions was resale by the purchasing dealer as registered dealer and since the concept of registered dealer has relation only to sale inside Delhi, the resale must be within the territory of Delhi.
We do not think there is any substance or validity in these arguments and we see no cogent or compelling reasons to add the words "inside the Union Territory of Delhi" to qualify 'resale ' in section 5 (2) (a) (ii) and the Second Proviso.
110 Now, if there is one principle of interpretation more well settled than any other, it is that a statutory enactment must ordinarily be construed according to the plain natural meaning of its languageand that no words should be added, altered or modified unless it is plainly necessary to do so in order to prevent a provision from beingunintelligible, absurd, unreasonable, unworkable or total irreconcilable with the rest of the statute.
This rule of literal construction is, firmly established and it has received judicial recognition in numerous cases.
Crawford in his book on "Construction of Statutes" (1940 ed.) at page 269 explains the rule in the following terms: "Where the statute 'section meaning is clear and explicit, words cannot be interpolated.
In the first place, in such a case they are not needed.
If they should be interpolated, the statute would more than likely fail to express the legislative intent as the thought intended to be conveyed might be altered by the addition of new words.
They should not be interpolated even though the remedy of the statute would thereby be advanced, or a more desirable or just result would occur.
Even where the meaning of the statute is clear, and sensible, either with or without the omitted word, interpolation is improper, since the primary source of the legislative intent is in the language of the statute." Lord Parker applied the rule, in R. vs Dakes(1) to: construe "and", as "or" in section 7 of the Official Secrets Act, 1920 and stated "It seems to this Court that where the literal reading of a statute, and a penal statute, produces an intelligible result, clearly there is no ground for reading in words or changing words according to what may be the supposed intention of Parliament.
But here we venture to think that the result is unintelligible." Lord Reid also with great clarity and precision which always characterise his judgments enunciated the rule as follows in Federal Steam Navigation Co. Ltd. vs Department of Trade and Industry(2) : "Cases where it has properly been held that a word can be struck out of a deed or statute and another substituted can as far as I am aware be grouped under three heads : where without such substitution the provision is unintelligible or absurd or totally unreasonable where it is unworkable and where it is totally irreconcilable with the plain intention shown by the rest of the deed or statute.
" This rule in regard to reading words into a statute was also affirmed by this Court in several decisions of which we may refer only to one, namely, Naraynaswami vs Pannerselvam & Ors.(3) where the Court pointed out that: (1) (2) (3) ; 111 ". addition to or modification of words used in statutory provision is generally not permissibly but " courts may depart from this rule to avoid a patent absur dity.
" Here, the word used in section 5 (2) (a) (ii) and the Second Proviso is 'resale ' simpliciter without any geographical limitation and according to its plain natural meaning it would mean resale any where and not necessarily inside Delhi.
Even where the purchasing dealer resells the goods outside Delhi, he would satisfy the requirement of the statutory provision according to its plain grammatical meaning.
There are no words such as 'inside the Union Territory of Delhi ' qualifying 'resale ' so as to limit it to resale within the territory of Delhi.
The argument urged on behalf of the Revenue requires us to readsuch limitative words in section 5 (2) (a) (ii) and the Second Proviso.
The question is whether there is any necessity or justification for doing so? If 'resale is construed as not confined to the territory of Delhi, but it may take place any where, does section 5 (2) (a) (ii) or the Second Proviso lead to a result manifestly unintelligible, absurd, unreasonable, unworkable or irreconcilable with the rest of the Act ? Is there any compulsive necessity to depart from the rule of plain and natural construction and read words of limitation in section 5 (2) (a) (ii) and the Second Proviso when such words have been omitted by the law giver ? We do not think so.
It may be pointed out in the first place that the Legislature could have easily used some such,words as "inside the Union Territory of Delhi" to qualify the word 'resale ', if its intention was to confine resale within the territory of Delhi, but it omitted to do what was obvious and used the word 'resale ' without any limitation or qualification, knowing full well that unless restriction were imposed as to situs, 'resale would mean resale any where and not merely inside the territory of Delhi.
The Legislature was enacting a piece of legislation intended to levy tax on dealers who are laymen and we have no doubt that if the legislative intent was that 'resale ' should be within the territory of Delhi and not outside, the.
Legislature would have said so in plain unambiguous language which no laymen could possibly misunderstand.
It is a well settled rule of interpretation that where there are two expressions which might have been used to convey a certain intention, but one of those expressions will convey that intention more clearly than the other, it is proper to conclude that, if the legislature used that one of the two expressions which would convey the intention less clearly, it does not intend to convey that intention at all.
We may repeat what Pollock C. B. said in Attorney General vs Sillen(1) that "If this had been the object of our legislature, it might have been accomplished by the simplest possible piece of legislation; it might have been expressed in language so clear that no human being could entertain a doubt about it".
We think that in a taxing statue like the present which is intended to tax the dealings of ordinary traders, if (1) (1964) 2 W & C 431 at 526. 112 the intention of the legislature were that in order to qualify a sale of goods for deduction, 'resale ' of it must necessarily be inside Delhi, the Legislature would have expressed itself clearly and not left its intention to be gathered by doubtful implication from other provisions of the Act.
The absence of specific words limiting 'resale ' inside the territory of Delhi is not without significance and it cannot be made good by aprocess of judicial construction, for to do 'so would be to attribute to the legislature an intention which it has chosen not to express and to usurp the legislative function.
It is true that the Legislature had no legislative competence to tax sale outside the territory of Delhi and section 27 also in clear and explicit terms exempts sale outside the territory of Delhi from liability to tax under the Act, but we fail to see how this circumstance can require us to construe 'resale ' in section 5 (2) (a) (ii) and the Second Proviso as excluding resale outside the territory of Delhi.
It is obvious that resale is subsequent sale after the first and it must, therefore, have the same meaning as ' sale ' defined in section 2(g).
The definition of 'sale ' in section 2(g) is a general definition which does not limit it to a sale inside the territory of Delhi.
Even a sale outside the territory of Delhi is within the coverage of the definition.
That is why section 27 provides that nothing in the Act or the rules made thereunder shall be deemed to impose or authorise imposition of a tax on any sale outside the territory of Delhi.
This provision was introduced to bring the Act into conformity with Article 286 of the Constitution.
Therefore, for the purpose taxability only 'sale outside the territory of Delhi would be excluded from the scope and purview of the Act.
But section 5 (2) (a) (ii) does not seek to impose any tax on resale.
What it does is to provide deduction in respect of sale to a registered dealer provided the condition is satisfied that the goods purchased are of the class or classes specified in the certificate of registration of the purchasing dealer as being intended for resale by him and a declaration is given by the purchasing dealer that he has purchased the same for resale.
Undoubtedly, where the purchasing dealer does not act in conformity with the intention expressed by him and utilises the goods for any other purpose, he becomes liable to tax under the Second Proviso, but even there, what is taxed in his hands is the price of the goods purchased by him, that is, the turnover exempted in the hands of the selling dealer and not the turnover of resale made by him.
It is still the first sale made by the selling dealer which is taxed and not the resale made by the purchasing dealer.
Thus there is no tax sought to be imposed on the resale under section 5 (2) (a) (ii) or the Second Proviso, but resale is made a condition of granting deduction in respect of the first sale.
It is, therefore, difficult to see how lack of legislative competence on the part of the Legislature to tax sale outside Delhi or exemption from tax provided to sale outside Delhi under section 27 can operate to cut down the plain meaning of resale ' so as to exclude resale outside Delhi.
The Revenue placed some reliance on the words 'by him ' following upon 'resale ' in section 5(2) (a) (ii) and the Second Proviso for the purpose of contending that the resale contemplated there is resale by 113 the purchasing dealer, as a registered dealer and since a registered dealer is a dealer who carries on business in Delhi and whose liability to tax is determined by reference to his gross turnover in Delhi, resale by him must be resale within the territory of Delhi.
But this contention has no merit and the utmost that can be said about it is that it raises a point that has position, but no magnitude.
The words 'by him ' are merely descriptive of the purchasing dealer and they are introduced merely with a view to emphasizing that the goods must be resold by the same person who has purchased them.
It is clear from the scheme of the Act that a dealer who carries on business of selling goods in the territory of Delhi and who is liable to pay tax under section 4 of the Act is required to be registered and he must possess a registration certificate.
If such a dealer purchases goods of the class or classes specified in his certificate of registration on furnishing a declaration that the same are intended for resale "by him, the sale to him would be exempt from tax and hence he would not have to pay any amount by way of tax to the selling dealer.
But then the goods must be resold by the purchasing dealer himself and, in case of such resale the requirement of the statutory provision as well as the declaration would be satisfied and there will be no breach of the statement of intention contained in the declaration.
The emphasis which is sought to be added by the words 'by him ' is that the goods must be resold by the same person who has purchased them, namely, the purchasing dealer.
It would be straining the language of the enactment too much to say that the words 'by him ' are intended to mean 'by him as a registered dealer '.
Moreover, it may be noted that though a registered dealer has to be a person who carries on business of selling goods in the territory of Delhi.
there is no requirement of law that a registered dealer must effect sales only in Delhi and not outside.
There is nothing in the Act which prohibits a registered dealer from selling goods outside Delhi.
If a registered dealer can effect sales outside Delhi it is impossible to see how, by any stretch of reasoning, the words 'by him ' can be pressed into service for the, purpose of resting 'resale to that inside Delhi.
We fail to see any reason why the word 'resale ' in section 5 (2) (a) (ii) and the Second Proviso should not be construed according to its plain natural meaning to comprehend resale taking place any where without any limitation as to situs and it should be read as referring only to resale inside, Delhi as if the words 'inside the Union Territory of Delhi ' were added by way of limitation or restriction.
Even without such words and reading the statutory provision according to its plain natural sense as referring to resale, irrespective whether it is inside or outside Delhi, section 5 (2) (a) (ii) and the Second Proviso do not become absurd unintelligible, unworkable or unreasonable, nor is it possible to say that they come into conflict with any other provision of the Act.
We have already explained the scheme of section 5 (2) (a) (ii) and its two provisos and, even on the view that 'resale means resale any where and not necessarily inside Delhi, they enact a statutory provision which is quite intelligible, reasonable and workable.
The selling dealer is granted deduction in respect of sale to a registered dealer where the goods purchased are of the class or classes specified 114 in the certificate of registration of the purchasing dealer as being intended for resale by him and the purchasing dealer gives a declaration that the goods are purchased by him for resale.
So long as the goods are required by the purchasing dealer for resale, whether inside or outside Delhi, the sale to the purchasing dealer is exempted from tax.
It is true that if the purchasing dealer resells the goods outside Delhi, the Union Territory of Delhi would not be able to recover any tax since the sale to the purchasing dealer would be exempt from tax under section 5(2) (a) (ii) and the resale by the purchasing dealer would also be free from fax by reason of section 27.
But that is not such a consequence as would compel us to read the word 'resale ' as limited to resale inside Delhi.
The argument of the Revenue was that the Legislature could never have intended that the Union Territory of Delhi should be altogether deprived of tax in cases of this kind.
The legislative intend could only be to exempt the sale to the purchasing dealer in those cases where the Union Territory of Delhi would be able to recover tax on resale of the goods by the purchasing dealer.
The goods must be taxed at least at one point and it could not have been intended that they should not be taxable at all at any point by the Union Territory of Delhi.
The Revenue urged that it was for the purpose of taxing the goods at least at one point that the Second Proviso was enacted by the Legislature.
We do not think this contention based on the presumed intention of the Legislature is.
well founded.
It is now well settled that when the court is construing a statutory enactment, the intention of the Legislature should be gathered from the language used by it and it is not permissible to the court to speculate about the legislative intent.
Some eighty years ago, as far back as 1897, Lord Watson said in an oft quoted passage in Saloman vs Saloinan & Co. Ltd.(1) " 'The intention of the legislature ' is a common but very slippery phrase, which, popularly understood, may signify anything from intention embodied in positive enactment to speculative opinion as to what the legislature probably would have meant, although there has been an omission to enact it.
In a court of law or equity, what the legislature intended to be done or not to be done can only be legimately ascertained from that which it has chosen to enact, either in express words or by reasonable and necessary implication.
" The same view was echoed by Lord Reid in Black Clawson International Ltd. vs Papierwerke Waldh of Aschaffenburg "We often say that we are looking for the intention of Parliament, but that is not quite accurate.
We are seeking the meaning of the words which Parliament used.
We are seeking not what Parliament meant but the true meaning of what they said.
" (1) ; , at 38, (2) ; , at 814.
115 If the language of a statute is clear and explicit, effect must be given to it for in such a case the words best declare the intention of the law giver.
It would not be right to refuse to place on the language of the statute.
the plain and natural meaning which it must bear on the ground that it produces a consequence which could not have been in tended by the legislature.
It is only from the language of the statute that the intention of the Legislature must be gathered, for the legislature means no more and no less than what it says.
It is not permissible to the Court to speculate as to what the Legislature must have intended and then to twist or bend the language of the statute to make it accord with the presumed intention of the legislature.
Here, the language employed in section 5 (2) (a) (ii) and the Second Proviso is capable of bearing one and only one meaning and there is nothing in the Act to show that the legislature exempted the sale to the purchasing dealer from tax on the hypothesis that the Union Territory of Delhi would be entitled to tax the resale by the purchasing dealer.
The intention of the legislature was clearly not that the Union Territory of Delhi should be entitled to tax the goods at least at one point so that if the sale to the purchasing dealer is exempt, the resale by the purchasing dealer should be taxable.
We do not find evidence of such legislative intent in any provision of the Act.
On the contrary, it is very clear that there are certain categories of resales by the purchasing dealer which are admittedly free from tax.
If, for example, the purchasing dealer resells the goods within the territory of De1hi, but such resale is in the course of inter State trade or commerce, or in the course of export out of the territory of India, it would be exempt from tax and yet, even on the construction.suggested on behalf of the Revenue, the sale to the purchasing dealer would not be liable to tax.
Both the sale as well as the resale would be free of tax even if the word 'resale ' were read as limited to resale inside the territory of Delhi.
Then again, take a case where the resale by the purchasing dealer, though inside the territory of Delhi, falls within section 5 (2) (a) (v).
The resale in such a case would be exempt from tax and equally so would be the sale.
So also the resale would not be taxable if it falls within Rule 29 and in that case too the sale as well as the resale would both be exempt from tax.
it will, therefore, be seen that it is not possible to discover any legislative intent to tax the goods at least at one point and to exempt the sale to the purchasing dealer only if the resale by the purchasing dealer is liable to tax.
The Second Proviso too does not support any such legislative intent, for in the event there contemplated, namely, where the purchasing dealer utilises the goods for any purpose other than 'resale ', what is taxed in the hands of the purchasing dealer is not the resale, by him but the sale to him and that is done not with a view to ensuring that the goods must suffer tax at least at one point, but because the purchasing dealer having committed a breach of the intention expressed by him in the declaration, on the basis of which exemption is granted to the selling dealer, he should not be, allowed to profit from his own wrong and to escape the amount of tax on the sale.
We do not, in the circumstances, see any cogent or, compelling reason for reading the words 'inside the Union Territory of Delhi ' after 'resale ' in section 5(2)(a)(ii) and the Second Proviso.
116 It must also be remembered that section 5(2)(a)(ii) and the Second Proviso occur in a taxing statute and it is a well settled rule of interpretation that in construing a taxing statute "one must have regard to the strict letter of the law and not merely to the spirit of the statute or the substance of the law".
The oft quoted words of Rowlett, J., in Cape Brandy Syndicate vs Inland Revenue Commissioner(1) lay down the correct rule of interpretation in case of a (fiscal statute : "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 a tax.
Nothing is to be read in, nothing is to be implied.
One can only look fairly at the language used".
It is a rule firmly established that "the words of a taxing Act must never be stretched against a tax payer".
If the legislature has, failed to clarify its meaning by use of appropriate language, the benefit must go to the tax payer.
Even if there is any doubt as to interpretation, it must be resolved in favour of the subject.
We would, therefore, be extremely loathe to add in section 5(2)(a) (ii) and the Second Proviso words which are not there and which, if added, 'would have the effect of imposing tax liability on the purchasing dealer.
Moreover, it may not noted that if the purchasing dealer resells the goods outside Delhi, then, on the construction contended for on behalf of the Revenue, he would be liable to include the price of the goods paid by him in his return of taxable turnover and pay tax on the basis of such return and if he fails to do so, he would expose himself to penalty, through he has complied literally with the declaration made by him.
We find that in fact a penalty of Rs. 2 lacs has been imposed on the assessees in Civil Appeal No. 1085 of 1977 for not including the price of the goods purchased by them in their return of taxable turnover and paying tax on the basis of such return.
It would be flying in the face of well settled rules of construction of a taxing statute to read the words 'inside the Union Territory of Delhi ' in section 5(2)(a)(ii) and the Second Proviso, when the plain and undoubted effect of the addition of such words would be to expose a purchasing dealer to penalty.
It is also significant to note that if the words 'inside the Union Territory of Delhi ' are to be read after 'resale ' in section 5(2)(a)(ii) and the Second Proviso, they would also have to be read in the prescribed form of the declaration to be given by the purchasing dealer.
But we fail to see how any such words can be read in a declaration of intention which refers to resale simpliciter without any restriction as to place.
When a declaration of intention in the prescribed for without the words 'inside the Union Territory of Delhi ' is given by the purchasing dealer at the time of purchase, how can these words be read in the declaration when they are not there.
It might be permissible to read such words in a statutory Provision like section 5 (2) (a) (ii) and the Second Proviso, but we fail to see how such 'Words can be read in a declaration of intention furnished by a purchasing dealer.
It may also be pointed out that the Act in the present case was originally enacted by the Bengal Legislature in 1941 and it was (1) [1921] 1 k.
B. 64. 117 applied in Delhi with certain modifications by the Central Government (in 28th April, 1951.
The Act was: thus in operation prior to 15th August 1947 in Bengal and thereafter in 'West Bengal for an aggregate period of about ten years before it was made applicable to Delhi.
It was not disputed on behalf of the Revenue that during this period the Department administered the provision of section 5(2)(a)(ii) on the basis that 'resale ' was not confined to resale inside the State of Bengal or West Bengal, as the case may be, but it also included outside State resale.
When the Central Government applied the Act to the territory of Delhi, it must be presumed to be aware of this, interpretation which had been placed on section 5(2)(a)(ii) by the Revenue in the State of West Bengal.
Even so, the Central Government, whilst it made several other modifications in the Act while applying it to the territory of Delhi, did not add the words 'inside the Union Territory of Delhi ', to qualify 'resale '.
Then again, it was common ground that at least for a few years after the Act was made applicable to the territory of Delhi, the Revenue interpreted 'resale ' in section 5 (2) (a) (ii) to mean resale any where and not necessarily inside the territory of Delhi and administered the law on the basis of such interpretation.
It is, no doubt, true that the view of the Department as to the meaning of a statute which is administered by them is not admissible as an aid to construction because wrong practice does not make the law, but, as pointed out by Maxwell in his well known work on 'The Interpretation of Statutes ' (12th ed.) at page 264 : " the long acquiescence of the legislature in the interpretation put upon its enactment by notorious practice may, perhaps, be regarded as some sanction and approval of it".
The circumstance that for long years the Legislature did not intervene to amend the law by adding the words 'inside the Union Territory of Delhi ' in section 5(2)(a)(ii) even though the Revenue was continually administering the law on the basis that 'resale ' in section 5(2)(a)(ii) means resale any where and not necessarily inside the territory of Delhi and acquiescence in this interpretation placed by the Revenue is a circumstance which does throw some little light on the intention of the Legislature and indicates that the Legislature did not intend to restrict resale to the territory of Delhi.
Similarly, for the same reasons which we need not repeat again, 'manufacture ' and 'sale ' in section 5(2)(a)(ii) and the Second Proviso mean manufacture and sale any where without any geographical limitation and neither 'manufacture ' nor 'sale ' is restricted to the territory of Delhi.
There are no words like 'inside the Union Territory of Delhi ' to qualify ' manufacture ' or 'sale ' and there is no cogent or compelling reason for reading such words in section 5(2)(a)(ii) and the Second Proviso.
The use of the goods purchased as raw materials in the manufacture of goods may, therefore, take place any where and not necessarily inside Delhi and equally the sale of the goods so manufactured may be effected any where, whether inside or outside Delhi.
The only end use of the goods purchased required to be made for attracting the applicability of section 5(2)(a)(ii) is that the goods must be utilised by the purchasing dealer as raw materials in the manufacture of goods and 118 the goods so manufactured must be sold, irrespective whether the manufacture or sale takes place inside Delhi or outside.
If the purchasing dealer does not use the goods purchased as raw materials in the manufacture of goods or having manufactured the goods does not sell them, he would commit a breach of the intention expressed by him in the declaration furnished to the selling dealer and the Second Proviso would immediately be attracted and the price of the goods purchased by him would be liable to be included in his taxable turnover.
But so long as he carries out the intention expressed in the declaration and uses the goods purchased as raw materials in the manufacture of goods, whether inside or outside Delhi, and sells the goods so manufactured in Delhi or outside, he would not tall within the Second Proviso and the sale to him would not be taxable in his hands.
The subsequent history of the Act also supports the construction which we are inclined to place on section 5 (2) (a) (ii) and the Second Proviso.
Section 5(2)(a)(ii) was amended with effect from 28th May, 1972 by Finance Act, 1972 and the words 'in the Union Territory of Delhi ' were added after the word 'manufacture ' so as to provide that manufacture should be inside the territory of Delhi.
It was also provided by the amendment that the sale of manufactured goods should be inside Delhi or in the course of inter State trade or commerce or in the course of export outside India.
This amendment clearly excluded manufacture of goods as also sale of manufactured goods outside Delhi.
It is clear from the statement of objects and reasons that this amendment was not introduced by Parliament ex abundant cautela, but in order to restrict the applicability of the exemption clause in section 5(2)(a)(ii).
The statement of objects and reasons admitted in clear and explicit terms that "at present sales of raw materials in Delhi are exempted from tax irrespective of the fact whether the goods manufactured therefrom are sold in Delhi or not.
It is, therefore, made clear that sales of raw materials will be tax free only when such sales are made by those who manufacture in Delhi taxable goods for sale.
" It is obvious that under section 5(2)(a)(ii), as it stood prior to the amendment, the exemption was available to the selling dealer even if the purchasing dealer used the goods purchased as rawmaterials in manufacture outside Delhi, or having manufactured the goods, sold them outside Delhi.
That is why Parliament amended section 5(2)(a)(ii) with a view to restricting manufacture as well as sale inside the territory of Delhi.
It is of ' course true that a parlia mentary assumption may be unfounded and an amendment may proceed on an erroneous construction of the statute and, therefore, it cannot alter the correct interpretation to be placed upon the statute; but if there is any ambiguity in the statute, the subsequent amendment can certainly be relied upon for fixing the proper interpretation which is to be put upon the statute prior to the amendment.
The amendment made in section 5(2) (a)(ii) read with the 119 statement of objects and reasons thus clearly supports the construction that under the unamended section manufacture as well as sale could be any where and not necessarily inside the territory of Delhi.
It is also significant to note that though Parliament amended section 5(7)(a)(ii) for restricting manufacture as well as sale to the territory of Delhi, it did not carry out any amendment in the section with a view to limiting resale in the same manner by the addition of some such words as 'in the Union 'Territory of Delhi ' or 'inside Delhi '.
This clearly evinces parliamentary intent not to insist upon resale being restricted to the territory of Delhi.
It is a circumstance which lends support to the view that 'resale ' in section 5(2)(a)(ii) and the Second Proviso meant resale outside as well as inside Delhi.
We must, therefore, reach the conclusion that during the relevant assessment years, 'resale ' within the meaning of section 5(2)(a)(ii) and the Second Proviso was not confined to the territory of Delhi, but also included resale outside the territory of Delhi and similarly, for the period upto 28th May, 1972 when section 5(2)(a)(ii) was amended by Finance Act, 1972 'manufacture and 'sale ' contemplated by the section were not restricted to the territory of Delhi but could also be outside.
There was no geographical limitation confining 'resale ', 'manufacture ' or 'sale ' to the territory of Delhi.
On this construction, the Second Proviso would be attracted only if the purchasing dealer, in the former case, did not resell the goods at all and in the latter case, did not use them as raw materials in the manufacture of goods, or even if he manufactured the goods, failed to sell them and thus utilised the goods purchased for a purpose different from that for which they were purchased.
Now, the burden of proving that the goods purchased were utilised by the purchasing dealer for a different purpose would be on the Revenue if the Revenue wants to include the price of the goods purchased in the taxable turnover of the purchasing dealer, and it would, therefore.
be for the Revenue to show in a given case that the goods purchased were utilised by the purchasing dealer for a different purpose, that is, where he purchased the goods for resale, he did not resell them and where he purchased the goods for use by him as raw materials in the manufacture of goods for sale, he either did not use them as raw materials in the manufacturer of goods, or even if he did so, the goods manufactured were not sold by him.
Here in the present appeals, the assessees were purchasing dealers and in some of the cases, they purchased goods for resale and in others, for use as Taw materials in the manufacture of goods for sale.
This intention of the assessees was evidenced by the declarations given by them to the selling dealers at the time of purchase of the goods.
On the view taken by us, it was immaterial where the assessees who purchased goods for resale, resold them inside Delhi or outside : in either case the Second Proviso would not be applicable and the assessees would not be liable to be taxed on the price of the goods purchased by them.
Equally, for the period.upto 28th May, 1972, it did not make any difference whether the assessees, in those cases 120 where they purchased goods for use as raw materails in the manufacture of goods for sale used them as raw materials inside Delhi or out side, or having manufactured the goods, sold them inside or outside Delhi, for in either case the Second Proviso would not be attracted and the price of the goods purchased by them would not be includable in their taxable turnover.
The burden of showing that the assessese utilised the goods purchased for any other purpose that is, for a purpose different from that for which the goods were purchased as evidenced by the declaration, would be on the Revenue and the Revenue may discharge this burden by calling upon the assessees to produce evidence to show, in one case that the goods were resold by them, and in the other, that the goods were used by them as raw material in the manufacture of goods and the goods so manufactured were sold.
This would be a fact exclusively within the knowledge of the assessees and it the assessees do not produce sufficient evidence to establish this fact, it might be legitimate for the Revenue to raise an inference that the assessees did not utilise the goods for the purpose for which they were purchased, but utilised them for 'any other purpose? '.
The question still.
remains in regard to the taxability of the assessees under the Second Proviso subsequent to 28th May, 1972 in cases where the goods were purchased for use as raw materials in the manufacture of goods for sale, because some of the appeals relate to the assessment year 1972 73 which comprises the period from 28th May, 1972 to 31st March, 1973.
We have already pointed out that on 28th May, 1972, section 5(2)(a)(ii) was amended by Finance Act, 1972 and the words 'in the Union Territory of Delhi ' were added after the word 'manufacture ' and the words 'inside Delhi after the word 'sale '.
It is clear from this amendment that from and after 28th May 1972, sale of goods was exempted from tax only if the goods were purchased by the purchasing dealer "as being intended for use by him as raw materials in the manufacture in the Union Territory of Delhi of goods for sale inside Delhi".
Both 'manufacture ' and ; 'sale ' were now required to be in the territory of Delhi and not outside.
But the form of the declaration to be, given by the purchasing dealer ' to the selling dealer, as prescribed in Rule 26, was not amended until 29th March, 1973 with a view to bringing it in conformity with the amended section 5 (2) (a) (ii).
The result was that from 28th May, 1972 to 29th March, 1973 the form of the declaration continued to be the same as before and carried the statement that the goods were purchased by the purchasing dealer "for use by him as raw matinal in the manufacture of goods for sale" without any restriction as to place of manufacture or sale and this was the form in which declarations were given by the, assessees to the selling dealers when they purchased the goods.
The declarations given by the assessees did not state that the goods were purchased for use by them as raw materials in the manufacture in the territory of Delhi of goods for sale inside Delhi, since that was not the prescribed form and the First Proviso required that the declaration should be given only on the prescribed form.
Now, if the declarations given by the assessees stated the purpose of purchase of goods to be used as raw materials in the manufacture of goods for sale and did not specify that the manufacture and 121 sale will be inside the territory of Delhi, it is difficult to see how the assessees could be said to have utilised the goods for "any other purpose" if they used the goods as raw materials in manufacture outside Delhi or sale the goods manufactured outside Delhi.
Even if they manufactured goods outside Delhi and sold the goods so manufactured outside Delhi, the use by them of the goods purchased would be for the purpose stated in the declarations and it would not be right to say that they utilised the goods for any other purpose.
The problem can also be looked at from another point of view and that too yields the same conclusion.
We may assume for the purpose of argument that since the words 'in the Union Territory of Delhi ' and 'inside Delhi ' were added after 'manufacture? and 'sale ' respectively section 5 (2) (a) (ii), a similar amendment may also be taken to have been effected in the Second Proviso and we may read there the words 'in the Union Territory of Delhi ' after the word 'manufacture ' and the words 'inside Delhi ' after the word 'sale '.
What the Second Proviso, on this construction, postulates in that the goods must be purchased by the purchasing dealer as being intended for use by him as raw materials in the manufacture 'in the territory of Delhi ' of goods for sale 'inside Delhi '.
But the declarations given by the assessees being in the unmended form, it would not be possible to say that the goods were purchased by the assessees as being intended for use as raw materials in the manufacture, 'in the territory of Delhi ' of goods for sale 'inside Delhi '.
The condition for the applicability of the Second Proviso was, therefore clearly not satisfied and the Second Proviso could not be invoked for including the price of the goods purchased in the taxable turnover of the assessees.
Even if we take the view that by reason of the amendment of section 5 (2) (a) (ii) the form of the declaration also stood amended, though in fact no amendment was made in it until 29th March, 1973, it would not help the Revenue, because in that case the declarations given by the assessees to the selling dealers could not be said to be on the prescribed form and in terms of section 5 (2) (a) (ii) and the consequence of that would be that the selling dealers would be disentitled to exemption under section 5 (2) (a) (ii) and not that the price of the goods purchased would be includable in the taxable turnover of the assessees.
Exemption would be available to the, selling dealers under section 5 (2) (a) (ii) only if they could show that they have obtained proper declarations from the assessees and consequently if the declarations are not on the prescribed form or in terms of section 5 (2) (a) (ii) (on the assumption that they are required to be in conformity with that provision), it is the selling dealers who would be ineligible for exemption and there would be no question of the assessees being made liable to tax under the Second Proviso.
It would not be competent to the assessing authority to read the words 'in the territory of Delhi ' after the word 'manufacture ' and the word inside Delhi after the word "said" in the declaration given by the assessees when these words are conspicuous by their absence and on that basis to grant exemption to the selling dealers and then to seek to impose liability on the assessees under the Second Proviso.
It Is indeed difficult to see how the assessees could be saddled with liability to tax under the Second Proviso when they have literally complied with the statement of intention expressed in the declarations given by them to the selling dealers.
9 211 SCI/78 122 The Revenue strongly relied on the decision of this Court in Modi Spinning and Weaving Mills Co. Ltd. vs Commissioner of Sales Tax, Punjab & Anr.(1) in support of its contention, but we fail to see how this decision can be of any help to the Revenue.
It is necessary to refer briefly to the facts of this case in order to understand the true ratio of Its decision.
The assessment year for which the appellants were being assumed in this case was the financial year 1959 60 and the assessment was being made under the Punjab General Sales Tax Act, 1948.
Section 5(2)(a)(ii) of the Punjab Act, as it stood prior to its amendment, was in material respects identical with the unmended section 5 (2) (a) (ii) of the Delhi Act.
However, it was amended by Punjab Act No. 13 of 1959 by the addition of the words "in the State of Punjab" after the word 'manufacture ' and the amended section applied during the relevant assessment year.
When section 5 (2) (a) (ii) was amended, the rule making authority also simultaneously amended Rule 26 and Form S.T. XXII which was the prescribed form of declaration, by the addition of the same words 'in the State of Punjab '.
The result was that not only was section 5 (2) (a) (ii) amended to make it clear that the manufacture must be in the State of Punjab but also Rule 26 and the form of declaration were also amended so as to provide that the declaration must set but the intention of the purchasing dealer to use the goods purchased in the manufacture 'in the State of Punjab ' of goods for sale.
The appellants gave declarations in the amended form with the word 'in the State of Punjab ' after the word 'manufacture ' against purchases of raw cotton made by them and they ginned the cotton in their ginning mills and sent the bales to their spinning and weaving mills situated in the State of Uttar Pradesh for the purpose of manufacture of cloth.
The question arose whether the price of the raw cotton was liable to be included in the taxable turnover of the appellants under the Second Proviso which was in identical terms with the Second Proviso in the present case.
The principal argument advanced on behalf of the appellants for repelling the applicability of the Second Proviso was that since the certificate of registration held by them was not amended by the addition of the words 'in the State of Punjab ' and there was no condition in it that the goods must be purchased for use in the manufacture 'in the State of Punjab ' of goods for sale, they were not bound to use the cotton purchased in the manufacture of cloth in the State of Punjab and even if they did so outside the State of Punjab, the Second Proviso was not attracted.
The reason why the appellants continued to have the old certificate of registration in the unamended form was that though section 5 (2) (a) (ii) was amended, no corresponding amendment was made in the form of the certificate of registration until 29th September, 1961 long after the expiration of the relevant assessment year.
This argument was, however, rejected by a bench of five Judges of this Court on the ground that it was not right to read the certificate of registration by itself but that "sections 5 and 7 have to be read with Rule 26 and Form S.T. XXII, the declaration" and so read, "the old registration certicate, even though it did not contain the words 'in the State of Punjab ' would stand impliedly modified by the sections and the Rule and Form ST.
XXII operating together".
This Court emphasised that the appel (1) 16 section T. Cases 310.
123 lants had to comply With the Act and the Rules and could not take shelter behind the unamended certificate and the only question which Court had to consider was whether the appellants had complied.
with the Act and the Rules and since the Act and the Rules required that the manufacture must be in the State of Punjab, the appellants, who manufactured cloth, out of the cotton purchased, outside the State of Punjab, could not be said to have complied with the Act and the Rules and hence the Second Proviso was applicable to them.
It would be seen that the only question before the Court was as to what was the effect of absence of the words 'in the State of Punjab ' in the certificate of registration in a case where Rule 26 and Form S.T. XXII were both simultaneously amended along with section 5 (2) (a) (ii) and the declaration on given by the purchasing dealer contained the words 'in the State of Punjab ' after the word 'manufacture ' so that there was a breach of the statement contained in the declaration when the purchasing dealer used the goods purchased in manufacture outside the State of Punjab.
The Court was not concerned with a case where Rule 26 and Form S.T. XXIII continued to stand unamended and the declaration given by the purchasing dealer did not state that the use of the goods purchased in manufacture would be in the State of Punjab, but merely contained a general statement that the goods purchased would be used in the manufacture of goods for sale and the purchasing dealer utilised the goods purchased in manufacture outside the State of Punjab without committing a breach of the statement in the declaration.
That is the case before us and it is entirely different from the case decided by the Court in Modi Spinning & Weaving Mills case (supra).
The decision in Modi Spinning & Weaving Mills case is, therefore, no authority for the proposition that even where the deolara tion is given on the Prescribed form by a purchasing dealer.
which does not contain a statement that the manufacture of goods would be in Delhi or the manufactured goods would be sold in Delhi, this condition should be read into the declaration by the addition of some such words as 'inside Delhi ' after 'manufacture and 'sale, so that if the goods purchased are not used as raw materials in manufacture in Delhi or the goods manufactured are sold outside Delhi, the purchasing dealer could be said to have committed a breach of the statement made in the declaration so as to attract the applicability of the Second Proviso.
We are clearly of the view that such is not the correct legal position and the Second Proviso is not attracted in such a case.
We are conscious that the result of this view which we are taking would be that both the selling dealers as well as the assessees would escape tax even in cases where the assessees have manufactured goods outside Delhi or having manufactured goods, sold them outside Delhi.
But that is an unfortunate result for which the blame must lie fairly and squarely at the door of the administration.
We fail to understand why the administration should not have amended Rule 26 and the form of the declaration until 29th March, 1973, when the amendment in section 5 (2) (a) (ii) was made as far back as 28th May, 1972.
The lethargy and inaction on the part of the administration are inexplicable and it is a matter of regret that the Union Territory of Delhi should have lost a large amount of Revenue entirely due to gross negligence and default on the part of the administration.
124 We may refer to one other contention advanced on behalf of the appellants in Civil Appeals Nos. 17 and 18 of 1975 and 236 and 450 of 1976.
The contention was that what the Second Proviso sought to do, in effect and substance, was to tax purchases made by the purchasing dealer by including the price of the goods purchased in his taxable turnover but this was impermissible because section 4 was the only charging section in the Act and under that section, tax was payable only on sales effected by a dealer and purchases effected by him could not be taxed.
No tax, it was argued, could be levied on purchases effected by a dealer even by resorting to the fiction of deeming them to the sales.
This contention, we are afraid, is rather difficult to appreciate.
We asked the learned counsel appearing on behalf of the appellants in these appeals as to what was the sequester of this contention and whether it was her submission that the Second proviso was void as being outside the legislative competence of the Legislature.
But she frankly conceded that it was not possible for her to challenge the vires of the Second Proviso on ground of lack of legislative competence, because it is competent to the Legislature to impose a tax as much on purchase as on sale.
She, however, urged that in her submission the Second Proviso was inconsistent with section 4 and, therefore no effect should be given to it.
This contention is, in our opinion, wholly unsustainable.
We fail to see how the Second Proviso can be said to be inconsistent with section 4.
It may be pointed out that even if there were some conflict, which we do not think there is, it would have to be reconciled by a harmonious reading of the two sections and it would not be right to adopt a construction which tenders one of the two sections meaningless and ineffectual unless the conflict between the two is so utterly irreconcilable that the Court is driven to that conclusion.
Here we find that section 4 merely imposes liability on a dealer to pay tax if his gross turnover exceeds the taxable quantum.
It is really section 5 which provides for levy of tax and it says that the tax payable by a dealer shall be levied on his 'taxable turnover.
Now, 'taxable turnover ' is a concept entirely different from gross turnover and it is arrived at by making certain additions and deductions to the gross turnover.
Section 5 (2) (a) (ii) provides for a deduction while the Second Proviso speaks of an addition.
Where the conditions of the Second Proviso are satisfied, the price of the goods purchased is to be added to the 'taxable turnover ' of the purchasing dealer and it would then form part of the 'taxable turnover on which the tax is levied.
This provision has been made in order to ensure that the purchasing dealer does not commit a breach of the declaration given by him on the basis of which exemption is given to the selling dealer.
The sale to the purchasing dealer is exempted from tax in the hands of the selling dealer but it is taxed in the hands of the purchasing dealer on account of breach of faith committed by him.
We do not, therefore, see any inconsistency at all between section 4 and the Second Proviso and the contention urged on behalf of the appellants in these appeals must be rejected.
Lastly, it was contended that the resales effected by the branches of the assessees outside Delhi could not be regarded as resales by the assessees within the meaning of section 5 (2) (a) (ii) and the Second 125 Proviso and hence the assessees must be held to have utilised the goods for a purpose different from that for which the goods were purchased, namely, resale by them and the price of the goods purchased must be included in their taxable turnover under the Second Proviso.
But this contention fails to take into account the plain and obvious fact that when the branches of the assessees resell the goods outside Delhi, it is really the assessees who resell the goods, for the branches are not distinct and independent from the, assessees but are merely establishments of the assessees.
Resales effected by the branches are nothing else than resales made by the assessees at the, branches and hence it is not possible to say that when the goods were resold by the branches, the resales were not by the ass so as to attract the applicability of the Second Proviso.
That leaves only one other point and that relates to the imposition of penalty of Rs. two lakhs on the assessees in Civil Appeal No. 1085 of 1977.
This penalty was imposed on the assessees on the ground that they failed to include in the returns filed by them for the period from 8th May, 1972 to 29th March, 1973 the price of the goods purchased by them for use as raw materials in the manufacture of goods for sale and to pay tax on the amount of such price along with the submission of the returns.
There were several grounds on which the imposition of this penalty was challenged on behalf of the assessees, but it is not necessary to refer to all of them, since there is one ground which is, in our opinion sufficient to invalidate the order imposing the penalty.
We have already pointed out that even where the assessees used the goods purchased as raw materials in the manufacture of goods outside Delhi or having manufactured the goods, sold them outside Delhi, there was no breach of the intention expressed by them in the declarations given to the selling dealers and they could not be said to have utilised the goods for any purpose other than that for which they were purchased so as to attract the applicability of the Second Proviso.
Now, if the Second Proviso was not attracted in the case of the assessees even where then, used the goods purchased as raw materials in manufacture outside Delhi or sold the manufactured goods outside Delhi, there could be no obligation on the assessees to include the price of the goods purchased in their returns or to pay tax on the amount of such price along with the returns.
The assessees could.
if at all, be made liable for penalty only if it could be shown that they did not use the goods purchased as raw materials in manufacture of goods or having manufactured the goods, did not sell them but utilised them for any other purpose.
But of this there was no evidence at all before the assessing authority and the order imposing penalty was, therefore, plainly unjustified.
It was based on misconstruction of section 5 (2) (a) (ii) and the Second Proviso and it must, therefore, be quashed and set aside.
We accordingly allow the appeals and the writ petitions, set aside the orders passed by the High Court in Civil Appeals Nos. 1724 of 1974 and 456 of 1976 as also the orders passed by the assessing authority which are impugned in the appeals and the writ petitions and direct the assessing authority whose orders are set aside to pass 126 fresh orders in each case in the light of the above decision given by us.
We may make it clear that the assessee shall not be entitled to reagitate before the assessing authority any other point except that relating to the taxability of the price of the goods purchased by the assessees tinder the Second Proviso.
We also set aside the order passed by the assessing authority imposing penalty of Rs. two lakhs on the assessees in Civil Appeal No. 1085 of 1977.
The respondent will pay the costs of the appellants/petitioners in each appeal and writ petition.
P.H.P. Appeals allowed.
| IN-Abs | Bengal Finance (Sales Tax) Act, 1947 was applied to the Union Territory of Delhi subject to certain modifications by a notification dated 28 4 1951.
Every dealer whose gross turnover exceeds the taxable quantum is liable to pay tax on sales effected by him after a specified date and while he is liable to pay tax, he cannot carry on business unless he gets himself registered and possesses a registration certificate.
The tax is leviable on a dealer in respect of his taxable turnover.
To compute taxable turnover of a dealer, certain deductions are required to be made from his gross turnover and one of the deductions is that set out in section 5(2)(a)(ii).
What is permitted to be deducted under this provision is turnover of sales to a registered dealer of goods of the class or classes specified in his certificate of registration as being intended for resale by him or for use by him as raw materials in the manufacture of goods for sale.
The first proviso enacts that the turnover of sales covered by section 5 (2) (a) (ii) would be deductible only if a declaration duly filled in and signed by the Registered dealer to whom the goods are sold and containing the prescribed particulars in prescribed form is furnished by the selling dealer.
The requirement of such declaration as condition of deduction is clearly intended to prevent fraud and promote administrative efficiency.
The second proviso provides that where any goods specified in the certificate of registration are purchased by a registered dealer as being intended for resale by him or for use by him as raw materials in the manufacture of goods for sale but are utilised by him for any other purpose the price of the goods purchased shall be allowed to be, deducted from the gross turnover of the selling dealer but shall be included in the taxable turnover of the purchasing dealer.
There are broadly two groups in which the appeals and the writ petitions can be divided.
One group consists of appeals where the assessees purchased goods of the class specified in the certificate of registration as being intended for resale by them and furnished to the dealers selling the goods, declarations in the prescribed form stating that the goods were intended for resale kind thereafter resold the goods though not within, the territory of Delhi.
The second group consists of appeals where the assessees Purchased goods of the class specified in the certificate of registration as being intended for use by there.
as raw materials in the manufacture of goods for sale and furnished to the prescribed particulars in prescribed form is furnished by the selling dealer, the dealers selling the goods declarations in the prescribed form stating that the goods were purchased by them for use as raw materials in the manufacture of goods for sale and thereafter used the goods purchased as raw materials in the manufacture of goods, in some cases outside Delhi and in some others inside, but in the after.
sold the goods so manufacturer outside Delhi.
The High Court of Delhi negatived the contention of the assessees that they were not covered by the second proviso to section 5(2) (a) (ii).
The High Court took the view that for the purposes of section 5(2)(a)(ii) and the second proviso, resale of the goods purchased was confined to, resale inside Delhi and so also use of the goods purchased is raw materials in the manufacture of goods and 99 sale of manufactured goods were required to be, inside Delhi and, therefore, if the assessees resold the goods outside Delhi or used them as raw materials in the manufacture outside Delhi, or even if the manufacture was inside Delhi sold the goods manufactured outside Delhi, there was utilisation of the goods by the assessees for a purpose other than that for which they were purchased and hence the second proviso to section 5(2)(a)(ii) was attracted and the price of the goods purchased was liable to be included in the taxable turnover of the assessees The question for consideration was whether "resale" under section 5 (2) (a)(ii) and the second proviso means,resale any where without any geographical limitation or it is confined only to resale inside Delhi.
The Revenue contended (1) the words "inside the Union territory of Delhi" are not to be found in section 5 (2) (a) (ii) and the second proviso but they must be read in these provisions as a matter of construction because (a) if resale outside Delhi were held to be within the terms of section 5(2)(a)(ii) and the second proviso, the Union territory of Delhi would lose tax altogether in cases where the goods were resold outside Delhi.
The intention of the Legislature was to recover tax at only one point while the goods were in the stream of trade.
(b) the Legislature had no legislative competence to tax sale outside Delhi.
Therefore, resale ", 'thin the meaning of section 5(2)(a)(ii) and the second proviso could not possibly include resale outside Delhi.
(c) the words "by him" following upon the word "resale" in section 5(2)(a)(ii) and the second proviso clearly indicated 'that the resale contemplated under these provisions was resale by the purchasing dealer as a registered dealer and since the concept of registered dealer has relation only to sale inside Delhi, the resale must be within the territory of Delhi.
Allowing the appeals and Writ Petitions, HELD : 1.
It is a well settled principle of interpretation that a statutory enactment must or ordinarily be construed according to the plain natural meaning of its language and that no words should be added, altered or modified unless it is plainly necessary to do so in order to prevent a provision from being unintelligible absurd unreasonable unworkable or totally irreconcilable with the rest of the statute.
[11OA] R. vs Dakees , Federal Steam Navigation Co. Ltd: vs V. Department of Trade & Industry, , Narayanaswani vs Pannersalvam & Ors. ; relied on.
Addition to or modification of words used in statutory provision is generally not permissible but the court may depart from this rule to avoid a patent absurdity.
There are no words such as 'inside the Union territory of Delhi" qualifying resale so as to limit it to resale within the territory of Delhi.
The Legislature could have easily used such words if its intention was to confine resale within the territory of Delhi but it omitted to do so.
[IIIA, B, E] Attorney General Sillen [1964] 2 H & C at 526 referred to.
The absence of specific words limiting resale inside the territory of Delhi is not without significance and it cannot be made good bya process of judicial construction, for to do so would be to attribute to the Legislature and intention which it has not chosen to express and to usurp the legislative function.
It is obvious that resale is subsequent sale after the first and it must, therefore, have the some meaning as 'sale ' defined in section 2(g).
The definition of sale in section 2(g) is a general definition which does not limit it to a sale inside the territory of Delhi.
Even a sale outside the territory of Delhi is within the coverage of the definition.
Section 5(2)(a)(ii) does not see to impose any tax on resale.
What it does is to provide deduction in respect of 100 sale to a registered dealer.
Even under the second proviso, what is taxed is the ' just sale made by tile, selling dealer and not the resale made by the purchasing dealer.
Thus there is no tax sought to be imposed on the resale under section 5(2)(a)(ii) or the second proviso and the argument of lack of legislative competence has no substance.
It would, be straining the language of the enactment too much to say that the words "by him" are intended to mean by him as a registered dealer.
[112B D, El G. 113D] 3.
The argument of the Revenue that the Legislature could never have intended that the Union territory of Delhi should be altogether deprived of tax in cases of this kind is erroneous.
It is not correct that the legislative intent was to exempt the sale.
to the purchasing dealer only in those cases where the Union territory of Delhi would be able to recover the tax on resale of the goods by the purchasing dealer.
It is now well settled that when the Court is construing a statutory enactment the intention of the Legislature should be gathered from the language used by it and it is not permissible to the court to speculate about the Legislative intent.
[114C D] Saloman vs Saloman & Co. Ltd. ; , at 38 and, Back Clawson International Ltd. vs Papierwerke Waldhof Aschaffenburg ; at 814, relied on.
Section 5(1)(a)(ii) and the second proviso occur in a taxing statute and it is a well settled rule of interpretation that in construing a taxing statute one must have regard to the strict letter of the law and not merely to the spirit of the Statute or the substance of the law.
[116A] Cape Brandy Syndicate vs Inland Revenue Commissioner referred to.
It would be flying in the face of well settled rules of construction of a taxing statute to read the words "inside the Union territory of, Delhi" in section 5(2)(a)(ii) and the second proviso, when the Plain and undoubted effect of the addition of such words would be to expose a purchasing dealer to penalty.
[H116E] 6.
During the period the department administered the Act in West Bengal and for few years in Delhi, they administered it on the basis that resale was not confined to resale inside the State of West Bengal or Union territory of Delhi.
It is true that the view of the department as to the meaning of a Statute which is administered by them is not admissible as an aid to construction, because wrong practice does not make the law, but long acquiescence of the Legislature in the interpretation put upon an enactment may be regarded as some sanction and approval of it.
The circumstance that for long years the Legislature did not intervene to amend the law by adding words "inside the Union territory of Delhi" even though the Revenue was continually administering the law on the basis that resale means resale anywhere does throw some light on the intention of the Legislature.
The subsequent amendment also throws light on the intention of the Legislature.
[117A E, 118A]
|
Nos. 712, 715 739, 760 764, 765 770, 779 780, 781 84, 838 855, 861 873 & 874 892 of 1977.
A. K. Sen (in WP.
712), V. M. Tarkunde (in WP 715 39) J. L. Jain (in WP 861 892) & P. P. Juneja for the petitioners in W. P. Nos.
712, 715 739, 874 892 and 861 873/77.
77. D. Goburdhan for the Petitioners in WP Nos.
760 64 & 765 70/77 2 277 SCI/78 302 A. K. Sen (in WP 779 780), section B. Sanyal, Alit K. Mittar & P. K. Mukherjee for the petitioners WP 779 80/77 D. P. Mukherjee & A. K. Ganguli for the petitioners in W. P. Nos.
781 784/77.
section section Ray, A. K. Punja & H. K. Puri for the Petitioners in W.P. Nos.
838 855/77 section N. Kackar, Sol.
(WP Nos. 812 & 838), R. P. Bhatt (WP 861), E. C. Agarwala and Girish Chandra for the respondent. 770, L. N. Sinha & U. P. Singh for R/State of Bihar in W. P. No. 765781 784/77 A. P. Chatterjee, Mukti Maitre & G. section Chatterjee for R/State of West Bengal The following Judgments were delivered BEG, C.J.
The ninety one writ petitions before us for delivery of our reasons in support of our order dated 23 November, 1977 dismissing them, raised a common question of the validity of an order (hereinafter referred to as 'the Control Order), passed on 30th September, 1977, by the Ministry of Civil Supplies and Cooperation of the Government of India, which runs as follows "ORDER New Delhi, the 30th September 1977 section O. WHEREAS the Central Government is of opinion that it is necessary and expedient so to do for securing equitable distribution and availability at fair prices, of mustard oil; NOW, THEREFORE, in exercise of the powers conferred by section 3 of the (10 of 1955), the Central Government hereby makes the following orders namely : 1.
Short title, extent and commencement.
(1)This Order may be called the Mustard Oil (Price Control) Order, 1977.
(2) It extends to the whole of India.
(3) It shall come into force at once.
Definition.
In this Order, "dealer" means a person engaged in the business of the purchase, sale or storage for sale of mustard oil.
Price at which a dealer may sell.
No dealer shall, either by himself or by any person on his behalf, sell or offer to sell any mustard oil at a retail price exceeding Rs. 10/ per kilogram, exclusive of the cost of container but inclusive of taxes.
Sd/ (T. Balakrishnan) Joint Secretary to the Govt.
of India (File No. 26(16)/77 ECR)" 303 The order WAS passed in exercise of the powers conferred upon the Central Government by section 3 of the (hereinafter referred to as 'the Act ').
This provision lays down: "3(1) If the Central Government is of opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices, or for securing any essential commodity for the defence of India or the efficient conduct of military operations it may, by order, provide for regulating or prohibiting the production.
supply and distribution thereof and trade and commerce therein.
(2) Without prejudice to the generality of the powers conferred by subsection (1), an order made thereunder may provide (a) xxx xxx xxx xxx xxx (b) xxx xxx xxx xxx xxx (c) for controlling the price at which any essential commodity may be bought or sold; (d) for regulating by licences, permits or otherwise the storage, transport, distribution, disposal, acquisition, use or consumption of, any essential commodity; (e) for prohibiting the withholding from sale of any essential commodity ordinarily kept for sale; (f) for requiting any person holding in stock, or engaged in the production, or in the business of buying or selling, of any essential commodity," (a) to sell the whole or a specified part of.
the quantity held in stock or produced or received by him, or (b) in the case of any such commodity which is likely to be produced or received by him, to sell the whole or a specified part of such commodity when produced or received by him.
to the Central Government or a State Government or an officer or agent of such Government or to a Corporation owned or controlled by such Government or to such other person or class of persons and in such circumstances as may be specified in the order.
Explanation I. An order made under this clause in relation to foodgrains, edible oilseeds or edible oils, may, having regard to the estimated production, in the concerned area, of such foodgrains, edible oilseeds and edible oils, 304 fix the quantity to be sold by the producers in such area and may also fix, or provide for the fixation of, such quantity on a graded basis, having regard to the aggregate of the area held by, or under the cultivation of, the producers.
Explanation 2.
For the purpose of this clause, "production" with its grammatical variations and cognate expressions includes manufacture of edible oils and sugar;" We are not concerned here with other provisions of section 3 (2).
Section 3(3), which will be relevant for the purposes of interpretation, runs as follows : "3 (3) Where any person sells any essential commodity in compliance with an order made with reference to clause (f) of sub section (2), there shall be paid to him the price therefore as hereinafter provided (a) where the price can, consistently with the controlled price, if any, fixed under this section, be agreed upon, the agreed price; (b) where no such agreement can be reached, the price calculated with reference to the controlled price, if any; (c) where neither clause (a) nor clause (b) applies, the price calculated at the market rate prevailing in the locality at the date of sale.
" Again, section 3A lays down: "3A(1) If the Central Government is of opinion that it is necessary so to do for controlling the rise in prices, or preventing the hoarding, of any foodstuff in any locality, it may, by notification in the Official Gazette, direct that notwithstanding anything contained in sub section (3), the price at which the foodstuff shall be sold in the locality in compliance with an order made with reference to clause (f) of sub section (2) shall be regulated in accordance with the provisions of this sub section.
(ii) Any notification issued under this sub section shall remain in force for such period not exceeding three months as may be specified in the notification.
(hi) Where, after the issue of a notification under this sub section, any person sells foodstuff of the kind specified therein and in the locality so specified, in compliance with an order made with reference to clause (f) of sub section (2), there shall be paid to the seller as the price therefore. (a) where the price can, consistently with the controlled price of the foodstuff, if any, fixed under this section, be agreed upon, the agreed price; 305 (b) where no such agreement can be reached, the price calculated with reference to the controlled price, if any; (c) where neither clause (a) nor clause (b) applies, the price calculated with reference to the average market rate prevailing in the locality during the period of three months immediately preceding the date of the notification.
(iv) For the purposes of sub clause (c) of clause (iii), the average market rate prevailing in the locality shall be determined by an officer authorised by the Central Government in this behalf, with reference to the prevailing market rates for which published figures are available in respect of that locality or of a neighbouring locality and the average market rate so determined shall be final and shall not be called in question in any court.
" Additional sub sections (3B) and (3C,) will also require consideration in order to arrive at the correct meaning of section 3(2).
They read as follows "(3B) Where any person is required, by an order made with reference to clause (f) of sub section (2), to sell to the Central Government or a State Government or to an officer or agent of such Government or to a Corporation owned or controlled by such Government, any grade or variety of foodgrains, edible oilseeds or edible oils in relation to which no notification has been issued under sub section (3A), or such notification having been issued has ceased to be in force, there shall be paid to the person concerned notwithstanding anything to the contrary contained in sub section (3), an amount equal to the procurement price of such foodgrains, edible oilseeds or edible oils, as the case may be specified by the State Government, with the previous approval of the Central Government having regard to (a) the controlled price, if any, fixed under this section or by or under any other law for the time being in force for such grade or variety of foodgrains, edible oilseeds or edible oils; (b) the general crop prospects; (d) the recommendations, if any, of the Agricultural grains, edible oilseeds or edible oils available at reasonable prices to the consumers, particularly the vulnerable section of the consumers; and (d) the recommendations, if any, of the Agricultural Prices Commission with regard to the price of the concerned grade or variety of foodgrains, edible Oilseeds or edible oils.
306 (3C) Where any producer is required by an Order made with reference to clause (f) of subsection (2) to sell any kind of sugar (whether to the Central Government or a State Government or to an officer or agent of such Government or to any other person or class of persons and either no notification in respect of such sugar has been issued under sub section (3A) or any such notification, having been issued hag ceased to remain in force by efflux of time, then, notwithstanding anything contained in sub section (3), there shall be paid to that producer an amount therefore which shall be calculated with reference to such price of sugar as the Central Government may, by order, (determine, having regard to (a) the minimum price, if any, fixed for sugarcane by the Central Government under this, section; (b) the manufacturing cost of sugar; (c) the duty or tax, if any, paid or payable thereon; and (d) the securing of a reasonable return on the capital employed in the business of manufacturing sugar, and different prices may be determined from time to time for different areas or for different factories or for different kinds of sugar.
Explanation.
For the purposes of this sub section, "producer" means a person carrying on the business of manufacturing sugar.
" It is necessary to keep other clauses of section 3 also in one 's mind to get a true picture of the statutory context of the power of price control.
The drastic measures which the Central Government may adopt, extending to virtually taking over of management of appointing Authorised Controllers of particular undertakings, so as to carry out the objects 'stated in section 3(1) of the Act, and the mechanism of control visualised to ensure due and proper exercise of the statutory powers are also very significant.
The provisions containing these are : "3(4) If the Central Government is of opinion that it is necessary so to do for maintaining or increasing the production and supply of an essential commodity, it may, by order, authorise any person (hereinafter referred to as an authorized controller) to exercise, with respect to the whole or any art of any such undertaking engaged in the production and supply of the commodity as may be specified in the order such functions of control as may be provided therein.
and so long as such order is in force with respect to any undertaking or part thereof," 307 (a) the authorized controller shall exercise his functions in accordance with any instructions given to him by the Central Government, so, however, that he shall not have any power to give any direction inconsistent with the provisions of any enactment or any instrument determining the functions of the persons in charge of the management of the undertaking, except in so far as may be specifically provided by the order; and (b) the undertaking or part shall be carried on in accordance with any directions given by the authorized controller under the provisions of the order, and any person having any functions of management in relation to the undertaking or part shall comply with any such directions.
3(5) An order made under this section shall, (a) in the case of an order of a general nature or affecting a class of persons, be notified in the Official Gazette; and (b) in the case of an order directed to a specified individual be served on such individual (i) by delivering or tendering it to that individual, or (ii) if it cannot be so delivered or tendered, by affixing it on the outer door or some other conspicuous part of the premises in which that individual lives, and a written report thereof shall be prepared and witnessed by two persons living in the neighbourhood.
3 (6) Every order made under this section by the Central Government or by 'any officer or authority of the Central Government shall be laid before both Houses of Parliament as soon as may be, after it is made.
" It has also to be remembered that if the mechanism of price/, control of some essential commodities fails, there is under our Constitution, with its socialistic orientation and objectives, the provision in Article 19 (6) (ii) for "the carrying on by the State, or by a corporation owned or controlled by the State, of any trade, business, industry or service,, whether to the exclusion, complete or partial, of citizens or otherwise".
The petitioners assail the control order on four grounds : firstly, that it violates the fundamental rights of the petitioners to property under Article 19 (1) (f) and to carry on their trade and business guaranteed by Article 19(1) (g) of the Constitution; secondly, that the petitioners are denied the benefits of Article 14 of the Constitution; thirdly, that the order is hit by Article 301 of the Constitution; 308 and, fourthly, that the Central Order is outside the scope of section 3 of the Act.
We need not consider Article 301 of the Constitution as the petitions do not, beyond citing the provision, set out any facts to show how this Article is involved.
This Article is meant for protecting inter State as well as intrastate "freedom of trade, commerce, and intercourse".
But, Article 302 provides "Parliament may by law impose such restrictions on the freedom of trade, commerce or intercourse between one State and another or within any part of the, territory of India as may be required in the public interest." Although, Article 302 does not speak of "reasonable" restrictions, yet, it is evident that restrictions contemplated by it must bear a reasonable nexus with the need to serve "public interest".
It the tests of Section 3 of the Act are satisfied by an Order, it could not fail to serve public interest.
Hence, from this point of view also, it is enough if we consider whether the Control Order falls within section 3 of the Act.
It was evidently for this reason that, beyond mentioning Article 301, counsel for the petitioners did not, quite rightly, advance much argument to show how Article 301 is involved here.
We will, therefore, not consider it any more here.
It was, however, vehemently urged on behalf of the petitioners that the Control Order is assailable for violating Article 14 and 19(1) (f) and (g) despite the fact that the Act itself was placed in 1976 in the 9th Schedule of the Constitution.
The result of placing it there by a constitutional amendment is that section 3 of the Act became free from any limitations based on the provisions of Part III of the Constitution.
Article 31B, providing for a removal of the protection to fundamental rights given by Part III of our Constitution, lays down : "31B. Validation of certain Acts and Regulations.
Without prejudice to the generality.
of the provisions contained in article 31A, none of the Acts and Regulations specified in the Ninth Schedule nor any of the provisions thereof shall be deemed to be void, or ever to have become void, on the ground that such Act, Regulation or provision is inconsistent with, or takes away or abridges any of the rights conferred by, any provisions of this Part, and notwithstanding any judgment, decree or order of any court or tribunal to the contrary, each of the said Acts and Regulations shall, subject to the power of any competent legis lature to repeal or amend it, continue in force.
" It is evident that Article 31B protects only Acts and Regulations specified in the Ninth Schedule from the vice of invalidity for inconsistency with provisions of Part III of the Constitution but not anything done or to be done in future under any of the provisions of 3 0 9 any Act so specified, such as an order passed under section 3 of the Act.
, If section 3 of the Act, which was held in Shri Hari Kishan Bagla vs State of Madhya Pradesh(1) to pass the tests of validity imposed by articles 14 and 19 (1) (f) and (g), read with articles 19 (5) and (6), a Control Order passed under section 3 would also be required to pass these tests as its scope could not be wider than that of the provisions which authorises its promulgation.
A delegate or derivative power could not rise higher or travel beyond the source of that power from which it derives its authority and force.
If Bagla 's case (supra) is good law (no party has questioned its correctness) Articles 14 and 19(1) (f) and (g) could be deemed to be, if one may so put it, "written into" section 3 of the Act itself.
They would control the scope of orders which could be passed under it.
That is, undoubtedly ' the way in which guarantees of fundamental rights could and should function if the Act containing section 3 itself had not been placed in the Ninth Schedule so as to take, away ',be guaranteed of fundamental rights from the substance of it.
The question of interpretation before us is : What is the effect of putting the Act in the Ninth Schedule upon Control Orders passed under section 3 of the Act? The answer to this question must necessarily depend upon the effect of such a change of the legal position upon the provisions of section 3 itself which authorise control orders passed under it.
If the effect was to widen the orbit of section 3 of the Act or to remove the limitations put by Article 14 and 19 upon the exercise of powers under it, the logical and natural result would be to enlarge also the scope or sweep of the orders passed under it.
But, if it has no such effect upon section 3 of the Act itself, orders passed under it would continue to be subject to provisions of section 3 of the Act as controlled by Articles 14 and 19 of our Constitution so that they will have to satisfy what may be described as a "dual test" : firstly that of provisions of section 3 of the Act itself; and, secondly, that of provisions of Chapter III of the Constitution containing fundamental rights.
Learned Counsel for the petitioners suggested that the placing of the Act in the Ninth Schedule protected only the grant of powers under section 3 of the Act but not their exercise.
Article 31B, no doubt, speaks of "specified" Acts and Regulations.
But it makes no distinction whatsoever between any grants of powers and their exercise.
Powers are granted or conferred so as to be exercised and not to be kept in cold storage for purposes of some kind of display only as though they were exhibits in a show case not meant for actual use.
The whole object of a protection conferred upon powers meant for actual use is to protect their use against attacks upon their validity based upon provisions of Part 111.
If ',his be the correct position, it would, quite naturally and logically, follow that their use is what is really protected.
(1) [1955] 1 SCR380.
310 In practice, it is the exercise of power which is generally assailed and not the mere conferment of it which raises the somewhat different question of legislative competence.
Indeed, the Ninth Schedule does not provide any protection at all against attacks based upon either the vice of excessive delegation or want of legislative compete defects which could be said to vitiate the grant of powers despite their place in the Ninth Schedule.
But, questions of conflict with fundamental rights and of transgression of Legitimate or reasonable, limit.% upon their exercise arise when citizens complain of unreason.
able impediments to the exercise of their fundamental rights.
The distinction between protection to a mere grant of powers and to their exercise, therefore, seems specious in the context of the protection.
It cannot explain why, if section 3 is protected by the Ninth Schedule.
the exercise of power granted by it, which manifests itself.
in control orders, is not protected.
It would be so protected, if at all, not be cause the orders to be made in future, as such are protected, but because the power actually conferred and found in existence in section 3 is protected.
The protection is given to a power which is specified and in existence which has to be used 'of certain purposes and not to what may be specified in future.
If orders passed under section 3 of the Act also get a protection it would be what may be described as a "derivative" protection so long as the orders are covered by section 3 of the Act.
It is available only so long as and because the source of their authority section 3 of the Act is protected by the Ninth Schedule.
Orders purporting to be made under section 3 of the Act must, however, satisfy the tests found in section 3 itself in every case.
They can never escape the basic tests whether section 3, the source of their authority, is protected by the Ninth Schedule or not.
The further tests imported by Articles 14 and 19 of the Constitution into section 3 could be applied to these orders only so long as these added tests are attached to or can be read into section 3 of the Act, but not after they have been deliberately delinked or removed from section 3, if one may so describe the effect of the inclusion of the Act in the Ninth Schedule.
The Solicitor General contended that section 3 of the Act constituted what he described as "skeleton" legislation, over which the exercised of powers given by section 3 built, so to say, a body of "flesh and blood".
The term "skeleton" legislation is used sometimes for denoting the broad outlines of a particular scheme found in an Act of which details are to be filled in later by administrative orders of experts.
It is doubtful whether the , could be spoken of as a piece of "skeleton" legislation.
Section 3, sub s.(1) of the Act provides for delegation of powers to the Central Government in order that it may carry out certain purposes by framing appropriate schemes and evolving policies which may meet the purposes of the Act.
These schemes and policies to serve the stated purposes may differ as.
regards the nature of means adopted and even in the particular objectives sought at particular times to accord with changing circumstances.
311 Orders passed under section 3 of the Act, in pursuance of such schemes or policies, do not become parts of the Act for the purposes of the Ninth Schedule of the Constitution.
On the strength of the views expressed by this Court in Godavari Sugar Mills Ltd. & Ors.
vs section B. Kamble & Ors.,(1) with which we respectfully agree, the most one can say is that orders passed under the Act, before, its inclusion in the Ninth Schedule, could also be said to be protected directly by the Ninth Schedule if mentioned there.
But, there could be no independent and direct protection of this Schedule conferred upon orders passed under the Act before us just as none could be given to either the amendments of an Act or to regulations passed under the Act which were considered in Godavari Sugar Mills case (supra).
As already indicated above, the impugned control order is assailed mainly on the ground that it violates Articles 14 and 19(1) (f) and (g) of the Constitution.
It is alleged that the manufacturers of oil having invested a great deal of capital in Mustard oil manufacturing industry and having purchased oil seeds at higher rates than those which have entered into the calculation of the Government in fixing the price of mustard oil for the consumer cannot be made to sell oil, into which Mustard seed is converted, at prices below those at which they could themselves produce oil.
It is submitted that to require them to do so amounts to confiscation of property contrary to law as well as a restriction upon the right guaranteed by Article 19(1)(g) of the Constitution upon them to carry on an industry or business free from unreasonable restrictions.
Valid restrictions, it is submitted, can only be reasonable and in the interests of the general public.
It was suggested that the protection of Article 31(1) against deprivation of property contrary to law was also involved here.
The main question ,to be decided therefore, is whether Part III of the Constitution is available at all to test the validity of the impugned control order.
In Latafat Ali Khan & Ors.
vs State of U.P.,(1) a Constitution Bench of this Court decided such a question quite rightly in our opinion as follows (at p. 720) : "It seems to us that if a statutory rule is within the powers conferred by a section of a statute protected by article 3 1 B, it is difficult to say that the rule must further be scrutinised under articles 14, 19 etc, Rule 4(4) seems to us to be a rule which does not go beyond the powers conferred under section 6(xvii), read with section 44 of the Act.
At any rate, section 6(xvii) and rule 4(4) are part of a scheme of land reform in U.P. and would be protected from attack under article 31B of the Constitution".
In that case, the rule made under the provisions of the Imposition of Ceiling on Land Holdings Act 1960 of U.P. was under attack.
The section under which the rule was made enjoyed the protection of both Articles 3 1 A and 3 1B of the Constitution.
Hence, it was held that the rule was not to be questioned if it fell within the empowering (1) ; (2) [1971] Suppl.
S.CR.719at720.
312 provision of the Act.
The position before us is very similar.
The Control order passed under section 3 of the provisions of the Act before us, included in the Ninth Schedule, is assailed on the ground that, although section 3 of the Act may be protected by the 9th Schedule of the Act, yet, an order passed under this provision is not so protect ed.
Although, we agree that the impugned order is not protected for this reason, yet, if the section under which it was passed is protected from any attack based on the provisions of Part III of the Constitution, the only question which survives is whether the control order is covered by the protected empowering provision.
If it falls outside the empowering provision it would be invalid in any case.
If it falls within the empowering provision but could be found to be struck by the provisions of article 19 (1 ) (f) and (g) of the Constitution, an attack on the control order, by reason of Article 19(1) (f) or (g), would be really one against the empowering provision itself which is protected.
The control order, therefore, enjoys what may be called a derivative protection.
All that has to be shown by the Central Government is that it falls within the empowering provision.
No further test, based on fundamental rights in Chapter III of the Constitution, can be applied to it in such a case.
All the tests of validity of the impugned price control or fixation order are, therefore, to be found in section 3 of the Act.
Section 3 makes necessity or expediency of a control order for the purpose of maintaining or increasing supplies of an Essential commodity or for securing its equitable distribution at fair prices the criteria of validity.
it is evident that an assessment of either the expediency or necessity of a measure, in the light of all the facts and circumstances which have a bearing on the subjects of price fixation, is essentially a subjective, matter.
It is true that objective criteria may enter into determinations of particular selling prices of each kilogram of mustard oil at various times.
But, there is no obligation here to fix the price in such.
a way as to ensure reasonable profits to the producer or manufacturer.
It has also to be remembered that the object is to secure equitable distribution and availability at fair prices so that it is the interest of the consumer and not of the producer which is the determining factor in applying any objective tests at any particular time.
Hence the most important objective fact in fixing the price of mustard oil, which is consumed generally by large masses of people of limited means is, the paying capacity of the average purchaser or consumer.
Statistics of rise in prices of mustard oil throughout the country indicated a very sharp rise during the period preceding the control order.
It was no longer available at a reasonable price to the average consumer.
It is difficult to understand how the average consumer could buy mustard oil at more than Rs. 10/ for each kilogram of mustard oil unless his purchasing capacity was increased by pumping money into his pocket artificially.
This would necessarily imply a general rise in wages of the working classes and salaries of middle classes which do not share the profits of an inflationary economy.
In other words, a 313 fixation of price above Rs. 10/ per kg.
of mustard oil could have, contributed to push the country down the slippery slope of inflation towards economic crisis and disaster.
Price control and planning may have been forced upon all nations of the world due to the needs and exigencies of modern "total" warfare.
But, as has been observed, the problems of the aftermath or of the peace and reconstruction, which follow (according to some they "break out") are no less demanding.
In addition, it is common knowledge that the population explosion, unemployment, and rising prices in our country, due to the inflationary spiral pose problems with no less grave implications for the whole country than a war.
It would be no exaggeration to say that the fate of every government depends ultimately upon a satisfactory solution of these problems, and, particularly, on its capacity to check rise in prices of essential commodities.
We have listened to long arguments directed at showing us that producers and sellers of oil in various parts of the country will suffer so that they would give up producing or dealing in mustard oil.
It was urged that this would, quite naturally, have its repercussions on consumers for whom mustard oil will become even more scarce than ever ultimately.
We do not think that it is the function of this Court or of any Court to sit in judgment over such matters of economic policy as must necessarily be left to the Govt.
of the day to decide.
Many of them, as a measure of price fixation must necessarily be, are matters of production of ultimate results on which even experts can seriously err and doubtless differ.
Courts can certainly not be expected to decide them without even the aid of experts.
It is impossible for any Court to take evidence from all over the country to determine whether particular concerns or parties which have come up before this Court or could not reasonably produce mustard oil at a cost which could make it reasonable for them to sell it at Rs. 10 /per kg.
Learned Counsel before us have tried to perform this impossible task.
We think that it should not even have been attempted in a case of this kind because the price at which mustard oil was sold commonly in the market not very long ago and the price which prevailed at the time when the control order of 30th September, 1977, was passed are matters of common knowledge.
All that the Govt.
need have done was to take a policy decision based on what could reasonably be the paying capacity of the average buyer of mustard oil and the likely effects of the intended price fixation.
It seems to us to have done that.
It is true that sufficient material, from these points of view, was 'not placed before us by the Union of India.
Nevertheless, the matter is so obvious and glaring that we do not think that detailed statistics are needed.
We deliberately do not go into the great mess of materials which have been sought to be placed before us from the point of view of present cost of producing mustard oil and the fixation of a reasonable price based on a determination of that.
The more essential questions to answer, from the point of view of provisions of section 3 of the Act were : Can the mass of ordinary consumers pay more than Rs. 10/ per kg ? Even if the price of mustard oil is fixed at less than the cost price to the ducers, is it not necessary to take such a measure in order to break the 314 vicious inflationary spiral and bring down prices ? The last question could only be answered by waiting and watching the ultimate effects of a particular price, fixation on prices of mustard seed and cost of production of mustard oil ultimately.
If the object of price fixation suggested by this question is very 'necessary to take into account, from the point of view of availability of mustard oil at fair prices to consumers, as we think it is, the actual cost of production to the purchasers could certainly not be the sole or the decisive factor.
It could only be one out of a Dumber of relevant facts and circumstances.
The net result of the mass of statistics placed before us on behalf of the petitioners is that the price fixed should have been about Rs. 3/ per kg.
more, that is to say, about Rs. 13/ per kg.
Even if we accept this to be correct estimate for normal times, when fair and reasonable profits to the producers could be an important consideration, we think that a price fixed at Rs. 10/ per kg., as a part of an attempt to break the vicious inflationary circle, is not at all an unreasonable step.
Students and observers of economic systems tell us that inflation is no problem in socialist countries because the whole.
economy is so completely controlled that there is no question of a rise in prices.
Under which our system is known as a "mixed economy" planning and price fixation are part of that social control which becomes inevitable under certain conditions.
Indeed, it seems quite unavoidable, under any system which adopts socialistic measures to achieve the common good.
The argument on behalf of the Union is that the result of this fixation, even below cost price, will necessarily produce desired effects upon the free sector in which price of mustard seed is still not controlled.
The control imposed will make it impossible for producers to offer excessive prices for mustard oil seed demanded by the growers.
Hence, it was argued that the cost of production was bound to come down in course of time if petit loners could only wait a little.
Fixation at even uneconomic selling price implied temporary loss to the producers, so as to serve their own ultimate interests and those of general welfare.
Such sacrifices ought it was suggested, be readily borne by producers of mustard oil in a, system like ours.
If they were not able to bear them, they could close down their factories.
They could hot claim a right to carry on business or manufacture on their own terms.
Such is not the right guaranteed even by article 19 (1) (g) of the Constitution.
However, as we have already indicated, it seems that the Act was put in the Ninth Schedule to prevent the invocation of Articles 14, 19 and 31 for obstructing measures so necessary as price fixation of essential commodities is for promoting the objectives of a socialist welfare economy.
This, in our opinion, would be a sufficient answer to all the arguments which had been put forward at considerable length before us on the unconstitutionality of fixing the price of mustard oil below what is claimed to be the cost price.
It may be mentioned, en passant, that even during the interval between the passing of our order dismissing Writ Petitions for the enforcement of fundamental rights protected by Part III of the Constitution and the delivery of these reasons, so beneficial was the effect of the order of 30th September, 1977, that price of mustard oil has 315 fallen in the neighbourhood of Rs. 7/ per kg.
Apparently, this is enough to cover reasonable profits of producers as well as middlemen.
We are informed that the impugned Control Order has itself been withdrawn by the Central Government.
We can take judicial notice of those facts which illustrate the extreme inadvisability of any interference by any court with measures of economic control and planning directed at maximising general welfare.
It is not the function of the Courts to obstruct or defeat such beneficial measures devised by the Govt.
of the day.
Courts cannot pass judgments on the wisdom of such actions, unless actions taken are so completely unreasonable that no law can be cited to sanction them.
If the impugned order of 30th September, 1977, falls within this provision, as we think it does, no question of violating a fundamental right could arise.
If an impugned order were to fall outside section 3 of the Act, no question of applying any test of reasonableness contemplated by Article 19(6) need arise because it would then be a purely illegal I restriction upon the right conferred by Article 19(1) (g) which would fall for lack of authority of any law to support it.
We have also heard considerable argument on principles of fair fixation of price which, it was submitted, must take into account the cost of production as well as a reasonable amount of profit to the manufacturer and the middleman.
As indicated above, such principles apply only in those cases where there is an obligation upon the price fixing authority to take certain matters.
into account which have a bearing on cost of production and are designed to secure fair share of profits to the producers.
Section 3 of the Act set out above,, as already indicated, has very different purposes in view.
It may be that the cost of production and reasonable amount of profits to the manufacturers have an indirect bearing on matters set out in section 3(1) of the Act.
But, in cases where the effects of a policy or a measure adopted in achieving purposes set out in Section 3 (1 ) are matters of guess work, after experimentation, the actual consequences can be indicated with a fair amount of certainty only by giving sometime for a policy to work and reveal its results.
Presence of such features in a case cannot invalidate price fixation of which the direct objects are set out in section 3(1) of the Act.
Mr. Kacker, learned Solicitor General has rightly drawn our attention to a distinction between merely, regulatory orders and those of price fixation or price control under section 3 (2) (c) of the Act.
A price fixation to meet the general purposes set out in section 3(1) of the Act, aimed at reversing the vicious inflationary spiral of rising prices, may appear arbitrary or unreasonable judged by standards applicable to price fixation aimed at giving reasonable profits to producer, , which is not the object of section 3(1) of the Act.
The whole evidence of the petitioners is misdirected inasmuch as it proceeds on the assumption that what could be no more than a relevant consideration is the whole and sole object of section 3(1) of the, Act.
About other matters there is practically no evidence so that we are left in the region of guesswork.
316 No case has been cited before us to show that an Order meant to serve a purpose the execution of which may, as indicated above, require fixation of price even below cost price for the time being, is outside Section 3 (1) of the Act.
It was rightly urged on behalf of the Union that the Control order is a temporary and experimental device for achieving a particular purpose, covered by Section 3(1) of the Act at a particular time, in a particular state of affairs.
It was submitted that, after the purpose is achieved, the order could be and will be withdrawn by the Govt.
of India.
As already 'stated above, that order has been withdrawn because the purpose has been achieved.
Even if that purpose had not been achieved, the order could be withdrawn if it became evident to the Government that such control would not achieve the desired object.
It is extremely hazardous for Courts to enter the sphere of experimentation in matters of economic policy which must be, left to the Government of the day.
It will be seen from the provisions of Section 3 (3) of the Act that price fixation on certain given principles is enjoined only when there is an order under Section 2 (f) of the Act compelling the sale of a whole stock or a specified part of it to the Central or a State Government or to authorities or persons as directed by them.
Again, Section 3 (a) (iii) provides a machinery for price fixation in special cases.
Similar is the position with orders under sections 3B and 3C.
The whole machinery of control of supplies with a view to their equitable distribution and securing their availability at fair prices, it will be seen, is much more comprehensive than the machinery for price fixation in special cases on given principles.
The cases cited before us on price control relate to the sphere in which the criteria for fixation of were indicated either by a statutory provision or by orders= thereunder.
In Panipat Cooperative Sugar Mills vs Union of India(1), this Court said : "Two principal questions arise in these appeals : (1) what is the true interpretation of section 3 (3C) and (2) whether the price of Rs. 124.63 was in accordance with the provisions of section 3 (3C) ?" Thus, statutory principles for price fixation were under consideration there.
Again, in Shree Meenakshi Mills Ltd. vs Union of India(2), there were directions given under the Cotton Textiles Control Orders prescribing sales through certain channels.
The principles on which the sale prices of textiles were to be fixed, in accordance with relevant rules, were explained by this Court.
In Meenakshi Mills ' case (supra) may, C.J., disapproved of the decision of this Court in Premier Automobiles Ltd. vs Union of India(3), in the following words (1) [1973] 2 S.C.R. 860.
(2) (3) ; 317 .lm15 "The Premier Automobiles (supra) decision does not consider that the concept of fair prices vanes with circumstances in which and the purposes for which the price control is sought to be imposed.
This decision because of the special agreement there does not consider that the fixation of fair price with a view to holding the prices line may be stultified by allowing periodic increase in price.
" It was also observed there : "In Premier Automobiles case (supra) this Court said that the concept of fair price fixed under section 18G takes in all the elements to make it fair for the consumer leaving a reasonable margin of profit to the manufacturer without which no one will engage in any manufacturing activity.
These observations were made on the basis of the agreement of the parties there that irrespective of technical or legal points the Court should base its judgment on examination of correct and rational principles and should direct deviation from the report of the Commission of Inquiry appointed by it with the concurrence of the parties only when it is shown that there has been a departure from the established princi ples or the conclusions of the commission are shown to be demonstrably wrong or erroneous. '. ' In other words, the judgment was not to provide a precedent for anything similar to be done by Courts in other cases.
In Saraswati Industrial Syndicate Ltd. etc.
vs Union of India(1) the cases mentioned above were discussed by this Court in the context of Suger Control Order, 1966, where clause (7) laid down certain matters to be considered in determining fair price.
It was held there "Price fixation is more in the nature of a legislative measure even though it may be based upon objective criteria found in a report or other material.
It could not, therefore, give rise to a complaint that a rule of natural justice has, not been followed in fixing the price.
Nevertheless, the criterion adopted must be reasonable." The guiding factors laid down in clause (7) of the Sugar Control Order, 1966, were held to afford only indicate to help the Government in fixing prices on the lines indicated in the Control Order.
We think that unless, by the terms of a particular statute, or order, price fixation is made a quasi judicial function for specified purposes or cases, it is really legislative in character in the type of control order which is now before us because it satisfies the tests of legislation.
A legislative measure does not concern itself with the facts of an individual case.
It is meant to lay down a general rule applicable to all persons or objects or transactions of a particular kind or class.
In the case before us, the Control Order applies to sales of mustard oil anywhere in India by any dealer.
Its validity does not depend on the observance (1) ; 3 277SCI/78 318 of any procedure to be complied with or particular types of evidence to be taken on any specified matters as conditions precedent to its validity.
The test of validity is constituted by the nexus shown between the order passed and the purposes for which it can be passed, or in other words by reasonableness judges by possible or probably consequences.
It is true that even executive or legislative action must be confined to the limits within which it can operate.
It must fall reasonably within the scope of the powers conferred.
The scope of the powers conferred depends upon the terms of the empowering provision.
As we have already mentioned, the empowering provision in the instant case is widely worded.
The validity of section 3 has not been challenged before us.
As indicated above, it could not be challenged by reason of Article 31B after its inclusion in the 9th Schedule of the Constitution.
The result necessarily is that, in a case in which the Central Government is the judge of expediency and necessity to the extent that even the protection of guaranteed fundamental rights cannot stand in the way of its view or opinion of such necessity and expediency, it challenge on the grounds on which it was attempted before us could not succeed.
We may also mention that the view we have taken of the dominant purpose of section 3(1) of the Act is in accordance with the following elucidation of its purpose in Meenakshi Mills case (supra): "The question of fair price to the consumer with reference to the dominant object and Purpose of the legislation claiming equitable distribution add Availability at fair price is completely lost sight of if profit and the producer 's return are kept in the forefront.
The maintenance or increase of supplies of the commodity or the equitable distribution and availability at fair prices are the fundamental purposes of the Act.
" We do not think that we need deal with American cases in price 'fixation such as Leo Nebbia vs People of the State of New York(1), where the guarantee of due process against capricious action was involved.
in this country, such guarantees in regard to rights of property or to carry on industry or trade or business could only arise by reason of Articles 14 and 19 of the Constitution which it, excluded here because of the protection conferred upon section 3 of the Act by the 9th Schedule of the Constitution.
I may, however, mention that in Permian Basin Area Rate cases(2), where the majority of learned judges of the U.S. Supreme Court laid down, inter alia, with regard to price fixation by a body of experts of Federal Power Commission required to proceed quasi judicially, that in order to "over turn the Commission 's judgment" the petitioners must "undertake the heavy burden of making a convincing showing that it is invalid, because it is unjust and unreasonable in its consequences".
That was a case in which a Commission was charged with a duty to fix rates in accordance (1) 291 U.S. (78 Law.
En.) 502.
(2) ; p. 312.
319 with certain principles after taking evidence and hearing parties effected.
Nevertheless, the duty of the petitioners was held to extend to demonstrating the unreasonableness and injustice of the consequences.
A fortiori, patent injustice and unreasonable injury to the interests of consumers must be shown if a measure of price control, in the nature of either legislative or purely administrative action, is assailed.
So long as the action taken is not so patently unjust and unreasonable as to lead to the irresistible conclusion that it could not fall within section 3(1) of the Act it cannot be set aside or declared invalid.
The test has to be that of consequences on objects sought by section 3 ( 1 ) of the Act.
Judged by this test we think that the Order of 30th September, 1977, fell within the purview of section 3 of the Act and it has served ,its purposes.
For reasons given above, the order of dismissal of Writ Petitions already passed by us on 23rd November, 1977 is, in our opinion, fully justified.
ORDER Y. V. CHANDRACHUD, P. N. BHAGWATI, section MURTAZA FAZAL ALI, P. N. SHINGHAL AND JASWANT SINGH JJ.
We will give our reasons later since as at present advised, with great respect, we are not disposed to agree with a part of the reasoning of the learned C.J. (Dated May 5, 1978) CHANDRACHUD, C.J.
On September 30, 1977, the Government of India in its Ministry of Civil Supplies and Cooperation issued the Mustard Oil (Price Control) Order 1977, in exercise of the power conferred by section 3 of the , 10 of 1955.
The Price Control Order provides by clause 3 that no dealer shall either by himself or by any person on his behalf sell or offer to sell any mustard oil at a retail price exceeding Rs. 10/ per kilogram, exclusive of the cost of container but inclusive of taxes.
Clause 2 defines a 'dealer ' to mean a person engaged in the business of purchase, sale, or storage for sale of mustard oil.
The Price Control Order was challenged in this Court by several ,dealers on the ground, mainly that it violates articles 14, 19 (1 ) (f) and 19 (1) (g) of the Constitution.
Article 301 was cited but not argued upon with any seriousness.
The argument that the Price Control Order offends against the right to property and the right to carry on trade or business requires 'for its appreciation and decision the awareness that by the 40th Amendment passed in 1976, the was placed in the 'Ninth Schedule to the Constitution as item 125.
One of the main con tentions of the Union Government in answer to the petitioners ' challenge to the constitutionality of the Price Control Order is that since the Act, by reason of its being placed in the Ninth Schedule, is immune from attack on the ground that its provisions violate the funda 320 mental rights guaranteed by Part III of the Constitution, the Price Control Order which is but a creature of the Act must enjoy the same immunity.
This contention has found favour with the learned Chief Justice, Shri M. H. Beg but, with respect, we are unable to share his view.
Article 3 1 A of the Constitution saves laws which provide for matters mentioned in clauses (a) to (e) thereof from a challenge under articles 14, 19 or 31 notwithstanding anything contained in article 13 of the Constitution.
Article 31A which was introduced by the Constitution (First Amendment) Act, 1951, validates certain Acts and Regulations providing that without prejudice to the generality of the provisions contained in Article 31A, "none of the Acts and Regulations specified in the Ninth Schedule nor any of the provisions thereof" shall be deemed to be void, or ever to have become void, on the ground that such Act, Regulation or provision is inconsistent with, or takes away or abridges any of the rights conferred by, any provisions of Part III.
On a plain reading of this article it seems to us impossible to accept that the protective umbrella of the Ninth Schedule takes in its ever widening wings not only the Acts and Regulations specified therein but also Orders and Notifications issued under those Acts and Regulations.
Article 31B constitutes a grave encroachment on fundamental rights and doubtless as it may seem that it is inspired by a radiant social philosophy, it must be construed as strictly as one may, for the simple reason that the guarantee of fundamental rights cannot be permitted to be diluted by implications and inferences.
An express provision of the Constitution which prescribes the extent to which a challenge to the constitutionality of a law is excluded, must be construed as demarcating the farthest limit of exclusion.
Considering the nature of the subject matter which article 31B deals with, there is, in our opinion, no justification for extending by judicial interpretation the frontiers of the field which is declared by that article to be immune from challenge on the ground of violation or abridgement of fundamental rights.
The article affords protection to Acts and Regulations specified in the Ninth Schedule.
Therefore, whenever a challenge to the constitutionality of a provision of law on the ground that it violates any of the fundamental rights conferred by Part III is sought to be repelled by the State on the plea that the law is placed in the Ninth Schedule, the narrow question to which one must address oneself is whether the impugned law is specified in that Schedule.
If it is, the provisions of article 31B would be attracted and the challenge would fail without any further inquiry.
On the other hand, if the law is not specified in the Ninth Schedule, the validity of the challenge has to be examined in order to determine whether the provisions thereof invade in any manner any of the fundamental rights conferred by Part III.
It is then no answer to say that though the particular law, as for example a Control Order, is not specified in the Ninth Schedule, the parent Act under which the Order is issued is specified in that Schedule.
The Mustard Oil (Price Control) Order, 1977, was passed under section 3 of the , which by the relevant part of its sub section (1) empowers the Central Government to provide by an order for regulating or prohibiting the production, 321 supply and distribution of an essential commodity or trade and commerce therein, if it is of the opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing its equitable distribution and availability at a fair price.
Since the Act of 1955 has been placed in the Ninth Schedule, none of its provisions, including of course section 3(1), is open to attack on the ground that it ever was or is inconsistent with or takes away or abridges any of the rights conferred by any provision of Part III of the Constitution.
But that is the farthest that the immunity offered by article 31B can go.
In other words, speaking of a provision directly in point, section 3(1) of the Act of 1955 is not open to challenge on the ground, to take a relevant instance, that it violates the guarantee contained in article 19 (1) (f) or 19 (1) (g) of the Constitution.
But there is no justification for extending the protection of that immunity to an Order passed under section 3 of the Act like the Mustard Oil (Price Control) Order.
Extending the benefit of the protection afforded by article 31B to any action taken under an Act or Regulation which is specified in the Ninth Schedule, appears to us to be an unwarranted extension of the provisions contained in article 31B, neither justified by its language nor by the policy or principle underlying it.
When a particular Act or Regulation is placed in the Ninth Schedule, the Parliament may be assumed to have applied its mind to the provisions of the particular Act or Regulation and to the desirability, propriety or necessity of placing it in the Ninth Schedule in order to obviate a possible challenge to its provisions on the ground that they offend against the provisions of Part III.
Such an assumption cannot, in the very nature of things, be made in the case of an Order issued by the Government under an Act or regulation which is placed in the Ninth Schedule.
The fundamental rights will be eroded of their significant content if by judicial interpretation a constitutional immunity is extended to Orders the validity of which the Parliament at least theoretically, has had no opportunity to apply its mind.
Such an extension takes for granted the supposition that the authorities on whom Dower is conferred to take appropriate action under a statute will act both within the framework of the statute and within the permissible constitutional limitations, a supposition which past experience does not justify and to some extent falsifies.
In fact, the upholding of laws by the application of the theory of derivative immunity is foreign to the scheme of our constitution and accordingly orders and Notifications issued under Acts and Regulations which are specified in the Ninth Schedule must meet the challenge that they offend against the provisions of Part III of the Constitution.
The immunity enjoyed by the parent Act by reason of its being placed in the Ninth Schedule cannot proprio vigore be extended to an offspring of the Act like a Price Control Order issued under the authority of the Act.
it is therefore open to the petitioners to invoke the writ jurisdiction of this Court for determination of the question whether the provisions of the Price Control Order violate articles 14, 19 (1) (f) and 19 (1) (g) of the Constitution.
The learned Solicitor General relies, justifiably, on two decisions of this Court in Vasantlal Maganbhai Sanjanwala vs The State of Bom 32 2 bay and Others(1) and Latafat Ali Khan and Ors.
vs The State of U.P.(2), in support of his argument that the Price Control Order must receive the protection of the Ninth Schedule to the same extent as the under which that order was issued and which has been placed in the Ninth Schedule.
In Vasantlal Maganbhai(1), the vires of section 6(2) of the Bombay.
Tenancy and Agricultural Lands Act, 1948, was challenged on the ground that it suffered from the vice of excessive delegation.
In exercise of the power con feared by section 6(2), the State Government had issued a Notification fixing the maximum rent payable by tenants of lands situated in the areas specified in the schedule appended to the Notification.
The validity of that Notification was challenged on the ground.
that it offended against Article 31 of the Constitution.
The first contention was rejected by the majority which held that section 6(2) did not suffer from excessive delegation. 'On the second question it was held by the Court that since the Bombay Tenancy Act was placed in the Ninth Schedule, the Notification which was issued under section 6(2) of that Act could not be challenged on the ground that it violated article 31.
Subba Rao J., who was in minority, did not consider the latter point regarding the validity of the Notification issued under section 6(2) because he took the view that section 6(2) suffered from the vice of excessive delegation and was therefore unconstitutional.
This decision undoubtedly lends support to the contention of the Union Government that if an Act or Regulation is specified in the Ninth Schedule, any order or notification issued under it would equally be entitled to the protection of that Schedule.
We are, however, of the opinion, respectfully, that the decision in Vasantlal Maganbhai (supra) does not reflect the true legal position which, according to us, is that the immunity enjoyed by an Act placed in the Ninth Schedule cannot be extended to an order or notification issued under it.
The decision of.
the Court appears to have been influenced largely by the consideration that the only argument advanced against the validity of the notification was that in substance it amended the provisions of section 6(1) and was therefore a fresh legislation to which article 31B could not apply.
The Court rejected that argument and held that if section 6(2) was 'Valid, the exercise of the power validly conferred on the Provincial Government could not be treated as a fresh legislation.
The decision in Latafat Ali Khan (supra) contains no reasons beyond the bare statement that "if a statutory rule is within the powers conferred by a section of a statute protected by article 3 1 B, it is difficult to say that the rule must further be scrutinised under articles 14, 19, etc.".
It is clear from the judgment that since the Court was of the opinion that " at any rate" the impugned provisions of U.P. Imposition of Ceiling on Land Holdings Act and the Rules were part of a scheme of land reform and were therefore protected from attack under article 31 A of the Constitution, it did not think it necessary to examine the question whether statutory rules framed under the Act which was placed in the Ninth Schedule would enjoy the same immunity.
(1) ; (2) [1971] Supp.
S.C.R. 719.
323 The decision of this Court in Godavari Sugar Mills Ltd. and Ors vs section B. Kamble and Ors.(1), appears to us to be in point and it supports the petitioners ' contention that the benefit of article 31B of the Constitution cannot be extended to an order or notification issued under an Act which is placed in the Ninth Schedule.
The Bombay High Court while affording protection of article 31B to the Maharashtra Agricultural Lands (Ceilings on Holdings) Act, 1961, which was included in the Ninth Schedule, also granted the benefit of that protection to the later Amending Acts of 1968, 1969 and 1970 on the ground that they were only ancillary or incidental to section 58 of the Principal Act.
That view was rejected by this Court on the ground that if the protection afforded under article 31 B is.
extended to amendments made to an Act or Regulation subsequent to its inclusion in the Ninth Schedule, the result would be that even those provisions would enjoy the protection which were never scrutinised and could not, in the very nature of things, have been scrutinised by the prescribed majority vested with the power of amending the, Constitution.
That, according to the Court, would be tantamount to giving a power to the State Legislature to amend the Constitution in such a way as would enlarge the contents of the Ninth Schedule to the Constitution.
Khanna, J., who spoke for the Court, observed that "Article 31B carves out a protected zone", that any provision which has the effect of making an inroad into the guarantee of fundamental rights must be construed very strictly and that it is not permissible to the Court to widen the scope of such a provision or to extend the frontiers of the protected zone beyond what is warranted by the language of the provision.
In the result, it was held that the entitlement to protection cannot be extended to provisions which were not included in the Ninth Schedule and that this principle would hold good irrespective of the fact whether the provision in regard to which the protection was sought dealt with new, substantive matters or with matters which were merely incidental or ancillary to those already protected.
This decision shows unmistakably that the circumstance that a Control Order is a mere creature of the parent Act and is incidental or ancillary to it cannot justify the protection of the Ninth Schedule being extended to it on the ground that the parent Act is incorporated in that Schedule.
But having.
won the battle on a point of law, undoubtedly of public importance, the petitioners have to lose the war of price fixation because there is no substance in their grievance that the Price Control Order offends against articles 14, 19(1)(f), and 19(1)(g).
Taking first the challenge under article 14 for consideration, the argument is that the impugned Order treats the entire country as one unit regardless of regional variations relating to factors like the cost of procurement of raw material and freight.
The contention, in other words, is that the order is over inclusive since it treats unequals as equals by imposing an identical burden upon a wider range of individuals than those who can legitimately be treated as constituting one single class for the purpose of remedying the mischief at which the law aims.
In the first place, the averments in the various Writ Petitions are far too vague and general to justify the application of article 14.
The petitioners have failed (1) [1975] 3 S.C.R.885. 324 to show by acceptable data that they fall into a separate class altogether and cannot therefore be subjected to the restraints of a single order of price fixation.
It may be that economic factors governing the mustard oil trade vary from region to region as in the case of any other trade and further, the pattern of the trade may differ in different growing regions and manufacturing centres like Uttar Pradesh, Rajasthan, Bihar, West Bengal, Punjab and Orissa.
But that by itself cannot justify the argument that different prices must be fixed for different regions and that failure to do so would necessarily entail discrimination. 'Dealers ' in Mustard Oil, wherever they operate, can legitimately comprise a single class for the purpose of price fixation, especially as it is undisputed that the two basic constants of the trade are that the cost of mustard seed constitutes 94 per cent of the cost of the mustard oil and that about 3.12 kilograms of seed goes into the extraction of one kilogram of oil.
Fixation of different price this background, frustrate the very object commodity should be made available for different regions will, in of the exercise that an essen to the consumer at a fair price.
Consumer goods have a disconcerting tendency to disappear from regions where prices are lower and they notoriously migrate to areas where higher prices rule.
Besides, the grievance of the West Bengal dealers, that since they have to import mustard seed from Uttar Pradesh their cost of production is higher than in Uttar Pradesh can be met with the answer that in any event, West Bengal has also to import at least 1/3rd of its total annual requirement of 1.3 lakhs of Metric tonnes of Mustard Oil.
Uttar Pradesh grows 66% of the total production of mustard seed whereas West Bengal grows only 6%.
The question really is whether dealers in different regions can be said to be so differently situated in the context of and in relation to the purpose for which the Price Control Order is issued that one common price for dealers all over the country can reasonably be described as discriminatory as against some of them.
As observed earlier, there is no reliable data to support this contention and we cannot accept the charge of over inclusiveness for the mere reason that dealers in a certain region have to import their raw material from another region.
Perhaps, the high rate of turnover and consumption in a region like West Bengal may easily absorb the additional cost of freight.
We are therefore unable to hold, to use the language of Mathew J., in State of Gujarat vs Shri Ambica Mills Ltd. (1) that the Government of India, in fixing one common price for mustard oil for the whole country, has acted like Herod who ordered the death of all male children born on a particular day because one of them would some day bring about his downfall.
It is interesting that in matters of price fixation, whichever method the authorities adopt is made the subject matter of challenge for one reason or another, often conflicting and contradictory.
In Saraswati Industrial Syndicate Ltd. vs Union of India(1) one of the contentions on behalf of the manufacturers of sugar was that sugar prices should not have been determined on the basis of 22 different zones but should have been determined either on an All India basis or for a unit of fix zones.
That contention was rejected by this Court but the case is (1) ; , 762.
(2) ; 325 an instance of how a division of the country into separate zones for the purpose of fixing the price of an essential commodity does not offer a commonly acceptable solution.
It is doubtless that if lower prices were fixed for Uttar Pradesh on the ground that the dealers there were not required to import raw material from outside, a hue and cry would have been raised that the Government of India was victimising the dealers in a particular area for the irrelevant reason that it grew the raw material in abundance.
In the ultimate analysis, the mechanics of price fixation has necessarily to be left to the judgment of the executive and unless it is patent that there is hostile discrimination against a class of operators, the processual basis of price fixation has to be accepted in the generality of cases as valid.
That takes us to the petitioners ' contention that the Price Control Order is violative of the petitioners ' right under articles 19(1) (f) and 19 (1 ) (g) of the Constitution.
The case of M/s Prag Ice & Oil Mills who are petitioners in Writ Petition No. 712 of 1977 is as follows : The average cost of production mustard oil, when the Price Control Order was issued, was about Rs. 1351.10p ' per quintal i.e. Rs. 13.51 per kilogram.
Taking into consideration overhead costs and allowing for a reasonable margin of profit, the fair selling price of mustard oil would come to Rs. 14.01 per kilogram at the factory gate.
Petitioners, being wholesalers, sell their goods to other wholesalers and retailers some of whom have to transport the goods at considerable distances from the petitioners ' factory.
Under the impugned Order the price of mustard oil is fixed at Rs. 10/ per kilogram 'which means that the petitioners have to sell the goods to the retailer at about Rs. 8.50 per kilogram since the retailer has to provide for a margin of at least Rs. 1.50 per kilogram for his costs and a small I profit.
Thus the petitioners have to suffer a loss of over Rs. 5/ per kilogram as a result of the Price Control Order.
By this method, the petitioners are deprived of their right to acquire and hold their property and carry on their trade or business of extracting, manufacturing and selling mustard oil.
The price of Rs. 10/ per kilogram has been fixed, according to the petitioners, arbitrarily and without any application of mind.
These allegations contained 'in the Writ Petition of M/s. Prag Ice & Oil Mills may be taken as representing broadly the grievance of the other petitioners who are more or less similarly situated.
Those allegations have been traversed by Shri V. Srinivasan, Deputy Secretary to the Ministry of Civil Supplies and Cooperation Government of India, on behalf of the Union Government.
Shri Srinivasan has stated in his affidavit that in March 1977, the retail price of mustard oil in several mustard oil consuming centres ranged between Rs. 9.75 and Rs. 10.81 per kilogram.
It became necessary to issue the impugned Order in view of the fact that the price of mustard oil was increasing persistently in spite of the fact that the prices of other edible oils were showing a declining trend.
The available stocks disappeared from the market suddenly and the Government had to intervene in order to control the distribution of an essential commodity in public interest.
The fixation of price in these circumstances was necessarily empirical, for which purpose the Government took into account prices which were 326 prevailing in the market when the goods were freely available, the general level of prices of other edible, oils the purchasing power of the consumer and the amount of loss which the industry was able to absorb after it had made huge profits in prosperous years.
The affidavit further says that even at Rs. 10/ per kilogram, it was possible for the petitioners to make a small profit but, whether or not the dealers.
made any profit, the validity of the Price Control Order was not liable to be challenged on the ground that the dealers would incur a loss if they were obliged to sell mustard oil at Rs. 10/ per kilogram.
The question as to which was the fair price to the consumer was kept by the Government in the forefront and by that method alone could the dominant object of the be achieve effectively.
Shri Srinivasan 's affidavit further states that mustard seed is grown mainly in the rabi season, i.e., from September to October and February to March and the peak marketing season is from April to June.
The mustard crop is by and large grown by small farmers who have no staying ability and who, in their anxiety to dispose of their produce as quickly as possible after the harvest, sell their produce between April and June.
From this it is stated to follow that the millers effect the bulk of their purchases during the first quarter of the year and therefore, the petitioners could not be heard to contend that the price of mustard seed after the coming into force of the impugned Price Control Order should be taken into account for determining the cost which they have to incur in producing mustard oil.
The affidavit con tains a table showing the prices paid by the millers and the prices, received by the farmers for the mustard seed.
The fair price of the mustard oil, according to the Government, could be fixed on the basis, of weighted average price or the mean price of the mustard seed.
But in order not to cause hardship to the dealers, the price was fixed at Rs. 10 per kilogram on the basis of the average of the highest and the lowest of the market prices prevailing during the period of bulk arrivals of the seed in the market, The prices ranging at ten different centres are alleged to have been taken into account, namely, Aligarh, Allahabad, Hapur, Gauhati, Hathras, Jullundur, Kanpur, Moga, Rohtak and Sriganganagar.
, Those prices yield a mean price of around Rs. 350/ per quintal of mustard seed and upon that basis the retail price works out to be less than Rs. 10/ viz., Rs. 9.95 per kilogram.
Considering these rival contentions and the data which has been produced,before us in support thereof, we are unable to accept the petitioners ' submission that the Price Control Order is violative of their rights under articles 19 (1) (f ) and 19 (1) (g) of the Constitution.
In the first place, it is impossible to determine in these Writ Petitions the accuracy of the petitioners ' case that they purchase mustard seed from month to month and from week to week as the crushing of the seed progresses.
We see no reason to doubt the statement contained in the affidavit filed on behalf of the Government of India that most of the growers of mustard seed are small agriculturists who have hardly any staying ability and are therefore compelled to sell their produce immediately after the harvesting season, that is to say, between March 32 7 and June.
If the prices of mustard seed prevailing during that period are taken into account, it is difficult to accept that the price of Rs. 10 per kilogram is so patently unreasonable as to be violative of the petitioners right to hold property or to do trade or business.
the petitioners that it is futile to fix the price of oil without at the same time fixing the ceiling price of the raw material, namely, the mustard seed.
This Contention is also effectively met by the: respondent 's plea that the bulk of the, purchases are made by the petitioners immediately after the harvesting season and that, considering the pattern of the trade in mustard seed it is wholly unnecessary to control the price of the seed in order effectively to control the price of mustard oil.
It is significant that whereas mustard seed was sold in certain areas at prices ranging between Rs. 480/ and Rs. 530/ per quintal in September 1977, prices after the promulgation of the impugned Price Control Order had come down to a range between Rs. 365/and Rs. 390/ per quintal.
This has not been denied by the petitioners but they describe the phenomenon as irrelevant for the purpose of determining the legality of the Price Control Order.
Their contention, in which we find no ' substance, is that the.
consequence of the Price Control Order cannot be looked at for the purpose of deciding whether the price of mustard oil was fixed in accordance with legally acceptable principles.
The proof of pudding, as the saying goes, is in the eating, and no court can shut its eyes to the fact that the Price Control Order produced the salutary and tangible result of bringing down the price of raw material.
The basic rule of construction in these matters, as observed in Vrajlal Manilal & Co. & Ors.
vs State of Madhya Pradesh & Ors.(1) is that a mere literal or mechanical construction is not appropriate where important questions such as the impact of an exercise of a legislative power on constitutional provisions and safeguards ,hereunder are concerned.
In cases of such a kind, two rules of construction have to be kept in mind : (1) that courts generally lean towards the constitutionality of a legislative measure impugned before them upon the presumption that a legislature would not deliberately flout a constitutional safeguard or right, and (2) that while construing such an enactment the court must examine the object and the purpose of the impugned Act,.
the mischief it seeks to prevent and ascertain from such factors its true scope and meaning.
Section 3(1) of the , empowers the Central Government to fix the prices of essential commodities if it is of the opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at a fair price.
Sub section (2) (c) of section 3 provides that without prejudice to the generality of the power conferred by sub section (1), an order made under that sub section may provide for controlling the price at (1) [1970] S.C.R.400,409. 328 which any essential commodity may be bought or sold.
The dominant purpose of these provisions is to ensure the availability of essential commodities to the consumers at a fair price.
And though patent injustice to the producer is not to be encouraged, a reasonable return on investment or a reasonable rate of profit is not the sine qua non of the validity of action taken in furtherance of the powers conferred by section 3(1) and section 3(2)(c) of the .
The interest of the consumer has to be kept in the forefront and the prime consideration that an essential commodity ought to be made available to the common man at a fair price must rank in priority over every other consideration.
We are not impressed by the play of statistics on the part of the petitioners which is designed to show that as a result of the Price Control Order, they are faced with a loss of about Rs. 5/ per kilogram on the sale of mustard oil.
We will ignore, while we are on this point, the pronounced reiteration of the respondent that the, peti tioners have made huge profits in past years and that their concerns are sufficiently prosperous to be able to absorb a small loss for a temporary period.
But even in the absence of satisfactory proof of the extent of the profits made by the petitioners in past years, we are of the opinion that the circumstance that the petitioners may have to suffer a loss over a short period immediately following upon the pro mulgation of the Price Control Order will not render the Order constitutionally invalid.
The interplay of economic factors and the laws of demand and supply are bound eventually to have their impact on the pattern of prices prevailing in the market.
If the dealer cannot lawfully sell the finished product at more than Rs. 10/ per kilogram, the price of raw material is bound to adjust itself to the price of the product.
Subsequent events unmistakably demonstrate the effect of such interplay and the favourable reaction which the Price Control Order has produced on 'the, price of mustard seed.
But above all things, it is necessary to bear in mind in matters of the present nature what Krishna Iyer, J., said in B. Banerjee vs Anita Pan.(1) that such provisions have to be viewed through a socially constructive, not legally captious microscope to discover a glaring unconstitutional infirmity, that when laws affecting large chunks of the community are enacted stray misfortunes are inevitable and that social legislation without tears, affecting vested rights, is virtually impossible.
Having considered the matter from every possible angle, we are unable to accept the petitioners ' contention that the impugned Price Control Order is so unreasonable as to be constitutionally invalid.
As observed by Beg J., in Saraswati Industrial Syndicate, (supra) it is enough compliance with the constitutional mandate if the basis adopted for price fixation is not shown to be so patently unreasonable as to be in excess of the power to fix the price.
Learned counsel for the petitioners expressed the fear that the fixation of an uneconomic price will drive the manufacturers out of the market and thus the very source of supply of an essential (1) [1975](2) S.C.R. 774, 782.
329 commodity will dry up , thereby frustrating the object of the that the consumer must get his basic needs at a fair price.
The fallacy of this contention is that immediately prior to the promulgation of the Price Control Order the consumer was denied the chance to get the mustard oil at a price which lie could reasonably afford.
For him, therefore, the supply had already dried up.
If, after the issuance of the order, the supply position shows no improvement, that consequence cannot be legitimately attributed to the operation of the Price Control Order, At best, the Order can then be said to have failed to achieve its purpose.
This discussion will not be complete without reference to the decision of a Constitution Bench of this Court in Shree Meenakshi Mills Ltd. vs Union of India(1).
The question which arose in that case was as regards the validity of a notification fixing fair prices of cotton yarn.
It was contended on behalf of the petitioners therein that the price fixed was arbitrary because the fluctuation in the price of cotton was not taken into consideration, the price of raw materials, the liability for wages and the necessity for ensuring reasonable profit to the trader were not taken into account; and above everything else, the industry was not ensured a reasonable return on its investment.
These contentions were rejected by this Court on the ground that, just as the industry cannot complain of rise and fall of prices due to, economic factors in an open market, it cannot similarly complain of some increase in or reduction of prices as a result of a notification issued under section 3(1) of the because, such increase or reduction is also based on economic factors.
Dealing with the contention that a reasonable profit must be assured to the manufacturers, the Court held that ensuring a fair price to the consumer was the dominant object and purpose of the and that object would be completely lost sight of, if the producer 's profit was kept in the fore front.
Ray C.J., speaking for the Court, observed : "In determining the reasonableness of a restriction imposed by law in the field of industry, trade or commerce, it has to be remembered that the mere fact that some of those who are engaged in these are alleging loss after the imposition of law will not render the law unreasonable.
By its very nature, industry or trade or commerce goes through periods of prosperity and adversity on account of economic and sometimes social and political factors.
In a , largely free economy when controls have to be introduced to ensure availability of consumer goods like foodstuff, cloth and the like at a fair price, it is an impracticable proposition to require the Government to go through the exercise like that of a Commission to fix the prices." Another passage from the judgment of the learned Chief Justice which has an important bearing on the instant case is to the following effect (1) [1974] 2 S.C.R.398.
330 "When available stocks go underground and the Government has to step in to control distribution and availability in public interest, fixing of price can, therefore, be only empirical.
Market prices at a time when the goods did not go underground and were freely available, the general rise in prices, the capacity of the consumer specially in case of consumer goods like food stuff, cloth etc.
the amount of loss which the industry is able to absorb after having made huge profits in prosperous years, all these enter into the calculation of a fair price in an emergency created by artificial shortages.
" On this aspect of the matter, the Court cited with approval a passage from an American decision, Secretary of Agriculture vs Central Reig Refining Company(1) to the effect that Courts of Law cannot be converted into tribunals for relief from the crudities and inequities of complicated experimental economic legislation.
Counsel for the petitioners relied upon the decisions in Panipat Co operative Sugar Mills vs Union of India(2) and Anakapalle Cooperative Agricultural and Industrial Society Ltd. vs Union of India(3) in support of their contention that fixation.
of a price without ensuring a reasonable return to the producers or dealers is unconstitutional.
The infirmity of this argument, as pointed out in Meenakshi Mills vs Union of India, (supra) is that these two decisions turn on the language of section 3(3c) of the under which it is statutorily obligatory to ensure to the industry a reasonable return on the capital employed in the business of manufacturing sugar.
These decisions can, therefore, have no application to cases of price fixation under section 3 (1) read with section 3 (2) (c) of the Act.
Cases failing under sub sections 3A, 3B and 3C of section 3 of that Act belong to a different category altogether.
It is customary in price fixation cases to cite the oft quoted decision in Premier Automobiles Ltd. & Anr. etc.
vs Union of India(4) which concerned the fixation of price of motor cars.
It is time that it was realized that the decision constitutes.
no precedent in matters of price fixation and was rendered for reasons peculiar to the parti cular case.
At page 535 of the Report Grover J., who spoke for the Court, stated at the outset of the judgment : "Counsel for all the parties and the learned Attorney General are agreed that irrespective of the technical or legal points that may be involved, we should base our judgment on examination of correct and rational principles and should direct deviation from the report of the Commission which was an expert body presided over by a former judge of a High Court only when it is shown that there has been a departure from, established principles or the conclusions of the Commission are shown to be demonstrably wrong or erroneous.
" By an agreement of parties the (1) 94Law Ed. 381.
(2) A.T.R. (3) A.T.R. (4) ; 331 Court was thus converted into a Tribunal for considering every minute detail relating to price fixation of motor cars.
Secondly, as regards the escalation clause, the Court recorded at page 543 that it was not disputed on behalf of the Government, and the Attorney General accepted the position, that a proper method should be devised for escalation or de escalation.
Thirdly, it is clear from page 544 of the Report that the Learned Attorney General also agreed that a reason able return must be allowed to the manufacturers on their investment.
The decision thus proceeded partly on an agreement between the parties and partly on concessions made at the Bar.
That is the reason why the judgment in Premier Automobiles (supra) cannot be treated as a precedent and cannot afford any appreciable assistance in the decision of price fixation cases.
The contention that the Price Control Order is arbitrary because it is not limited in point of time is without any merit.
In the very nature of things, orders passed under section 3(1) read with section 3(2) of the are designed primarily to meet urgent situations which require prompt and timely attention.
If a price control order brings about an improvement in the supply position or if during the period that such an order is in operation there is a fall in prices so at to bring an essential commodity within the reach of the ordinary consumer, the order shall have lost its justification and would in all probability be withdrawn.
That in fact is what has happened in the instant case.
It appears that the supply position having improved, or, so at any rate seems to be the assessment of the situation by the Government, the order has been recently with,drawn.
Learned counsel for the petitioners laid great stress on the circumstance that, as is shown by the affidavit filed on behalf of the Union Government, the Price Control Order did not take into account the circumstance that the cost of production of mustard oil includes a fairly large margin of profit of the middleman.
It is urged that small millers cannot afford to take large investments and lock up their limited capital and therefore resort is required to be had to the intervention of the middleman who is in a position to invest a: large capital in the purchase of raw material and who, naturally, expects a fair return on his investment.
The intervention of the middleman is an acknowledged reality of all trades and businesses.
The fact that the middleman 's profit increases the price (A goods which the consumer has to pay, was described by this Court in Narendra Kumar and Others vs The Union of India and Others(1) as 'axiomatic.
As observed in, that case, since the middle mans charges often add to a considerable sum, it has been the endeavour in modern times for those responsible for social control to keep the middleman 's activities to the minimum and to attempt to replace them largely by cooperative sale societies of producers and cooperative purchase societies of consumers.
The elimination of the middleman is bound to cause trouble and inconvenience, 1 [1960] 2S.C.R.375.
332 but the ultimate savings in the cost of the finished product could more than balance that inconvenience.
The argument of the petitioners really amounts to a rigid insistence that they are entitled to carry on their business as they please, mostly in a traditional manner, regardless of its impact on public interest.
But, property rights are not absolute, and important as the right of property may be, the right of the 'public that such rights be regulated in common interest is of greater importance.
These correlative rights, as observed in Lea Nebbia vs People of the State of New York(1), are always in collision : "No exercise of the private right can be imagined which will not ever slight, affect the public; no exercise of the to regulate abridge his liberty or affect his property.
But subject only to constitutional restraint the private right must yield to the public the words of Justice Roberts who delivered the opinion of in Leo Nebbia (supra) : "The Constitution does not secure to any one liberty to conduct his business in such fashion as to inflict injury upon the, public at large, or upon any substantial group of the people.
Price control, like any other form of regulation, is unconstitutional only if arbitrary, discriminatory, or demonstrably irrelevant to the policy the legislature is free to adopt, and hence an unnecessary and unwarranted interference with individual liberty.
" Counsel for the petitioners characterised the fixation of price in the instant case as a veiled transgression of power conferred by section 3 ( 1 of the .
In support of that submission the judgment of this Court in K. C. Gajapati Narayan Deo anti Others vs The State of Orissa(2) was cited in which it was said that when a legislative power is defined by reference to purpose, legislation not directed to that purpose will be invalid.
We are unable to appreciate how, if the Government has got the power to fix a fair price of an essential commodity, it can be said that they have under a pretext trespassed upon a field which does not properly belong to them.
The power conferred by section 3(1) of the is undoubtedly purposive.
But it seems to us incontrovertible that the Price Control Order was promulgated by the Government in order to achieve the purpose set out in section 3(1) of the Act.
The fact that a legislative remedy or an administrative order passed in exercise of a statutory power is effective to mitigate an evil may show that it has failed to achieve its purpose, highlighting thereby the paradox of reform.
But, as observed in Joseph Beaubarnais vs People of the State of Illinois(1) , that "is the price to be paid for the trail and error inherent in legislative efforts to dial with obstinate social issues".
We are, therefore, unable to hold that by fixing a fair price for mustard oil, the Government has committed a veiled and subtle trespass upon private rights or upon a legislative field which is not open to them to occupy.
(1) 78 Lawyers ' Edition 940.
(2) ; (3) 96 Lawyers 'Edition 919.
333 To sum up, it seems to us impossible to accept the contention of the petitioners that the impugned Price Control Order is an act of hostile discrimination against them or that it violates their right to property or their right to do trade or business.
The petitioners have taken us into the mutest details of the mechanism of their trade operations and they have attempted to demonstrate in relation thereto that a factor here or a factor there which ought to have been taken into account while fixing the price of mustard oil has been ignored.
Dealing with a similar argument it was observed in Metropolis Theater Company vs City of Chicago(1) that to be able to.
find fault with a law is not to demonstrate its invalidity.
"It may seem unjust and oppressive, yet be free from judicial interference.
The problems of government are practical ones and may justify, if they do not require rough ,accommodations, illogical, it may be, and unscientific.
But even such criticism should not be hastily expressed.
What is best is not always discernible, the wisdom of any choice may be disputed or condemned.
Mere errors of government are not subject to our judicial review.
It is only its palpably arbitrary exercises which can be declared void.
" The Parliament having entrusted the fixation of prices to the expert judgment of the Government, it would be wrong for this Court, as was done by common consent in Premier Automobiles (supra) to examine each and every minute detail pertaining to the Governmental decision.
The Government, as was said in Permian Basin Area Rate Cases, (supra) is entitled to make pragmatic adjustments which may be called for by particular circumstances and the price control can be declared unconstitutional only if it is patently arbitrary, discriminatory or demonstrably irrelevant to the policy which the legislature is free to adopt.
The interest of the producer and the investor is only one of the variables in the "constitutional calculus of reasonableness ' and Courts ought not to interfere so long as the exercise of Governmental power to fix fair prices is broadly within a "zone of reasonableness '.
If we were to embark upon an examination of the desperate contentions raised before us on behalf of the contending parties we have no doubt that we shall have exceeded our narrow and circumscribed authority.
Before closing, we would like to mention that the petitioners rushed to this Court too precipitately On the heels of the Price Control Order.
Thereby they deprived themselves of an opportunity to show that in actual fact, the Order causes them irreparable prejudice.
Instead, they were driven through their ill thought haste to rely on speculative hypotheses in order to buttress their grievance that their right to property and the right to do trade was gone or was substantially affected.
A little more patience, which could have been utilised to observe how the experiment functioned, might have paid better dividends.
The impugned Price Control Order is, therefore, valid and the challenge made thereto by the petitioners his to fail.
These are our reasons in support of the order passed earlier that the Petitions be dismissed with costs.
S.R. Petitions dismissed.
(1) 57Lawyers Edition730.
| IN-Abs | Sub section (1) of section 3 of the which is placed in the Ninth Schedule of the Constitution, empowers the Central Govt.
to provide by an order for regulating or prohibiting the production, supply and distribution of an essential commodity or trade or commerce therein, if it is of the opinion, that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing its equitable distribution and availability at a fair price.
In exercise of the power conferred by section 3 of the , 10 of 1955, the Government of India in its Ministry of Civil Supplies and Cooperation issued on 'September 30, 1977 the Mustard Oil (Price Control) Order, 1977.
The Price Control Order provided by Clause (3) that no dealer was either by himself or by arty person on his behalf to sell or offer to sell any mustard oil at a retail price exceeding Rs. 10 per Kg.
exclusively of the cost of container but inclusive of taxes.
Clause 2 defines a dealer to mean a person engaged in the ,business of purchase, sale, or storage for sale of mustard oil.
The Price Control Order was challenged in this Court by several dealers on the ground mainly, that it violated Articles 14.
19(1)(f) and 19(1)(g) of the Constitution, article 301 was cited but not argued upon with any seriousness.
Upholding the validity of the impugned Price Control Order and dismissing the appeals the Court, HELD: Per majority The Mustard Oil (Price Control Order, 1977) is constitutionally valid.
The impugned Price Control Order is not an act of hostile discrimination against the traders.
It does not violate their right to property or their right to trade or business.
[319C; 331G] 294 Per Chandrachud, J. was he then was] (On behalf of Bhagwati, Murtaza Fazal Ali, Shirghal, Jaswant Singh, JJ.
and himself).
On a plain reading of article 31 A it cannot be said that the protective umbrella of the Ninth Schedule takes in not only the acts and regulations specified therein but also orders and notifications issued under those acts and regulations.
[320 C] (a) article 31 B constitutes a gave encroachment on fundamental rights, and though it is inspired by a radiant social philosophy, it must be construed as strictly as one may, for the simple reason that the guarantee of fundamental rights cannot be permitted to be diluted by implications and inferences.
The Constitution which prescribes the extent to which a challenge to the constitutionality of a law is excluded, must be construed as demarcating the farthest limit of exclusion.
Considering the nature of the subject matter which, article 31 B deals with, there is no justification for extending by judicial interpretation the frontiers of the field which is declared by that article to be immune from challenge on the ground of violation or abridgement of fundamental rights; [320 D E] (b) The article affords protection to Act and Regulation specified in the Ninth Schedule.
Therefore, whenever a challenge to the constitutionality of a provision of law on the ground that it violates any of the fundamental rights conferred by Part III is ought to be repelled by the State on the plea that the law is placed in the Ninth Schedule the narrow question to which one must address oneself is whether the impugned law is specified in that Schedule.
If it is, the provisions of article 31 B would be attracted and the challenge would fail without any further inquiry.
On the other hand, if the law is not specified in the Ninth Schedule, the validity of the challenge has to be examined in order to determine whether the provisions thereof invade in any manner any of 'the fundamental rights conferred by Part III.
It is then no answer to say that though the particular law, as for example a Control Order, is not specified in 'the Ninth Schedule, the parent Act under which the order is issued is specified in that Schedule; [320 E G] (c) Extending the benefit of the protection afforded by article 31 B to any action taken under an Act or Regulation which is specified in the Ninth Schedule.
is an unwarranted extension of the provisions contained in Article 31 B, neither justified by its language nor by the policy or principle underlying it.
When a particular Act or Regulation is placed in the Ninth Schedule, the Parliament may be assumed to have applied its mind to the provisions of the particular Act or Regulation and to the desirability, property or necessity or placing it in the Ninth Schedule in order to obviate a possible challenge to its provisions on the ground that they offend against the provisions of part III.
Such an assumption cannot, in the very nature of things, be made in the case of an order issued by the Govt.
under an Act or Regulation which is placed in the Ninth Schedule, The fundamental rights will be eroded of their significant content if by, judicial interpretation a constitutional immunity is extended to Orders to the validity of which the Parliament, at least theoretically, has had no opportunity to, apply its mind.
Such an extension takes for granted the supposition that the authorities on whom power is conferred to take appropriate action under a statute will act within the permissible constitutional limitations, a supposition which past experience, does not justify and to some extent falsifies.
[321 C F] 2.
The unholding of laws, by the application of 'he theory of derivative immunity is foreign to, the scheme of our Constitution and accordingly Orders and Notifications issued under Acts and Regulations which are specified in the Ninth Schedule must meet the challenge that they offend against the provisions of Part III of the Constitution.
The immunity enjoyed by the parent Act by reason of its being placed in the Ninth Schedule cannot proprio vigore be extended to an off spring of the Act like a Price Control Order issued under the authority of the Act.
It is therefore open to the petitioners to invoke the 295 writ jurisdiction of this Court for determination of the question whether the provisions of the Price Control Order violates article 14, 19(11)(f) and 19(1)(g) of the Constitution.
[321 F G].
Vasantlal Maganbhai Sanjanmal vs State of Bombay and Ors.
, ; , Latafat Alikhan and Ors.
vs State of U.P., [1971] Supp.
S.C.R. 719; Explained.
Godavari Sugar Mills Ltd. and Ors.
vs section B. Kamble and Ors.
; Applied.
Price Control Order does not offend against article 14 of the Constitution [323 F] (a) The averments in the various Writ Petitions are far too vague and general to justify the application of article 14.
The petitioners have failed to show by acceptable data that they fall into a separate class altogether, and cannot therefore be subjected to the restraints of a single order of price fixation.
[323 H, 324 A] (b) Variation in economic factors governing the mustard oil trade from region to region or differences in the pattern of trade.
in different growing regions and manufacturing centres cannot by itself justify the argument that different prices must be fixed for different regions and that failure to do so would necessarily entail discrimination.
[324 A B] (c) Dealers in mustard oil, wherever they operate can legitimately comprise a single class for the purpose of price fixation, especially as it is undisputed that the two basic constants of the trade are : (i) the cost of mustard seed constitutes 94 per cent of the cost of the mustard oil and (ii) about 3.12 kilograms of seed goes into the extraction of one kilogram of oil.
Fixation of different prices for different regions will, in this background, frustrate the very object of the exercise that an essential commodity should be made available to the consumer at a fair price.
[324 B C] (d) There is no reliable, data to support the contention, that dealers in different regions are so differently situated in the context of and in relation to the, purpose for which the Price Control Order is issued that fixation of common price for dealers all over the country can reasonably be described as discriminatory as against some of them.
[324 E] (e) The charge of over inclusiveness for the mere reason that dealers in a certain region have to import their raw material from another region cannot be accepted.
Perhaps the high rate of turnover and consumption in a region like West Bengal may easily absorb the additional cost of freight.
The Government of India.
in fixing one common price for mustard oil for the whole country, has not acted like Herod who ordered the death of all male children born on a particular day because one of them would some day bring about his downfall.
[324 F F] State of Gujarat vs Sri Ambica Mills Ltd., ; @ 782 referred to.
(f) The mechanics of price fixation has necessarily to be left to the judgment of the executive and unless it is patent that there is hostile discrimination against a class of operators, the processual basis of price fixation has to be accepted in the generality of cases as valid.
[325 B] Saraswati Industrial Syndicate Ltd. vs Union of India ; referred to. 4.
The Price Control Order is not violative of the petitioners ' rights under articles 19(1)(f) and 19(1)(g) of the Constitution.
[326 G] (a) It is impossible to determine in these writ petitions the accuracy of the petitioners ' allegation that they purchase mustard seed from month to.
month and from week to week as the crushing of the seed progresses.
Most of 296 the growers of mustard seed are small agriculturists who have hardly any staying ability and are therefore compelled to.
sell their produce immediately after the harvesting season, that is to say, between March and June.
If the prices of mustard seed prevailing during that period are taken into account, it is difficult to accept that the price of Rs. 10/ per kilogram is so patently unreasonable as to be violative of the petitioners ' right to hold property or to do trade or business [326 G H, 327 A] (b) Since the bulk of the purchases are made by the petitioners immediately after the harvesting season considering the general pattern of the trade in mustard seed, it is wholly unnecessary to control the price of mustard seed, in order effectively to control the price of mustard oil.
[327 B C] (c) The contention that the consequence of the Price Control Order cannot be looked at for the purpose of deciding whether the price of mustard oil was fixed in accordance with legally acceptable principles cannot be upheld.
No Court can shut its eyes to the fact that the Price Control Order produced the salutary and tangible result of bringing down the price of raw material.
[327 C D] (d) A mere literal or mechanical construction is not appropriate where important questions such as the impact of an exercise of a legislative power on constitutional provisions and safeguards thereunder are concerned.
In cases of such a kind, two rules of construction have to be kept in mind : (1) that Courts generally lean towards the constitutionality of a legislative measure upon the presumption that a legislature will not deliberately flout a constitutional safeguard or right, and that (2) while construing an enactment, the Court must examine its object and the purpose, the mischief it seeks to prevent and ascer tain from such factors its true scope and meaning.
[327 E F] Vrajlal Manilal & Co. and Ors.
vs State of M.P. and Ors.
; , 409, reiterated.
(e) The dominant purpose of the provisions of sub section (1) and 2(c) of Section 3 of the is to ensure the availability of essential commodities to the consumers at a fair price.
And though patent injustice to the producer is not to be encouraged, a reasonable return on investment or a reasonable rate of profit is not the sine qua non of the validity of action taken in furtherance of the powers conferred by section 3(1) and section 3(2)(c) of the .
The interest of the consumer has to be kept in the forefront and the prime consideration that an essential commodity ought to be made available to the common man at a fair price must rank in priority over every other consideration.
[328 A B] (f) Even in the absence of satisfactory proof of the extent of the profits made by the petitioners in past years, the circumstance that the petitioners may have to suffer a loss over a short period immediately following upon the promulgation of the Price Control Order will not render the Order constitutionally invalid.
The interplay of economic factors and the laws of demand and supply are bound eventually to.
have their impact on the pattern of prices prevailing, in the market.
If the dealer cannot lawfully sell the finished product at more than Rs. 10/ per kilogram, the price of raw material is bound to adjust itself to the piece of the product.
Subsequent events unmistakably demonstrate the effect of such interplay and the favourable reaction which the Price Control Order has produced on the price of mustard seed.
In matters of the present nature, such provisions have to be viewed through a socially constructive.
not legally captious microscope to discover a glaring unconstitutional infirmity, that when laws affecting large chunks of the community are enacted stray misfortunes are inevitable and that social legislation without tears, affecting vested rights is virtually impossible.
[328 C F] B. Panerjee vs Anita Pan, ; @ 782 followed.
(g) The impugned Price Control Order is not so unreasonable as to be constitutionally invalid.
It is enough compliance with the constitutional mandate if the basis adopted for price fixation is not shown to be so patently unreasonable as to be in excess of the power to fix the price.
[328 G] 297 Saraswati industrial Syndicate vs Union of India, ; ; referred to.
(h) Immediately prior to the promulgation of the price control order the consumer was denied the chance to get the mustard 'Oil at a price which he could reasonably afford.
For him, therefore, the supply had already dried,up.
If, after the issuance of the order, the supply position shows no improvement, that consequence cannot be legitimately attributed to the operation of the Price Control Order.
At worst, the Order can then be said to have failed to achieve its purpose.
[329 A B] (i) Just as the industry cannot complain of rise and fall of prices due to economic factors in an open market it cannot similarly complain of some increase or reduction in prices as a result of a notification issued under section 3(1) of the because, such increase or reduction is also based on economic factors.
Ensuring a fair price to the consumer was the dominant object and purpose of the and that object would be completely lost sight of, if the producer 's profit was kept in the forefront.
[329 D E] Shree Meenakshi Mills Ltd. vs Union of India, , Secretary of Agriculture vs Central Reig Refining Co., 94 Law.
Edn. 381; applied.
Panipat Cooperative Sugar Mills vs Union of India, A.LR. ; Anakapalle Cooperative Agricultural and Industrial Society Ltd. vs Union of India, A.I.R. 1973 S.C. 734; held inapplicable.
Premier Automobiles Ltd. & Anr.
vs Union of India, ; ; distinguished, (j) Courts of law cannot be converted into tribunals for relief from the crudities and inequities of complicated experimental economic legislation.
[331 A B] 5.
The contention that the Price Control Order is arbitrary because it is not limited in point of time is without any merit.
In the very nature of things orders passed under section 3(1) read with section 3(2) of the are designed primarily to meet urgent situations which require prompt and timely attention.
If a price control order brings about an improvement in the supply position or if during the period that such an order is in operation there is a fall in prices so as to bring an essential commodity within the reach of the ordinary consumer, the order shall have lost its justification and would in all probability be withdrawn.
That in fact is what has happened in the instant case.
It appears that the supply position having improved.
or so at any rate seems to be the assessment of the situation by the Government, the order has been recently withdrawn.
[331 C E] 6.
The 'intervention of the middlemen is an acknowledged reality of all trades and businesses.
The fact that the middleman 's profit increases the price of 'goods which the consumer has to pay, is axiomatic.
It has been the endea vour in modern times for those responsible for social control to keel) the middleman 's activities to the minimum and to attempt to replace them largely by cooperative purchase societies of consumers.
The elimination of the middlemen is bound to cause trouble and inconvenience, but the ultimate saving in the cost of the finished product could more than balance that inconvenience.
The argument of the petitioners really amounts to a rigid insistence that they are entitled to carry on their business as they please, mostly in a traditional manner, regardless of its impact on public interest.
But, property rights are not absolute, and important as the right of property may be, the right of the public, that such rights be regulated in common interest is of greater importance,.
[331 G H, 332 A B] Led Nebbia vs People of, the State of New York, 78 Law Edn.
p. 940 and Narendra Kumar and ' Ors.
vs Union of India and Ors.
, ; referred to.
298 7.
If the Government has got the power to fix a fair price of an essential commodity, it cannot be said that they have under a pretext trespassed upon a field which does not properly belong to them.
The power conferred by section 3(1) of the is undoubtedly purposive.
The Price Control Order was promulgated by the Government in order to achieve the purpose set out in section 3(1) of the Act.
The fact that a legislative remedy or an administrative order passed in exercise of a statutory power is ineffective to mitigate an evil may show that it has failed to achieve its purpose, highlighting thereby the paradox of reform.
By fixing a fair price for mustard oil, the Government has not committed a veiled and subtle trespass upon private rights or upon a legislative field which is not open to them to occupy.
[332 E G] K. C. Gajapati Narayannai Rao and Ors., vs State of Orissa ; ; Joseph Beauharis vs People of the State of Illinois, 96 Law.
919 referred to.
To be able to find fault with a law is not to demonstrate its invalidity.
The Parliament having entrusted the fixation of prices to the expert judgment of the Government it would be wrong for this Court, to examine each and every minute detail pertaining to the Governmental decision.
The Government is entitled to make pragmatic adjustments which may be called for by particular circumstances and the price control can be declared unconstitutional only if it is patently arbitrary, discriminatory or demonstrably irrelevant to the policy which the legislature is free to adopt.
The interest of the producer and the investor is only one of the variables in the constitutional calculus of reasonableness and Courts ought not to interfere so long as the exercise of Governmental power to, fix fair prices is broadly within a "Zone of reascuableness".
The impugned Price Control Order is, therefore, valid and the challenge made, thereto by the petitioners has to fail.
[333 B G] Metropolis Theater Co. vs City of Chicago, 57 Lawyers Edn. 730; Premier Automobiles & Anr.
vs Union of India ; permian Basin Area Rate Cases; , 312 referred to.
Per Beg, C.J. (On behalf of Desai J. and himself) (Contra) 1.
Article 31 B, no doubt, speaks of "specified" Acts and Regulations.
But it makes no distinction whatsoever between any grants of powers and their exercise,.
Powers are granted or conferred so as to be exercised and not to be kept in cold storage for purposes of some kind of display only as though they were exhibits in a show case not meant for actual use.
The whole object of a protection conferred upon powers meant for actual use is to protect their use against attacks upon their validity based upon provisions of Part ITT.
If this be the correct position, it would, quite naturally and logically, follow that their use is what really protected.
[30F H] 2.
A delegated or derivative power could not rise higher or travel beyond the source of that power from which it derives its authority and force If Bagla 's case is good law (no party has questioned its correctness, Articles 14 and 19(i) (f) d (g) could be deemed to be, "written into" Section 3 of the Act itself? (They would control the scope of orders which could be passed under it.
That is, undoubtedly the way in which guarantees of fundamental rights could and should function if the Act containing Section 3 itself had not been placed in the Ninth Schedule so as to take away the guarantees of fundamental rights from the substance of it.
[309 B C] Hart Krishna Bagla vs State of M.P., ; referred to.
If the effect was to widen the orbit of section 3 of the or to remove the limitations put by Articles 14 and 19 upon the exercise of powers under it, the logical and natural result would be to enlarge the scope or sweep of the Orders passed under it.
But, if it has no such upon section 3 of the Act itself, orders passed under it would continue to subject to provisions of section 3 of the Act as controlled by Articles 14 and of the Constitution so that they will have to satisfy what may be described 299 as a "dual test", firstly, that of provisions of section 3 of the Act itself; and secondly, that of provisions of Chapter III of the Constitution containing fundamental rights.
[309 D F] 4.
The Ninth Schedule does not provide any protection at all against attacks based upon either the vice of excessive delegation or want of legislative competence defects which could be said to vitiate the grant of powers despite their place in the Ninth Schedule.
The distinction between protection to a mere grant of powers and to their exercise, therefore, seem specious in the context of the protection.
It cannot ,explain why, if section 3 is protected by the Ninth Schedule, the exercise of power granted by it, which manifests itself in control orders is not protected.
It would be so protected, if at all, not because the Orders to be made in future, as such, are protected but because the power actually conferred and found in existence in section 3 is protected.
The protection is given to a power which is specified and in existence which has to be used for certain purposes and not to what may be specified in future.
[310 A C] 5.
If orders passed under section 3 of the Act also get a protection it would be what may be described as a "derivative" protection so long as the Orders are covered by section 3 of the Act.
It is available only so long as and because the source of their authority Section 3 of the.
Act is protected by the Ninth Schedule.
Orders purporting to be made under section 3 of the Act must, however satisfy the tests found in section 3 itself in every case. 'They can never escape the basic tests whether section 3, the source of their authority, is protected by the Ninth Schedule or not.
The further tests imported by Articles 14 and 19 of the Constitution into section 3 could be applied to these orders only so long as these added tests are attached to or can be read into section 3 of the Act, but not after they have been deliberately delinked or removed from section 3.
The term "skeleton" legislation is used sometimes for denoting the broad outlines of a particular scheme found in an Act of which details are to be filled in later by administrative orders of experts. , cannot be spoken of as a piece of "skeleton" legislation.
[310 D, F G] 6.
Section 3, sub section (1) of the Act provides for delegation of powers to the Central Government in order that it may carry out certain purposes by framing appropriate schemes and evolving policies which may meet the purposes of the Act.
These schemes and policies to serve the stated purposes may differ ,as regards the nature of means adopted and even in the particular objectives sought at particular times to accord with changing circumstances.
Orders passed under section 3 of the Act, in pursuance of such schemes or policies, do not become parts of the Act for the purposes of the Ninth Schedule of the Constitution.
Orders passed under the Act, before its inclusion in the Ninth Schedule, could also be said to be protected directly by the Ninth Schedule if mentioned there.
But, there could be no independent and direct protection of this Schedule conferred upon orders passed under the Act.
[310 G H, 311 A B] Godavari Sugar Mills Ltd. and Ors.
vs section B. Kamble and Ors., referred to.
If the section under which the control order was passed is protected from any attack based on the provisions.
of Part III of the Constitution, the only question will be whether the Control Order is covered by the protected empowering provision.
If it falls outside the empowering Provisions it would be invalid in any case.
If it falls within the empowering Provision but could be found to be struck by the provisions of article 19(1)(f) and (g) of the Constitution, an attack on the Control Order by.
reason of Article 19(1)(f) and (g) would be really on against the empowering provisions itself which is protected.
The Control order, therefore, enjoys what may be called derivative protection.
[312 A C.] Latafat Alikhan and Ors.
vs State of U.P., [1971] SUPP.
S.C.R. 719 @ 720; applied.
The Act was put in the Ninth Schedule to prevent the invocation of Articles 14, 19 and 31 for obstructing measures to necessary as price fixation of 300 essential commodities is for promoting the objectives of a socialist welfare economy.
This would be a sufficient answer to all the argument& on the unconstitutionality of fixing the price of mustard oil below what is claimed to be the cost price.
[314 G] As the impugned order of 30th September, 1977, falls within the provisions of section 3, question of violating a fundamental right does not arise.
If an impugned order were to fall outside section 3 of the Act, no question of applying any test of reasonableness contemplated by Article 19(6) need arise because it would then be purely illegal restriction upon the right conferred by article 19(1)(g) which would fail for lack of authority of any law to support it.
[315 B C] 9.
Section 3 makes necessity or expediency of a control order for the purpose of maintaining or increasing supplies of an essential commodity or for securing its equitable distribution at fair prices the criteria of validity.
It is evident that an assessment of either the expediency or necessity of a measure, in the light of all the facts and circumstances which have a bearing on the subjects of price fixation, is essentially in a subjective matter.
Objective criteria may enter into determination of particular selling prices of each kilogram of mustard oil at various times.
But, there is no obligation here to fix the price in such a way as to ensure reasonable profits to the producer or manufacturer, because the object is to secure equitable distribution aid availability at fair prices so that it is the interest of the consumer and not of the producer which is the determining factor in applying any objective tests at any particular time.
The most important objective fact in fixing the price of mustard oil, which is consumed generally by large masses of people of limited means, is the paying capacity of the average purchaser or consumer.
[312 D G] 10.
Principles of fair fixation of price apply only in those cases where there is an obligation upon the price fixing authority to take certain matters into account which have a bearing on cost of production and are designed to secure fair share of profits to the producers.
Section 3 of the Act has very different purposes in view.
It may be that the cost of production and reasonable amount of profits to the manufacturers have an indirect bearing on matters set out in section 3(1) of the Act.
But, in cases where the effects of a policy or a measure adopted in achieving purposes set out in section 3(1) are matters of guess work, after experimentation, the actual consequences can be indicated with a fair amount of certainty only by giving sometime for a policy to work out and reveal its results.
Presence of such features in a case cannot invalidate price fixation of which the direct objects are set out in section 3(1) of the Act.
[315 D F] A price fixation to meet the general purposes set out in section 3(1) of the Act, aimed at reversing the vicious inflationary spiral of rising prices.
may appear arbitrary or unreasonable judged by standards applicable to price fixation aimed at giving reasonable profits to producers which is not the object of section 3(1) of the Act.
[315 G H] The whole machinery of control of supplies with a view to their equitable distribution and securing their availability at fair prices , 1 is much more comprehensive than the machinery for price fixation in special cases on given principles.
Price fixation on certain given Principles is enjoined under section 3(3) of the Act only when there is an order under section 2(f) of the Act compelling the sale of a whole stock or a specified Part of it to the Central or a State Government or to authorities or persons as directed by them.
Again, section 3 (a) (iii) provides a machinery for price fixation in special cases.
Similar is position with orders under sections 3B and 3C. [316 D E] 11.
It is not the function of Supreme Court or of any Court to sit in judgment over matters of economic policy as must necessarily be left to the Government of the day to decide.
Many of them, as a measure of price fixation must necessarily be, are matters of prediction of ultimate results on which even experts can seriously err and doubtless differ.
Courts can certainly not be expected to decide them without even the aid of experts.
That a price fixed at Rs. 10/ per kg., as a part of an attempt to break the vicious inflationary circle, is not at all an unreasonable step.
[313 C D] 301 But the, Court can take judicial notice of subsequent facts.
The effect of the order of 30 9 77 was so beneficial that the rice, of mustard oil has fallen in the neighbourhood of Rs. 7/ per kg.
which illustrates the extreme inadvisability of any interference by any.
Court with measures of economic control and planning directed at maximising general welfare.
It is not the function of the.
Courts to obstruct or defect such beneficial measures devised by the Government of the day.
Courts cannot pass judgments on the wisdom of such actions, unless actions taken are so completely unreasonable that no law can be cited to sanction them.
[314 H, 315 A B] 12.
Unless, by the terms of a particular statute, or order, price fixation is made a quasi judicial function for specified purposes or cases, it is really legislative in character because it satisfies the tests of legislation.
A legislative measure does not concern itself with the facts of an individual case.
It is meant to lay down a general rule applicable to all persons or objects or transactions of a particular kind or class.
In the case before us, the control order applies to sales of mustard oil anywhere in India by any dealer.
Its validity does not depend on the observance of any procedure to be complied with or particular types of evidence to be taken on any specified matters as conditions precedent to its validity.
The test of validity is constituted by the nexus shown between the order passed and the purposes for which it can be passed, or, in other words by reasonableness judges by possible or probably consequences.
[317 G H, 318 A] Panipat Corporation Sugar Mills vs Union of India, [1973] 2 SCR 860; Meenakshi Mills Ltd. vs Union of India ; Premier Automobile Ltd. vs Union of India, ; ; Saraswati Industrial Syndicate Ltd. etc.
vs Union of India; , ; referred to.
Even executive or legislative action must be confined to the limits within which it can operate.
It must fall reasonably within the scope of the powers conferred.
The scope of the powers.conferred depends upon terms of the empowering provision.
The empowering provision in the instant case is widely worded.
The validity of section 3 has not been challenged.
and it could not be challenged by reason of Article 31 B after its inclusion in the 9th Schedule of the Constitution.
[318 B C] 14.
In a case in which the Central Government is judge of expediency and necessity to the extent that even the protection of the guaranteed fundamental rights cannot stand in the way of its view or opinion of such necessity and expediency, a challenge on the grounds on which it was attempted could not succeed.
[318 C D] 15.
Patent injustice and unreasonable injury to the interests of consumers must be shown if a measure of price control, in the nature of either legislative or purely administrative action, is assailed.
So long as the action taken is not so patently unjust and unreasonable as to lead to the irresistible conclusion that it could not fall within section 3(1) of the Act it cannot be set aside or declared invalid.
The test has to be that of consequences on objects sought by section 3(1) of the Act.
Judged by this test, the order of 30th September, 1977, fall within the purview of section 3 of the Act and it has served its purposes.
[319 A C] Leo Nebbia vs People of the State of New York, 29 U.S. (78 Law.
Edn.) 502; Permian Basin Area Rate Cases (20 Law Edn.
2d) p. 312 referred to.
|
ns Nos. 108 and 174 177 of 1976.
(Under Article 32 of the Constitution of India).
R. K. Garg, section C. Agarwala & Aruneshwar Gupta for the petitioners in WP 108 Somnath Chatterjee, P. K. Chatterjee & Rathin Das for the petitioners in 174 77 section V. Gupte, Attorney Genl., U. R. Lalit, R. N. Sacluhey & A. Subhashini for r. 2 in all the WPs.
section V. Gupte, Attorney Gent. & D. N. Mishra for rr. 2 & 3 in WP 108 and rr.
2 4 in WP 174 77.
P. section Khera for the Intervener (AIN LIC Employees Federation) The following Judgments were delivered BEG, C.J. The Life Insurance Corporation was constituted under the Life Insurance Corporation Act 31 of 1956 (hereinafter to be referred to as "the Act").
On 1 6 1957, the Central Government issued, under section 11 (1) of the Act, an order prescribing the 'Pay scales, dearness allowance and conditions of service applicable to Class III and IV employees.
Among these conditions it is, stated that no bonus would be paid but amenities like insurance and medical treatment free of cost would be provided.
On 26 6 1959, an order was passed by the Central Government under section 11(2) of the Act, amending para 9 of the 1957 Order inasmuch as it was provided that bonus other than profit sharing bonus would be paid to the employees drawing the salary not exceeding Rs. 5001 per month.
On 2nd of July 1959, there was.
a settlement between the L.I.C. and the employees providing for payment of cash bonus at the rate of one and a half month 's basic salary which was to be effective from 1 9 1956 and valid upto 31 12 1961.
In July 1960, regulations were framed under section 49 to regulate the conditions of service of classes of employees and regulation 58 provided for payment of non profit sharing bonus to the employees.
Orders were again passed on 14 4 1962 and 3rd August 1963, the effect of which was to remove the restriction of Rs. 5001 for eligibility for payment of bonus.
On 29th January 1963, another settlement was arrived at between the L.I.C. and its employees for payment of cash bonus at the rate of one and a half month 's basic salary.
This was to continue in operation until 31st March 1969.
On 20th June 1970, a third settlement was reached for payment of cash bonus at the same rate which was to be effective upto 31st March 1972.
On 26 6 1972, a fourth settlement for payment of cash bonus at the rate of 10 per cent of gross wages (basic and special pay and dearness allowance) was made effective from 1st 'April 1972 to 1973.
On 21st January 1974 and 6th February 1974, settlements for payment of cash bonus at 15 per cent of gross wages, valid for four years from 1st April 1973 to 31st March 1977, were reached.
It is clear that this so called "bonus" did not depend upon profits earned but was nothing short of increas 340 ed wages.
The settlements were approved by the Board of Directors of the L.I.C. and also by the Central Government.
On 29th March, 1974, a circular was issued by the L.I.C. for payment of bonus in accordance with the settlement along with the salary in April.
In April 1974, the payment of bonus for the year 1973 74 was actually made in accordance with the settlement.
Again, in April 1975, *bonus for the year 1974 75 was made in accordance.
with the settlements.
On 25th September 1975, however, a Payment of Bonus Amendment Ordinance was promulgated.
On 26 9 1975, the L.I.C. issued a circular stating that, as the payment of bonus was being reviewed in the light of the Ordinance, and, on 22nd of March, 1976, payment of bonus for the year 1975 76 was to, be withheld until a final decision was) taken.
Against this, a writ petition was filed in the; High Court of Calcutta.
On 21st May 1976, the Calcutta High Court passed an order recognising the right of petitioners to payment of bonus for the year 1975 76 which had become payable along with the salary in April 1976 and ordered that it must be paid to the employees.
Apparently, bonus was treated as part of the right of the petitioners to property protected by Article 19( and 31(1) of the Constitution.
On 29th May 1976, the Life Insurance Corporation Modification of Settlement Act 1976 was enacted by Parliament denying to the petitioners the right which had been recognised by the settlements, approved by the Central Government and acted upon by the actual payment of bonus to the employees, and, finally, converted into right under the decision of the Calcutta High Court on 21st May 1976.
Provisions.
of section 1 1 (2) may read as follows "(2) Where the Central Government is satisfied that for the purpose of securing uniformity in the scales of remuneration and the other terms and conditions.
of service applicable to employees of insurers whose controlled busi ness has been transferred to, and vested in, the Corporation, it is necessary so to do, or that, in the interests of the Corporation and its policy holders,, a reduction in the remuneration payable, or a revision of the other terms and conditions of service applicable, to employees or any class of them is called for, the Central Government may, notwithstanding anything contained in sub section (1), or in the , or in any other law for the time being in force, or in any award, settlement or agreement for the time being in force, alter (whether by way of reduction or otherwise) the remuneration and the other terms and conditions.
of service to such extent, and in such manner as it thinks fit; and if the alteration is not acceptable to any employee, the Corporation may terminate his employment by giving him compensation equivalent to three months ' remuneration unless the contract of service with such employee provides for a shorter notice of termination.
Explanation : The compensation payable to an employee under this sub section shall be in addition to, and shall not affect, any pension, gratuity, provident fund money 341 or any other benefit to which the employee may be entitled under his contract of service.
" Section 1 1 (2) of the Act shows that the Central Government had ample power to revise the scales of remuneration and other terms and conditions of service if it was satisfied that the interest of the Corporation or the policy holders demanded this.
Of course, such orders had to be passed as a result of satisfaction upon material placed before the Central Government relating to the interests of the Corporation or its policy holders.
But, no such order was passed.
What was actually done was that the Act was passed to set aside the terms of the settlements which had been incorporated in the Judgment inter parties of the Calcutta High Court.
The objects and reasons of the Act were set out as follows "The provisions of the do not apply to the employees employed by the Life Insurance Corporation of India.
However, the Corporation has, as a matter of practice, been paying bonus to its employees.
The bonus to Class I and Class II employees is being paid in pursuance of agreements between the Corporation and such employees.
The bonus to Class III and ,Class IV employees is being paid under the terms of settlement arrived at between the Corporation and such employees from time to time.
In terms of the settlement arrived at between the Corporation and its Class III and class IV employees on 24th January, 1974 under the , which is in force upto the 31st March, 1977, bonus is payable by the Corporation to its Class III and Class IV employees at the rate of fifteen per cent, of their annual salary without any maximum limit.
It is proposed to set aside, with effect from the 1st April, 1975, these provisions of the settlement arrived at between the Corporation and its Class III and Class IV employees on 24th January, 1974 to enable the Corporation to make ex gratia payments to such employees at the rates determined on the basis of the general Government policy for making ex gratia payments to the employees of the non competing public sector undertakings.
The bill seems to, achieve the above object.
" The statement of objects and reasons discloses that the purpose ,of the impugned Act was to undo settlements which had been arrived at between the Corporation and Class III and Class IV employees on January 24 and February 6, 1974, and actually recognised by the order of the Calcutta High Court.
The question could well arise whether this was really the exercise of a legislative power or of a power comparable to that of an appellate authority considering the merits of what had passed into a right to property recognised by the This Court has decided in Shrimati Indira 342 Narain(1) that even a constitutional amendment cannot authorise the assumption of a judicial power by Parliament.
One of the tests laid down there was whether the decision is of a kind which requires hearing to be given to the parties, or, in other words, involves at least a quasi judicial procedure, which the Parliament does not, in exercise of its legislative power, follow.
A decision reached by the Central Government, under section 11(2) of the Act, is the result of a satisfaction on matters stated there and would imply quasi judicial procedure where the terms of a settlement had to be reviewed or revised.
But, the legislative procedure, followed here, does not require that to be done.
It would, in any event, be unfair to adopt legislative procedure to undo such a settlement which had become the basis of a decision of a High Court.
Even if legislation can remove the basis of a decision it has to do it by an alteration of general rights of a class but not by simply excluding two specific settlements between the Corporation and its employees from the purview of the section 18 of the , which had been held to be valid and enforceable by a High Court.
Such selective exclusion could also offend Article 14.
If Parliament steps in to set aside such a settlement, which the Central Government could much more reasonably 'have examined after going into the need for it or for its revision, the question also arises whether it violates the fundamental right to property guaranteed under Article 19 (1 ) (f ) of the Constitution, inasmuch as the right to get bonus is part of wages and, by its deprivation, a judicially recognised right to property is taken away and not saved by the provisions of Article 19 (6) of the Constitution? A restriction upon a right may even cover taking away of the right to increased remuneration in the interests of the general public.
Where was the question of any restriction here in the interests of the general public ? it seems a pure and simple case of a deprivation of rights of Class III and Class TV employees without any apparent nexus with any public interest.
The first hurdle in the way of this attack upon the Act undoing the settlement under Article 19 (1) (f) of the Constitution placed before us what that the Act of 1976 notified on 29 5 1976 was passed during the emergency.
Hence, it was submitted that Article, 358 of the Constitution is an absolute bar against giving effect to any right arising under Article 19 of the Constitution.
Furthermore, it was submitted that the effect of the Act was to wash off.
the liability altogether after 1 4 1975 so that nothing remained to be enforced after 1 4 1975.
The Act is a very short one of 3 sections.
After defining the settlement as the one which was arrived at between the Corporation and their workers on 24 1 1974 under section 18, read with clause (p) of section 2, of the and the similar further settlement of 6 2 1974, section 3 lays down (1) [1976](2)S.C.R.347.
343 "Notwithstanding anything contained in the , the provisions of each of the settlements, in so far as they relate to the payment of an annual cash bonus to every Class, III and Class IV employees of the Corporation at the rate of fifteen per cent of his annual salary, shall not have any force or effect and shall not be deemed to have any force or effect on and from 1st day of April, 1975.
" The object of the Act was, in effect, to take away the force of the judgment of the Calcutta High Court recognising the settlements in favour of Class III and Class IV employees of the Corporation.
Rights under that judgment could be said to arise independently of Article 19 of the Constitution.
I find my self in complete agreement with my learned brother Bhagwati that to give effect to the judgment of the Calcutta High Court is not the same thing as enforcing a right under Article 19 of the Constitution.
It may be that a right under Article 19 of the Constitution becomes linked up with the enforceability of the judgment.
Nevertheless, the two could be viewed as separable sets of rights.
If the right conferred by the judgment independently is sought to be set aside, section 3 of the Act, would, in my opinion, be invalid for trenching upon the judicial power.
I may, however, observe that even though the real object of the Act may be to set aside the result of the mandamus issued by the Calcutta High Court, yet, the section does not mention this object at all.
Probably this was so because the jurisdiction of a High Court and the effectiveness of its orders derived their force from Article 226 of the Constitution itself, These could not be touched by an ordinary act of Parliament.
Even if section 3 of the Act seeks to take away the basis of the judgment of the Calcutta High Court, without mentioning it, by enacting what may appear to be a law, yet, I think that, where the rights of the citizen against the State are concerned, we should adopt an interpretation which upholds those rights.
Therefore, according to the interpretation, I prefer to adopt the rights which had passed into those embodied in a judgment and became the basis of a Mandamus from the High Court could not be taken away in this indirect fashion.
Apart from the consideration mentioned above there are also other considerations put forward, with his usual vehemence, by Mr. R. K. Garg who relies upon the directive principles of the State Policy as part of the basic structure of our Constitution.
At any rate, he submits that in judging the reasonableness of a provision the directive principles of State policy can be used, as this Court has repeatedly done, as criteria of reasonableness, and, therefore, of validity.
Garg bad relied strongly upon the provisions of Article 43 of the Constitution which says : "43.
The State shall endeavour to secure by suitable legislation or economic Organisation or in any other way, to all workers, agricultural, industrial or otherwise, work, a living wage,, conditions of work ensuring a decent standard 344 of life and full enjoyment of leisure and social and cultural opportunities and, in particular, the State shall endeavour to promote cottage industries on an individual or co operative basis in rural areas.
" He submits that Article 43 casts an obligation on the State to secure a living wage for the workers and is part of the principles "declared fundamental in the governance of the country".
In other words, he would have us use Article 43 as conferring practically a fundamental right which can be enforced.
I do not think that we can go so far as that because, even though the directive principles of State policy, including the very important general ones contained in Article 38 and 39 of the Constitution, give the direction in which the fundamental policies of the State must be oriented yet, we cannot direct either the Central Government or Parliament to proceed in that direction.
Article 37 says that they "shall not be enforceable by any court, but the principles therein laid down are nevertheless fundamental in the governance of the country and it shall be the duty of the State to apply these principles in making laws." Thus, even if they are not directly enforceable by a court they cannot be declared ineffective.
They have the life and force of fundamentals.
The best way in which they can be, without being directly enforced, given vitality and effect in Courts of laws is to use them as criteria of reasonableness, and, therefore, of validity, as we have been doing.
Thus, if progress towards goals found in Articles 38 and 39 and 43 are desired, there should not be any, curtailment of wage rates arbitrarily without disclosing any valid reason for it as is.
the case here.
It is quite reasonable, in my opinion, to submit that the measure which seeks to deprive workers of the benefits of a settlement arrived at and assented to by the Central Government, under the provisions of the , should not be set at naught by an Act designed to defeat a particular settlement.
If this be the purpose of the Act, as it evidently is, it could very well be said to be contrary to public interest, and, therefore, not protected by Article 19(6) of the Constitution.
Furthermore, I think that the principle laid down by this Court in Union of India & Ors.
vs M/s. Indo Afghan Agencies Ltd.(1) can also be taken into account in judging the reasonableness of the provision in this case.
It was held there (at p. 385) : "Under our jurisprudence the Government is not exempt from liability to carry out the representation made by it as to its future conduct and it cannot on some undefined and undisclosed ground of necessity or expediency fail to carry out the promise solemnly made by it, nor claim to be the judge of its, own obligation to the citizen on an ex parte appraisement of the circumstances in which the obligation has arisen." (1) [1968] (2)S.C.R.365.
34 5 In that case, equitable principles were invoked against the Government.
It is true that, in the instant case, it is a provision of the Act of Parliament and not merely a governmental order whose validity is challenged before us.
Nevertheless, we cannot forget that the Act is the result of a proposal made by the Government of the day which, instead of proceeding under section 11(2) of the Life Insurance Corporation Act, chose to make an Act of Parliament protected by emergency provisions.
I think that the prospects held out, the representations made , the conduct of the Government, and equities arising therefrom, may all be taken into consideration for judging whether a particular piece of legislation, initiated by the Government and en acted by Parliament, is reasonable.
Mr. Garg has also strongly attacked section 3 of the Act as, violative of Article 14 of the Constitution which was also not available to the petitioners during the emergency.
He alleges that the Corporation has been making very handsome profits so that the question of jeopardising the interests of the Corporation or Policyholders could not arise.
He submits that the Act is nothing more than selective discrimination practised against the lower levels of the staff of the Life Insurance Corporation.
I do not think that these contentions are devoid of force.
I am sorry that due to the very short interval left for me to dictate my opinion in this case I have not been able to fully set out the reasoning or to cite all the authorities I would have liked to have done.
The pressure of work on hand is too great.
I have several judgments to pronounce tomorrow, the last day on which I shall have the authority to participate as a Judge in the decisions of this Court.
I have, however, thought it to be my duty to indicate my line of thinking briefly as I have my doubts whether Article 31(2A) is not an effective answer to complete reliance upon Article 31(2) of the Constitution.
It is true that the right to receive bonus which had been recognised by the Central Government both by its orders and conduct under a settlement is a right to property.
Nevertheless, since acquisition is defined by Article 31(2A) of the 'Constitution, I seriously doubt whether that definition of acquisition really satisfied by the facts in the case before us.
The provision reads as follows : "31(2A) Where a law does not provide for the transfer of the ownership or right to possession of any property to the State or to a Corporation evened or controlled by the State, it shall not be deemed to provide for the compulsory acquisition or requisitioning, of property, notwithstanding that it deprives any person of his property.
" I have, however, no doubt that the conclusion reached by my learned brother Bhagwati is quite correct inasmuch as the benefits of the rights recognised by the judgment of the Calcutta High Court could not be indirectly taken away by section 3 of the Act selectively directed against specified settlements only.
346 I think that section 3 of the impugned Act is struck by the provisions of Article 19(1) (f) of the Constitution and not saved by Article 19(6) of the Constitution.
It is also struck by Article 14.
If the fundamental rights guaranteed by Articles 14 and 19 are not suspended, but their operation is only suspended, a view which I expressed in A. D. M. Jabalpur vs Shivkant Shukla(1) the effect of the suspension is to restore the status quo ante.
Would this not mean that only the validity of an attack based on Articles 14 and 19 is suspended during the Emergency ? But, once this embargo is lifted Articles 14 and 19 of the Constitution whose use was suspended, would strike down any legislation which would have been bad.
In other words, the declaration of invalidity is stayed during the emergency.
Both Articles 358 and 359(1A) provide that, as soon as a proclamation of emergency ceases to operate, the effect of suspension must vanish "except as respects things done or omitted to be done before the law so ceases to have effect".
The things done or omitted to be done could certainly not mean that the rights conferred under the settlements were washed off completely as the learned Attorney General suggested.
To hold that would be to convert the suspension of invalidity into a validation of law made during the emergency.
If the law was not validated but only its invalidation was suspended, we should not give any wider effect to the suspension.
I think we should interpret "things done or omitted to be done" very narrowly.
If this be so, it means that the settlements are not to be deemed to be wiped off.
No doubt payments under them were temporarily suspended.
This must obviously mean that no payment could be demanded under them during the emergency, but, as soon as the emergency was over, the settlements would revive and what could not be demanded during the emergency would become payable even for the period of emergency for which payment was suspended.
Otherwise the enactment will have effect even after the emergency had ceased.
This would clearly be contrary to the express provisions of Article 358 and 359(1A).
In other words, valid claims cannot be washed off by the emergency per se.
They can only be suspended by a law passed during the operation of Article 358 and 359(1A) of the Constitution.
For the reasons given above, I reach the same conclusion as my learned brother Bhagwati although perhaps by a difference route.
concur in the final order made by my learned Brother Bhagwati.
BHAGWATI, J.
These writ petitions are filed by employees of the Life Insurance Corporation challenging the constitutional validity of the Life Insurance Corporation (Modification of Settlement) Act, 1976.
This unusual piece of legislation was enacted by Parliament during the emergency at a time when there could hardly be any effective debate or discussion and it sought to render ineffective a solemn and deliberate Settlement arrived at between the Life Insurance Corporation and four different associations of its employees for payment of cash bonus.
It is necessary, in order to appreciate the various (1) A.T.R. Suppl.
S.C.R. 172.
347 contentions arising in the writ petitions to recapitulate briefly the facts leading up to the enactment of the Life Insurance Corporation (Modification of Settlement) Act, 1976, hereinafter referred to as the impugned Act.
The Life Insurance Corporation is a statutory authority established under the and under section 6 it is the general duty of the Life Insurance Corporation to carry On life insurance business, whether in or outside India, and it is required to so exercise its powers as to secure that life insurance business is developed to the best advantage of the community.
It is not necessary to refer to the various provisions of the which define the powers, duties and functions of the , since we are not concerned with them in these writ petitions.
It would be enough to refer to section 49 which confers power on the Life Insurance Corporation to make regulations. 'Sub section (1) of that section provides that the Life Insurance Corporation may,.
with the previous approval of the Central Government, make regulations, not in consistent with the Act, "to provide for all matters for which provision is expedient for the purpose of giving effect to the provisions" of the Act and sub section (2) enacts that in particular and without prejudice to the generality of the power conferred under sub section (1), such regulations may provide for "(b) the method of recruitment of employees and agents of the Corporation and the terms and conditions of service of such employees or agents; (bb) the terms and conditions of service of persons who have become employees of the Corporation under subsection (1) of section 11;" The Life Insurance Corporation has in exercise of the power conferred under clauses (b) and (bb) of sub section (2).
of section 49 and with the previous approval of the Central Government, made the Life Insurance Corporation (Staff) Regulations, 1960 defining the terms and conditions of service of its employees.
There is only one Regulation which is material for our purpose, and that is Regulation 58 which is in the following terms "The Corporation may, subject to such directions as the Central Government may issue, grant non profit sharing bonus to its employees and the payment thereof, including conditions of eligibility for the bonus, shall be regulated by instructions issued by the Chairman from time to time.
" We have set out Regulation 58 in its present form as that is the form in which it stood throughout the relevant period.
It will be a matter for consideration as to what is the effect of this Regulation on the Settlement arrived at between the Life Insurance Corporation and its employees in regard to bonus.
348 It appears that right from 1959 Settlement were arrived at between the Life Insurance Corporation and its employees from time to time in regard to various matters relating to the terms and conditions of service of Class III and Class IV employees including bonus payable to them.
The last of such Settlement dated 20th June, 1970, as modified by the Settlement dated 26th June, 1972, expired on 31st March, 1973.
Thereupon four different associations of employees of the Life Insurance Corporation submitted their charter of demands for revision of scales of pay, allowances and other terms and conditions of service on behalf of Class III and Class IV employees.
The Life Insurance Corporation carried on negotiations with these associations.
between July 1973 and January 1974 at which there was free and frank exchange of views in regard to various matters including the obligation of the Life Insurance Corporation to the policy holders and;.
the community and ultimately these negotiations culminated in a Settlement: dated 24th January, 1974 between the Life Insurance Corporation and these associations.
The Settlement having been arrived at other wise than in the course of conciliation proceeding, was binding on the parties under section 18, sub section (1) of the and since the four associations which were parties to the.
employees, the Settlement was binding on the Life Insurance Corporation and all its Class III and Class IV employees.
The Settlement provided for various matters relating to the terms and conditions of: service but we are concerned only with Clause (8) which made provision in regard to bonus.
That clause was in the following terms "(i) No profit sharing bonus shall be paid.
However, the Corporation may, subject to such directions as the Central Government may issue from time to time, grant any other kind of bonus to its Class III & IV employees.
(ii) An annual cash bonus will be paid to all Class III and ' Class IV employees at the rate of 15% of the annual salary (i.e. basic pay including of,special pay, if any, and dearness allowance and additional dearness allowance) actually drawn by an employee in respect of the financial year to which thebonus relates.
(iii) Save as provided herein all other terms and conditions attached to the admissibility and payment of bonus shall be as laid down in the Settlement on bonus dated tile 26th, June, 1972.
" It is also necessary to reproduce here Clause (12) as that has some bearing on the controversy between the parties "PERIOD OF SETTLEMENT: (1) This Settlement shall be effective from 1st April, 1973 and shall be for a period of four years, i.e., from 1st April,, 1973 to 31st March, 1977.
349 (2) The terms of this Settlement shall be subject to the approval of the Board of the Corporation and the Central Government.
(3) This Settlement disposes of all the demands raised by the workmen for revision of terms and conditions of their service.
(4) Except as otherwise provided or modified by this Settlement, the workmen shall continue to be governed by all the terms and conditions of service as set forth and regulated by the Life Insurance Corporation of India (Staff) Regulations, 1960 as also the administrative instructions issued from time to time and they shall, subject to the provisions thereof including any period of operation specified therein be entitled to, the benefits thereunder.
" It was common ground between the parties that the Settlement was approved by the Board of the Life Insurance Corporation as also by the Central Government and the Chief of Personnel by his Circular dated 12th March, 1974 intimated to the Zonal and Divisional Managers that the approval of the Central Government to the Settlement having been received the Life Insurance Corporation should proceed to implement the terms of the Settlement.
The Executive Director also issued a circular dated 29th March, 1974 containing administrative instructions in regard to, payment of cash bonus under clause 8 (ii) of the Settlement.
These administrative instructions set out directions in regard to Various matters relating to payment of cash bonus and of these, two are material.
One was that in case of retirement or death, salary up to the date of cessation of service shall be taken into account for the purpose of determining the amount of bonus payable to the employee, or his heirs and the other was that the bonus shall be paid along with the salary for the month of April, but in case of retirement or death, payment will be made "soon after the contingency".
There was no dispute that for the first two years, 1st April, 1973 to 31st March, 1974 and 1st April, 1974 to 31st March, 1975, the Life Insurance Corporation paid bonus to its Class III and Class IV employees in accordance with the provisions of Clause 8(ii) of the Settlement read with the administrative instructions dated 29th March, 1974.
But then came the declaration of emergency on 26th June, 1975 and troubles began for Class III and Class IV ,employees of the Life Insurance Corporation.
On 25th September, 1975 an Ordinance was promulgated by the President of India called the Payment of Bonus (Amendment) Ordinance, 1975 which came into force with immediate effect.
Subsequently, this Ordinance was replaced by the Payment of Bonus (Amendment) Act, 1976 which was brought into force with retrospective effect from the date of the Ordinance, namely, 25th September, 1975.
This amending law considerably curtailed the rights of the employees to bonus in industrial establishments, but it had no impact so far as the employees of the Life Insurance Corporation were concerned since the original was not applicable to the life Insurance Corporation by reason of section 32 which exempted the Life Insurance L5 277SCI/78 350 Corporation from its operation.
The Central Government, however, decided that the employees of establishments which were not covered by the would not be eligible for payment of bonus but ex gratia cash payment in lieu of bonus would be made "as may be determined by the Government taking into account the wage level, financial circumstances etc.
in each case and such payment will be subject to a maximum of 10% and pursuant to this decision, the Life Insurance Corporation was advised by the Ministry of Finance that no further payment of bonus should be made to the employees "without getting the same cleared by the Government".
The Life Insurance Corporation thereupon by its Circular dated 26th September, 1975 informed all its offices that since the question of payment of bonus was being reviewed in the light of the Bonus Ordinance dated 25th September,, 1975, no bonus should be paid to the employees "under the existing provisions until further instructions".
The ' All India Insurance Employees ' Association protested against this stand taken by the Life Insurance Corporation and pointed out that the Life Insurance Corporation was bound to pay bonus in accordance with the terms of the Settlement and the direction not to pay bonus was clearly illegal and unjustified.
The Life Insurance Corporation conceded that payment of bonus was covered by the settlement but contended that it was subject to such directions as the Central Government might issue from time to time and since the Central Government had advised the Life Insurance Corporation not to make any payment of bonus without their specific approval, the Life Insurance Corporation was justified in not making payment to the employees.
This stand was taken by the Life Insurance Corporation in its letter dated 7th February, 1976 addressed to, the All India Insurance Employees ' Association and this was followed by a Circular dated 22nd March, 1976 instructing all the offices of the Life Insurance Corporation not to make payment by way of bonus.
The All India Insurance Employees ' Association and some others thereupon filed writ petition No. 371 of 1976 in the High Court of Calcutta for a writ of Mandamus and Prohibition directing the Life Insurance Corporation to act in accordance with the terms of the Settlement dated 24th January.
1974 read with the administrative instructions dated 29th March, 1974 and to rescind or cancel the Circulars dated 26th September, 1975, 7th February, 1976 and 22nd March, 1976 and not to refuse to pay cash bonus to Class III and Class IV employees along with their salary for the month of April 1976 as provided by the Settlement read with the administrative instructions.
The writ petition was resisted by the Life Insurance Corporation on various grounds to which it is not necessary to refer since we are not concerned with the correctness of the judgment of the Calcutta High Court disposing of the writ petition.
Suffice it to state, and that is material for our purpose, that by a judgment dated 21st May, 1976 a Single Judge of the Calcutta High Court allowed the writ petition and issued a writ of Mandamus and Prohibition as prayed for in the writ petition.
The Life Insurance Corporation preferred a Letters Patent Appeal against the judgment of the learned Single Judge but in the mean time the impugned Act bad already come into force and it was, therefore, stated on behalf of the Life Insurance Corporation before the Division Bench that there was 351 no necessity for proceeding with the appeal and hence the Division Bench made no order in the appeal.
The result was that the judgment of the learned Single Judge remained intact : with what effect, is a matter we shall presently consider.
On 29th May, 1976 Parliament enacted the impugned Act providing inter alia for modification ' of the Settlement dated 24th January, 1974 arrived at between the Life Insurance Corporation and its employees.
The impugned Act was a very short statute consisting only of three sections.
Section 1 gave the short title of the impugned Act, section 2 contained definitions and section 3, which was the operative section, provided as follows : "Notwithstanding anything contained in the , the provisions of the settlement in so far as they relate to the payment of an annual cash bonus to every Class III and Class IV employees of the Corporation at the rate of fifteen per cent, of his annual salary, shall not have any force or effect and shall not be deemed to have had any force or effect on and from the 1st day of April, 1975.
" Since the impugned Act did not set at naught the entire settlement dated 24th January, 1974 but merely rendered without force and effect the provisions of the Settlement in so far as they related to payment of annual cash bonus to Class III and Class IV employees and that too not from the date when the Settlement became operative but from 1st April, 1975, it was said to be a statute modifying the pro visions of the Settlement.
The plain and undoubted effect of the impugned Act was to deprive Class III and Class IV employees of the annual cash bonus to which they were entitled under clause 8(ii) of the Settlement for the years 1st April, 1975 to 31st March, 1976 and 1st April, 1976 to 3 1 St March, 1977 and therefore, two of the associations along with their office bearers field the present writ peti tions challenging the constitutional validity of the impugned Act.
There were two grounds on which the constitutionality of the impugned Act was assailed on behalf of the petitioners and they were as follows : A.
The right of Class III and Class TV employees to annual cash bonus for the years 1st April, 1975 to 31st March, 1976 and 1st April, 1976 to 31st March, 1977 under clause 8(ii) of the Settlement was property and since the impugned Act provided for compulsory acquisition of this property without payment of compensation, the impunged Act was violative of Article 31(2) of the Constitution and was hence null and void.
B. The impugned Act deprived Class III and Class IV employees of the right to annual cash bonus for the years 1st April, 1975 to 31st March, 1976 and 1st April, 1976 to 31st March, 1977 which was vested in them under clause 8(ii) of the Settlement and there was, therefore, clear infringement of their fundamental right under Article 3 52 19(1) (f) and since this deprivation of the right to annual cash bonus, which was secured under a Settlement arrived at as a result of collective bargaining and with full and mature deliberation on the part of the Life Insurance Corporation and the Central Government after taking into account the interests of the policy holders and the community and with a view to approximating towards the goal of a living wage as envisaged in Article 43 of the Constitution, amounted to an unreasonable restriction, the impugned Act was not saved by Article 19(5) and hence it was liable to be struck down as invalid.
We shall proceed to consider these grounds in the order in which we have set them out, though we may point out that if either ground succeeds, it would be unnecessary to consider the other.
But before we proceed, further, it would be convenient at this stage to refer to one other contention of the petitioner based on the judgment of the Calcutta High Court in Writ Petition No. 371 of 1976.
The contention was that since the Calcutta High Court had by its judgment dated 21st May, 1976 issued a writ of Mandamus directing the Life Insurance Corporation to pay annual cash bonus to Class III and Class IV employees for the year 1st April, 1975 to 31st March, 1976 along with their salary for the month of April, 1976 as provided by the Settlement and this judgment had be come final by reason of withdrawal of the Letters Patent Appeal preferred against it, the Life Insurance Corporation was bound to obey the writ of Mandamus and to pay annual cash bonus for the year 1st April, 1975 to 31st March, 1976 in accordance with the terms of clause 8(ii) of the Settlement.
It is, no doubt, true, said the petitioners, that the impugned Act, if valid, struck at clause 8(ii) of the Settlement and rendered it ineffective and without force with effect from 1st April, 1975 but it did not have the effect of absolving the Life Insurance Corporation from its obligation to carry out the writ of Mandwnus.
There was, according to the petitioners, nothing in the impugned Act which set at naught the effect of the judgment of the Calcutta High Court or the binding character of the writ of Mandamus issued against the Life Insurance Corporation.
This contention of the petitioners requires serious consideration and we are inclined to accept it.
It is significant to note that there was no reference to the judgment of the Calcutta High Court in the Statement of Objects and Reasons, nor any non obstante clause referring to a judgment of a court in section 3 of the impugned Act.
The attention of Parliament does not appear to have been drawn to the fact that the Calcutta High Court had already issued a writ of Mandamus commanding the Life Insurance Corporation to pay the amount of bonus for the year 1st April, 1975 to 31st March, 1976.
It appears that unfortunately the judgment of the Calcutta High Court remained almost unnoticed and the impugned Act was passed in ignorance of that judgment.
Section 3 of the impugned Act provided that the provisions of the Settlement in so far as they relate to payment of annual cash bonus to Class III 353 and Class IV employees shall not have any force or effect and shall not be deemed to have had any force or effect from 1st April, 1975.
But the writ of Mandamus issued by the Calcutta High Court directing the Life Insurance Corporation to pay the amount of bonus for the year 1st April, 1975 to 31st March, 1976 remained untouched by the impugned Act.
So far as the right of Class III and Class IV employees to annual cash bonus for the year 1st April, 1975 to 31st March, 1976 was concerned, it became crystallised in the judgment and thereafter they became entitled to enforce the writ of Mandamus granted by the judgment and not any right to annual cash bonus under the settlement.
This right under the, judgment was not sought to be taken away by the impugned Act.
The judgment continued to subsist and the Life Insurance Corporation was bound to pay annual cash bonus to Class III and Class IV employees for the year 1st April, 1975 to 31st March, 1976 in obedience to the writ of Mandamus.
The error committed by the Life.
Insurance Corporation was that it withdrew the Letters Patent Appeal and allowed the judgment of the learned Single Judge to become final.
By the time the Letters Patent Appeal came up for hearing, the impugned Act had already come into force and the Life Insurance Corporation could, therefore, have successfully contained in the Letters Patent Appeal that, since the Settlement, in as far as it provided for payment of annual cash bonus, was annihilated by the impugned Act with effect from 1st April, 1975, Class III and Class IV employees were not entitled to annual cash bonus for the year 1st April, 1975 to 31st March, 1976 and hence no writ of Mandamus could issue directing the Life Insurance Corporation to make payment of such bonus.
If such contention had been raised, there is little doubt, subject of course to any constitutional challenge to the validity of the impugned Act, that the judgment of the learned Single Judge would have been upturned and the Writ petition dismissed.
But on account of some inexplicable reason, which is difficult to appreciate, the Life Insurance Corporation did not press the Letters Patent Appeal and the result was that the judgment of the learned Single Judge granting writ of Mandamus became final and binding on the parties.
It is difficult to see how in these circumstances the Life Insurance Corporation could claim to be absolved from the obligation imposed by the judgment to carry out the Writ of Mandamus by relying on the impugned Act.
The Life Insurance Corporation leaned heavily on the decision of this Court in Shri Prithvi Cotton Mills Ltd. vs Broach Borough Municipality( ' ) in support of its contention that when the settlement in so far as it provided for payment of annual cash bonus was set at naught by the impugned Act with effect from 1st April, 1975, the basis on which the judgment proceeded was fundamentally altered and that rendered the judgment ineffective and not binding on the parties.
We do not think this decision lays down any such wide proposition as is contended for and on behalf of the Life Insurance Corporation.
It does not say that whenever any actual or legal situation is altered by retrospective legislation, a judicial decision rendered by a court on the basis of such factual or legal situation prior to the alteration, would (1) [1970]1 S.C.R. 388.
354 straightaway, without more, cease to be effective and binding on the parties.
It is true that there, are certain observations in this decision which seem to suggest that a court decision may cease to be binding when the conditions on which it is based are so fundamentally altered that the decision could not have been given in the altered circumstances.
But these observations have to be read in the light of the question which arose for consideration in that case.
There, the validity of the Gujarat Imposition of Taxes by Municipalities (Validation) Act, 1963 was assailed on behalf of the petitioners.
The Validation Act had to be enacted because it was held by this Court in Patel Gordhandas Hargovindas vs Municipal Commissioner, Ahmedabad(1) that since section 73 of the Bombay Municipality Boroughs Act, 1925 allowed the Municipality to levy a 'rate? on buildings or lands and the term 'rate? was confined to, an imposition on the basis of annual letting value, tax levied by the Municipality on lands, and buildings on the basis of capital value was invalid.
Section 3 of the Validation Act provided that notwithstanding anything contained in any judgment, decree or order of a court or tribunal or any other authority, no tax assessed or purported to have been assessed by a municipality on the, basis of capital value of a building or land and imposed, collected or recovered by the municipality at any time before the commencement of the Validation Act shall be deemed to have invalidly assessed, imposed, collected or recovered and the imposition, collection or recovery of the tax so assessed shall be valid and shall be deemed to have always been valid and shall not be called in question merely on the ground that the assessment the tax on the basis of capital value of the building or land was not authorised by law and accordingly any tax so assessed before the commencement of the Validation Act and leviable for a period prior to such commencement but not collected or recovered before such commencement may be collected or recovered in accordance with the relevant municipal law.
It will be seen that by section 3 of the impugned Act the Legislature retrospectively imposed tax on building or land on the basis of capital value and if the tax was already imposed, levied and collected on that basis, made the imposition levy, collection and recovery of the tax valid, notwithstanding the declaration by the Court that as 'rate, the levy was incompetent.
This was clearly permissible to the Legislature because in doing so, the Legislature did not seek to reverse the decision of this Court on the interpretation of the word 'rate,, but retrospectively amended the law by providing for imposition of tax on land or building on the basis of capital value and validated the imposition, levy, collection and recovery of tax on that basis.
The decision of this Court holding the levy of tax to be incompetent on the basis of the unamended law, therefore, became irrelevant and could not stand in the way of the tax being assessed, collected and recovered on the, basis of capital value under the law as retrospectively amended.
That is why this Court held that the Validation Act was effective to validate imposition, levy, collection and recovery of tax on land or building on the basis of capital value.
It is difficult to see bow this decision given in the context of a validating statute can be of any help to the life Insurance Corporation.
Here, the judgment given by the (1) [1964] 2S.C.R.608.
355 Calcutta High Court, which is relied upon by the petitioners, is not a mere declaratory judgment holding an impost or tax to be invalid, so that a validation statute can remove the defect pointed out by the judgment amending the law with retrospective effect and validate such impost or tax.
But it is a judgment giving effect to the right of the petitioners to annual cash bonus under the Settlement by issuing a writ of Mandamus directing the Life Insurance Corporation to pay the amount of such bonus.
If by reason of retrospective, alteration of the factual or legal situation, the judgment is rendered erroneous, the remedy may be by way of appeal or review, but so long as the judgment stands, it cannot be disregarded or ignored and it must be obeyed by the Life Insurance Corporation.
We are, therefore, of the view that, in any event, irrespective of whether the impugned Act is constitutionally valid or not, the Life Insurance Corporation is bound to obey the writ of Mandamus issued by the Calcutta High Court and to pay annual cash bonus for the year 1st April, 1975 to 31st March, 1976 to Class III and Class IV employees.
Now, to the grounds of constitutional challenge Re: Ground A : This ground raise & the question whether the impugned Act is violative of clause, (2) of Article 31.
This clause provides safeguards against compulsory acquisition or requisitioning of property by laying down conditions subject to which alone property may be compulsorily acquired or requisitioned and at the date when the impugned Act was enacted, it was in the following terms "No property shall be, compulsorily acquired or requisitioned save for a public purpose and save by authority of a law which provides for acquisition or requisitioning of the property for an amount which may be fixed by such law or which may be determined in accordance with such principles and given in such manner as may be specified in such law; and no, such law shall be called in question in any court on the ground that the amount so fixed or determined is not adequate or that the whole or any part of such amount is to be given otherwise than in cash Clause (2) in this form was substituted in Article 31 by the Constitution (Twenty fifth Amendment) Act, 1971 and by this amending Act, clauses (2A) and (2B) were also introduced in Article 31 and they read as follows : "(2A) Where a, law does not provide for the transfer of the ownership or right to, possession of any property to the State or to a corporation owned or controlled by the State, it shall not be deemed to provide for the compulsory acquisition or requisitioning of Property, notwithstanding that it does any person of his property.
(2B) Nothing in sub clause (f) of clause (1) of Article 19 shall effect any such law as is referred to in clause (2) 356 The argument of the petitioners was that the right of Class III and Class IV employees to annual cash bonus ' for the, years 1st April, 1975 to 31st March, 1976 and 1st April, 1976 to 31st March, 1977 under Act provided for Insurance, Corporation 12, it was a law providing for compulsory acquisition of property as contemplated under clause (2A) of Article 31 and it was, therefore, required to meet the challenge of Article 31, clause (2).
The compulsory acquisition of the right to annual cash bonus ' sought to be effectuated by the impugned Act, said the petitioners, was not supported by public purpose nor did the impugned Act.
provide for payment of any compensation for the same and hence the impugned Act was void as contravening clause (2) of Article 21.
The first question which arises for consideration on this.
contention is whether the right of Class III and Class IV employees to 'annual cash bonus ' for the years 1st April, 1975 to 31st March, 1976 and 1st April, 1976 to 31st March, 1977 under the Settlement was property so as to attract the inhibition of Article 31, clause (2).
The Life Insurance Corporation submitted that at the date when the, impugned Act was enacted, Class III and Class IV employees had no absolute right to receive 'annual cash bonus ' either for the, year 1st April, 1975 to 31st March, 1976 or for the year 1st April, 1976 to 31st March, 1977 and there was, therefore,, no property which could be compulsorily acquired under the impugned Act.
The argument of the Life Insurance Corporation was that the Life Insurance Corporation (Staff) Regulations, 1960 which laid down the terms and conditions of services inter alia of Class III and Class IV employees did not contain any provision for payment of bonus except Regulation 58 and since under this Regulation, grant of annual cash bonus by the life Insurance Corporation was subject to such directions as the Central Government might issue, the right of Class III and Class IV employees to receive annual cash bonus could not be said to be an absolute right.
It was a right which was liable to, be set at naught by any directions that might be issued by the Central Government and in fact the Central Government did issue a direction to the life Insurance Corporation not to make payment of bonus to the employees "without getting the same cleared by the Government" and consequently, Class III and Class IV employees had no absolute right to claim bonus.
The result, according to the Life Insurance Corporation, also followed on a proper interpretation of clauses 8 (i) and 8(ii) of the Settlement, for it was clear on a proper reading of these two clauses that annual cash bonus payable to Class III and Class IV employees under clause 8 (ii) was, by reason of clause 8 (i) , subject to such directions as the Central Government might issue from time to time and the Central Government having directed that no further payment of bonus should be made to the employees, Class III and Class TV employees were not entitled to claim annual cash bonus from the Life Insurance Corporation.
This argument of the Life Insurance Corporation is plainly erroneous and it is, not possible to accept it.
Regulation 58 undoubtedly says that non profit sharing bonus may be granted by the Settlement was property and since the impugned transfer of the ownership of this right to the Life which was 'State ' within the meaning of Article 35 7 the Life Insurance Corporation to its employees, subject to such directions as the Central Government may issue and, therefore, if the Central Government issues a direction to the contrary, nonprofit sharing bonus cannot be granted by the Life Insurance Corporation to any class of employees.
But here, in the present case, grant of annual cash bonus by the Life Insurance Corporation to Class III and Class IV employees under clause 8(ii) of the Settlement was approved by the Central Government as provided it clause 12 and the 'direction contemplated by Regulation 58 was given by the Central Government that annual cash bonus may be granted as provided in clause 8(ii) of the Settlement.
It was not competent to the Central Government thereafter to issue another contrary direction which would have the effect of compelling the Life Insurance Corporation to commit a breach of its obligation under section '18, sub section (1) of the to pay annual cash bonus in terms of clause 8 (ii) of the Settlement.
Tumina to clause 8(i) of the Settlement, it is true that under this, clause non profit sharing bonus could be granted by the Life Insurance Corporation 'subject to such directions as the Central Government may issue from time to time but these words giving overriding power to the Central Government to issue directions from time to time are conspicuously absent in clause 8(ii) and it is difficult to see bow they could be projected or read into that clause,.
Clauses 8(i) and 8(ii are distinct and independent clauses and while clause 8(i) enacts a general provision that non profit sharing bonus may be paid by the Life Insurance Corporation to Class III and Class IV employees subject to such directions as the Central Government might issue from time to time, clause 8(ii) picks out one kind of non profit sharing bonus and specifically provided that annual cash bonus shall be paid to all Class III and Class IV employees at the rate of 15 per cent of the annual salary and this specific provision in regard to payment of annual cash bonus is made subject to only the approval of the Central Government which was admittedly obtained.
It is, therefore, clear that Class III and Class IV employees had absolute right to receive annual cash bonus from the Life Insurance Corporation in terms of clause 8(ii) of the Settlement and it was not competent to the Central Government to issue any directions to the Life Insurance Corporation to refuse or withhold payment of the same.
It is true that under clause 8(ii) of the Settlement the annual cast bonus for a particular year was payable at the rate of 15 per cent.
of the annual salary actually drawn by the employee in respect of the financial year to which the bonus, related and it would, therefore, seem that the bonus was payable at the end of.
the year and not before, but it was not disputed on behalf of the Life Insurance Corporation that even an employee who retired or resigned before the, expiration of that year, as also the heirs of a deceased employee who died during the. currency of the year, were entitled to receive, proportionate bonus and the Life Insurance Corporation in fact recognised this to be the correct position in its administrative instructions dated 29th March, 1974 and actually paid proportionate bonus to the retiring or resigning employee and the heirs; of the deceased employee.
The annual cash bonus payable under clause 8(ii) of the Settlement, therefore, accrued 358 from day to day, though payable in case of retirement resignation or death, on the happening of that contingency and otherwise, on the expiration of the year to which the bonus related.
There was thus plainly and unquestionably a debt in respect of annual cash bonus accruing to each Class III or Class IV employees from day to day and consequently, on the expiration of the year 1st April, 1975 to 31st March.
1976, the annual cash bonus payable under clause 8(ii) of the Settlement was a debt due and owing from the Life Insurance Corporation to each Class III or Class IV employee and so also at the date when the impugned Act came into force, each Class III or Class IV employee was entitled to a debt due and owing to him from the Life Insurance Corporation in respect of the annual cash bonus from 1st April, 1976 upto that date.
The question is whether these debts due and owing from the Life Insurance Corporation were property of Class III and Class IV employees within the meaning of Article 31(2).
So also, was the right of each Class III and Class IV employee to receive annual cash bonus for the period from the date of commencement of the impugned Act upto 31st March, 1977 property for the purpose of Article 31(2) ? These questions we shall now proceed to consider, for on the answer to them depends the applicability of Article 31(2).
It is clear from the scheme of fundamental rights embodied in Part III of the Constitution that the guarantee of the right to property is contained in Article 19 (1 ) (f) and clauses ( 1 ) and (2) of Article 31.
It stands to reason that 'property ' cannot have one meaning in Article 19(1) (f), another in Article 31 clause (1) and still another in Article 31, clause (2).
'Property ' must have the same connotation in all the three Articles and since these are constitutional provisions intended to secure a fundamental right, they must receive the widest interpretation and must be held to refer to property of every kind.
While discussing the scope and content of Entry 42 in List III of the Seventh Schedule to the Constitution, which confers power on Parliament and the Legislatures to legislate with respect to "acquisition and requisitioning of property" It was J., speaking on behalf of the majority in R. India(1) that property which can be compulsorily aquired by legislation under this Entry means the "highest anything, being that right which one has to with respect to "acquisition and requisition of property", it was pointed out by Shah, C. Cooper vs Union of acquired by legislative a man can have to lands or tenements, goods or chattels which does not depend on another 's courtesy : it includes ownership, estates and interests in corporeal things, and also rights such as trade marks, copyrights, patents and even rights in persona capable of transfer or transmission, such, as debts; and signifies a beneficial right to or a thing considered as having a money value, especially with reference to transfer or succession, and to their capacity of being injured".
It would, therefore, seem that, according to the decision of the majority in R. C. Cooper '.s case, debts and other rights in personam capable of transfer or transmission are property which can form the subject matter of compulsory acquisition.
And this would seem to be unquestionable on principle, since even jurisprudentially debts and other rights of action are property and there is no (1) ; 359 reason why they should be excluded from the protection of the constitutional guarantee.
Hidayatullah, C.J., had occasion to consider the true nature of debt in H. H. Maharajadhiraja Madhav Rao Jiwaji Rao Scindia Bahadur & Ors.
vs Union of India(1) where the question was whether the Privy Purse payable to the Ruler was property of which he could be said to be deprived by the Order of the President withdrawing his recognition as Ruler.
The learned Chief Justice, making a very penetrating analysis of the jural relationship involved, in a debt, pointed out that " a debt or a liability to pay money passes through four stages.
First there is a debt not yet due.
The debt has not yet become a part of the obliger 's 'things ' because.
no net liability has yet arisen.
The Second stage is when the liability may have arisen but is not either ascertained or admitted.
Here again the amount due has not become a part of the obligor 's things, The third stage is reached when the liability is both ascertained and admitted.
Then it is property proper of the debtor in the creditor 's hands.
The law begins to recognise such property in insolvency, in ,dealing with it in fraud of creditors, fraudulent preference of one creditor against another, subrogation, equitable estoppel, stoppage intransitive etc.
A credit debt is then a debt fully provable and which is fixed and absolutely owing.
The last stage is when the debt becomes a judgment debt by reason of a decree of a Court." and apply ing this test, concluded that the Privy Purse would be property and proceeded to add : "As, soon as an Appropriation Act is passed there is established a credit debt and the outstanding Privy Purse becomes the property of the Ruler in the hands of Government.
It is also a sum certain and absolutely payable." Since the effect of the Order of the President was to deprive the, Ruler of his Privy Purse which was his property the learned Chief Justice held that there was infringement of the fundamental right of the Ruler under Article 3 1 (2).
Hegde, J., also pointed out in a separate but concurring judgment that since the right to get the Privy Purse was a legal right "enforceable through the courts", it was undoubtedly property and its deprivation was sufficient to, found a petition based on contravention of Article 31(2).
It was also held by this Court in State of Madhya Pradesh vs Ranajirao Shinde & Anr.
(2) that a right to receive cash grant annually from the State was property within the, meaning of that expression in Article 19(1)(f) and clause (2) of Article 31.
The right to pension was also regarded as property for the purpose of Article 19(1) (f) by the decisions of this Court in Deokinanda Prasad vs State of Bihar(1) and State of Punjab vs K. R. Erry & Sobhag Rai Mehta(4).
This Court adopted the same line of reasoning when it said in State of Gujarat and Anr.
vs Shri Ambica Mills Lid.
, Ahmedabad(5) that "unpaid accumulations represent the obligation of the, employers to the employees and they are the property of the employees".
Mathew, J., speaking on behalf of the Court, observed that the obligation to, the employees owned by the employers was (1) ; (3) [1971] Supp.
S.C.R. 634.
(4) ; (5) ; (2) 360 "property from the standpoint of the employees".
It would, therefore, be seen that Property within the meaning of Article 19(1)(f) and clause (2) of Article 31 comprises every form of property, tangible or intangible, including debts and chooses in action, such as unpaid accumulation of wages, pension, cash grant and constitutionally protected Privy Purse.
The debts due and owing from the Life Insurance Corporation in respect of annual cash bonus were, therefore, clearly property of Class III and Class IV employees within the meaning of Article 31, clause (2).
And so also was their right to receive annual cash bonus for the period; from the date of commencement of the impugned.
Act upto 31st March, 1977, for that was a legal right enforceable through a court of law by issue of a writ of Mandamus, Vide the observation of Hegde, J., at page 194 in the Privy Purse case.
But a question was raised on behalf of the Respondents whether debts and choses in action, though undoubtedly property, could form the subject matter of compulsory acquisition so as to attract the applicability of Article 31, clause (2).
There is divergence of opinion amongst jurists in the United States of America on this question and though in the earlier decisions of the American courts, it was said that the power of eminent domain cannot be exercised in respect of money and choses in action, the modern trend, as pointed by Nicholas on Eminent Domain, Vol. 1, page 99, para 2, seems to be, that the right of eminent domain can be exercised on choses in action.
But even if the preponderant view in the United States were that choses in action cannot come within the power of eminent domain, it would not be right to allow us to be unduly influenced by this view in the interpretation of the scope and ambit of clause (2) of Article 31.
We must interpret Article 31, clause (2) on its own terms without any preconceived notions borrowed from the law in the United States on the subject of eminent domain.
Let us see how this interpretative exercise has been performed by this (Court in the decisions that have been rendered so far and what light they throw on the question as to whether choses in action can be compulsorily acquired under clause (2) of Article 31.
We shall confine our attention only to the question of compulsory acquisition of choses in action and not say anything in regard to compulsory acquisition of money, for in these appeals the question arises only in regard to choses in action and it is not necessary to consider whether money can form the subject matter of compulsory acquisition.
This question came to be considered by a constitution Bench of this Court in State of Bihar vs Kameshwar Singh( ',).
Section 4(b) of the Bihar Land Reforms Act, 1950, which provided.
for vesting in the State, of arrears of rent due to the pro prietors or tenure holders for the period prior to the date of vesting of the estates or tenures held by them, on payment of only 50 per cent of the amount as compensation, was challenged as constitutionally invalid on the ground that there was no public purpose for which such acquisition could be said to have been made.
The necessity for existence of public purpose was not sought to be spelt out from Article 31, clause (2), because even if there were violation of that (1) 361 clause, it would be protected by Article 31A and the Ninth Schedule read with Article 31 B, the.
Act being included as Item in the Ninth Schedule, but it was said that public purpose was an essential element in the very nature of the power of acquisition and even apart from Article 31, clause (2), no acquisition could be made save for a public purpose.
It was in the context of this argument that Mahajan, J., observed that money and choses in action could not be taken under the power of compulsory acquisition, since the only purpose which such taking would serve would be to augment the revenues of the State and that would clearly not be a public purpose.
The learned judge pointed out at pages 942 944 of the Report : "It is a well accepted proposition of law that property of individuals cannot be appropriated by the State under the power of compulsory acquisition for the, mere purposes of adding to the, revenues of the State no instance is known in which it has been taken for the mere purpose of raising a revenue by sale, or otherwise Taking money under the right of eminent domain, when it must be compensated in money afterwards is nothing more or less than a forced loan Money or that which in ordinary use passes as such and which the Government may reach by taxation and also rights in action which can only be available when made to produce money, cannot be taken under this power".
for the taking would not be for a public purpose, and proceeded to and that the only purpose, to support the acquisition of the arrears of rent was "to raise revenue to pay compensation to some of the zamindars whose estates are being taken" and this purpose did not fall within any definition, however, wide, of the phrase 'public purpose and the law was, therefore, to this extent unconstitutional.
Mukherjea, J., came to the same conclusion and observed at page 961 of the Report "Money as such and also rights in action are ordinarily excluded from this List by American jurists and for good reasons.
There could be no possible necessity for taking either of them under the power of eminent domain.
Money in the hands of a citizen can be reached by the exercise of the power of taxation, it may be confiscated as a penalty under judicial order But, as Cooley has pointed out, taking money under the right of eminent domain when it must be compensated by money afterwards could be nothing more or less than a forced loan and it is difficult to say that it comes under the head of acquisition and is embraced within its ordinary connotation.
" Chandrasekhara Aiyer, J., also took the same view and held that money.
and choses in action were exempt from compulsory acquisition "not on the ground that they are movable property, but on the ground that generally speaking there could be no public purpose in their 362 acquisition".
Patanjali Sastri, C.J., and Das, J., on the other hand held that the arrears of rent constituted a debt due by the tenants.
It was nothing but an actionable claim, against the tenants which was undoubtedly a species of 'property ' which was assignable and, therefore, it could equally be acquired by the State as a species of 'property '.
These two rival views were referred to by Venkatarama Aiyer, J. speaking on behalf of the Court in Bombay Dyeing & Manufacturing Co. Ltd. vs The State of Bombay & Ors.(1) but the learned Judge did not treat the majority view as finally settling the law on the subject.
It appears that in the subsequent case of State of Madhya Pradesh vs Ranajirao Shinde (supra) Hegde, J., delivering the judgment of the Court observed that the majority view in Kameshwar Singh 's case was followed by this Court in Bombay Dyeing & Manufacturing Co. 's case, but we do not think that this observation correctly represents what was decided in Bombay Dyeing & Manufacturing Co 's case.
Venkatarama Aiyer, J., rested his decision in Bombay Dyeing & Manufacturing Co '$ case on alternative grounds : if, the impugned section provided for the acquisition of money, and if money could not be acquired, then the section was void under Article 19 (1) (f) as imposing an unreasonable restriction on the right to hold property.
If, on the other hand, money could be acquired , the section was void as offending Article 31, clause (2) since the section did not provide for payment of compensation.
The decision in Bombay Dyeing & Manufacturing Co. 's case did not, therefore, lay down that money and choses in action could not be acquired under Article 31, clause (2).
But in State of Madhya Pradesh vs Ranojirao Shinde (supra) this Court did hold that money and choses in action could not form the subject matter of acquisition under Article 31, clause (2) and the reason it gave for taking this view was the same as that which prevailed with the majority judges in Kameshwar Singh 's case.
This Court held that the power of compulsory acquisition conferred under Article 31, clause (2) could not be utilised for enriching the coffers of the State; that power could be exercised only for a public purpose and augmenting the resources of the State could not be regarded as public purpose.
Hegde, J., speaking on behalf of the Court, pointed out that if it were otherwise, "it would be permissible for the legislatures to enact laws acquiring all public debts due from the State, annuity deposits returnable by it and provident fund payable by it by providing for the payment of some nominal compensation to the persons whose rights are acquired, as the acquisitions in question would augment the resources of the State", but nothing so bad could be said to be within the contemplation of clause (2) of Article 31.
Let us first examine on principles whether this reasoning qua choses in action is sound and commends itself for our acceptance.
This premise on which this reasoning is based is that the only purpose for which choses in action may be acquired is augmenting the revenues of the State and there can be no other purpose for such (1) ; 363 acquisition.
But this premise is plainly incorrect and so is the reasoning based upon it.
Why can choses in action 'not be acquired for a public purpose other than mere adding to the revenues of the State ? There may be debts due and owing by poor and deprived tillers, artisans and landless labourers to moneylenders and the State may acquire such debts with a view to relieving the weak and exploited debtors from the harassment and oppression to which they might be subjected by their economically powerful creditors.
The purpose of the acquisition in such a case would not be to enrich the coffers of the State.
In fact, the coffers of the State would not be enriched by such acquisition, because having regard to the financial condition of the debtors, it may not be possible for the State to recover much, or perhaps anything at all, from the impoverished debtors.
The purpose of such acquisition being relief of the distress of the poor and helpless debtors would be clearly a public purpose.
We have taken one example by way of illustration, but in a modern welfare State, dedicated to a socialist pattern of society, myriad situations may arise where it may be necessary to acquire choses in action for achieving a public purpose.
It is not correct to say that in every case where choses in action may be acquired, the purpose of acquisition would necessarily and always be augmenting of the revenues of the State and nothing else.
Even the theory of forced loan may break down in case of acquisition of choses in action.
There is a fundamental difference between chose in action and money, in that the former has not the same mobility and liquidity as the latter and its values is not measured by the amount recoverable under it, but it depends on a variety of factors such as the financial condition of the person liable, the speed and effectiveness of the litigative process and the eventual uncertainty as to when and to what extent it may be possible to realise the chose in action.
Even after the chose in action is acquired, the State may not be able to recover the amount due under it and there may even be cases where the chose in action may be released by the State.
Where money is given as compensation for taking of money, the theory of forced loan may apply,.
but it is difficult to see how it can be applicable where chose in action is taken and money representing its value, which in a large majority of cases would be less than the amount recoverable under it, is given as compensation.
Moreover, the theory of forced loan stands considerably eroded after the amendment of Article 31, clause (2) by the Constitution (Twenty fifth Amendment) Act, 1971, because under the amended clause, even if an amount less than the just equivalent is given as compensation for acquisition of property, it would not be violative of the constitutional guarantee.
It is true, and this thought was also expressed by Krishna Iyer, J., and myself in our separate but concurring Judgment in the State of Kerala vs The Gwalior Rayon Silk Manufacturing (Wvg.) Co. Ltd.(1) that, notwithstanding the amended clause (2) of Article 31, the legislature would be expected, save in exceptional socio historical setting to provide just compensation for acquisition of property, but if for any reason the legislature provides a lesser amount than the just equivalent, it would not be open to challenge on the ground of infringement of clause (2) of Article (1) [1974] 1 S.C.R.671.
364 31.
Then, how can the theory of forced loan apply when chose in action is acquired and what is paid for it is not the just equivalent but a much lesser amount, which is of course not illusory.
Moreover, there is also one other fallacy underlying the argument that there can be no public purpose in the acquisition of choses in action and that is based on the assumption that the public purpose contemplated by Article 31, clause (2) lies in the use to which the pro perty acquired is to be put as for example, where land or building or other movable property is acquired for being used for a public purpose.
But this assumption is hot justified by the language of Article 31, clause (2), because all that this clause requires is that the purpose for which the acquisition is made must be a public purpose, or, in other words, the, acquisitions must be made to achieve a public purpose.
Article 31, clause (2) does not require that the property acquired must itself be used for a public purpose.
So long as the acquisition subserves a public purpose, it would satisfy the requirement of clause (2) of Article 31 and, therefore, if it can be shown that the acquisition of choses in action is for subserving a public purpose, it would be constitutionally valid.
Hegde, J., expressed an apprehension in State of Madhya Pradesh vs Ranojirao Shinde (supra) that if this view were accepted, it would be permissible for the legislature to enact laws acquiring the public debts due from the State, the annuity deposits returnable by it and the provident fund payable by it by providing for payment of some nominal compensation to the persons whose rights were acquired.
We do not think this apprehension is well founded.
It is difficult to see what public purposes can possibly Justify a law acquiring the public debts due to the State or the annuity deposits returnable by it or the provident fund payable by it.
If the legislature enacts a law acquiring any of these choses in action, it could only be for the purpose of augmenting the revenues of the State or reducing State expenditure and that would clearly not be a public purpose and the legislation would plainly be violative of the constitutional guarantee embodied in Article 31, clause (2).
We would, therefore, prefer the minority view of Das, J., in Kameshwar singh 's case (supra) as against the majority view of Mahajan, J., Mukherjea, J. and Chandrasekhara Aiyer, J. So much on principle.
Turning now to the authorities, we find that, apart from the view of the majority judges in Kameshwar Singh 's case and the decision in the State of Madhya Pradesh vs Ranojirao Shinde (supra), there is no other decision of this Court which has taken the view that choses in action cannot be compulsorily acquired under Article 31, clause (2).
There are in fact subsequent decisions which clearly seem to suggest the, contrary.
We have already referred to R. C. Cooper 's case.
The majority judgment case gives the widest meaning to 'property which of Shah, J., in that can be, compulsorily acquired and includes within it ::rights in personam capable of transfer or transmission, such as debts.
The majority view in Kameshwar Singh 's case (supra) and the decision in State of Madhya Pradesh vs Ranojirao Shinde (supra) on this point can no longer be regarded as good law in view of this statement of the law in the majority judgment of Shah, J. Then again, in the Privy Purse case (supra), 365 Hidayatullah, C.J., held that the Privy Purse payable to a Ruler was a credit debt owned by him and since he was deprived of it by the Order of the President, there was violation of his fundamental right under Article 31, clause (2).
The learned Chief Justice thus clearly recognised that debt or chose in action could form the subject matter of compulsory acquisition under Article 31, clause (2).
Hegde, J., also took the same view in his separate but concurring judgment in the Privy Purse case.
It will, therefore, be seen that the trend of the recent decisions has been to regard debt or chose in action as property which can be compulsorily acquired under clause (2) of Article 31.
We are accordingly of the view that the debts due and owing from the Life Insurance Corporation to Class III and Class IV em ployees in respect of annual cash bonus were 'property ' within the meaning of Article 3 1, clause (2) and they could be compulsorily acquired under that clause.
The question, however, still remains whether by the impugned Act there was compulsory acquisition of the debt due and owing from the Life Insurance Corporation to Class III and Class IV employees in respect of annual cash bonus.
It was not disputed on behalf of the Life Insurance Corporation that if the impugned Act had the affect of compulsorily acquiring these debts belonging to Class III and Class IV employees, it would be void as offending Article 31, clause (2), since it admittedly did not provide for payment of any compensation.
The Statement of Objects and Reasons undoubtedly said that the provisions of the Settlement in regard to payment of annual cash bonus were being set aside with effect from 1st April, 1975 with a view to enabling the Life Insurance Corporation to make ex gratia payment to the employees "at the rates determined on the basis of the general Government policy for making ex gratia payments to the, employees of non competing public sector undertaking".
But the impugned Act did not contain any provision to that effect and Class III and Class IV employees were deprived of the debts due and owing to them without any provision in the statute for payment of compensation.
The learned Attorney General on behalf of the Life Insurance Corporation, however, strenuously contended that there was no compulsory acquisition of the debts due and owing to, Class III and Class IV employees under the impugned Act, but all that the impugned Act did was to extinguish those debts by annihilating the provisions of the Settlement in regard to payment of annual cash bonus with effect from 1st April, 1975.
The debts due and owing from the Life Insurance Corporation to Class III and Class IV employees, said the learned Attorney General, were extinguished and not compulsorily acquired and hence there was no contravention of Article 31, clause (2).
Now, prior to the Constitution (Fourth Amendment) Act, 1955, which introduced clauses (2A) and (2B) in Article 3 1, there was considerable controversy as to the inter relation between clauses (1) and.
(2) and that coloured the interpretation of the words "taken possession of or acquired" in clause (2) as it stood prior to the amendment.
The majority view in The State of West Bengal vs Subodh Gopal Bose & Ors.(1) and Dwarkadas Shrinivas of (1) ; 6 277SCI/78 366 Bombay vs The Sholapur Spinning & Weaving Co. Ltd. & Ors:(1) was that clauses (1) and (2) of Article 31 were not mutually exclusive; but they dealt with same topic and the deprivation contemplated in clause (1) was no, other than the compulsory acquisition or taking possession of property referred to in clause (2) and hence where the deprivation was so substantial as to amount to compulsory acquisition or taking possession, Article 31 was attracted.
The introduction of clause ( ' )A) in Article, 31 snapped the link between clauses (1) and (2) and brought about a dichotomy between these two clauses.
Thereafter, clause.
(2) alone dealt with compulsory acquisition or requisitioning of property by the State and clause (1) dealt with deprivation of property in other ways and what should be regarded as compulsory acquisition or requisitioning of property for the Purpose of clause (2) was defined in clause (2A).
It was if clause (2A) supplied the dictionary for the mean of 'compulsory acquisition and requisitioning of property in clause (2).
Clause (2A) declared that a law shall not be deemed, to provide for the compulsory acquisition or requisitioning of property, if it does not provide for the transfer of the ownership or right to possession of the property to the State or to a corporation owned or controlled by the State.
It is only where a law provides for the transfer of ownership or right to possession of any property to the State or to a corporation owned or controlled by the State that it would have to meet the challenge of clause (2) of Article 31 as a law providing for compulsory acquisition or requisitioning of property.
Whenever, therefore, the constitutional validity of a law is challenged on the ground of infraction of Article 31, clause (2), the question has to be asked whether the law provides for the transfer of ownership or right to possession of any property to the State or to a corporation owned or controlled by the State.
Here, the Life Insurance Corporation is a corporation owned by the State as its entire capital has been provided by the Central Government.
The debts due, and owing to Class III and Class IV employees from the Life Insurance Corporation are cancelled or extinguished by the impugned Act.
Does that amount to transfer of ownership of any property to the Life Insurance Corporation within the meaning of clause (2A) of Article 31 ? If it does, Article 31, clause (2) would be attracted, but not otherwise.
That depends on the true interpretation of Article 31, clause (2A).
Now, whilst interpreting Article 31, clause (2A), it must be remembered that the interpretation we place upon it will determine the scope and ambit of the constitutional guarantee under clause (2) of Article 31.
We must not, therefore, construe clause (2A) in a narrow pedantic manner nor adopt a doctrinaire or legalistic approach.
Our interpretation must be guided by the substance of the matter and not by lex scripts.
When clause (2A) says that in order to attract the applicability of clause (2) the law must provide for the transfer of ownership of property to the State or to a corporation owned or controlled by the State, it is not necessary that the law should in so many words provide for such transfer.
No particular verbal formula need be adopted.
It is not a ritualistic mantra which is required to be repeated in the law.
What (1) ; 3 67 has to be considered is the substance of the law and not its form.
The question that is to be asked is : does the law in substance provide for transfer of ownership of property, whatever be the linguistic formula employed ? What is the effect of the law : does it bring about transfer of ownership of property ? Now, 'transfer of ownership is also a term of wide import and it comprises every mode by which ownership may be transferred from one person to another.
The mode of transfer may vary from one kind of property to another : it would depend on the nature of the property to be transferred.
And moreover, the court would have to look to the substance of the transaction in order to determine whether there is transfer of ownership involved in what has been brought about by the law.
There is no doubt that in the present case the impugned Act extinguished or put an end to the debts due and owing from the Life Insurance Corporation to Class III and Class IV employees.
that was the, direct effect of.
the impugned Act and it can, therefore, be legitimately said that in substance the impugned Act provided for extinguishment of these debts, though it did not say so in so many words.
This much indeed was not disputed on behalf of the Life Insurance Corporation and the controversy between the parties only centred round the question whether the extinguishment of these debts involved any transfer of ownership of property to the Life Insurance Corporation.
The learned Attorney General on behalf of the Life Insurance Corporation sought to make a distinction between extinguishment and transfer of ownership of a debt and contended that when ownership of a debt is transferred, it continues to exist as a debt in the hands of the transferee, but when a debt is extinguished it ceases to exist as a debt and it is not possible to say that the debtor has become the owner of the debt.
There can be no transfer of ownership of a debt, said the learned Attorney General unless the debt continues to exist as such in the hands of the transferee, and, therefore, extinguishment of a debt does not involve transfer of ownership of the debt to the debtor.
This contention of the learned Attorney General, though attractive at first blush, is, in our opinion not well founded.
It is not correct to say that there can be no transfer of ownership of a right or interest unless such right or interest continues to have a separate identifiable existence in the hands of the transferee.
It is not difficult to find instances where ownership of a right or interest may be transferred from one person to, another by extinguishment.
Take for example, a case where the lessor terminates the lease granted by him to the lessee by exercising his right of forfeiture or the lessee surrenders the lease in favour of the lessor.
The lease would in such a case come to an end and the interest of the lessee would be extinguished and correspondingly, the reversion of the lessor would be enlarged into full ownership by the return of the leasehold interest.
There would clearly be transfer of the lease hold interest from the lessee to the lessor as a result of the determination of the lease and the extinguishment of the interest of the lessee.
The same would be the position where A law provides for cancellation, of the lease and in such a case, if the lessor is the State or a corporation owned or controlled by the State, it would amount to compulsory acquisition of the leasehold interest of the lessees within meaning of clause (2A) of Article 31.
It was in fact to held by this 368 Court and in our opinion rightly in Ajit Singh vs State of Punjab(1) where sikri, J., speaking on behalf of the majority, pointed out at page 149 that if "the State is the landlord of an estate and there is a lease of that property and a law provides for the extinguishment of leases held in an estate it would properly fall under the category of acquisition by the State because the beneficiary of extinguishment would be the State".
Where by reason of extinguishment of a right or interest of a person, detriment is suffered by him, and a corresponding benefit accrues to the State, there would be transfer of ownership of such right or interest to the State.
The question would always be : who is the, beneficiary of the extinguishment of the right or interest effectuated by the law? If it is the State, then there would be transfer of ownership of the right or interest to the State , because what the owner of the right or interest would have lost by reason of the extinguishment would be the benefit accrued to the State.
This was precisely the reason why Hegde, J., speaking on behalf of the Court observed in the State of Madhya Pradesh vs Ranojirao Shinde (supra) that it was possible to view the abolition of cash grants under the Madhya Pradesh law impugned in that case "as a statutory transfer of rights of the grantees to the State".
It was pointed out in that case that there was no difference between taking by the State of money that is in the hands of others and the abrogation of the liability of the State to make payment to others, for in the former case the State would be compulsorily taking others ' property, while in the latter it would be seeking to appropriate to itself the property of others which is in its hands.
It is, therefore, clear that when a debt due and owing by the State or a corporation owned or controlled by the State is extinguished by law, there is transfer of ownership of the money representing the debt from the creditor to the State or the State owned/controlled corporation.
So long as the debt is due and owing to, the creditor, the State or the State owned/controlled corporation is under a liability to pay the amount of the debt to the creditor and, therefore, if the amount of the debt is X, the total wealth of the creditor would be A plus X, while that of the State or State owned/controlled corporation would be B minus X.
But if the debt is extinguished, the total wealth of the creditor would be reduced by X and that of the State or State owned/controlled corporation augmented by the same amount.
Would this not be in substance and effect of transfer of X from the creditor to the State or State owned/controlled corporation ? The extinguishment of the debt of the creditor with corresponding benefit to the State or State owned/controlled corporation would plainly and indubitably involve transfer of ownership of the amount representing the debt from the former to the latter.
This is the real effect of extinguishment of the debt and by garbing it in the form of extinguishment, the State or State owned/controlled corpo ration cannot obtain benefit at the cost of the creditor and yet avoid the applicability of Article 31, clause (2).
The verbal veil constructed by employing the device of extinguishment of debt cannot be permitted to conceal or hide the real nature of the transaction.
It is necessary to remember that we are dealing here with a case where a constitutionally guaranteed right is sought to be enforced and the protection of such right should not be allowed to be defeated or rendered illusory by legis 3 69 lative stratagems.
The courts should be ready to rip open such stratagems and devices and find out whether in effect and substance the legislation trenches upon any fundamental rights.
The encroachments on fundamental rights are often subtle and sophisticated and they are disguised in language which apparently seems to steer clear of the constitutional inhibitions.
The need for a perspective and alert Bar is, therefore, very great and the courts too have to adopt a bold and dynamic approach, if the fundamental rights are to be protected against dilution or erosion.
In the light of this discussion, the conclusion is inevitable that the direct effect of the impugned Act was to transfer ownership of the debts due and owing to Class III and Class IV employees in respect of annual cash bonus to the Life Insurance Corporation and since the Life Insurance Corporation is a corporation owned by the State, the impugned Act was a law providing for compulsory acquisition of these debts by the State within the meaning of clause (2A) of Article 31.
If that be so, the, impugned Act must be held to be violative of Article 31, clause (2) since it did not provide for payment of any compensation at ail.
for the compulsory acquisition of these debts.
Re : Ground (B) Since the impugned Act has been held void as offending Article 3 1, clause (2) under Ground (A), it is unnecessary to consider Ground (B) based on infraction of Article 19 ( 1) (f).
It is the settled practice of this Court to decide no more than what is absolutely necessary for the decision of a case.
Moreover, once it is held that the impugned Act falls within Article 31, clause (2), its validity cannot be tested by reference to Article 19 (1) (f) by reason of clause (2B) of Article 31.
Hence we do not propose to discuss the very interesting arguments advanced before us in regard to Article 19 (1) (f).
We accordingly allow the writ petitions and declare the Life Insurance Corporation (Modification of Settlement) Act, 1976 void as offending Article 31, clause (2) of the Constitution and issue a writ of Mandamus directing the union of India and the Life Insurance Corporation to forebear from implementing or enforcing the provisions of that Act and to, pay annual cash bonus for the years 1st April, 1975 to 3 1 st March, 1976 and 1 st April, 1976 to 3 1 st March, 1977 to, Class III and Class IV employees in accordance with the terms of clause 8(ii) of the Settlement dated 24th January, 1974.
The respondents will pay the costs of the writ petitions to the petitioners.
ORDER We agree with the conclusion of Brother Bhagwati but prefer to rest our decision on the ground that the impugned Act violates the provisions of Article 31(2) and is, therefore, void.
We consider it unnecessary to express any opinion on the effect of the judgment of the Calcutta High Court in W.P. No. 371 of 1976.
P.B.R. Petitions allowed.
| IN-Abs | From time to time the Life Insurance Corporation and its employees arrived at settlement relating to the terms and conditions of service of Class III and Class IV employees including bonus payable to them.
Clause (8) of the Settle ment dated January 24, 1974, which related to payment of bonus, provided (i) that no profit sharing bonus shall be paid but the Corporation may, subject to such directions as the Central Government may issue from time to time, grant any other kind of bonus to its Class III and Class IV employees; (ii) that an annual cash bonus will be paid to all Class III and Class IV employees at the rate of 15% of the annual salary actually drawn by an employee in respect of the financial year to which the bonus relates and (iii) that save as provided therein all other terms and conditions attached to the admissibility and payment of bonus shall be as laid down in the Settlement on bonus dated June 26, 1972.
Clause (12) of the Settlement which refers to the, period of settlement provided (1) that the Settlement shall be effective from April 1, 1973 for a period of four years and (2) that the, terms of the Settlement shall be subject to the approval of the Board of the Corporation and the Central Government.
One of the administrative instructions issued by the Corporation in regard to the payment of cash bonus under cl.
8(ii) of the Settlement was that in case of retirement or death, salary up to the date of cessation of service shall be taken into account for the purpose, of determining the amount of bonus payable to the employee or his heirs and the other was that the bonus shall be paid along with the salary for the month of April but in case of retirement or death, payment will be made soon after the contingency.
The payment of Bonus (Amendment) Act.
1976 considerably curtailed the rights of the employees to bonus in industrial establishments.
But in so far as the employees of the Corporation were concerned this Act had no application because by reason of section 32 of the Payment of Bonus Act, the Corporation was outside the purview of its operation.
The Central Government however decided that the employees of establishments which were not covered by the Bonus Act would not be eligible for payment of bonus but exgratia payment in lieu of bonus would be made to them.
Pursuant to this decision the L.T C. was advised by the Ministry of Finance, Government of India, that no further payment of bonus should be made to its employees without getting the same cleared by the Government.
The Corporation accordingly issued administrative instructions not to pay bonus to its employees under the existing provisions until further instructions.
To the employees ' assertion that the Corporation was bound to, 335 pay bonus in accordance with the terms of the Settlement the Corporation cOntended that payment of bonus by the Corporation was subject to such directions as the Central Government might issue from time to time, and since the Central Government had advised it not to make any payment of bonus without its specific approval, bonus could not be paid to the employees.
Thereupon, the All India Insurance Employees ' Association moved the High Court for issue of a writ directing the Corporation to act in accordance with the terms of the Settlement dated January 24, 1974 read with administrative instructions dated March 29, 1974 and not to refuse to pay cash bonus to Class III and Class IV employees.
A single Judge of the High Court allowed the writ petition.
While the Letters Patent Appeal was pending, Parliament passed the Life Insurance Corporation (Modification of Settlement) Act, 1976 (which is the Act impugned in this case).
In the Letters Patent Appeal the Corporation stated that in view of the impugned Act , there was no necessity for proceeding with the appeal and hence the Division Bench made no order in the appeal.
Since the effect of the impugned Act was to deprive Class III and Class IV employees of bonus payable to them in accordance with the terms of the Settlement, two of the associations filed writ petitions in this Court challenging the constitutional validity of the impugned Act.
It was contended on their behalf that even if the impugned Act rendered cl.
(8) (ii) ineffective with effect from April 1, 1975 it did not have the effect of absolving the Life Insurance Corporation from its obligation to carry out the writ of Mandamus issued by the High Court and (2) that the right of Class III and Class IV employees to annual cash bonus for the years 1975 76 and 1976 77 under Cl.
8(ii) of the Settlement was property and since the impugned Act provided for compulsory acquisition of this property.
without payment of compensation, it was violative of article 31(2) of the Constitution.
Allowing the writ petitions Beg C.J. (concurring with the majority) HELD : Section 3 of the Life Insurance Corporation (Modification of Settlement) Act, 1976 is struck by the provisions of article 19(1)(f) and is not saved by article 19(6) of the Constitution.
[346 A] 1.
The Statement of Objects and Reasons of the Act discloses that the purpose of the impugned Act was to undo settlements arrived at between the Corporation and Class III and Class IV employees on January 24 and February 6, 1974 and recognised by the High Court.
In Smt.
Indira Gandhi vs Raj Narain this Court held that even a constitutional amendment cannot authorise the assumption of judicial power by Parliament.
One of the tests laid down was whether the decision is of a kind which requires hearing to be given to the parties i.e., whether it involves a quasi judicial procedure.
A decision reached by the Central Government is the result of a satisfaction on matters stated there and would imply quasi judicial procedure where the terms of a settlement had to be reviewed or revised.
But, the legislative procedure.
followed in this case does not require that to, be done.
It would be unfair to adopt legislative procedure to undo a settlement which had become the basis of a decision of a High Court.
Even if legislation can remove the basis of a decision it has to do it by an alteration of general rights of a class but not by simply excluding two specific settlements between the Corporation and its employees from the purview of section 18 of the which had been held to be valid and enforceable by a High Court.
[341 G, H, 342 A C] 2(a) The object of the Act was in effect to take away the force of the judgment of the High Court.
Rights under that judgment could be said to, rise independently of article 19, of the Constitution.
To give effect to that judgment is not the same thing as enforcing a right under article 19.
It may be that a right under article 19 becomes linked up with the enforceability of the judgment.
Nevertheless the two could be viewed as separable sets of rights.
If the right conferred by the judgment independently is sought to be set aside section 3 would be invalid for trenching upon the judicial power.
[343 B D] 336 (b) A restriction upon a right may even cover taking away of the right to increased remuneration in the interests of the general public.
But the present is a pure and simple case of deprivation of rights of the employees without any apparent nexus with any public interest.
In the instant case the impugned Act is a measure which seeks to deprive workers of the benefits of settlement arrived at and assented to by the Central Government under the provisions of the .
Such a settlement should not be set at naught by an Act designed to defeat the purpose.
In judging the reasonableness of an Act the prospects held out, the representations made, the conduct of the Government and equities arising therefrom may all be taken into consideration.
[342 E F, 344 E F] 3.
Even though the real object of the Act was to set aside the result of mandamaus, the section does not mention this object.
This was perhaps because the jurisdiction of a High Court and the effectiveness of its orders derived their force from article 226 of the Constitution.
Even if section 3 seeks to take away the basis of the judgment without mentioning it, yet where the rights of the citizens against the State are concerned the court should adopt an interpretation which upholds those rights.
Therefore, the rights which had passed into those embodied in a judgment and become the basis of a mandamus from the High Court, could not be taken away in an indirect fashion.
[343 D E].
Even though the Directive Principles contained in article 43, cast an obligation on the State to secure a living wage for the workers and is part of the principles declared fundamental in the governance of the country, it is not a fundamental right which can be enforced.
Even though the Directive Principles give a direction in which the fundamental policies of the State must be oriented, yet this Court cannot direct either the Central Government or the Parliament to proceed in that direction.
Even if the Directives are not directly enforceable by a Court they cannot be declared ineffective.
They have the life and force of fundamentals.
The best way to give vitality and effect to them is to use them as criteria of reasonableness.
[344 B C] 5(a) Articles 358 and 359(1A) provide that as soon as the Proclamation of emergency cease to operate the effect of suspension must vanish "except as respects things done or omitted to be done before the law so ceases to have effect. ' [346 B C] (b) The term "things done or omitted to be done", should be interpreted very narrowly.
In the present case it means that the settlements are not to be deemed to be wiped off.
All that it means is that no payment of bonus could be demanded during the emergency but as soon as the emergency was over, the settlement would revive and what could not be demanded during the emergency would become payable even for the period of emergency for which payment was suspended.
In other words valid claims cannot be washed off by the emergency per se.
They can only be suspended by a law passed during the operation of articles 358 and 359(1A).
[346 C F] (Per Chandrachud, Fazal Ali and Shinghal, JJ.).
Concurring with the majority.
The impugned Act violates article 31(2) and is, therefore, void.
[369 G] (Per Bhagwati, Iyer and Desai, JJ.) Irrespective whether the impugned Act is constitutionally valid or not, the Corporation is bound to obey the Writ of Mandamus issued by the, High Court and to pay annual cash bonus for the year 1975 76 to Class III and Class IV employees.
[352 D E] 1.
Section 3 of the impugned Act merely provided that the provisions of the Settlement, in so far as they related to payment of annual cash bonus to Class in and Class IV employees, shall not have any force or effect and shall not be deemed to have had any force or effect from April 1, 1975.
The writ of Mandamus issued by the High Court was not touched by the impugned Act.
The right of the employees to annual cash bonus ' for the year 1975 76 became 337 crystallised in the judgment and this right was not sought to be taken away by the impugned Act.
The Judgment continued to subsist and the corporation was bound to pay bonus in obedience to the writ of Mandamus.
By the time the Letters Patent Appeal came up for hearing, the impugned Act had already come into force and the Corporation could have successfully contended in the appeal that since the Settlement, in so far as it provided for payment of annual cash bonus, was annihilated by the impugned Act with effect from 1st April, 1975 and so the employees were not entitled to bonus for the year 1975 76 and hence no writ of Mandamus could issue against the Corporation directing it to make payment of bonus.
If such contention had been raised, there is little doubt that the judgment of the single Judge would have been upturned.
But that was not done, and the judgment of the single Judge became final and binding oil the parties.
[353 A F, 355 C] Shri Prithvi Cotton Mills Ltd. vs Broach Borough Municipality, [1970] 1 SCR 358 and Patel Gordhandas Hargovindas vs Municipal Commissioner, Alimedabad, ; ; distinguished and held inapplicable. 2(a).
The argument on behalf of the Corporation that on a proper interpretation of the clauses annual cash bonus payable under cl.
8(ii) was, by reason of cl.
8(i) subject to the directions issued by the Central Government from time to time and the Government having stopped further payment of bonus, the employees were not entitled to claim annual cash bonus, is erroneous.
The employees had absolute right to receive annual cash bonus from the Corporation in terms of el. 8(ii) and it was not competent to the Central Government to issue any directions to the Corporation to refuse or withhold payment of the same.
[356 D H] (b) Although under regulation 58 of the Service Regulations non profit sharing bonus could be granted subject to the directions of the Central Government and if the Government issues a direction to the contrary bonus could not be paid by the Corporation, in the instant case, as provided in cl. 12 of the Settlement, the Central Government approved the payment of bonus under cl. 8(ii).
That having been done it was not competent to the Central Government thereafter to issue another contrary direction which would have the effect of compelling the Corporation to commit a breach of its obligation under section 18(1) of the to pay annual cash bonus under clause 8(ii).
The overriding power given to the Central Government to issue directions from time to time contained in cl.
8(i) is conspicuously absent in cl. 8(ii).
The power contained in cl.
8(i) cannot be projected or read into cl. 8(ii).
These two clauses are distinct and independent.
While cl. 8(i) is a general provision, el. 8(ii) specifically provides that cash bonus in the manner prescribed therein shall be paid to the employees.
This specific provision is made subject only to the approval of the Central Government, which was obtained.
[357 A F] (c) Moreover, under cl.
8(ii) read with the administrative instruction issued by the Corporation, annual cash bonus accrued from day to day, though payable in case of retirement, resignation or death on the happening of that contingency and otherwise on the expiration of the year to which the bonus related, Thus the annual cash bonus payable for the year 1975 76 was a debt due and owing from the Corporation to each of the employees.
, On the date when the impugned Act came into force each of the employees was entitled to a debt due and owing to him from the Corporation.
[357 H, 358 A] 3(a) The impugned Act must be held to be violative of article 31(2) since it did not provide for payment of any compensation for the compulsory acquisition of the debts.
[369 C] (b) The direct effect of the impugned Act was to transfer ownership of the debts due and owing to Class III and Class IV employees in respect of cash bonus to the Life Insurance Corporation and since the Corporation is a Corporation owned by the State, the impugned Act was a law providing for compulsory acquisition of the debts by the State within the meaning of article 31(2A).
1369 B C] 338 (c) Choses in action can be acquired by the State.
So long as the acquisition sub serves a public purpose, it would satisfy the requirement of article 31(2).
There is a fundamental distinction between a chose in action and money.
A chose in action has not the same mobility and liquidity as money, and its value is not measured by the amount recoverable under it but depends on a variety of factors.
Where money is given as compensation for taking money the theory of forced loan may apply, but it is not applicable where a chose in action is taken and money representing its value is given as compensation.
[363 A, D F] R. C. Cooper vs Union of India, ; ; Madhav Rao Scindia vs Union of India : ; reiterated.
State of Bihar vs Kameshwar Singh, ; State of Madhya Pradesh vs Ranojirao Shinde, ; ; dissented; Deokinandan Prasad vs State of Bihar, [1971] Suppl.
S.C.R. 634; State of Punjab vs K. R. Erray & Sobhag Rai Mehta, ; ; State of Gujarat, vs Sri Ambica Mills Ltd., ; and Slat(, of Kerala vs The Gwalior Rayon Silk Mfg.
(Wvg.) Co. Ltd., ; followed; State of Madhya Pradesh vs Ranojirao Shinde, [1968] 3 S.C.R. 489; State of Bihar vs Kameshwar Singh, and Bombay Dyeing and Manufacturing Co. Ltd. vs State of Bombay, ; explained; ; and ; held no longer good law.
(d) The debts due and owing from the Corporation in respect of annual cash bonus were clearly property of the employees within the meaning of article 31(2) and they could be compulsorily acquired under article 31(2).
Similarly their right to receive cash bonus for the period from the date of commencement of the impugned Act upto March 31, 1977 was a legal right enforceable through Court of law.
[360 B C] (a) Property within the meaning of articles 19(1)(f) and 31(2) comprises every form of property, tangible or intangible, including debts and choses in action such is unpaid accumulation of wages, pension, cash grants etc.
[360 A] R. C. Cooper vs Union of India, ; ; H. H. Maharajadhiraja Madhay Rao Jiwaji Rao Scindia Bahadur & Ors.
vs Union of India; , ; State of M.P. vs Ranojirao Shinde & Anr., ; ; Deokinandan Prasad vs State of Bihar, [1971] Supp.
S.C.R. 634; State of Punjab vs K. R. Erry & Sobhag Rai Mehta, [1973] 2 S.C.R. 485; and State of Gujarat & Anr vs Shri Ambica Mills Ltd., Ahmedabad, ; referred to.
4(a) The contention of the Corporation that when ownership of a debt is transferred it continues to exist as a debt but that when the debt is extinguished it ceases to exist as a debt and that extinguishment of a debt does not therefore involve transfer of ownership of the debt to the debtor is not well founded.
Where, by reason of extinguishment of a right or interest of a person, detriment is suffered by him and a corresponding benefit accrues to the State, there would be transfer of ownership of such right or interest to the State.
The question would always be : who is the beneficiary of the extinguishment of the right or interest effectuated by the law ? If it is the State, then there would be transfer of ownership of the right or interest to the State, because what the owner of the right or interest would lose by reason of the extinguishment would be the benefit accrued to the State [367 H, 368 B C] (b) Extinguishment of the debt of the creditor with corresponding benefit to the State or State owned/controlled Corporation would involve transfer of ownership of the amount representing the debt from the former to the latter.
This is the real effect of extinguishment of the debt and by garbing it in the form of extinguishment, the State or State owned/controlled Corporation cannot obtain benefit at the cost of the creditor and yet avoid ' the applicability of 339 article 31(2).
The verbal veil constructed by employing the device of extinguishment of debt cannot lot permitted to conceal or hide the real nature of the transaction [368 F B]
|
Appeal No. 375 of 1976.
(Appeal by Special Leave from the Judgment and Order dated 7.11.1975 of the High Court at New Delhi in Civil Writ No. 1123 of 1975) G.B. Pai, O.C. Mathur and D.N. Mishra, for the appellant.
M.K. Ramamurthi, S.C. Jain and Madan Mohan, for respond ent No. 1.
The Judgment of the Court was delivered by SARKARIA, J.
The principal question that arises in this appeal by special leave is: Whether an order of the Labour Court to the effect, that since no demand of the workmen had been served on the employer, no industrial dispute had come into existence in accordance with law, and as such the Reference was invalid and the Court had no jurisdiction to adjudicate the matter referred to it by the Government, is an "award" for the purposes of Section 19 of the , (for short, called the Act)? Cox & Kings (Agents) Ltd. (for short, the Management) dismissed from service three of their workmen after a domes tic enquiry conducted against them on certain charges.
In May 1967, the Lt. Governor of Delhi made a Refer ence under section 10 read with section 12(5) of the Act to the Labour Court, Delhi, to determine: "Whether the terminations of services of S/Shri H.S. Rawat, Bidhi Chand and Ram Sarup Gupta were unlawful and unjustified, and if so, to what relief are these workmen entitled?" By an amendment of their written statement in February, 1969, augmented by an application dated 17.8.1971; the Management raised a preliminary objection that since no demand notice had been ,served on the Management, no indus trial dispute had legally come into existence, and as such the Reference was invalid and the Labour 334 Court had no jurisdiction to adjudicate it.
By an order, dated September 27, 1972, the Labour Court accepted the objection, holding: ". that no industrial dispute came into existence before this reference as the workmen have failed to establish serving of demand on the management prior to this reference.
The effect of this finding is that the reference could not have been made for adjudication and the same is accordingly invalid and hence the question of deciding the issue as in the reference or other issues does not arise as the industrial dispute under reference did not come into existence in accordance with law before this reference.
This award is made accordingly.
" Thereafter, the workmen on 25.10.1972, raised a dispute by serving demand notices on the Management.
By his order dated 2.5.1973, the Lt. Governor, Delhi, again made a Refer ence to the Labour Court, under the Act for adjudication of the same matter relating to the termination of the services of the aforesaid workmen.
The Management raised, inter alia, a preliminary objec tion that a second Reference within one year of the first `award ', dated September 27, 1972, was not competent in view of what is contained in sec.
19 of the Act.
By an order dated 2.5.1973, the Labour Court dismissed the preliminary objections.
After recording the evidence produced by the parties, the Court held on merits, that the termination of the services of 3 workmen was illegal and unjustified.
The Court further found that Bidhi Chand work man had become gainfully employed elsewhere as a driver with better emoluments and it was therefore sufficient to award him compensation without any relief of reinstatement, at the rate of 50% of his wages for three years from 1966 to 1969 to the date of his getting employment elsewhere.
It further found that Ram Sarup Gupta had remained unemployed after his dismissal in 1966.
It therefore directed his reinstatement with full back wages and continuity of serv ice.
As regards H.S. Rawat, the Court found that he could not have remained unemployed throughout but was doing some work or the other for his living, may be with occasional spells.
The Court therefore held that Rawat was entitled to reinstatement and continuity of service with 50% back wages till the award Came into operation and he got his reinstate ment.
This award was made by the Labour Court on 1 5 1975.
The Management impugned this award by filing a writ petition under article 226 of the Constitution in the High Court of Delhi.
Only three contentions were canvassed by the Management at the preliminary heating before the High Court: (i) That the determination, dated 27.9.1972, by the Labour Court was an 'award ' as defined in section 2(b) of the Act, and in view of sub section
(3) of section 19, it had to be in operation for a period of one year.
It could be terminated only by a notice given under sub sections
(4) & (6) of section 19.
Since no such notice was given, the award continued to be in operation.
The second award, dated 1 5 1975, could not be validly made during the period, the 335 first award was in operation; (ii) The demand for reinstate ment was not made by the workmen till 1972 and the Labour Court was not justified in awarding them the relief of reinstatement together with compensation for back wages from 1966 onwards; (iii) The onus to show that the workmen had not obtained alternative employment, after their dismissal, was on the workmen and this onus has not been discharged.
On the other hand, the Labour Court wrongfully did not permit the Management to adduce additional evidence to show that the workmen had obtained alternative employment and, in consequence, were not entitled to back wages.
Regarding (i), the High Court held that since the `award ' dated 27.9.1972, was not one which imposed any continuing obligation on the parties, but had ended with its pronouncement, nothing in subsections (3) and (6) of sec.
19 was applicable to it.
As regards (ii), the High Court held that once the dismissal of the workmen was found illegal, it was inevita ble to award the compensation from the dates of dismissal till they found alternative employment or till the date of the award, as the case may be.
In regard to (iii), the High Court said that the ques tion of burden of proof as to who is to prove, whether the workmen did not get alternative employment for the period for which back wages have 'been awarded to them could arise only if no evidence was given by either party or if the evidence given by them was evenly balanced.
Neither of these circumstances was present before the Labour Court, and there was no good reason to disturb the finding of fact recorded by the Labour Court on this point.
The High Court thus rejected all the three contentions, and, in the result, dismissed the writ petition in limine, with a speaking order.
Hence this appeal.
Shri G.B. Pai has reagitated all the three points before us.
He assails the findings of the High Court, thereon.
Regarding point No. (i) Mr Pai 's argument is that the determination, dated 27.9.1972, also, was an `award ' within the second part of the definition of the term in a. 2(b) of the Act, inasmuch as it determined a question relating to an industrial dispute.
Emphasis has also been laid on the point that this `award ', dated 27.9.1972 was duly published by the Government under section 17(1) and had assumed finality under sub section
(2) of the same section.
This award dated 27.9.1972 proceeds the argument had to remain operative under sub section
(3) of section 19 for a period of one year from the date on which it became enforceable under section 17A i.e., a date one month after its publication.
It is submitted that no second Reference could be validly made by the Government during the period the first award remained operative, and since the second Reference, dated 2.5.1973 was made before the expiry of such period of the first award (which had not been terminated in the manner laid down in section 19), it was invalid and the consequential adjudication by the Labour Court on its basis, was null and void.
In this connection counsel has relied upon a 7 436SCI/77 336 judgment of this Court in Management of Bangalore Woollen, Cotton & Silk Mills Co. Ltd,.
vs The Workmen and ant.(1) wherein it was held that when there is a subsisting award binding on the parties, the Tribunal has no jurisdiction to consider the same points in a fresh reference.
In that case, the earlier award had not been terminated and the Reference was therefore held to be incompetent.
Reference has also been made to a single Bench Judgment of the Allaha bad High Court in Workmen of Swadeshi Cotton Mill, Co. Ltd. v Swadeshi Cotton Mills Co., Ltd., Kanpur and ors.
(2) As against this, Shri M.K. Ramamurthi maintains that the Labour Court 's order, dated May 1, 1972 was not an 'award ' within the definition of the term in s 2(b) inasmuch as it was not a determination, on merits, of any industrial dis pute or of any question relating to an industrial dispute.
In this connection reliance has been placed on a judgment of this Court in Civil Appeal No. 241 of 1964 (Technological Institute of Textiles vs Its Workmen and ors.(3).
Before dealing with the while to notice the relevant conten tions canvassed, it will be worthwhile to notice the rele vant statutory provisions.
The terms `award ' and `industrial dispute ' have been defined in the Act as follows: `Award ' means an interim or a final determination of any industrial dispute or of any question relating thereto by any Labour Court, Industrial Tribunal or National Indus trial Tribunal and includes an arbitration award made under section 10A".
[vide section 2 (b)].
"Industrial dispute" means "any dispute or difference between employers and employers, or between employers and workmen, or between workmen and workmen, which is connected with the employment or non employment or the terms of employment or with the conditions of la bour, of any person", [vide section 2 (k)].
Section 10 describes the matters which can be referred to Boards, Courts or Tribunals for adjudication.
Only clause (i) of subsection (1) is material for our purpose.
It provides; "Where the appropriate Government is of opin ion that any industrial dispute exists or is apprehended, it may at any time by order in writing (a). (b) . (c) refer the dispute or any matter appear ing to be connected with, or relevant to the dispute, if if relates to any (1) ; (2) 42 Indian Factories Journal p. 255.
(3) 337 matter specified in the Second Schedule to a Labour Court for adjudication".
Sub section (4) requires the Labour Court to confine its adjudication to those points of dispute and matters incidental thereto which the appropriate Government has referred to it for adjudication.
The material part of section 19 reads as under: "(1) . (2) . (3) An award shall, subject to the provi sions of this section remain in operation for a period of one year from the date on which the award becomes enforceable under section 17A; Provided that the appropriate Government may reduce the said period and fix such period as it thinks fit: "Provided further that the appropriate Govern ment may, before the expiry of the said peri od, extend the period of operation by any period not exceeding one year at a time as it thinks fit so, however, that the total period of operation of any award does not exceed three years from the date on which it came into operation.
(4) Where the appropriate.
Government, Whether of its own motion or on the application of any party bound by the award, considered that since the award was made, there has been a material change in the circumstances on which it was based, the appropriate Government may refer the award or a part of it to a Labour Court, if the award was that of a Labour Court or to a Tribunal, if the award was that of a Tribunal or of a National Tribunal for decision whether the period of operation should not, by reason of such change, be shortened and the decision of Labour Court or the Tribunal, as the case may be, on such reference shall be final.
(5) Nothing contained in sub section (3) shall apply to any award which by its nature, terms or other circumstances does not impose, after it has been given effect to, any continuing obligation on the parties bound by the award.
(6) Notwithstanding the expiry of the period of operation Under sub section (3), the award shall continue to be binding, on the parties until a period of two months has elapsed from the date on which notice is given by any party bound by the award to the other party or parties intimating its intention to terminate the award.
338 (7) No notice given under sub section (2) or sub section (6) shall have effect, unless it is given by a party representing the majority of persons bound by the settlement or award, as the case may be.
" There is no dispute that the order on the earlier Refer ence was made by the Labour Court on 27 9 1972, while the second Reference with the same terms of Reference to that Court was made by the Government on 2.5.1973, i.e., within one year of the earlier order.
It is common ground that the period of one year for which an award normally remains in operation under sub section
(3) was not reduced or curtailed by the Government under sec.
19 or under any other provision of the Act.
It is further admitted between the parties that no notice was given by any party of its intention to terminate the Order dated 27.9.1972.
The controversy with regard to the first point there fore narrows down into the issues whether the determination dated 27.9.1972, of the Labour Court was an award as defined in section 2(b) of the Act? The definition of award in section 2(b) falls in two parts.
The first part covers a determination, final or interim, of any industrial dispute.
The second part takes in a determi nation of any question relating to an industrial dispute.
But the basic postulate common to both the parts of the definition, is the existence of an industrial dispute, actual or apprehended.
The "determination" contemplated by the definition is of the industrial dispute or a question relating thereto, on merits.
It is to be noted further that Sec. 2, itself, expressly makes the definition subject to "anything repugnant in the subject or context".
We have therefore to consider this definition in the context of sec.
19 and other related provisions of the Act.
Mr. Pai concedes that the order dated 27.9.1972, is not a determination of any industrial dispute, as such, falling under the first part of the definition.
However, Iris argument is that the expression any question relating there to" in the second part of the definition is of wide ampli tude and should be spaciously construed.
It is main tained that a question, whether or not an industrial dispute exists, will itself be a question relating to an industrial dispute within the tendment of the second part of the defi nition.
The contention appears to be attractive but does not stand a close examination.
Sub section (1) of sec.
10 indicates when and what matters can be referred to the Labour Court for adjudica tion.
The sub section expressly makes formation of opinion by the appropriate Government, that any industrial dispute exists or is apprehended" a condition precedent to the exercise of the power of making a Reference.
Subsection (4) gives a mandate to the Labour Court to confine its adjudication to those points of dispute which have been specified in the Order of Reference, or are incidental thereto.
From a conjoint reading of cl.(b) of section 2 and sub section (1) and (4) of sec.
10, it is 339 clear that in order to be an `award ' within the second part of the definition, a determination must be (i) an adjudica tion of a question or point relating to an industrial dis pute, which has been specified in the Order of Reference or is incidental thereto: and (ii) such adjudication must be one on merits.
Now let us test the Labour Court 's order, dated 27.9.72 in the light of the above enunciation.
That Order did not satisfy any of the criteria indicated above.
It did not determine the questions or points specified in the Govern ment Order of Reference.
Nor was it an adjudication on merits of any industrial dispute or a question relating thereto.
The only question determined by the Order, dated 27.9.1972, was about the existence of a preliminary fact, viz., existence of an industrial dispute which in the Labour Court 's opinion was a sine qua non for the validity of the Reference and the exercise of further jurisdiction by the Court.
Rightly or wrongly, the Court found that this preliminary jurisdictional fact did not exist, because "no industrial dispute had come into existence in accordance with law", and, in consequence, the Reference was invalid and the Court was not competent to enter upon the Reference and determine the matter referred to it.
With this find ing, the Court refused to go into the merits of the question referred to it.
There was no determination on merits of an industrial dispute or a question relating thereto.
We are therefore of opinion that Labour Court 's determination dated 27.9.1972, did not possess the attributes essential to bring it within the definition of an award.
The mere fact that this order was published by the Government under section 17(1) of the Act did not confer that status on it.
In the view we take we are fortified by the principle laid down by this Court in Technological Institute of Tex tiles vs Its Workmen (supra).
In that case, there was a settlement which in the absence of necessary formalities, was not binding on the parties.
Certain items of dispute were not pressed and withdrawn under the terms of such settlement.
In the subsequent reference before the Indus trial Tribunal some of the items of dispute were withdrawn and no award was made in respect thereto.
Thereafter, these items were again referred for adjudication along with cer tain other matters to the Tribunal.
It was contended on behalf of the Management that subsequent reference with regard to the items which had been withdrawn and not pressed in the earlier reference, was barred under sec.
19, because the earlier award had not been terminated in full.
Ramaswa mi J., speaking for the Court, repelled this contention, with these observations: "It is manifest in the present case that there has been no adjudication on merits by the industrial tribunal in the previous reference with regard to the matters covered by items (1) and (3) of the present reference, because the workmen had withdrawn those mat ters from the purview of the dispute.
There was also no settlement in exhibit R. 4, because the demands in question had been withdrawn by the workmen and there was no agreement between the parties 340 in regard thereto.
Our conclusion, therefore, is that the bar of section 19 of the does not operate with regard to the matters covered by items (1) and (3) of the present reference and the argument put forward by the appellant on this aspect of the case must be rejected." Although the facts of the case before us are different, yet the principle enunciated therein viz., that the bar of sec.
19 operates only with regard to a determination made on merits, is fully applicable.
By any reckoning, the decision dated 27.9.1972 of the Labour Court by its very nature did not impose any continuing obligation on the parties bound by it.
This was an additional reason for holding that the earlier reference was not barred by anything contained in sub section (3) or other provisions of section 19.
We have gone through the single Bench decision of the Allahabad High Court in Workmen of Swadeshi Cotton Mills Co. Ltd. case (supra).
That decision is to the effect that the finding recorded by the Labour Court that the matter re ferred to it for adjudication was not an industrial dispute as defined in the Act is itself a determination of a ques tion relating to an industrial dispute, and would fall within the definition of the term "award" under the Act.
In our opinion.
this is not a correct statement of the law on the point.
The next submission of Mr. Pai is that since the demand for reinstatement was not duly made by the workmen before 28.10.
1972, the Courts below were not justified in award ing to the workmen, compensation for back wages from 1966 onwards.
On the other hand, Mr. Ramamurthi maintains that such a claim was presumably agitated by the workmen in proceedings before the Conciliation Officer, in 1966.
While conceding that technically, no demand notice for reinstatement was served by the workmen on the Management before 25.10.
1972, Counsel submits that the Management were aware of the work men 's claim to reinstatement, since 1966, and in these circumstances, the Management should not be allowed to take shelter behind this technical flaw, and deny just compensa tion to them from the date of wrongful dismissal.
We have carefully considered the contentions advanced on both sides.
After taking into consideration all the circum stances of the case, we are of opinion that the Labour Court was not justified in awarding compensation to the workmen, for wages relating to the period prior to 25.10.1972 i.e., the date on which the demand notices for reinstatement were served on the Management.
To this ex tent, we would accept the contention of the appellants.
341 The third contention of the appellants is that the onus of proving that they had not obtained alternative employment elsewhere after the termination of their services, was on the workmen, and they had failed to discharge that onus.
We find no merit in this contention.
The question of onus oft loses its importance when both the parties adduce whatever evidence they had to produce.
In the instant case, both the parties led their evidence and closed their respective cases.
Subsequently, at a late stage, the Management made an application for adducing additional evidence.
The Labour Court declined theft appli cation.
The High Court found and we think rightly, no good reason to interfere with the discretion of the Labour Court.
It may be remembered further, that this appeal arises out of a petition under article 226 of the Constitution, and in the exercise of that special jurisdiction, the High Court does not reopen a finding of fact based on legal evidence.
The findings of the Labour Court to the effect, that after their dismissal, Ram Swamp Gupta was unable to find any alternative employment elsewhere, while Rawat was able to find only intermittent employment elsewhere, were based on evidence produced by the parties.
The High Court was there fore right in not interfering with those findings of fact.
Lastly it was urged by Mr. Pai, that the employers had lost confidence in the employees, and therefore, compensa tion, without reinstatement, would have been adequate re lief.
It is submitted that the business of the employers is that of Travel Agents and such a sensitive business can be successfully carried on only with the aid of employees whose fidelity and integrity is beyond doubt.
It is stressed that the employees of the appellants, have to handle daily lot of cash received from their clients in the discharge of their duties.
It is pointed out that the charge against H.S. Rawat was one of misappropriation of such funds and this charge was established in the domestic enquiry.
The Labour Court, proceeds the argument, did not displace that finding of the domestic Tribunal, but ignored it on the ground that the charge was stale and had been condoned.
In short, the argument is that the employers had lost confidence in this employee who could no longer be entrusted to perform sensitive jobs on behalf of the Management, without detriment to its business.
We are unable to accept this contention.
Firstly, this point was not argued before the High Court.
Secondly, the observations of the Labour Court, read as a whole, show that, in its opinion, the charge of misap propriation of funds had not been proved against H.S. Rawat.
This is what the Labour Court said on the point: "I am therefore of opinion that the charges had been condoned and they could not be revived again and the act of reviving the charge on account of his Union activities was an act of unfair labour practice on the part of the Management and amounted to victimisation.
Even the 342 charges in the charge sheet exhibit M/5 have not been established before me, that the workman withdrew the funds from the company on false pretences for revenue stamps and misappropri ated the same.
" Thus there is no factual basis for this belated conten tion, and we repel the same.
For the foregoing reasons, we dismiss this appeal with the modification that in addition to the relief of rein statement with continuity of service, S/Shri H.S. Rawat and Ram Swarup Gupta shall be entitled to 50%, and full back wages, respectively, from 25.10.1972.
It may be recalled that the special leave to appeal in this case, was granted on the condition that the appellants shall pay the costs of this appeal to the respondents, in any event.
We order accordingly.
P.B.R. Appeal dismissed.
| IN-Abs | The term 'Award ' has been defined by section 2(b) of the to mean an interim or a final determination of any industrial dispute or of any question relating thereto by a Labour Court.
Section 10, which describes the matters that can be referred to a Labour Court etc.
for adjudication 'provides in sub s.(1) that where an appropriate government is of opinion that any industrial dispute exists or is apprehended it may, at any time, by order in writing. (c) refer the dispute or any matter appearing to be connected with or relevant to the dispute, if it relates to any matter specified in the second sched ule, to a Labour Court for adjudication.
Under section 19(3) an award shall remain in operation for a period of one year from the date on which the award becomes enforceable under section 17A. An industrial dispute relating to the dismissal of three workmen of the appellant had been referred to a Labour Court.
The Labour Court held that the reference was in valid because, as the workmen had not served demand notice on the management prior to the reference, no industrial dispute could legally come into existence before the refer ence.
After serving a demand notice on the management within a month thereafter the workmen raised an industrial dispute relating to the same matter.
The Labour Court rejected the employer 's preliminary objection that in view of section 19, the second reference was not competent in that it was made within one year of the first award, and decided the case on merits.
The Labour Court held that the termination of the services of the workmen was illegal and ordered reinstatement with back wages from the date of termination.
The employer 's writ petition under article 226 of the Constitution impugning the Labour Court 's decision was dismissed by the High Court.
Dismissing the appeal, HELD: The Labour Court 's determination in the first reference did not possess the attributes essential to bring it within the definition of an award.
The mere fact that this order was published by the Government under section 17(1), did not confer that status on it.
[339 D] 1(a) The definition of `award ' under section 2(b) falls in two parts (i) determination, final or interim, of any indus trial dispute and (ii) of any question relating to an indus trial dispute.
The basic postulate common to both the parts of the definition is the existence of an industrial dispute, actual or apprehended.
The `determination ' contemplated by the definition is of an industrial dispute or a question relating thereto on merits.
[338 D] (b) In the instant cases the order of the Labour Court in the first reference did not determine the question or points specified in government order of reference, nor was it an adjudication on merits of any industrial dispute or a question relating thereto.
The only question determined by the Labour Court was about the existence of an industrial dispute which in its opinion was a sine qua non for the validity of the reference.
Rightly or wrongly it found that this preliminary jurisdictional fact did not exist because no industrial dispute had come into existence in accordance with law and in consequence the reference was invalid.
There was, therefore, no determination of the dispute on merits on the question relating thereto.
[339 C D] 333 Technological Institute of Textiles vs Its Workmen and Ors. , followed.
Management of Bangalore Woollen, Cotton & Silk Mills Co. Ltd. vs The Workmen and Anr. ; , referred to.
Workmen of Swadeshi Cotton Mills Co. Ltd. vs Swadeshi Cotton Mills Co. Ltd. Kanpur and Ors.
42 Indian Factories Journal p. 255, not approved.
(b) Moreover the decision of the Labour Court in the first reference did not impose any continuing obligation on the parties bound by it.
The second reference was, there fore, not barred by anything contained in sub section (3 ) or other provisions of section 19.
[340 C] 2.
The Labour Court was not justified in awarding com pensation to the workmen for wages relating to the period prior to the date on which the demand notice for reinstate ment was served on the management.
[340 H]
|
Civil Appeal No. 1037 of 1971.
(From the Judgment and Order dated the 17th June, 1971 of the Gujarat High Court in Special Civil Application No. 112/67).
V.P. Raman, Addl.
and Girish Chandra, for the appellants.
G.N. Dikshit and R.N. Dikshit, for the respondent.
The Judgment of the Court was delivered by GUPTA, J.
The respondent is a partnership firm manufac turing non woven felts from woollen fibres which are uti lised for the purpose of filtration in heavy industries.
Between August 25, 1965 and January 5.
1967 the Excise authorities compelled the respondent to pay Rs. 55,055/87 p. as excise duty on its products.
The respondent 473 filed a writ petition in the High Court of Gujarat at Ahme dabad for quashing the order levying excise duty on the felts manufactured by the respondent treating them as 'woo llen fabrics ' covered by entry 21 in Schedule I to the (hereinafter referred to as the Act).
The High Court allowed the writ petition holding that the respondents products were not 'woollen fabrics ' and directed refund of the sum of Rs. 55,055/87 p. collected as excise duty from the firm.
The Union of India has preferred this appeal on certificate of fitness granted by the High Court questioning the correctness of the deci sion.
The only question in the appeal is whether the felts manufactured by the respondent are "woolien fabrics" within the meaning of entry 21 in the first schedule to the Act.
The writ petition describes the process of manufacture and states that the thickness of the felts produced varies from 1 mm.
to 50 mms.
according to.
the specification of the customers and that these are really machine pressed raw woolwaste.
It is stated further that the felts manufactured .by the process described are neither sheets nor fabrics, they are not material from which garments could be prepared nor they could be used 'as covering or for similar other purposes.
Entry 21 in the first schedule to the Act reads: "21.
WOOLLEN FABRICS "Woollen fabrics" .means all varieties of fabrics manufactured wholly of wool or which contain 40 per cent, or more by weight of wool and includes blankets, lohis, rugs, shawls and embroidery in the piece, in strips or in motifs: Provided that in the case of embroidery in the piece, in strips or in motifs, the percentage referred to above shall be in relation to the base fabrics which are embroi dered _ (1) Woollen fabrics, other than Ten percent.
embroidery in the piece, in ad valorem.
strips or in motifs.
(2) Embroidery in the piece in The duty for strips or in motifs, in or in the time being relation to the manufacture leviable on the of which any process is ord base fabrics, inarily carried on with the if not already aid of power.
paid, plus twenty percent.
ad va 'orern Explanation " Base fabrics" means fab rics falling ' under sub item (1) of this Item which are subjected to the process of embroi dery.
" 0 Are the products of the respondent 's factory woollen fabrics ? Fabric means woven material.
The articles manu factured by the respondent, as already stated, are non woven felts from woollen fibres.
It is contended on behalf of the appellant, Union of India, 474 that in a technical sense the felts manufactured by the respondent would still be woollen fabrics.
The well known rule in interpreting items in statutes like the one we are concerned with is that "resort should be had not to the scientific or the technical meaning of such terms but to their popular meaning or the meaning attached to them by those dealing in them, that is to say, to their commercial sense".
(Commissioner of Sales Tax, Madhya Pradesh, Indore vs M/s. Jaswant Singh Charan Singh)(1).
The High Court has held that a trader dealing in woollen fabrics would not regard the respondent 's products as woollen fabrics, but it does not appear that there is any evidence on the record of the case to support the finding.
However, an inquiry re garding the meaning of the term woollen fabrics as commer cially understood would be relevant only when there is doubt as to the sense in which the term has been used in entry 21; it seems to us plain from the entry read as a whole that the respondent 's products did not fail within it.
Entries 19 to 22 in the schedule all deal with fabrics.
Entry 19 deals with cotton fabrics which is stated to cover, barring the exceptions specified, all varieties of fabrics manufactured either wholly or partly from cotton and in cludes, dhoties, sarees, chadders, bed sheets, bed spreads etc.
Entry 20 relates to slik fabrics which is said to mean all varieties of fabrics manufactured.
either wholly or partly from silk with certain exceptions and includes em broidery in the piece, in strips or in motifs.
Entry 22 relates to rayon or artificial silk fabrics which also is said to mean all varieties of fabrics manufactured either wholly or partly from rayon or artificial silk with some exceptions and includes embroidery in the piece, in strips or in motifs etc.
In this group, entry 21 describes woollen fabrics as meaning all varieties of fabrics manufactured out of wool, barring the exceptions mentioned, including blankets, lohis, rugs, shawls and embroidery in the piece, in strips or in motifs.
If the term 'woollen fabrics ' in this entry had been used in its technical or scientific sense and, if in that sense, it was wide enough to cover non woven material which is wool based, then it is diffi cult to explain why the entry should specifically mention blankets, rugs and shawIs as being included within it.
No one could possibly be in any doubt in respect of these few items if the term was so pervasive, and there was no reason for singling out these specific objects.
On the contrary, the mention of these items suggests that the word 'fab rics ' in entry 21 has been used to mean woven material in which sense it is popularly understood, and blankets, rugs and shawls etc.
have been specifically included in the entry out of abundant caution to indicate that 'woollen fabrics ' in entry 21 means not only woollen garments but also woollen material used as 'covering or for similar other purposes.
We therefore find no reason to take a view different from that taken by the High Court.
The appeal is dismissed with costs.
S.R. Appeal dismissed.
| IN-Abs | An excise duty of Rs. 55055.87 was levied and collected from the respondent firm by the Excise authorities treating the non woven felts manufactured by them as "woollen fab rics" covered by entry 21 in Schedule I to the .
The Gujarat High, Court allowed the writ petition filed by the respondent and held that the respondent 's products were not "woollen fabrics" and direct ed the refund of the entire sum collected as excise duty.
Dismissing the appeal by certificate to this Court, HELD: (1) The well known rule in interpreting items in statutes is that resort should be had not to the scientif ic or the technical meaning of such terms but to their popular meaning or the meaning attached to them by those dealing in them, that is to say, their commercial sense.
[474 A B] Commissioner of Sales Tax, Madhya Pradesh, Indore vs M/s. Jaswant Singh Charan Singh; , , applied.
(2) Fabric means woven material.
Entries 19 to 22 in the Schedule deal with fabrics.
Entry 21 describes woollen fabrics as meaning all varieties of fabrics manufactured out of wool, barring the exceptions mentioned, including blan kets, lohis, rugs, shawls and embroidery in the piece in strips or in motifs.
The word "fabric" in entry 21 has been used to mean woven material in which sense it is popularly understood.
The term "woollen fabrics" in that sense was not wide enough to cover non woven material which is wool based.
Blankets.
rugs and shawls etc.
have been specifical ly included in the entry out of abundant caution to indicate that "woollen fabrics" in entry 21 means not only woollen garments but also woollen material used as covering or for similar other purposes.
[473 H, 474 F G] (3) It is plain from entry 21 in Schedule 1 to the that the respondent 's products did not fall within it as they are nonwoven felts from woollen fibres.
[474 C]
|
minal Appeal No. 343 of 1977.
(Appeal by Special Leave from the Judgment and Order dt.
21 10 75 of the Delhi High Court in Criminal Revision No. 118 of 1973).
A .K. Sen & A. K. Nag for the Appellant.
R. N. Sachthey & section P. Nayar for Respondent No. 1.
V. Prabha and section P. Nayar for Respondent No. 2.
The Judgment of the Court was delivered by FAZAL ALI, J.
This appeal by special leave is directed against the judgment of the High Court of Delhi dated 21st October, 1975 by which the High Court set aside the order of the Magistrate discharging the appellant and directed his commitment to the Court of Session.
The facts of the case have been detailed in the judgment of the High Court and that of the trial Court and it is not necessary for us to repeat the same all over again.
It will be enough to say that the complainant Pratap Bhanu Prakash Singh purchased 27,000 shares of Rohtas Industries which are entrusted to the appellant against a loan of Rs. 1.82 lacs advanced by the appellant.
Accordingly the allegation was made in the complaint that the appellant committed a breach of trust of the amount covered by the shares by selling them against express directions of the complainant.
The allegations were denied by the appellant who put forward a plea that there was no entrustment and that the shares were pi iced in the hands of the appellant as security and therefore the question of breach of trust did not arise.
In view of the allegations and counter allegations more by the parties, we are not inclined to go into the merits of the case particularly when we propose to uphold the order of the High Court directing commitment of the appellant to the Court of Session.
Any observations which may be made by us on merits are likely to prejudice either party at the trial and therefore we refrain from going into merits at this stage.
We are, however, satisfied that having regard to the reasons given by the High Court it cannot be said that the High Court was in error in exercising its discretion by setting aside the order of discharge and directing commitment to the Court of Session.
It appears that the appellant was tried by the trial Magistrate, who after entering into pros and con; of the case found that no prima facie case was established and he accordingly discharged the appellant by his order dated 28 10 1971.
"he complainant unsuccessfully filed a Revision against this order before the Sessions Judge, Delhi who affirmed the order of the Magistrate.
Ultimately the matter came up in revision before the High Court which after going through facts and circumstances of the case found that a prima facie case for commitment was made out and set aside the order of discharge passed 490 by the Magistrate and upheld by the Sessions Judge and directed that the appellant be committed to the Court of Session.
Hence this appeal by special leave before us.
Two points were argued by Mr. Ashoke Sen, the leaned counsel for the appellant.
In the first place, it was urged that having regard to the admitted facts and circumstances of the case no prima facie case against the accused was made out and the trial Magistrate was therefore justified in discharging the appellant and the High Court exceeded its jurisdiction in reversing the order of discharge and di recting commitment.
For the reasons that we have already given it is not possible for us to hold that the order of the High Court suffers High Court suffers from the infirmity pointed out.
The High Court has arrived at a finding of fact that a prima.facie case was made out for directing commitment to the Court of Session and this Court would not normally interfere with the discretion exercised by the High Court.
We would like to point out that under Sec.
213 sub cl.
(2) of the Code of Criminal Procedure, 1898 (hereinafter referred to as the "1898 Code") a Magistrate can discharge the accused if he finds that there are no sufficient grounds for committing the accused.
It is obvious that the High Court has applied its mind to the facts and circumstances of the case and it is not for this Court in appeal by special leave to go into the sufficiency or insufficiency of the, material before the Magistrate which may afford a justification for passing an order of discharge.
In these circumstances the first argument put forward by the learned counsel for the appellant is overruled and we refrain from saying anything more on this aspect.
The second argument of Mr. Ashoke was that even if the High Court was right in directing commitment, by setting aside the order of discharge the position will be that by virtue of a legal fiction, the commitment proceedings which culminated in the discharge of the appellant would revive so as to attract the operation of the Code of Criminal Procedure, 1973 (hereinafter referred to as the "1973 Code") as a result of which the case against the appellant would cease to be one which would be exclusively triable by the Sessions Court and therefore the Magistrate would be competent to try the, case himself under the 1973 Code.
In order to appreciate the argument advanced by the learned counsel for the appellant it may be necessary to extract the, relevant portion of the 1973 Code.
The relevant section 484 runs thus : "484(1) The Code of Criminal Procedure, 1898, is hereby repealed, (2) Notwithstanding such repeal, (a) if, immediately before the ate on which a& 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 C de of Criminal Procedure, 1898, as 'in force immediately before such commence 491 ment, (hereinafter referred to as the "Old Code '), as if this Code had not come into force : Provided that every inquiry under Chapter XVIII of the Old Code, which is pending at the commencement of this Code, shall be dealt with and disposed of in accordance with the provisions of this Code.
" The first part of this section clearly excludes the application of the 1973 Code to any appeal application, trial, inquiry etc.
pending at the time when the 1973 Code comes into force.
The provisio to sec.
484(1) & (2) however carves out an exception to the general rule contained in section 484(2) (a) and provides that where a commitment inquiry is pending at the commencement of the 1973 Code it is to be governed by the 1973 Code and not the 1898 Code.
It was thus argued that the moment the order of discharge passed by the Magistrate was set aside the commitment inquiry revived and would be deemed to be pending on the date on which the order of the High Court was passed that is to say 21 10 1975 and thereafter the inquiry would have to be regulated by the provisions of the 1973 Code.
It was argued that under the 1973 Code a case under section 409 is not exclusively triable by Sessions Court but is triable by a First Class Magistrate and therefore there would be no question of commitment of the case to the Court of Session but the Magistrate would have to try the case himself as he was competent to do so being a Magistrate of the First Class.
We have examined this argument carefully but we are unable to accede to the same.
The High Court has not passed any order to the effect that the commitment inquiry was to be revived but has, in absolutely clear and unequivocal terms, ordered "that the respondent 'shall stand committed to the Court of Session under sec.
409 ' view of the order passed by the High Court there is no question of any inquiry being received.
Moreover, it would appear from the perusal of sec.
437 of the 1898 Code that the revisional Court in hearing a revision against an order of discharge passed the Magistrate may direct Commitment without any in quiry at all or he may direct a fresh inquiry.
In this connection the relevant portion of section 437 of the .898 Code runs as follows : "When on examining the record of any case under section 435 or otherwise, the Sessions Judge or District Magistrate considers that such case is triable exclusively by the Court of Session and that an accused person has been improperly discharged by the inferior Court, the Sessions Judge or District Magistrate may cause him to be arrested, and may thereupon, instead of directing t fresh inquiry order him to be committed for trial upon tie matter of which he has been, in the opinion of the Sessions Judge or District Magistrate, improperly discharged".
It therefore, manifestly clear that there are two courses open to the revisional court (1) either to set aside the order of discharge and direct a fresh inquiry to be made under section 436 in which, 492 case the inquiry will automatically revive or (2) that instead of directing any fresh inquiry pass an order committing the accused for trial to the Court of Session.
An order of the, second category amounts to an order of commitment and there is no necessity of any further inquiry at all.
In the instant case as the High Court did not choose to order any further inquiry but directed that the accused will stand committed to the Court of Session the question of revival of the inquiry does not arise at all.
Indeed, if the High Court would have directed further inquiry into the matter then the matter would have gone back to the Magistrate and the original inquiry would have revived in terms of the order of the High Court.
In that case, no doubt, the 1973 Code may have applied.
In the instant case since by virtue of the order of the High Court the Magistrate had no control or siesin of the case at all the question of any inquiry pending before him does not arise.
For these reasons, therefore, we overrule the second contention put forward by Mr. Ashoke Sen.
The result is that the appeal fails and is dismissed.
As the case is old, the Sessions Court will give top priority to this case and dispose it of as early as possible in accordance with law.
section R. Appeal dismissed.
| IN-Abs | A complaint filed by respondent Pratap Bhanu Prakash Singh alleging that the appellant to whom he has entrusted the 27000 shares purchased by him from Rohtas Industries against a loan of Rs. 1.82 lacs advances by the latter, has committed a breach of trust of the amount covered by the shares by selling them against his express directions, was inquired into the trial magistrate and was dismissed later on 28 10 71.
The revision filed before the Sessions Judge Delhi failed.
In the further revision, the High Court set aside the order of discharge and directed that the appellant be committed to the Court of Sessions.
Dismissing the appeal by special leave, the Court HELD : 1.
it is not for the Supreme Court in appeal by special leave to go into the sufficiency or insufficiency of the material before the magistrate which may afford a justification for passing an order of discharge.
Under sec tion 213, sub clause (2) of the Crl.
Procedure.
Code, 1898, a magistrate can discharge the accused if he finds that there are no sufficient grounds for committing the accused.
[490 B D] 2.
Under section 437 of the Criminal Procedure Code 1898, the revisional Court in hearing a revision petition against an order of discharge passed by the magistrate may direct a commitment without any inquiry at all or he may direct a fresh inquiry.
There are two courses open to the revisional Court : (1) either to set aside the order of disc charge and direct a fresh inquiry to be made under Section 436 in which case, the inquiry will automatically revive or (2) that instead of directing any fresh inquiry an order committing the accused for trial to the Court of Sessions.
An order of the second category amounts to an order of commitment and there is no necessity of any further inquiry at all.
[491 E F, H, 492 A] 3.
The first part of Section 484 clearly excludes the application of 1973 code to any appeal, application, trial, inquiry etc.
pending at the time when the 1973 Code comes into force.
The provision to section 484 (1) (2) carves out an exception to the general rule contained in Section 484(2) (a) and provides that where a commitment inquiry is pending at the commencement of the 1973 Code, it is to be governed by 1973 Code and not by 1898 Code.
In the instant case, the High Court has not passed any order to the effect that the commitment inquiry was to be revived, but has in absolutely clear and unequivocal terms ordered, "the, respondent shall stand committed to the Court of Sessions u/s 409.
" Since by virtue of the High Court the magistrate had no control or siesin of the case at all,the of any inquiry pending before him does not arise.
[491 B, C,E 492 B C] 489
|
il Appeals Nos. 22 and 22 A and 301 of 1955.
Appeals by special leave from the judgment and order dated the 4th July 1952 of the Labour Appellate Tribunal of India, Lucknow in Appeals Nos. 391 and 392 of 1951 arising out of the Award dated the 1st November 1951 of the Adjudicator and Additional Regional Conciliation Officer, Kanpur in Case No. 53 of 1951.
G.S. Pathak, (Rameshwar Nath and Rajinder Narain), for the appellants in all the appeals.
G. C. Mathur, for the respondent in C. A. Nos. 22 and 22 A and respondent No. 4 in C. A. No. 301 of 1955.
K. B. Asthana and C. P. Lal, for the respondent No. 3 in C. A. No. 301 of 1955.
December 23.
The Judgment of the Court was delivered by BOSE J.
We are concerned here with three appeals.
They arise out of a dispute between the J.K. Iron and Steel Company Limited and the Iron and Steel Mazdoor Union.
We will call them the 1317 Company and the Mazdoor Union respectively.
The facts are as follows.
The Company had its factory and other works at Kanpur in Uttar Pradesh.
On 10 4 1948 the Ministry of Commerce in the Government of India ordered the Company to shift its Jute Baling Hoops factory from Kanpur to Calcutta.
As no land was available in Calcutta no effect could be given to this order till the year 1950 51.
On 19 3 1951 the Iron and Steel Controller ordered the Company to stop the rolling of jute baling hoops at once.
Accordingly, the production of these hoops was stopped from that date.
At the same time there was scarcity of scrap iron and the Company 's case is that forced it to reduce the working of its furnace from three shifts a day to one.
The Company states that because of these two causes it was obliged to retrench its staff.
Therefore, it issued the following notice dated 15 5 1951 to 128 of its workers: "Consequent to transfer of the Rolling Mill to Calcutta and want of scrap to Furnace Department in full, the services of the persons as per list attached are dispensed with from today.
Their wages and other dues in full settlement will be paid after 2 P.m.
" Twenty five of the 128 accepted their wages and other dues in full settlement but the remaining 103 refused.
Their cause was accordingly espoused by the Mazdoor Union which made an application to the Regional Conciliation Officer at Kanpur on 16 5 1951 complaining that the retrenchment was illegal and asking that the workmen be reinstated with full payment of their wages for the period they were out of work.
This was forwarded to the Government of Uttar Pradesh and on 28 6 1951 the Governor of that State referred the following issue to the Regional Conciliation Officer at Kanpur under sections 3, 4 and 8 of the U.P. for adjudication: "Whether the retrenchment of the workmen 1318 given in the Annexure by Messrs J. K. Iron and Steel Co. Ltd ' Kanpur, is unjustified? If so, to what relief are the workmen entitled?" The parties filed their written statements on 14 7 1951 and the Company filed a rejoinder on 20 7 1951.
The Adjudicator thereupon took evidence, oral and documentary, and gave his award on 1 11 1951.
But before that was done the case of one of the workmen (Kapil Deo Singh) was withdrawn and that left 102 for him to deal with.
The Adjudicator reached the following conclusions.
The Mazdoor Union had contended that the retrenchment was not in good faith.
The Adjudicator held that it was and that there was neither harassment nor victimisation.
So also on the question about the shortage of scrap he held that there was a shortage but that it was only temporary and that it was not likely to last for more than 8 or 9 months.
He then referred to the Standing Orders and said that the Company was not entitled to resort to retrenchment except as a last resort and that in the circumstances of the present case these workmen should (1) have been offered the option of employment in the new set up at Calcutta; and (2) those that did not want it should have been laid off in rotation instead of being retrenched.
He accordingly ordered that should be done and drew up a graduated scale ,of compensation.
We observe in passing that the expression used throughout has been "played off".
The reason for that is that is the phrase used in the Standing Orders and in the copy of the Act and Model Standing Orders reproduced by the U. P. De partment of Labour in its Annual Review of Activities.
But it seems to us that was due to printer 's error at some stage which has been repeated in various places.
The correct expression is "lay off".
That is the expression used and defined in the Act.
The Standing Orders should have used the same phrase.
Apart from the definition in the Act, "lay off " is a well known industrial term meaning, according to the Oxford Dictionary, "a period during which 1319 a workman is temporarily discharged".
We will use the correct expression in this judgment.
Both sides appealed to the Labour Appellate Tribunal.
The decision, there was as follows.
The Tribunal upheld the finding that there was in fact a shortage of scrap iron and also agreed with the Adjudicator that was only likely to be temporary.
Then it held, apparently as a matter of law, that under the Standing Orders it is not permissible to retrench workmen and deprive them of their maintenance when there is only a temporary shortage of material, whatever the duration of the shortage; all that the employer can do in a case like that is to lay them off.
The Tribunal also upheld the finding that the Hoop Mill was in the course of transfer to Calcutta consequent on the orders of Government, but they held that there was nothing on the record to show which of the 105 persons (it should be 102) whose cases they were considering were "specifically engaged in the Hoop Mills and had become surplus by reason of the transfer to Calcutta".
This is one of the findings attacked before us by the Company on the ground that the Tribunal has failed to realize that the Company 's operations must be considered as a whole and that because of the interdependence of its various departments a closure of one section, coupled with a shortage of materials in another, is bound to affect its all round working and therefore the question of retrenchment cannot be looked at from the narrow point of view of only one department but must be viewed in its all round setting.
We will deal with this later.
Another of the Tribunal 's findings on the "transfer" aspect of the case was that a cut in profits is not in itself a good ground for retrenchment.
It held that retrenchment can only be made when there is a total closure of the mill "or when for any such other reason the workmen become surplus".
The final conclusion of the Tribunal was that the retrenchment was "wholly unjustified".
Accordingly, it set aside the retrenchments and held that the 1320 affected workmen will be deemed to be "still in service".
and directed that they be reinstated.
The appeal of the Mazdoor Union was partly allowed and that of the Company dismissed.
This impelled the Company.
to do the following things: (1)to file a writ petition in the Allahabad High Court on 4 8 1952.
This was dismissed by that Court on 9 4 1953 and Civil Appeal No. 301 of 1955 is the appeal to us against that order; (2)to file two appeals to this Court against the order of the Labour Appellate Tribunal.
These appeals are Civil Appeal No. 22 of 1955 and Civil Appeal No. 22 A of 1955.
This judgment covers all three appeals.
Mr. G. C. Mathur, who appeared for the Mazdoor Union, raised a preliminary objection against the Company 's appeals based on the following facts.
The Company had appealed to this Court against the Labour Appellate Tribunal 's decision on 26 8 1952.
The petition was summarily dismissed on 10 9 1952.
Counsel contended that barred the present appeals: Civil Appeal 22 A of 1955 because it is an appeal against the very order that is now under appeal, and Civil Appeal 301 of 1955 on the basis of res judicata because it raises the same points as were raised in the petition for special leave which was dismissed.
We rejected this objection because the previous petition for appeal does not appear to have been dismissed on the merits but on two technical grounds.
It is true the order of dismissal is general but the office note states (1) that no certified copy of the decision appealed against was filed though Order 13, rule 4, of the Rules of the Supreme Court, requires that and (2) that the reliefs sought in the petition for special leave and in the writ petition before the High Court are the same.
It is evident that formed the basis of the order of dismissal especially as it is the usual practice not to entertain an appeal here when a similar matter is pending in the High Court, 1321 Before we come to the merits it will be necessary to set out the grounds on which the High Court proceeded.
The learned Judges were concerned with a writ for certiorari and so naturally focussed their attention on questions of jurisdiction rather than on the merits.
They considered that the Adjudicator ' was free to take into consideration all matters bearing on the question of retrenchment and to consider whether it was "absolutely necessary" to retrench the workmen.
They looked at Standing Order 16(a) and decided that the Adjudicator had jurisdiction to determine the scope and meaning of this Order and that he and the Labour Appellate Tribunal were competent to hold that these orders meant that the Company was not entitled to take what the learned Judges called the "extreme step of retrenchment" so long as it was possible for it to "lay off " the workmen.
That at once raises questions about the scope and authority of an adjudicator under the .
But that, we feel is now settled by authority.
The Federal Court held in Western India Automobile Association vs Industrial Tribunal, Bombay(1) that adjudication does not mean adjudication according to the strict law of master and servant and held that an adjudicator 's award may contain provisions for settlement of a dispute which no Court could order if it was bound by ordinary law.
They held that Industrial Tribunals are not fettered by these limitations and held further that an adjudicator has jurisdiction to investigate disputes about discharge and dismissal and, where necessary, to direct reinstatement.
That decision was followed with approval by this Court in State of Madras vs C. P. Sarathy(2) and it was again pointed out that the scope of an adjudication under the is much wider than that of an arbitrator making an award.
It would be pointless to cover the same ground; so we must take that now as settled law.
All the same, wide as their powers are, these Tri (1) , 345.
(2) , 348, 1322 bunals are not absolute and there are limitations to the ambit of their authority.
In Bharat Bank Ltd. vs Employees of Bharat Bank Ltd.(1) this Court held by a majority that though these Tribunals are not Courts in the strict sense of the term they have to discharge quasi judicial functions and as such are subject to the overriding Jurisdiction of this Court under article 136 of the Constitution.
Their powers are derived from the statute that creates them and they have to function within the limits imposed there and to act according to its provisions.
Those provisions invest them with many of the "trappings" of a court and deprive them of arbitrary or absolute discretion and power.
There is, in our opinion, an even deeper reason which is hinted at in the judgment of Mahajan J. (as he then was) at page 500 where he says that "benevolent despotism is foreign to a democratic Constitution".
That, in our opinion, is the heart of the matter.
When the Constitution of India converted this country into a great sovereign, democratic, republic, it did not invest it with the mere trappings of democracy and leave it with merely its outward forms of behaviour but invested it with the real thing, the true kernel of which is the ultimate authority of the Courts to restrain all exercise of absolute and arbitrary power, not only by the executive and by officials and lesser tribunals but also by the legislatures and even by Parliament itself.
The Constitution established a "Rule of Law" in this land and that carries with it restraints and restrictions that are foreign to despotic power.
Despite this, however, the Courts must always exercise caution and see that they do not substitute their own judgment and discretion for that of these Tribunals, for, as Mahajan, J. said in Bharat Bank Ltd. vs Employees of Bharat Bank Ltd.(1) the overriding powers of this Court under article 136 are exceptional; and he went on to point out that "extraordinary Powers of this character can only be justifiably used here there has been a grave miscarriage of justice or where the procedure adopted by (1) ; , 497.
1323 the Tribunal is such that it offends against all notions of legal procedure".
Now the position in the present case is this.
The Tribunals are directed by section 7 of the to adjudicate industrial disputes "in accordance with the provisions of the Act" and section 11 directs them to follow "such procedure as may be prescribed".
The procedure for the Uttar Pradesh Tribunals is laid down by the U.P. State Industrial Tribunal Standing Orders, 1951.
Very broadly it follows the pattern of the civil Courts.
Once the reference is made by Government, the Tribunal has to take the pleadings of the parties in writing and to draw up issues.
Then it takes evidence, hears arguments and finally pronounces its "judgment" "in open Court".
It is evident from this that though these tribunals are not bound by all the technicalities of civil Courts, they must nevertheless follow the same general pattern.
Now the only point of requiring pleadings and issues is to ascertain the real dis pute between the parties, to narrow the area of conflict and to see just where the two sides differ.
It is not open to the Tribunals to fly off at a tangent and, disregarding the pleadings, to reach any conclusions that they think are just and proper.
What exactly was the dispute in the present case? The broad conflict was of course about the retrenchment and the Tribunal was asked to decide whether the retrenchment of these 103 persons was unjustified; but that by itself left the issue much too broad, so it was necessary to "particularise" and that was done in the pleadings.
The Company justified its action on two grounds: (1) because of the shortage of scrap and (2) because of the stoppage of work in the Hoop Department consequent on the orders of Government.
But none of the persons retrenched came from the Hoop Department and the Company explained that was because of the interdependence of its various departments and, taking the retrenchments in groups, department by department, it explained just why reduction was effected in those particular places.
In 167 1324 this way, it dealt serially with the retrenchments in(1) the Scrap Department, (2) the Cast Iron Foundry,(3) the Punching and Pressing Department, (4) the Watch and Ward Department and (5) the Clerical Department.
The Company also made the following assertions, (1) that retrenchment is a necessary incidence of an industry and that the discretion of the management should not be interfered with; (2) that it is the exclusive function of the management to determine the size of its working force and (3) that the employer must be the sole judge as to how economically or efficiently its business is to be run.
The Mazdoor Union retorted that the retrenchments were not done in good faith.
It denied that there was any shortage of scrap but admitted the interdependence of the various departments and used that fact as an argument to indicate the Company 's bad faith.
The Union said the very fact that there had been no retrenchment in the department that was directly affected, namely the Hooping Department, and that there was no retrenchment in certain allied departments that would have been the first to be bit, had there been any real shortage of scrap, showed that the reasons given by the Company for the retrenchment were untrue.
In particular, the Union pointed out that there had been no retrenchment in the following departments which, according to it, would have been the hardest hit had there been any truth in the Company 's case namely, (1) the Furnace Department, (2) Rolling Mill Department, (3) Workshop, (4) Painting and Bundling, (5) Works and Maintenance.
Then, as regards the Foundry Department and the Scrap Department where there bad been retrenchments, the Union said that these departments bad sub sections and yet there were no retrenchments in the sub sections that would have been hit if the Company 's allegations were true.
The Union gave no reply to the Company 's assertions about its right to retrench in the absence of bad faith , its right to determine the size of its work 1325 ing force and its right to judge of the economy and efficiency of its business.
The Company filed a written rejoinder and explained in detail why there had been no retrenchments in the places where, according to the Union, there should have been on the facts alleged by the Company and it again explained why it had retrenched workers in the departments which, according to the Union, ought to have been the hardest hit.
This explanation again brought out the interdependence of the various departments.
Instead of drawing up issues, as it is required to do by Standing Order 22 of 1951, and determining just where the parties disagreed, the Adjudicator at once proceeded to record evidence and entered upon a rambling enquiry which embraced questions which had not been raised at all.
On the only point on which the parties were really at issue, namely the good faith of the management, the findings were in favour of the Company.
So also the Adjudicator accepted the Company 's assertion about its right to determine the size of its labour force and to effect retrenchment where necessary subject only to the proviso which the Adjudicator added, namely that this must be done in good faith; and indeed the Mazdoor Union had not challenged these assertions in its written statement.
The Adjudicator said "It is however an accepted principle that such changes as are being done by the management now form a part of managerial discretion and cannot be interfered with unless it is coloured with the element of victimisation or unfair labour practice".
But despite this, and despite his findings about good faith, the Adjudicator considered that, in spite of it all "the right of the workmen has to be safeguarded to certain extent".
What is left of the right if the "accepted principle" be what he says it is and if there is no victimisation or bad faith, he did not proceed to explain.
If the principle he enunciated and accepted is sound, then the only rights they have are to complain of 1326 bad faith, victimisation and so forth.
However, feeling under a compulsion to safeguard these unexplained rights he had recourse to Standing Order 16(a) and ignored Standing Orders 19 and 20.
The "accepted principle" to which the Adjudicator refers in the passage quoted above is implicit in Standing Orders 19(a) and 20(a).
They deal with the termination of service by an industrial establishment and prescribe a certain quantum of notice in writing, and then comes this important proviso in Standing Order 19 (a) "Provided that if a permanent workman feels that he has been discharged for reasons not connected with his employment or that the reason of discharge communicated to him is not genuine, he may make an appeal to the Labour Commissioner.
The decision of the Labour Commissioner. . . shall be binding on both the parties".
Reading the body of Standing Order 19 (a) along with the proviso in the light of the "accepted principle", it is evident that the only right the workman has, when his services are lawfully terminated after service of due notice and so forth, is to question the order on only two grounds (1)that he has been discharged for reasons not connected with his employment, and (2)that the reason of discharge communicated to him is not genuine.
There is nothing in these Standing Orders to indicate that retrenchment is a measure of last resort and that an employer must continue to lay off his workmen however uneconomical that may be to the business; still less that he must lay them off in rotation and thus affect other workmen who would not be affected by a legitimate order of retrenchment.
That cuts at the root of the "accepted principle".
In any event, the ground on which the adjudicator proceeded was not a matter in dispute between the parties because it was not raised in their pleadings and could not have been put in issue bad the Adjudicator troubled to draw up issues as he should have done.
As Mahajan, J. said, adjudicators and tribu 1327 nals cannot act as benevolent despots and that is exactly what it comes to when an adjudicator, after setting out, correctly in our opinion the Company 's rights, holds against the Union on the only grounds that it did raise and then proceeds to give an award, not only on grounds that are not raised but on grounds that fly in the face of the very principles that he enunciated; and that only because he felt that he was under a compulsion to "safeguard" the workmen to "a certain extent".
Both sides appealed to the Labour Appellate Tribunal and the second ground of the appeal lodged, by the Mazdoor Union was "that the award of the learned Adjudicator is quite arbitrary" which, of course, is exactly what it was And so also ground No. 9: "That the learned Adjudicator has gone beyond his jurisdiction in awarding relief on a question not, referred to it by Government".
That again we feel is justified.
What was referred was the question of the justification for retrenchment of certain specified workmen.
What was awarded was the laying off of persons whose cases were not even considered, that is to say, when the Adjudicator directed laying off in rotation, his order necessarily affected persons who had neither been laid off nor retrenched and whose cases not even the Union had in mind.
It is to be observed that the Mazdoor Union complains about this part of the order in ground No. 11 though on a different ground.
The Company also appealed against the Adjudicator 's order and grounds Nos. 6, 9 and 24 of their appeal are directed against that part of the order that deals with the lay off of the workmen.
Among other reasons advanced is that this will adversely affect others who are not retrenched.
The other grounds repeat what was said in the company 's written statement though in different language.
The Labour Appellate Tribunal contrasted Standing Order 15(a) with Standing Order 16(a) but also ignored Standing Orders 19(a) and 20 which are the 1328 only ones that really apply to this case.
It upheld the finding of the Adjudicator that there was a shortage of scrap but held that as the shortage was for only 6 months retrenchment was not justified.
In point of fact, the Labour Appellate Tribunal is wrong about the six months.
It was under the impression that the Adjudicator had come to that conclusion.
But what the Adjudicator said was that the shortage at best was for a period of 8 or 9 months.
The passage which the Appellate Tribunal quotes is not the finding of the Adjudicator but the argument advanced on behalf of the Company.
The full passage runs thus: "Shri Mahalingam stated that Standing order 16(a) which provides for a lay off of a maximum period of 12 days in a month contemplates a temporary shortage of very short duration.
It could not apply to shortage of raw materials lasting for more than 6 months and hence the Company 's right to retrench is not affected by the aforesaid Standing Order".
The Appellate Tribunal quoted the portion we have underlined but ignored the rest of the sentence and the part that went before and concluded that the portion underlined was a part of the Adjudicator 's findings.
However, even if we assume that the Tribunal would have reached the same conclusion if it had realised that the shortage was for as long as 8 or 9 months, the error into which it has fallen is that the question of retrenchment cannot be made to depend on the duration of the shortage or even on the fact that those retrenched will be thrown out of employment but on the effect that an omission to retrench will have on the business.
In some cases, laying off even for 6 or 8 or 9 months might make the Company bankrupt, therefore, if the Appellate Tribunal considered that it had power to stop retrenchment for reasons other than those given in the proviso to Standing Order 19(a) it was bound to look into the Company 's finances and determine the question of justification on that basis.
The only question referred was the retrenchment justified? and we find it 1329 impossible to see how that can be determined without considering the question of good faith which in turn would largely depend on the finances of the Company, on the adverse effect that retention would have on the business and on whether retention would mean the deadweight of an uneconomic surplus and so forth.
Next, when the Appellate Tribunal turned its attention to the transfer of the Hoop Mill to Calcutta, it agreed that would have been a good ground for retrenching those who were specifically engaged in the Hoop Mill but not the others.
But this takes an impossibly narrow view and ignores the over all working of a business concern and the repercussions that a transfer of this kind would have on other parts of the business.
It totally ignores the pleadings of the parties and, like the adjudicator, bases its conclusion on some airy view of what it considers would be a good thing for the workmen.
That is not a decision "given in accordance with the Act" and is as much open to objection on that score as the award of the Adjudicator.
It is pertinent at this stage to refer to a decision of this Court reported in Muir Mills Co. vs Suti Mills Mazdoor Union, Kanpur(1) where Bhagwati, J. delivering the judgment of the Court said "The considerations of social justice imported by the Labour Appellate Tribunal in arriving at the decision in favour of the respondent were not only irrelevant but untenable".
In the present case also we are of opinion that the Adjudicator and the Labour Appellate Tribunal had adopted the attitude of benevolent despots and have based their conclusions on irrelevant considerations and have ignored the real questions that arose for decision and the issues that arose out of the pleadings of the parties.
It would not be right for us to substitute our judgment and discretion for that of the Adjudicator and the Tribunal: accordingly, as we are of opinion that the.
real questions that were in dispute between the (1) ; , 1001.
1330 parties were neither appreciated nor considered we have no alternative but to remit the matter to the Labour Appellate Tribunal for a proper decision after drawing up issues that arise out of the pleadingS, considering them and deciding the dispute accordingly, with liberty of course to remit the case to the Adjudicator for a retrial or for the taking of further evidence if it is of the opinion that the omission to draw up issues and focus attention on the points that seem to be in dispute has had the result of shutting out evidence that might otherwise have been led.
An agreement said to have been reached between the parties on 7 9 1953 was placed before us towards the end of the arguments but we have not looked at it because counsel for the Mazdoor Union said it did not cover the case of these retrenched workers.
The Company insisted that it did.
We were not prepared to investigate that dispute at that late stage but we make it plain that the Labour Appellate Tribunal will be at liberty to consider it or not as it deems right after hearing what both sides have to say about it.
The award and the decision of the Labour Appellate Tribunal are set aside and the case is remitted to the Labour Appellate Tribunal for a re bearing of the appeals filed before it and for a fresh decision in the light of the foregoing observations.
We will, however, have to make some interim arrangement for payment of what may be termed a sort of subsistence allowance to the affected workmen during the pendency of those further proceedings.
As there is no agreement between the parties on the subject, we leave it to the Labour Appellate Tribunal or the Adjudicator, as the case may be, to make suitable orders in this respect.
There will be no order, about costs as neither party is to blame for what has happened.
| IN-Abs | Held, that adjudication by an adjudicator under the does not mean adjudication according to the strict law of master and servant and that an adjudicator 's award may contain provisions for the settlement of a dispute which no court could order if it was bound by ordinary law.
Thus the scope of an adjudication under the is much wider than that of an arbitrator making an award.
Industrial Tribunals are not fettered by such limitations and an adjudicator has jurisdiction to investigate disputes about discharge and dismissal and where necessary, to direct reinstatement.
Nevertheless, wide as their powers are, these Tribunals are not absolute and there are limitations to the ambit of their authority.
Though they are not courts in the strict sense of the term, they have to discharge quasi judicial functions and as such are subject to the overriding jurisdiction of the Supreme Court under article 136 of the Constitution.
Their powers are derived from the statute that creates them and they have to function within the limits imposed there and to act according to its provisions.
Those provisions invest them with many of the trappings" of a court and deprive them of arbitrary or absolute discretion and power.
Benevolent despotism is foreign to a democratic Constitution.
When the Constitution of India converted this country into a sovereign, democratic, republic, it did not invest it with the mere trappings of democracy but invested it, with the real thing, the true kernel of which is the ultimate authority of the courts to restrain all exercise of absolute and arbitrary power not only by the executive and by officials and lesser tribunals but also by the legislatures and even by Parliament itself.
The Constitution established a "Rule of Law" in this land and that carries with it restraints and restrictions that are foreign to despotic power.
The courts, however, must always exercise caution and should not substitute their own judgment and discretion for that of such tribunals.
166 1316 In view of sections 7 and 11 of the and U.P. State Industrial Tribunal Standing Orders 1951 these Tribunals, though not bound by all the technicalities of Civil Courts must nevertheless follow the general pattern of the Civil Courts in the matter of taking the pleadings of the parties in writing and the drawing up of issues.
It is not open to the Tribunals to disregard the pleadings and to reach any conclusion that they think are just and proper.
The Supreme Court remitted the case to the Labour Appellate Tribunal for a rehearing of the appeals as the Adjudicator and the Labour Appellate Tribunal had adopted the attitude of benevolent despots and had based their conclusion on irrelevant considerations and ignored the real questions that arose for decision and the issues that arose out of the pleadings of the parties.
Western India Automobile Association vs Industrial Tribunal, Bombay ([1949] F.C.R. 321, 345), State of Madras vs C. P. Sarathy, ([1953] S.C.R. 334, 348), Bharat Bank Ltd. vs Employees of Bharat Bank Ltd., ([1950] S.C.R. 459, 497), Muir Mills Co. vs Suti Mills Mazdoor Union, Kanpur ([1955] 1 S.C.R. 991, 1001), referred to.
|
minal Appeal No. 568 of 1976.
(From the Order dt. 2 4 1975 of the Punjab and Haryana High, Court at Chandigarh in Criminal Original No. 15/Crl.11975).
Mohan Behari Lal for the Appellant.
Hardev Singh, Sunada Bhandare and Mohini for the Respondents Nos.
1 2. 511 section M. Kacker, Sol.
Genl. & R. N. Sachthey for Respondent No. 3.
The Judgment of the Court was delivered by UNTWALIA, J.
This is an appeal filed by the alleged contemner under section 19(1) of the (hereinafter called the Act), from the order dated 2nd April, 1975 of the High Court of Punjab and Haryana directing the issue of notice to the appellant to show cause why he should not be proceeded against for committing con tempt of the High Court.
The Notice was issued in accordance with the procedure prescribed under section 17 of the Act, to show cause against the appellant 's alleged liability to be punished under section 15.
A preliminary objection was raised by the, Learned Solicitor General,, on behalf of the respondents that no appeal lies to this Court under section 19 of the Act from an order issuing notice as nothing yet has been decided by the High Court.
Mr. Mohan Behari Lai, learned counsel for the appellant combated this argument and submitted that an appeal does lie to this Court as a matter of right under section 19.
In our opinion, the preliminary objection raised on behalf of the, respondents is well founded and must be accepted as correct.
section 19(1) says .lm15
An appeal shall lie as of right from any order or decision of the High Court in the exercise of its jurisdiction to punish for contempt (a) where the order or decision is that of a single judge, to a Bench of not less than two Judges of the Court; (b) where the order or decision is that of a Bench, to the Supreme Court : Provided that where the order or decision is that of the Court of the Judicial Commissioner in any Union territory, such appeal shall lie to the Supreme Court.
" It would appear from a plain reading of the section that an appeal shall lie to this Court as a matter of right from any order or decision of a bench of the High Court if the order has been made in the exercise of its jurisdiction to punish for contempt.
No appeal can lie as a matter of right from any kind of order made by the High Court in the proceeding for contempt: The proceeding is initiated under section 17 by issuance of a notice.
Thereafter, there may be many interlocutory orders passed in the said proceeding by the High Court.
It could not be the intention of the legislature to provide for an appeal to this Court as a matter of right from each and every such order made by the High Court.
The order or the decision must be such that it decides some bone of contention raised before the High Court affecting the right of the party aggrieved.
Mere initiation of a proceeding for contempt by the issuance, of the notice on the prima facie view that the case is a fit one for drawing up the proceeding, does not decide any question.
This Court, 512 for the first time, cannot be asked in such an appeal to decide whether the; person proceeded against has committed contempt of the High Court or not.
The matter has to be decided either finally or, may be.
even at an earlier stage an order is made, which does decide a contention raised by the alleged contemner asking the, High Court to drop the, proceeding.
It is neither possible, nor advisable, to make an exhaustive list of the: typo of orders which may be appealable to this Court under section 19.
A final order, surely, will be appealable.
Our attention was drawn by Mr. Mohan Behari Lai, to section 20 of the Act which provides "No Court shall initiate any proceedings for contempt, either on its own motion or otherwise, after the expiry of a period of one year from the date on which the contempt is alleged to have been committed.
" He submitted that initiation of the proceeding by the High Court will be, without jurisdiction if it is in violation of section 20.
It may be so.
If the alleged contemner in response to the notice appears before the High Court and asks it to drop the proceeding on the.
ground of its being barred under section 20 of the Act but the High Court holds that the, proceeding is not barred, it may well be that an appeal would lie to this Court under section 19 from such an order although the proceeding has remained pending in the High Court.
We are not called upon to express our final opinion in regard to such an order, but we merely mention this type of order by way of an example to show that even orders made at some intermittent stage in the proceeding may be, appealable under section 19.
In our considered judgment, an order merely initiating the proceeding without anything further, does not decide anything against the alleged contemner and cannot be appealed against as a matter of right tinder section 19.
in a given case special leave may be granted under article 136 of the Constitution from an order initiating the proceeding.
But that is entirely a different matter.
What we are deciding in, this case is that the present appeal filed under section 19 (1) of the Act does not lie and is incompetent.
We find some support to, the view expressed by us above from the decision of this Court in Baradakanta Mishra vs Orissa High Court,(1) where it has been held that no appeal lies to this Court under section 19 of the Act from an order rejecting the prayer of the alleged contemner for bearing the case piecemeal.
Mr. Lai placed reliance on the observations of this Court in Baradakanta Mishra vs Justice Gatikrushna Mishra (2).
What has been decided therein is this : that on a reference made by the Advocate General if the Court declines to take cognisance and to initiate proceeding for contempt, the order is not an order initiating contempt proceeding.
Surely, it is not appealable under section 19.
But there are no observations by this Court nor on the facts of that case there can be any,.
to show that an appeal would lie to, this Court from an order of the High Court merely initiating the proceeding by issuance of a notice.
We, may repeat that it may be, a different matter if the order does decide (1) A.I.R. 1976 S.C. 1206.
(2) ; (at pp.
531 32).
513 some disputes raised before it by the contemner asking it to drop the proceeding on one ground or the other.
But unless and until there is some order or decision of the High Court adjudicating upon any matter raised before it by the parties, affecting their right, the mere order issuing the notice is not appealable.
The appeal is, therefore, dismissed as being not maintainable.
P H. P. Appeal dismissed.
| IN-Abs | The High Court passed an order directing issue of notice to the appellant to show cause why he should not be proceeded against for committing contempt .of the High Court.
The notice was issued in accordance with the procedure prescribed under section 17 of the .
The appellant filed an appeal against the said order under section 19(1) of the Act in this Court.
The counsel for the respondent raised a preliminary objection that no appeal under section 19(1) is maintainable against the order in question.
Dismissing the appeal the Court, HELD : (1) An appeal lies to this Court as a matter of right from any order or decision of a Bench of the High Court if the order has been made in the exercise of its jurisdiction to punish for contempt.
However, an appeal cannot lie from any kind of order made by the High Court in the proceeding for contempt.
The proceeding is initiated under section 17 by issuance of a notice.
Thereafter, there may be many interlocutory orders passed in the said proceeding by the High Court.
It could not be the intention of the Legislature to provide for an appeal to this Court as a matter of right from each and every such order made by the High Court.
The order or the decision must be such that.
it decides some bone of contention raised before the High Court affecting the right of the party aggrieved.
Mere initiation of a proceeding does not decide any question.
[511 F H] 2.
if the alleged contemner in response to the notice appears before the High Court and asks it to drop the proceedings on the ground of its being barred under Section 20 of the Act but the High Court holds that the proceedings is not barred, it may well be that an appeal would lie to this Court under section 19 It is neither possible nor advisable to make an exhaustive list of the type of orders which may be appealable under section 19.
[512 B C] Baradakanta Mishra vs Orissa, High Court, A.I.R. 1976 S.C. 1206, relied on.
Baradakanta Mishra vs Justice Gatikrushna Mishra ; , 53132, distinguished.
|
minal Appeal No. 483 of 1976 Appeal by Special Leave from the Judgment and Order dated the 19th February 1976 of the Madras High Court in Crl.
A. No. 669/75 ,and Reference Trial No. 46 of 1975 Frank Anthony, section C. Agarwal, P. Ramachandran, Aruneshwar Gupta and Sushil Kumar for the Appellant.
A. P. Rangam for the Respondent.
The Judgment of the Court was delivered by SHINGHAL, J.
This appeal by special leave is directed against the judgment of the Madras High Court dated February 19, 1976, convicting appellant Ramanathan of offences under section 302 (on two counts), section 307 and section 460 of the Indian Penal Code, and section 27 of the Arms Act.
The High, Court has confirmed the sentence of death for the offences under section 302, and has upheld the sentence of imprisonment for life for the offence under section 307, of ,rigorous imprisonment for 10 years for the offence under section 460 and of rigorous imprisonment for 3 years for the offence under section 27 of the Arms Act.
Nataraj an (deceased) who was a well to do yarn merchant of Nagercoil used to live there in his own house in Kumari Colony.
His wife Smt.
Nagammal (P.W. 1) used to live with him in that house.
Their second son Varadarajan (deceased) was 21 years old and was studying in fourth year in the Medical College at Palayam Kottai.
As September 19, 1974 was Vinayakchaturthi day, he took leave of absence for a day and came to his father 's house in Nagercoil on September 18, 1974.
On the following day (September 19, 1974) Natarajan returned home from his shop, in his car, at about 9 p.m.
His driver parked the car in the compound of his house, locked the gate of the compound wall, delivered its key to Smt.
Nagammal and went away.
The other servants also went away at about 6 p.m. as usual.
Nagammal locked the outer gate of her house as well as the grill door of the front verandah.
Natarajan, his wife Smt.
Nagammal and their son Varadarajan took their food at about 10 p.m.
Varadarajan went to the office room, which was adjacent to the bed room of his parents, for study.
Nagammal retired to.
her bed room and went to sleep.
She woke up and went to the bath room at about 1.30 a.m.
She saw that Varadarajan was sleeping on the cot which was there for the purpose in the office room.
One leaf of the door of that room was open at that time.
Nagammal went back to her, bed room and slept there leaving one of the doors of her bed room open.
A zero watt bulb was burning in her bed room.
It is alleged that at about 2.30 a.m. she heard a loud cry from the direction of her son 's room and thought that he was shouting in his dream.
But she heard the sound of a shot immediately thereafter.
She woke up her husband Natarajan and asked him to go and look in 696 Varadarajan 's room.
Natarajan opened the door leading to the drawing ball which was adjacent to his bed room.
Nagammal heard the sound of another gun shot.
She went towards the drawing ball and saw appellant Ramanathan standing at a distance of about 1 1/2 feet from the door of the drawing hall and firing his pistol at her husband who was standing near the eastern window of that room. Smt.
Nagammal raised an alarm shouting "ayyo".
Her husband moved to catch the appellant who went near the western portion of the drawing hall and fired at Smt.
Nagammal.
The shot grazed her body just above her stomach.
Natarajan caught hold of the hands of the appellant and there was a tussle between them.
The appellant shot at Natarajan repeatedly.
Natarajan fell down but rose up.
He dashed against the wall of the drawing hall.
Nagammal went to his rescue, and the appellant shot at her stomach.
She turned to go to the other room to use the telephone but the appellant hit her with the pistol on her head.
The appellant then pressed the head of her husband with his pistol and went towards the front verandah.
Nagammal again shouted " ayyo" and ran after him.
She put on the verandah lights and the front light of her house and shouted "ayyo" and cried that the thief was running away after shooting.
She found that one of the grill doors of the verandah was open at that time.
The appellant ran through it, picked up a bag from near Natarajan 's car, scaled over the front compound wall and ran away on the road.
Rajagopal (P.W. 2) who was living in the opposite house heard the reports of the shots and Smt.
Nagammal 's shouts and came running so quickly that, according to him, he was able to see the appellant when he was getting down from the front verandah of the house and was scaling the compound wan.
Laxmi, who lived near Rajagopal 's house, also reached there.
They seated Natarajan on a sofa in the drawing hall.
Muthu (P.W. 3) who lived only three houses away and was a relation of Natarajan, also heard the shots and Smt.
Nagammal 's shout for help and reached there.
He immediately brought Dr. Samson (P.W. 13) at about 3.15 a.m.
He examined Varadarajan on his cot in the room and found that he had died.
He went to the drawing hall and found Natarajan sitting on a sofa with gun shot injuries on his chest and some injuries on his head.
He was however not able to talk and was sitting with a "stunned appearance" and was bleeding.
Dr. Samson found that Smt.
Nagammal had also received gun, shot injuries.
As it was a medico legal case, the matter was referred to the Police and Muthu (P.W. 3) took Natarajan and Smt.
Nagammal in his car to the hospital of Dr. Balasundram (P.W. 14).
First aid was given to Smt.
Nagammal, while Natarajan was taken to the operation room.
Inspector Narayana Nair (P.W. 30) reached there and recorded the statement (exhibit P. 1) of Smt.
Nagammal at about 4.30 a.m. and registered the case.
Nagammal narrated the incident in her aforesaid statement (Ex P. 1) and specifically stated that the culprit was aged 30 or 35 years, he appeared to be stout, and seemed to have a beard.
She categorically recorded that although his name was not known to her, she could identify him "if seen.
697 Dr. Balasundaram (P.W. 14) x rayed the injuries of Natarajan and performed an operation.
He gave blood transfusion and intravenous fluids, but Natarajan succumbed to his injuries on September 24, 1974.
Dr. Balasundaram had examined the injuries of Smt.
Nagammal (P.W. (1) on September 20, 1974 at about 4.30 a.m. and found that two of her injuries had been caused by a bullet, another injury by the grazing of a bullet, and yet another injury by a hit with the butt head of a revolver.
She was taken to the Government hospital on September 24, 1974, but was brought back to Dr. Balasundaram 's nursing home and was discharged on September 25, 1974.
Investigation of the case was taken up by Inspector Narayana Nair (P.W. 30).
He found blood stains at several places on the cement floor of the front verandah and the rooms of Natarajan 's house.
He found three spent bullets in the drawing hall and one in the bed room.
He also recovered the lock which was lying near the sofa of the drawing hall as well as a screw driver.
He found some bullet marks also, and prepared the inquest reports.
He searched the house of the appellant at Nagercoil on September 20, 1974 at 10 p.m. after sending prior information to the Magistrate, but did not find him there.
He sent special search parties to search for him.
Deputy Inspector of Police Balasubramaniam (P.W. 26) searched for the appellant at several places in Madras from September 28, 1974 to October 5, 1974, but did not find him.
He traced him to several places in Delhi from October 7, 1974 to October 19, 1974, but to no avail.
He learnt that the appellant was at Madras and left Nagercoil for Madras where he learnt that the appellant was in Hyderabad.
He reached Hyderabad on November 11, 1974 and learnt that the appellant was in patient in Sarojini Eye Hospital, Hyderabad.
He went there and arranged for his discharge from that hospital.
He was ultimately arrested on November 14, 1974 by Inspector Sadasivan Nair (P.W. 31).
An identification parade was held soon after, on November 16, 1974, by Kanagasabapathy (P.W. 27) Judicial Magistrate.
lie was correctly identified by Smt.
Nagammal (P.W. 1), Rajagopal (P.W. 2), Samraj (P.W. 9) and Vasantha (P.W. 10).
The Investigating Officer took the help of the ballistics expert also.
Ultimately the appellant was charge sheeted and was tried and convicted as aforesaid.
It has been argued by Mr. Anthony, learned counsel for the appellant, that Smt.
Nagammal (P.W. 1) knew the appellant before the incident as he used to reside in Nagercoil and there were civil and criminal cases between him and her husband.
Our attention has particularly been invited to the copy of a notice sent by the appellant to Natarajan on December 24 (26 ?), 1969, in which he had stated that when he came to see him, be was told by his wife that he (Natarajan) had gone to Trivandrum, that he would come in the night and that the would fix the price and complete the transaction of the property which was the bone of contention between the appellant and the deceased.
We find however that when such a suggestion was made to Smt.
Nagammal (P.W. 1), she categorically denied having seen the appellant prior to the date of the incident.
She in fact stated that while she had heard his name, she had not met him before the incident.
10 315SC1578 698 It has been argued, and has not been disputed, that the aforesaid notice was not exhibited or proved during the course of the trial, and does not really form part of the record.
The High Court has, all the same, taken the view that even if it were assumed that Smt.
Nagammal (P.W. (1) saw the appellant on one occasion in December, 1969, at her house, in the casual manner referred to in the notice, it was quite likely that she did not note hisfeatures and may not have remembered them after a lapse of morethan four years.
Then there is the further fact that the appellant hashimself stated that he did not even know that her house was situated in Kumari Colony, Nagercoil.
So if that was the position regarding his contact with the house of the husband of Smt.
Nagammal, the High Court cannot be blamed for arriving at the conclusion that she did not know the appellant at the time of the incident and had to describe the assailant with reference to his physiognomy.
An ancillary argument has been made that as Natarajan (deceased) undoubtedly knew the appellant, the fact that he did not name him to his wife Smt.
Nagammal (P.W. 1), his neighbour Rajagopal (P.W. 2), his relation Muthuswami (P.W. 3), Dr. Samson (P.W. 13) or to Dr. Balasundaram (P.W. 14) even though he died after four days of the incident, is sufficient to rule out the possibility that it was the appellant who had committed the murders.
It has also been argued that if Natarajan could shout "ayyo" at least once as stated by his wife, he could as well shout his name at the time when he saw him for the first time, during the course of the incident.
We have gone through the statements of all these witnesses and we find that all of them were questioned in this respect and have given categorical answers.
Nagammal (P.W. 1) has stated that her husband was not able to talk "on account of the shock".
Rajagopal (P.W. 2) has stated that when he reached the house of the deceased, be found that there was blood on the injuries which had been caused to him by gun shots, "he was stupefied" and "did not talk about anything".
When he was cross examined further, he stated that when he saw Natarajan for the first time "he was in a stupor" and that he did not say anything about the person who had attacked him.
As the witness reached the place immediately on bearing the gun shots, so much so that, according to him, he was able to see the appellant when he was getting down from the front verandah of the house and was scaling the compound wall, his statement is important and fully corroborates the statement of Smt.
Nagammal (P.W. 1) Muthuswami (P.W. 3) also reached the place of occurrence soon after, on hearing the shouts of his aunt Smt.
Nagammal (P.W. 1) He has stated that be asked Natarajan what had happened, but he was in "a shock" and "never replied".
Muthuswami (P.W. 3) reached the house of Dr. Samson (P.W. 13) at about 3.15 a.m. and both of them returned to the house of the deceased in about 5 or 7 minutes.
Dr. Samson (P.W. 13) has stated that he found Natarajan (deceased) sitting on a sofa cum bed, he had gun shot injuries on his chest and some injuries on his head, and that be was "not able to talk to me" and was "sitting with a stunned appearance '.
The witness asked Natarajan what had happened, but 'he did not reply.
Then there is the statement of Dr. Balasundaram (P.W. 14) who 699 examined all the injuries of Natarajan at about 4.15, a.m.
He has categorically stated that Natarajan was not in a position to speak at that time, and that he asked questions to him but "he could not respond".
The witness has further stated that Natarajan was unable to speak from the time of his admission in his Nursing Home, that he was not res ponding even to painful stimuli even though he could sit, and that the same condition continued till his death.
The witness denied the suggestion that Natarajan regained consciousness.
and was able to talk.
He has stated that he was "dazed" and even though there was no serious injury on his head, there may be other reasons for which he was not able to talk even though his centres of speech were not affected.
It would thus appear that the High Court has taken all the relevant evidence into consideration in taking the view that Natarajan was not able to name the appellant at the time of the incident, or thereafter.
Dr. Natarajan (P.W. 15), who was Professor of Forensic Medicine, performed the postmortem examination on Natarajan 's body.
He has mentioned the numerous injuries on the dead body.
In particular, he has stated that the right lobe of the lever was pale and cirrhotic with laceration in the middle of the right lobe and contusion around.
There was another laceration in the right lobe of the lever.
The 4th rib was found cut and was absent.
There was communited fracture of the 5th rib above the middle portion with a number of bits of the bone along with clots of blood.
There were fractures of the 6th and 8th ribs also and there was a long contusion.
Then there was another equally long contusion on the right parietal pleura along with ribs Nos.
1 to 6 in the middle.
There was a very long contusion along ribs 1 to 8 on the left side measuring 20 cm.
x 6 cm.
in the left parietal pleaura.
The witness has stated the serious condition of the lungs and has stated that Natarajan died of haemorrhagic shock resulting from the injuries sustained by him.
The brain surface vessels had congested and the cut sections of the brain disclosed patchial haemorrhages.
The injuries which were inflicted on Natarajan were therefore very serious, and we are unable to think that the High Court went wrong in reading the evidence while arriving at its finding that Natarajan was not in a position to name his assailant.
It has further been argued in this connection that there was no sufficient light which could enable Smt.
Nagammal (P.W. 1) and Rajagopal (P.W. 2) to identify the appellant.
It is true that there was no light in the drawing hall, or in the office room where Varadarajan was sleeping, or in the front grill verandah from which the appellant is alleged to have broken into the house.
Nagammal (P.W. 1) and Raja gopal (P.W. 2) have however stated that two mercury street lights, each having two tubes, were burning in front of the verandah, and it is not disputed that the distance between them and the verandah was not more than 29 feet.
Rajarathinam (P.W. 8) has stated that he had put on the street light switch on the preceding evening at 6.30 p.m. and that all the three street lights on Kumari Colony road were burning.
Moreover, Smt.
Nagammal (P.W. 1) has stated that the street light was flowing through the half open front door of the drawing hall and that a white zero watt bulb was burning in her bed room.
She has also 700 stated that there was a ventilator just above the window of the drawing hall through which the light was coming.
As has been stated, the verandah had a grill, and even if Mr. Anthony 's argument is accepted that the shutters of the window of the drawing hall had been closed and the street light did not pass through them, the High Court cannot be blamed for holding that there was sufficient light to enable Smt.
Nagammal to see and notice the features of the appellant.
An effort was made to argue that as Smt.
Nagammal did not mention in her statement exhibit P. I that her assailant was wearing a turban, the description was quite insufficient and should have been rejected.
We have examined Smt.
Nagammal 's statement in exhibit P. 1.
She has stated that the assailant was about 30 or 35 years old, he appeared to be stout (hefty ?) and seemed to have a beard.
The High Court has taken the view that the description was satisfactory, and we see no justification why it should be rejected merely because Smt.
Nagammal did not state, at that time, that her assailant was wearing a turban.
Her explanation that she could not make a mention of the turban in exhibit P. I because of "anguish" cannot be said to be unsatisfactory.
Then there is the further fact that a mention had been made of the turban even at the time of the inquest report which was drawn up, the same day.
It would thus appear that when the other description in exhibit P. 1 was quite satisfactory, it could not have been rejected merely because Smt.
Nagammal did not state that the assailant was wearing a turban.
The prosecution has examined Smt.
Nagammal (P.W. 1) and Rajagopal (P.W. 2) as the main witnesses against the appellant.
We have made a mention of the description of the assailant given by Smt.
Nagammal in her report exhibit P. 1 and its reiteration in her statement in the trial court with the further statement that the assailant was wearing a turban at the time of the incident.
In both the statements she claimed that she would be able to identify him on seeing him.
As has been stated, there is no reason to disbelieve her statement that she had not seen him on any earlier occasion.
The incident involved two murders, and the firing of at least eight shots including the two which hit Smt.
Nagammal from close proximity.
All that must have given sufficient opportunity to Smt.
Nagammal to notice the features of her assailant who was out to destroy her family.
There was sufficient light to enable her to do so and it therefore remained for the Investigating Officer to arrange for a test identification parade.
We shall deal with that aspect of the evidence in a while.
Rajagopal (P.W. 2) was the Vice Chairman of the Nagercoil Municipality and was living just across the road, at a distance of not more than 40 feet from the house of the deceased.
He has stated that he immediately got up on hearing the two gun shots and put on the light of his house.
He went and saw both in fro, it and backward but could not see anything at his house.
He again went to bed.
Two minu tes later be heard 4 or 5 shots from Natarajan 's house.
He immediately put on the light of the drawing ball of his house and came to this front verandah.
He heard Smt.
Nagammal (P.W. 1) raising an alarm, and saw the appellant getting down from the front varandah of her house, 701 going north, towards her car shed and then scaling the front compound wall of her house and jumping and running away towards the north of the main road.
The witness did not know the appellant earlier, but he saw that he was having a beard and had tied a circular turban.
He clearly stated that he could see him because of the tube lights and which were burning at that time and the light in front of Natarajan 's varandah.
The investigating Officer therefore Wanted to test his capacity for identification also, as soon as the culprit was arrested.
It will be recalled that the appellant could be arrested only on November 14, 1974, and it is disputed that a test identification parade was held soon after on November 16, 1974.
It cannot therefore be said that there was any delay in holding the parade.
The parade was held by Kanagasahapathy (P.W.27), who was a Judicial Magistrate at Nagercoil.
He has stated that he selected eleven under trial prisoners from the sub jail for the test identification parade who were almost of the same size and complexion as the appellant, and that as the appellant was having a slight beard, three of the selected under trial prisoners were persons having slight beards "just like the accused".
It appears from the memorandrum of the identification parade that the persons who were mixed with the appellant were persons of the same status (or position in life).
The appellant was allowed to change his place (or number) of each occasion when a witness was called to identify him.
The Magistrate has given all the details of the identification parade and has stated that the appellant was correctly identified by Smt.
Nagammal.
and Rajagopal, as well as by the two other witnesses.
No effective argument has been made why the evidence of the +Lest identification parade should not have been believed by the trial court and the High Court in these circumstances.
An attempt was made to argue that the witnesses were able to identify the appellant because his photograph had appeared in a local newspaper on November 16, 1974.
Nagammal (P.W.1) has however stated that she was not in the habit of reading a newspaper and did not even know about the publication of any such issue.
Rajagopal (P.W.2) was also cross examined in this respect and he has also stated that he had not noticed any such publication.
It cannot therefore be said that the parade was a farce or was a got up affair.
It has however been argued further that as only the appellant was wearing a white dhoti and a white shirt, the test identification parade was of no consequence and the High Court erred in taking a contrary view.
It may be pointed out that when such, a suggestion was made to the Magistrate who held the test identification parade, he denied it, and it cannot be said that there was any such infirmity in the parade.
There is also satisfactory evidence to prove that the appellant was not wearing spectacles as his pair was given to another prisoner before the witnesses were called in for his identification.
Mr. Anthony has however argued that as the prosecution had not led any evidence to prove that the appellant was kept ba parda ', the test identification parade was of no consequence because of that fatal infir 703 The appellant cannot therefore derive any benefit from the decision in Dhokal Singh 's case which has been adequately re examined in Ranjita 's case.
Identification parades have been in common use for a very long time, for the object of placing a suspect in a line up with other persons for identification is to find out whether he is the perpetrator of the crime.
This is all the more necessary where the name of the offender is not mentioned by those who claim to be eye witnesses of the incident but they claim that although they did not know him earlier they could recall his features in sufficient details and would be able to identify him if and when they happened to see him.
The holding of a test identification in such cases is as much in the interest of the investigating agency or the prosecution as in the interest of the suspect or the accused.
For while it enables the investigating officer to ascertain the correctness or otherwise of the claim of those witnesses who claim to have seen the perpetrator of the crime and their capacity to identify him and thereby fill the gap in the investigation regarding the identity of the culprit, it saves the suspect or the, accused from the sudden risk of being identified in the dock by the self same witnesses during the course of the, trial.
The line up of the suspect in a test identification parade is a workable way of testing the memory and veracity of witnesses in such cases and has worked well in actual practice.
In the present case where there was satisfactory evidence to prove that at least two of the witnesses emphatically claimed from the very beginning of the incident that they bad noticed the culprit and had in fact described him and had claimed that they could identify him, the holding of a test identification parade was absolutely necessary.
The fact that such a parade was held within two days of the arrest of the appellant, and was held by a Judicial Magistrate with all the necessary precautions and arrangements, leaves no room for doubt trial the evidence of the test identification was of considerable importance.
The appellant knew about that evidence from the date the parade was held, and if he wanted to demolish it, it was for him to do so by effective cross examination of the witnesses and/or by examining his/own witnesses in rebuttal.
As the appellant has not succeeded in doing so, it is futile to contend that we should reject this important piece of evi dence merely because the prosecution did not lead evidence of the nature referred to in Dhokal Singh 's case (supra).
The trial court and the High Court have placed reliance on the statements of Smt.
Nagammal and Rajagopal and have found that the identification parade was held "properly and fairly".
No satisfactory argument has been advanced why we should interfere with that finding.
it has next been argued that although the evidence of the prosecution showed that eight shots were fired at the time of the incident, the High Court erred in accepting the opinion of Ramiah (P.W.23) who was the Fire Arms Expert of the Tamilnadu Forensic Science) ' and Chemical Laboratory, Madras, that all of them were fired from one and the same fire arm.
It has been urged that as no "empties" were found at the place of the incident, the eight shots could not have been fired from a 704 pistol and the expert 's opinion that they could have been fired from a revolver should not have been accepted as, even according to him, such revolvers with eight chambers were rare.
It has also been argued that the evidence of the expert could not have been accepted because he did not take photographs for the purpose of comparing the land and groove markings on the bullets and contended himself by their com parison under a "comparison microscope".
We do not think there is any real basis for this argument.
Even if it were assumed for the sake of argument that the crime revolver bad only six chambers and an eight chamber revolver was not available for the commission of the murders, there was nothing to prevent the appellant from reloading the revolver after firing the first two shots on hearing which Smt.
Nagamal (P.W.1) came from threshold of her bed room to the drawing hall.
Ramiah (P.W.23) has stated that if the person using the revolver bad been an expert, he would have required about a minute to reload it.
The prosecution has led satisfactory evidence to prove that the appellant was an expert who had taken regular training in the use of firerms and had passed it with credit.
If it would take a minute for an expert to reload all the six chambers, it would have taken less than that time in replacing the two cartridges which were used in the first two shots.
As it is, the evidence on the record does not exclude the possibility of such a reloading, and when an assasin who has received training in the use of firearm trespasses at night into the house of his enemies with the intention of murdering them, it would be quite natural for him to replace the discharged cartridges.
Much would not therefore turn on the question whether the appellant used a six or an eight chamber revolver in the commission of the crime In support of his argument regarding examination under the comparison microscope without the aid of photographs, Mr. Anthony has placed reliance on The State of Gujarat vs Adam Fateh Mohmed Umativa and others(2).
In that case the expert did not take photographs of the misfired cartridges, and admitted that the photographs were necessary for comparison.
In that context this, Court made a reference to Burrad 's, "The identification of Firearms and Forensic Ballistics", 3rd edition, 1956, page, 173, where it has been stated that any evidence of identification Which is unsupported by photographs cannot be regarded as being anything morel than an expression of opinion, and held that it did not establish that the test cartridges and the empty cartridges were fired from the same weapon or that the misfired cartridge was fired from the same weapon.
That was therefore a different case which has decided on its own facts.
It also appears that there was no evidence in that case to show that the comparison had been with the help of a comparison microscope.
The evidence of the expert therefore suffered from an inherent infirmity and was not satisfactory.
Counsel for the appellant however tried to refer to some observations from Hatcher 's "Fireams Investigation, Identification and Evidence" for the purpose of showing the importance of photography and the use of enlarged photographs in such cases.
Hatcher has devoted a whole chapter to photography in investigation of firearms crimes and (1) 705 while discussing the history of firearms identification he has pointed out the reasons why consideration importance was given to, such photographs for the visual satisfaction of the Judge and the jury.
But while referring to the importance of photographs taken directly through the comparison microscope, he has devoted a paragraph to the decline in the use of micro comparison photographs and has gone on to state as follows, "There are also photographic reasons for the almost entire abandonment of this method of presentation.
Unfortunately, the lenses of a camera do not adjust in the, way that the human eye adjusts.
The depth of field is ex tremely limited.
Unlike the human eve a photographic film has far less tolerance to variations in lighting.
Photographs are almost always unsatisfactory to the Expert who has made a positive comparison through the microscope.
You photograph only what you can see at one single time.
The camera cannot move along the surface of bullets to pick up identity after identity.
" The position has been stated as follows in section 178 (page 260) of Ehrlich and Jones, "Photographic Evidence", 1967 edition.
, "Usually more can be seen through a microscope than can be photographed through it.
There are several reasons for this superiority of visual perception.
In the first place, the eye looking through a microscope can scan the field and change focus at different points of the field.
In, addition, the eye can see any movement present, and, with the aid of mental "filling in", is able to perceive form and detail that may not be recorded photographically.
Moreover, the lens system of the microscope produces a curved fields; this works out nicely for the eye since the retina is curved, but does not work so well photographically since the film plane is flat.
Due to this latter defect, not all of the field will be photographed to the same degree of sharp focus, and some distortion may be produced in the photograph.
" It cannot therefore be doubted that a comparison microscope is the most important and most widely used scientific instrument in comparing the crime cartridge with the test cartridge.
Such microscope are of various types but they have been described as follows, in Volume I of Mathews 's "Firarms Identification" at page 38, "A comparison microscope consists essentially of two compound microscopes, having identical optical system, so that they give the same magnification, connected by an optical "bridge" containing a combination of prisms such that by viewing two separate objects (one under each microscope) through a single eyepiece the two objects may be compared by bringing the images of parts of each into juxtaposition.
" It has further been stated that when the desired condition is attained for purpose of comparison, the bullets are said to be "matched", and correct opinion can be given thereon.
706 It is true that there his been considerable difference of opinion amongst investigators regarding the use of photographs in a court for the purpose of illustrating the matching of the markings, and while it may be that microscopic photographs, when taken with due care and in the best of conditions, may enable the evidence to be placed on the record in a visible form, it cannot be denied that a court would not be justified in rejecting the opinion of an expert who has examined the markings under the comparison microscope simply for the reason that he has not thought it necessary to take the photographs.
It is therefore not possible for us to reject the exidence of Ramuiah (P.W. 23) who has categorically stated that he had compared the land and grovee markings on the bullets under a comparson microscope, simply because he did not think it necessary to take the photographs.
It has next been argued by Mr. Anthony that the appellant could not possibly have committed the murders as he had written a letter to the Magistrate informing him that he was involved in two motor cycle accidents in 1948 and 1963, three car accidents in 1906, 1970 and 1974.
and had been injured in 1969 when a constable stamped on his leg, and had lost his vision in the accident etc.
Reference in this connection has also been made to the statement of the Investigating Officer showing that the accused was brought to the Court of Session by supporting him with an arm, and to the fact that he found by the police in.
the Sarojini Eye Hospital after the present incident.
We find that a similar argument was urged for the consideration of the trial court as well as the High Court, but it was rejected for satisfactory reasons.
Sreenivasan (P.W. 16) who was the Inspector incharge of the Civilian Rifle Training Centre, at Nagercoil, has stated that the appellant was one of the members of the Centre who received training under him from January 2, 1972 to March 12, 1972, and passed the test having secured a high percentage of marks.
The witness has stated that the appellant was in a fit state of health, that his vision was all right, and that he could shoot the rifle by triggering it only with his left hand.
He has further stated that the appellant used to take aim with his left eye and press the trigger with his left forefinger and that a person who knows bow to fire a rifle can also fire a revolver.
There is therefore no occasion for us to re examine the finding of the two courts regarding the ability of the appellant to commit the crimes.
An attempt has also been made to argue that there was no justification for the High Court to take into consideration the evidence) regarding the movement of the appellant after the occurrence and that be did not in fact abscond and his statement that he had gone to, Madras to see off Subramania Thevar 's son on September 20, 1974, as he was leaving for America, should have been accepted.
This argument is also of no consequence in view of the detailed statement of Deputy Inspector Balasubramanian (P.W. 26) who was placed on special duty in the months of September, October and November, 1974, to trace out the appellant.
The prosecution has examined some other witnesses also regarding the movements of the appellant, but even the statement of Balasubramaniam (P.W. 26) is sufficient to justify the High Court 's view in the matter.
707 The prosecution has led evidence to prove the motive for the crime, and it has been argued that the High Court erred in taking the view that the dispute in regard to the resale of the coconut tope was a "burning issue" between the appellant and the deceased at the time of the incident.
Even if the other evidence on the record is left out of consideration, there can be no doubt that the deceased had purchased the coconut tope from the appellant 's brother and the appellant was not only challenging his possession but was pressing him for a resale.
The evidence relating to the civil and criminal cases between the parties justifies the conclusion arrived at by the High Court which, we have no doubt is essentially correct.
It has lastly been argued that although a number of fingerprints were obtained by the Investigating Officer and others, 'the High Court did not take into consideration the fact that those prints did not compare with the fingerprints of the appellant.
It has been pointed out that the High Court erred in thinking that the fingerprints of Varadarain were got obtained by the police even though the inquest report showed that the prints had been taken.
It is true that the, evidence on the record goes to show that a number of fingerprints were obtained during the course of the investigation, and it may well be that the identity of the appellant could not be established on that basis, but that could not be said to be enough to justify his acquittal when there was overwhelming evidence against him to establish his guilt.
It would thus appear that the learned counsel for the appellant has not been able to advance any such argument as would justify this Court 's interference with the concurrent findings of the trial court and the High Court against the appellant.
The appeal fails and is dismissed.
S.R. Appeal dismissed.
| IN-Abs | The appellant was convicted of offences under Sections 302 (,on two counts), 307 and 460 I.P.C., and sentenced to death by the trial court, for illegally entering a residential house and causing two murders by shooting.
He was noticed by the deceased Natrajan 's wife and neighbour, who identified him in a test parade.
The High Court confirmed the death sentence.
The appellant, inter alia, challenged the propriety of his identification by the witnesses, and also the identification of the fire arm used for the murders.
Dismissing the appeal, the Court.
HELD : 1.
Identification parades have been in common use for a very long time, for the object of placing a suspect in a line up with other persons for identification is to find out whether he is the perpetrator of the crime.
This is all the more necessary where the name of the offender is not mentioned by those who claim to be eye witnesses of the incident but they claim that although they did not know him earlier, they could recall his features in sufficient details and would be able to identify him if and when they happened to see him.
The holding of a test identification in such cases is as much in the interest of the investigating agency or the prosecution as in the interest of the suspect or the accused.
For while it enables the investigating officer to ascertain the correctness or otherwise of the claim of those witnesses who claim to have seen the perpetrator of the crime, and their capacity to identify him, and thereby fill the Zap in the investigation regarding the identity of the culprit, it saves the suspect or the accused from the sudden risk of being identified in the dock by the self same witnesses during the course of the trial.
The line up of the suspect in a test identification parade is, therefore, a workable way of testing the memory and veracity of witnesses in such cases and has worked well in actual practice.
[703 A D] (2)The argument that the evidence regarding the holding of a test identification parade would be of no consequence and would suffer from a fatal defect if the prosecution has not led any evidence to prove that the appellant was kept "ba parda", is not correct.
After referring to the decision in Dhokal Singh and Anr.
vs The State, I.L.R. (1953) 3 Raj. 762, their Lordships approved of the view taken in State of Rajasthan vs Ranjitha, A.I.R. 1962, Raj 78 (FB) in which the earlier decision in Dhokal Singh 's case was adequately reexamined.
[701 H, 702, 703A] (3)A comparison microscope is the most important and most widely used scientific instrument in comparing the crime cartridge with the test cartridge, but there has been considerable difference of opinion amongst investigators regarding these photographs in a court for the purpose of illustrating the matching of the markings, and while it may be that microscopic photographs, when taken with the due care and in the best of conditions, may enable the evidence to be placed on the record in a visible form, a court would not be justified in rejecting the opinion of an expert who has examined the markings under the comparison microscope simply for the reason that he has not thought it necessary to take the photographs.
[705 F 706 A B] 695 The State of Gujarat vs Adam Fateh Mohmed Umative & Ors., , differentiated.
|
No. 1113 of 1974.
(From the Judgment and Order dated the 15/16/17 1 1974 of the Bombay High Court in S.C.A. No. 815 of 1972) AND CA No. 242 of 1974 (From the Judgment and order dated the 14 7 1973 of the Gujarat High Court in S.C.A. No. 1418 of 1971).
C. As.
Nos. 285 287 of 1974.
(From the Judgment and Order dated the 14 7 1973 of the Gujarat High Court in S.C.A. No. 1418/71, 422/70 & 1099/69 respectively).
K. K Singhvi in CA 1113/74, ,4.
K. Garg, S.C. Agarwal and V.J. Francis for the appellants in CAs 1113/and 242/74 & for respondents Nos. 2, 3, 5, 6 13 in CA No. 285, Rr. 2 18 in CA 286 and for Rr. 3, 7, 16 23, 28 and 33, 35 39, 41 43 and 45 in CA 287/74.
M.C. Bhandare and M.N. Shroff, for respondent 's 1 and 2 in CA 1113/74.
M.V. Paranjpe, M.K. Joshi, K. Rajendra Choudhary and Mrs. Veena Devi, for respondent No. 3 in CA No. 1113/74.
M.K. Ramamurthi, Vimal Dave and Miss Kailash Mehta, for the appellants in CAs 285 to 287774 and for the respondents No. 2 and 3 in CA 242/74.
D.V. Patel, in CA 285 to 287/74, P.H. Parekh and M.N. Shroff for the respondent No. 1 in CAs Nos.
242/74 and 285 to 287 of 1974.
The Judgment of the Court was delivered by CHANDRACHUD, J.
This is a group of five appeals, one from Maharashtra and four from Gujarat.
They involve substantially identical questions and since the appeal from the judgment of the Bombay High Court was argued as the main appeal, we will refer 'to the facts of that appeal and indicate at appropriate places if there is any material difference between those facts and the facts leading to the Gujarat appeals.
Civil Appeal No. 1113 of 1974 from Maha rashtra is by certificate granted by the High Court of Bombay under article 133(1) (a) & (b) of the Constitution.
Civil Appeals Nos. 242 and 285 287 of 1974 from Gujarat are also by certificate granted by the Gujarat High Court under article 133(1) of the Constitution.
Special Civil Application No. 815 of 1972 which has given rise to Civil Appeal No. 1113 of 1974 was disposed of by a Division Bench of the Bombay High Court by its judg ment dated 15th, 16th and 17th January, 1974.
The four Gujarat appeals arise out of 781 Special Civil Applications Nos. 1099 of 1969, 422 of 1970 and 1418 of 1971 which were disposed of by a Full Bench of the Gujarat High Court by its judgment dated July 14, 1973.
The complexity of the questions involved in these ap peals has been expressed by the Bombay High Court by saying that the writ petitions before it involved "ticklish and complicated questions" and by the Gujarat High Court by saying that though it had many occasions to consider complex problems pertaining to service laws, there was "no case comparable" to the writ petitions filed before it in the instant case.
The learned Chief Justice (Bhagwati, J.) who delivered the judgment of the Full Bench obserVes that these questions of "unrivailed complexity" had caused considerable anxiety to the Court in reaching a satisfactory conclusion.
We share this anxiety which is further heightened by the diametrically opposite and entirely inconsistent stands taken by the State governments from time to time.
Evidently, the State governments did not know their own mind and being unable to take up a firm and consistent stand, they defended the various Writ petitions filed against them by their employees according to the mood of the passing moment.
That must be deprecated.
The appeals raise the familiar question of seniority in service, the competing groups being promotees on the one hand and direct recruits on the other, to the posts of Deputy Engineers.
The writ petitions were filed and de fended by the rival groups in a representative capacity so that, our decision will bind not only the parties thereto but all others whom, under the relevant provisions of the Code of Civil Procedure, they were permitted to represent.
Taking the facts of the Maharashtra case, the two appel lants therein were.
initially recruited as Overseers in 1953 and were promoted temporarily as Deputy Engineers, in Janu ary 1959 and October 1957 respectively.
They were con firmed as Deputy Engineers after the coming into force of certain rules framed on February 19, 1970.
The 1st respondent to the appeal is the State of Maharashtra.
The 2nd and 3rd respondents were appointed directly on probation as Deputy Engineers.
They are Engineering Graduates but so are the appellants.
Respondents 2 and 3 qualified for direct appointment after passing a competitive examination in 1963 and 1959 respectively.
They were confirmed two years later, in 1965 and 1961 respectively.
The grievance of the appellants is that notwithstanding the length of their continuous service as Deputy Engineers since 1959 and 1957, respondents 2 and 3 were shown as senior to them in the Cadre of Deputy Engineers though they were appointed later in 1963 and 1959 respectively. 'The appellants claim that their seniority should have been fixed under the rules framed by the then Government of Bombay on November 21, 1941 as clarified by the Chief Secretary to that Government by his letter dated January 11, 1949.
According to them, the rules flamed by the Maharashtra Government on April 29, 1960 cannot take away the right which had accrued to them under the rules existing fat the time of their promotion in 1959 and 1957.
They challenge the validity of rule 8(iii) of the 1960 rules and of rule 33 of the 1970 rules aS being violative of articles 14 and 16 of the 782 Constitution.
They also challenge the 1970 rules on the ground that they lack approval of the Central Government, thereby violating the proviso to s.81 (6) of the Bombay State Reorganisation Act of 1960.
According to the appel lants, the 1960 rules were superseded by the rules dated July 29, 1963 and still the State Government continued to apply the defunct rules of 1960.
On these grounds, broad ly, the appellants filed a writ petition in the Bombay High Court on behalf of themselves and all those promoted as Deputy Engineers in Class II of the Maharashtra Engineering Service.
Putting it as briefly as one may, the, sum and substance of the stand taken by respondents 2 and 3 is that neither the 1941 rules nor the 1963 rules are applicable to employ ees in Maharashtra Engineering Service.
The posts of Deputy Engineers, according to them and according to the State of Maharashtra, were required to be filled in by direct recruits and promotees in the ratio of 75 : 25 under the 1960 rules which had super seded the earlier rules of 1939.
Therefore, ac cording to them, the question of seniority of the appellants could not possibly arise until they were con firmed, and seniority has to be fixed from the respective dates of confirmation in terms of rule 8(iii) of the 1960 rules.
The Government of Maharashtra contended that the confirmation of appellants depended necessarily on the availability of vacancies allotable to them within the quota of 25% of the total vacancies, and delay in passing orders of confirmation was inevitably caused by the fact that the number of officiating Deputy Engineers was much too large.
In order to rectify the somewhat unsatisfactory position, the State Government, according to its contention, framed the 1970 rules, altering the ratio of direct recruits and promotees from 75: 25 to 34: 66, as a result of which sever al promotees were confirmed.
Even prior to that, according to the State Government, whenever vacancies occurred in the substantive posts which were required to be filled is ac cording to the prescribed ratio, those vacancies were duly filled in from amongst the officiating Deputy Engineers and they were given anterior dates of, confirmation with effect from the dates when the vacancies had actually occurred.
The respondents disputed that rule 8(iii) of the 1960 rules and rule 33 of 1970 rules were unconstitutional or otherwise invalid.
Before examining the merits of these contentions it would be necessary, for a proper understanding of the issues involved in the case, to set out briefly the history of the Engineering Service and the background in which the various rules came to be framed.
The Engineering Service in the then province 'of Bombay consisted, prior to 1937, of (i) the Indian Engineering Service which was an All India Service, (ii) the Bombay Subordinate Service of Engineers, (iii)Supervisors, both permanent and temporary, and (iv) temporary Engineers, appointed annually.
The Bombay Subordinate Service of Engineers consisted of non gazetted Class III employees, in which 2 posts used to be filled in annually by direct re cruitment on the basis of the results of the examination held for Diploma in Civil Engineering.
The remaining posts used to be filled in by promotion from the 783 rank of temporary Overseers.
On March 22, 1937 the Govern ment of Bombay in the Public Works Department passed a resolution reorganizing the Engineering Service.
This resolution contemplated the creation of two new Provincial Engineering Services to be designated as Bombay Engineering Service Class I and Bombay Engineering Service Class 1I.
The cadre strength of Class I Service was fixed initially at 36 while that of Class II Service was fixed at 80.
Class I Service comprised the apex posts of Chief Engineer, Superin tending Engineer and Executive Engineer, and the junior posts of Assistant Engineers.
Class II Service consisted of Deputy Engineers only.
On September 21, 1939 the Government of Bombay passed a resolution adopting rules for regulating the methods of recruitment to the posts of Assistant Engineers and Execu tive Engineers in Class I Service and the posts of Deputy Engineers in Class II Service.
These rules were made by the Governor of Bombay in exercise of the powers conferred by section 241(2) (b) of the Government of India Act 1935 and were called: "Recruitment Rules of the Bombay Service of Engi neers (Class 1 and Class II).
" The rules appear at Item 53 is Section V of A endix C to the Bombay Civil Services Classification and Recruitment Rules under the heading "Bombay Service of Engineers." Rule 2 of the 1939 Rules laid down the method of re cruitment to the Bombay Service.
of Engineers, Class I, by providing that such recruitment was to be made either (a) by nomination under the guarantee given to the College of Engineering, Poona, or (b) by promotion from the existing Bombay Service of Engineers or from the Bombay Service of Engineers Class II.
Rule 3 provided that as regards the recruitment from source (a), such number of appointments as may be fixed by the Government from time to.
time would be made from amongst the students of the College of Engineer ing, Poona, who had passed the examination for the Degree of B.E. (Civil) in First Class.
The candidates.
so recruited by nomination were to be appointed in the first instance as Assistant Engineers on probation for two years and on completion of the probationary period, they Were to be confirmed as Assistant Engineers.
Rule 10 of the 1939 Rules prescribed the method of recruitment to the Bombay Service of Engineers Class II.
It provided that recruitment of Class II service shall be made either (a) by nomination under rule 11 under the guar antee given to the College of Engineering, Poona, or (b) by promotion from any of the three prescribed sources.
Those sources were (1 ) the Bombay Subordinate Engineering Serv ice, ( 2 ) Permanent or temporary Supervisors and ( 3 ) Temporary Engineers appointed on annual sanction.
Rule 11 provided that such number of appointments as may be fixed by the Government from time to time shall be made annually from amongst the students of the College of Engineering, Poona, who have passed the examination for the Degree of B.E. (Civil).
Every such candidate recruited by nomination was required by rule 14 to serve intially as a "candidate" for one year on the expiry of which period he would be appointed as a Deputy Engineer on probation for one year.
On the satisfactory completion of the probationary period, the candidate would be eligible for confirmation as a Deputy Engineer.
784 The guarantee envisaged by rules 2(a) and 10(a) of the 1939 rules was given by the Government to the students of the College of Engineering, Poona, under a resolution dated July 12, 1940.
The guarantee operated in different measures until it was finally withdrawn by a resolution dated May 27, 1947.
The last batch of students who obtained the benefit of the guarantee were those that passed the examination for the Degree of B.E. (Civil) in 1949.
By a resolution dated November 25, 1950 the Government of Bombay appointed a Committee under the Chairmanship of Shri Gurjar to examine the, question of future recruitment to Engineering Services, Classes I and II.
That Committee submitted its recommendations to the Government after prolonged deliberations but since the implementation of the recommendations had to be deferred, the Government started making appointments to both classes of services by direct recruitment through the Public Service Commission.
Such appointments were made from the year 1950.
As stated earli er, the cadre strength of Class I and Class II Services was fixed initially at 36 and 80 permanent posts respectively.
But with the launching of new development projects, the strength of both cadres had to be expanded from time to time by addition to the permanent posts.
In fact, for an early and effective achievement of the target it became necessary to make appointments of several temporary Execu tive Engineers and Deputy Engineers.
On November 1, 1956 there were 360 temporary posts of Deputy Engineers as against 200 permanent posts.
By April 29, 1960 these numbers had risen respectively to 600 and 400.
One of, the bones of contention between the parties is whether these temporary posts of Deputy Engineers were additions to Class II cadre, even if temporary, or whether the temporary posts were wholly outside the cadre of Class II Service.
It is neces sary to mention at this stage that appointments as officiat ing Deputy Engineers to such temporary posts were made by promotion from amongst the members of the Bombay Subordinate Service of Engineers as also from amongst permanent and temporary Supervisors.
But no direct appointments were made by the Government to these temporary posts of officiat ing Deputy Engineers.
The direct appointments were made only to permanent posts because such appointees were prom ised confirmation after two years from the date of appoint ment, during which period they were expected to complete their probation.
On April 29, 1960 the Government of Bombay in the Public Works Department passed a resolution embodying rules of recruitment to Bombay Service of Engineers Class I and Class II.
These rules continued the existing division of Engineering Services into Class I and Class II and they provided that appointments to both classes of service should be made by nomination as well as by promotion.
As regards appointments by nomination it was provided that they should be made through competitive examination held by the Public Service Commission and that for both the classes of service there should be a common examination.
Candidates recruited directly were to be confirmed after two years in their respective cadres, if otherwise found fit.
The resolution of 1960 was signed by Under Secretary to the Government, "By order and in the name of the 'Governor of Bombay.
" 785 The rules regarding recruitment to Class I and Class II Engineering Service were set out in the Appendix to the 1960 Resolution.
Rule 1 of those rules provided that appointments to both classes of services shall be made either by nomina tion after a competitive examination held by the Public Service Commission or by promotion from amongst the members of the lower cadres concerned, provided however that the ratio of appointments by nomination and promotion shall, as far as practicable, be 75: 25.
By rule 2, candidates ap pointed to either of the services by nomination were to be on probation for two years.
They were to serve, in the first instance, as Trainees for a period not exceeding one year and thereafter they were to be placed in a probationary capacity in charge of a sub division for a period of not less than one year.
On the expiry of the aforesaid period of two years they were to be confirmed as Assistant Engi neers in Class I or as Deputy Engineers in Class II, as the case may be, if favourably reported upon by their superiors.
Rule 2 further provided that Assistant Engineer would be confirmed as Executive Engineer after 9 years ' service unless the period was extended by the Government.
Under rule 3, candidates securing higher places in the competi tive examinations were to be appointed in Class I service according to the number of vacancies declared for such recruitment in that cadre while candidates securing the next higher places were to be offered appointments to Class II service.
Rule 6 of the 1960 Rules read thus: "6.
(i) The number of posts to be filled in the Bombay Service of Engineers, Class I, by promotion of officers from the Bombay Service of Engineers Class II shall be about 25 per cent of the total number of superior posts, in the Bombay Service of Engineers, Class I cadre.
This percentage 'should be aimed at for confirmations made after 1st November, 1956, subject of course, to Class II officers of the requisite fitness and length.
of serv ice being available.
(ii) For absorption into Class I, a Class II officer must be in the permanent Bombay Service of Engineers, Class II cadre, should have at least 15 years ' service to his credit in Class II in temporary and permanent capacities, and should be holding an officiat ing divisional rank, at the time of such absorption.
On such absorption, the Class II officer shall be confirmed as an Executive Engineer.
(iii) The seniority of the Class II promo tees shall be fixed below the bunch of the Assistant Engineers, any one of whom is duo for confirmation as Executive Engineer during the calendar year, provided that an Class II promotee shall be placed senior to a direct recruit to Class I Assistant Engineer who has been officiating as Executive Engineer from a date earlier than the class II promo tee.
In the latter ease, the Class II promo tee though holding a post and lien as a confirmed Executive Engineer shall be 786 shown both under Permanent Executive Engineers and also along with the directly recruited Class I Assistant Engineers, with a suitable remark under the permanent Executive Engi neers list.
This is also subject to further conditions as in paragraph 7 below." In spite of the provisions contained in rules 2 and 6, sufficient number of direct recruits ,to Class I service were not available, which caused the apprehension that for the next few years it may not be possible to fill 75% of the superior posts from amongst direct recruits to Class I.
In order to meet this.
situation, it was provided by rule 7 that, as far as possible, promotions as officiating Execu tive Engineers shall be so made that the promotee under consideration from Class II has to his credit at least 6 years ' longer service than a promotee under consideration from Class I, subject, generally, to the condition that a Class I officer shall not hold a divisional rank at less than 4, and a Class II officer at less than 7 years ' serv ice.
Clause (iii) of rule 7 emphasised that if any promo tions were made from Class.
II to Class I service to the confirmed posts of Executive Engineers beyond the quota available to Class II service personnel, there, would have to be a consequent reduction in the promotion of Class II employee.s to Class I appointments in the following years in order to work up the overall percentage of 75:25.
Clause (iv) of rule 7 provided that if any confirmation is made from the bunch of temporary Executive Engineers.
who had no lien on any cadre, such confirmation shah be counted against the quota of 25% which was meant for the non direct recruits to Class I service.
Since the challenge to the vires of rule 8(iii) has occupied the best part of the arguments and since the High Court of Bombay and Gujarat have differed on that question it would be necessary to set out the whole of rule 8.
(i) The Sub Divisional posts in the Department are at present manned by direct recruits.
to Bombay Service of Engineers, Class II cadre, Deputy Engineers confirmed from subordinate Service of Engineers, the temporary Deputy Engineers recruited by the Bombay Public Service Commission, Officiating Deputy Engineers and similar other categories.
These various categories are being compiled into two lists only, viz. Bombay Service of Engineers Class 11 cadre of permanent Deputy Engineers and a list of officiating Deputy Engineers.
The future recruitment to Bombay Service of Engineers, Class II cadre, shall be made by nomination of candidates recruited direct by competitive examination, held by the Commission and by promotion from the list of officiating Deputy Engineers.
The number of such promotions shall be about one third the number of direct recruits appointed in that year.
(ii) All direct recruitment, of temporary Deputy Engineers having been stopped, further officiating vacancies will be 787 manned from the ranks of the subordinate Service of Engineers.
For this purpose, a State wide Select Seniority list will be maintained of members of the Subordinate Service of Engineers cadre, considered fit to hold sub divisional charges.
The list shall be compiled as on 30th June each year.
For inclusion in this list, a graduate shall have to, his credit not less than 3, a Diploma holder not less than 8, and a non qualified person not less than 13 years ' service as Overseer.
For confirmation as a Deputy Engineer, the officer would be expected to have put in not less than 3 years ' service as officiating Deputy Engineer.
(iii).
The probationers recruited directly to the Bombay Service of Engineers, Class II cadre in any year shall, in a bunch, be placed senior to promotees confirmed during that year." The Rules of 1960 were made by the Government of Bombay on April 29, 1960 and within two days thereafter, that is, on May 1, 1960 State of Bombay was bifurcated into the States of Maharashtra and Gujarat.
With a view to avoiding any administrative difficulty, the Government of Gujarat passed a resolution on May 1, 1960 providing that all rules, regulations, circulars, etc.
prevailing in the former State of Bombay will continue to operate in the new State of Gujarat until changed or modified by that Government.
The Rules of 1960 were amended by the Government of Gujarat by a notification dated August 21, 1965 issued in the exer cise of powers conferred by the proviso to article 309 of the Constitution.
By that notification, the Government of Gujarat introduced a new clause, clause 10, in the Rules of 1960 providing that candidates selected through the competi tive examination and appointed to posts in the Gujarat Service of Engineers, Class I and Class II, shall if so required, be liable to serve in any Defence Service or post connected with the defence of India, provided that such a candidate shall not be required to serve as aforesaid after the expiry of ten years from the date of his appointment or after attaining the age of 40 years.
The terms of this Gujarat amendment are not the subject of controversy but it became necessary to refer to the amendment since it is argued that even if the Rules of 1960, being in the nature of executive instructions, did not have statutory force, those rules acquired a statutory character by being recognised and amended by the notification of August 21, 1965 which was issued under the proviso to art, 309 of the Constitution.
On the bifurcation of the State of Bombay, 181 permanent and 220 temporary posts of Deputy Engineers were allocated to the state of Gujarat.
In practice however, 99 permanent posts of Deputy Engineers were vacant in the State of Guja rat against which confirmation had to be made by that Gov ernment.
Some of the Deputy Engineers who were promoted to those posts from lower ranks were also allocated to the Stare of Gujarat and several of them having 788 completed three years ' qualifying service had become eligi ble for confirmation under rule 8(ii) of the 1960 Rules.
But they were denied confirmation in spite of their long service and in spite of the existence of clear vacancies in substantive posts of Deputy Engineers.
Since the quantum of pension also depended in those days on the average substan tive pay, the denial of confirmations to the promotee Deputy Engineers led to great dissatisfaction amongst them.
Some, who had officiated in those appointments for several years, had to retire without being confirmed.
On March 28, 1961 the Government of Gujarat passed an order provisionally confirming 37 officiating Deputy Engineers with effect from May 1, 1960.
On August 7 1968 it confirmed another batch of 26 officiating Deputy Engineers with retrospective effect from May 1, 1960 and directed that the order of provisional confirmation dated March 28, 1961 shall be treated as final.
In so far as the Gujarat appeals are concerned there are no further rules or resolutions to be considered.
But the Government of Maharashtra issued two.
resolutions after the bifurcation of the State of Bombay.
On July 29, 1963 it passed a resolution laying down principles of seniority and on December 19, 1970 it passed a resolution superseding the resolution passed by the Government of Bombay on April 29, 1960.
Rule 33 of the 1970 rules provides: "Seniority 33.
There shall be two parts of the seniority list in each cadre in Class I and Class 11 viz. Part A of confirmed officers and Part B of those who are not confirmed.
(a) In Part A the names shall be arranged with reference to the year of confirmation.
(b) The confirmed officers shall be treated as senior to the unconfirmed Officers in the respective cadre.
(c) In Part B of the seniority list of any cadre, the names shall be arranged with refer ence to the date of continuous officiation except where a promotion in an officiating capacity was by way of purely temporary or local arrangement.
" In Gujarat, there are no resolutions corresponding to, those of 1963 and 1970 issued by the Maharashtra Government.
Civil Appeal No. 1113 of 1974 by the promotees arises court of the judgment dated January 17, 1974 of the Bombay High Court dismissing SpeCial Civil Application No. 815, of 1972 filed by them against the State and the direct re cruits.
Four Special Civil Applications were filed in the Gujarat High Court which were disposed of by it by a common judgment dated July14, 1973.
S.C. As.
1099 of 1969.
422 of1970 and 957 of 1970 were filed by the direct recruits while S.C.A. No. 1480 of 1971 was filed by the promotees. ' The promotees failed in the Bombay High Court but succeeded in the Gujarat High Court.
Both the High Courts have granted certificates of fitness for filing appeals in tiffs Court.
789 Before us, Mr. K.K. Singhvi and Mr. R.K. Garg appeared for the promotees while Mr. M.V. Paranjpe and Mr. M.K. Ramamurti appeared for the direct recruits.
Mr. M.C. Bhandare appeared for the State of Maharashtra and Mr. D.V. Patel for the State of Gujarat.
Mr. Patel took a non contentious attitude, which highlights how difficult it was for the State counsel to support any particular cause in view of the shifting stand taken up by both the State Gov ernments from time to time.
Several points were raised be,fore us and a large number of decisions were cited in support thereof, but the main question for decision in these appeals is whether departmen tal promotees and direct recruits appointed as Deputy Engi neers in the Engineering Services of the Governments of Maharashtra and Gujarat belong to the same class so that they must be treated with an even hand or whether they belong to different classes or categories and can justifia bly be treated unequally.
Concededly, they are being treated unequally in the matter of seniority because whereas, promo tees rank for seniority from the date of their confirmation the seniority of direct recruits is reckoned from the date of their initial appointment.
The disparity is indeed so glaring that though direct recruits have to successfully complete a two years ' probationary period before confirma tion, even that period is not excluded while counting their seniority.
A promotee ranks below the direct recruit even if he has officiated continuously as Deputy Engineer for years before the appointment of the direct recruit is made and even if he, the promotee, could have been confirmed in an available substantive vacancy before the appointment of the direct recruit.
Learned counsel for the direct recruits have stoutly defended the preferential treatment accorded to them by contending, inter alia, that since the promotees do.
not belong to Class II service until they are confirmed, they have no fight to.
rank for seniority along with the direct recruits who enter that class or cadre on the very date of their initial appointment.
The fact that the Government did not confirm a particular promotee even though a substan tive vacancy was available in which he could have been confirmed cannot, according to the direct recruits, make any difference to that position.
For facilitating a proper understanding of this problem it is necessary to take bird 's eye view of the various rules and resolutions which were passed by the two State Govern ments, most of which we have already noticed.
In this be half, attention has to be called particularly to: (1) The rules framed by the Government of Bombay on September 21, 1939 under section 241 (2)(b).of the Government of India Act, 1935; (2) The rules framed by the Government of Bombay on November 21, 1941 regarding fixation of seniority (3) The letter dated January 11, 1949 written by the Chief Secra tary, Government of Bombay, to the Honorary Secretary, Bombay Civil Service Association: (4) The Resolution of the Government Of Bombay dated April 29, 1960 containing Rules regarding recruitment of Class I and Class II Engineering Services and regarding fixation of seniority; (5) The 790 Resolution of the Government of Maharashtra dated July 29, 1963 laying down principles of seniority; (6) The Notifi cation dated August 21, 1965 issued by the Government of Gujarat under the proviso to.
article 309 of the Constitu tion, introducing clause 10 in the Rules of 1960; (7) The Resolution of the Government of Maharashtra dated December 19, 1970 superseding the Resolution of April 29, 1950 and framing new rules of seniority; and (8) The Circulars dated January 12, 1961, March 15, 1963 and October 18, 1968 issued by the Government of Maharashtra, converting a cer tain number of temporary posts into permanent posts from time to time.
It is common ground that except the Bombay Rules dated September 21, 1939 and the Gujarat Notification dated August 21, 1965 the rest of the rules are in the nature of execu tive instructions.
The Rules of 1941, 1960, 1963, 1965 and 1970 were not framed by the State Government concerned in the exercise of constitutional or statutory power.
The Rules of 1960 and 1970 were issued "By order and in the name of the Governor," but that does not lend support to the construction faintly suggested on behalf of the direct recruits that the two sets of rules must be deemed to have been made under article 309 of the Constitution.
All execu tive action of the Government of a Stale is required by article 166 of the Constitution to be taken in the name of the Governor.
The appeals have therefore to be disposed of on the basis that except for the Bombay rules dated September 21, 1939 and the Gujarat Notification dated August 21, 1965 the remaining rules, whether of recruitment or of seniority, are in the nature of executive instructions.
These in structions, unlike rules regulating recruitment and condi tions of service framed under the proviso to article 309 of the Constitution or section 241(2)(b) of the Government of India Act, 1936, cannot have any retrospective effect.
The 1939 rules called "Recruitment Rules of the Bombay Service of Engineers (Class I and Class II)" have constitu tional authority but being rules made to regulate the methods of recruitment", they afford no assistance in finding a solution to the rival claims to seniority laid by the promotees and direct recruits.
The rules neither fix a quota for recruitment from the two, avenues nor do they provide, in any other manner, a guideline for fixation of seniority as between appointees recruited from different sources.
Rule 10 on which the promotees rely as affording to them a guarantee in the matter of promotion is also beside the point because the crux of their grievance is not that they are denied opportunities of promotion but that they are discriminated against in the matter of seniority in comparison with the direct recruits.
By its resolution dated November 21, 1941 the Government of Bombay, Political and services Department, directed that in the case of direct recruits appointed substantively on probation, the seniority should be determined with reference to the date of appointment on probation while in the case of officers promoted to "substantive vacancies", the seniority should be determined with reference to the date of their promotion to the substantive vacancies, pro vided there has been no break in their service prior to their confirmation in those vacancies.
This Reso lution expressly 791 governed the seniority of direct recruits and promoted officers in all provincial services except the Bombay Serv ice of Engineers, Class I Since Deputy Engineers do not belong to Class I Service, their seniority was governed by the Resolution.
The wording of the Resolution leaves no doubt that the Government of Bombay applied: two different standards for fixing inter se seniority of direct recruits and promotees appointed as Deputy Engineers.
The former were entitled to reckon their seniority with effect from the. date of their initial appointment on probation while the seniority of the latter had to be determined with reference to the date of their promotion to, substantive vacancies, subject to the further qualification that there was no break in their service prior to their confirmation in those vacancies.
Thus, for purposes of seniority, the promo tees had to depend firstly on the availability of substan tive vacancies and secondly on the arbitrary discretion of the Government to confirm or not to confirm them in those vacancies.
The fact that a substantive vacancy had arisen and was available did not, proprio vigore, confer any right on the promotee to be confirmed in that vacancy.
The 1941 Rules contained the real germ of discrimination because the promotees had to depend upon the unguided pleasure of the Government for orders of confirmation.
In the pre Consti tution era, such hostile treatment had to be suffered si lently as a necessary incident of government service.
It is curious that though the 1941 rules expressly recite that the principles contained therein should be observed in determining the seniority of direct recruits and promoted officers in the provincial Services except the Class I Bombay Service of Engineers, Shri L.M. Ajgaonkar, Deputy Secretary to the Government of Maharashtra says in his affidavit dated July 25, 1973 that in practice the Rules of 1941 were never applied to Class II officers in the Engineering Service and that their seniority used to be determined by the same rules by which the seniority of Class I officers was determined.
It is difficult to accept this bare statement which is not even supported by a proper verification.
Shri Ajgaonkar 's affidavit contains an omni bus and rolled up clause of verification at the end, which detracts from the weight of his assertion.
Turning next to the letter dated January 11, 1949 writ ten by the Chief Secretary, Government of Bombay, to the Honorary Secretary, Bombay Civil Service Association, we find it difficult to uphold the claim of the _promotees that the Rules of 1941 were modified by that letter.
The letter was written in answer to, the representation dated July 28, 1948 made by the Bombay Civil Service Association to, the Government of Bombay regarding emergency recruitment to the Indian Administrative service and "other matters".
Paragraph 2 of the letter says that promotees can have no grievance in the matter of seniority since the seniority of a direct recruit to the cadre of "Deputy Collectors" vis a vis a promoted officer is determined not according to the date of confirmation but according to the principles laid down in the Rules of 1941, i.e. with reference to the date of first appointment on probation in the case of direct recruits and of continious officiation in the ease of pro moted officers.
In the first place, 792 this part of the letter on which the promotees rely deals expressly and exclusively with the case of Deputy Collectors which makes it difficult, without any further data, to extend the benefit of what is said therein to Deputy Engi neers, working in an entirely different branch of govern ment service.
The Chief Secretary 's letter is a reply to the Association 's letter which the promotees did not pro duce.
The Association had addressed its letter not to the Ministry which handled problems of Engineering Services but to the Ministry of Home and Revenue, the latter of which was concerned to consider the grievance of Deputy Collectors.
Lastly the opening sentence of paragraph 2 of the Chief Secretary 's reply shows that he was referring to a class of service in which a quota system was then operating.
Admit tedly, the quota system properly so called, did not apply either under the 1939 or under the 1941 rules to Engineering Services.
The Chief Secretary 's reply cannot, therefore improve the promotees ' case.
But we disapprove that instead of explaining the circumstances in which the reply was sent, the State Government should merely say through Shri Ajgaon kar 's affidavit that it craves "leave to refer" to the reply for its "true effect".
The Government could surely have produced the letter of the Association which would have set this part of the controversy at rest.
That takes us to the 1960 Rules which are the meat of the matter.
We have already extracted rules 6 and 8 fully but it will be necessary to recapitulate briefly the scheme of the 1960 rules.
Under these rules, the,ratio of ap pointment by nomination and promotion of both Class I and Class II Engineering Services was fixed, as far as practica ble, at 75: 25.
Candidates appointed by nomination, i.e. direct recruits, were to be on probation for two years out of which, normally, one year was to be spent on training.
On satisfactory completion of probation, the direct recruits were to be confirmed as Assistant Engineers in Class I or as Deputy Engineers in Class II, as the case may be.
For ab sorption in Class I, a Class II officer had to be in the permanent Bombay Service of Engineers, Class II cadre.
He was further required to have at least 15 years ' service to his credit in Class II in temporary and permanent capaci ties.
In addition to these qualifications, he has to be holding, at the time of his absorption in Class 1, an offi ciating divisional rank.
On such absorption the Class II officer was to be confirmed as an Executive Engineer.
The Rules of 1960 show that the seniority of Class II promotees was to be fixed below the bunch of Assistant Engineers, any one of whom was due for confirmation as an Executive Engi neer during the calendar year.
But no Class II promotee could be placed above a direct recruit recruited to Class I, who was officiating as Executive Engineer from a date earlier than the Class II promotee, Rule 8(1) says that the various categories which manned the Class I sub divisional posts were being compiled into.
two lists: (i) One list of Bombay Service of Engineers Class 1I cadre of permanent Deputy Engineers and (ii) the other list of officiating Deputy Engineers.
The future recruit ment to Class II cadre was to be made by (a) nomination of candidates recruited directly by competitive examination and (b) promotion from the list of officiating Deputy Engineers, 793 in the ratio of 2/3rd and 1/3rd respectively.
After recit ing that direct recruitment of temporary Deputy Engineers was stopped, rule 8(ii) provides that further officiating vacancies would be manned from the ranks of the Subordi nate Service of Engineers.
For this purpose a statewise Select Seniority List was to be maintained of members to the Subordinate Service of Engineers, considered fit to hold subdivisional charge.
For inclusion in this list graduates, diploma holders and non qualified persons had to have to their credit Service of not less than 3, 8 and 13 years respectively.
For confirmation as a Deputy Engineer the officer was expected to have put in not less than three years ' service as officiating Deputy Engineer.
Then comes the much debated clause (iii) of rule 8: "(iii) The probationers recruited directly to the Bombay Service of Engineers, Class II cadre in any year shall, in a bunch, be placed senior to promotees con firmed during that year.
It is patent that this clause is highly discriminatory against promotees and accords a preferential treatment to direct recruits.
Its principal justification is said to be that persons who are promoted as officiating Deputy Engi neers do not belong to Class II cadre so long as they are not confirmed as Deputy Engineers, whereas direct recruits appointed on probation as Deputy Engineers enter that class or cadre on the very date of their appointment since, on satisfactory completion of probation, confirmation is gua ranteed to them.
This contention needs careful examination.
There is no universal rule, either that a cadre cannot consist of both permanent and temporary employees or that it must consist of both. ' That is primarily a matter of rules and regulations governing the particular service in relation to which the question regarding the composition of a cadre arises.
For example, in Bishan Sarup Gupta vs Union of India(1) the cadre of Income Tax officers Class I, Grade II was held by this Court to consist of both permanent and temporary pests.
Similarly, in A.K. Subraman vs Union of India, (2) while holding that the cadre of Executive Engi neers in Class I Central Engineering Service consisted both of permanent and temporary posts, it was pointed out by this Court that a cadre may consist of permanent posts only or "sometimes, as is quite common these days, also of temporary posts".
Counsel for direct recruits relied upon a decision of this Court in Ganga Ram & Others vs Union of India(3) for showing that a cadre cannot consist of temporary posts but that decision rested on the finding, arising out of the rules contained in the Indian Railway Establishment Manual, that direct recruits and promotees constitute different classes.
The question which we have to consider at this stage is not whether direct recruits and promotees appointed as Deputy Engineers in the Bombay and Gujarat service of Engineers belong to different classes but Whether officiat ing Deputy Engineers belong to class II cadre at all.
(1) ; (2) [1975] 2 S.C.R. 979 (3) ; 794 On the state of the record in the Bombay and Gujarat appeals, such as it is, we find it difficult to hold that officiating Deputy Engineers do not belong to Class 1I cadre of the Bombay and Gujarat Service of Engineers.
In the Maharashtra writ petition, 815 of 1972, as many as four affidavits. were filed on behalf of the State Government by Shri L.M. Ajgaonkar.
These are dated July 25, December 17, December 21, 1973 and January 17, 1974.
The question whether officiating Deputy Engineers belong to Class II cadre was of the essence of the dispute in the High Court and was squarely raised by the promotees.
Yet, in none of the affidavits did the State Government say that they did not belong to Class II cadre.
The last affidavit dated January 17, 1974 was filed after the High Court had dictated its judgment in open Court for three days, and even then the affidavit is significantly silent on the question.
The only explanation of this can be that according to the State Government, officiating Deputy Engineers belong to Class II cadre.
The resolution dated November 8, 1962 issued by the Government of Maharashtra.
Buildings and Communications Department, shows unmistakably that even temporary posts of Deputy Engineers were treated as temporary additions to Class II cadre.
An additional Division with four subdivi sions was sanctioned by that resolution for construction of a section of National Highway No. 8.
Temporary posts had therefore to be created for that project for a period of one year.
The resolution says that "The posts of Executive Engineers and Deputy Engineers should be treated as tempo rary additions to their respective cadres." In so far as the Gujarat appeals are concerned, Shri N.S. Nagrani, Under Secretary to the Government of Gujarat, P.W.D., filed an affidavit dated April 28, 1970 in one of the writ petitions, 422 of 1970.
He says in that affidavit that "temporary posts are to be treated as temporary additions to the respective cadres of B.S.E. Class I and Class II", that "permanent posts are not created anew but come into existence by the conversion of the existing tempo rary posts into permanent posts" and that "both the tempo rary posts and permanent posts are two categories of posts belonging to the same cadre".
To the similar effect is the affidavit dated June 22, 1970 made in another writ petition, 1099 of1969, by Shri A.R. Bhatt, Under Secretary to, the Government of Gujarat, P.W.D. He says therein that "there are no separate categories of permanent and temporary posts of Deputy Engineers.
Temporary post of Deputy Engineers are treated as temporary additions to the G.S.E. Class II cadre.
" Pleading on behalf of the Gujarat Government, Shri Bhatt stoutly resisted the claim of direct recruits that they had prior claim for consideration for promotion to the posts of Executive Engineers on the ground that they belong to the Class II cadre while the officiating Deputy Engineers do not.
We cannot ignore these sworn assertions made solemnly by officers of the Maharashtra and Gujarat Governments.
The fact that the permanent strength of the.
cadre was deter mined on the basis of permanent posts at any given time, as for example when the Bombay 795 Government passed resolutions on March 22, 1937 and April 13, 1945 cannot detract from the position that even tempo rary posts of Deputy Engineers were treated as additions, though temporary, to Class II cadre.
The government offi cers who swore the affidavits knew of these resolutions and yet they were instructed to state, a position Which they contended for more then once, that officiating Deputy Engineers belonged to Class II cadre.
The learned counsel for the direct recruits laid great emphasis on the lists referred to in clauses (i) and (ii) o[ rule 8 for showing that officiating Deputy Engineers do not belong to Class 11 cadre of Engineering Service.
This contention has to be rejected since the point is concluded by a decision of this Court in P.Y. Joshi vs State of Maharashtra.
(1) It was contended in that case on behalf of direct recruits that officiating Deputy Engineers could only be considered as promoted to the grade of Deputy Engi neers on confirmation and therefore the 7 years ' qualifying service which they had to put in before being promoted as officiating Executive Engineers must be reckoned from the ' date of their confirmation as Deputy Engineers in support of this contention reliance was placed in that case on clause (ii) of rule 8 and it was argued that no person could be "promoted" as a Deputy Engineer unless he was first put in the list of officiating Deputy Engineers.
This argument was squarely dealt with and repelled by this Court by hold ing that the list referred to in clause (ii) of rule 8 is the same list which is referred to in the latter part of clause (i) of that rule which speaks of "future recruitment".
Consequently, a promoted officiating Deputy Engineer, who belonged to Class II cadre, was held entitled to be considered for promotion under rule 7 to the post of officiating Executive Engineer if he had put in 7 years ' qualifying service.
The eligiblity for promotion did not require that the officiating Deputy Engineer must have put in 7 years ' service after the date of his confirmation.
It must necessarily follow that "promotion" which the latter part of rule 8(i) relating to future recruitment speaks of means promotion as an officiating Deputy Engineer from the Select List prepared under clause (ii) of rule 8.
A person thus promoted from the Select List as an officiat ing Deputy Engineer is as full and complete a member of the Class II cadre as a person directly appointed as a Deputy Engineer.
In tiffs view of the matter, the prescription contained in the closing sentence of rule 8(i) that "the number of such promotions shall be about 1/3rd the number of direct recruits appointed in that year" would apply to initial appointments and cannot govern the confirmation of those who have already been appointed to Class II cadre.
In other words, direct recruits and promotees have to.
be appointed in the proportion of 75: 25 to Class II cadre, the former as Deputy Engineers and the latter as officiating Deputy Engineers, but once that is done, the quota rule would cease to apply with the result that confirmations in the posts of Deputy Engineers are not required to be made in the proportion in which the initial appointments had (1) 796 to be made.
Thus rule 8(i) only requires that for every three direct recruits appointed as Deputy Engineers only one promotee can be appointed as officiating Deputy Engineer.
The rule cannot be construed to mean that.
for every three confirmations, of Deputy Engineers, not more than one promo tee can be confirmed as Deputy Engineer.
In A. K. Subraman (supra) it was held by this Court, while interpreting rules relating to Central Engineering Service Class I, that though in cases where recruitment is made from different sources the quota system can be validly applied, the quota rule was to be enforced at the time of initial recruitment to the posts of officiating Executive Engineers and not at the time of their confirmation.
The Court further observed that there was a well recognised distinction between promotion and confirmation and that the tests to be applied for the purposes of promotion are entirely different from those that had to be applied at the time of confirmation.
If officiating Deputy Engineers belong to Class II cadre as much as direct recruits do and if the quota system cannot operate upon their respective confirmation in that cadre, is there any valid basis for applying different standards to the members of the two group for determining their seniori ty? Though drawn from two different sources, the direct recruits and promotees constitute in the instant case a single integrated cadre.
They discharge identical functions, bear similar responsibilities and acquire an equal amount of experience in their respective assignments.
And yet clause (iii) of rule 8 provides that probationers recruited during any year shall in a bunch be 'treated as senior to promo tees confirmed in that year.
The plain arithmetic of this formula is that a direct recruit appointed on probation say in 1966, is to be regarded as senior to a promotee who was appointed as an officiating Deputy Engineer, say in 1956, but was confirmed in 1966 after continuous officiation till then.
This formula gives to the direct recruit even the benefit of his one year 's period of training and another year 's period of probation for the purposes of seniority and denies to promotees the benefit of their long and valuable experience.
If there was some intelligible ground for this differentiation bearing nexus with efficiency in public services, if might perhaps have been possible to sustain such a classification.
It is interesting that time and again the State Governments themselves found it difficult to justify the hostile treatment accorded to the promotees.
In various affidavits filed on their behalf, entirely contra dictory contentions were taken, sometimes in favour of the promotees and sometimes in favour of direct recruits.
In stead of adopting an intelligible differentia, rule 8 (iii) leaves seniority to be determined on the sole touchstone of confirmation which Seems to us indefensible.
Confirmation is one of the inglorious uncertainities of government serv ice depending neither on efficiency.
of the incumbent nor on the availability of substantive vacancies.
A glaring in stance widely known in a part of our country is of a distin guished member of the judiciary who was confirmed as a District Judge years after he was confirmed as a Judge of the High Court.
It is on the record of these writ petitions that officiating Deputy Engineers were not confirmed even though substantive vacancies were available in which they could have been confirmed.
It shows that confirmation does not have to conform to any set rules and whether an employee should be confirmed or not depends on the sweet will and pleasure of the government.
797 There is no substance in the plea that direct recruits must be given weightage on the ground that the engineering services require the infusion of new blood since it is a highly specialised service.
Were it so, the Government would not have itself reduced the proportional representa tion gradually so as to tilt the scales in favour of promo tees.
Besides, the plea that engineering service is a spe cialised service is made not by the Government but by direct recruits who, obviously, are interested in so contending.
Nor indeed is the apprehension justified that the higher echelons of engineering services will in course of time be manned predominantly by promotees.
Those recruited directly as Assistant Engineers in Class I can, under the rules, officiate as Executive Engineers after 4 years ' service and are eligible for confirmation as Executive Engineers after a total service of 9 years.
Promotees can hardly ever match with that class in terms of seniority.
Learned counsel for direct recruits relied on the deci sion of this Court in B.S. Gupta vs Union of India(1) where it was observed that when recruitment is made from several sources, it may be necessary in the public interest to depart from the normal rule of seniority and to provide that dates other than the dates of appointment will determine inter se seniority of officers.
These observations have to be understood in the context which the Court itself clari fied by saying that the, problem before it was not of dis crimination in the matter of promotion from an integrated service constituted from two sources but the problem was of integrating two sources in one service by adjusting inter se seniority (p. 115).
Besides, the rule of seniority pre scribed in that case was not shown to suffer from the in firmity from which rule 8 (iii), suffers.
Reliance was also placed by the direct recruits on another decision of this Court in V.B. Badami vs State of Mysore,(2) in which it was held that in cases where rules prescribe a quota between direct recruits and promotees, confirmations for substantive appointments can only be made in clear vacancies occurring in the permanent strength of the cadre and that confirmed persons have to be treated as senior to those who are officiating.
This decision is distinguishable because it is based on the consideration that rule 9 of the Probation Rules of 1957 provided for confirmation of a probationer as a full member of the serv ice in any substantive vacancy in the permanent cadre and that rule established the exclusion of temporary posts from the cadre (p.822).
Since the cadre consisted of permanent posts only, confirmation in permanent posts necessarily determined the inter se seniority of officers.
Rule 8(ii) in the instant case adopts the seniority cum merit test for preparing the statewise Select List of seniority.
And yet clause (iii) rejects the test of merit altogether.
The vice of that clause is that it leaves the valuable right of seniority to depend upon the mere accident of confirmation.
That, under articles 14 and 16 of the Constitution, is impermissible and therefore we.must strike down rule g(iii) as being unconstitutional.
(1) ; (2) [1976]1 S.C.R. 815 798 On July 29, 1963 the Government of Maharashtra in its General Administration Department passed a resolution super seding the rules of November 21, 1941 and framing new rules for determining the inter se seniority of direct recruits and promotees.
Paragraph A of the 1963 resolution provides that the seniority of direct recruits and promoted officers should be determined according to the date of appointment on probation in the case of direct recruits and according to the date of promotion to officiate continuously in the case of those appointed by promotion, irrespective of whether the appointments are made in temporary or in permanent vacan cies.
Paragraph B of the resolution says that a list of services in respect of which special orders for fixation of seniority are in force and to which the resolution will not apply would be issued in due course.
It is contended on behalf of the Maharashtra promotees that the rules of 1963 superseded the 1960 rules by neces sary implication and therefore the State Government had no power or authority to apply the criterion of seniority fixed under the 1960 rules after their repeal by the 1963 rules.
This contention has not only the merit of plausibility but is apparently supported by an observation in P. Y. Joshi (supra) case.
We are however satisfied that the Bombay High Court was right in rejecting the contention.
The quota system was the very essence of 1960 rules and if it was desired to abrogate that system it is unlikely that the 1963 rules will not even refer to those of 1960.
The rules of 1941 having been expressly superseded by the 1963 rules, it is difficult to accept that along with the 1941 rules the resolution of 1963 would not have referred to the 1960 rules also.
Secondly, the resolution dated December 19, 1970 of the Government of Maharashtra expressly superseded the 1960 rules which shows that the latter were in force until 1970 and were not superseded by the 1963 rules.
In fact, the resolution of 1970 refers to all previous resolutions except the resolution of 1963 which shows that the latter was not applicable to engineering services.
It is true that in P.Y. Joshi 's case (supra) it was observed that the 1963 rules repealed those of 1960 but that is a mere passing observa tion.
The question in regard to such repeal did not arise for decision in that case and it appears that no argument whatsoever was addressed to the Court on this question.
None of the considerations mentioned by us were placed before the Court in that case.
We therefore agree with the High Court that the 1960 rules were not superseded by those of 1963.
We have already indicated that in Gujarat there is no resolution corresponding to that of 1963.
In the Gujarat writ petitions it was argued that the 1960 rules, though originally in the nature of executive instructions, acquired a statutory force and character by reason of their amendment by the rules of 1965 which were made by the Governor of Gujarat in exercise of the power under the proviso to article 309 of the Constitution.
This argument was rightly rejected by the High Court because all that was done by the rules of 1965 was to introduce a new rule, rule 10, in the 1960 rules.
The rules of 1960 were neither reiterated nor re enacted by the rules of 1965 and the new rule introduced into the rules of 1960 is not of such a character as to compel the inference that the rule making authority had applied its mind to be rules of 1960 with a view to 799 adopting them.
In Bachan Singh vs Union of India(1), on which the direct recruits rely, the amendment made vital changes in the main fabric of the original rules which led this Court to the conclusion that the original rules became statutory rules by incorporation.
This question is not relevant in the Maharashtra appeal since there are no rules in Maharashtra corresponding to those of 1965 in Gujarat.
The challenge to rule 33 of the rules dated December 19, 1970 framed by the Government of Maharashtra is based on grounds identical with those on which the validity of rule 8(iii) of the 1960 rules was assailed.
The rules of 1970, which supersede the rules of 1960, were framed in order (i) to alter the ratio between direct recruits and promotees which was "causing hardship" to promotees; (ii) to correct the manifest error resulting from the fact that "A large number of temporarily promoted officers both in Class I and Class II could not be confirmed in spite of permanent vacan cies being available"; and (iii) to ensure the efficiency of the engineering services as a whole.
Rule 6 provides briefly that officers who are confirmed in or who have a lien on a post will be members of the Maharashtra Service of Engineers Class I or Class II as the case may be Those who do not have such a lien and who may be officiating in any one of the cadres of Class I or Class II will be treated as temporary members of their respective cadres.
Rules 7 to 11 deal with direct appointments to the posts of Assistant Engineers Class I and Assistant Engineers Class II.
By rule 11, such appointees are to be confirmed after a training of one year and a further probation for a period of not less than one year in their respective cadres.
Rules 12 to 23 deal with appointments by promotion to Class 11 service.
Rule 12(a) as amended by the Government resolution dated January 20, 1972 provides that the cadre of Deputy Engineers will consist of (i) all officers confirmed upto the date of commencement of the rules as Deputy Engineers, whether actually working in or only having a lien on the posts; (ii) all direct recruits who have been appointed upto the date of commencement of the rules on probation against permanent posts of Deputy Engineers (iii) all officers who were offi ciating as Deputy Engineers on 30th April, 1960, provided their promotions prior to 30th April, 1960 are not deemed to be fortuitous; and (iv) those who were not promoted prior to 30th April, 1960, but who have been included in the Select Lists for the period prior to 30th April 1900 of Overseers fit to be Deputy Engineers.
RuIe 12(c) fixes the ratio between direct recruits and promotees at 34: 66 instead of 75: 25 as under the 1960 rules.
Rule 33 called "Seniority", which we have extracted already, provides that there shall be two parts of the seniority list in each cadre in Class I and Class Ii, part A of confirmed officers and part B of those who are not confirmed.
In part A the names are to be arranged with reference to the year of confirmation.
Con firmed officers are to be treated as senior to the uncon firmed officers in the respective cadres.
In part B the names are to be arranged with reference to the date of continuous officiation except where promotion in an offici ating capacity is by way of a purely temporary or local arrangement.
(1) ; 800 Rule 33, in so far as it makes seniority dependent upon the fortuitous circumstance of confirmation, is open to the same objection as rule 8(iii) of the 1960 rules and must be struck down for identical reasons.
The circulars dated January 12, 1961, March 15, 1963 and October 18, 1969 which the promotees want to be enforced are issued by the Finance Department and being in the nature of inter departmental communications, they cannot confer any right on the promotees.
The Bombay High Court was therefore right in not accepting this part of the promo tees ' case.
We also agree with the view taken by the High Courts of Bombay and Gujarat, for the reasons mentioned by them, that the rules under consideration do not in any manner violate the provisions of the Bombay Reorganisation Act, 11 of 1960.
The proviso to section 81 (6) of that Act says that the condi tions of service applicable to any person allotted to the States of Maharashtra or Gujarat shall not be varied to his disadvantage except with the previous approval of the Cen tral Government.
Neither the rules of 1960 and much less the rules of 1970 alter the conditions of service of Deputy Engineers to their disadvantage within the meaning of the proviso.
We are not unmindful of the administrative difficulties in evolving a code of seniority which will satisfy all conflicting claims.
But care ought to be taken to avoid a clear transgression of the equality clauses of the Constitu tion.
The rules framed by the State Governments were con stitutionally so vulnerable that the administration was compelled to adopt inconsistent postures from time to time leaving the employees no option save to resort to courts for vindication of their rights.
In this process, courts, high and low, had to discharge functions which are best left to the expertise of the appropriate departments of the Govern ment.
Having struck down certain rules, we do not want to take upon ourselves the task of framing rules of seniority.
That is not the function of this Court and frankly it lacks the expertise and the data to do so.
We how.
ever hope that the Government will bear in mind the basic principle that if a cadre consists of both permanent and temporary employees, the accident of confirmation cannot be an intelligible criterion for determining seniority as between direct re cruits and promotees.
All other factors being equal, con tinuous officiation in a non fortuitous vacancy ought to receive due recognition in determining rules of seniority as between persons recruited from different sources, so long as they belong to the same cadre, discharge similar functions and bear similar responsibilities.
Saying anything beyond this will be trespassing on a field which does not belong to the courts.
We would like to clarify that the list of seniority, for the period till November 1, 1956, prepared by the Maharash tra Government by its resolution dated April 10, 1970 has been approved by the Government of India.
That list would therefore govern the seniority of direct recruits and promo tees as on November 1, 1956.
Secondly, it seems to us difficult to uphold the direction given by the Gujarat High Court that interim promotions made during the pendency of writ petitions should not be disturbed until the expiration of one month from the date of the seniority as finally fixed by the Government and intimated to the con 801 cerned parties.
Interim promotions which do not comply with the constitutional requirements and which under the judgment of the Gujarat High Court are bad cannot be permitted to stand.
We accordingly set aside that direction.
These then are our reasons in support of the order which we passed on January 31, 1977.
That order reads thus: "Civil Appeal No. 1113 of 1974 is filed by the promo tees and it arises out of special Civil Application No. 815 of 1972 filed by them in the Bombay High Court.
We set aside the judgment of the High Court and allow the appeal.
Civil Appeal No. 286 of 1974 is filed by direct re cruits and it arises out of Special Civil Application No. 1099 of 1969 filed by them in the High Court of Gujarat.
We confirm the judgment of the High Court and dismiss the appeal.
Civil Appeal No. 287 of 1974 is filed by direct re cruits and it arises out of Special Civil Application No. 422 of 1970 filed by them in the High Court of Gujarat.
We confirm the judgment of the High Court and dismiss the appeal.
Civil Appeal No. 242 of 1974 and Civil Appeal No. 285 of 1974 are cross appeals.
Both of these appeals arise out of Special Civil Application No. 1418 of 1971 which was field by the promotees in the High Court of Gujarat.
Civil Appeal No. 242 of 1974 is filed by the promotees in this Court challenging the decision of the Gujarat High Court to the extent to which they failed.
Civil Appeal No. 285 of 1974 is filed by the direct recruits challenging the afore said decision to the extent to which the High Court allowed the reliefs claimed by the promotees.
We allow Civil Appeal No. 242 of 1974 partly and dismiss Civil Appeal No. 285 of 1974.
The reasons in support of the conclusions to which we have come in these appeals will be given later.
The extent to which the appeals are allowed or dismissed will become clear from those reasons.
| IN-Abs | In exercise of the power conferred by section 241(2)(b) of the Government of India Act, 1935 the Governor of Bombay framed rules called Recruitment Rules of the Bombay Service of Engineers (Class I and Class II 1939), Rule 2 laid down the method of recruitment to Class I of the Service by direct recruitment and by promotion from the existing Bombay Service of Engineers or from the Bombay Service of Engineers Class II.
Rule 10 provided that recruitment to Class II service shall be either by direct recruitment or by promo tion from (i) the Bombay Subordinate Engineering Service (ii) permanent or temporary supervisors and (iii) tempo rary engineers.
In 1941 the Government of.
Bombay passed a resolution directing that in the case of direct recruits appointed substantively on probation, seniority should be determined with reference to the date of appointment on probation, while in the case of officers promoted to substantive vacan cies, seniority should be determined with reference to the date of their promotion to the substantive vacancies provid ed there had been no break in their service prior to their confirmation in these vacancies.
In 1949 the Chief Secretary to the Government of Bombay in reply to a representation made by the Bombay Civil Service Association regarding emergency recruitment to the I.A.S. and "other matters" stated that promotees could have no grievance in the matter of seniority since the seniority of a direct recruit to the cadre of Deputy Collector vis a vis a promoted officer was determined not according to the date of confirmation but according to the principles laid down in the Rules of 1941, i.e., with refer ence to the date of first appointment on probation in the case of direct recruits and of continuous officiation in the case of promoted officers.
In April 1960, a resolution embodying the rules of recruitment to Bombay Service of Engineers Class I and Class II was passed by the Government and signed by the Under Secretary to the Government "by order and in the name of the Governor of Bombay".
They provided for direct recruitment through common competitive examination conducted by the State Public Service Commission for both classes of service as well as by promotion.
Direct recruits were to be con firmed after two.
years in their respective cadets.
The rules also provided that the ratio of appointments by nomi nation and promotion to both classes shall, as far as prac ticable, be 75:25.
Rule 8(i) says that the various catego ries which manned the Class II sub divisional posts were being compiled into two lists: (i) of Bombay Service of Engineers, Class 11 cadre of permanent Deputy Engineers and (ii) of officiating Deputy Engineers.
The future recruit ment to Class II cadre was to be made by (a) nomination of candidates recruited directly by competitive examination and (b) promotion from the list of officiating Deputy Engineers in the ratio of 2: 1.
Rule 8(ii) provides that further officiating vacancies would be manned from the ranks of the Subordinate Service of Engineers.
For this purpose of state wise Select Seniority List was to be maintained of members of the Subordinate Service of Engineers, considered fit to hold sub divisional charge.
For inclusion in this list graduates.
diploma holders and non qualified persons had to have to their credit service of not less than 3, 8 and 13 years respectively.
For confirmation as a Deputy 776 Engineer the officer was expected to have put in not less than three years ' service as officiating Deputy Engineer.
Rule 8(iii) provides that the probationers recruited di rectly to the Bombay Service of Engineers, Class II cadre in any year shall, in a bunch, be placed senior to promotees confirmed during that year.
On July 29, 1963 the Government of Maharashtra passed a resolution superseding the 1941 rules and framing new rules for determining inter se seniority of direct recruits and promotees.
On December 19, 1970 the State Government passed a resolution superseding the resolution of 1960.
Rule 33 of the 1970 rules provides that the seniority list in respect of each of Class I and Class II shall consist of: Part A confirmed officers and Part B, not confirmed officers, that Part A shall be arranged with reference to the year of confirmation and confirmed officers shall be treated as senior to the unconfirmed officers in the respective cadre and Part B, names shall be arranged with reference to the date of continuous officiation except where a promotion in an officiating capacity was by way of purely temporary or local arrangement.
Immediately after the 1960 rules were made by the Government of Bombay the State of Bombay was bifurcated into the State of Maharashtra and Gujarat.
The Government of Gujarat passed a resolution on May 1, 1960 providing that all rules, regulations, circulars etc., prevailing in the former State of Bombay will continue to operate in the new State of Gujarat until changed or modified.
In 1965 the Government of Gujarat modified the 1960 rules in exer cise of the powers conferred by the proviso to article 309 of the Constitution and introduced a new clause 10 in the 1960 rules.
On the bifurcation certain permanent and temporary posts of Deputy Engineers were allocated to the State of Gujarat.
Some of the promotee Deputy Engineers from the lower ranks were also allocated to the State of Gujarat and several of them having completed three years ' qualifying service had become eligible for confirmation under r. 8(ii) of the 1960 rules but were not confirmed.
The two appellants who were recruited as Overseers in 1953 were promoted temporarily as Deputy Engineers in 1959 and 1957 and were confirmed as Deputy Engineers in 1970.
Respondents Nos. 2 and 3, who were direct recruits, were appointed as Deputy Engineers in 1963 and 1959 and were confirmed in 1965 and 1961.
The two appellants alleged that though they had been in continuous service as Deputy Engineers since 1959 and 1957, respondents 2 and 3, who were appointed in 1963 and 1959 were shown as senior to them and that their (the appel lants ') seniority should have been fixed under the 1941 rules.
In any case the 1960 rules could not take away the right accrued to them under the rules existing at the time of their promotion in 1959 and 1957 and that r. 8(iii) of the 1960 rules and r. 33 of the 1970 rules were ultra vires articles 14 and 16 of the Constitution.
The respondents on the other hand contended that neither the 1941 rules nor 1963 rules had any application to them and that under the 1960 rules which superseded the 1939 rules, posts of Deputy Engineers were required to be filled in by direct recruits and promotees in the ratio of 75:25 and the question of seniority of the appellants could not arise until they were confirmed and their seniority fixed from the date of confirmation in terms of r. 8(iii) of the 1960 rules.
HELD:I (a) Except the Bombay Rules of 1939 and the Gujarat notification dated August 21, 1965 the rest of the rules are in the nature of executive instructions, which, unlike rules regulating recruitment and conditions of serv ice framed under the proviso of article 309 of the Constitution or section 241(2)(b) of the Government of India Act, 1935 cannot have any retrospective effect.
The rules of 1941, 1960, 1963, 1965 and 1970 were not framed by the State Government in the exercise of constitutional or statutory power.
The rules of 1960 and 1970 were issued "By order and in the name of the Governor" but that 777 does not mean that the two sets of rules must be deemed to have been made under article 309 of the Constitution.
All executive action of the Government of a State is required by article 166 to be taken in the name of the Governor.
[790 B E] (b) The 1939 rules have constitutional authority but being rules made "to regulate the methods of recruitment" they afford no assistance in finding a solution to the problem.
They neither fix a quota for recruitment from the two avenues nor do they provide in any other manner a guide line for fixation of seniority as between appointees re cruited from different sources.
Rule 10 is beside the point because the crux of the promotees ' grievance is not that they are denied opportunities of promotion but that they are discriminated against in the matter of seniority in compari son with the direct recruits.
[790 E G] (c) The departmental promotees are being treated un equally in the matter of seniority because whereas, promo tees rank for seniority from the date of their confirmation, seniority of direct recruits is reckoned from the date of their initial appointment.
The disparity is so glaring that though direct recruits have to successfully complete a two year probationary period before confirmation, even that period is not excluded while counting their seniority.
A promotee ranks below the direct recruit even if be has officiated continuously as a Deputy Engineer for years before the appointment of the direct recruit is made and even if the promotees could have been confirmed in an avail able substantive vacancy before the appointment of the direct recruit.
[789 B D] 2(a) The 1941 resolution expressly.
governed the senior ity of direct recruits and promoted officers in all provin cial services except the Bombay Service Engineers, Class I. Since Deputy Engineers do not belong to Class service, their seniority was governed by the Resolution.
[791 A] (b) The wording of the Resolution leaves no doubt that the Government of Bombay applied two different standards for fixing inter se seniority of direct recruits and promo tees appointed as Deputy Engineers, The former were enti tled to reckon their seniority with effect from the date of their initial appointment on probation while the seniority of the latter had to be determined with reference to the date of their promotion to substantive vacancies subject to the further qualification that there was no break in their service prior to their confirmation in those vacancies.
Thus, for the purposes of seniority, the promotees had to depend firstly on the availability of substantive vacancies and secondly on the arbitrary discretion of the Government to confirm or not to confirm them in those vacancies.
The fact that a substantive vacancy had arisen and was available did not proprio vigore, confer any right on the promotee to be confirmed in that vacancy.
The 1941 rules contained the real germ of discrimination because the promotees had to depend upon the unguided pleasure of the Government for orders of confirmation.
In the pre Constitution era, such hostile treatment had to be suffered silently as a necessary incident of government service.
[791 B D] (c) It is difficult to uphold the claim of the promotees that the 1941 rules were modified by the letter dated Janu ary 11, 1949.
The Chief Secretary 's letter cannot improve the promotees ' case.
[791 G] (d) The part of the letter on which the promotees rely deals exclusively with the case of Deputy Collectors which makes it difficult to extend the benefit of what is said therein to Deputy Engineers, working in an entirely differ ent branch of government service.
The Association had addressed its letter, not to the Ministry which handled problems of Engineering Services, but to the Ministry of Home and Revenue, the latter of which was concerned to consider the grievance of Deputy Collectors.
The opening sentence of paragraph 2 of the Chief Secretary 's reply shows that he was referring to a class of service in which a quota system was then operating, which did not apply either under the 1939 or under the 1941 rules to Engineering Serv ices.
[792 A C] 778 3(a) Clause 8(iii) is highly discriminatory against promotees and accords preferential treatment to direct recruits and must be struck down as unconstitutional.
(b) There is no Universal rule either that a cadre cannot consist of both permanent and temporary employees or that it must consist of both.
That is primarily a matter of rules and regulations governing the particular service in relation to which the question regarding the composition of a cadre arises.
[793 E] Bishan Sarup Gupta vs Union of India, [1973] 3 S.C.C. 1 and A. K. Subraman vs Union of India, [1975] 2 S.C.R. 979 referred to.
Ganga Ram & Ors.
vs Union of India, ; distinguished.
(c) It is difficult to hold that the officiating Deputy Engineers do not belong to Class II of the Bombay and Gujarat Service of Engineers.
[794 A] (d) The contention that in view of cll.
(i) and (ii) of r. 8 of the 1960 rules officiating Deputy Engineers do not belong to Class Ii cadre of the Bombay and Gujarat Service of Engineers must be rejected since the point is concluded by the decision of this Court in P.Y. Joshi vs State of Maharashtra It was held in that case that the list referred to in cl.
(ii) of r. 8 is the same list which is referred to in the latter part of cl.
(i) of that rule which speaks of "future recruitment".
Consequent ly a promoted officiating Deputy Engineer, who belonged to Class II cadre, was held entitled to be considered for promotion under r. 7 to the post of officiating Executive Engineer if he had put in 7 years ' qualifying service.
The eligibility for promotion did not require that the offici ating Deputy Engineer must have put in 7 years ' service after the date of confirmation.
[795 B E] (e) It must necessarily follow that "promotion" with the latter part of r. 8(i) relating to future recruitment speaks of means promotion as an officiating Deputy Engineer from the Select List prepared under r. 8(ii).
A person thus promoted from the Select List as an officiating Deputy Engineer is as full and complete a member of the Class II cadre as a person directly appointed as a Deputy Engineer.
In this view of the matter, the prescription contained in the closing sentence of r. 8(i) that "the number of such promotions shall be about 1/3rd the number of direct re cruits appointed in that year" would apply to initial ap pointments and cannot govern the confirmation of those who have already been appointed to Class II cadre.
In other words, direct recruits and promotees have to be appointed in the proportion of 75: 25 to Class II cadre, the former as, Deputy Engineers and the latter as officiating Deputy Engi neers, but once that is done, the quota rule would cease to apply with the result that confirmations in the post of Deputy Engineers are not required to be made in the propor tion in which the initial appointments had to be made.
Thus r. 8(i) only requires that for every three direct recruits appointed as Deputy.
Engineers only one promotee can he appointed as officiating Deputy Engineer.
The rule cannot be construed to mean that for every three confirmations of Deputy Engineers not more than one promotee can be confirmed as Deputy Engineer.
[795 F H, 796 A] A. K. Subraman vs Union of India [1975] 2 S.C.R. 979 fol lowed.
(f) Though drawn from two different sources, the direct recruits and promotees constitute in the instant case a single integrated cadre.
They discharge identical func tions, bear similar responsibilities and acquire an equal amount of experience in their respective assignments.
Yet clause (iii) of r. 8 provides that probationers recruited during any year shall in a bunch be treated as senior to promotees confirmed in that year.
This formula gives to the direct recruit even the benefit of his one year 's period of training and another year 's period of probation for the purposes of seniority and denies to promotees the benefit of their long and valuable experience.
If there was some intelligible ground for this differentiation bearing nexus with efficiency in public services, it might perhaps have been possible to sustain such a 779 classification.
Instead of adopting an intelligible differentia, r. 8 (iii) leaves seniority to be determined on the sole touchstone of confirmation.
Confirmation is one of the inglorious uncertainties of government service de pending neither.on efficiency of the incumbent nor on the availability of substantive vacancies.
In the instant case officiating Deputy Engineers were not confirmed even though substantive vacancies were available in which they could have been confirmed.
[796 C G] (g) There is no substance in the plea that direct recruits must be given weightage on the ground that the engineering services require the infusion of new blood since it is a highly specialised service.
Were it so, the Government would not have itself reduced the proportional representa tion gradually so as to tilt the scales in favour of promotees.
Besides, the plea that engineering service is a specialised service is made not by the Government but by recruits who are interested in so contending.
Nor is the apprehension justified that the higher echelons of engi neering service will in course of time be manned predomi nantly by promotees.
Those recruited directly as Assistant Engineers in Class I can, under the rules, officiate as Executive Engineers after four years ' service and are eligible for confirmation as Executive Engineers after a total service of 9 years.
Promotees can hardly ever match with that class in terms of seniority.
[797 A C] B.S. Gupta vs Union of India ; and V.B. Badami vs State of Mysore [1976] 1 S.C.R. 815 distin guished.
In the instant case rule 8(ii) adopts seniority cure merit test for preparing the state wise Select List of seniority and yet cl.
(iii) rejects the test of merit altogether.
The vice of that clause is that it leaves the valuable right of seniority to depend upon the mere accident of confirma tion.
That under articles 14 and 16, is impermissible and, therefore, r. 8(iii) must be struck down as unconstitu tional.
[797 G H] 4.
The High Court was right in rejecting the contention of the promotees that the 1963 rules superseded the 1960 rules by implication and, that, therefore, the State Government had no power or authority to apply the criterion of seniori ty fixed under the 1960 rules, after their repeal by 1963 rules.
The quota system was the very essence of 1960 rules and if it was desired to abrogate that system it is un likely that the 1963 rules will not even refer to those of 1960.
The rules of 1941 having been expressly superseded by 1963 rules, it is difficult to accept that along with the 1941 rules the resolution of 1963 would not have re ferred to the 1960 rules also.
Secondly, the resolution of 1970 of the Government of Maharashtra expressly superseded the 1960 rules which shows that the latter were in force until 1970 and were not superseded by the 1963 rules.
The resolution of 1970 refers to all previous resolutions except the resolution of 1963 which shows that the latter was not applicable to engineering services.
[798 C E] 5.
Rules 33 of the 1970 rules in so far as it makes seniority dependent upon the fortuitous circumstance of confirmation, is open to the same objection as r. 8(iii) of the 1960 rules and must be struck down for identical rea sons.
[800 A B] 6.
The circulars dated January 12, 1961, March 15, 1963 and October 18, 1968 which the promotees want to be enforced were issued by the Finance Department and being in the nature of inter departmental communications they cannot confer any right on the promotees.
[800 A B] 7.
The High Courts were right on the view that the rules under consideration do not in any manner violate the provisions of the Bombay Reorganisation Act.
11 of 1966.
[800 B] 8.
The argument in the Gujarat Writ Petitions that though originally the 1960 rules were in the nature of executive instructions they have acquired a statutory force and character by reason of their amendment by the rules of 780 1965 was rightly rejected by the High Court, because all that was done by the 1965 rules was to introduce a new rule, r. 10, in the 1960 rules.
The rules of 1960 were neither reiterated nor reenacted by the rules of 1965; and the new rule introduced into the rules of 1960 is not of such a character as to compel the inference that the rule making authority had applied its mind to the rules of 1960 with a view to adopting them.
[798 G H, 799 A] Bachan Singh vs Union of India, ; inap plicable.
|
Appeal No. 2462 of 1968.
Appeal by Special Leave from the Judgment and Order dated 17 5 1968 of the Allahabad High Court in First Appeal No. 13 of 1956.
M. N. Phadke, M. Qamaruddin, (Mrs.) M. Qamaruddin, M. Y. Omar, N. Aly Khan and V. M. Phadke for the appellant.
889 Lal Narain Sinha, D. P. Singh, section C. Agarwal, A. Gupta, section Mohdkazum and P. P. Singh; for the Respondent.
The Judgment of the Court was delivered by UNTWALIA, J.
This is an appeal by special leave.
Bibi Saddiqa Fatima, the appellant, was the plaintiff in Suit No. 86 of 1952 filed in the Court of the Civil Judge it Aligarh in which the defendant was Saiyed Mohammad Hasan.
He was the sole respondent in this appeal also.
He died during the pendency of the appeal and on his death his legal heirs and representatives were substituted as respondents.
For the sake of convenience hereinafter in this judgment by the respondent would be meant the original respondent.
One Smt.
Sughra Begum was a Shia Muslim Lady.
She was a resident of Asgharabad in the District of Aligarh.
She was possessed of vast Zamindari and other properties.
On October 6, 1928, she created a waqf of the entire properties dividing them in three qurras.
Raja Haji Saiyad Mohammad Mahmood Hasan was appointed by the waqifa as the Mutawalli of qurra No. 1.
His brother was appointed the Mutawalli of the second qurra.
The waqifa appointed herself the Mutawalli of the third qurra.
The dispute in this case relates to a property concerning qurra No. 1.
The Raja 's first wife was Smt.
Akbari Begum.
She died in the year 1931 leaving behind four sons and six daughters.
Raja Sahib, when he was about 50 years of age, took the plaintiff as his second wife in the year 1933.
The plaintiff, at the time of her marriage with the Raja, was a young lady of seventeen.
Raja died in September, 1939.
On January 22, 1935, a permanent lease was executed on behalf of one Saiyed Anwarul Rahman in respect of the disputed land in the name of the plaintiff.
The rent fixed was Rs. 80/ per year.
Between the years 1937 and 1939 a Kothi (Bungalow) was constructed on the said land, which was named as 'Mahmood Manzil '.
The suit property in this litigation is the said Kothi together with the land appertaining to it.
In short the plaintiff 's case is that the disputed property belongs to her.
The defendant was inducted as a tenant of the Kothi an and from 1st of March, 1947 on a rental of Rs. 60/ per month.
He paid rent upto May, 1950 but did not pay any rent thereafter.
In the year 1952, the plaintiff served a notice on the defendant to pay the arrears of rent and deliver vacant possession of the Kothi.
The defendant, in his reply, refuted the claim of the plaintiff and asserted that the Kothi did not belong to her nor was be a tenant of the same.
Hence the appellant instituted the suit for realisation of arrears of rent, damages and recovery of possession of the suit property.
The respondent, inter alia, pleaded that Raja Sahib, the.
first Mutawalli of qurra No. 1, had acquired the lease of the land and constructed the Kothi with the waqf fund as Mutawalli of the waqf.
It was a waqf property.
After the death of the Raja, the respondent became the Mutawalli of qurra No. 1 including the Kothi in question.
He occupied the Kothi as a Mutawalli and not as a tenant.
The Trial Court accepted the case of the defendant, rejected that of the plaintiff and 6 329SCI/78 890 dismissed her suit.
The ' Allahabad High Court has dismissed her appeal.
She has preferred this appeal in this Court on grant of special leave.
Shri M. N. Phadke advanced a very strenuous argument in sup port of this appeal.
Shri Lal Narayan Sinha combated his argument on behalf of the respondent.
It would be convenient to refer to some more facts and facets of the case from the pleadings of the parties and judgments of the Courts below before enunciating and enumerating the submissions made on their behalf.
The case pleaded in the plaint by the appellant was like this, Raja Sahib out of great love for the plaintiff "used to pay her a handsome amount every month as pin money and also a good deal of money occasionally.
" The plaintiff, with the object of constructing a Kothi, took on lease the disputed land measuring about 4 bighas and had been paying the annual rent of Rs. 80/ since the execution of the lease.
She pleads in para 4: "After the execution of the said lease, the plaintiff with her personal fund built a kothi and the out houses on the land mentioned in paragraph No. 3 above and named it as Mahmood Manzil after the name of her husband.
The construction of this Kothi bad been completed by May 1938, after which the plaintiff herself used lo stay in that Kothi whenever she came from Asgharabad to Aligarh." The plaintiff bad only one daughter born to her out of the wedlock with the Raja.
She is Smt.
Abrar Fatima.
She was married on the 25th May, 1950 to one Saiyed Mohammed Raza Ali Khan.
The defendant was quite obedient and faithful to the plaintiff until the marriage of her daughter.
But after the said marriage, he gradually turned hostile and thereupon the plaintiff mostly lived with her daughter.
According to the respondent 's case in his written statement the lease was taken by Raja Sahib and the sum of Rs. 786/spent on 'Nazrana ' etc.
for taking the lease was paid by him from the income of the waqf property and he constructed the Kothi from the wakf fund of Asgharabad estate.
He had neither any money of his own to invest in acquisition of the property nor was the property acquired by the plaintiff with her personal fund.
The appellant was examined on commission as a witness to support her case at the trial.
In her examination in chief, she stated that her husband used to give her Rs. 500/ per month as pin money besides, meeting her expenses regarding food and clothing.
Over and above this, he used to send money on the occasions of Id and Bakrid and also gave her money whenever she demanded.
She constructed the Kothi at Aligarh by investing about Rs. 20,000/ .
In other words she meant to convey in her examination in chief that she had acquired the land and constructed the Kothi out of the savings she had from the various amounts of money given by the Raja monthly or from time to time.
At a later stage of her deposition (probably in cross examination) she demolished her case and claimed to be in possession of Rs. 50,000/ at the time of the death of her husband, 891 which sum was her total savings out of the money paid to her monthly or from time to time by the Raja.
Thus in her evidence she could not explain as to out of which personal fund she claimed to have acquired the disputed property.
The Civil Judge framed for trial several issues out of which issues 1 and 5 were, in the following terms "1.
Whether the plaintiff is the owner of the property in suit as alleged and is she entitled to the possession claimed ? 5.
Whether the defendant possesses the disputed property as the Mutawalli ' as alleged by him The defendant 's case was that the 'Patta ' was obtained by the old Raja tinder the influence of her young wife benami in her name though it was acquired with the waqf fund.
The Raja, as Mutawalli, was the real lessee of the land.
He had constructed the Kothi out of the income of the waqf property.
A Mutawalli is not an owner of the waqf property, but whatever property of the waqf was there from before or acquired subsequently must, ordinarily, be in the name of the Mutawalli.
A property could be acquired in the name of any beneficiary, like the plaintiff, but she would be; merely a benamidar of the Mutawalli and the property will be a waqf property.
The Civil Judge has noted in his judgement that the plaintiff did not put forth a plea that the Kothi was built by late Raja out of his personal money and that she was owner, on the basis of the equitable deoctrine of advancement.
He has said further: "Thus the only point on which the parties were at issue was with respect to the source of the money out of which the patta was obtained and the building constructed and the plaintiff could succeed only if she proved that she had obtained the patta and built the kothi out of the money given to her by her late husband as pocket expenses, etc.
" The Civil Judge also remarked "Had she stated that she built the kothi out of the money which she had saved, that would have been consistent with her allegations in the plaint.
But she admitted that the whole of her savings were still with her and that out of them she had spent a little when she filed the present suit." The Trial Court, thereafter, considered the voluminous documentary evidence in the light of the oral evidence adduced and came to the conclusion that the plaintiff did not provide any money either for the lease of the land or for the construction of the Kothi thereon and that the money for both the purposes was provided out of the waqf estate.
Hence it was held, while deciding issues 1 and 5, that the plaintiff was not the owner of the Kothi in suit and the defendant was in possession of it in his capacity as the successor Mutawalli.
892 It would be advantageous to note at this stage the stand taken by the appellant in the High Court in her Memo of Appeal as also in argument.
On perusal of the grounds set out in the Memorandum of Appeal, especially ground Nos. 6, 8, 9, 11, 13 and 27, it would appear that the case made out therein was that the Raja had his personal money kept in the waqf estate treasury alongwith the waqf money.
The amount spent in constructing the Kothi was mostly taken out of the treasury from his personal fund with the intention of making his wife the owner of the property even though the doctrine of advancement did not apply in India, and that the observation of the learned Civil Judge that the plaintiff failed to prove that she did not provide any money out of her personal fund was wholly irrelevant for the decision of issue No. 1.
In argument, however, a stand like the one taken in the Trial Court was reiterated but consistently and concurrently rejected because the evidence in favour of the defendant 's case was so overwhelming to show that the lease had been taken and the Kothi had been constructed with the money coming out of the waqf fund that no other view was reasonably probable to be taken.
At one place in its judgment the High Court says "Counsel for the appellant has strongly relied on these documents in proof of the fact that the Kothi was constructed with her money and belonged to her." In the teeth of the overwhelming evidence the appellant was obliged to take 'an entirely new stand in her petition for special leave and in the argument before us.
In paragraph 23 of the petition it was stated That the case of the applicant had been that the lease was obtained with the applicant 's funds and that she had constructed the Kothi with her own money and it was also her alternative case put forward before the Hon 'ble High Court that even if it be assumed that the money utilised for constructing the Kothi did not pass directly from the plain tiff 's hand: and even if it be the finding of the Court that the money so utilised bad proceeded from Raja Mahmudul Hasan then on the admitted case of the defendant that this fund was waqf fund, the plaintiff 's claim ought to have been decreed inasmuch as on the ground that the usufruct or the profit of the waqf property though arising out of the waqf property did not belong to waqf as waqf property but it was by its very nature the property of the beneficiary and in the absence of any evidence to the contrary Raja Mahmoodul Hasan.
I held that those funds for the beneficiaries and the amount spent by him in the construction of the Kothi should be the money belonging to the applicant." Mr. Phadke made the following submissions (1) The Raja intended to acquire the land on lease and construct the Kothi for the plaintiff by investing from time to time money taken out of the waqf estate treasury, which had the effect of disbursement and payment of the money by the Mutawalli to his wife, 893 the beneficiary, for the purpose of the, acquisition of the Kohi.
The source of Money in that event is immaterial.
(2) The intention of the Raja to provide a separate Kothi to the plaintiff evidenced by numerous documents taken and standing in her name must be respected.
(3) The Raja went on giving money in driblets for construction of the Kothi by taking out the money from the waqf fund from time to time.
It was open to him to do so in accordance with clause 18 of the waqf deed Ext.
(4) The intention of the Raja is further fortified 'by the recital in his Will Ext.
(5) That there is a number of circumstances in support of the contentions aforesaid.
(6) The rules of pleading should not be too strictly applied in India and no party should be defeated on that account when both sides adduced evidence and proceeded to trial of the real issues in the case 'with their full knowledge and understanding.
(7) That there is no substantial variance in the case made out in the pleadings and the evidence and in argument either in the Courts below or in this Court.
(8) The burden of proof to displace the ostensible title of the appellant and to show that she was a benamidar was on the respondent.
In absence of any clinching evidence on either side, the ostensible title prevails.
(9) Although the doctrine of advancement does not apply in India, the Mutawalli being the owner of the waqf property had full and unlimited power of disposal over its usufruct and income.
Mr. Lal Narayan Sinha, while refuting the submissions made on behalf of the appellant, contended that it is a settled law that the question whether a particular transaction is, benami or not is purely one of fact and this Court in exercise of its jurisdiction under Article 136 of the Constitution does not, ordinarily and generally, review the comment findings of the Courts below in that regard.
Counsel submitted that the Courts below had correctly applied the Muslim law applicable to Shias in respect of the waqf property and its income.
They have rightly come to the conclusion that the suit property appertained to the waqf.
It was clear, according to the submis 894 sion of Mr. Sinha, that the parties went to trial to prove their respective cases as to whether the property had been acquired with the personal funds of the Plaintiff or those of the waqf.
The plaintiff 's case failed in view of the overwhelming evidence against her and she should not be permitted to make out an entirely new case in this Court.
He also contended, firstly, that the theory of onus probandi is not strictly applicable when both parties have adduced evidence;in such a situation it becomes the duty ' of the Court to arrive at the true facts on the basis of reasonable probabilities.
Secondly, in the instant case the strict tests to prove the benami character of the transaction cannot be applied, as, to do so will be in the teeth of the, well settled principles of Mohammedan law in relation to waqfs.
We proceed to examine the correctness of the rival contentions of the parties but not exactly in the Order it has been stated above.
It is undisputed in this case that a valid waqf was created by Smt.
Sughra Begum.
It is further indisputably clear from the waqf deed that except a portion of money which was to be spent for public, religious or charitable objects the waqf was primarily of a private nature for the benefit of the.
settler 's family and their descendants, which is called wakf alal aulad.
The ultimate object of the waqf was to spend income, if any, in the service of the Almighty God.
In Abdul Fata Mahomed vs Rasamaya (1) their Lordships of the Privy Council held that the gift to charity was illusory, and that the sole object of the settler was to create a family settlement in perpetuity.
The waqf of this kind was, therefore, invalid.
Ibis decision aforesaid caused considerable dissatisfaction in the Mohammedan community in India.
This led to the passing of the which was made retrospective in opera tion by a subsequent Act of 1930.
In view of the Validating Act of 1913 the validity of the wakf was beyond the pale of challenge.
Although in respect of the law applicable to waqfs there is some difference in regard to some matters between the Shia law and the various other schools of Mohamedan law applicable to Sunnis, in very many fields the law is identical.
After the Validating Act of 1913, on the basis of the law as it prevailed even before, creation of a waqf for the purpose of the maintenance of the members of the waqif 's family and their descendants is also a charitable purpose.
We now proceed to notice some salient features of the law as applicable to waqfs and especially of the Shias.
Tyabji 's Muslim Law, Fourth edition, Chapter X deals with waqf.
According to Shia law the waqf is irrevocable after possession is given to the beneficiaries or the Multawalli.
The settler divests himself of the ownership of the property and of everything in the nature of usfufruct from the moment the wakf is created.
In purely metaphorical sense the expression "ownership of God" is used but unlike Hindu Law, since conception of a personal God is not recognized, there is no (1) 22 Indian Appeals, 76. 895 ownership of God or no property belongs to God in the jural sense, although "the ownership of the property becomes reverted in God as he is originally the owner of all things" (vide page 523).
The Shia authorities considered the property as transferred to the beneficiaries or to the object of the, waqf.
Strictly speaking, the ownership of the waqf property has no jural conception with any exactitude.
The corpus is tied 'down and is made inalienable.
Only the usufruct and the income from the corpus of the waqf property is available for carrying out the objects of the wakf.
The Sharaiu 'l Islam says "Waqf is a contract the fruit or effect of which is (a) to tie up the original and (b) to leave its usufruct free " "the waqf or subject of appropriation (corpus) is transferred, so to become the property of the mowkoof alehi, [or 'person on whom the settlement is made '] for he has a right to the advantage or benefits (usufruct) to be derived from it." (vide page 494, In the foot note at the same page occurs a passage which runs thus "But it should not be overlooked that question about ownership of property after dedication, refers merely to scientulla juris, supposed to remain undisposed of although entire usufruct, (all benefits, & C.) are assigned away.
Question in whom property rests, therefore, entirely academical.
" Mutawalli is like a Manager rather than a trustee (see page 498).
The Mutawalli, so far as the waqf property is concerned, has to see that the beneficiaries got the advantage of usufruct.
We have already pointed out that under the Shia law the property does not remain with the waqif.
It is transferred to God or to the beneficiaries.
At page 554 of Tyabji 's famous book it is stated : "The support and maintenance of the waqf 's family, & c. would seem under the Act to be deemed a purpose recognized by the Muslim law as religious, pious or charitable : section 2.
This view was put forward by Ameer Ali, J., with great learning in his dissenting judgment in Bikani Mia 's case." ' Section 527 at page 593 runs thus "The mutawalli has no ownership, right or estate in the waqf property: in that respect he, is not a trustee in the technical sense : he holds the property as a manager for ful filling the purpose of the waqf.
" A contrary statement of law at page 202 of Mullas Mohamedan Law, seventeenth edition based on the decision of the Allahabad High Court in Mohammad Qamar Shah Khan vs Mohammad Salamat Ali Khan(1) (1) A.I.R. 1933 Allahabad 407.
896 to the effect that "the mutawalli is not a mere superintendent or manager but is practically speaking the owner" is not correct statement of law.
In a later Full Bench decision of the same court in Moattar Raza and others vs Joint Director of Consolidation, U.P. Camp at Bareilly and others(1) while over ruling the earlier decision, it has been said at pages 513 14 : "the legal status and position of a mutawalli under a waqf under the Musalman Law is that of a Manager or Superintendent.
" The general powers of the Mutawalli as mentioned in section 529 of Tyabji 's book are that he "may do all acts reasonable and proper for the protection of the wakf property, and for the administration of the waqf.
" It will be useful to point out the Law as regards, distribution of distributable income of the waqf properties amongst the beneficiaries as mentioned in the various subsections of section 545 at pages 606 608.
Unless a different intention appear, subsection (4) says: "The benefit of a waqf for a person 's "sons and his children, and the children of his children for ever so long as there are descendants, is taken per capita, males and females taking equally and the children of daughters being included.
" Attention must be called to an important statement of law in the well known authoritative book of Mohamedan Law by Ameer Ali Vol. 1, fourth edition, page 472.
It runs thus : "It is lawful for a mutawalli with the income of a waqf to erect shops, houses, & c., which may yield profit to the waqf, as all this is for the benefit of the waqf.
All properties purchased by the mutawalli out of the proceeds of the waqf become part of the waqf and are subject to the same legal incidents as the original waqf estate." Mr. Phadke cited the decision of this Court in Ahmed G. H. Ariff & Ors.
vs Commissioner of Wealth Tax, Calcutta(2) and contended that the right of the beneficiaries to get money out of the income of the waqf property for their maintenance and support was their property.
In our opinion the case does not help the appellant at an in regard to the point at issue.
A hanafi Muslim had created a wakf alalaulad and on a proper construction of the relevant clauses in the waqf deed it was held that the aliquot share of the income provided for the beneficiaries was not meant merely for their maintenance and support but even if it was so, it would be an asset within the meaning of section 2 (a) of the Wealth Tax Act, 1957.
The definition of the term 'asses, was very wide in the Wealth Tax Act.
The share of the income which a beneficiary was getting under the said waqf was assessable to income tax and following the particular method of evaluation it was held to be an asset for the purposes of the Wealth Tax.
The question at issue in the present case is entirely different as will be shown and discussed (1) A.I.R. 1970 Allahabad, 509.
(2) ; 897 hereinafter.
But in support of what we have said above in relation to the waqf property and the position of the Mutawalli we may quote a few lines from tills judgment also which am at page 24 : "As mentioned before, the moment a wakf is created, all rights of property pass out of the Wakif and vest in the Almighty.
Therefore, the Mutawalli has no right in the property belonging to the wakf.
He is not a trustee in the technical sense, his position being merely that of a superintendent or a manager.
" It would be convenient to briefly discuss the questions of fact and the evidence in relation thereto before we advert to the discussion of some other questions of law argued before us on either side as those principles of law will be better"appreciated and applied in the.
background of the facts of this case.
As has been stated already the evidence is overwhelming on the question as to what was the source of money for the acquisition of the disputed property, either the land or the kothi.
It came from the waqf fund.
This position could not be seriously challenged before us.
What was argued will be alluded to a bit later.
We may just cursorily refer to some, of the pieces of the evidence on the question aforesaid.
A 35 is a written direction by the Raja to Mahmud Syedullah Tahvildar directing him to debit a sum of Rs. 741/ to his personal account for the acquisition of the.
plot in question.
The details of the expenses and the Nazrana money are given therein.
The payment was from the funds of the waqf estate.
But the Raja made a feable and futile attempt to get this debit entry made as a repayment of the loan money said to have been advanced by him to the waqf estate.
The High Court as also the Trial Court has rightly remarked that the entry like Ext.
A443 was got made by the Raja in the account books of the waqf estate as a fictitious countervailing entry in his attempt to show that some of the sums of money which he had withdrawn from the waqf estate were on account of the repayment of his alleged loans.
The High Court has rightly pointed out that they were all fictitious entries.
Mr. Phadke endeavored to show that the approximate gross income of the waqf estate was not Rs. 43,515/ as is shown by the High Court but it was in the neighbourhood of Rs. 58,000/ .
We shall accept it to be so.
Thus the net distributable income at the disposal of the Raja was about Rs. 30,000/ instead of Rs. 15,5101 mentioned in the judgment of the High Court.
There were 13 beneficiaries in qurra No. 1 of which the Raja was the Mutawalli.
In that capacity he was getting a monthly allowance of Rs. 70/ only from the estate account.
He bad no other personal property or source of income from which he could advance any loan to the waqf estate.
Nor could it be shown that the waqf estate at any point of time was in need of any loan from the Raja.
Therefore, the attempt of the Raja to put a show of acquiring the land in the name of his young wife out of his personal money was a very crude attempt to disguise the real source of that 898 money.
The concurrent findings of the Courts below that the expenses for the acquisition of the lease were incurred from the waqf estate funds could not be successfully assailed.
The High Court has referred next to the question of payment of rent of the land to the lessor.
The plaintiff produced six rent receipts.
13 and 14 were of the year 1952 when disputes between the parties had started.
As regards four other receipts the High Court was inclined to believe the explanation of the defendant that the plaintiff had surreptitiously obtained their possession.
On the other band, the defendant filed four rent receipts of the period when the Raja was alive.
Since the lease had been taken in the name of the plaintiff, naturally all the receipts were in her name.
The High Court has also referred to the satisfaction of a decree for rent obtained by the lessor in a suit instituted against the plaintiff as well as the defendant and has come to the conclusion that the entire decretal amount, the expenses of the auction sale and the costs were deposited in the Court out of the waqf fund.
Then comes the evidence regarding the construction of the Kothi.
All documents for obtaining permission from 'be Municipal Board and for electric connection etc.
obviously stood in the name of the plaintiff as the lease wag, standing in her name.
As in the High Court, so here, Mr. Phadke strongly relied upon those documents to show that the Kothi was constructed for and on behalf of the plaintiff.
As already stated the stand in the High Court was, that it was constructed with her money.
Here it was a completely different stand.
It was urged that the money came from the waqf fund but as and when the money was being spent by the Raja for the construction of the Kothi it amounted, in law, as payment of the money by the Raja to his wife and the construction of the Kothi should thus be treated as having been made with her money.
We shall scrutinize the correctness of this branch of the argument a bit later.
Numerous documents are mentioned in the judgments of the Trial Court as also of the High Court to show that every bit of expenditure in the construction of the Kothi came out of the ' waqf fund under the direction of the Raja.
We need not discuss these documents in any detail as the concurrent finding of the Courts below could not be assailed in face of these documents and that led the appellant to make a somersault here and to take an ingenuous stand.
These documents are Ext.
A 449 series; Ext.
A 450 series; Ext.
A 452; Ext.
A 453; Ext.
A 455; Ext.
A 458; Ext.
A 460; Ext.
A 463; Ext.
A 486; Ext.
A 491; Ext.
A 493 series; Ext.
A 495 and Ext.
A 518.
A 3 shows that Ramlal, a mason who had worked as a contractor in the construction of the Kothi instituted a suit for recovery of Rs. 2,917/10/ , the amount which was not paid during the life time of the Raja.
The suit was instituted in the year 1941.
It was decreed in 1942.
A 36, A 43 and A 44 are the receipts in proof of the fact that eventually the decree was satisfied by the defendant on payment of money to Ramlal.
A 45 is a similar receipt dated January 2, 1942 showing payment of Rs. 923/ by the defendant to Zafaruddin in satisfaction of his decretal dues on account of the construction of the Kothi.
The 899 plaintiff 's claim of the payment of Rs. 2,000/ to Ramlal was too slippery to be accepted by the Courts below and it need not detain us either.
The High Court has also relied upon two letters Exts.
A 28 and A 27 written by the Raja to the Supervisor of the building operations indicating that if the foundation of the Kothi was not laid within a certain time, loss would be caused to the Riyasat namely the waqf estate.
It may be emphasised here that the countervailing fictitious entries got made by the Raja were very few and far between and the entire amount spent in the acquisition of the Kothi which was in the neighbourhood of Rs. 21,000/ (both for the land and ,the building) could not be.
shown to be the personal money of the Raja by this spurious method.
A major portion of the total amount obviously, clearly, and admittedly too, had come from the waqf fund., And that compelled the appellant to take an entirely new stand in this Court.
We now proceed to deal with the new stand.
It is necessary in that connection to refer to some of the important recitals in Ext.
A 2 the waqf deed.
In the preamble of the document it is recited that the waqf is being created with some religious purposes and for the regular support and maintenance of the descendants of the waqif for all times to come so that they may get their support from generation to generation.
The ultimate object is for charitable purposes in the service of the God Fisaliilah.
After referring to the Act of 1913 it is stated : "Hence the entire property given below having become Waqf Alal aulad in perpetuity, has become, uninheritable and non transferable".
Each Mutawalli of his respective qurra was appointed " the principal manager with full and complete powers of entire waqf property." From clauses 7 and 13 of the waqf deed it was rightly Pointed out on behalf of the appellant, and not disputed by the respondent either, that Rs. 6,000/ amiually had to be spent by Mutawalli of qurra No. 1 for the religious purposes mentioned therein.
This was the first obligation of the Mutawalli before he could apply the rest of the usufruct in the support and maintenance of the family beneficiaries.
Then comes the most important clause in the waqf deed namely clause 18.
The said clause as translated and printed in the paper book runs as follows "Syed Mahmood Hasan the Mutawalli of the, first lot is vested with the power to fix stipends for his children and their descendants and for his wives during his life time whatsoever he pleases or to lay down conditions by means 0 a registered document or may get any writing kept reserved in the custody of the district judge, so that after him it be binding upon every Mutawalli, such in case he might not get any writing registered or kept in the custody of the district judge of the district, then under such circumstances the twenty percent (20%) of the income of the waqf property having been set apart for the expenditure of collection and realisation and right of the, Mutwalliship and the amount of Rs. 6,000/ (Rupees six thousand) for meeting 900 the expenditure of Azadari ' as detailed at para No. 7 above; the entire remaining will be distributed among the heirs of Mahmood Hasan according to their respective legal share provided under Mohammadan Law.
" The High Court referring to this clause has said that the power given to the Raja in clause 18 could be exercised by him during his life time in the fixation of the stipends but it was to come in operation after his death.
With the help of learned counsel for both sides,.
we looked into the original clause 18 and found that there is some inaccuracy in the translation as made and printed in the paper book.
But substantially there is not much difference.
Correctly appreciated, the meaning of the clause is that Saiyed Mohammad Hasan, the Raja, was given a special power and right to fix stipends for his children, wives and descendants either by a registered document and or by a document in writing kept in the custody of the District Judge so that after him it may be binding on every subsequent Mutawalli.
If he failed to do so, then after setting apart 20% of the gross income to meet the expenditure of collection and realisation and Rs. 6,000/the charitable expenditure mentioned in clause 7, the balance was to be distributed amongst the heirs of Saiyed Mohammad Hasan according to their respective legal shares provided under the Mahomedan law.
The bone of contention between the parties before us was that according to the appellant such a power of fixation of stipends for the wives and children was given to the Raja even to be operative during his life time, while according to the respondent it was only to be effective after his death.
We do not think it necessary to meticulously examine the terms of clause 18 and resolve this.
difference.
We shall assume in favour of the respondent that, in terms, the power was given which was meant to be operative after his death.
But then, does it stand to reason that he had no such power during his life time ? On a reasonable view of the matter, either by way of construction of clause 18, or as a necessary implication of it, we find no difficulty in assuming in favour of the appellant that the Raja was vested with the power to fix stipends for his children and their descendants and for his wives during his life time also.
A question, however, arises was this power completely unfettered, unguided and not controlled by the general principles of Mohamedan law ? Apart from the fact that in clause 27 of the waqf deed it is specifically mentioned that any condition or phrase laid down in any of the paras of the waqf deed was not meant to go against the, Mohamedan law and was not to be of any effect, if it did so, it is difficult to conclude that the Raja was conferred an absolute power or discretion to fix any stipend for any beneficiary and no stipend for some beneficiary.
Equality amongst all is a golden thread which runs throughout the Mohamedan law.
It is a chief trait of that law.
We have already pointed out from Tyabji 's book that each beneficiary was entitled to share the usufruct of the waqf property per capita.
The Power given to the Raja under clause 18 had to be reasonably exercised within a reasonable limit of variation according to the exigencies and special needs of a particular beneficiary.
He had no power to spend money quite disproportionately for the benefit of one 901 beneficiary may she be his young wife or young daughter or be he a young son.
He had no power to spend money for acquisition of any immovable property for a beneficiary.
No income from the waqf estate could be, spent for acquisition of an immovable property, and particularly a big property with which we are concerned in this case, to benefit only one beneficiary ignoring the others who were about a dozen.
The money had to be spent equitably for the support and maintenance of each and every beneficiary.
Of course, the Raja had the discretion to spend more money say on the education of a particular beneficiary it was necessary to do so or for the treatment of an ailing one.
There it would be preposterous to suggest that money bad to be equally spent.
It is, however, difficult to spell out from Clause 18, as was argued by Mr. Phadke, that the Raja should be deemed to have fixed as stipends for the young lady all the numerous sums of money spent from time to time in the various items of the acquisition of land or the construction of the Kothi.
Such a construction will, not only militate against the tenets of the Mahomedan law as quoted from Ameer Ali 's book, but would be obviously against the spirit of clause 24 of the waqf deed itself.
The said clause says "If any property will be purchased out of the funds of the State, it shall also be deemed to be property included in and belonging to the waqf.
It shall not become the private or personal property of any one.
" Taking a permanent lease of the land and constructing a Kothi thereupon to all intents and purposes, is a purchase of the property out of the funds of the estate.
It will be a startling proposition of Mahomedan law to cull out from clause 1 8 of the waqf deed that a property acquired obviously and clearly out of the funds of the waqf estate in the name of one of the beneficiaries should be treated as having been acquired for him or her in exercise of the power under clause 18.
It should be remembered that apart from the properties which were mentioned in the waqf deed and which had been tied and made inalienable if any further property was to be acquired, in the, eye of law, according to the concept of Mahomedan law, there was no legal entity available in whose name the property could be acquired except the Mutawalli or the beneficiary.
Unlike Hindu law, no property could be acquired in the name of the God.
Nor could it be acquired in the name of any religious institution like the waqf estate.
Necessarily the property had to be taken in the name of one of the living persons.
Ordinarily and generally the acquisition of property out of the waqf funds should have been made in the name of the Mutawalli.
But it did not cease to be, a waqf property merely because it was acquired in the name of one of the beneficiaries.
We are empbasizing this aspect of the matter at this stage to point out that the law relating to benami transactions, strictly speaking, cannot be applied in all its aspects to a transaction of the kind we are concerned with in this case.
We, however, hasten to add that even if applied, there will be no escape from the position that the real owner of the property was the Raja in his capacity as Mutawalli and the plaintiff was 902 a mere benamidar.
The property in reality, therefore, belong to the waqf estate as concurrently and rightly held by the two courts be low.
It is a very novel and ingenuous stand which was taken in this Court to say that all money spent from time to time in acquiring the land and constructing the Kothi was payment by the Raja as Mutawalli to his wife and therefore the property must be held to have been acquired by the lady herself out of her own personal fund.
At no stage of this litigation except in this Court such a case was made out in pleading or evidence or in argument.
The defendant was never asked to meet such a case.
Parties went to trial and evidence was adduced upon the footing that the plaintiff claimed that out of the money given to her by the Raja as pin money or on the occasions of festivals or otherwise she had saved a lot and out of those savings she had spent the money in acquiring the property.
The defendant asserted and proved that the case of the plaintiff was untrue and that all the money came from the waqf fund directly to meet the cost of the ac quisition of the property.
In such a situation it is difficult to accept the argument put forward by Mr. Phadke that pleadings 'should not be construed too strictly.
He relied upon three authorities of this Court in support of this argument namely, (1) Srinivas Ram Kumar vs Mahabir Prasad and others(1); (2) Nagubai Ammal & others vs B. Shama Rao & others(2), and (3) Kunju Kesavan vs M. M. Philip I.C.S. and others(3).
Let us see whether any of them helps the appellant in advancing her case any further.
In the case of Srinivas Ram Kumar (supra) the suit for specific performance of the contract failed.
The defendant had admitted the receipt of Rs. 30,000/ .
In that event, it was held that a decree could be passed in favour of the plaintiff for the recovery of Rs. 30,000/ and interest remaining due under the agreement of loan pleaded by the defendant, even though the plaintiff had not set up such a case and it was even inconsistent with the allegations in the plaint.
The Trial Court had passed a decree for the sum of Rs. 30,000/ .
The High Court upturned it.
In that connection, while delivering the judgment of the Court, it was observed by Mukherjea J., as he then was, at page 282 : "The question, however, arises whether, in the absence of any such alternative case in the plaint it is open to the Court to give him relief on that basis.
The rule undoubtedly is that the Court cannot grant relief to the plaintiff on a case for which there was no foundation in the pleadings and which the other side was not called upon or had an opportunity to meat.
But when the alternative case, which the plaintiff could have made, was not only admitted by the defendant in his written statement but was expressly put forward as an answer to the claim which the plaintiff made in the suit, there would be nothing improper in giving the plaintiff a decree upon the case which the defendant him self makes." (1) ; (2) ; (3) [1964]3 S.C.R. 634. 903 In the instant case, there is no question of giving any alternative relief to the plaintiff.
The relief asked for is one and the same.
The plaintiff claimed that she had acquired the property with her personal funds.
The defendant successfully combated this case.
He had not said anything on the basis of which any alternative relief could be given to the plaintiff.
The facts of the case of Nagubai Ammal (supra) would clearly show that the decision of this Court does not help the appellant at all.
The respondent did not specifically raise the question of his pending in his pleading nor was an issue framed or.
the point, but he raised the question at the very commencement of the trial in his deposition, proved relevant documents which were admitted into evidence without any objection from the appellants who filed their own documents, cross examined the respondent and invited the Court to hold that the suit for maintenance and a charge and the connected proceedings evidenced by these documents were collusive in order to avoid the operation of section 52 of the Transfer of Property Act.
The matter was decided with reference to section 52.
In such a situation it was held by this Court that the decisions of the Courts below were correct and in the facts and circumstances of thecase the omission of the respondent to specifically raise the questionof his pending in his pleading did not take the appellants by surprise.
It was a mere irregularity which resulted in no prejudice to the appellants.
In the instant case no body at any stage of the litigation before the appeal came up to this Court had taken any stand or said a word any where that money spent in acquisition of the property was the personal money of the plaintiff because as and when the sums were spent they went on becoming her personal money.
The evidence adduced and the stand taken in arguments were wholly different.
No party had said anything on the lines of the case made out in this Court.
Similar is the position in regard to the decision of this Court in the case of Kunju Kesavan.
At page 648 Hidayatullah J., as he then was,has stated, "The. parties went to trial fully understanding the central fact whether the succession as laid down in the Ezhava Act applied to Bhagavathi Valli or not.
The absence of an issue, therefore, did not lead to a mis trial sufficient to vitiate the decision.
" It was further added that the plea was hardly necessary in view of the plea made by the plaintiff in the replication.
Mr. Lal Narayan Sinha placed reliance upon the decision of this Court in Meenakshi Mills, Madurai vs The Commissioner of Income tax, Madras(1) in support of his submission that the question of benami is essentially a question of fact and this Court would not ordinarily and generally review the concurrent findings of the courts below in that regard.
Mr. Phadke submitted that his case was covered by some exceptionscarved out in the decision of the Federal Court in Gangadara Ayyarand others vs Subramania Sastrjgal and others.(2) (1) ; (2) A.T.R. 904 In our opinion it is not necessary to decide as to on which side of the dividing line this case falls in the light of the principles enunciated, in the case aforementioned.
Truly speaking, the concurrent findings of the Courts below on the, primary facts could not be seriously challenged.
They are obviously correct.
But a new stand was taken on ' the basis of clause 18 of the waqf deed which we have already discussed and rejected.
Mr. Phadke, heavily relied upon clause 19 of the Win dated 17 6 1938 Ext.
15 executed by the Raja fixing various amounts of stipends to be paid to the beneficiaries after his death.
He had executed two other wills prior to this Will.
In an earlier litigation, a question had arisen as to which Will would prevail the first one or the last one.
The amounts fixed for the plaintiff in the last Will was much higher than the amount fixed for her in the first Will.
in an earlier judgment dated 3 9 1949 Ext.
3 which was a judgment inter partes it was held that the amount fixed in the first Will would prevail.
Clause 18 of the waqf deed was also interpreted in a particular manner.
Mr. Lal Narayan Sinha endeavoured to use this judgment operating as res judicata in regard to some of the questions falling for decision in this litigation.
We do not propose to make use of that judgment in that form.
Nor do we propose to express any final opinion as to which amount of stipend was effective the first one or the last one.
shall assume in favour of the plaintiff that the. amount fixed by the last Will was effective and binding on the subsequent Mutawalli.
We are, however, concerned to read clause 19 of the last Will which runs as follows "My wife Siddique Fatima has got a kothi known as (main (?) Shagird Pasha in mauza Doodhpur (paper torn) by taking on perpetual lease.
I or the state has no concern with the same.
It has been 'constructed by her with her own funds.
All the articles lying there belong to her and have been purchased by her from her own money.
I have certainly given some articles to her which belonged to me personally.
In short all the articles, of whatever sort they may be are her property and nobody has got any right in respect thereof because the state or any one else has got no concern or right in respect thereof.
Hence she(?) has got the right to dispose the same off or to make a waqf of the same.
She may give it to any of my sons, who renders obedience and service to her or may give the same to any of my grandsons.
My other heirs shall have no right in respect thereof.
If any body brings, any claim, in order to harass her, the same shall be false.
" Let us see whether this clause advances the case of the appellant any further.
On a close scrutiny, it would be found that it directly demolishes her stand taken in this Court.
The recital by the Raja in clause 19 is that his wife bad taken the perpetual lease and constructed the kothi with her own funds.
All the articles lying there have been purchased by her from her own money.
He had certainly given some articles to her which belonged to him personally.
There is 905 no recital that the Raja had constructed the kothi ',for the plaintiff out of his own funds nor was there a recital that he had constructed the kothi by taking the money from the waqf estate and treating it as payment of stipends to her as and when the sums of money were paid.
By no stretch of law such a recital could create a title in favour of the plaintiff and finish the right of the, waqf to the property.
The recital was demonstrably false and could not bind the subsequent Mutawalli.
If the property became the acquired property of the waqf a Mutawalli,as the Raja was, by his mere declaration contained in clause 19 ofthe Will could not make it a property of the lady.
The recital of fact could be pressed into service only to lend additional support to the plaintiff 's case if she would have stuck to that case and proved it by evidence aliunde.
The appellant 's counsel relied upon the various circumstances to, advance her case in this Court the foremost of them is based upon clause 18 of the waqf deed, which we have already dealt with.
It was next contended that the real question was that the property was of waqf alal aulad of which the main object was the maintenance and support of the members of the settler 's family and to tie up the corpus of the property in perpetuity so as to, make it inalienable.
The Raja, however, according to the submission was left free duringhis life time to make disbursement of the income in any manner he chose and liked.
Acquiring a property with the waqf fund was the fulfillment of the object of the wakf.
It was a part of making a provision for the maintenance and support of the wife of the Mutawallii.
It was an integral part of the object of the waqf and was not in breach of the trust.
We are not impressed with this argument and have already dealt with it in the earlier portion of this judgment.
True it is that the property was not acquired by the sale of the corpus of any of the waqf property but even acquisition of an immovable property directly with the, waqf fund was an accretion to the waqf property.
The Raja had no power while administering the waqf to acquire a property for a particular beneficiary by way of maintenance and support of such a beneficiary.
As indicated earlier, a Mutawalli of a waqt although not a trustee in the true sense of the terms is still bound by the various obligations of a trustee.
He like a trustee or a person standing in a fiduciary capacity, cannot advance his own interests or the interests of his close relations by virtue of the position held by him.
The use of the funds of the waqf for acquisition of a property by a Mutawalli in the name of his wife 'would amount to a breach of trust and the property so acquired would be treated as waqf property.
In the tenth edition of The Law of Trusts by Keaton and Sheridan it has been pointed out at page 329, Chapter XX "The general rule that a trustee must not take.
heed of one beneficiary to the detriment of others has already been discussed.
Put in another way, the rule implies that although a trustee, may be the servant of all the beneficiaries, he is not the servant of any one of them, but an arbitrator, who must hold the scales evenly.
" The position of the Mutawalli under the.
Mahomedan law is in no way different and all the beneficiaries are entitled to benefit equally, 7 329 SCI/78 906 of course, subject to the special power conferred on the Mutawalli as the one provided in clause 18 of the waqf deed and to the extent and in the manner interpreted by us above.
Exhibit A 22 an account of daily expenses incurred in the construction of the Kothi was attacked as a spurious document.
we do not attach much importance to Ext.
A 22 in face of the other pieces of evidence to indicate that the expenses were all met from the waqf fund.
It is not necessary to lay any stress on Ext.
A 22 Our attention was drawn to some statements made in the testimony of the defendant himself who was examined as D.W. 2 and D.W. 1the brother of the Raja.
It may be mentioned here that Hamid Hasan brother of the defendant was examined at P.W.3.
The plaintiff had examined herself in the house in which P.W. 3 was living and in his presence.
Without discussing in any detail a few lines here for a few lines there in their evidence, suffice it to say that their evidence could not and did not establish the plaintiffs case as made out in the Courts below nor did they lend any support to the new case made out here.
We, therefore, do not think it necessary to encumber this judgment by a detailed discussion of the evidence, because it has all been dealt with in full by the Trial Court and to a large extent by the High Court also.
We now proceed to consider, the law of benami prevalent in India and especially in regard to acquisition of a property by the husband in the name of the wife.
We would also in this connection be discussing whether the, doctrine of advancement is applicable in India or any principle analogous to that can be pressed into service on behalf of the appellant as was sought to be done by her learned counsel.
Alongwith the discussion of the points aforesaid, we shall be adverting to the appellant 's argument of burden of proof being on the person to prove that a transaction which is apparent on the face of the document of title is not a real one but a benami deal.
In conclusion, we shall show that neither the Trial Court nor the High Court has deviated from the application of the well settled principles in this regard, although at places the Trial Court seems to have apparently thrown the onus on the plaintiff.
But as a matter of fact neither of the two Courts below has committed any error in the application (,it the real principle.
In Gopeekrist Gosain and Gungaparsaud Gosain(1) it was pointed out as early as 1854, at page 72 : "It is very much the habit in India to make purchases in the names of others, and, from whatever cause or causes the practice may have arisen, it has existed for a series of years, and these transactions are known as "Benamee transactions." Lord Justice Knight Bruce proceeds to observe further at Pages 7475 that if the money for acquisition of property has been provided by a person other than the individual in whose name the purchase was effected and if such a person was a stranger or a distant relative of the person providing the money,, "he would have.
been prima (1)6 Moore 's Indian Appeals, 53. 907 facia a trustee".
It was observed further that even when the purchaser was the son of the real purchaser the English doctrine of advancement was not applicable in India.
This case was followed by the Board in Bilas Kunwar and Desraj Ranjit Singh and others(1) Sir George Farwell has said at page 205 : "The exception in our law by way of advancement in favour of wife or child does not apply in India : Gopeekrist vs Gangaparsaud; (1854) 6 Moo, Ind. Ap.
53 but the relationship is a circumstance which is taken into consideration in India in determining whether the transaction is benami or not.
The general rule in India in the absence of all other relevant circumstances is thus stated by Lord Campbell in Dhurm Das Pandey vs Mussumat Shama Soondari Dibiah (1843) 3 Moo.
Ind. Ap. 229; "The criterion in these cases in India is to consider from what source the money comes with which the purchase money is paid." Lord Atkinson reiterated the same view in Kerwick and Kerwick (2) at page 278 in these terms : "In such a case there is, under the general law in India, no presumption of an intended advancement as there is in England.
" It will be useful to quote a few lines from the judgment of the Judicial Committee of the Privy Council delivered by Sir John Edge in the case of Sura Lakshmiah Chetty and others vs Kothandarama Pillai ( 3 ) The lines occurring at page 289 run thus : "There can be no doubt now that a purchase in India by a native of India of property in India in the name of his wife unexplained by other proved or admitted facts is to be regarded as a benami transaction, by which the beneficial interest in the property is in the husband, although the ostensible title is in the wife.
The rule of the law of England that such a purchase by a husband in England is to be assumed to be a purchase for the advance ment of the wife does not apply in India.
" In the well known treatise of the law of Trusts referred to above the learned authors say at page 173 : "The best example of a trust implied by law is where property is purchased by A in the name of B; that is to say, A supplies the purchase money, and B takes the conveyance.
Here, in the absence of any explanatory facts, such as an intention to give the property to B, equity presumes that A intended B to hold the property in trust for him.
" It may here be made clear that much could be said in favour of the appellant if the Raja would have acquired the property with his own money intending to acquire it for her.
But such an intention was of (1) 42 Indian Appeals, 202.
(2) 47 Indian Appeals, 275.
(3) 52 Indian Appeals, 286.
908 no avail to the appellant when the money for the acquisition of the property came from the coffers of the waqf estate over which the Raja had no unbridled or uncontrolled power of ownership.
He was himself in the position of a trustee owing a duty and obligations to the beneficiaries.
He had no free volition in the matter to spend and invest the trust fund in any manner he liked and for showing undue advantage to his wife.
At one stage of the argument Mr. Phadke felt persuaded to place reliance upon the decision of Yorke and Agarwal JJ in Mt. Sardar Jahan and others vs Mt. Afzal Begam(1).
At page 291, column 1 the observation seems to have been made per in curium to the effect: "As regards this question of pleading, it does not appear to us that there was anything to prevent the plaintiff from falling back on the plea of advancement in case she was unable to satisfy the court that the moneys expended were her own." Yorke J realised the inaccuracy of the above proposition and said so in Mt. Siddique Begam vs Abdul Jabber Khan and others(2) and then concluded at page 312 column 1 thus : "In point of fact it has been laid down by their Lordships in earlier cases that the burden of proof that a transfer is benami does lie in the first instance upon the person asserting it to be so, but that burden is discharged upon the said person showing that the purchase money was provided by him.
" In the case of Gangadara Ayyar and others (supra) Mahajan J., enunciated the law pithily, if we may say so with respect, in paragraph 14 at page 92 : "It is settled law that the onus of establishing that a transaction is benami is on the plaintiff and it must be strictly made out.
The decision of the Court cannot rest on mere suspicion, but must rest on legal grounds and legal testimony.
In the absence of evidence, the apparent title must prevail.
It is also well established that in a case ' where it is asserted that an assignment in the name of one person is in reality for the benefit of another, the real test is the source whence the consideration came and that when it is not possible to obtain evidence which conclusively establishes or rebuts the allegation, the case must be dealt with on reasonable probabilities and legal inferences arising from proved or admitted facts.
" While dealing with the question of burden of proof, one must remember a very salutary principle reiterated by this Court in Kalwa Davadattam and two others vs The Union of India and other(3) at page 205.
Says the learned Judge: (1) A.I.R. 1941, oudh, 288.
(2) A.I.R. 1942, Allahabad, 308.
(3) ; 909 The question of onus probandi is certainly important in the early stages of a case.
It may also assume importance where no evidence at all is led on the question in dispute by either side; in such a contingency the party on whom the onus lies to prove a certain fact must fail.
Where however evidence has been led by the contesting parties on the question in issue, abstract considerations of onus are out of place; truth or otherwise of the case must always be adjudged on the evidence led by the parties." Shinghal J. recently followed this dictum in the case of Union of India vs Moksh Builders and Financiers Ltd. and ors.
etc.(1) at page 973.
Mr. Phadke heavily relied upon the decisions of this Court in (1) Kanakarathanammual vs V. section Loganatha Mudaliar and another(2) (2) Jaydayal Poddar (deceased) through his L. Rs and another vs Mst.
Bibi Hazra and ors(3) and (3) Krishnanand vs The State of Madhya Pradesh (4).
A question of some fine distinction arose in Kanakarathanammal 's case.
The question was whether the property purchased in the name of the wife by the money given to her by the husband was a property gifted to her under section 10(2) (b) of the Mysore Hindu Law women 's Rights Act, 1933 or was it a property in which fell under clause (d) of section 10(2).
If it was a property gifted by the husband to the wife, then the appellant 's contention was right and it became a property gifted under section 10(2) (b).
If, on the other hand, it was a property purchased with the money gifted by the husband to the wife, then it would not be so.
According tothe finding of the Courts below, the whole of the consideration waspaid by the appellant 's father and not by her mother.
The majorityview expressed by Gajendragadkar J., as he then was, at page 9 of the report is : "We have carefully considered the arguments thus presented to us by the respective parties and we are satisfied that it would be straining the language of section (2)(b) to hold that the property purchased in the name of the wife with the money gifted to her by her husband should be taken to amount to a property gifted under section 10(2) (b).
" It would thusbe seen that indisputably in that case the property was of the wife.
The only dispute was whether the property itself was acquired as agift from her husband or it was acquired with the money gifted to her by the husband.
In our opinion, therefore, this case is of no help, to the appellant in this appeal.
In Jaydayal Poddar 's case (supra) one of us (Sarkaria J.) while delivering the judgment on behalf of the Court was dealing with a case where the question was whether the property purchased by Abdul Karim in the name of his wife Mst.
Hakimunnissa was a benami purchase in the name of the latter.
The Trial Court held that she was benamidar.
The High (1) ; (2) ; (3) (4) [1977]1 S.C.R. 816.
910 Court reversed the decision and held that the plaintiffs had failed to show that Mst.
Hakimunnissa in whose name the sale deed stood, was only a benamidar and not the real purchaser.
While affirming the view of the High Court, it was aptly said at pages 91 92 : "It is well settled that the burden of proving that a particular sale is benami and the apparent purchaser is not the real owner, always rests on the person asserting it to be so.
This burden has to be strictly discharged by adducing legal evidence of a definite character which would either directly prove the fact of Benami or establish circumstances unerringly and reasonably raising an inference of that fact.
The essence of a benami is the intention of the party or parties concerned; and not unoften such intention is shrouded in a thick veil which cannot be easily pierced through.
But such difficulties do not relieve the person asserting the transaction to be benami of any part of the serious onus that rests on him; nor justify the acceptance of mere conjectures or surmises, as a substitute for proof.
The reason is that a deed is a solemn document prepared and executed after considerable deliberation and the person expressly shown as the purchaser or transferee in the deed, starts with the initial presumption in his ' favour that the apparent estate of affairs is the real state of affairs.
Though the question, whether a particular sale is Benami ornot, is largely one of fact, and for determining this question,no absolute formulae or acid tests, uniformally applicable inall situations, can be laid down; yet in weighing the probabilities and for gathering the relevant indicate, the courts are usually guided by these circumstances : (1) the source from which the purchase money came; (2) the nature and possession of the property, after the purchase; (3) motive, if any, for giving the transaction a benami colour; (4) the position of the parties and the relationship, if any between the claimant and the alleged benamidar; (5) the custody of the title deeds after the sale and (6) the conduct of the parties concerned in dealing with the property after the sale.
The above indicate are not exhaustive and their efficacy varies according to the facts of each case.
Nevertheless No. 1, viz. the source whence the purchase, money came, is by far the most important test for determining whether the sale standing in the name of one person is in reality for the benefit of another." Apart from the fact that in the present appeal we are not concerned with a simple case of purchase of the property by the husband in the name of the wife with his own money, the purchase being with the waqf money, even applying the principles extracted above it would be noticed that the concurrent findings of the courts below that the appellant was benamidar on behalf of the waqf does not suffer from any infirmity to justify our interference with the said finding. ] 'lie burden has been strictly discharged by the respondent so much 911 so that the finding as recorded could not be assailed.
It was merely attempted to be availed of to support a new case in this Court.
It should be remembered that 'by far the most important test for determining whether the sale standing in the name of one person is in reality for the benefit of another ' namely the source whence the purchase money came has been established beyond doubt.
The nature and possession of the property after the acquisition was such that it did not lead to the conclusion that it was not a waqf property and was a property in exclusive possession of the appellant through her tenants including tile respondent.
The motive to, acquire the property in the name of the wife is clearly spoken of by D.W.I.brother of the Raja when he said at page 37 of the paper book "Raja Sahib was also present at the time of the execution of the lease.
At that time there was no debt against him.
On being asked by me he said that the plaintiff used to, trouble him and that in order to please her he was getting a fictitious lease executed in her favour.
" It was argued for the appellant that the Raja wanted to make a provision for his young wife to protect her interests from being trampled with by her sons and daughters.
This is not correct.
Although the defendant was not pulling on well with the Raja after he had married the plaintiff, according to her own case pleaded 'in the plaint she was pulling on well with the defendant upto the year 1950 and the relations between them got strained when her daughter was married to Saiyed Mohammed Raja Ali Khan.
The position of the parties, namely, the Raja and the plaintiff, was such that one could be inclined to believe that in all probability the Raja could provide funds for acquisition of the property not only in the name of his wife but for her and her alone provided the funds expended were his personal funds.
But no such inference is possible on the unmistakable position of thiscase that the funds came from the coffer of the waqf estate.
The custody of the title deed and other papers, except a few, were not with the plaintiff.
But on the facts of this case one, cannot attach much importance to this circumstance either way.
The conduct of the parties concerned in dealing with the property after acquisition also goes in favour the defendant and against the plaintiff.
It could not be shown that the plaintiff bad realised rent from the other tenants who had been there in the Kothi before 1947.
Nor was there anything to show that the defendant himself was inducted as a tenant in the Kothi by the plaintiff.
We, therefore, hold that even on the application of the salutary principles of law enunciated in Jaydyal Poddar 's case the appellant cannot succeed.
This case was merely followed in Krishnanand 's case by Bhagwati J.
We may again emphasize that in a case of this nature, all the aspects of the benami law including the question of burden of proof cannot justifiably be applied fully.
Once it is found, as it has been consistently found, that the property was acquired with the money of with the money of the waqf, a presumption would arise that the property is a waqf property irrespective of the fact as to in whose name it was acquired.
The Mutawalli by transgressing the limits of his power and showing undue favour to one of the beneficiaries in disregard to a large 912 number of other beneficiaries could not be and should not be permitted to gain advantage by this method for one beneficiary which in substance would be gaining advantage for himself.
In such a situation it will not be unreasonable to say rather it would be quite legitimate to infer, that it was for the plaintiff to establish that the property acquired was her personal property and not the property of the waqf Is it possible to decree her appeal in face of her three varying stands in the three courts ? They are (1) in the Trial Court case of acquisition of property with her personal money; (2) in the High Court acquisition of property with the personal money of her husband and (3) in this Court the waqf fund invested from time to time became her personal money and enabled her to acquire the property.
For the reasons stated above, we dismiss the appeal, but with this direction that the parties will bear their own costs throughout.
Before we part with this case, we would like to put on record that a suggestion was thrown from the Court to the parties to arrive, at some kind of lawful settlement which may not go against the terms of the waqf deed or the Mahomedan law in relation to waqf.
Pursuant to the said suggestion, an offer was made on behalf of the substituted respondents to pay a sum of Rs. 30,000/ to the, appellant within a period of one year.
This was on the footing, as suggested by the Court, as if the lease hold in the land upon which the Kothi stands was the property of the appellant, but the Kothi was of the waqf.
Unfortunately this offer was not accepted by the appellant.
Still we hope and trust that the respondent will honour their unilateral offer and pay the sum of Rs. 30,000/ to the appellant within a period of one year from today, preferably in 4 three monthly equal instalments of Rs. 7,500/ each.
The amount so paid would be over and above the duty and the obligation which is there under the waqf on the present Mutawalli out of the substituted respondents.
We have tried to take a compassionate view for the appellant to the, extent to which we thought we could justifiably go.
We have relieved her of costs in all the three Courts.
We believe that the respondents will not belie our hopes merely because an executable decree in respect of the sum of Rs. 30,000/ in absence of them acceptance of the offer by the appellant cannot be passed.
S.R. Appeal dismissed.
| IN-Abs | One Smt.
Sughra Begum, a Shia Muslim lady was possessed of vast Zamindari and other properties.
On October 6, 1928, she created a waqf of the entire properties dividing them in three qurras, Raja Haji Saiyed Mohammad Mahmood Hasan was appointed by the waqifa as the Mutawalli of qurra No. 1.
After the death of his first wife Smt.
Akbari Begum.
the Raja took the plaintiff appellant as his second wife in the year 1933.
On January 22, 1935, a permanent lease was executed on behalf of one Saiyad Anwarul Rahman in respect of the disputed land in the name of the plaintiff.
The rent fixed was Rs. 80/per year.
Between the years 1937 and 1939 a bungalow was constructed on the said land which was named as "Mahmood Manzil".
The Raja died in September, 1939.
The plaintiff appellant filed a suit No. 86 of 1952 in the Court of the Civil Judge, Aligarh in which the original respondent was the sole defendant.
The plaintiffs case was that the disputed property belonged to her and that the defendant was inducted as a tenant of the 'kothi ' on and from 1 3 1947 on a rental of Rs. 60/ p.m., that he paid rent upto May 1950, but did not pay any rent thereafter, that she served a notice on him to pay the arrears of rent and deliver vacant possession of the Kothi.
The defendant respondent pleaded inter alia that Raja Sahib, the first Mutawali of qurra No. 1 had acquired the lease of the land and constructed the Kothi with the waqf fund as Mutawalli of the waqf and therefore it was a waqf property, that after the death of the Raja, he became the Mutawalli of qurra No. 1 including the Kothi in question and that he occupied the Kothi as a Mutawalli and not as a tenant.
The Trial Court accepted the case of the defendant, rejected that of the plaintiff and dismissed her suit.
Her appeal before the High Court was dismissed.
Dismissing the appeal by special leave, the Court HELD : 1.
According to Shia law, the waqf is irrevocable after possession is given to the beneficiaries or the Mutawalli.
The settler divests himself of the ownership of the property and of everything in the nature of usufruct from, the moment the waqf is created.
In pure metaphorical sense, the expression "ownership of God" is used but unlike Hindu law, since conception of a personal God is not recognised there is no ownership of God or no property belongs to God in the jural sense, although "the ownership of the property becomes reverted in God as he is originally the owner of all things".
The property is considered as transferred to the beneficiaries or the Mutawalli for the object of the waqf.
Strictly speaking, the ownership of the waqf property has no jural conception with any exactitude.
The corpus is tied down and is made inalienable.
Only the usufract and the income from the corpus or the waqf property is available for carrying out the objects of the waqf.
Creation of waqf for the purpose of maintenance of the waqif 's family and their descendants is also a charitable purpose.
[894 G 14, 895 A B] 2.
A Mutawalli is like a manager rather than a trustee.
The Mutawalli, so far as the waqf property is concerned, has to see that the beneficiaries got the advantage of usufruct.
The Mutawalli may do all acts reasonable and proper for the protection of the waqf property, and for the administration of the waqf.
[895 E, 896 D] 887 2(a) A Mutawalli of a waqf although not a trustee in the true sense of the term is still bound by the various obligations of a trustee.
He like a trustee or a person standing in a fiduciary capacity cannot advance his own interests or the interests of one class of relations by virtue of the position held by him.
The use of the funds of the waqf for acquisition of a property by a Mutawalli in the name of his wife would amount to a breach of trust and the property so acquired would be treated as waqf property.
[905 E G] Moattar Raza and Ors.
vs Joint Director of Consolidation U.P., Camp at Bareilly and Ors., A.1,R. 1970 All.
509 explained.
Mohammad Qamer Shah Khan vs Mahammed Salamat Ali Khan A.I.R. 1933, All. 407 over ruled.
The law as regards distribution of distributable income of the waqf property amongst the beneficiaries is that the benefit of a waqf for a person 's "sons and his children, and the children of his children for ever so long as there are descendants, is taken per capita, males and females taking equally and the children of daughters being included." [896 C F] Ahmed G. H. Ariff and Ors.
vs Commissioner of Wealth Tax, Calcutta, ; ; explained and held inapplicable.
In the eye of law, according to the concept of Mohammedan law, there was no legal entity available in whose name the property could be acquired except the Mutawalli or the beneficiary.
Unlike Hindu law, no property could be acquired in the name of God.
Nor could it be acquired in the name of any religious institution like the waqf estate.
Necessarily the property bad to be taken in the name of one of the living persons.
Ordinarily and generally the acquisition of property out of the waqf funds should have been in the name of the Mutawalli.
But it did not cease to be a waqf property merely because it was acquired in the name of one of the beneficiaries.
[901 E G] 5.
(a) The burden of proof that a particular sale is benami and the apparent purchaser is not the real owner always rests on the person asserting it to be so.
This burden has to be strictly discharged by adducing legal evidence of a definite character which would either directly prove the fact of benami or establish circumstances unerringly and reasonably raising an inference of that fact.
[910 A B] (b) The law relating to benami transactions strictly speaking, cannot, be applied in all its aspects to a transaction of such a kind.
Even if applied there will be no escape from the position that the real owner of the property was the Raja in the instant case in his capacity as Mutawalli and the appellant was a mere benamidar.
The property in reality, therefore belong to the waqf estate as concurrently and rightly field by the two Courts below.
[901 G H, 902 A] Gopeekrist Gosain and Gangaparsaud Gosain, 6 Moore 's Indian Appeals, 53.
Bilas Kunwar and Desraj Ranjit Singh and Ors., 42 Indian Appeals, 202, Kerwick and Kerwick, 47 Indian Appeals, 275, Sura Lakshmiah Chetty and Ors.
vs Kothandarama Pillai 52 Indian Appeals, 286 Mt. Sardar Jahan and Ors.
vs Mt. Afzal Begam, A.I.R. 1941, Oudh, 288, Mt. Siddique Begam vs Abdul Jabbar Khan and Ors.
, A.I.R. 1942, Allahabad, 308, Kalwa Devadattam and two Ors.
vs The Union of India and Ors, ; Union of India vs Moksh Builders and Financiers Ltd. and Ors., ; Kana karathanammal vs V. section Loganatha Mudaliar and Anr.
; , Jaydayal Poddar (deceased) through 1. rs.
and Anr.
vs Mst.
Bibi Hazra and Ors., and Krishnanand vs The State of Madhya Pradesh, [1977] 1 S.C.C. 816 referred to.
In the instant case (a) It is not possible to decree the appeal in face of her three varying stands in the three Courts viz. (1) in the Trial Court case of acquisition of property with her personal money; (2) in the High Court acquisition of property with the personal money of her husband and (3) in this Court the waqf fund invested from time to time became her personal money and enabled her to acquire the property.
[912 B C] 888 (b) A valid waqf was created by Smt.
Sughra Begum.
Except a Portion of money which was to be spent for public, religious or charitable objects the waqf was primarily of a private nature for the benefit of the settler 's family and their descendants, which is called waqf alal aulad.
The ultimate object was to spend income, if any, in the service of the Almighty God.
[894 C] Abdul Fata Mohammad vs Rasamaya, 22 Indian Appeals 76 referred to.
(c) The evidence is overwhelming on the question as to what was the source of money for the acquisition of the disputed property, either the land and Kothi.
It came from the waqf fund.
[897 C] (d) Though the Raja was vested with the power to fix stipends for his children and their descendants and for his wives during his life time also, he was not conferred an absolute power or discretion to fix any stipend for any beneficiary and no stipend for some beneficiary.
Equality amongst all is a golden thread which runs throughout the Mohammadan law.
It is a chief trait of that law.
[900 G] (e) Clause 19 of the last will of the Raja cannot create a title in favour of the plaintiff and finish the right of the waqf to the property.
If the property became the acquired property of the waqf, a Mutawalli; as the Raja was, by his own declaration contained in clause 19 of the Will could not make it a property of the plaintiff appellant.
The recital of fact could be pressed into service only to lend additional support to the plaintiff 's case if she would have stuck to that case and proved it by evidence aliunde.
[905 A B] (f) The concurrent findings of the Courts below that the appellant was benamidar on behalf of the waqf does not suffer from any infirmity to justify this court 's interference with the said finding.
The burden has been discharged by the respondent so much so that the finding as recorded could not be assailed.
It was merely attempted to be availed of to support a new case in this Court.
It should be remembered that 'by far the most important test for determining whether the sale standing in the name of one person is in reality for the benefit of another ' namely the source whence the purchase money came has been established beyond doubt.
The nature and possession of the property after the acquisition was such that it did not lead to the conclusion that it was not a waqf property and was a property in exclusive possession of the appellant through her tenants including the respondent.
[910 H, 911 A B] (g) In a case of this nature, all the aspects of the benami law including the question of burden of proof cannot justifiably be applied fully.
Once it is found, as it has been consistently found, that the property was acquired with the money of the waqf, a presumption would arise that the property is a waqf property irrespective of the fact as to in whose name it was acquired.
The Mutawalli by transgressing the limits of his power and showing undue favour to one of the beneficiaries in disregard to a large number of other beneficiaries could not be and should not be permitted to gain advantage by this method for one beneficiary which in substance would be gaining advantage for himself.
In such a situation it will not be unreasonable to say rather it would be quite legitimate to infer, that it was for the plaintiff to establish that the property acquired was her personal property and not the property of the waqf.
[911 G H, 912 A B]
|
Appeal No. 1735 of 1972.
From the Judgement and Order dated the 29th October 1971 of the High Court of Goa, Daman and Diu in S.C.A. No. 31 of 1970.
V. section Desai and Miss A. Subhashini for the, Appellant.
section T. Desai, M. V. Shah and R. P. Kapur for Respondent.
The Judgment of the Court was delivered by CHANDRACHUD, C.J.
The respondent, Gosalia Shipping Private Limited, which is a company incorporated under the Indian Companies Act does the business of Clearing and Forwarding and as Steamship Agents.
In 1970, respondent acted as the shipping agent of 'Aluminium Company of Canada, Limited ' which is a non resident company.
The, Aluminium Company time chartered a ship "M. V. Sparto" belonging to a non resident company called Sparto Compania Naviera of Panama.
The said ship called at the port of Betul, Goa, on March 1, 1970 where it loaded 13,000 long tons of bauxite belonging to the time charterers, the Aluminium Company.
On March 20, 1970 the ship left for Alfred port, Canada.
The ship was allowed to leave the port of Betul on the basis of a guarantee bond executed by the respondent in favour of the President of India, undertaking to pay the income tax payable by the time charterers under section 172 of the Income tax Act, 1961.
On April 15, 1970, the First Income tax Officer, Margao, Goa, issued a demand notice to the respondent for payment of Rs. 51,191 by way of income tax under the aforesaid provision.
The respondent filed Special Civil Application No. 31 of 1970 in the Court of the Judicial Commissioner, 'boa, asking for a writ of Mandamus directing the Income tax Officer to withdraw the demand notice.
By a judgment dated October 29, 1971, 945 the learned Judicial Commissioner allowed the respondent 's Writ Petition and passed an order quashing the demand notice.
Having obtained from the Judicial Commissioner a certificate of fitness to appeal to this Court under article 133(1)(b) and (c) of the constitution, the Union of India has filed this appeal.
The question as to whether the respondent is liable to pay the income tax demanded of it by the Income tax Officer, depends for its decision on the construction of section 172 of the Income tax Act, 1961, which read as follows at the relevant time : "172.
(1) The provisions of this section, shall, notwithstanding anything contained in the other provisions of this Act, apply for the purpose of the levy and recovery of tax in the case of any ship, belonging to or chartered by a nonresident, which carries passengers, live stock, mail or goods shipped at a port in India.
(2) Where such a ship carries passengers,live stock, mail or goods shipped at a port in India ,one sixth of the amount paid or payable on account of such carriage to the owner or the charterer or to any person on his behalf, whether that amount is paid or payable in or out of India, shall be deemed to be income accruing in India to the owner or charterer on account of such carriage.
(3) Before the departure from any port in India of any such ship, the master of the ship shall prepare and furnish to the Income tax Officer a return of the full amount paid or payable to the owner or charterer or any person on his behalf, on account of the carri age of all passengers, live stock, mail or goods shipped at that port since the last arrival of the ship thereat : Provided that where the Income tax Officer is satisfied that it is not possible for the master of the, ship to furnish the return required by this sub section before the departure of the ship from the port and provided the master of the ship has made satisfactory arrangements for the filing of the return and payment of the tax by any other person on his behalf the Income tax Officer may, if the return is filed within thirty days of the departure of the ship, deem the filing of the return by the person so authorised by the master as sufficient compliance with this subsection.
(4) On receipt of the return, the Income tax Officer shall assess the income referred to in sub section (2) and determine the sum payable as tax thereon at the 946 rate or rates in force applicable to the total income of a company which has not made the arrangements referred to 'in section 194 and such sum shall be payable by the master of the ship.
(5) For the purpose of determining the tax payable under sub section (4), the Income tax Officer may call for such accounts or documents as he may require.
(6) A port clearance shall not be granted to the ship until the Collector of Customs, or other Officer duly authorised to grant the same, is satisfied that the tax assessable under this section has been duly paid or that satisfactory arrangements have been made for the payment thereof.
(7) Nothing in this section shall be deemed to prevent the owner or charterer of a ship from claiming before the expiry of the assessment year relevant to the previous year in which the date of departure of the ship from the Indian port falls, that an assessment be made of his total income of the previous year and the tax payable on the basis thereof be determined in accordance with the other provisions of this Act, and if he so claims, any payment made under this section in respect of the passengers, live stock, mail or goods shipped at Indian port during that previous year shall be treated as a payment in advance of the tax leviable for that assessment year, and the difference between the sum so paid and the amount of tax found payable by him on such assessment shall be paid by him or refunded to him, as the case may be.
" Section 172 occurs in Chapter XV which is entitled "liability in special cases" and the sub heading of the section is "Profits of nonresidents from occasional shipping business.
" It creates a tax liability in respect of occasional shipping by making a special provision for the levy and recovery of tax in the case of a ship belonging to or chartered by a non resident which carries passengers livestock mail or goods shipped at a port in India.
The object of the section is to ensure the levy and recovery of tax in the case of ships belonging to or chartered by nonresidents.
The section brings to tax the profits made by them from occasional shipping, by means of a summary them assessment in which one sixth of the gross amount received by of the is deemed to be the assessable profit.
Before the departure ship, the master of the ship has to furnish to the Income tax Officer a return of the full amount paid or payable to the owner or charterer on account of the carriage of passengers, goods etc., shipped at the port in India since the last arrival of the ship at the port.
In the event that, to the satisfaction of the Income tax Officer, the master is 9 47 unable so to do, he has to make Satisfactory arrangements for the filing of the return and payment of the tax by any other person on his behalf.
A port clearance cannot be granted to the ship until the tax assessable under the section is duly paid or satisfactory arrangements have been made for the payment thereof.
The assessee in this case is the Aluminium Company of Canada which had time chartered the ship and on whose behalf its shipping agent, the respondent, had executed the guarantee bond.
Since the Company is a non resident and the ship carried goods which were shipped at a port in India, the conditions specified in sub section (1) are satisfied and the provisions of section 172 will apply for the purpose of levy of tax, notwithstanding anything contained in the other provisions of the Income tax Act.
The charging provision it contained in sub section (2) of section 172, the relevant part of which provides that where a ship belonging to or chartered by a nonresident carries goods shipped at a port in India, one sixth of the amount paid or payable "on account of such carriage" to the owner or the charterer or to any person on his behalf shall be deemed to be income accruing in India to the owner or char terer on account of such carriage.
The ship was delivered to the time charterers at Betul, Goa, whereupon they loaded it with their own goods to the fullest capacity of the ship.
Under the charter party, the charterer had agreed to pay to the owners of the ship a sum of 4.50 U.S. dollars per ton on the total dead weight carrying capacity per calendar month, commencing on and from the date of the delivery of the ship.
The short question for consideration is whether the amount which the time charterers had agreed to pay to the owners of the ship was payable "on account of" the carriage of goods.
If any guidance is to B sought from the terms of the agreement between the parties, the conclusion seems inescapable that the amount which the time charterers where required to pay to the owners of the ship was not payable on account of the carriage of goods but was payable on account of the use and hire of the ship.
The charter party provided by clause (4) that the charterers shall pay a sum at the rate of 4.50 U.S. dollars on the total dead weight carrying capacity of the ship, "for the use and hire of the said vessel".
It is true that one cannot place over reliance on the form which the parties give to their agreement or on the label which they attach to the payment due from one to the other.
One must have regard to the substance of the matter and, if necessary, tear the veil in order to see whether the true character of a payment is something other than what, by a clever device of drafting, it is made to appear.
But we see no reason to hold that the real intention of the parties was something different from what the words used by them convey in their accepted sense.
The charterparty was drawn in a standard form approved by the 'New York Produce Exchange ' and there is no warrant for supposing that though the payment which the Charterers bound themselves to make to the owners of the ship was on account of the 948 carriage of goods, the parties described it as; being payable for the use and hire of the vessel, in order to avoid the payment of Indian income tax.
Indeed, the other terms of the charterparty and the general tenor of the document show that the payment was in fact to be made by the time charterers for use and hire of the ship.
Under the agreement, charterers had the "liberty to sublet" the vessel for all or any part of the time covered by the agreement.
The Captain of the ship was to be under the orders and directions of the, charterers as regards employment and agency.
And if the vessel be lost, money paid in advance and not earned was to be returned by the owners to the charterers at once.
These terms and conditions of the contract between the parties are not consistent with the theory that the charterers were liable to pay to the owners any amount on account of the carriage of goods.
In order that it may be said that the amount was payable on account of the carriage of goods.
Under the terms of charterparty, the the consideration for the other, that is to say, that the payment which the charterers had agreed to make to the owners of the ship was in consideration of the carriage of goods.
If the charterers are liable to pay the amount irrespective of whether they carry the goods or not, it would be difficult to say that the amount was payable on account of the carriage of goods.
Under the terms of Charterparty, the owners of the ship received the amount as charges for the use and hire of the ship.
The character of the payment cannot change according to the use to which the charterers put the ship or according as to whether the ship is loaded with goods in a port in India.
What is payable as hire charges for the use of the ship cannot transform itself into an amount payable on account of the carriage of goods, by reason of the circumstance that the ship was loaded with goods in India.
It is relevant, for the decision of the question under consideration.
that the time charterers loaded the ship at Betul, Goa, with their own goods.
They did not sub let the ship for the purpose of carriage of goods nor did they load the ship with, goods belonging to a third party in which event they might have earned some freight on account of the carriage of goods.
They paid hire charges to the owner of the ship for the use of the ship and since they loaded the ship with their own goods, they received nothing on account of the carriage of the goods.
Neither the one nor the other, therefore, received any amount on account of the carriage of the goods.
The weakness of the argument advanced by the appellant 's counsel consists in its assumption that the charterparty has to be, an agreement for the carriage of something like goods, passengers, livestock or mail.
A contract by charterparty, says, B. C. Mitra in his "Law of Carriage by Sea" (Tagore Law Lectures 1972), : "is a contract by which an entire ship or some principal part thereof is let to a merchant who is called the charterer, for the conveyance of goods on a determined voyage to one or more places, or until the expiration of a specified period; in the former case it is called a 'voyage charterparty ', and in the latter a 'time charterparty ' ".
A time charter, according to the 949 author is "one in which the ownership and also possession of the ship remain in the original owner whose remuneration or hire is generally calculated at a monthly rate on the tonnage, of the ship, while a voyage charter is a contract to carry specified goods on a defined voyage on a remuneration or freight usually calculated according to the quantity of cargo carried.
" In Carver 's "Carriage by Sell" (Eleventh ed., 1963, page 263), it is stated that "all charterparties are not contracts of carriage.
Sometimes the ship itself, and the control over her working and navigation, are transferred for the time being to the persons who use her.
In such cases the contract is really one of letting the ship, and, subject to the express terms of the charterparty, the liabilities of the shipowner and the charterer to one another are to be determined by the law which relates to the hiring of chattels and not by reference to the liabilities of carriers and shippers.
" According to Scrutton on Charterparties (seventeenth ed., 1964, page 4), charterparties fall into three main categories (i) charters by demise (ii) time charters (not by way of demise), and (iii) voyage charters.
Sometimes categories (i) and (ii) are both referred to as time charters as distinguished from category (iii), and they have this in common that the shipowner 's remuneration is reckoned by the time during which the charterer is entitled to the use of services of his ship.
" The contract in the instant case is of the nature of time charterparty, whether there is a demise of the ship or not being immaterial.
Clause 4 of the charterparty provides for the payment by the charterers "for the use and hire" of the vessel at the rate of U.S. 4.50 dollars per ton on vessel 's total dead weight carrying capacity, per calender month, commencing on and from the date of deliver of the ship, "hire to continue until the hour of the day of her redelivery.
" These clauses of the charterparty show that the Aluminium company took the ship from its owners on a time charterparty, that the owners were entitled to payment for the use and hire of the ship, that the amount was payable irrespective of what use the ship was put to by the time charterers or indeed, whether it was put to any use at all and that no part of the payment can be said to have been made on account of the carriage of goods.
Similies can be misleading but if a hall is hired for a marriage, the charges payable to the owner of the place are for the use and hire of the place, not on account of marriage.
For these reasons we confirm the judgment of the learned Judicial Commissioner and dismiss the appeal with costs.
S.R. Appeal dismissed.
| IN-Abs | The respondent which is a company incorporated under the Indian Companies Act does the business of Clearing and Forwarding and as Steamship agents.
In 1970, respondent acted as the shipping agents of "Aluminium Company of Canada Ltd." which is a non resident company.
The Aluminium company time chartered a ship "M.V. Sparto" belonging to another nonresident company.
Clause 4 of the Charter party provided for the payment by the charterers "for the use and hire" of the vessel at the rate of U.S. 4.50 dollars per ton on vessels ' total dead weight carrying capacity per calendar month commencing on and from the date of delivery of the ship.
"hire to continue until the hour of the day of her redelivery".
The said 'ship called at the port of Betul.
Goa on March 1, 1970 and loaded 13000 long tons of bauxite belonging to the time charterers, the Aluminium Co. The ship was allowed to leave the port of Betal on the basis of the guarantee bond executed by the respondent in favour of the President of India undertaking to pay the income tax payable by the time charterers under Section 172 of the Income Tax Act, 1961.
On April 15, 1970, the First Income Tax Officer, Margoa issued a demand notice to the respondent for the payment of Rs. 51,191/ by way of income tax under the aforesaid provision.
The respondent filed a Writ Petition asking for a mandamus directing the Income Tax Officer to withdraw the notice.
The petition was allowed by the Judicial Commissioner Goa.
Dismissing the appeal by Certificate, the Court HELD : 1.
The amount which the time charterers were required to pay, to the owners of the ship was not payable on account of the carriage of goods but was payable on account of the use and hire of the ship.
[947 E F] 2.
It is true that one cannot place over reliance on the terms which the parties give to their agreement or on the label which they attach to the payment due from one to the other.
One must have regard to the substance of the matter and if necessary, tear the veil in order to see whether the true character of a payment is something other than what, by a clever device of drafting, it is made to appear.
[947 F G] In the instant case there is no reason to hold that the real intention of the parties was something different from what the words used by them, convey in their accepted sense.
The charter party was drawn in a standard form approved by the "New York Produce Exchange" and there is no warrant for supposing that though the payment which the charterers bound themselves to make to the owners of the ship was on account of the carriage of goods, the parties described it as being payable for the use and hire of the vessel, in order to avoid the payment of Indian income Tax.
The character of the payment cannot change according to the use to which the charterers put the ship or according as to whether the ship is loaded with goods in a port in India.
What is payable as hire charges for the use of the ship cannot transform itself into an amount payable on account of the carriage of goods, by reason 944 of the circumstance that the ship was loaded with goods in India.
The time charterers loaded the ship at Betul, Goa, with their own goods.
They did not sub let the ship for the purpose of carriage of goods nor did they load the ship with goods belonging to a third party in which event they might have earned some freight on account of the carriage of goods.
They paid hire charges to the owner of the ship for the use of the ship and since they loaded the ship with their own goods, they received nothing on account of the carriage of the goods.
Neither the one nor the other, therefore, received any amount on account of the carriage of the goods.
[947 G H, 948 A, B, F G] 3.
A contract by charter party is a contract by which an entire ship or some principal part thereof is let to a merchant who is called the charterer, for the conveyance of goods on a determined voyage to one or more places, or until the expiration of a specified period.
The contract ' in the instant case is of the nature of time charter party, whether there is a demise of the ship or not being immaterial.
Clause 4 of the charter party provides for the payment by the charterers "for the use and hire" of the vessel at the rate of U.S. 4.50 dollars per ton on vessel 's total dead weight carrying capacity ' per calendar month, commencing on and from the date of delivery of the ship, "hire to continue until the hour of the day of her redelivery".
These clauses of the charter party show that the Aluminium Company took the ship from its owners on a time charter party, that the owners were entitled to payment for the use and hire of the ship, that the amount was payable irrespective of what use the ship was put to by the time charterers or indeed, whether it was put to any use at all and that no part of the payment can be said to have been made on account of the carriage of goods.
[948 G H, 949 D F]
|
Special Leave Petition (Civil) Nos.
1731 and 927 of 1978.
From the Judgment and order dated 3 11 76 of the Allahabad High Court (Lucknow Bench) in W.P. 116 of 1971 and from the Judgment and order dated 5 8 77 of the Allahabad High Court (Lucknow Bench) in Revision Application No. 29/77 respectively.
R. K. Garg, Madan Mohan and V. J. Francis for the Petitioner.
The order of the Court was delivered by KRISHNA IYER, J.
For around 50 years, a man and a woman, as the facts in this case unfold, lived as husband and wife.
An adventurist challenge to the factum of marriage between the two, by the petitioner in this special leave petition, has been negatived by the High Court.
A strong presumption arises in favour of wed lock where the partners have lived together for a long spell as husband and wife.
Although the presumption is rebuttable, a heavy burden lies on him who seeks to deprive the relationship of legal origin.
Law leans in favour of legitimacy and frowns upon bastardy.
In this view, the contention of Shri Garg, for the petitioner, that long after the alleged marriage, evidence has not been produced to sustain its ceremonial process by examining the priest or other witnesses, deserves no consideration.
If man and woman who live as husband and wife in society are compelled to prove, half a century later, by eye witness evidence that they were validly married, few will succeed.
The contention deserves to be negatived and we do so without hesitation.
The special leave petitions are dismissed.
S.R. Petitions dismissed.
| IN-Abs | Dismissing the special leave petition, the Court ^ HELD: If man and woman who live as husband and wife in society are compelled to prove, after half a century of wedlock by eye witness evidence that they were validly married fifty years earlier, few will succeed.
` A strong presumption arises in favour of wed lock where the partners have lived together for a long spell as husband and wife.
Although the presumption IS rebuttable, a heavy burden lies on him who seeks to deprive the relationship of its legal origin.
Law leans in favour of legitimacy and frowns upon bastardy.
[1 F H]
|
Civil Appeal No. 1264 of 1978.
Appeal by Special Leave from the Judgment and order dated 11 8 1976.
Of the Madras High Court in CRP.
No. 2084/76.
K. section Ramamurthy, A. T. M. Sampath, section Gopalakrishna and A. N. Ramjani for the Appellant.
K. Jayaram and K. A. Bala Subramaniam and K. Ram Kumar for the Respondents.
ORDER Leave granted.
It is unfortunate that long years have been spent by the courts below on a combat between two parties on the question of court fee leaving the real issues to be fought between them to come up leisurely.
Two things have to be made clear.
Courts should be anxious to 69 grapple with the real issues and not spend their energies on peripheral A ones.
Secondly, court fee, if it seriously restricts the rights of a person to seek his remedies in courts of justice, should be strictly construed.
After all access to justice is the basis of the legal system.
In that view, where there is a doubt, reasonable of course, the benefit must go to him who says that the lesser court fee alone be paid.
In this particular case there is hardly any difficulty in holding that the plaintiff in paragraph 14 of the plaint has clearly alleged that sh., is in joint possession and is seeking partition and separate possession of her half share in the suit properties as heir of deceased, Paramayee.
Obviously, the court fee that is payable is as she has claimed, namely under sec.
37(2) which corresponds to article 17(b) of the Central Act, which is the predecessor legislation on the subject.
We allow the appeal and send the case back to the trial court and direct that court to proceed with the suit expeditiously.
We make it clear that our decision on the question of court fee does not have any implications on the merits including the validity or otherwise of the Will.
No costs.
| IN-Abs | The appellant paid the correct court fee under Section 37(2) of the Madras Court Fees and Suits Valuation Act clearly alleging in para 14 of the plaint that she is in joint possession and is seeking partition and separate possession of her half share in the suit properties as heir of deceased Paramayee.
The preliminary objection as to the correct court fee payable raised and taken up resulted in the final appeal before this court.
Allowing the appeal by Special Leave, the Court ^ HELD: (a) Courts should be anxious to grapple with the real issues and not spend their energies on peripheral ones.
[68H, 69A] (b) Court fee, if it seriously restricts the right of a person to seek his remedies in Courts of justice should be strictly construed.
Since access to justice is the basis of the legal system, where there is a doubt, reasonable of course, the benefit must go to him who says that the lesser court fee alone be paid.
[69A] In the instant case, the court fee that is payable is under s.37(2) of the State Act, which corresponds to article 17 D of the Court Fees & Suits Valuation Central Act, which is the predecessor legislation on the subject.
|
Civil Appeal No. 2371 of 1968.
From the Judgment and Decree dated 20th April, 1967 of the Madhya Pradesh High Court in First Appeal No. l of 1960.
section N. Kacker, Sol.
K. L. Hathi, Rajiv Datta and P. C. Kapur, for the Appellant.
L. N. Sinha, H. K. Puri, Vivek Seth, P. P. Singh and M. C. Dhingra for Respondents Nos. 1 4.
The Judgment of the Court was delivered by FAZAL ALI, J.
This appeal by certificate is directed against the judgment of the High Court of Madhya Pradesh dated 20th April 1, 1967 affirming the decree passed by the Additional District Judge Indore decreeing the plaintiff 's suit.
The facts of the case are detailed in the judgment of the High Court and that of the District Judge and it is not necessary for us to repeat the same all over again.
Briefly, the present action was brought by the plaintiff for recovery of a sum of Rs. 2,00,000 invested by the plaintiff in the Adarsh Bima Company being defendant No. 1 and the predecessor of the appellant, who is defendant No. 3 (Life Insurance Corporation of India).
The action was brought on the basis that the Managing Director of the Adarsh Bima Company by practising fraud and misrepresentation on the plaintiff induced him to part with a sum of Rs. 2,00,000 by purchasing 200 shares of Rs. 100/ each.
The courts 13 below have recorded clear findings of fact that the fraud alleged by the plaintiff has been clearly proved and that the plaintiff had parted with a sum of Rs. 2,00,000 by investing the same in purchase of 2000 shares as a result of which the shares scrips were handed over to the plaintiff and he was assured of a dividend of 4%.
it has also been found as a fact that such a resolution was contrary to the statute of the company.
The suit was contested by the appellant who is defendant No. 3 in the courts below mainly on the ground that after the appellant took over the Adarsh Bima Company, he was not liable for any act of the company which was ultra vires the statutes of the company.
In support of the appeal the Solicitor General submitted two points before us.
In the first place it was contended that on the finding that a fraud was committed on the plaintiff and the act of the Managing Director being ultra vires of the statutes of the company, the company would not be liable although the Managing Director may be personally liable.
Secondly, it was argued that assuming that the company was liable but in view of the provisions of section 7(2) of the (hereinafter called the Act), the liability of the appellant would extend only to matters appertaining to the controlled business as defined in the Act.
As regards the first contention we find absolutely no substance in the same.
There was absolutely no pleading by the defendants that the monies were received by the Managing Director personally and that the same did not go to the coffers of the company.
On the other hand, the plaintiff clearly pleaded in paragraphs 3 (b), 8 (a) and 8(b) of the plaint that the money was paid to defendant No. 1 company which after receiving the amount issued share scrips to the plaintiff.
The relevant portions of the aforesaid statements may be extracted thus: "3 (b) Relying upon the said guarantee and promise given by the defendant No. 2 on the Company 's behalf Plaintiff No. 1 on 11th June, 1947 gave at Jhabua to Defendant No. 1 Company through Defendant No. 2, Government of India 3 percent Loan Bonds of 1953 55 of the value of Rs. 1,00,000 duly endorsed in favour of Defendant No. 1 company. .
The company addressed a letter acknowledging receipt of the application for 1000 shares and the full consideration of the said shares at the rate of Rs. 100 per share and agreed to allot the said 1000 shares to plaintiff No. 4".
14 "8(a) . . . . . .
The plaintiffs submit that the transaction of selling the said 2000 shares of defendant No. 1 Company and registering the same as aforesaid in the names of plaintiffs No. 2 to 4 with a guarantee of minimum return is ultra vires the defendant No. 1 Company and is found to be void and inoperative in law.
8(b) The said 2000 shares of defendant No. 1 Company are as aforesaid applied for and registered in the names of plaintiffs No. 2 to 4.
At all material times when the said shares were registered in the name of plaintiffs No. 2 to 4, the plaintiffs No. 2 to 4 were minors.
The plaintiffs submit that the transaction of issuing the said 2000 shares to plaintiffs No. 2 to 4 who were then minors and registering them as share holders in the Register of defendant No. 1 Company is void in law".
Thus, the plaintiff has clearly alleged that the monies were paid to the defendant company and not to the Managing Director personally.
If the share scrips were issued, to the plaintiff then it must be presumed that the money was received by the company.
This fact has not been denied by the defendant appellant.
In these circumstances, therefore, it is absolutely clear that there is nothing to show that the money was paid to the Managing Director personally and not to the company.
Moreover, this is essentially a question of fact and it does not appear to have been raised before any of the courts below.
For these reasons, therefore, the first contention put forward by the Solicitor General is hereby over ruled.
Coming to the next contention the same undoubtedly merits serious consideration.
Before however examining this contention the following admitted facts may be stated thus: 1.
That the Bima Company was doing merely the business of life insurance and no other; 2.
That on the coming into force of the Act the entire interest of the Company vested in the Government: Section 7(2) of the Act runs thus: "7 (2) The assets appertaining to the controlled business of an insurer shall be deemed to include all rights and powers, and all property, whether movable and immovable, appertaining to his controlled business, including, in particular, cash balances, reserve funds, investments, deposits 15 and all other interest and rights in or arising out of such property as may be in the possession of the insurer and all books of account or documents relating to the controlled business of the insurer; and liabilities shall be deemed to include all debts, liabilities and obligations of whatever kind then existing and appertaining to the controlled business of the insurer.
Explanation: The expression 'assets appertaining to the controlled business of an insurer ' (a) in relation to a composite insurer, includes that part of the paid up capital of the insurer or assets representing such part which has or have been allocated to the controlled business of the insurer in accordance with the rules made in this behalf; (b) in relation to a Government, means the amount lying to the credit of that business on the appointed day".
D It is contended by the Solicitor General that the appellant was liable to discharge only those liabilities which pertained to the controlled business of the insurer.
Sub clause (3) of section 2 of the Act defines 'controlled business ' thus: "controlled business" means (i) in the case of any insurer specified in sub clause (a) (ii) or sub clause (b) of clause (9) of section 2 of the Insurance Act and, carrying on life insurance business . " As we have already pointed out that defendant No. 1 Adarsh Bima Company was carrying on the business of life insurance only.
Thus the moment the Act was passed, the business of the Adarsh Bima Company vested in the Corporation.
Pari passu this contention it was submitted that under section 7(2) of the Act the liability of the appellant would not extend not to any acts which are fraudulent or ultra vires of the statutes of the company.
We are, however, unable to agree with this contention.
The words of section 7(2) of the Act appear to be of the widest amplitude and the section includes all debts, liabilities, obligations of whatever kind then existing and appertaining to the controlled business of the insurer.
There can be no doubt that at the time when the appellant took over the Adarsh Bima Company the obligation to restitute the benefit received by the company from the plaintiff had been fastened and the appellant was legally bound to return the same to the plaintiff under section 65 of the Contract 16 Act in view of the finding of fact recorded by the Courts below that the contract was void.
The question as to whether or not the transaction was ultra vires of the statutes of the company was wholly irrelevant because that was the reason why the contract was void and not a ground for exempting the appellant from its liability to pay.
The words "of whatever kind" are wide enough, to take within their sweep all kinds of transactions entered into by the predecessor company.
The present transaction was undoubtedly entered into by the predecessor company which had received the sum of Rs. 2,00,000 from the plaintiff and had issued share scrips.
In these circumstances, therefore, we do not see how the defendant No. 3 can escape his liability even under section 7(2) of the Act.
As however the plaintiff will be entitled to restitution of the benefits under section 65 of the Act, he can only get the amount which he had paid to the appellant company and not any interest thereon up to the date of the suit.
For these reasons, we are of the opinion that the judgment of the High Court is correct and does not require any interference except a slight modification in the form of the decree.
We, therefore, direct that the plaintiff will be entitled to the decree of Rs. 2,00,000 passed by the courts below but not to the interest of Rs. 47,000 claimed by him and to that extent the decree is hereby modified.
The plaintiff will however be entitled to interest at six per cent per annum from the date of the suit to the date of the payment.
With this modification the appeal is dismissed, but in the circumstances without any order as to costs.
S.R. Appeal dismissed.
| IN-Abs | The plaintiff respondent filed a suit for recovery of a sum of Rs. 2 lakhs invested by him in the Adarsh Bima Company, which was taken over by the appellant, (defendant No. 3) herein, on the basis that the managing,, director of the Adarsh Bima Company by practising fraud and misrepresentation on the plaintiff that the plaintiff would be entitled to an assured dividend of 4%, that too contrary to the statute of the company induced him to part with the said sum by purchasing 200 shares of Rs. 100/ each.
The suit was contested by the appellant mainly on the ground that after the appellant took over the Adarsh Bima Company he was not liable for any act of the company which was ultra vires of the statutes of the company.
The trial Court passed a decree in favour of the respondents and the High Court affirmed it by dismissing the appeal by the appellant.
In appeal by certificate, the appellant contended (a) that on the finding that fraud was committed on the plaintiff and the act of the managing director being ultra vires of the statutes of the company, the company would not be liable although the managing director may be personally liable; and (b) assuming that the company was liable, but in view of the provisions of section 7(2) of the , the liability of the appellant would extend only to matters appertaining to, the controlled business as defined in the Act.
Dismissing the appeal the Court.
^ HELD : (1) The words of section 7(2) of the are of the widest amplitude and the section includes all debts, liabilities, obligations of whatever kind then existing and appertaining to the controlled business of the insurer.
There can be no doubt that but the time when the appellant took over the Adarsh Bima Company.
the obligation to restitute the benefit received by the company from the plaintiff had been fastened and the appellant was legally bound to return the same to the plaintiff under section 65 of the Contract Act, in view of the findings of the Courts below that the contract was void.
[15G H, 16A I] (2) The question as to whether or not the transaction was ultra vires of the statutes of the company was wholly irrelevant because that was the reason why the contract was void and not a ground for exempting the appellant from its liability to pay.
[16A] (3) The words "of whatever kind" in section 7(2) are wide enough to take within its sweep all kinds of transactions entered into by the predecessor company.
The present transaction was undoubtedly entered into by the Predecessor 12 company which had received the sum of Rs. 2 lakhs from the plaintiff and had issued share slips and the appellant, therefore, cannot escape his liability even under section 7(2).
[16 A C] (4) As the plaintiff will be entitled to restitution of the benefits under section 65 of the Contract Act, he can get only the amount which he had paid to the appellant company and not any interest upto the date of the suit.
[16C] [However the Court awarded interest at six percent per annum from the date of the suit, to the date of payment under section 34 of the C.P.C.] (5) The contention that on the finding that a fraud was committed on the plaintiff and the act of the managing director being ultra vires of the statutes of the company, the company would not be liable although the managing director may be personally liable is wrong.
There was absolutely no pleading by the defendants that the monies were received by the managing director personally and in fact the same did not go to the coffers of the company.
From the issue of the share scrips to the plaintiff, it must be presumed that the money was received by the company.
Moreover this question not having being raised before any Courts below and also being a question of fact cannot be gone into.
[13C, E, F, 14D E]
|
Civil Appeal Nos.
122 1244 of 1978.
Appeal by special leave from the Judgment and order dated 23 11 77 of the Andhra Pradesh High Court in appeals against orders Nos. 236, 237, 241 to 243, 246, 253 to 260, 287, 288, 293, and 294 of 1977.
Y. section Chitale, A. A. Khan, J. B. Dadachanji and D. N. Mishra for the appellants.
S.V. Gupte, Attorney General of India and Girish Chandra for the Respondent.
83 The order of the Court was delivered by KRISHNA IYER, J. Law is essentially the formal expression of the regulation of economic relations in society.
That is the key note thought in this case" where the core question is: who is an employee ? Secondly, to decide the meaning of a welfare measure a feeling for the soul of the measure is a surer guide than meticulous dissection with lexical tools alone.
The definitional amplitude of 'employee ' in section 2(9) of the , (hereinafter referred to as the Act), is the sole contentious issue canvassed by counsel at the bar.
We have heard Sri Chitale for the appellant and the learned Attorney General for the respondent Corporation at some length, because a decision by this Court as to the width of the definition and consequential fall out of statutory obligations may cover a considerable number of establishments.
We have granted leave to appeal on that basis and now proceed to study the anatomy of 'employee ' as defined in section 2(9) of the Act.
A brief factual narration may help get a hang of the case.
The High Court, before which the present appellants had filed fruitless appeals has summarised the facts succinctly thus: "The appellants are owners of theatres in the twin cities of Hyderabad and Secunderabad, where films are exhibited.
Within the same premises as the theatre, in every case, there in a canteen and a cycle stand.
The canteen and the cycle stand are leased out to contractors under instruments of lease.
The contractors employ their own servants to run the can teen and the cycle stand.
In regard to persons so employed by the contractors, the owners of the theatres were treated 'Principal Employers ' and notices of demand were issued to them calling upon them to pay contribution under the employees ' State Insurance Act.
Thereupon the owners of theaters filed application under Section 75 of the Employees State Insurance Act before the Employees Insurance Court for a declaration that the provisions of the Act were not applicable to their theaters and that they were not liable to any contribution in respect of the persons employed in the can teens and cycle stands attached to the theaters.
The Insurance Court, on a consideration of the relevant lease deeds and other evidence, noticed the following features in regard to the running of the canteens: "(1) All these canteens are within the premisses of the cinema theatres (2) A few of these canteens have access 84 directly from the abutting roads whereas the other canteens can be reached only through the open space inside the cinema theatres.
(3) The persons running the canteens are them selves responsible for equipping the canteens with the necessary furniture and for providing the required utensils.
(4) The Managements of all these Cinema theaters pay the electricity charges due in respect of these canteens.
(5) The persons working in these canteens are employed only by the contractors or tenants who run the canteens and they alone are responsible for the salaries payable to the persons.
(6) The managements of the cinema theatres have absolutely no supervisory control over the persons employed in these canteens.
(7) These canteens have to be run only during the show hours.
This is made abundantly clear by Exhibits P 7 to P 10 and in the, face of the recitals contained in these agreements, I am not prepared to accept P.W. 1 's evidence that the tenants of these canteens are at liberty to run them at other times also.
In particular Exhibit P 10 provides that the lessee shall run the business only during the show hours and that it shall be closed as soon as the cinema shows are closed.
(8) A few of the persons working in the can teens are allowed inside the auditorium during the interval for vending eatables and beverages.
They can enter the auditorium a few minutes before the interval and can remain inside the auditorium for a few minutes after the interval.
(9) It is seen Freon Ex P. 10 that the management of the cinema theatre had reserved to itself the right to specify what types of things should be sold in the canteen.
The canteens are expected to maintain a high degree of cleanliness and sanitation.
(10) In some cases the managements of the theatres reserve the right to enter the canteen premises at all reasonable time for purposes of check and inspection.
exhibit P. 9 contains a specific clause in that regard.
" These features led the Insurance Court to arrive at the following findings of fact. "From the several circumstance mentioned above it is clear that these canteens are meant primarily for the convenience and comfort of those visiting the cinema theatres though in a few cases the persons in charge of canteens seem to be allowing the general public also to have access to the canteens taking advantage of the fact that the canteens can be recalls directly from the abutting road.
But this Circum 85 stance does not by itself indicate that these canteens are A thrown open to the general public as other hotels, restaurants or eating houses.
" In regard to cycle stands, the Insurance Court held: "Hence it may safely be concluded that these cycle stands are meant exclusively for the convenience of persons visiting B, the theaters." The Insurance Court found that the owners of theaters where principal employers with reference to the persons employed by contractors in the canteens and the cycle stands attached to the theaters and rejected the applications filed by the owners of theaters under Sec. 75 of the Act.
The disappointed theatre owners appealed under Sec. 82, without avail, but undaunted.
moved this Court for Special Leave to Appeal which we have granted, as stated earlier, so that we may discuss the facets of the definitional dispute in some detail and lay down the law on the main question.
A conspectus of the statute, to the extent relevant, is necessary to appreciate the controversy at the Bar.
The statutory personality and the social mission of the Act once projected, the resolution of the conflict of interpretation raised in this case is simple.
Although, technically, the Act is a pre Constitution one, it is a post Independence measure and shares the passion of the Constitution for social justice.
Articles 38, 39, 41, 42,,43 and 43 A of the Constitution show concern for workers and their welfare.
Since Independence, this legislative motivation has found expression in many enactments.
We are concerned with one such law designed to confer benefits on this weaker segment in situations of distress as is apparent from the Preamble.
The machinery for state insurance is set up in the shape of a Corporation and subsidiary agencies.
All employees in Factories or establishments are sought to be insured against sickness and allied disabilities, but the funding, to implement the policy of insurance, is by contributions from the employer and the employee.
In view of the complexities of modern business organisation the principal employer is made primarily liable for payment of contribution "in respect of every employee, whether directly employed by him or by or through an immediate employer".
Of course, where the employee is not directly employed by him but through another 'immediate employer ', the principal employer is empowered to recoup the contribution paid by him on behalf of the immediate employer (section 41).
There is an Inspectorate to supervise the determination and levy of the contributions.
86 There is a chapter prescribing penalties; there is an adjudicating machinery and there are other policing processes for the smooth working of the benign project envisaged by the Act.
The benefits belong to the employees and are intended to embrace is extensive a circle as is feasible.
In short, the social orientation, protective purpose and human coverage of the Act are important considerations in the statutory construction, more weighty than mere logomachy or grammatical nicety.
With this prefatory statement we may go straight to the crucial definition.
The essential question is whether a cinema theatre manager who has no statutory obligation to run a canteen or provide a cycle stand but, for the better amenities of his customers and improvement of his business, enters into an arrangement with another to maintain a canteen and a cycle stand and that other employs, on his own, workers in connection with the canteen and the cycle stand, can be held liable for contribution as the principal employer of the workmen although they are engaged independently by the owner of the canteen or the cycle stand.
It is common ground that there is no statutory obligation on me part of the appellants to run canteens or keep cycle stands.
It is common ground? again.
that the workers with whom we are concerned are not directly employed by the appellants and, if we go by the master and servant relationship under the law of contracts, there is no employer employee nexus.
Even so, it has been held cone currently by the Insurance Court and the High Court that "canteens are meant primarily for the convenience and comfort of persons visiting the theatres and the cycle stands are meant exclusively for the convenience of the persons visiting theatres" and "that the persons employed in the` canteens and cycle stands are persons employed on work which is ordinarily part of the work of the theatre or incidental to the purpose of the theatres.
In relation to the person so employed, therefore, the owners of the theatres are principal employers. ' ' The High Court proceeded further to affirm: "By undertaking to run the canteen or the cycle stand the contractor has undertaken the execution of the whole or part of the work which is ordinarily part of the work of the theatre of the principal employer or is incidental for the purpose of the theatre.
We have already held that the running of canteen or cycle stand is work carried on in connection with the work of the theatre, work which may be considered to be either ordinarily part of the work of the theatre or incidental to the purpose of the theatre.
If so, there is no reason why the contractor should not come within the definition of 'immediate employer ' ".
87 Before us counsel have mainly focussed on the definition of "employee" since the short proposition which creates or absolves liability of the appellants depends on the canteen workers and the cycle stand attendants being 'employees ' vis a vis the theatre owners.
There is no doubt that a cinema theatre is an 'establishment ' and that the appellants, as theatre owners, are principal employers, being persons responsible for the supervision and control of the establishment.
Admittedly, the canteens and cycle stands are within the theatre premises.
Within this factual metrix let us see if the definition in section 2(9) will fit.
We may read the definition of "employee" once again before analysing the components thereof 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 or 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 of 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, or (iii)whose services are temporarily lent or let on hire to the principal employer by the person with whom the person whose services are so lent or let on hire has entered into a contract of service; and includes any person employed for wages on any work connected with the administration of the factory or establishment or any part, department or branch thereof or with the purchase of raw materials for, or the distribution or sale of the products of, the factory or establishment; but does not include: (a) any member of the Indian naval, military or air forces; or 88 (b) any person so employed whose wages (excluding remuneration for overtimes work) exceed five hundred rupees a month: Provided that an employee whose wages (excluding remuneration for overtime work) exceed five hundred rupees a month at any time after and not before, the beginning of the contribution period, shall continue to be an employee until the end of that period.
The reach and range of the definition is apparently wide and deliberately transcends pure contractual relationships.
We are in the field of labour jurisprudence, welfare legislation and statutory construction which must have due regard to Part IV of the Constitution.
A teleological approach and social perspective must play upon the interpretative process.
Now here is a break up of Sec.
The clause contains two substantive parts.
Unless the person employed qualifies under both he is not an 'employee '.
Firstly he must be employed "in or in connection with the work of an establishment.
The expression "in connection with the work of an establishment" ropes in a wide variety of workmen who may not be employed in the establishment but may be engaged only in connection with the work of the establishment.
Some nexus must exist between the establishment and the work of the employee but it may be a loose connection. 'in connection with the work of an establishment ' only postulates some connection between what the employee does and the work of the establishment.
He may not do anything directly for the establishment; he may not do anything statutorily obligatory in the establishment; he may not even do any thing which is primary or necessary for the survival or smooth running of the establishment or integral to the adventure.
It is enough if the employee does some work which is ancillary, incidental or has relevance to or link with the object of the establishment.
Surely, an amenity or facility for the customers who frequent the establishment has connection with the work of the establishment.
The question is not whether without that amenity or facility the establishment cannot be carried on but whether such amenity or facility, even peripheral may be, has not a link with the establishment.
Illustrations may not be exhaustive but may be informative.
Taking the present case, an establishment like a cinema theatre is not bound to run a canteen or keep a cycle stand (in Andhra Pradesh) but no one will deny that a can teen service, a toilet service, a car park or cycle stand, a booth foresail of catchy film literature on actors, song hits and the like, surely have connection with the cinema theatre and even further the venture.
89 On the other hand, a book stall where scientific works or tools are A sold or stall where religious propaganda is done, may not have anything to do with the cinema establishment and may, therefore, be excluded on the score that the employees do not do any work in connection with the establishment, that is, the theatre.
In the case of a five star hotel, for instance, a barber shop or an arcade, massage parlour, foreign exchange counter or tourist assistance counter may be run by some one other than the owner of the establishment but the employees so engaged do work in connection With the establishment or the hotel even though there is no obligation for a hotel to, maintain such an ancillary attraction.
By contrast, not a lawyer 's chamber or architect 's consultancy.
Nor indeed, is it a legal ingredient that such adjunct should be exclusively for the establishment, if it is mainly its ancillary.
The primary test in the substantive clause being thus wide, the employees of the canteen and the cycle stand may be correctly described as employed in connection with the work of the establishment.
A narrower construction may be possible but a larger ambit is clearly imported by a purpose oriented interpretation.
The whole goal of the statute is to make the principal employer primarily liable for the insurance of kindred kinds of employees on the premises, whether they are there in the work or are merely in connection with the work of the establishment.
Merely being employed in connection with the work of an establishment, in itself, does not entitle a person to be 'employee '.
He must not only be employed in connection with the work of the establishment but also be shown to be employed in one or other of the three categories mentioned in Sec.
2(9) (i) covers only employees who are directly employed by the principal employer.
Even here, there are expressions which take in a wider group of employees than traditionally so regarded, but it is imperative that any employee who is not directly employed by the principal employer cannot be eligible under Sec. 2 '(9) (i) .
In the present case, the employees concerned are admittedly not directly employed by the cinema proprietors.
Therefore, we move down to Sec.
2(9) (ii).
Here again, the language used is extensive and diffusive imaginatively embracing all Possible alternatives of employment by or through all independent employer.
In such cases, the 'principal employer ' has no direct employment relationship since the 'immediate employer ' of the employee, concerned is some one else.
Even so, such an employee, if 7 520SCI/78 90 he works (a) on the premises of the establishment, or (b) under the supervision of the Principal employer or his agent '`on work which is ordinarily part of the work of the establishment or which is preliminary to the work carried on in or incidental to the purpose of the establishment", qualifies under Sec.
2(9) (ii).
The plurality of persons engaged in various activities who are brought into the definitional net is wide and considerable; and all that is necessary is that the employee be on the premises or be under the supervision of the principal employer or his agent.
Assuming that the last part of Sec.
2(9) (ii) qualifies both these categories, all that is needed to satisfy that requirement is that the work done by the employee must be (a) such as is ordinarily (not necessarily nor statutorily) part of the work of the establishment, or (b) which is merely preliminary to the work carried on in the establishment, or (c) is just incidental to the purpose of the establishment.
No one can seriously say that a canteen or cycle stand or cinema magazine booth is not even incidental to the purpose of the theatre.
The cinema goers ordinarily find such work an advantage, a facility an amenity and some times a necessity.
All that the statute requires is that the work should not be irrelevant to the purpose of the establishment.
It is sufficient if it is incidental to it.
A thing is incidental to another if it merely appertains to something else as primary.
Surely, such work should not be extraneous or contrary to the purpose of the establishment but need not be integral to it either.
Much depends on time and place, habits and appetites, ordinary expectations and social circumstances.
In our view, clearly the two operations in the present case, namely, keeping a cycle stand and running canteen are incidental or adjuncts to the primary purpose of the theatre.
We are not concerned with Sec.
2(9) (iii) nor with the rest of the definitional provision.
Shri Chitale tried to convince us that on a minute dissection of the various clauses of the provision it was possible to exclude canteen employees and cycle stand attendants.
May be, punctilious sense of grammar and minute precision of language may sometimes lend unwitting support to narrow interpretation.
But language is handmaid, not mistress.
Maxwell and Fowler move along different streets, sometimes.
When, as in Sec.
2(9), the definition has been cast deliberately in the widest terms and the draftsman has endeavoured to cover every possibility so as not to exclude even distant categories of men employed either in the primary work or cognate activities, it will defeat the object of the statute to truncate its semantic sweep and throw out of its ambit those who obviously are within the benign 91 contemplation of the Act.
Salvationary effort, when the welfare of the weaker sections of society is the statutory object and is faced with stultifying effect, is permissible judicial exercise.
In this view we have no doubt that the findings assailed before us are correct and that the conclusion reached deserves to be affirmed.
We do so.
Learned counsel for the appellants finally submitted that, in this event of our negativing his legal contention, he should be given the benefit of natural justice.
We agree.
The assessment of the quantum of the employers ' contribution has now been made on an ad hoc basis because they merely pleaded non viability and made no returns.
on the strength of Sec.
45A the contribution was determined without hearing.
In the circumstances of the case, and the learned Attorney General has no obiection we think it right to direct the relevant Corporation authorities to give a fresh hearing to the principal employers concerned, if sought within 2 months from to day, to prove any errors or infirmities in the physical determination of the contribution.
Such a hearing in tune with the ruling, of this Court in the Central Press case(1) is fair and so we order that the assessment shall be reconsidered in the light of a de novo hearing to the appellants and the quantum of contribution affirmed or modified by fresh orders.
Before we formally wind up we think it apt to make a critical remark on the cumbersome definition in Sec.
2(9) of the Act when has promoted considerable argument.
This reminds us of the well known dictum or Sir James Fitzjames Stephen "that in drafting it is not enough to gain a degree of precision which a person reading in good faith can understand, hut it is necessary to attain if possible to a degree of precision which a person reading in bad faith cannot misunderstand.
"(2) Subject to this direction we dismiss the appeals with costs (one set) .
S.R. Appeals dismissed (1)[1977] 3 S.C.R. 35.
(2)Lux Gentium Lex Than and Now 1799 1974 p. 7.
| IN-Abs | The appellants are owners of theaters in the twin cities of Hyderabad and Secunderabad, where fulls are exhibited.
Within the same premises as the theaters, in every case, there is a canteen and a cycle stand, leased out to contractors under instruments of lease.
The contractors employ their own servants to run the canteen and the cycle stand.
In regard to persons so employed by the contractors the owners of the theaters were treated as 'principal employers ' and notices of demands were issued to them calling upon them to pay contribution under the Employees State Insurance Act.
Thereupon the appellant filed an application under section 75 of the Act before the Employees Insurance Court for a declaration that the provisions of the Act were not application to their theaters and that they were not liable to any contribution in respect of the persons employed in the canteen and the cycle stands attached to their theaters.
The Insurance Court found "that the canteens are meant primarily for the convenience and comfort for those visiting the cinema theaters though in a few cases the persons in charge of the canteens seem to be allowing the general public also to have access to the canteens" and that the cycle stands "are meant exclusively for the convenience of the persons visiting the theaters".
The Insurance Court held that the owners of the theaters were, therefore, principal employers with reference to the persons employed by the contractors in the canteens and the cycle stands attached to the theaters and rejected the application filed by the contractors under section 75 of the Act.
In appeal the High Court confirmed the said findings and hence the appeal by special leave.
Dismissing the appeal, the court ^ HELD: (1) Law is essentially the formal expression of the regulation of.
economic relations in society.
In view of the complexities of modern business organisations, 'the principal employer ' is made primarily liable for payment of contribution "in respect of every employee, whether directly employed by him or by or through an immediate employer," under the Insurance Act, the main purpose of which is to insure all employees in factories or establishments against sickness and allied disabilities, but the funding.
to implement the policy of insurance is by contribution from the employers and the employees.
The benefits belong to the employees and are intended to embrace as extensive a circle 81 as is feasible.
In short the social orientation, protective purpose and human A coverage of the Act are important considerations in the statutory construction, more weighty than mere logomachy or grammatical nicety.
[83A, 85G H, 86A B] (2) In the field of labour jurisprudence, welfare legislation and statutory construction which must have due regard to Part IV of the Constitution, a teleological approach and social perspective must play upon the interpretative process. 'The reach and range of the definition of 'employee ' in section 2(9) of the E.S.I. Act is apparently wide and deliberately transcends pure contractual relationships.
[88C] (3) Clause (9) of section 2 contains two substantive parts.
Unless the person employed qualifies under both he is not an employee.
Firstly he must be employed "in or in connection with" the work of an establishment.
The expres sion "in connection with the work of an establishment ' ' ropes in a wide variety of workmen who may not be employed in the establishment.
Some nexus must exist between the establishment and the work of the employee but it may be a loose connection.
"In connection with the work of an establishment" only postulates some connection between what the employee does and the work of the establishment.
He may not do anything directly for the establishment concerned; he may not clo anything statutorily obligatory in the establishment; he may not do anything which is primary or necessary for the survival or smooth running of the establishment or integral to the adventure.
It is enough if the employee does some work which is ancillary, incidental or has relevance to or link with the object of the establishment.
Surely, the amenity or facility for the customers who frequent the establishment has connection with the work of the establishment.
the question is not whether without theat amenity or facility the establishment cannot be carried on but whether such amenity or facility even peripheral may be, has not a link with the establishment.
Nor indeed is it legal ingredient that such adjunct should be exclusively for the establishment if it is mainly its ancillary.
C] The primary test in the substantive clause being thus wide, the employees of the canteen and the cycle stand may be correctly described as employed in connection with the work of the establishment.
A narrower constriction may be possible but a larger ambit is clearly imported by a purpose oriented interpretation.
The whole goal of the statute is to make the principal employer primarily liable for the insurance of kindred kinds of employees on the premises, whether they are there in the work or are merely in connection with the work of the establishment.
Merely being employed in connection with the work of establishment, in itself, does not entitle a person to be an "employee".
He must not only be employed in connection with the work of the establishment but also be shown to be employed in one or other of the three categories mentioned in section 2(9) (1).
[89D F] (4) section 2(9) (i) covers only employees who are directly employed by the 'principal employer '.
It is imperative that any employee who is not directly employed by the principal employer cannot be eligible under section 2(9) (i).
In the present case the employees concerned are admittedly not directly employed by the cinema proprietors.
[89F G] 82 (5) The language of section 2(9) (ii) is extensive and diffusive imaginatively embracing all possible alternatives of employment by or through an independent employer.
In such cases the principal employer has no direct employment relationship since the immediate employer of the employee concerned is someone else.
Even so such an employee if he works (a) on the premises of the establishment, or (b) under the supervision of the principal employer or his agent on work which is ordinarily part of the work of the establishment or which is preliminary to the work carried on in or incidental to the purpose of the establishment", qualifies under section 2(9) (ii).
The plurality of persons engaged in various activities who are brought into the definitional net is wide and considerable and all that is necessary is that the employee be on the premises or be under the supervision of the principal employer or his agent.
[89G H, 90A B] (6) A thing is incidental to another if it merely appertains to something else as primary.
Surely such work should not be extraneous or contrary to the purpose of the establishment but need not be integral to it either.
such depends upon time and place, habits and appetites, ordinary expectations and social circumstances.
Keeping a cycle stand and running a canteen are incidental or adjuncts to the primary purpose of the theatre.
[90D E] (7) May be punctilious sense of grammar and minute precision of language may sometimes lend unwitting support to narrow interpretation.
But language is the handmaid, not mistress.
Maxwell and Fowler move along different streets, sometimes.
It will defeat the objects of the statute to truncate its semantic sweep and throw out of its ambit those who obviously are within the benign contemplation of the Act, when, as in section 2(9) the definition has been cast deliberately in the widest terms and the draftsman has endeavoured to cover every possibility so as not exclude even distant categories of men employed either in the primary work or cognate activities.
Salvationary effort, when the welfare of the weaker sections of society is the statutory object and is faced with stultifying effect, is permissible judicial exercise.
The findings, in the instant case, arc correct and the conclusion reached deserves to be affirmed.
[90G H, 91A B] [In view of the fact that the contribution was determined without hearing under section 45 A of the ESI Act, the Court directed the Corporation authorities to give a, fresh hearing to the principal employers i.e. the employers in tune with the ruling of this Court in the Central Press case [19771] 3 SCR 351.
|
Appeal No. 107 of 1953.
Appeal by special leave from the judgment and decree dated the 7th February 1949 of the Patna High Court in appeal from original decrees No. 230 and 268 of 1945 arising out of the decree dated the 9th 3 day of August 1945 of the Second Court of Subordinate Judge at Monghyr in Title Suit No. 40 of 1943.
P. K. Chatterjee, for the appellants.
Tarachand Brijmohanlal, B. C. Misra and section Barneshwar Prasad, for respondents Nos.
3 to 6, 20 to 25 and 27 to 39.
January 16.
The Judgment of the Court was delivered by VENKATARAMA AYYAR J.
The properties which are the subject matter of this litigation are agricultural lands of the extent of 18 acres 23 cents situate in Mauza Chowki.
They originally belonged to Khiran Rai, Firangi Rai and others, and were usufructuarily mortgaged by them on 10 8 1900 to Babunath Prasad and Babu Misri Lal under two sudbharna deeds, Exhibits 2 and 3, for a sum of Rs. 1,600.
The defendants of the first party are the representatives of these mortgagees.
In execution of a money decree passed against the mortgagors, 9 acres 6 cents out of the above lands were brought to sale on 11 6 1907 and purchased by Rameshwar Prasad Singh, the undivided uncle of the first plaintiff.
On 23 12 1913 the remaining extent of 9 acres 17 cents was purchased by the.
first plaintiff from the mortgagors, and thus, the plaintiffs who were members of a joint Hindu family became entitled to all the interests of the mortgagors in the suit lands.
In 1943 they deposited under section 83 of the Transfer of Property Act the amounts due on the mortgage deeds, Exhibits 2 and 3, in the court of the District Munsif, Monghyr.
The defendants of the first party withdrew the amount, and the mortgages thus became redeemed.
When the plaintiffs attempted to take khas or actual possession of the lands, they were obstructed by the defendants of the second party who claimed occupancy rights therein.
The plaintiffs then instituted the suit out of which the present appeal arises, in the court of the Subordinate Judge, Monghyr, for recovery of possession of the lands from the second party defendants.
4 The plaintiffs alleged that the lands were 'kamat khudkast ' which had been in the personal enjoyment of Khiran Rai and Firangi Rai and thereafter of the mortgagees and the defendants of the first party by virtue of the sudbharna deeds, Exhibits 2 and 3, that the second party defendants claimed rights as occupancy raiyats under a settlement by the mortgagees, that the settlement was not real or bona fide, and was not binding on the mortgagors.
In the alternative, the plaintiffs claimed damages against the defendants of the first party, if it was found that the second party bad acquired occupancy rights under a settle ment from them.
Both sets of defendants denied that the lands were kamat lands, or that the defendants of the first party settled the defendants of the second party as raiyats on the land.
They pleaded that the latter had been in possession even prior to the mortgages, Exhibits 2 and 3, under a settlement with the mortgagors, and that accordingly the plaintiffs were entitled neither to possession from the second party nor damages from the first party.
The Subordinate Judge of Mongbyr who tried the suit, held that the lands were private lands of the proprietors, that the defendants of the second party or their predecessors in title bad not been inducted on the lands by the mortgagors, that they were put into possession by the mortgagees only under the lease deed, Exhibit 2(a) dated 27th May 1905, that they were mere creatures of the first party, and that the settlement was not bona fide and not binding on the plaintiffs.
He accordingly granted a decree in favour of the plaintiffs in ejectment.
Against this judgment, there was an appeal by the defendants to the High Court of Patna, which agreed with the Subordinate Judge that the defendants of the second party were inducted into possession only in 1905 under the lease deed, Exhibit 2(a), and that they were not raiyats settled by the mortgagors prior to 1900.
But the learned Judges held that the suit lands were not proved to be 'sir ' or private lands, that the second party defendants were not the creatures of the first party, that the lease deed, Exhibit 2(a) was a 5 bona fide transaction, and that the recognition of the defendants of the second party by the mortgagees as tenants would confer occupancy rights on them.
In the result, the suit was dismissed.
The plaintiffs appeal.
It may be stated that the alternative claim for damages against the first party was abandoned by the plaintiffs, and the only relief now claimed is possession of lands as against the second party.
Mr. Misra, counsel for the first party, had accordingly nothing to say about the merits of the controversy between the appellants and the second party defendants, and merely pressed for his costs being awarded.
It was the second party appearing by counsel Mr. Tarachand Brijmohan Lal, that vigorously contested the appeal.
The substantial question that arises for our decision is whether the lands in dispute are private lands of the proprietor.
Section 120(2) of the Bihar Tenancy Act VIII of 1885, hereinafter referred to as the Act, enacts a presumption that "land is not a proprietor 's private land, until the contrary is shown".
And further, there was a cadastral survey in 1908, and in the final notification published under section 103 A of the Act, the lands were recorded as in the possession of the second party defendants, whose status was described as 'kaimi ' or settled raiyats.
Under section 103 B(3), "every entry in a record of rights so published shall be evidence of the matter referred to in such entry, and shall be presumed to be correct until it is proved by evidence to be incorrect".
The result of both these provisions is that the burden is on the proprietor clearly to establish that the lands are his private lands.
Some oral evidence has been adduced by both sides as to the character of the lands, but it is too vague, recent and interested to be of much value, and the question therefore falls primarily to be decided on the 'documentary evidence in the case.
The earliest document bearing on the question is Exhibit 1, which is a mortgage deed executed by the previous owners, Firangi Rai and others, to Harbans Narain Singh on the 10th April, 1893 over a portion 6 of the suit lands.
Therein, it is recited that the mortgagors "mortgage, hypothecate and render liable the properties constituting the proprietory mukarri interest, with all the zamindari rights and claims including the khudkasht kamat lands".
The word 'khudkasht ' means personal cultivation, and that is a neutral expression, which might include both private lands and bakasht lands, that is to say, raiyati lands, which had come into the possession of the proprietor by surrender, abandonment or otherwise.
But the word 'kamat ' has a definite connotation, and means private lands.
Vide section 116 of the Bihar Tenancy Act.
If the recital in Exhibit I is to be accepted as correct, the lands were on that date in the personal cultivation of the proprietor as private lands.
Exhibits 2 and 3 are the sudbharna deeds dated 10 8 1900 under which the first party defendants got into possession of the suit lands.
They are in the same terms, and recite the at the mortgagees are to enter into possession and occupation of lands, " cultivate or cause to be cultivated the same for their self satisfaction", and that after the expiry of the period fixed for redemption, the mortgagors are to pay the mortgage amounts in one lump and take back the properties "in our sir and khas possession".
The word 'sir ' is synonymous with 'kamat ' and 'ziraat ', and means private lands of the proprietor.
(Vide section 116).
These recitals are of considerable importance, as they occur in deeds inter parties.
The respondents are right in contending that they cannot be regarded as admissions by the mortgagees as the deeds were executed by the mortgagors; but they are certainly admissible under section 13 of the Evidence Act as assertions of title, and as it is under these documents that the first party defendants claim, their probative value as against them and as against the second party defendants who claim under them is high.
Exhibit I (b) is a simple mortgage executed by Firangi Rai and others on 21 12 1901 in favour of one Chhotu Singh over some properties forming part of the suit lands.
It also contains the recital that these properties are kamat khudkasht lands.
There 7 is finally the lease deed executed in favour of the first party by the defendants of the second party, Exhibit 2(a) under which the latter came into possession of the lands.
It recites that the lands had been in the exclusive cultivation of Babu Nath Prasad and Babu Misri Lal, that the lessees will give up possession of the lands at the end of the term which was a period of 2 years,, and that the lessors will be "competent to bring the lands mentioned in this kabuliat under their exclusive cultivation".
As these documents are ante litem motam, and as some of them, are inter parties and extend over a considerable period of time, they form cogent and strong evidence that the lands are private lands.
Now, what is the evidence adduced by the defendants to rebut the inference to be drawn from them? None.
They simply trust to the presumptions in their favour enacted in sections 120(2) and 103 B of the Act to non suit the plaintiffs.
But these are rebuttable presumptions, and they have, in our opinion, been rebutted by the evidence in the suit, which is all one way.
It was argued for the respondents that even if the evidence referred to above was accepted, that would be insufficient under section 120 of the Act to support a finding that the lands were private lands.
Section 120 runs as follows: "(1) The Revenue Officer shall record as a proprietor 's private land (a) land, which is proved to have been cultivated as khamar, ziraat , sir, nij, nijjot or kamat by the propriet or, himself with his own stock or by his own servants or by hired labour for twelve continuous years immediately before the passing of this Act, and (b) cultivated land which is recognised by village usage as proprietor 's khamar, ziraat, sir, nij, nijjot or kamat.
(2) In determining whether any other land ought to be recorded as a proprietor 's private land, the officer shall have regard to local custom, and to the question whether the land was, before the second day 8 of March, 1883, specifically let as proprietor 's private land, and to any other evidence that may be produced; but shall presume that land is not a proprietor 's private land until the contrary is shown.
(3)If any question arises in a Civil Court as to whether land is or is not a proprietor 's private land, the Court shall have regard to the rules laid down in this section for the guidance of Revenue Officers".
The contention of the respondents is that under this section before lands could be held to be private, it must be shown that they had been cultivated as private lands for 12 years prior to the date of the Act, and that as the evidence in the case went back only to 1893, the requirements of the section were not satisfied.
This argument proceeds on a misconception about the true scope of section 120.
That section does not enact that no land shall be recorded as private, unless it is proved to have been cultivated as private land for 12 years prior to the date of the Act.
It only provides that when that is proved, it shall be recorded as private land.
But when no such evidence is forthcoming, it does not preclude that fact from being established by "any other evidence that may be produced", if that is relevant and admissible under the provisions of the Evidence Act.
That was the view taken in Maharaja Kesho Prasad Singh vs Parmeshri Prasad Singh(1), and on appeal, the Privy Council agreed with it in Bindeshwari Prasad Singh vs Maharaja Kesho Prasad Singh(2).
The position, therefore, is that section 120 merely enacts certain rules of evidence to be followed in an enquiry as to whether a disputed land is 'ziraat '.
When in such enquiry the facts mentioned in section 120(1) are established, the law raises a presumptio juris et de jure that the lands are private.
But where such evidence is not available, that fact can still be estab lished by otber and satisfactory evidence.
What has to be decided therefore is whether the evidence actually adduced by the plaintiffs in the present case is (1) Patna 414.
(2) [1926] 53 I.A. 164, 9 sufficient to discharge the burden which the law casts on them and to prove that the lands are 'kamat ' or 'sir ' lands.
For the reasons already given, weare of opinion that it is sufficient to justify a findidg in the affirmative.
Strong reliance was placed by the respondents on Exhibits F 1 and F 1(1) which are khatians relating to the suit lands published on 7 12 1909 recording them as in the possession of the defendants of the second party as 'kaimi ' and on the presumption under section 103 B that that entry is correct.
This presumption, it is contended, is particularly strong in the present case, because the predecessors in title of the plaintiffs were parties to the proceedings and contested the same, and that the record of rights was made after considering their objections.
The plaintiffs, however, denied that they were parties to the proceedings, and contended that they were taken behind their back by the mortgagees and the second party defendants acting in collusion with a view to defeat their rights.
Exhibits A 1 and A 1(1) are certified copies of the objection petitions stated to have been filed by the mortgagors under section 103 A of the Act, and they purport to have been signed by one Chulai Mahto as karpardaz of some of the mortgagors.
The plaintiffs deny the genuineness of the signatures in Exhibits A 1 and A 1(1) and also the authority of Chulai Mahto to represent the mortgagors.
There is no evidence that the signatures on Exhibits A 1 and A 1 (1) are true, but the defendants rely on the presumption enacted in section 90 of the Evidence Act in favour of their genuineness.
But Exhibits A 1 and A 1 (I) are merely certified copies of the objection petitions filed before the Survey Officer and not the originals, and it was held in Basant vs Brijraj(1) that the presumption enacted in the section can be raised only with reference to original documents and not to copies thereof.
There is the further difficulty in the way of the respondents that the documents are signed by Chulai Mahto as agent, and there is no proof that he was an agent, (1) [1935] 62 I.A. 180.
10 and section 90 does not authorise the raising of a presumption as to the existence of authority on the part of Chulai Mahto to represent the mortgagors.
It is again to be noted that the objection on the merits raised in Exhibits A 1 and A 1(1) that the lands are bakasht lands in the possession of mortgagees is not one which it was to the interests of the mortgagors to put forward, as, if accepted, it would preclude them from admitting tenants in respect of them, without conferring on them the status of settled raiyats and occupancy rights under section 21 of the Act.
It was only if the lands were private lands that the proprietor would be entitled to cultivate them personally, and that was the claim which they had been making consistently from 1893 onwards.
The claim put forward in Exhibits A 1 and and A 1(1) is destructive of the rights claimed all along by the mortgagors, and amounts to an admission that the lands are not private and raises the doubt that the petitions were not really inspired by them.
It should also be mentioned that at the hearing of the petition, no evidence was adduced by the mortgagors, and the decision of the Survey Officer was given practically ex parte.
The mortgagees were parties to the proceedings, and they did not appear and produce the mortgage deeds, Exhibits 2 and 3, under which they got into possession, and which described the lands as 'sir '.
It was to the interests of the mortgagees that the 'lands should be held to be 'sir ', and it was further their duty to defend the title of the mortgagors as against the claim made by the tenants that they were raiyati lands.
Why then did they not produce Exhibits 2 and 3 at the hearing? The recitals in the lease deed, Exhibit 2(a) which was executed by the defendants of the second party, were inconsistent with their claim that the lands were raiyati.
Why did they not produce it at the hearing ? Thereis therefore much to be said for the contention ofthe appellants that the proceedings evidenced by Exhibits A 1 and A 1(1) were collusive in character.
But even assuming that they were real, that 11 would not materially affect the result, as the true effect of a record of rights under section 103 A is not to create rights where none existed but simply to raise a presumption under section 103 B that such ' rights exist, and that presumption is one liable to be rebutted.
There is a long line of authorities that a person who attacks a record made under section 103 A as incorrect discharges the burden which the law casts on him under section 103 B by showing that it was not justified on the materials on which it is based.
Vide Bogha Mower vs Ram Lakhan(1) and Eakub Ali vs Muhammad Ali(2).
And where., as here, no evidence was placed before the authorities who made the record, he has only to produce evidence which satisfies the court that the entry is erroneous.
Whether the question is considered with reference to the presumption under section 120(2) or section 103 B, the position is the same.
The plaintiffs who claim that the lands are kamat have to establish it by clear and satisfactory evidence.
If the evidence adduced by them is sufficient, as we have held it is, to establish it, the presumption under section 103 B equally with that under section 120(2 becomes displaced.
In the result, we are of opinion that the suit lands are the private lands of the proprietor.
It was next contended that even if the lands were private lands, that would not prevent the acquis tion of occupancy rights by the tenants under Chapter V, as the restriction provided in section 116 in that behalf did not apply on the facts of the present case, and that in consequence no relief in ejectment could be granted.
Section 116 enacts, omitting what is not material, that "nothing in Chapter V shall confer a right of occupancy in a proprietor 's private land where any such land is held under a lease for a term of years or under a lease from year to year".
, In the present case,, the tenants got into possession under Exhibit 2(a), which was a lease for two years, and they would therefore be precluded from acquiring occupancy rights by virtue of that demise.
But it is argued that the tenants continued in possession of (1) (2) 12 the holdings even after the expiry of the term under Exhibit 2(a), paid the rent to the mortgagees who recognised them as tenants, and that their status therefore was not that of tenants holding under a lease for a term or from year to year, and that accordingly there was no impediment to their acquiring occupancy rights under Chapter V.
The point has not been argued whether, as Exhibit 2(a) is an agricultural lease, the tenants who held over after the expiry of the period fixed therein, should not be con, sidered to hold as tenants from year to year, on the principle enacted in sections 106 and 116 of the Transfer of Property Act.
We shall proceed on the footing that on the findings of the High Court that the tenants were riot the creatures or servants of the mortgagees, and that they had been in continuous possession paying rent to them, section 116 did not debar them from acquiring rights under Chapter V.
But the question is whether they acquired such rights under that Chapter.
Section 21 provides that every person who is a settled raiyat in a village shall have a right of occupancy in all land for the time being held by him as a raiyat in that village.
Section 20 defines a settled raiyat as a person who holds continuously land for a period of 12 years in any village.
Section 5(2) defines 'raiyat ' as a person who has acquired a right to bold land for the purpose of cultivating it by himself or members of his family or servants or partners, and section 5 (3) provides that "a person shall not be deemed to be a raiyat unless he holds land either immediately under a proprietor or immediately under a tenure bolder".
The position therefore is that before a person can claim occupancy rights under section 21, he must establish that he is a raiyat as defined in sections 5(2) and 5(3), and as the defendants of the second party acquired the right to hold the lands for the purpose of cultivation from the first party mortgagees and not under the mortgagors, they are not raiyats as defided in section 5(3), and can claim no rights under section 21.
On behalf of the tenants, it was contended that as under section 58 of the Transfer of Property Act a 13 mortgage is a transfer of interest in land, the mortgagee is the owner of that interest and therefore a proprietor for the purpose of section 5(3).
Section 3(2) defines a proprietor as meaning a person owning whether in trust or for his own benefit an estate or part of an estate.
A mortgagee is no doubt the transferee of an interest in immovable property, and may in a loose sense be said to be the owner of that interest.
But the definition of a proprietor requires that he should own the estate or part thereof and not merely an interest therein.
It would be a contradiction in terms to say of a mortgagee that he owns the estate over which he owns an interest.
As observed in Ghose on the Law of Mortgage in India, Volume I, page 77, "Interest which passes to the mortgagee is not the ownership or dominion which, notwithstanding the mortgage, resides in the mortgagor".
The question whether for purposes of section 21 of the Act a tenant from a mortgagee can be held to be a raiyat as defined in section 5(3) was considered by this Court in Mahabir Gope and others vs Harban8 Narain Singh and others(1), and it was held that a mortgagee is neither a proprietor nor a tenure holder, and a tenant inducted by him on the lands is not a raiyat within the definition of those terms under the Act.
That decision governs this case.
The contention of the respondents that the mortgagees could be considered as tenure holders within section 5(3) is equally untenable.
Section 5(1) defines a tenure holder as meaning a person who has acquired a right to hold lands for collecting rents or for bringing them into cultivation by establishing tenants thereon.
In the present case, the lands were under the personal cultivation of the mortgagors at the time when they were mortgaged under Exhibits 2 and 3.
There were then no raiyats on the land and no 'question of transferring the right to collect rent from them.
The respondents relied on the terms in Exhibits 2 and 3 that the mortgagees might cultivate the lands or cause them to be cultivated at their pleasure, as authorising the establishment of tenants.
But that (1) , 781.
14 clause would apply only if the lands had to be brought afresh under cultivation, and that was not the position here.
As the mortgagees are neither proprietors nor tenure holders as defined in the Act, the tenants holding under them could not claim to be raiyats as defined in sections.5(2) and 5(3), and no occupancy rights could therefore be acquired by them under section 21 of the Act.
It was next contended that the mortgagees had the power under section 76 of the Transfer of Property Act to induct tenants on the land for purposes of cultivation, that such a transaction.
would be binding on the mortgagors, and that its effect would be to confer on the tenants the status of raiyats and that they would get occupancy rights under section 21 of the Act.
The decisions in Manjhil Lal Biswa Nath Sah Deo vs Mahiuddin(1), Rajendra Nath vs Dinu Prodhan(2) and Pramatha Nath vs Sashi Bhu8an(3) were relied on in support of this contention.
This argument proceeds on a confusion of two wholly independent concepts distinct in their origin and different in their legal incidents.
The law is that a person cannot confer on another any right higher than what he himself possesses, and therefore, a lease created by a usufructuary mortgagee would normally terminate on the redemption of the mortgage.
Section 76(a) enacts an exception to this rule.
If the lease is one which could have been made by the owner in the course of prudent management, it would be binding on the mortgagors, notwithstanding that the mortgage has been redeemed.
Even in such a case, the operation of the lease cannot extend beyond the period for which it was granted.
In the present case, assuming that the mortgagees bad the power under section 76(a) of the Transfer of Property Act to continue the lessees under Exhibit 2(a) as tenants on the lands after the termination of the period fixed therein that would confer on them at best the status of tenants from year to year and not give them the right to continue in possession after the termination of the agricultural year during which the redemption (1) (2) A.I.R. 1930 Cal.
(3)A.I.R. 15 takes place.
In this view, the power of the mortgagee under section 76(a) of the Transfer of Property Act to induct tenants in the usual course of management would not avail the respondents to claim occupancy rights over the lands.
Turning next to the provisions of the Bihar Tenancy Act, section 21 confers on settled raiyats a permanent right of occupancy, provided the conditions mentioned in that section are satisfied.
But this right is a creature of the statute, and cannot be claimed apart from its provisions.
A mortgagee is, as already stated, neither a proprietor nor a tenure holder, and a person settled by him on the land does not enjoy the status of a raiyat under sections 5(2) and 5(3).
He is therefore not a person entitled under the terms of the statute to any occupancy rights.
Thus, if the respondents cannot resist the suit for ejectment either by reason of section 76(a) of the Transfer of Property Act or section 21 of the Bihar Tenancy Act, it is difficult to see how they could get such a right as the result of the interaction of both those sections.
In Manjhil Lal Biswa Nath Sah Deo vs Mahiuddin(1), the suit was by a mortgagor after redemption to recover possession of lands, which had been leased by the mortgagee.
The proprietor claimed that the lands were zirait; but the finding, however, was that they were raiyat lands, and that the mortgagee had inducted tenants into possession in the usual course of management.
It was held that the tenants could not be ejected.
The decision was expressly based on the fact that the lands were raiyati lands, and the learned Judges distinguished the cases in Mahadeo Prasad Sahu vs Gajadhar Prasad Sahu(2 ) and Jogeshwar Mazumdar vs Abed Mahomed Sirkar (3) on the ground that the lands which were the subject of mortgage therein were zerait lands.
This decision does not support the broad proposition for which the respondents contend, and is really against them, as the mortgage in the present case is of 'kamat ' lands.
In Rajendra Nath vs Dinu Prodhan(4), the facts were (1) (2) (3) (4) A.I.R. 1930 Cal.
16 similar to those in Manjhil Lal Biswa Nath Sah Deo vs Mahiuddin(1), except that the lands do not appear to have been raiyati lands.
In holding that the mortgagor was not entitled to possession, Guha, J. observed that the mortgage deed did not stand in the way of the tenants being settled by the mortgagee, and that when they were so settled, they had well defined rights under the Act, and could not be ejected.
If section 5(3) of the Act did not apply and it would not, unless the letting was by the proprietor or tenureholder it is not stated what other provision of law operated to confer occupancy rights on the tenant.
The learned Judge then referred to Binad Lal Pakrashi vs Kalu Pramanik(2 ) as furnishing the principle on which the decision should rest.
There, a tenant was put into possession by a person who claimed to be the proprietor, and though it subsequently turned out that he was not, it was held that the letting by him conferred on the tenant the status of a raiyat.
As pointed out in Peary Mohun Mondal vs Radhika Mohun Hazra(3) and Krishna Nath Chakrabarty vs Mahomed Wafiz(4) the basis of the decision in Binad Lal Pakrashi vs Kalu Pramanik(2) was that the word "proprietor" in section 5(3) would include a defacto as well as a de jure proprietor, and a tenant who is bona fide inducted into possession by him would have the status of a raiyat.
This decision makes an inroad on the general principle that no one can confer a better right than what he has got, and later decisions have generally shown a disposition to confine its application within narrow limits.
But even on its own ground, it can have no application when the person who admits a tenant is not, as required by section 5 (3), a proprietor de facto or de jure, but a mortgagee.
The principle of the decision in Binad Lal Pakraski vs Kalu Pramanik(2) does not therefore support the conclusion in Rajendra Nath vs Dinu Prodhan(5) that a tenant admitted by a mortgagee into possession acquires the status of a raiyat.
(1) , (2) Cal.
(3) (4) (5)A.I.R. 17 In Pramtha Nath vs Sashi Bhusan(1), a permanent lease was granted by a mortgagee after he had obtained a decree for foreclosure.
Subsequently, that decree was recalled in a suit by the Official Receiver ' representing one of the mortgagors and a fresh decree for redemption was passed.
After redemption, the Official Receiver received rent from the lessee treating him as a tenant on the land.
A transferee from the Official Receiver having subsequently instituted a suit in ejectment against the tenant, it was held that the latter bad acquired a right of occupancy under section 21 of the Act, and that the relief for khas possession could not be granted as against him.
Notwithstanding that some of the observations in the judgment are widely expressed, the ground of the decision really is that when the Official Receiver accepted rent from the tenant, that amounted to an affirmance of the lease by him, and that would have the effect of bringing section 5(3) directly into play and conferring on the tenant the status of a raiyat.
The decisions discussed above do not lay down any acceptable principle that a lease by a mortgagee which is protected by section 76(a) of the Transfer of Property Act, operates by itself to confer a right of occupancy on the tenant under section 21 of the Act.
Some argument was founded by the respondents on the clause in Exhibits 2 and 3 that the mortgagee could get the lands cultivated.
It was contended that this clause conferred authority on the mortgagee to settle raiyats on the lands, and that the tenants admitted in pursuance of this authority would be in the same position as if they had been admitted by the proprietor and the conditions of section 5(3) would be satisfied.
But then, the lands are private lands, and the clause in question is followed by the provision that on redemption the mortgagors would be entitled to resume "sir and khas possession", and that would be rendered nugatory if the deed is construed as authorising the mortgagees to settle tenants on the lands with the status of raiyats.
The authority to get lands cultivated can only mean (1) A.I.R. 1937 Cal. 763.
3 18 getting them cultivated through hired labour as contemplated in the definition of 'private lands '.
We are clearly of opinion that the mortgage deed conferred no authority on the mortgagees to admit tenants so as to confer on them rights of occupancy.
In the result, we must old that the defendants of the second party have failed to establish that they have any rights of occupancy over the suit lands, and that the plaintiffs are accordingly entitled to a decree in ejectment, with future mesne profits as claimed in the plaint.
This appeal is allowed, the decree of the lower court is set aside, and that of the Subordinate Judge of Monghyr restored as against 2nd party defendants with costs throughout.
The suit as against the first party defendants is dismissed, but in the circumstances, there will be no order as to costs.
| IN-Abs | The appellants were the purchasers of the mortgagors ' interests in the agricultural lands in suit and deposited the amounts due on the mortgages in court under section 83 of the Transfer of Property Act, which were withdrawn by the representatives of the mortgagees and the mortgages were redeemed.
They were obstructed in taking khas possession of the lands by tenants who were recorded as "settledraiyats" in the finally published record of rights and brought the suit for recovery of possession from the tenants and, alternatively, for damages against the representatives of the mortgagees.
The subordinate Judge found that the lands were the private lands of the proprietors and the tenants were inducted not by them but by the mortgagees in possession by a lease for a term which was neither bona fide nor binding on the appellants and passed a decree in ejectment.
On appeal, the High Court held that the lands were not the private lands of the mortgagors, the lease was bona fide and the recognition of the lessees as tenants by the mortgagees conferred on them rights of occupancy in the suit lands and dismissed the suit.
The respondents relied on the presumptions under sections 103 B and 120(2) of the Bihar Tenancy Act and contended that the recognition by the mort gagees of their tenancy right had the effect of conferring on them the rights of occupancy under the Act.
Held, that an entry in the record of rights published under section 103 A of the Bihar Tenancy Act does not create rights but merely raises a presumption under section 103 B of the Act that such Tights exist, which can be rebutted if it can be shown that the materials on which it was based do not justify it.
Bogha Mower vs Ram Lakhan, ([1917] and Bakub Ali vs Muhammad Ali ([1928] , referred to.
That where, as in the present case, no evidence was produced before the authority who made the record, one has only to produce 2 such evidence as satisfies the court in order to rebut the presumption.
This is equally true with regard to the presumption enacted by section 120(2) of the Act with regard to the proprietor 's private land.
That section 120 of the Bihar Tenancy Act merely enacts certain rules of evidence for determining whether a disputed land is the proprietor 's "private" land.
It does not preclude the proprietor, even if he cannot prove that he cultivated the land as such for 12 years prior to the date of the Act, from adducing other evidence to show that the land is his private land.
Kisho Prashad Singh vs Parmeshri Prasad Singh, ([1923] I.L.R. 2 Pat. 414) and Bindeshwari Prasad Singh vs Kisho Prasad Singh ([1926] L.R. 53 I.A. 164), relied on.
That as the mortgagees were neither proprietors nor tenure holders as defined by the Bihar Tenancy Act, persons inducted by them could not be raiyats within the meaning of section 5(3) of the Act so as to acquire any rights of occupancy under section 21 of the Act.
Mahabir Gope vs Harbans Narain Singh ([1952] S.C.R. 775), applied.
Nor could the provisions of section 76 (a) of the Transfer of Property Act be of any avail.
Assuming that the lease granted by the mortgagees continued even after termination of the period fixed therein, that could confer on the lessees no more than the status of tenants from year to year, in which case, their possession would cease with the termination of the agricultural year during which the mortgages were redeemed.
Rajendra Nath vs Dinu Prodhan (A.I.R. , disap proved.
Binod Lal Pakrashi vs Kalu Pramanik ([1893] I.L.R. 20 Cal.
708), doubted and held inapplicable.
Pramatha Noth vs Sashi Bhusan (A.I.R. , distinguished.
Case law discussed.
Held further, that there is no presumption of genuineness in favour of certified copies of documents under section 90 of the Evidence Act, nor does that section authorise the raising of a presumption as to the existence of authority of an agent to act for another.
Basant vs Brijraj ([1935] L.R. 62 I.A. 180), referred to.
|
Civil Appeal Nos.
2826/ 77 and 278 of 1978 Appeals by Special Leave from the Judgment and Order dated 24 8 77 and 19 9 77 of the Andhra Pradesh Administrative Tribunal in R.P. Nos.
203/76 and 319/76 respectively.
L. N. Sinha, G. Narayana Rao and P. P. Singh for the Appellants in both appeals.
Vepa Parthasarathy and A .
Subba Rao for Respondent No. 1 in both the appeals.
P. Ramachandra Reddy, Adv.
A.P., T. I '.
section Narasimhachari, G. Narayana Rao (In C.A.2826/77) and Mrs. Urmila Sirur for R. R. 2 and 4 in C.A. No. 2836/77 and R. 2 in C.A. 278/78.
The Court delivered the following order Respondent 1, Shri V. V. section Krishna Murthy, may if so advised file a writ petition in the High Court of Andhra Pradesh for challenging the order of his compulsory retirement passed by the Governor of Andhra Pradesh on September 29, 1975.
If he files the writ petition within three weeks from today, the High Court of Andhra Pradesh and the State of Andhra Pradesh, whom respondent 1 proposes to implead to his writ petition, shall file their counter affidavit, if so advised, within three weeks after the filing of the writ petition.
If respondent I desires to file a rejoinder he shall do so within a week after the filing of the counter affidavit.
The High Court shall take up the writ petition for hearing within six weeks after the filing of the counter affidavit.
30 The learned counsel who appeared before us for the High Court as also the.
learned counsel who appeared before us for the State of Andhra Pradesh agree that the High Court and the State Government will not raise any objection to the maintainability of the writ petition which respondent 1 desires to file for challenging the order of compulsory retirement" either on the ground of laches or of delay or on any other technical ground.
All the contesting parties before us are agreed that the writ petition to be filed by respondent 1, as aforesaid, may be disposed of by the High Court on merits The Government of Andhra Pradesh shall comply with the.
Order passed by this Court on March 22, 1978 within four weeks from to day.
We quash the order of the Andhra Pradesh Administrative Tribunal dated September 19, 1977 in R.P. No. 319 of 1976.
We will give our reasons in support of that conclusion later.
The common Judgment in C.A. 2826/77 and C.A. 278/78 (C.A.V.) of the Court was delivered by SARKARIA, J. This judgment will not only dispose of this Appeal (C.A. 2826 of 1977) but also furnish reasons in support of our short order dated August 4, 1978, by which we allowed Civil Appeal No.278 of 1978.
Both these Appeals raise a common question with regard to the interpretation, scope and impact of Article 371 D on Articles 226, 229 and 235 of the Constitution.
In Civil Appeal 2826 of 1977, appellant 1 is the Chief Justice and appellant 2 is the High Court of Andhra Pradesh represented by the Registrar of that Court.
Respondent 1, Shri L. V. A. Dikshitulu is a former employee of the High Court whose premature retirement is in question.
Respondents 2 and 3 are the Government? and the Accountant General, respectively of Andhra Pradesh.
Respondent 1 was a permanent employee of the former Hyderabad High Court prior to November 1, 1956.
He was confirmed in the post of Chief Superintendent on the establishment of that High Court on October 6, 1956.
At the time of his confirmation, he was serving on deputation, with the concurrence of the Chief Justice of the Hyderabad High Court, as Junior Law officer in the Ministry of Law, Government of India.
In March 1965, with the concurrence of the Chief Justice of the High Court of Andhra Pradesh which was the 31 successor High Court to the Hyderabad High Court he was appointed as a temporary Deputy Secretary in the Law Department of the Government of Andhra Pradesh.
By an order dated February 6, 1968, the State Government replaced his services at the disposal of the Chief Justice.
On his reversion from deputation, he rejoined the establishment of the High Court as Sub Assistant Registrar on February 8, 1968.
On that very day, the High Court received a complaint petition from one Smt.
Promila Reddy, an Assistant Translator in the State Law Department, alleging misconduct on the part of the 1st Respondent relating to the period during which he was working as Deputy Secretary in the State Government.
A preliminary inquiry was conducted by the then Registrar, Shri section Ramachandra Raju (later Judge of High Court of Andhra Pradesh), respondent 4 herein.
The Registrar submitted his preliminary inquiry report to the then Chief Justice.
After considering the report, the then Chief Justice suspended the 1st respondent and ordered a departmental inquiry against him by Mr. Justice Chinappa Reddy.
After due inquiry the enquiring Judge found the 1st respondent guilty of misconduct and recommended his suspension from service for three years.
The Chief Justice, however, differed with the enquiring Judge regarding the punishment, and proposed to impose the punishment of compulsory retirement after issue of a show cause notice to that effect.
After considering the representations made by the 1st respondent, the Chief Justice by an order, dated January 3, 1969, compulsorily retired him from service.
The 1st respondent then moved the High Court under Article 226 of the Constitution by a writ petition (No. 1425 of 1969) questioning the order of the State Government replacing his services with the High Court and assailing the penalty of compulsory retirement inflicted upon him by the Chief Justice.
The High Court set aside the order of reversion of the first respondent from deputation to the High Court staff, on the ground that there was a stigma attached thereto.
It also set aside the order of compulsory retirement, not on merits, but on the ground that the recommendation of the enquiring Judge in regard to punishment, viz. stoppage of increments, was not communicated to him (1st respondent).
The High Court while allowing the writ petition observed that it will be open to the State Government to take action against him in accordance with the Andhra Pradesh Civil Services (C.C.A.) Rules pertaining to lent officers.
32 After the first respondent 's writ petition (No. 1425 of 1969) was allowed, the State Government by an order, dated November 10, ]970, reinstated the I st respondent as Deputy Secretary with effect from February 8, 1968, and once again replaced his services at the disposal of the Chief Justice with effect from April 25, 1968.
The State Government did not take further departmental action on the complaint of Smt.
Promila Reddy.
The 1st respondent then filed another writ petition (No. 5442 of 1970) under Article 226 of the Constitution in the High Court, impugning the order, dated November 10, 1970, of the State Government.
But, the High Court dismissed the same by a judgment, dated December 30, 1 970.
The first respondent 's appeals (C.A. 476 and C.A. 1536 of 1971) against the orders of the High Court in the afore said writ petitions are pending in this Court.
After the dismissal of his writ petition (No. 5442/70), the first respondent, on reinstatement, joined duty as Sub Assistant Registrar in the High Court.
Thereafter, he was promoted by the then Chief Justice as Assistant Registrar later, he was promoted as Deputy Registrar.
In 1975.
A. P. Government Servants Premature Retirement Rules, 1975 came into force.
Under the Rules, which amended Andhra Pradesh Liberalised Pension Rules, 1961 and the Hyderabad Civil Service Rules, employees of the State who have completed 25 years of service or completed 50 years age can be prematurely retired after 3 month 's notice or grant of 3 month 's pay in lieu of notice.
Rule 19 of the Andhra Pradesh High Court Service Rules contains a similar provision.
Thereafter on September 19, 1975, a Committee was constituted under an order of the Chief Justice.
It consisted of the Acting Chief Justice and two Judges (Madhava Reddy and Ramachandra Raju, JJ.) of the High Court.
The Committee reviewed the service records of the servants and officers of the High Court who had reached the age of 50 years.
The 1st respondent, Sri Dikshitulu had attained the age of 50 years on March 12, 1974.
The Committee resolved to retire him prematurely, among others, in public interest.
By an order, dated September 26, 1975, of the Acting Chief Justice, purporting to have been passed under Article 229 of the Constitution read with Rule 39 of the Andhra Pradesh High Court Service Rules, Rule 3(2)(a) of Andhra Pradesh Liberalised Pension Rules 1961/Rule 292 of the Hyderabad Civil Service Rules and Rule 2(1) of A. P. Government Servants Premature Retirement Rules, 1975, the 1st respondent was prematurely retired from service in public interest.
On April 8, 1976, 33 he filed a Review Petition.
The then Chief Justice rejected his Review Petition.
The rejection was communicated to him by a letter, dated September 13, 1976.
The first respondent, again, moved the High Court on the Judicial Side by a writ petition (No. 58908 of 1976) under Article 226 of the Constitution, praying for a writ of certiorari to quash the orders of his pre nature retirement.
This writ petition came up for preliminary hearing before a Division Bench of the High Court, which by a lengthy speaking order (after hearing the Government pleader), on October 29, 1976, dismissed it on the preliminary ground that it was not maintainable because "the jurisdiction of the High Court which was hitherto being exercised under Article 226 of the Constitution to correct orders of the Chief Justice on the administrative side with regard to conditions of service of officers of the High Court now stands vested in the Administrative Tribunal by reason of clause 6(1) of the Administrative tribunal order (made by President) and Article 371 D of the Constitution.
" The first respondent then on November 16, 1976, moved the Andhra Pradesh Administrative Tribunal, impugning the order of his compulsory retirement.
In that petition, the first respondent inter alia contended that Mr. Justice M. Ramachandra Raju, who sat in the Committee to consider the case of the 1st respondent for premature retirement, was biased against him and that the impugned order, dated September 26, 1975, on his premature retirement was arbitrary and capricious.
The Tribunal, however, set aside the impugned order of the 1st respondent 's premature retirement made by the Chief Justice on the sole ground that it is arbitrary and amounts to a penalty of dismissal or removal from service and is hit by Article 311 (2) of the Constitution.
Against the aforesaid order, dated August 24, 1977, the appellants have now come in appeal before us by special leave under Article 136 of the Constitution.
Now, the relevant facts giving rise to Civil Appeal No. 278 of 1978, may be set out.
G The 1 st respondent, Shri V. V. section Krishnamurthy, in that appeal was, at the material time, a member of the Andhra Pradesh State Judicial Service.
He attained the age of SO years on November 24, 1974.
He was prematurely retired, in public interest, by an order dated September 29, 1975 of the State Government on the recommendation of the High Court.
Before the Government passed this order, a Committee of Judges appointed by the High Court, considered the entire 34 service record of the 1st respondent and records of other Judicial officers and decided to prematurely retire the first respondent in public interest.
The first respondent filed a petition before the Andhra Pradesh Administrative Tribunal, challenging the order of his premature retirement made by the State Government.
It was contended by him that his service record has throughout been good.
Before the Tribunal the High Court resisted the respondent 's petition on the ground that the order of premature retirement be based upon the over all performance of the respondent and the order had been passed in public interest and was in accordance with the Rules.
On behalf of the 1st respondent, a memorandum was filed, in which it was contended that since, according to the Andhra Pradesh State Judicial Service Rules, the High Court in the case of Subordinate Judges is the appointing authority, the Governor has no power or jurisdiction to pass an order of premature retirement of a member of the State Judicial Service.
The tribunal accepted this contention and allowed the Respondent 's petition without considering the other contentions raised in the petition, and set aside the order of the respondent 's premature retirement.
Against that order of the Tribunal, the High Court of Andhra Pradesh came in appeal (C.A. 278 of 1978) by special leave to this Court under Article 136 of the Constitution.
The first contention of Shri Lal Narain Sinha, appearing for the appellants, is that in the context of basic and fundamental principles underlying the Constitution relating to the judiciary including the High Court, officers and servants of the High Court and members of the judicial services are outside the scope of Article 371 D of the Constitution.
It is urged that the general expressions indicating class or classes of posts in Article 371 D(3) must be given a restricted interpretation which is in harmony with this basic scheme of the Constitution.
The thrust of the argument is that in the absence of clear, unequivocal words in Article 371 D(3) showing a contrary intention, the Article cannot be construed as taking away the jurisdiction of the High Court under Article 226 to review administrative action against a member of the High Court staff or the Subordinate Judiciary.
Any other construction, proceeds the argument, will militate against the exclusiveness of the control vested in the Chief Justice under Article 279, and in the High Court under Article 235, over the High Court staff or the Subordinate Judiciary, as the case may be, and will make such control subject and subservient to the wishes of the Executive 35 Government which, in terms of the Presidential order constituting the A Administrative Tribunal, is the ultimate authority to confirm, vary or annul the orders passed by the Tribunal.
In support of his contention that the basic scheme of the Constitution seeks to ensure the independence of the High Court staff and the judiciary from executive control, learned counsel has referred to Pradyat Kumar Bose vs The Hon 'ble the Chief Justice of Calcutta High Court(1); M. Gurumoorthy vs Accountant General Assam & Nagaland & Ors.,(2); State of West Bengal vs Nirpendra Nath Bagchi(3); Baldev Raj Guliani & Ors.
vs The Punjab & Haryana High Court & Ors.(4); and State of U.P. vs Batuk Deo Pati Tripathi & Anr.(5).
As against the above, Shri Vepa Sarathy, appearing for the respective first respondent in C.A. 2826 of 1977 and in C.A. 278 of 1978 submits that when his client filed a writ petition (No. 58908) of 1976 under Article 226 of the Constitution in the High Court for impugning the order of his compulsory retirement passed by the Chief Justice, he had served, in accordance with Rule 5 of the Andhra Pradesh High Court (original Side) Rules, notice on the Chief Justice and the Government Pleader, and in consequence, at the preliminary hearing of the writ petition before the Division Bench, the Government Pleader appeared on behalf of all the respondents including the Chief Justice and raised a preliminary objection that the writ petition was not maintainable in view of Section 6 of the Andhra Pradesh Administrative Tribunal order made by the President under Article 371 D which had taken away that jurisdiction of the High Court and vested the same in the Administrative Tribunal.
This objection was accepted by the High Court, and as a result, the writ petition was dismissed in limine.
In these circumstances proceeds the argument the appellant is now precluded on principles of res judicata and estoppel from taking up the position, that the Tribunal 's order is without jurisdiction.
But, when Shri Sarathy 's attention was invited to the fact that no notice was actually served on the Chief Justice and that the Government Pleader who had raised this objection, had not been instructed by the Chief Justice or the High Court to put in appearance on their behalf, the counsel did not pursue this contention further.
Moreover, this is a pure question of law depending upon the interpretation of Article 371 D.
If the argument holds good, it will make the decision of the (1) ; (2) [1971] Supp.
S.C.R. 420.
(3) ; (4) ; (5) 36 Tribunal as hearing been given by an authority suffering from inherent lack of jurisdiction.
Such a decision cannot be sustained merely by the doctrine of res judicata or estoppel as urged in this case.
In the alternative, Shri Sarathy submitted that the subject matter of this case will fall within the purview of `sub clause (c) of Clause (3).
Of Article 371 D, because (i) compulsory retirement is a condition of service, and (ii) the 1st respondent was a person appointed to a post in a "civil service of the State" within the contemplation of the said Clause.
According to Shri Sarathy, even if an order issued by the President under Clause (3) of article 371 D, abridges, curtails or takes away the powers vested in the Chief Justice under Article 229, or in the High Court under Articles 226 and 235, or is contrary to the constitutional scheme of securing independence of the judiciary, such a result was intended to be brought about by the amendment of the Constitution as is clear from the non obstante provision in Clause (10) of this Article.
Shri Sarathy further invited our attention to the definition of the expression "public post" given in the order of the President issued under Article 371 D(3).
This definition, according to the learned counsel, is wide enough to include all posts held by the staff of the High Court and the Subordinate Judiciary.
To appreciate the contentions canvassed before as, it is necessary, at the outset, to have a look at the constitutional scheme delineated in Chapters V and VI (Part IV), in general, and the content of Article 229 and 235, in particular.
Chapter V is captioned: 'The High Courts in the States".
It provides for various matters relating to High Courts, such as constitution of High Courts (Article 216).
Appointment and Conditions of the office of a Judge (article 217), Salaries of Judges (article 221), Transfer of Judges (article 222), Jurisdiction of existing High Courts and the powers of the Judges thereof in relation to the administration of justice in the Court, including the power to make rules of Court and to regulate the sittings of the Court (article 225).
Article 226 gives power to High Court to issue certain Writs against any Government for the enforcement of fundamental rights and for the redress of any substantial injury arising by reason of any substantive or procedural illegality Article 228 confers power on a High Court to withdraw to its own file cases involving a substantial question of law as to the interpretation of the Constitution.
Then comes the crucial provision in Article 229, which is the fulcrum of the scheme of this Chapter.
Article 229 bears the marginal heading: "officers and Servants and the expenses of High Courts".
Clause (1) of the Article provides that "appointments of officers and servants of a High Court shall be made by the Chief 37 Justice of the Court or such other Judge or officer of the Court as he A may direct".
Then there is a proviso to this clause with which we are not concerned in the instant case.
Clause (2) empowers the Chief Justice or some other Judge or officer authorised by him to make rules prescribing the conditions of service of officers and servants of the High Court.
This power, of course, is "subject to the provisions of any law made by the Legislature of the State".
Then, there is a proviso to this Clause, also, which requires that the "Rules made by the Chief Justice or the Judge or officer authorised by him under this Clause shall so far as they relate to salaries, allowances, leave or pensions, require the approval of the Governor of the State.
Clause (3) makes the administrative expenses of a High Court, including all C salaries, allowances and pensions payable to or in respect of the officers and servants of the Court, a charge upon the Consolidated Fund of` the State.
Now, let us see what is the ambit and scope of the power of "appointment" in Article 229(1).
In the context of article 229, read as a whole, this power is of wide amplitude.
The word "appointment" in Article 229 ( 1 ) is to be construed according to axiom that the greater includes the less.
This cardinal canon of interpretation underlies Section 16 of the General Clauses Act which has been made applicable by Article 317(1) of the Constitution.
Construed in the light of this juristic principle, the power of "appointment" conferred by Article 229(1 ) includes the power to suspend, dismiss, remove or compulsorily retire from service.
In short, in regard to the servants and officers of the High Court, Article 229 makes the power of appointment, dismissal, removal, suspension, reduction in rank, compulsory retirement etc., including the power to prescribe their conditions of service, the sole preserve of the Chief Justice, and no extraneous executive authority can interfere with the exercise of that power by the Chief Justice or his nominee, except to a very limited extent indicated in the Provisos.
In conferring such exclusive and supreme powers on the Chief Justice the object which the Founding Fathers had in view, was to ensure independence of the High Court.
The nature and scope of the powers of the Chief Justice under Article 229 has been the subject of several decisions of this Court.
In Pradyat Kumar Bose vs The Hon 'ble the Chief Justice of Calcutta (supra), two questions among others, came up for consideration: (i) Whether the Chief Justice of a High Court has the power to dismiss from service an officer of the High Court.
(ii) If so, whether the Chief Justice could pass an order of such dismissal without previous 38 consultation with the Public Service Commission, as provided by Article 320 of the Constitution.
The Court answered both the questions in the affirmative.
Dealing with the second question, the Court pointed out that members of the High Court staff are not "persons serving under the Government of a State", and that this phrase used in Article 320(3)(c) "seems to have reference to such persons in respect of whom the administrative control is vested in the respective executive Government functioning in the name of the President or of the Governor".
It was held that the servants and officers of the High Court do not fall within the scope of this phrase "because in respect of them the administrative control is clearly vested in the Chief Justice.
who under the Constitution, has the power of appointment and removal and of making rules for their conditions of service".
It was further observed: "The fact that different phrases have been used in the relevant sections of the Government of India Act (1935) and the Constitution relating to the constitutional safeguards in this behalf appears to be meant to emphasise the differentiation of the services of the High Court from other services." ".
Therefore, both on the ground that Article 320(3) (c) would be contrary to the implication of Article 229 and on the ground that the language thereof is not applicable to the High Court staff, we are of the opinion that for the dismissal of the appellant by the Chief Justice, prior consultation with the Public Service Commission was not necessary.
" It was, however, conceded that for the purposes of Article 311.
the phrase "a person who is a member of a civil service of a State" used in that Article includes the officers and servants of the High Court.
The powers of Chief Justice under Article 229 again came up for consideration before this Court in M. Gurumoorthy vs Accountant General Assam & Nagaland & Ors.
(supra).
The Stenographers Service in the High Court was reorganised.
Under the reorganisation scheme, one of these posts created with the sanction of the State Government, was to be that of Selection Grade Stenographer.
On May 7, 1959, the Chief Justice appointed the appellant as Secretary cum Selection Grade Stenographer after merger of the two posts.
The State Government objected that the post of Secretary could not be merged with that of Selection Grade Stenographer.
The Accountant General, under the Government 's instructions, withheld the appellant 's pay slips.
The appellant moved the High Court by a writ petition, which was dismissed.
On appeal, this Court held that the Government 39 had authority to sanction the post, but it could not interfere with the A choice of the incumbent, which undoubtedly was to be of the Chief Justice under Article 229 of the Constitution.
In that context, Grover J., speaking for the Court, neatly summed up the position, which being apposite to the point under discussion, may be extracted: "The unequivocal purpose and obvious intention of the framers of the Constitution in enacting Article 229 is that in the matter of appointments of officers and servants of a High Court, it is the Chief Justice or his nominee who is to be the supreme authority and there can be no interference by the executive except to the limited extent that is provided in the Article.
This was essentially to secure and maintain the independence of the High Courts.
The anxiety of the constitution makers to achieve that object is fully shown by putting the administrative expenses of a High Court including all salaries, allowances and pensions payable to or in respect of officers and servants of the court at the same level as the salaries and allowances of the judges of the High Court nor can the amount of any expenditure so charged be varied even by the legislature.
Clause (1) read with clause (2) of Article 229 confers exclusive power not only in the matter of appointments but also with regard to prescribing the conditions of service of officers and servants of a High Court by Rules on the Chief Justice of the Court.
This is subject to any legislation by the State Legislature but only in respect of conditions of service.
In the matter of appointments even the legislature cannot abridge or modify the powers conferred on the Chief Justice under clause (1).
The approval of the Governor, as noticed in the matter of Rules, is confined only to such rules as relate to salaries, allowances, leave or pension.
All other rules in respect of conditions of service do not require his approval.
Even under the Government of India Act, the power to make rules relating to the conditions of service of the staff of the High Court vested in the Chief Justice of the Court under Section 242(4) read with Section 241 of the Government of India Act, 1935.
" In the result, this Court held that any restrictions imposed by the Government, while communicating the sanction of the post, could not bind the Chief Justice in view of Article 229 of the Constitution.
We now turn to Chapter IV.
It is captioned: "Subordinate Courts".
It consists of Articles which provide for matters relating inter alia to appointment and control of persons who man posts in the 40 subordinate judiciary.
According to the scheme of this Chapter subordinate judiciary, has been classified into (i) District Judges; and members of the 'Judicial Service '.
Article 236 defines the expression "district judge" to include "judge of a city civil court, additional district judge, joint district judge, assistant district judge, Chief judge of a small cause court, chief presidency magistrate, additional chief presidency magistrate, sessions judge, additional sessions judge and assistant sessions judge".
The Article defines "judicial service" to mean "a service consisting exclusively of persons intended to fill the post of district judge and other civil judicial posts inferior to the post of district judge.
" Article 233 gives the High Court an effective voice in the appointment of District Judges.
Clause ( 1 ) of the Article peremptorily requires that "appointments of persons to be, and the posting and promotion of, district judges" shall be made by the Governor "in consultation with the High Court." Clause (2) of the Article provides for direct appointment of District Judges from advocates or pleaders of not less than seven years standing, who are not already in the service of the State or of the Union.
In the matter bf such direct appointments, also, the Governor can act only on the recommendation of the High Court.
Consultation with the High Court under Article 233 is not an empty formality.
An appointment made in direct or indirect disobedience of this constitutional mandate, would be invalid.
(See Chandra Mohan vs State of U.P.(1); Chandramouleshwar vs Patna High Court (2) . 'Service ' which under Clause (1) of Article 233 is the first source of recruitment of District Judges by promotion, means the 'judicial services ' as defined in Article 236.
The word 'posting ' as used in Article 233, in the context of 'appointment ' and 'promotion ', means the first assignment of an appointee or promotee to a position in the cadre of District Judges.
It cannot be understood in the sense of 'transfer '.
[See Ranga Muhammad 's case (3)].
Article 234 enjoins that the rules in accordance with which appointments of persons other than district judges to the judicial service of a State are to be made, shall be framed by the Governor in consultation with the High Court and the Public Service Commission.
The expression "judicial service" in this Article, carries the same connotation as.
defined in Article 236.
(1) (2) ; (3) ; 41 Article 235 is the pivot around which the entire scheme of the Chapter revolves.
Under it, "the control over district courts and court subordinate thereto including the posting and promotions of, and the grant of leave to persons belonging to the judicial service of State" is vested in the High Court.
The interpretation and scope of Article 235 has been the subject of several decisions of this Court.
The position crystallised by these decisions is that the control over the subordinate judiciary vested the High Court under Article 235 is exclusive in nature, comprehensive in extent and effective in operation.
It comprehends a wide variety matters.
Among others, it includes: (a) (i) Disciplinary jurisdiction and a complete control subject only to the power of the Governor in the matter of appointment, dismissal, removal, reduction in rank of District Judges, and initial posting and promotion to the cadre of District Judges.
In the exercise of this control, the High Court can hold inquiries against a member of the subordinate judiciary, impose punishment other than dismissal or removal, subject, however, to the conditions of service, and a right of appeal, if any, granted thereby and to the giving of an opportunities of showing cause as required by Article 311(2).
(ii) If Article 235, the word 'control ' is accompanied by the word "vest" which shows that the High Court alone is made the sole custodian of the control over the judiciary.
The control vested in the High Court, being exclusive, and not dual, an inquiry into the conduct of a member of judiciary can be held by the High Court alone and no other authority.
(State of West Bengal vs Nripendra Nath Bagchi (supra); Shamsher Singh vs State of Punjab(1); Punjab and Haryana High Court vs State of Haryana (sub nom Narendra Singh Rao) (2) (iii) Suspension from service of a member of the judiciary, with view to hold a disciplinary inquiry.
(b) Transfers, promotions and confirmation of such promotions of persons holding posts in the judicial service, inferior is that of District Judge.
(State of Assam vs section N. Sen); (3) State of Assam vs Kuseswar Saikia(4) ) .
(c) Transfers of District Judges (State of Assam vs Ranga Muhammad (supra); Chandra Mouleshwar vs Patna High Court (supra) .
(1) ; (3) (2) ; (4) 4 520SCI/78 42 (d) Award of Selection grade to the members of the judicial service, including District Judges it being their further promotion after their initial appointment to the cadre.
(State of Assam vs Kuseswar Saikia (supra).
(e) Confirmation of District Judges, after their initial appointment.
or promotion by the Governor to the cadre of District Judges under Article 233, on probation or officiating basis.
(Punjab & Haryana High Court vs State of Haryana (supra).
(f) Premature or compulsory retirement of Judges of the District Court and of Subordinate Courts (State of U.P. vs Batuk Deo Pati Tripathi & Anr.
(supra).
Since in both these appeals, orders of the premature retirement of the Respondents, viz. Of Shri Dikshitulu made by the Chief Justice, and of Shri Krishnamoorthy by the Governor in consonance with the decision of the High Court, are in question, it will be appropriate to amplify the point a little.
It is well settled that compulsory retirement, simpliciter, in accordance with the terms and conditions of service, does not amount to dismissal or removal or reduction in rank under Article 31 l or under the Service Rules because the Government servant does not lose the terminal benefits already earned by him (See Tara Singh vs State of Rajasthan (1); State of Haryana vs Inder Prakash Anand (2).
In the last mentioned case the Government servant was officiating in the cadre of District Judges.
The High Court recommended that he should be reverted to his substantive post of Senior Subordinate Judge/Chief Judicial Magistrate and, as such, allowed to continue in service till the age of 58 years.
Contrary to the recommendation or the High Court, the State Government passed an order under Rule S.32(c) of the Punjab Civil Service Rules, compulsorily retiring him from service at the age of 55 years.
Holding that the order of compulsory retirement was invalid, this Court stressed that the power of deciding whether a judicial officer should be retained in, service after attaining the age of 55 years upto the age of 58 years, vests in the High Court, and to hold otherwise "will seriously affect the independence of the judiciary and take away the control vested in the High Court".
The formal order of retirement, however, is passed by the Governor acting on the recommendation of the High Court.
that being "the broad basis of Article 235".
It was explained that "in such cases it is the contemplation in the Constitution, that the Governor as the (1) ; (2) ; 43 head of the State will act in harmony with the recommendation of the A High Court".
It was concluded that "the vesting of complete control over the Subordinate Judiciary in the High Court leads to this that the decision of the High Court in matters within its jurisdiction will bind the State".
In other words, while in form, the High Court 's decision to compulsorily retire a subordinate judicial officer in the exercise of its administrative or disciplinary jurisdiction under Article 235 is advisory, in substance and effect, it is well nigh peremptory.
Recently, in State of Uttar Pradesh vs Batuk Deo Pati Tripathi(1), this Court succinctly summed up the whole position as follows: "The ideal which inspired the provision that the control over District Courts and courts subordinate thereto shall vest in the High Courts is that those wings of the judiciary should be independent of the executive.
It is in order to effectuate that high purpose that article 235 as construed by the Court in various decisions, requires that all matters relating to the subordinate judiciary including compulsory retirement and disciplinary proceedings but excluding the imposition of punishments falling within the scope of Article 311 and the first appointments and promotions should be dealt with and decided upon by the High Courts in the exercise of the control vested in them.
" In sum, the entire scheme of Chapters V and VI in Part VI, epitomised in Articles 229 and 235 has been assiduously designed by the Founding Fathers to insure independence of the High Court and the subordinate judiciary.
The stage is now set for noticing the provision of Article 371 and the Andhra Pradesh Administrative Tribunal order, 1975, made by the President in exercise of the powers conferred by clause (3) and (4) of this Article.
Article 371 was inserted in the Constitution with effect from July 1, 1974 by the Constitution (Thirty second Amendment) Act, 1973.
This Article as its heading shows, makes "special provisions with respect to the State of Andhra Pradesh.
" Clause (1) of the Article authorises the President to provide by order "for equitable opportunities and facilities for the people belonging to different parts of the State" in matters of public employment and education.
Clause (2) particularises the what an order made by the (1) [1978]2 S.C.C. 102.
44 President under clause ( I ), may require to be done.
Clause (3), is crucial for the purpose of the instant case; and may be extracted in full.
It reads as under: (3) The President may, by order, provide for the constitution of an Administrative Tribunal for the State of Andhra Pradesh to exercise such jurisdiction, powers and authority (including any jurisdiction, power and authority which immediately before the commencement of the Constitution (Thirty second Amendment) Act, 1973, was exercisable by any Court (other than the Supreme Court or by any tribunal or other authority) as may be specified in the order with respect to the following matters, namely: (a) appointment, allotment or promotion to such cases or classes of posts in any civil service of the State, or to such class or classes of civil posts under the State, or to such class or classes of posts under the control of any local authority within the State, as may be specified in the order; (b) Seniority of persons appointed, allotted or promoted to such class or classes of posts in any civil service of the State, or to such class or classes of civil posts under the State, or to such class or classes of posts under the control of any local authority within the State, as may be specified in the order.
(c) Such other conditions of service of persons appointed.
allotted or promoted to such class or classes of posts i civil service of the State, or to such class or classes of posts under the State, or to such class or classes of posts under the control of any local authority within the State, as may be specified in the order.
(emphasis supplied).
Clause (4) of the Article further provides that an order made under clause (3) may (a) authorise the Administrative Tribunal to receive representation for redress of grievances relating to any matters within its jurisdiction, as the President may specify, and to make such orders thereon as the Tribunal may deem fit; (b) contain provisions with respect to the powers and authorities and procedure of the Administrative Tribunal, (c) provide for the transfer to the Administrative Tribunal proceedings relating to classes of posts within its jurisdiction, pending before any Court (other than the Supreme Court) or tribunal or other authority; (d) contain supplemental, incidental and consequential provisions including those relating to fees, limitation, evidence 45 Under Clause (5), "the order of the Administrative Tribunal finally disposing of any case shall become effective upon its confirmation by the State Government or on the expiry of three months from the date on which the order is made, whichever is earlier." Then there is a Proviso to this Clause, a most extraordinary provision, which says: Provided that the State Government may, by special order made in writing and for reasons to be specified there in, modify or annul any order of the Administrative Tribunal before it becomes effective and in such a case, the order of the Administrative Tribunal shall have effect only in such modified form or be of no effect, as the case may be.
This clause shows that unlike a Civil Court, or a High Court exercising jurisdiction under Article 226 (prior to the enactment of Article 371D, the Administrative Tribunal set up by an order under clause (3) of the Article, is not competent to pass definitive or final orders, in the sense that all its decisions or orders are subject to confirmation, modification or annulment by the State Government.
The Tribunal 's order has no force proprio vigore unless confirmed by the State Government either expressly within three months of the date on which it was made, or impliedly by not interfering with that order for the said period of three months.
Then there is no provision in the Article, requiring the State Government to give an opportunity of hearing to the parties before modifying or annulling the order of the Tribunal.
Clause (6) requires every special order of the Government made under Clause (5) to be laid before the State Legislature.
Clause (7) clarifies that the High Court or any other Court (other than the Supreme Court) or tribunal shall have no jurisdiction, power or authority in respect of any matter subject to the jurisdiction, power or authority of, or in relation to, the Administrative Tribunal Clause (8) gives power to the President to abolish the Administrative Tribunal, if he is satisfied that its continued existence is not necessary.
Clause (9) is a validating provision.
As will be presently seen, it was enacted to get over the difficulties created by the judicial decisions on Mulki Rules.
46 Clause (10) gives an overriding effect to the provisions of Article 371D and to the Presidential orders made thereunder, by enacting: "(10) The provisions of this article and of any order made by the President thereunder shall have effect notwithstanding anything; in any other provision of the Constitution or in any other law for the time being in force.
" In the context, we may also have a look at the provisions of the Andhra, Pradesh Administrative Tribunal order, 1975, dated the 19th May, 1975 (published as per G.O.Ms.
No. 323, General Administration (SPF D), 22nd May 1975), made by the President in exercise of his powers under Clauses (3) and (4) of Article 371 D. Paragraph 2 of this order contains definitions of various expressions used in therein.
Clause (d) of this paragraph defines "person employed" to mean "an individual, in relation to whom the Tribunal has jurisdiction in respect of the matters specified in paragraph 6 of this order." Paragraphs 3 to 5 are not material to the points under consideration.
Paragraph 6 is important.
It provides in regard to "Jurisdiction, powers and authority of the Tribunal".
It confers on the Tribunal "all the jurisdiction,, powers and authority which, immediately before the commencement of this order, were exercisable by all Courts (except the Supreme Court) with respect to appointment, allotment or promotion to any public post, seniority of persons appointed, allotted or promoted to such post and all other conditions of service of such persons.
" Sub para (2) provides that nothing in sub paragraph (1) of this paragraph shall apply to, or in relation to, (a) persons appointed on contract for a specified term or purpose; (b) member of the All India Services; (c) persons on deputation with the State Government or any local authority within the State being persons in the services of the Central or any other State Government or other authority; (d) persons employed, on part time basis; and (e) village officers.
Sub para (3) is not relevant.
Sub para (4) makes "the law in force immediately before the commencement of this order with respect to the practice procedure and disposal of petitions for the issue of directions, orders or writs under article 226 of the Constitution by 47 the High Court of Andhra Pradesh" applicable (with modifications, if any, made by the Tribunal) to the disposal of petitions by the Tribunal.
There is a proviso to this sub paragraph which is not relevant for our purpose.
The Explanation appended to this Sub paragraph defines for the purpose of Paragraph 6, "public post" to mean: (a) all classes of posts in all civil services of the State; (b) all classes of civil posts under the State; and (c) all classes of posts under the control of any local.
authority within the State.
Paragraph 7 empowers the Tribunal to receive representations from persons aggrieved, relating to matters within the jurisdiction of the Tribunal.
Then there is a proviso directing the Tribunal not to admit any such representation (a) unless the person concerned has availed of the remedies under the relevant rules for making such representation to the State Government or the local authority, as the case may be, "or to any other officer or other authority under the State Government or local authority and has failed;" or (b) if a period of more than six months has elapsed after a final order rejecting the representation.
The next material provision is in sub paragraph (3) which provides that where a representation has been admitted by the Tribunal "all proceedings for redress of such grievance pending before the State Government or local authority" shall abate.
Paragraph 8 is not relevant.
Paragraph 9 mandates the Tribunal that when it passes a final order disposing of any case, it shall forward the proceedings thereof to the State Government.
Paragraph 14 provides for transfer of proceedings from the High Court and other Courts to the Tribunal, in matters in relation to which jurisdiction has been conferred on the Tribunal by this order.
The rest of the provisions of the order are not relevant to the problem before us.
The ground is now clear for considering the question.
Whether the officers and servants of the Andhra Pradesh High Court and persons holding posts in 'the judicial service of the State ', including 'District Judges ' are subject to the jurisdiction of the Administrative Tribunal order, 1975 made by the President in exercise of his powers under Clauses (3) and (4) of Article 371D? 48 We have seen that the substantive provision is in Clause (3).
This clause defines the extent and delimits the area of the "jurisdiction, power and authority" with respect to certain matters mentioned therein, which may be conferred, wholly or in part, on the Administrative Tribunal by an order made by the President, thereunder.
Clause (4) only subserves and elucidates the substantive Clause (3).
It is undisputed that compulsory retirement is a condition of service.
The question, therefore, narrows down into the issue.
Do the posts held by officers and servants of the High Court, and members of the subordinate judiciary fall under any of the "class or classes of posts" mentioned in sub clause (c) of Clause (3) of Article 371D ? For reaching a correct finding on this issue, it is not necessary to dilate on the Administrative Tribunal order made by the President, or to explore the scope of the expression "public post" defined in Paragraph 6 thereof for, the order has, merely for the sake of convenience, adopted this brief expression to cover compendiously all the three phrases commonly employed in sub clauses (a), (b) and (c) of Clause (3) of the Article.
Though the content of the first limb of each of the sub clauses (a), (b) and (c) varies, the rest of the language employed therein is identical.
Each of these three sub clauses, in terms, relates to glass or classes of (i) "posts in any civil service of the State", or (ii) "civil posts under the State", or (iii)"posts under the control of any local authority with in the State".
It is manifest that posts on the establishment of the High Court or held by the members of the judiciary are not "posts under the control of any local authority".
Neither the Chief Justice, nor the High Court can be called a "local authority" within the meaning of clause (iii).
As regards (ii), it is conceded even by Shri Vepa Sarathy, that persons holding posts on the staff of the High Court or in the subordinate judiciary do not hold their posts under the control of the State Government, and, as such, those class or classes of posts do not fall within the purview of phrase (ii), either.
The compass of the problem thus further gets reduced into whether the phrase "posts in the civil services of the State" commonly occur ring in sub clauses (a), ( b) and (c) of Article 371 D (3) covers posts held by the High Court staff and persons belonging to the subordinate judiciary ? This phrase is couched in general terms which are susceptible of more than one interpretation.
49 The phrase "Civil service of the State" remains more or less an h amorphous expression as it has not been defined anywhere in the Constitution.
Contrasted with it, the expressions "judicial service of the State" and "District Judge" have been specifically defined in Article 236, and thus given a distinctive, definite meaning by the Constitution makers.
Construed loosely, in its widest general sense.
this elastic phrase can be stretched to include the 'officers and servants of the High Court ' as well as members of the Subordinate Judiciary.
Understood in its strict narrow sense, in harmony with the basic constitutional scheme embodied in Chapters V and VI, Part VI, and centralised in Articles 229 and 235, thereof the phrase will not take in High Court staff and the Subordinate Judiciary.
Shri Vepa Sarthy canvasses for adoption of the expansible interpretation which will cover the High Court staff and the subordinate judiciary, while Shri Lal Narain Sinha urges for acceptance of the restricted but harmonious construction of the said phrase.
A choice between these two rival constructions of the phrase "civil services of the State" is to be made in the light of well settled principles of interpretation of Constitutional and other statutory documents.
The primary principle of interpretation is that a Constitutional or statutory provision should be construed "according to the intent of they that made it" (Coke).
Normally, such intent is gathered from the language of the provision.
If the language or the phraseology employed by the legislation is precise and plain and thus by itself, proclaims the legislative intent in unequivocal terms, the same must be given effect to, regardless of the consequences that may follow.
But if the words used in the provision are imprecise, protean, or evocative or can reasonably bear meaning more than one, the rule of strict grammatical construction ceases to be a sure guide to reach at the real legislative intent.
In such a case, in order to ascertain the true meaning of the terms and phrases employed, it is legitimate for the Court to go beyond the arid literal confines of the provision and to call in aid other well recognised rules of construction, such as its legislative history, the basic scheme and framework of the statute as a whole, each portion throwing light on the rest, the purpose of the legislation, the object sought to be achieved, and the consequences that may flow from the adoption of one in preference to the other possible interpretation.
Where two alternative constructions are possible, the Court must choose the one which will be in accord with the other parts of the statute and ensure its smooth, harmonious working, and eschew the other which leads to absurdity, confusion.
Or friction, contradiction 50 and conflict between various provisions, or undermines, or tends to defeat or destroy the basic scheme and purpose of the enactment.
These canons of construction apply to the interpretation of our Constitution with greater force, because the Constitution is a living, integrated organism, having a soul and consciousness of its own.
The pulse beats emanating from the spinal cord of its basic framework can be felt all over its body, even in the extremities of its limbs.
Constitutional exposition is not mere literary garniture; nor a mere exercise in grammar.
As one of us (Chandrachud, J. as he then was) put it in Keshvananda Bharati 's case, "while interpreting words in solemn document like the Constitution, one must look at them not in a school masterly fashion, not with the cold eye of a lexicographer, but with the realization that they occur in 'a single complex instrument in which one part may throw light on the other ' so that the construction must hold a balance between all its parts.
" Keeping in mind the principles enunciated above, we will first leave a peep into the historical background of the provisions in Article 371 D.
The former State of Hyderabad comprised of three linguistic areas: Telengana, Marathwada and Karnatak.
In 1919, the Nizam issued a Firman promulgating what came to be known as Mulki Rules.
The Nizam confirmed these Rules by another Firman issued in 1949.
Those Rules provided inter alia 15 years ' residence in the State as an essential qualification for public employment.
In 1955, the Rajpramukh in exercise of his powers under Article 309, Proviso, of the Constitution framed the Hyderabad General Recruitment Rules, 1955 in supersession of all the previous rules o the subject.
One of these Rules laid down that domicile certificate would be necessary for appointment to a State or subordinate service, and the issue of such certificate depended upon residence in the State for a period of not less than 15 years.
On November 1, 1956, as a result of the coming into force of the States Reorganisation Act, the State of Hyderabad was trifurcated.
Telengana region became a part of the newly formed State of Andhra Pradesh, while Marathwada and Karnatak regions ultimately became parts of Maharashtra or Mysore States.
With these prefatory remarks, we may now notice the Statement of objects and Reasons for the Bill which became the Constitution (32nd Amendment) Act 1972.
This Statement may be quoted in extenso: "When the State of Andhra Pradesh was formed in 1956, certain safeguards were envisaged for the Telengana area in the matter of development and also in the matter of 51 employment opportunities and educational facilities for that residents of that area.
The provisions of clause (1) of Article 371 of the Constitution were intended to give effect to certain features of these safeguards.
The Public Employment (Requirement as to Residence) Act, 1957, was enacted inter alia to provide for employment opportunities for residents of Telengana area.
But in 1969 (in the case, A. V. section N. Rao vs Andhra Pradesh ; , the Supreme Court held the relevant provision of the Act to be unconstitutional in so far as it related to the safeguards envisaged for the Telengana area.
Owing to a variety of causes, the working of the safeguards gave rise to a certain amount of dissatisfaction sometimes in the Telengana area and sometimes in the other areas of the State.
Measures were devised from time to time to resolve the problems.
Recently several leaders of Andhra Pradesh made a concerted effort to analyse the factors which have been giving rise to the dissatisfaction and find enduring answers to the problems with a view to achieving fuller emotional integration of the people of Andhra Pradesh.
On the 21st September 1973, they suggested certain measures (generally known as the Six Point Formula) indicating a uniform approach for promoting accelerated development of the backward areas of the State so as to secure the balanced development of the State as a whole and for providing equitable opportunities to different areas of the State in the matter of education, employment and career prospects in public services.
This formula has received wide support in Andhra Pradesh and has been endorsed by the State Government.
This Bill has been brought forward to provide the necessary constitutional authority for giving effect to the Six Point Formula in so far as it relates to the provision of equitable opportunities for people of different areas of the State in the matter of admission to educational institutions and public employment and constitution of an Administrative Tribunal with jurisdiction to deal with certain disputes and grievances relating to public services.
The Bill also seeks to empower Parliament to legislate for establishing a Central University in the State and contains provisions of an incidental and consequential nature including the provision For the validation of certain appointments made in the past.
52 As the Six Point Formula provides for the discontinuance of the Regional Committee constituted under clause (1) of article 371 of the Constitution, the Bill also provides for the repeal of that clause." (Parenthesis and emphasis in Para 1 added).
It will be seen from the above extract, that the primary purpose of enacting Article 371D was two fold: (i) To promote "accelerated development of the backward areas of the State of Andhra so as to secure the balanced development of the State as a whole", and (ii) to provide "equitable opportunities to different areas of the State in the matter of education, employment and career prospects in public service.
To achieve this primary object, Clause (1) of Article 371D empowers the President to provide by order, "for equitable opportunities and facilities for the people belonging to different parts of the State in the matter of public employment and in the matter of education".
Clause (2) of the Article is complementary to Clause (1).
It particularises the matters which an order made under Clause (1) may provide.
For instance, its sub clause (c) (i) enables the President to specify in his order, "the extent to which, the manner in which and the conditions subject to which", preference or reservation shall be given or made in the matter of direct recruitment to posts in any local cadre under the State Government or under any local authority.
Sub clause (c) further makes it clear that residence for a specified period in the local area, can be made a condition for recruitment to any such local cadre.
Thus, Clause (4) also, directly is designed to achieve the primary object of the legislation.
From the foregoing conspectus it is evident that the evil which was sought to be remedied, (viz., inequitable opportunities and facilities for the people belonging to different parts of the State of Andhra Pradesh in matters of public employment and education) had no causal nexus, whatever, with the independence of the High Court and subordinate judiciary which the Founding Fathers have with solemn concern vouchsafed in articles 229 and 235.
Nor did the public agitation which led to the enactment of Article 371D make any grievance against the basic scheme of Chapters V and VI in Part VI of the Constitution.
The Statement of objects and Reasons does not indicate that there Was any intention, whatever, on the part of the legislature to impairer derogate from the scheme of securing independence of the Judiciary as enshrined in Articles 229 and 235.
Indeed, the amendment or 53 abridgement of` this basic scheme was never an issue of debut in Parliament when, the Constitution (32nd Amendment) Bill was considered.
One test which may profitably be applied to ascertain whether the High Court staff and the Subordinate Judiciary were intended to be included in Clause (3) of Article 371D, is: Will the exclusion of the judiciary from the sweep of this Clause substantially affect the scope and utility of the Article as an instrument for achieving the object which the Legislature had in view? The answer cannot but be in the negative.
The High Court staff and members of the Subordinate Judiciary constitute only a fraction of the number of persons in public employment in the State.
Incidently, it may be mentioned that one of the primary purposes of this Article, viz., to secure equitable share in public employment to people of certain local areas in the State on the basis of the Mulki Rules requiring 15 years residence in those areas, could be achieved under those Rules which, as subsequently clarified by this Court in State of Andhra Pradesh.
vs V. V. Reddy(1) continued to be in force as valid law in the territories of the former State of Hyderabad State, even after the constitution of the State of Andhra Pradesh.
Let us now apply another test which in the circumstances of the case will be decisive.
In that connection, we have to see what consequences will flow if we give this general, undefined and flexible phrase, "Civil services of the State" in Article 371D(3), the wider construction so as to include in it the High Court staff and the members of the subordinate judiciary.
The inevitable result of such an extensive construction will be that the control vested in the Chief Justice over the staff of the High Court, and in the High Court over the Subordinate Judiciary will become shorn of its substance, efficacy and exclusiveness; and after being processed through the conduit of the Administrative Tribunal, will pass on into the hands of the Executive Government.
which, under Article 371D(5), is the supreme authority, having full power to confirm or not to confirm, modify or annul the orders of the Tribunal.
Such a construction will lead to internecine conflict and contradiction, rob Articles 229 and 235 of their content, make a mockery of the Directive Principle in Article 50 and the fundamental concept of the independence of the judiciary, which the Founding Fathers have with such anxious concern built into the basic scheme of the, Constitution.
Parliament, we are sure, could never have intended such a strange result.
In our quest for the true intention of Parliament, therefore, we must eschew this wide literal interpretation (1) A.I.R. 1973 S.C. 823 54 which will defeat or render otiose the scheme of Chapters IV and V, Part VI particularised in Articles 229 and 235, and instead, choose the alternative interpretation according to which members of the High Court staff and the subordinate judiciary will not fall within the purview of the phrase "civil services of the State".
Such a restricted construction will ensure smooth working of the Constitution and harmony amongst its, various provisions.
It is true that this very phrase in the context of the provision in Article 311 includes the employees of the High Court and members of the judicial services.
But it must be remembered that the provisions of Article 311 are of a general nature.
They give constitutional recognition to a fundamental principle of natural justice, by making its protection available uniformly tc all Government servants.
That is why in the context of that Article this phrase has been spaciously construed.
As against this, Article 371D is a special provision which marks a departure from the general scheme of the Constitution.
The area of the departure cannot be extended beyond what is unmistakably and specifically delineated by the words employed therein.
A phrase used in the context cf a general provision may not carry the same meaning when employed in the context of a special provision, particularly when that phrase has no where been defined in the enactment.
"Words used with reference to one set of circumstances", said Lord Blackburn in Edinburn Street Tramways Co. vs V. Torbin(1), "may convey an intention quite different from what the self same set of words used in reference to another set of circumstances would or might have produced".
This holds true even when the same words are used in different contexts in the same enactment.
Therefore, in a special provision like Article 371D as its heading itself proclaims which derogates from the general scheme of the Constitution for a specific purpose, general undefined phrases are not to be interpreted in their widest amplitude but strictly attuned to the context and purpose of` the provision.
Conversely, had it been the intention of Parliament to include 'officers and servants of the High Court ' and members of the 'judicial services of the State ' and of the cadre of 'District Judges ', in the phrase 'civil services of the State ' occurring in Clause (3) of Article 371D, and thereby depart from the basic scheme of Chapters V and VI Part VI, the language commonly employed in the sub clauses should have read like this: "Class or classes of posts in the civil services of the State including posts.
in the "judicial service of the State " (1)[1877] 3 Appeal Cases 58, 68. 55 and of "District Judges" in the State; class or classes of posts of "officers and servants of the High Court" . " In our opinion, non use of the phrases "judicial service of the State" and "District Judges" (which have been specifically defined in Article 236), and "officers and servants of the High Court", which has been designedly adopted in Articles 235, and 229, respectively, to differentiate them in the scheme of the Constitution from the other civil services of the State, gives a clear indication that posts held by the High Court staff or by the Subordinate Judiciary were advisedly excluded from the purview of Clause (3) of Article 371D.
The scope of the non obstante clause in sub article (10) which gives an overriding effect to this Article is conterminous with the ambit of the preceding clauses.
The 'officers and servants of the High Court ' and the members of the Judicial Service, including District Judges, being outside the purview of Clause (3), the non obstante provision in Clause (10) cannot operate to take away the administrative or judicial jurisdiction of the Chief Justice or of the High Court, as the case may be, under Articles 229, 235 and 226 of the Constitution in regard to those public servants in matters or disputes falling within the scope of the said Articles.
Clause (10) will prevail over any provisions of the Constitution, other than those which are outside the ambit of Article 371 D, such as Articles 229 and 235.
Provisions not otherwise covered by Article 37t D, cannot be brought within its sweep because of the non obstante Clause (10).
It follows as a necessary corollary that nothing in the order of the President constituting the Administrative Tribunal, confers jurisdiction on the Tribunal to entertain, deal with or decide the representation by a member of the staff of the High Court or of the Subordinate Judiciary.
For the foregoing reasons, we hold that the impugned order dated August 24, 1977 of the Administrative Tribunal, having been passed without jurisdiction, is a nullity.
Accordingly, we allow Civil Appeal No. 2826 of 1977, leaving the parties to pay and bear their own costs.
The reasons given above apply mutatis mutants to the case of Krishnamurthy in Civil Appeal No. 278 of 1978 and furnish the basis of our short order dated August 4, 1978, by which we had accepted that appeal.
In this Appeal (C.A. No. 278/78) however, the respondent 's costs in this Court will be borne by the appellant in terms of this Court 's order dated 10 2 78 in S.L.P. (Civil) No. 626 of 1978.
In view of the orders dated 28th November, 1977 and 22nd March, 56 1978, passed in stay applications Nos.
4804 of 1977 and 1744 of 1978 respectively, and in terms of those orders we direct that since the appeals have been allowed, the excess payment, if any, made pursuant to the stay orders shall be adjusted towards pension that may be due to the respondents.
The adjustment shall be made in easy, convenient and reasonable instalments.
N.V.K. Appeals allowed.
| IN-Abs | Article 371 D (3) inserted by the Constitution (Thirty Second Amendment) Act 1973, empowers the President to constitute an Administrative Tribunal for the State of Andhra Pradesh to exercise such jurisdiction powers and authority which immediately before the amendment was exercisable by any Court, tribunal or authority in respect of appointment, allotment or promotion to posts in the Civil Services of the State, under the State or under the control of any local authority within the state.
Clause (10) provides that the provisions of the Article and any order made by the President thereunder, shall have effect notwithstanding any other provision of the Constitution or in any other law for the time being in force.
6 of the Andhra Pradesh Administrative Tribunal Order, 1975 issued by the President, setting up the Andhra Pradesh Administrative Tribunal, provides that the Tribunal shall have 'all the jurisdiction, powers and authority exercisable by all Courts with respect to appointment, allotment or promotion to any public post, seniority of persons appointed.
allotted or promoted to such post and all other conditions of service of such persons '. 'The first Respondent in C.A. No. 2826/77 was a former employee of the High Court.
He originally belonged to the High Court service.
After being on deputation with the Central and State Governments for some years he re joined the High Court service as Assistant Registrar and was later promoted as Deputy Registrar. 'The Chief Justice of the High Court in exercise of his powers under Article 229 of the Constitution read with the relevant rules, passed an order, dated January 3, 1969, compulsorily retiring the respondent from service, who by then had attained the age of 50 years.
His writ petition assailing the orders of compulsory retirement, was dismissed by the High Court on the ground that the jurisdiction of the High Court which was hitherto being exercised under Article 226 of the Constitution to correct orders of the Chief Justice on the administrative side with regard to conditions of service of officers of the High Court, vested in the Administrative Tribunal by reason or clause 6 (1) of the A.P. Administrative Tribunal order made by the President under Article 371 D of the Constitution.
The respondent thereafter moved the Andhra Pradesh Administrative Tribunal, which set aside the impugned order on the ground, that it was arbitrary.
27 and amounted to a penalty of dismissal or removal from service and, as such, as hit by Article 311(2) of the Constitution.
The respondent in C.A. No. 278/78 was a member of the Andhra Pradesh State Judicial Service working as a Subordinate Judge.
He was prematurely retired in public interest by an order of the State Government on the recommendation of the High Court.
The respondent 's contention, that in the case of Subordinate Judges, the High Court being the appointing authority, the Governor had no power or jurisdiction to pass an order of premature retirement, of a member of the State Judicial Service, was accepted by the Tribunal, and the impugned order was set aside.
In the appeals against both the orders of the Administrative Tribunal, it was contended before this Court by the appellants that Article 371 D of the Constitution should be construed harmoniously with the basic scheme underlying Chapters V and VI in Part VI of the Constitution; and so construed, the general expression, such as "class or classes of posts` ', "Civil Services of the State" etc.
in Clause (3) of this Article will not include posts/members of the High Court staff and the Subordinate Judiciary, with the result that the impugned orders of the Administrative Tribunal are without jurisdiction and nullities.
On the other hand, the respondents contended that.
the phrase "any Civil Service of the State" in clause (3) of this Article interpreted in its widest sense, includes the members of the High Court staff and the Subordinate Judiciary; that even it such an interpretation is contrary to the Constitutional scheme of securing independence of the judiciary, such a result was intended to be brought about by insertion of Article 371 D, the non obstante provision in Clause (10) of which gives it an over riding effect.
Allowing the appeals, ^ HELD: 1.
The entire scheme or Chapters V and VI in Part VI of the Constitution epitomised in articles 229 and 235 has been assiduously designed by the Founding Fathers to ensure independence of the High Court and the Subordinate Judiciary.
[43F] (a) In regard to servants and officers of the High Court, Article 229 of the Constitution makes the power of their appointment, dismissal, removal, suspension, reduction in rank, compulsory retirement etc.
including the power to prescribe their conditions of service, the sole preserve of the Chief Justice and no extraneous executive authority can interfere with the exercise of that power by the Chief Justice or his nominee except to a very limited extent mentioned in the provisos.
In conferring such exclusive and supreme powers on the Chief Justice the object which the Founding Fathers had in view was to ensure the independence of the High Court.
[37F G] (b) The control over the Subordinate Judiciary vested in the High Court under Article 23 5 is exclusive in nature, comprehensive in extent and effective in operation.
It comprehends a wide variety of matters and is a complete control subject only to the power of the Governor in me matter of appointment, dismissal or removal.
[41B C] 28 (c) Since retirement, simpliciter, in accordance with the terms and conditions of service, does not amount to dismissal or removal or reduction in rank under Article 311 or under the service rules, it is for the High Court in the exercise of its 'control ' under Article 235, to decide whether or not a judge of the Subordinate Judiciary should be prematurely or compulsorily retired.
Though in form such an administrative decision of the High Court is advisory in substance and effect.
it is well nigh peremptory.
[42D, 43B] M. Gurumoorthy vs Accountant General Assam and Nagaland and Ors. , Chandra Mohan vs State of Uttar Pradesh , Chandramouleshwar vs Patna High Court ; ; State of Assam vs Ranga Mohammed ; ; State of West Bengal vs Nripendra Nath Bagchi ; ; Shamsher Singh vs State of Punjab ; ; Punjab and Haryana High Court vs State of Haryana (Sub nom Narendra Singh Rao) ; ; State of Assam vs section N. Sen ; State of Assam vs Kuseswar Sukla State of U.P. vs Batuk Deo Pati Tripathi and Anr.
; Tara Singh vs State of Rajasthan ; ; State of Haryana vs Inder Prakash Anand ; referred to.
The phrase "any civil service of the State" commonly employed in sub clauses (a), (b) and (c) of clause (3) of Article 371 D is a general, undefined and flexible expression and is capable of bearing meaning more than one.
If it is construed loosely, in its widest sense so as to include in it the High Court staff and the members of the Subordinate Judiciary, the result will be that the control vested in the Chief Justice over the staff of the High Court, and in the High Court over the subordinate judiciary will become shorn of its substance, efficacy and exclusiveness; and after being processed through the conduit of the Administrative Tribunal, will pass on into the hands of the Executive Government, which, under clause (5) of Article 371 D is the supreme authority, having full power to confirm or not to confirm, modify or annul the orders of the Tribunal.
Such a construction will lead to internecine conflict and contradiction, rob Articles 229 and 235 of their content make a mockery of the Directive Principles in Article 50 and the fundamental concept of the independence of the judiciary, which the Founding Fathers have with such anxious concern built into the basic scheme of the Constitution.
Parliament could never have intended such a strange result.
[53E H] 3.
(a) In its strict, narrow sense, the phrase 'Civil service of the State.
will not take in members of the High Court staff and the subordinate judiciary.
[49 A C] (b) Non use of the expressions. "judicial service of the State" and "District Judges" (which have been specifically defined in Article 236), and "Officers and Servants of the High Court", which have been designedly adopted in Articles 235 and 229, respectively, to differentiate these in the scheme of the Constitution from the other Civil Services of the State, gives a clear indication that posts held by the High Court Staff or by the Subordinate Judiciary have been advisedly excluded from the purview of Clause (3) of Article 371 D. [55 B C] 4.
In such a situation.
the Court must eschew the wide, literal interpretation which will defeat or render otiose the scheme of Chapters V and VI, Part VI, particularised in Articles 229 and 235, and instead, choose the alternative interpretation according to which members of the High Court Staff and the Subordi 29 nate Judiciary will not fall within the purview of Clause (3) of Article 371 D. A Such a restricted construction will ensure smooth working of the Constitution; and harmony among its various provisions.
[53H, 54A B] 5.
The officers and servants of the High Court and the members of the Judicial Service, including District Judges, being outside the purview of Clause (3), the non obstante provision in Clause (10) of Article 371 D cannot operate to take away the administrative or judicial jurisdiction of the Chief Justice or of the High Court, as the case may be, under Articles 229, 235 and 226 of the Constitution in regard to a dispute or matter relating to the conditions of service of a member of the High Court Staff or of the Subordinate Judiciary.
[55D] 6.
In view of the above, nothing in the Andhra Pradesh Administrative Tribunal Order, 1975, issued by the President confers jurisdiction, power and authority on the Administrative Tribunal to entertain, deal with or decide the representation by a member of the High Court Staff or of the Subordinate Judiciary.
The impugned orders.
therefore, of the Administrative Tribunal in both these appeals, were without jurisdiction, null and void.
[55 F G]
|
Civil Appeal No. 2126 of 1968.
Appeal by Special Leave from the Judgment and order dated 14 8 1968 of the Punjab and Haryana High Court in Civil Revision No 430 of 1967 In person (C.K. Babbar) for the Appellant.
Harbans Singh for the Respondent.
The Judgment of the Court was delivered by SEN, J.
This appeal by special leave in directed against the order of the.
Punjab and Haryana High Court dated 14 August, 1968 upholding an order of the trial court dated 23 May, 1967 striking out the defence of the defendant under order XI, rule 21 read with section 151 of the Civil Procedure Code, 1908 and directing that the defendant cannot be permitted to cross examine the plaintiff 's witnesses.
The suit out of which this appeal arises was brought by the respondent Trilok Nath Mahajan, as plaintiff, against the appellant defendant M/s. Babbar Sewing Machine Co., on 9th March, 1966 for recovery of a certain sum alleged to be due to M/s. Chitra Multipurpose Co operative Society (Jogyana) Ltd., Ludhiana which remained unpaid towards the price of sewing machines sold on credit from time to time, claiming to be an assignee under a deed dated 27 April, 1965.
The transaction sued upon was of the year 1959, and the suit was obviously barred by limitation.
The plaintiff however, pleaded that the defendant had acknowledged his liability by his letter dated 8 March, 1963 for Forwarding cheque No. 01194 dated 7 March, 1963 for Rs. 50 drawn on the Punjab National Bank Ltd., Yamunanagar.
The defendant disputed the plaintiff 's claim and pleaded, inter alia, that he does not owe anything to the said society and as such the suit was not maintainable, that there was no privity of contract between the parties nor does any relationship of a creditor and debtor exists between them.
He further pleaded that the suit was barred by limitation.
He also pleaded that the trial court had no jurisdiction to try the suit.
On 11 November, 1966, the plaintiff moved an application under order XI, rules 14 and 18 for production and inspection of the following documents: (a) Cash book, day book and ledger for the year 1 4 1959 to 31 3 1960 and 1 4 1960 to 31 3 1961.
H (b) Cash book and ledger for the years 1 4 1961 to 31 3 1966 60 (c) All the original bills issued in favour of the defendant by M/s. Chitra Multipurpose Cooperative Society Jogyana Ltd., including Bill No. 22 dated 13 5 1960, Bill No. 43 dated 2 8 19607 Bill No. 49 dated 14 9 1960, Bill No. 53 dated 26 9 1960.
(d) Original letters written by the plaintiff to the defendant and letters addressed by M/s. Chitra Multipurpose Cooperative Society Jogyana Ltd., to defendant.
(e) Counterfoils of cheque book in use on 7 3 1963.
(f) The original cheque No. 01194 dated 7 3 1963.
(g) Bank pass book from 1 4 1962 to 31 3 1964 with counterfoils of the cheque books with which the respondent (T.N. Mahajan) firm had an account.
Despite objection by the defendant, the trial court by its order dated 11 January, 1967, directed their production on 30 January, 1967 holding that they were relevant for the determination of the controversy between the parties.
On 30 January, 1967, when the suit came up for hearing, the court adjourned the suit to 7 February, 1967, for production of the documents.
In compliance with the court 's order, on 7 February, 1967, the defendant produced all the documents in his possession viz., account books for the years 1959 60 to 1965 65 but he was permitted by the trial court to ' take back the account books as they were required to be produced before the Income Tax officer, Yamunanagar on that day, with the direction that he should produce the same on '23 February, 1967.
On 23 February, 1967 the defendant appeared in the court with his books but the trial judge directed him to produce them on 16 March, 1967 and in the meanwhile allow their inspection to the plaintiff with three days ' notice.
The defendant accordingly sent a letter dated 25 February, 1967 asking the plaintiff to take inspection of the account books on 27 February, 1967.
On 28 February, 1967, the plaintiff made an application that the defendant had not produced the documents for inspection but this was apparently wrong, as is evident from the registered notice dated 1 March, 1967, sent by the defendant to the following effect: "After the last date of hearing on 23.2.1967 I wrote you a letter from Yamuna Nagar on 25.2.1967 informing you that I shall be present in the office of my counsel Sh.
H. L. Soni on 27th February, 1967 at 6 p.m. for affording you the inspection of the documents.
I reached at my counsel 's office at the scheduled informed time but you did not turn up.
I 61 kept waiting for you uptil 8.30 p.m.
On that day.
Later A I contacted your lawyer Shri section R. Wadhera but he expressed his inability to contact you.
Now I would be reaching Ludhiana again on the 9th March, 1967 and shall be available in my lawyer 's Shri H. L. Soni 's office from 7 p.m. to 9 p.m. and you will be free to inspect the documents at the afore mentioned venue and during the above noted time.
Three days ' clear notice is being given to you.
Please be noted to this effect " Admittedly, the plaintiff never sent any reply to the notice.
Nor did he avail of the opportunity of inspecting the account books at the office of the defendant 's lawyer on 9 March, 1967.
On 16 March, 1967 the trial court passed an order saying that the defendant should produce the books within four days in the court to enable the plaintiff 's counsel to inspect them before 29 March, 1967 i.e. the date fixed for evidence, failing which the defence of the defendant would be struck off.
On 29 March, 1967 three witnesses of the plaintiff were examined.
After the examination of these witnesses, the trial court asked the plaintiff 's counsel that he should apply under order XI, rule 21 to strike out the defence of the defendant.
On 31 March, 1967, the plaintiff accordingly made an application under C`order XI, rule 21 read with section 151 of the Code asserting that the defendant had failed to comply with the order of the court as regards production of documents inasmuch as he had not produced them for inspection.
The defendant opposed the application stating, that there was no failure on his part to produce the documents ordered.
It was stated that all the documents as were capable of identification had been produced in the court.
It was alleged that the plaintiff had already inspected the documents that were specifically set out in the application.
It was also alleged that the plaintiff had not once but thrice or even four times inspected the documents to his entire satisfaction except that he was prevented from making fishing, roving and searching enquiries into the entries which had no relevance to the suit transaction.
It was, therefore, urged that the striking out of the defence would not he warranted by law.
Feeling apprehensive that he would not get a fair trial at the hands of the trial Judge, the defendant applied to the District Judge, Ludhiana for the transfer of the suit on 10 April, 1967.
While the District Judge was seized of the transfer application, the defendant moved the 62 High Court for transfer of the suit to some other court of competent jurisdiction.
The High Court by its order dated 15 May, 1967 declined to interfere.
On 23 May, 1967, the trial court passed an order under order XI, rule 21 striking out the defence of the defendant stating that he was placed in the same position as if he had not defended the suit and adjourned the suit to 21 June, 1967, for examination of the remaining witnesses of the plaintiff.
On 21 June, 1967, the court did not allow the defendant 's counsel to cross examine plaintiff 's witnesses holding that in view of the fact that his defence has been struck off, he had no right to participate and, therefore, could not cross examine the witnesses produced in the court.
The defendant filed a revision before the High Court which was rejected on 14 August, 1968.
In this appeal, two questions are involved: firstly, whether the trial court was justified in striking out the defence of the defendant under order XI, rule 21 of the C.P.C., 1908, and secondly, whether the High Court was right in observing that in view of the clear language are of order XI, rule 21 the defendant cannot be permitted to cross examine the plaintiff 's witnesses.
It is a travesty of justice that the trial court should have, in the facts and circumstances of the case, passed an order striking out the defence of the defendant under order XI, rule ' '1 and that the High Court should have declined to set it aside.
The penalty imposed by order XI.
rule 21 is of highly penal nature, and ought only to be used in extreme cases, and should in no way be imposed unless there is a clear failure to comply with the obligations laid down in the rule.
Order XI, rule 21 of the Code of Civil Procedure reads: "21.
Where any party fails to comply with any order to answer interrogatories, or for discovery of inspection of documents, he shall, if a plaintiff, be liable to have his suit dismissed for want of prosecution, and, if a defendant, to have his defence; if any, struck out, and to be placed in the same position as if he had not defended.
and the party interrogating or seeking discovery or inspection may apply to the Court for an order to that effect, and an order may be made accordingly.
" Section 136 of the Code of Civil Procedure, 1882, corresponding to order XI, rule 21 of the C.P.C. 1908, was based upon order XXXI, rule 20, now replaced by order XXIV, rule 16 framed under the Judi 63 cature Act.
The practice of the English Courts is, and it has always A been, to make the order a conditional one, and to grant a little further time for compliance.
In practice this provision is virtually obsolete(l).
Even assuming that in certain circumstances the provisions of order Xl, rule 21 must be strictly enforced, it does not follow that a Suit can be lightly thrown out or a defence struck out, without adequate reasons.
The test laid down is whether the default is wilful.
In the case of a plaintiff, it entails in the dismissal of the suit and, therefore, an order for dismissal ought not be made under order XT, rule 21, unless the court is satisfied that the plaintiff was willfully withholding information by refusing to answer interrogatories or by withholding the documents which he sought to discover.
In such an event, the plaintiff must take the consequence of having his claim dismissed due to his default, i.e. by suppression of information which he was bound to give: Denvillier vs Myers.(2) In the case of the defendant, he is visited with the penalty that his defence is liable to be struck out and to be placed in the same position as if he had not defended the suit.
The power for dismissal of a suit or striking out of the defence under order XI, rule 21, should be exercised only where the defaulting party fails to attend the hearing or is guilty of prolonged or inordinate and inexcusable delay which may cause substantial or serious prejudice to the opposite party.
It is well settled that the stringent provisions of order XI, rule 21 should be applied only in extreme cases, where there is contumacy on the part of the defendant or a wilful attempt to disregard the order of the court is established.
An order striking out the defence under order XI, rule 21 of the Code should, therefore, not be made unless there has been obstinacy or contumacy on the part of the defendant or wilful attempt to disregard the order of the court.
The rule must be worked with caution, and may be made use of as a last resort: Mulla 's C.P.C. 13th Ed.
I, p. 581, Khajah Assenoolla Joo vs Khajah Abdool Aziz(3), Banshi Singh vs Palit Singh(4), Allahabad Bank Ltd. vs Ganpat Rai(5), Haigh vs Haigh(6) and Twycroft vs Grant(7).
(1) Halsbury 's Laws of England, 4th Ed., Vol. 13.
p. 32.
(2) (3) I.L.R. (4) 7 C.L.J. 29S. (5) I.L.R. (6) (7) 64 In Haigh v Haigh (supra) Pearson J. observed: "I have no hesitation in saying that I have the strongest disinclination, as I believe every other Judge has, that any case should be decided otherwise than upon its merits.
But this order was introduced to prevent plaintiffs and defendants from delaying causes by their negligence or willfulness.
So great was my anxiety to relieve this lady from the consequence of her wrong headedness if, by any possibility, I could on proper terms, that I hesitated to refuse to make the order asked for, and I have looked into all the cases I could find on the subject to see that the practice of the Court has been on this order.
And I can find no case in the books where it has been applied, where a man knowingly and wilfully has allowed judgment to go by default.
" In Twycroft vs Grant (supra) Lush J. interpreting corresponding order XXXI, rule 20 of the Judicature Act, held that he would only exercise the powers conferred by the rule in the last resort.
In England, the party against whom such an order is made would, it seems, be entitled to come in and ask that the order might be set aside on showing sufficient grounds for such an application.
In Khajah Assenoolla Joo vs Khajah Abdool Aziz (supra), Pigot J. therefore made an order striking out the defence of the defendant under section 136 of the C.P.C. 1882 in consequence of non compliance with the earlier order for production of certain documents, and at the same time mentioned that the party against whom the order was made might come in and seek to set it aside on showing sufficient grounds for the application.
It is settled law that the provisions of order XI, rule 21, should be applied only in extreme cases where obstinacy or contumacy on the part of the defendant or a wilful attempt to disregard the order of the court is established.
As pointed out by Lord Russel C.J. in Reg.
vs Senior (1) and affirmed by Cave L. C. in Tamboli vs G.l.
P. Rail way(2), "wilfully" means that: "the act is done deliberately and intentionally, not by accident or inadvertence, but so that the mind of the person who does the act goes with it." In this case, there was no default, much less any wilful default, on the part of the defendant, to comply with any order of the court under order XI, rule 18(2).
In obedience of the order of the court dated (1) (2) I.L.R. 65 11 January, 1967, the defendant came all the way from Yamunanagar to Ludhiana on 27 February, 1967 and was waiting at his lawyer 's office from 6.00 p.m. to 8.30 p.m. when the plaintiff or his counsel did not turn up.
Thereafter the defendant sent a registered notice dated I March, 1967 offering inspection of the documents at his lawyer 's office on 9 March, 1967, but the plaintiff did not avail of the opportunity of inspecting the documents.
The defendant had filed an affidavit that the rest of the documents were not in his possession and could not be produced.
The account books for the years 1961. 62, 1962 63 and 1963 64 had to be produced by the defendant before the Income Tax officer, Yamunanagar on 31 January, 1967, then 7 February, 1967 and 16 March, 1967.
An affidavit to this effect was also filed.
It is somewhat strange that the trial court should have fixed the dates which were the dates fixed by the Income Tax officer In view of the notice dated 1 March, 1967, there can be no doubt that the defendant had tried to comply with the order of the court by offering inspection on 27 February, 1967.
There is no dispute that 27 February, 1967 was the date mutually agreed upon between the counsel for the parties.
The only controversy is about the scheduled time.
The time fixed according to the plaintiff 's application dated 28 February, 1967 was 2.30 p.m. at his lawyer 's office while that according to the defendant 's notice dated 1 March, 1967 it was 6.3() p.m. in his lawyer 's office.
The plaintiff has not examined his counsel, S.R. Wadhera, nor is there any affidavit by Wadhera.
From the material on record it is amply clear that the appointed scheduled time and place for inspection of the defendant 's account books was 6.30 p.m. at his lawyer 's office.
The plaintiff was afforded another opportunity of inspection of the account books on 9 March, 1967 at the office of the defendant 's lawyer from 7.0 p.m. to 9.0 p.m.
In the circumstances, the trial court was not justified in holding that there WAS any non compliance of its order under order XI, rule 18(2).
It is common ground that the account books for the years 195960 and 1960 61 were Lying in court.
The suit transactions are of the year 1959.
Nothing prevented the plaintiff from inspecting these books.
As regards the account books for the years 1961 62 to 1964 65, they were required to be produced before the Income Tax Authorities at Yamunanagar on 20 March, 1967 and on subsequent dates.
It is not clear what relevance these books could have to the controversy between the parties unless the plaintiff wanted to find some entries to show that there was carry forward of the entries relating to the suit transaction in the account books for the years 1959 60 to the subsequent years So as to bring his claim within time.
Apparently, there were no such entries in the account books for the years 1959 60 66 and 1960 61.
As regards the bank pass book of the defendant 's account with the Punjab National Bank Ltd., for the period 1 April, 1962 to 31 March, 1963 and 1 April, 1963 to 31 March, 1964 and the counterfoil of cheque No. 01194 dated 7 March, 1963, alleged to be drawn by the defendant in plaintiff 's favour, the defendant has sworn an affidavit that he had no account with Punjab National Bank Ltd., Yamunanagar during that period nor he had issued any such cheque as alleged.
In view of this, the order of the trial court dated 23 May, 1967, striking out the defence of the defendant was wholly unjustified .
The principle governing the court 's exercise of its discretion under Order XI, rule 21, as already stated, is that it is only when the default is wilful and as a last resort that the court should dismiss the suit or strike out the defence, when the party is guilty of such contumacious conduct or there is a wilful attempt to disregard the order of the court that the trial of the suit is arrested.
Applying this test, it is quite clear that there was no wilful default on the part of the defendant of the courts order under order XI, rule 18(2) for the production of documents for inspection, and consequently, the order passed by the trial court on 23 May, 1967, striking out the defence of the defendant must be vacated, and the trial must proceed afresh from the stage where the defendant was not permitted to participate.
It was further contended that the High Court was in error in observing that 'in view of the clear language of order X[, rule 21 ' the defendant has no right to cross examine the plaintiff 's witness.
A persual of order XI, rule ,?1 shows that where a defence is to be struck off in the circumstances mentioned therein, the order would be that the defendant 'be placed in the same position as if he has not defended '.
This indicates that once the defence is struck of under Order XI, rule 21, the position would be as if the defendant had not defendant and accordingly the suit would proceed ex parte.
In Sangram Singh vs Election Tribunal(l) it was held that if the court proceeds ex parte against the defendant under order IX, rule 6(a), the defendant is still entitled to cross examine the witnesses examined by the plaintiff.
If the plaintiff makes out a prima facie case the court may pass a decree for the plaintiff.
If the plaintiff fails to make out a prima facie case, the court may dismiss the plaintiff s suit.
Every Judge in dealing with an ex parte case has to take care that the plaintiff 's case is, at least, prima facie proved.
But, as we set aside the order under order XI, rule 21, this contention does not survive for our consideration.
We, therefore, refrain from expressing any opinion on the question.
(1) ; 67 For the reasons given, the order passed by the trial court dated A 23 May, 1967 striking out the defence of the defendant under order XI, rule read with section 151 of the C.P.C., and its subsequent order dated 21 July, 1967 are both set aside and it is directed to proceed with the trial according to law.
There shall be no order as to costs.
S.R. Appeal allowed.
| IN-Abs | The plaintiff respondent claiming to be an assignee of a debt under a deed dated 27th April, 1965, filed a suit against the defendant appellant for recovery of a certain sum alleged to be due to M /s Chitra Multipurpose Cooperative Society, the assignor.
On an interlocutory application moved by the respondent under order XI rules 14 and 18 C.P.C. for the production of certain documents, despite the objection by the appellant the Trial Court directed their production.
The appellant produced all the documents in his possession on 7 2 67, but he was permitted to take back The account books as they were required to Be produced before the Income Tax officer on that day with the direction that he should produce them on 23 2 67.
On 23 2 67, when the appellant appeared in the Court with his books the trial judge directed him to produce them on 16 3 67 and in the meanwhile allow their inspection to the respondent with three days ' notice.
The appellant accordingly sent a. letter dt.
25 2 67 asking the respondent to take inspection of the account books on 27 2 67 at 6 p.m. in the office d his Counsel.
On his failure to do so, the appellant sent once again a registered letter dt.
1 3 1967 asking the respondent to inspect the records on 9 3 67 in his lawyer 's office between 7 p.m. and 9 p.m.
The respondent never sent any reply to the notice.
Nor, did he avail of the opportunity of inspecting the account books at the office of the appellant 's lawyer on 9 3 67.
On 16 3 67 the Trial Court passed an order saying that the appellant should produce the books within four days in the Court to enable the respondent 's counsel to inspect them before 29 3 67 i.e. the date fixed for evidence.
After the examination of three witnesses of the respondent, the trial Court asked the respondent 's Counsel to apply under order XI rule 21 to strike out the defence of the appellant.
On 31 3 67 the respondent filed an application accordingly which was vehemently opposed by the appellant.
The appellant also moved both the District Court and the High Court for transfer of the suit to some other Court of competent jurisdiction.
The High Court declined to interfere.
Thereupon the trial Court passed an order on 23 5 67 striking out the defence of the appellant and on 21 6 67 refused permission to the appellant 's counsel to cross examine the respondent 's witnesses.
The revision filed by the appellant in the High Court was rejected on 14 8 1968.
Allowing the appeal by special leave, the Court ^ HELD: 1.
The penalty imposed by order XI, rule 21 is of a highly penal nature and ought only to be used in extreme cases and should in no way be imposed unless there is a clear failure to comply with the obligations laid 5 520SCI/78 58 down therein.
The stringent provisions of order XI, rule 21 should be applied only in extreme eases where there is contumacy on the part of the defendant or a wilful attempt to disregard the order of the Court is established.
[62E, 63E] 2.
The test laid down is whether the default is wilful.
In the case of the plaintiff, it entails in the dismissal of the suit and, therefore, an order of dismissal ought not to be made under order XI, rule 21, unless the Court is satisfied that the plaintiff was wilfully withholding the documents which the defendant sought to discover.
In such an event, the plaintiff must take the consequence of having his claim dismissed due to his default i.e. by suppression of information which he was bound to give.
In the case of defendant, he is visited with the penalty that his defence is liable to be struck out and to be placed in the same position as if he had not defended the suit.
[63 B D] 3.
The power for dismissal of a suit or striking out of the defence under order XI, rule 21, should be exercised only where the defaulting party fails to attend the hearing or is guilty of prolonged or inordinate and inexcusable delay which any cause substantial or serious prejudice to the opposite party.
The rule must be worked with caution and may be made use of as a last resort.
[63D,E] Denvillier vs Myers, , Banshi Singh vs Palit Singh, 7 C.I.J. 295, Haigh, , Twycroft vs Grant, , Reg vs Senior, [1889](1) QBD 283; quoted with approval.
Khajah.
Assenoolla Joo vs Khajah Abdool Aziz, I.L.R. and Allahabad Bank Ltd. vs Ganpat Rai, T.L.R. ; approved.
It is travesty of justice that the trial Court should have, in the facts and circumstances of the case, passed an order striking out the defence of the defendant under order XI, rule 21 and that the High Court should have declined to set it aside.
[62D E] 5.
Applying the principle governing the Court 's exercise of its discretion under order XI, rule 21, in the instant case, there was no wilful default on the part of the defendant of the Court 's order under Order XI, rule 18(2) for the production of documents for inspection, and consequently, the order passed by the trial court on 23 May, 1967, striking out the defence of the defendant must be vacated and the trial must proceed afresh from the stage where the defendant was not permitted to participate.
[66C E] 6.
A perusal of order XI, rule 21 shows that where a defence is to be struck off in the circumstances mentioned therein, the order would be that the defendant 'be placed in the same position as if the has not defended '.
This indicates that once the defence is struck off under order XI, rule 21, the position would be as if the defendant had not defended and accordingly the suit would proceeds ex parte.
If the Court proceeds ex parte against the defendant under order IX, rule 6(a), the defendant is still entitled to cross examine the witnesses examined by the plaintiff.
If the plaintiff makes out a prima facie ease the court unable pass a decree for the plaintiff.
If the plaintiff fails to make out a prima facie case, the Court may dismiss the plaintiff 's suit.
Every Judge in dealing with an ex parte case has to take care that the plaintiff 's case is, at least, prima facie proved.
[66E G] Santram Singh vs Election Tribunal, ; referred to.
|
N: Criminal Appeal No. 261 of 1976.
Appeal by Special Leave from the Judgment and order dated 2 12 1975 of the Andhra Pradesh High Court in Criminal Misc.
Petition No. 2064/75.
D. V. Patel, Naunitlal and Miss Kiran Singh for the Appellants.
P. P. Rao, K. Narayan Rao and G. N. Rao for the Respondent.
93 The Judgment of the Court was delivered by JASWANT SINGH, J.
The appellants who are Directors of Tandur and Navandgi Stone Quarries Private Limited and holders of a mining lease for extraction of lime stones (Shahabad Stones) are being prosecuted in the Court of Munsif, Judicial Magistrate, First Class, Tandur, for the alleged violation of Rule 21 (1)(ii) of the Mineral Conservation and Development Rules, 1958 which is made punishable under Rule 27 of the said Rules in that they failed to employ a qualified geologist or a mining engineer.
they made an application before the trial Magistrate urging by way of preliminary objection that the complaint against them was not maintainable in view of the fact that the 'Shahabad Stones ' Which were being extracted by them were used fol.
building and construction purposes and as such were minor minerals which were specifically excluded from the purview of the Rules.
The Magistrate dismissed the application holding that what was being operated by the appellants was 'a mine for the purpose of the provisions of Rule 21 of the Mineral Conservation and Development Rules, D, 1958 '.
The appellants thereupon moved the High Court for quashing the aforesaid criminal proceedings pending against them reiterating that as the Shahabad Stones which they were extracting were used for building purposes and were described as minor minerals in Item 15 of Schedule I to the Andhra Pradesh Minor Mineral Concession Rules, 1966 (hereinafter referred to as M.M.C. Rules, 1966), the complaint against them was not tenable. 'The High Court dismissed the application holding that the inherent powers possessed by it under Section 482 of the Code of Criminal Procedure 1973 could be invoked and exercised only when the facts alleged in the complaint if they are accepted to be correct at their face value, do not make out an offence with which the accused is charged.
The High Court further held that merely because the 'Shahabad Stones ' were included in Schedule I to Rule 10 of the M.M.C. Rules, it could not be said straightway that the Stones which were being extracted by the appellants were minor minerals and that some evidence regarding their user was necessary for determination of the question as to whether the appellants were entitled to the benefit of the provision of Rule 2 of the M.M.C. & D. Rules which Provided that the M.M.C. Rules do not apply to the minor minerals.
It is this refusal of the High Court to quash the proceedings which has given rise to the present appeal.
It is now well settled that the High Court does not ordinarily interfere at an interlocutory stage of a criminal proceedings pending in a subordinate Court.
Bearing in mind the well recognised principles of law governing the matter and taking into consideration the nature of 94 the impugned order, we think the High Court was right in declining to grant relief to the appellants.
It is also not a matter in which we may legitimately interfere in exercise of our extraordinary powers under Article 136 of the Constitution specially when the case is at its threshold and evidence has still to be adduced as to whether the minerals extracted could or could not be used as a major mineral for certain purposes.
It must be realised that it is not possible to determine difficult question of the kind involved in the instant case purely in abstract without relevant evidence bearing on the matter in issue.
Accordingly, we dismiss the appeal.
Our order will not, however, be interpreted as barring the appellants from raising any defence or contention that may be open to them before the trial court which will dispose of the same in accordance with law uninhibited by any observations made by it earlier or by the High Court in the course of its Order dismissing the application under section 482 of the Code of Criminal Procedure, 1973.
S.R. Appeal dismissed.
| IN-Abs | "Shahabad Stones" are included under Item 15 in Schedule I to Rule 10 of the Andhra Pradesh Minor Mineral Concession Rules 1966.
The appellants, who are directors of Tandur and Navandgi Stone Quarries (Pvt.) Ltd. and holders of mining lease for extraction of lime stones (Shahabad Stones when being prosecuted, for the alleged violation of Rule 21(1)(ii) of the Mineral Conservation and Development Rules, 1958 which is made punishable under Rules 27 of the said rules in that they failed to employ a qualified geologist or a mining engineer, raised a preliminary objection as to the maintainability of the complaint in view of the specific exclusion of the "Shahabad Stones" from the purview of the 1958 Rules, being a minor mineral being used for building and construction purposes.
The trial magistrate dismissed the application and the High Court declined to interfere under Section 48 of the Criminal Procedure Code, 1973.
Dismissing the appeal by special leave the Court, ^ HELD: As the High Court does not ordinarily interfere at an interlocutory stage of a criminal proceedings pending in a subordinate Court, the A.P. High Court was right in declining to grant relief to the appellants, bearing in mind the well recognised principles of law governing the matter and taking into consideration the nature of the impugned order.
It is also not a matter in which Supreme Court may legitimately interfere in exercise of their extra ordinary powers under article 136 of the Constitution especially when the case at its threshold and evidence has still to be adduced as to whether the minerals extracted could or could not be used as a major mineral for certain purposes.
It is not possible to determine difficult question of the kind involved in the instant case, purely in abstract without relevant evidence bearing on the matter in issue.
[93G H, 94A B]
|
N: Criminal Appeal No. 239 of 1975.
Appeal by special leave from the Judgment and order dated 17 10 1974 of the Allahabad High Court in Cr. A. No. 1013 of 1974 and Reference No. 18/74.
Badri Das Sharma (amicus curiae) for the appellant.
O. P. Rana for the respondent.
The Judgment of the Court was delivered by KAILASAM J.
This appeal is preferred by Deena alias Din Dayal by special leave against the judgment of the High Court convicting and sentencing him.
The case for the prosecution is that on the night of the 20th and 21st June, 1971 the deceased Nainsukh, his brother Hari Singh, his distant uncle Tika Ram, Chandra Pal, daughter 's son of Tika Ram and Chokhey slept on a platform of the Chaupal in village Jar.
According to the prosecution a lantern was hanging on the platform from the branch of a Neem tree.
In the morning at about 4 a.m. the appellant Deena and four other came to the Chaupal of Nainsukh.
The dogs began to bark as a result of which Hari Singh (P.W. 1 ) and others were 108 awakened.
Deena and his associates carried pistol and electric torches Deena challenged Nainsukh saying that he would be taught a lesson for appearing as a witness and fired his pistol striking Nainsukh on his head.
Hari Singh and Chandra Pal shouted for help.
They were also injured.
After hearing the alarm Nihal Singh, Panna Lal and others reached the place of the incident but before their arrival the accused had made good their escape.
The First Information Report was written by Bharat Singh on the dictation of Hari Singh.
The injured witness Hari Singh and Chandra Pal then went to Etah Police Station where the report exhibit Ka 4 was handed over at Police Station Kotwali at 2.05 a.m.
On 21st June, 1971.
The Police officer took up the investigation and reached the scene at about 1.30 p.m.
He found the dead body of Nainsukh and held the inquest, prepared the site plan and recovered the material objects.
Nihal Singh, P.W. 2, produced the lantern before the Investigating officer which was burning at the time the occurrence took place.
shell of used cartridge was also recovered from the scene.
Dr. N. K. Mittal (P.W. 13), the Medical officer of Etah.
found two injuries caused by fire arm on Chandra Pal and one injury on Hari Singh.
The autopsy on the body of Nainsukh was conducted by Dr. Prasad on 21st June, ]971.
He found two gun shot injuries, one on the right side of head above the right ear and the other was non traumatic swelling on the back surface of the right hand.
On internal examination it was found that the surface of the scalp of the right side was congested under injury No. 1.
The doctor found a fissured fracture of the right parietal bone, vertically placed from the suture line to eye brow.
The doctor was of the opinion that the injuries were sufficient in the ordinary course of nature to cause death.
Apart from the eye witness P.W. 1 the prosecution examined P W. 2 Nihal Singh, P.W. 3 Panna Lal who saw the accused running away after the incident.
Reliance was not placed by the courts below on the evidence of P.Ws 2 and 3.
The conviction therefore solely rests on the testimony of eye witness Hari Singh, P.W. ].
Hari Singh P.W. 1 has spoken of the motive.
About 4 or 6 years prior to the occurrence one Ram Chandra was murdered.
Deena was one of the accused in the case.
Deena was found guilty of murder and sentenced to imprisonment for life.
In that case the deceased Nainsukh gave evidence against Deena as an eye witness.
About two months before the murder of Nainsukh, Deena was released on hail and it was rumoured that Deena was saying that now when he had 109 come out of jail he would teach a lesson to Nainsukh.
Nainsukh, Hari Singh and their relations took the threat seriously and were living cautiously.
On the date of the occurrence, according to P.W. 1, a lantern was burning and at about 4 o 'clock in the morning he was awakened by the barking of the dogs.
Four or five other persons came along with Deena.
Deena and one of his companions had torches in their hands and they came flashing their torches.
Deena and the other accused came at the Chaupal from the staircase on the eastern side.
After coming over the Chabutra of the Chaupal the accused stated "Nainsukh, beware, now I will teach you the lesson for giving the evidence".
While flashing the torches on the deceased Deena fired at Nainsukh aiming towards his head.
The shot hit Nainsukh on the head.
The other shot fired by Deena injured Chandra Pal and the third shot hit the prosecution witness Hari Singh.
Hari Singh received an injury on his right shoulder.
The plea that was made by the defence on the evidence of P.W. 1 was that it cannot be safely relied on.
It was submitted that the other injured witness Chandra Pal who was examined as a court witness did not fully support the evidence of the prosecution.
We have gone through the testimony of P.W. 1 and witness Chandra Pal and we do not see any material contradiction.
The enmity between Deena on the one side and the deceased and his family on the other side is not seriously contested.
The deceased Nainsukh gave evidence against Deena in the murder case in which Ram Chandra was killed.
When Deena was released on bail he wanted to teach a lesson to the witness Nainsukh who had appeared against him.
This resulted in Deena shooting the deceased to death.
The motive as alleged by the prosecution stands amply proved.
So far as the scene of the offence is concerned it was not seriously disputed before the High Court.
It was submitted before us that no blood stains were scrapped from the scene which circumstance would show that the occurrence took place at some other place.
It is seen that there was a bundle of straw and a cot at the scene.
The strings of the cot and as well as the straws were stained with blood.
The Serologist had found human blood on the straws.
We do not find any difficultly in accepting the finding of the High Court that the occurrence took place at the site alleged by the prosecution.
The only question that requires consideration is whether there was sufficient light at the scene of occurrence to enable the witness to recognise the accused.
Because of the motive, it is highly probable that Nainsukh, Hari Singh and the family slept with the light burning on the platform which was the scene of offence.
Three shots were 110 fired and there could have been no difficulty in P.W. 1 identifying the appellant Deena.
It is common ground that the witness knew Deena very well.
The lantern that was burning was produced by P.W. 2, Nihal Singh, as soon as the Investigating officer came to the scene of occurrence.
The witness was sleeping to the south of the deceased person at a distance of few feet and we do not think there could have been any difficulty in identifying the assailant.
The High Court has fully considered the question as to whether P.W. 1 would have identified the assailant and has come to the conclusion that the prosecution has established that the lantern was burning and the assailants used torches which enabled the recognition of the accused at the time of the incident.
P.W. 1 Hari Singh is a natural witness and his presence cannot be disputed as he had sustained a gun shot injury.
He had no particular motive for falsely implicating Deena the accused.
The court witness Chandra Pal did not fully support the prosecution except that the incident took place at the chaupal as alleged by the prosecution.
But we do not feel any justification for rejecting the testimony of P.W. 1 because of the contradiction in the testimony of C.W. 1 Chandra Pal.
We are inclined to agree with the High Court that Chandra Pal was won over by the defence.
We also agree with the High Court and find that the appellant Deena was guilty of an offence under section 302 I.P.C. in causing the death of Nainsukh.
The High Court confirmed the extreme penalty of law imposed by the Sessions Court.
The Sessions Court in imposing the death sentence found that the appellant is a desperate character and that while he was on bail in Rare, Chandra murder case he committed the murder of Nainsukh one of the prosecution witnesses in Ram Chandra murder case.
As the offence was committed by a person under a sentence of imprisonment for life for an offence under section 302 I.P.C. the Sessions Court inflicted the extreme penalty.
As a charge under section 303 I.P.C. was not framed and as the parties are not able to tell us the result of the appeal filed by Deena in Ram Chandra 's case, we refrain from invoking the provisions of section 303 I.P.C.
Regarding the sentence after giving our serious and anxious consideration, we find ourselves unable to come to any different conclusion from that arrived at by the trial Judge and the High Court.
The offence was committed after deliberate planning in the night when the victim was sleeping.
It was for the purpose of teaching a lesson to a witness who gave evidence against the accused.
We do not see any extenuating circumstance.
We confirm the sentence of death and dismiss this appeal.
M.R. Appeal dismissed.
| IN-Abs | The appellant was convicted for having committed an offence u/s 302 I.P.C., and was serving a sentence of imprisonment for life.
He was released on bail.
and during that period.
committed the murder of a prosecution witness in the earlier murder case.
The Sessions Court found him guilty and imposed the sentence of death on him.
The sentence was confirmed by the High Court in appeal .
Dismissing the appeal, the Court ^ HELD: The murder was committed by a person under a sentence of imprisonment for life for an offence under section 302 I.P.C. while he was on bail.
The offence was committed for the purpose of teaching a lesson to a witness who gave evidence against him in the earlier murder case and was committed after deliberate planning, in the night when the victim was sleeping.
We confirm the sentence of death.
[110F H]
|
Civil Appeal No. 260 of 1969.
From the Judgment and order dated 13 3 1968 of the Rajasthan High Court in D.B. Civil Misc.
Writ Petition No. 205 of 1965.
Dr. L. M. Singhvi and U. P. Singh for the Appellant.
R. K. Garg, B. P. Agarwal, V. J. Francis and Madan Mohan for the Respondent.
The Judgment of the Court was delivered by SHINGHAL, J.
The State of Rajasthan has filed this appeal by certificate against the judgment of the Rajasthan High Court dated March 13, 1968, by which its writ petition for quashing the order of the Board of Revenue, Rajasthan, Ajmer, dated January 13, 1964, in case No. 1/1962/Tonk "to enable the petitioner" to recover Rs. 5,94,215.30, "according to law" was dismissed.
It was stated in the writ petition that the lands of the Uniara jagir, Aligarh tehsil of Tonk district.
vested in the Rajasthan State on their resumption under the provision of the Rajasthan Land Reforms and Resumption of Jagirs Act, 1952, hereinafter referred to as the Act.
The Jagir Commissioner therefrom took up the question of determining the compensation which was payable to Rao Raja Sardar Singh who was then the jagirdar of Uniara.
In that connection a certificate was filed before the Jagir Commissioner in Form 10 under rule 37 C of the Rajasthan Land Reforms and Resumption of Jagirs Rules, 1954, certifying that a sum of Rs. 5,49,234/12/3 should be recovered from the jagirdar 's compensation and rehabilitation grant on account of "revenue dues".
The jagirdar raised several objections before the Jagir Commissioner, but it was urged on behalf of the State that the sum of Rs. 5,49,234/12/3 was the unpaid amount of the liability of Rs. 5,54,226/13/6, which was payable under a resolution of the Jaipur State Council dated July 1, 1936.
After adding the sum of Rs. 44,980.53 on account of arrears of tribute, the total realisable amount was stated to be Rs. 5,94,215.30.
As the State was not able to give a proper account of the dues, the Jagir Commissioner made an order dated February 14, 1961, that the amount mentioned in the aforesaid certificate (in Form 10) could not be deducted.
An appeal was filed against that order of the Jagir Commissioner, to the Board 98 of Revenue, but it was dismissed on October 15, 1963.
The State contended that it was challenging the decisions of the Jagir Commissioner and the Board of Revenue "in separate proceedings", but that was not done and it is not in dispute before us that the Jagir Commissioner 's order dated February 14, 1961, which was upheld by the Board 's decision dated October IS, 1963, became final.
In the meantime, the Tehsildar of Aligarh issued a demand notice on November 3, 1961, which was revised on December 22, 1961, for the recovery of Rs. 594,215.30 under section 229 of the Rajasthan Land Revenue Act, 1956.
The jagirdar raised an objection that the Tehsildar had no jurisdiction to issue the demand notice because of the Jagir Commissioner 's earlier order dated February 14, 1961 (which had become final and binding on the parties after the Board 's judgment dated October 15, 1963), but the Tehsildar rejected it by his order dated December 22, 1961.
As the jagirdar did not pay the amount which was claimed under the demand notice proceedings were started for attachment and sale of his property, and the jagirdar made an application to the Board of Revenue for a revision of the Tehsildar ' order.
It was allowed by the order of the Board dated January 13, 1964.
The Board took the view that although the certificate for recovery had been sent to the Jagir Commissioner in Form 10, the required particulars were not furnished in spite of several opportunities, and that as the State Government 's claim for the recovery of the money had been completely rejected on an earlier occasion by the Jagir Commissioner 's order dated February 14, 1961, and the Jagir Commissioner had refused to deduct that amount from the compensation with reference to the provisions of sections 22(1)(e), 32(1)(b) and 34 of the Act, the jurisdiction of the Revenue Court in respect of the same dues was barred by section 46 of the Act and the proceedings which had been taken under section 257A of the Rajasthan Land Revenue Act were without jurisdiction.
As the Board quashed the order of the Tehsildar dated December 22, 1961, the State Government filed the writ petition, which has given rise to this appeal, in the High Court, for the recovery of the "revenue dues" mentioned in the certificate in Form 10, and feels aggrieved because of its dismissal by the impugned judgment dated March 13, 1968.
It may be mentioned that the jagirdar traversed the State Government 's claim in the writ petition altogether.
He contended that he never agreed to the Jaipur State Council resolution of July 1, 1936, and he was never informed of the dues claimed by the State.
He denied that any amount was due on account of land revenue or tribute, and averred that no loan had been taken by the Uniara jagir 99 from the State Government.
It was contended further that the Jagir Commissioner wanted to make an inquiry into the State Government 's claim for the recovery of the amount stated in the certificate in Form 10, but the State did not produce the account or proof of the dues so that the claim remained unexplained.
That, according to the jagirdar, was the reason why the Jagir Commissioner held in his order dated February 14, 1961, that the amount could not be deducted from the compensation.
As the appellate order of the Board of Revenue dated October 15, 1963, upheld the Jagir Commissioner 's order, it was pleaded that it became final and conclusive and could not be challenged by taking up the proceedings under the Rajasthan Land Revenue Act which were in fact barred by section 46 of the Act.
In its impugned judgment in the writ petition the High Court has taken the view that the determination of the State 's dues was a matter which was required to be settled! decided or dealt with by the Jagir Commissioner and that, by virtue of section 46 of the Act, a Civil or Revenue Court had no jurisdiction in respect of it.
Reference has been made to section 47 of the Act which provides that its provisions shall have effect notwithstanding anything therein contained being inconsistent with any existing Jagir law or any other law for the time being in force.
The High Court has taken note of the provisions of section 34(2) of the Act also and has held that "no other authority, be it the civil or the revenue court, can go behind" the Jagir Commissioner 's decision in that respect and make a recovery from the jagirdar by setting at naught that Jagir Commissioner 's order in that respect.
The High Court has thus upheld the Board 's decision dated January 13, 1964, against the State of Rajasthan, by which the proceedings which were taken for the recovery of the money under the Rajasthan Land Revenue Act were quashed.
We find from the High Court 's impugned judgement that the point of controversy there was whether the machinery provided under The Rajasthan Land Revenue Act could not be resorted to in face of the provisions of sections 46 and 47 of the Act.
The High Court examined that question only, and we shall confine ourselves to it.
The controversy thus is whether it was permissible for the State to recover the aforesaid arrears of "revenue dues" even after the Jagir Commissioner 's order dated February 14, 1961, under section 32(2) of the Act by which he clearly determined that the money was not recoverable from the jagirdar under clause (e) of sub section (t) of section 22 of the Act and ordered that it may not be deducted from H the final amount of the jagirdar 's compensation.
In other words the question is whether that order was final and no Civil or Revenue Court 100 had jurisdiction to reopen it as it related to a matter which was required to be settled or decided or dealt with by the Jagir Commissioner, or whether this was not so and the proceedings under the Rajasthan Land Revenue Act were competent? In order to arrive at a decision, it will be necessary for us to refer to the relevant provisions of the Act so that its scheme and scope may be understood and applied to the controversy.
The Act (No. VI of 1952) came into force with effect from February 18, ]952.
It provides for the resumption of jagir lands and other measures o land reforms, and extends to the whole of The State of Rajasthan.
Section 2(g) of the Act defines "Jagirdar", and it is not in controversy that Rao Raja Sardar Singh was the jagirdar of the Uniara jagir at the relevant time.
Clause (h) of section 2 defines "Jagir land".
Here again, it is not in dispute that the Uniara jagir formed such land.
Section 21 of the Act provides for the resumption of jagir lands on the appointed date, and once again there is no 13 controversy that the jagir lands of Uniara were so resumed.
Section 22 of the Act states the consequences of resumption Clause (e) of sub section (1) of that section provides as follows: "(e) all arrears of revenue, ceases or other dues in respect of any jagir land due from the jagirdar for any period prior to the date of resumption including any sum due from him under clause (d) and all loans advanced by the Government or the Court of Wards to the jagirdar shall continue to be recoverable from such jagirdar.
" The clause thus expressly provides for the jagirdar 's liability to pay, inter alia, all arrears of revenue, ceases or other dues in respect of his jagir land.
Section 30 deals with the recovery of such arrears and we shall revert to it after making a reference to section 26 which deals with the State Government 's liability to pay compensation to every jagirdar for the resumption of his jagir land.
That is the subject matter of Chapter VI and section 30 thereof reads as follows: "30.
Dues and Debts.
The amounts due from a jagirdar under clause (e) of sub section (1) of section 22 shall be recoverable out of the compensation payable to him under section 26.
" Chapter VII deals with the payment of compensation.
Section 31 of that chapter requires every jagirdar to file a statement of claim for compensation before the Jagir Commissioner.
Item (v) of sub section 101 (2) of that section provides that the statement of claim shall contain the following particulars also: "(v) the amount of dues and debts recoverable from the jagirdar under clause (e) of subsection (1) of section 22;" These provisions, read together, thus provide for the continuance of the jagirdar 's liability to the payment of the arrears of revenue, cesses and other dues, in respect of the jagir land, which were due from him for any period prior to the date of resumption of the jagir, out of the compensation payable to him for the loss of the jagir lands, and a duty has been cast on him to make a specific mention on the amount of the dues and debts recoverable from him under section 22(1) (e), in the statement of his claim for compensation.
Then comes section 32 which deals with the determination of the compensation after making such inquiry as the Jagir Commissioner may deem necessary.
Here again sub section (1) of that section makes it obligatory for the Jagir Commissioner to provisionally determine: "(b) the amount recoverable from the jagirdar under clause (e) of sub section (1) of section 22. ".
Sub section (2) requires that a copy of the provisional order shall be served on the Government, the jagirdar and every other interested person, and the Jagir Commissioner shall, after giving all of them a reasonable opportunity of being heard in the matter, "make a final order".
That order would therefore be a final order in respect of the aforesaid item (b) of the amount recoverable from the jagirdar under clause (e) of sub section (1) of section 22 also.
In other words, the Act provides that the order under sub section (2) of section 32 would be final in respect of the items mentioned in it, including the amount recoverable from the jagirdar under clause (e) of sub section (1) of section 22.
Section 33 requires the Jagir Commissioner to, communicate the "final order" under section 32(2) to the Government, the jagirdar and every other interested person.
Next is section 34, which provides the mode for the recovery of the aforesaid dues.
Sub section (1) of that section is to the following effect: "34.
Dues and deductions how payable.
(1) The amounts recoverable from a jagirdar under clause (e) of sub section (1) of section 22 and those determined in an order made under sub section (2) of section 32 shall be deducted from the compensation payable to him under section 26." 102 Sub section (2) of that section provides that the amount so finally determined, namely, the amount recoverable, inter alia, under clause (c) of sub section (1) of section 22 shall be payable in instalments.
The sub sections make clear reference to clause (e) of sub section (1) of section 22 and section 32 in providing for the deduction of the amounts determined thereunder from the compensation payable to the jagirdar under section 26.
Section 35 deals with the payment of compensation.
It will be sufficient for us to refer to the first two sub sections which read as follows: "35.
Payment of compensation. (1) After the amount of compensation payable to a jagirdar under section 26 is finally determined under sub section (2) of section 32 and the amounts specified in clauses (b), (c) and (e) of that section as finally determined are deducted therefrom, the balance shall be divided into fifteen equal annual instalments or at the option of the jagirdar into thirty equal half yearly instalments.
(2) The amounts finally determined under each of the clauses (b), (c) and (e) of sub section (1) of section 32 shall be deducted and paid to each of the persons entitled thereto from every instalment referred to in sub section (1) and the remaining amount of the instalment shall be payable by the Government to the jagirdar." Thus sub section (2) of section 32, section 33, sub section (2) of section 34 and sub sections (1) and (2) of section 35 taken together categorically provide that the Jagir Commissioner 's order determining, inter alia, the amount recoverable from the jagirdar under clause (e) of sub section (1) of section 22 shall be final, and that it shall be deducted from the compensation payable to the jagirdar under section 26.
The Act thus contains a comprehensive scheme for the determination of the amount of dues and debts recoverable by the State from the jagirdar ill respect of the jagir lands and their deduction from the amount of compensation payable to him.
The question of appeal has been dealt with in section 39.
Sub section (1) of that section specifically provides for an appeal against "any decision" of the Jagir Commissioner, inter alia, under sub section (2) of section 32, to the Board of Revenue, and sub section (4) declares that the decision of the Board in an appeal under the section shall be final.
Then comes section 46 which raises the bar of jurisdiction.
It provides as follows: 103 "46.
Bar of jurisdiction. (1) Save as otherwise provided in this Act, no Civil or Revenue Court shall have jurisdiction in respect of any matter which is required to be settled, decided or dealt with by any officer or authority under this Act.
(2) No order made by any such officer or authority under this Act shall be called in question in any Court.
" So where it is shown that any "matter" which is required to be settled, decided or dealt with by any officer or any authority under the Act, e.g., the Jagir Commissioner or the Board of Revenue, has been so settled? decided or dealt with, it shall not be permissible for any Civil or Revenue Court to settle, decide, or deal with it, except where there is, a contrary provision in that behalf in the Act itself.
It is also the mandate of sub section (2) that no order of any such officer or authority shall be open to challenge in any Court.
These provisions of the Act are quite adequate and comprehensive and, read with the relevant Rules, they provide for the determination and recovery of the amounts due from the jagirdar on account of the jagir lands.
This has to be so because when the Act provides for the resumption of the jagir lands and thereby deducts the jagirdar of his resources, it is fair and reasonable that it should make provision for the determination and recovery of the amount recoverable from the jagirdar under section 32(1) (a) .
The provisions of the Act to which reference has been made and the Rules made thereunder, are therefore a comprehensive code concerning the liability of the jagirdar.
If these provisions are applied to the facts and circumstances of the present case, it would appear that the following facts have been well established.
The State laid a claim for the recovery of Rs. 5,49,234/12/3 in Form 10, exclusively on the ground that they were revenue dues of the jagirdar for a period prior to the resumption of the jagir lands.
The Jagir Commissioner asked for information for the determination of the State Government 's claim, with particular reference to clause (b) of sub section (1) of section 32 as respects the amount recoverable from the jagirdar under clause (e) of sub section (1) of section 22, and made his final order on February 14, 1961.
It is not controverted before us that he did so after complying with the requirements of the law and communicated his decision to the Government and the jagirdar under section 33.
As the Jagir Commissioner 's order under sub section (2) of section 32 was against the State Government, nothing was deductible on account of the State Government 's claim 104 in Form 10, under section 34 of the Act, on account of the liability claimed under clause (e) of sub section (1) of section 22 and clause (b) of sub section (1) of section 32.
So when the final determination of that claim was 'nil ', inasmuch as it was held that nothing was recoverable from the jagirdar on account of the "revenue dues", it inevitably followed that no deduction was permissible from the compensation payable to him.
The decision was disadvantageous to the State and it preferred all appeal to the Board of Revenue but, as has been stated, it was dismissed on October 15, 1966.
It will be recalled that even though it was stated in the writ petition that the State was challenging the decisions of the Jagir Commissioner and the Board of Revenue "in separate proceedings", no such action was taken.
The fact therefore remains that as the order had been made by the Jagir Commissioner under the provisions of the Act, and as there was no provisions in the Act for challenging it otherwise than by an appeal to the Board of Revenue which was dismissed, the High Court was right in raising the bar of section 46 and in holding that no Civil or Revenue Court had jurisdiction in respect of the controversy as it was a matter which had been finally decided by the Jagir Commissioner and the Board of Revenue under the provisions of the Act.
The belated attempt by the State to get over the bar by instituting proceedings under section 229 or section 257A of the Rajasthan Land Revenue Act, was therefore illegal, and was set aside by the Board 's decision dated January 13, 1964.
The objection against it held no merit, and has rightly been rejected by the impugned judgment of the High Court dated March 13, 1968.
It was argued on behalf of the appellant that the resolution of the Jaipur State Council dated July 1, 1936, was the final adjudication of the liability of the Uniara Jagir for the payment of the amount mentioned in it, to the State, and was really in the nature of a decree which the Jagir Commissioner had no jurisdiction to examine under section 32 or any other section of the Act and tile Jagir Commissioner 's order dated February 14, 1961 was therefore quite illegal and could well be ignored by the State for the purpose of taking action under section 257A of the Rajasthan Land Revenue Act.
We find that a similar argument was urged for the consideration of the High J Court, but was rejected for satisfactory reasons.
The State did not even care to produce the Council resolution before the Jagir Commissioner and, as has been stated, the jagirdar took the plea in his reply to the writ petition that he never agreed to the passing of that resolution, he was never informed of the alleged arrears for which the resolution was said to have been passed, and nothing was payable by him on account of "revenue dues".
He therefore asked the Jagir 105 Commissioner to make an inquiry into the matter.
That was undertaken by the Jagir Commissioner under the relevant provisions of the Act, to which reference has been made already.
It will be recalled that the State Government filed an appeal against the adverse decision of the Jagir Commissioner, but it was dismissed, and the appellate decision of the Board became final under sub section (4) of section 39 of the Act.
We have dealt with the consequences which arose from, that decision by virtue of the bar of jurisdiction under section 46 It was further argued on behalf of the appellant that the Jagir Commissioner 's order under section 32 of the Act could possibly relate only to his final order in regard to the amount recoverable from the jagirdar, inter alia, under clause (e) of sub section (1) of section 22 of the Act, for the purpose of enabling its deduction from the jagirdar 's compensation under section 34, but could not possibly bar a civil action for it may well be that, in a given case, the amount of compensation may fall short of the amount recoverable from the jagirdar.
It will be enough to say that such a possibility could not arise in the instant case inasmuch as the net compensation payable to the jagirdar was Rs. 16,00,000/ , which was far in excess of his liability to the State.
Reference in this connection may also be made to rule 37 C(4) of the Rajasthan Land Reforms and Resumption of Jagir Rules, 1954, which casts a duty on the Jagir Commissioner not only to effect the deduction of the amount payable by the jagirdar, under section 34, but also for the deduction of the balance from the rehabilitation grant payable to him under section 38C of the Act.
The said rule casts a duty ' on the authority to whom the amount is payable by the jagirdar, to take necessary steps for the adjustment of the recovery so effected, and "further recovery of the balance, if any, that might remain outstanding against the jagirdar.
" There could therefore be no occasion for the recovery of any balance of revenue dues by civil action in the facts and circumstances of this case.
The appellant 's learned counsel made a reference to several cases including Ullel Venkatrava Kini vs Louis Souza (1), G. Venkatachala Odavar vs Ramachandra Odavar and another (2), Kulandaiswami Madurai and Others vs Murunayya Madurai and Others (3), Rameshwar Prasad and Others vs Satya Narain and Others (4), Gurbasappa Mahadevappa vs Neelkanthappa Shivappa (5).
A. R. Sarin vs B. C. (1) A. I. R. (2) A. I. R. 1961 Madras 423.
(3) A. I. R. 1969 Madras 14.
(4) A. I. R. 1954 All. 115.
(5) A. I. R. 1951 Bombay 136.
8 520SCI/78 106 Patil and another(1) and Shivshanker Prasad Shah and others vs Baikunth Nath Singh and others(2) for the purpose of showing that every adjudication of a dispute cannot oust the jurisdiction of a civil court.
But they were different cases where the jurisdiction of Civil Courts could not be said to have been ousted.
As we find no force in this appeal, it is dismissed with costs.
N.V.K. Appeal dismissed.
| IN-Abs | The Rajasthan Land Reforms and Resumption of Jagirs Act, 1952 which provide for the resumption of jagir lands and other measures of land reforms, contains a comprehensive scheme for the determination of the amount of dues and debts recoverable by the State from the Jagirdar in respect of the jagir lands and their deduction from the amount of compensation payable to him.
Sections 22 to 31 read together provide for the continuance of the Jagirdar 's liability to the payment of arrears of revenue, ceases and other dues which were due from him in respect of the jagir lands for any period prior to the date of resumption or the jagir, out of the compensation payable to him.
A duty has been cast on the jagirdar to mention, in the statement of his claim for compensation the amount of dues and debts recoverable from him under section 22(1)(e).
Section 32(1) makes it obligatory on The Jagir Commissioner to provisionally determine the amount of compensation unrecoverable from the Jagirdar under section 22(1)(e) and serve a copy of the provisional order on the Government, the Jagirdar and every other interested person.
It is only after giving all or them a reasonable opportunity that the Jagir Commissioner can make a final order.
The order so made under section 32(2) would be final in respect of the amounts mentioned in it.
Section 34 provides for the deduction of the amounts determined by the Commissioner, from the compensation payable to the Jagirdar under section 26.
Section 35 deals with payment of compensation.
Section 39 provides for appeals against and decision of the Jagir Commissioner, to the Board of Revenue according to which the decision of the Board in the appeal shall be final.
Section 46 provides that no order mad by any officer or authority under the Act shall be called in question in any civil or revenue court.
Under the provisions of the Act, the lands belonging to the respondent, who was a. Jagirdar in the State of Rajasthan, vested in the State.
When the Jagir Commissioner took up the question of deciding the compensation payable to the respondent, the State filed a claim that a certain amount was recoverable from the compensation payable to the Jagirdar on account of revenue dues etc.
But since the State was not able to give a proper account of the dues, the Jagir Commissioner made an order that the amount claimed by the State could not be deducted.
The Board of Revenue dismissed the State Government 's appeal any, therefore, the order of the Jagir Commissioner became final.
In the meanwhile, when the Tehsildar sought to recover the dues from the respondent, he raised an objection that since the Jagir Commissioner 's order became final the Government was not competent to claim that amount.
The 96 Tehsildar rejected the objection.
In the respondent 's appeal, the Board of Revenue quashed the order of the Tehsildar on the ground that the State Government did not furnish the required particulars in spite of several opportunities given to it when the matter was before him and that the Jagir Commissioner was light in rejecting the claim of the State.
It also held that since his order became final, proceedings to have the recovery of the dues under the Land Revenue Act, Where without jurisdiction.
The High Court dismissed the writ petition filed by the State Government.
It held that The determination of the dues and debts recoverable by the State from the Jagirdar was a matter which was required to be settled by the Jagir Commissioner and that by virtue of section 46 of the Act, a Civil or Revenue Court had no jurisdiction in respect of it.
On the question whether the Jagir Commissioner 's order was final and whether any Civil or Revenue Court had jurisdiction to reopen it, as it related to a matter which was required to be settled or decided or dealt with by the commissioner.
Dismissing the appeal, ^ HELD: The High Court was right in raising the bar of section 46 and holding that no Civil or Revenue Court had jurisdiction in respect of the controversy as it was a matter which had in fact been finally decided by the Jagir Commissioner and the Board of Revenue under the provisions of the Act.
The belated attempt by the State to get over.
the bar by instituting proceedings under section 229 or section 257 A of the Rajasthan land Revenue Act was illegal and was rightly set aside by the Board.
The objection against it had no merit and had rightly been rejected by the High Court.
[104D E] The provisions of the Act are quite adequate and comprehensive and read with the relevant rules, provide for the determination and recovery of the amounts due from the Jagirdar on account of the Jagir lands.
This had to be so, because when the Act provides for the resumption of the jagir lands it is fair and reasonable that it should make provision for the determination and recovery of the amount recoverable from the Jagirdar.
The provisions of that Act are a comprehensive code concerning the liability of the Jagirdar.
[103D E] There is no force in the contention that the resolution of the Jaipur State Council was a final adjudication of the liability of the Jagirdar and that, being in the nature of a decree, the Jagir Commissioner 's order was illegal.
The Jagirdar denied any knowledge of the resolution.
When the Jagir Commissioner undertook the enquiry, the State did not produce the resolution and, therefore, he dismissed the claim of the State.
[104F H, 105A B] There is also no force in the contention that section 34 is not a bar to civil action because in a given case the amount of compensation might fall short of the amount recoverable from the Jagirdar.
Such possibility could not arise in this case.
The compensation payable to the Jagirdar was far in excess of his liability to the State.
The Act casts a duty on the Jagir Commissioner to take necessary steps for the adjustment of the recovery and further recovery of the balance, if any, that might remain outstanding against the Jagirdar there could, therefore, be no occasion for the recovery of any balance of revenue does by civil action in this case.
[105C F] 97 Ullal Venkatrava Kini vs Louis Souza AIR ; G. Venkatachala Odavar vs Ramachandra Odavar & Anr., AIR 1961 Mad, 423 Kulandaiswami Madurai & Ors.
vs Murugayya Madurai & Ors., ; Rameshwar Prasad & Ors.
vs Satya Narain & Ors.
AIR 1954 All 115, Gurbasappa Mahadevappa vs Neel Kanthappa Shivappa AIR 1951 Bom.
136; A. R. Sarin vs B. C. Patil & Anr.
AIR 1951 Bom.
423; Shivshankar Prasad Shah & Ors.
vs Baikunth Nath Singh & Ors. ; held inapplicable.
|
Civil Appeal No. 1800 of 1968 From the Judgment and order dated 20 10 1967 of the Delhi High Court in Civil Writ No. 1376 of 1967.
section N. Kacker, Sol.
Genl., section N. Anand and R. N. Sachthey for the Appellant.
V. M. Tarkunde and Gautam Goswami for Respondent No. 1.
Yogeshwar Prasad and (Mrs.) Rani Chhabra for the Interveners.
Ex parte against Respondents Nos. 2 and 3.
72 The Judgment of the Court was delivered by KOSHAL, J.
The facts giving rise to this appeal by the Delhi Administration on certificate granted by the High Court of Delhi against its judgment dated the 20th October 1967 in a petition under articles 226 and 227 of the Constitution of India (Civil Writ Petition No. 1376/ 67) are not in dispute and may be briefly stated.
The Governments of the States of Punjab and Delhi entered into an agreement about 3() years back providing for the running of public service vehicles in routes which covered each of the two States so that every one of such routes had one terminus in one of the States and the other in the other.
In pursuance of the agreement one of the Governments would issue permits under the (hereinafter referred to as the Act) and the same would be counter signed by the other State before the former plied its buses on the routes covered by such permits.
One such permit related to the Delhi Karnal route and was countersigned by the State Transport Authority Delhi in the following terms: "Countersigned for the portion of the route Delhi Karnal from 31 7 1967 to 30 11 1967 subject to the condition that tickets will be issued for the destinations bet wen Delhi and Karnal.
Destination board should be exhibited.
Bus will cover the full route and all other conditions applicable under Motor Vehicle Laws.
" Other permits for the Delhi Karnal route and other interstate routes were counter signed in the same terms.
The routes above mentioned were extended by the Punjab State authorities under permits granted by them for intra State routes connecting different towns in the State of Punjab itself.
Thus a permit was issued in favour of the Punjab roadways for the route from Karnal to Chandigarh so that the bus operating on the Delhi Karnal route would carry passengers from Delhi to Chandigarh via Karnal.
On the 25th July 1956, officers of the two States came to an agreement whereby the State of Punjab was given the right to extend its services on inter State routes to any town in the State of Punjab.
This agreement was subject to ratification by the Governments of the Two States, which`was, however, never accorded.
In the year 1966, the State of Delhi objected to the exploitation by the State of Punjab of the inter State routes in the manner above stated, that is, by extending them beyond the termini specified in that behalf under the counter signatures made by the State of Delhi and approached the Inter State Transport Commission (hereinafter called the commissions) constituted under sub section (1) of Section 63A of the Act with 73 a request for interference.
After hearing counsel for the two States the Commission passed an order dated 27th August, 1966, in favour of the State of Delhi. 'the operative part of that order alongwith the reasons listed by the Commission in support of it is extracted below: "Section 48(2) of the , prescribes that every stage carriage permit shall be expressed to B. be valid only for a specified route or routes of for a specified area.
It appears, therefore, that if a permit is expressed to be valid only for the one specified inter State route, the same transport vehicle covered by the same inter State permit can not be allowed to proceed further to another route with liberty to pick up passengers in route on a second route, which is C: an intra State route, as this would be in violation of the provisions of the Act.
There is no objection to the same vehicle running on another route under a different permit, but it would be objectionable if passengers who embark on the route covered by the inter State permit are given direct tickets to any town on the second route for which the vehicle holds on intra State permit.
The issue of scull a direct ticket would amount to extending the span to the inter State route, which is not permissible under the .
In other words, there can be no objecting to the linking of the two routes but this linking should not involve boarding of direct passengers, i.e., those holding one ticket for travel over both the routes on either of the two routes.
"On a careful consideration of the provisions of the , the Commission advise under Section 63A(2) (b) of the , that it would not be in order if one vehicle operating on two permits for two routes were to book direct passengers travelling on both the routes on direct tickets for places on both the routes.
Operations which would contravene this advice should be stopped and the services be so regulated to ensure that the provisions of the are not violated " The State of Punjab went up in appeal to the Inter State Trans port Appellant Tribunal (hereinafter called the 'Tribunal) under rule 24 of the Inter State Transport Commission Rules, 1960.
That appeal was dismissed on the 4th July 1967 through an order, paragraph 3 to 7 of which may be re produced for facility of reference: "3.
The learned counsel for the Delhi Administration replied that the issue of tickets was a condition of a permit under Section 48(3) (xiv) of the .
The 6 520SCI/78 74 inter State permit from Delhi to Karnal was, therefore, subject to the condition that tickets bearing specified particulars shall be issued to passengers and shall show the fares actually charged.
This must be construed to mean that the ticket which is issued as a condition attaching to a single permit would be restricted to the route or routes covered by that permit.
As the inter State route alone is covered by the permit which is countersigned by the Delhi Administration, the said permit would require the issue of a ticket only on the Delhi Karnal route but not beyond.
We think that the contention of the Delhi Administration is further supported by Section 42(1) of the under which no owner of a "transport vehicle" (which includes a stage carriage) shall use the vehicle in any public place, save in accordance with the conditions of a permit granted or countersigned by a Regional or a State Transport Authority authorising the use of the vehicle in that place in the manner in which the vehicle is being used.
The vehicle starting from Delhi on the Delhi Karnal route would be governed by the conditions of the inter State permit countersigned by the Delhi Administration.
The use of the vehicle at Delhi or, for the matter of that, at any place on the inter State route, must be governed by the conditions of the inter State permit alone.
We have already construed session 48(3) (xiv) to mean that the tickets which must be issued as a condition of the permit must relate to the route or routes or area covered by that permit.
It would follow therefore that tickets to be issued from Delhi could not be for any place which was beyond Karnal and, therefore, not covered by the inter State permit.
Learned Counsel for the Government of Punjab submitted that the Delhi Administration has countersigned only the inter State route covered by a permit issued by the Government of Punjab with the knowledge that the same permit was valid floor a further intra State route also.
however, cannot mean that the Delhi Administration are estopped from contending that under the conditions of the inter State permit, a ticket for a place beyond the Inter State route cannot be issued.
From the point of view of the convenience of the passengers, we would have liked the vehicle starting from Delhi to issue a long distance ticket to a place even beyond 75 Karnal so that the passengers starting from Delhi could A be assured of reaching their destination beyond Karnal.
Unfortunately, the attainment of this objective has been fettered by the existing provisions of the referred to above.
For the above reasons, therefore, we are of the view that the advice given by the Inter State Transport Commission was, on the whole, correct, though we have taken the liberty of adding to the reasons on which the advice could be supported.
The appeal is, therefore, dismissed." This order of the Tribunal was challenged by the State of Haryana (which had been carved out of the erstwhile State of Punjab in the meantime) in the petition under Articles 226 and 227 of the Constitution of India which we have mentioned above and which has been accepted by a Division Bench of the High Court of Delhi.
The High Court took note of the various provisions of the Act and concluded that there was no warrant for the proposition that tickets could not be issued at Delhi for stations beyond Karnal by the Haryana Roadways for a bus operating under a permit in respect of the Delhi Karnal route and that the Commission and the Tribunal had both erred in holding to the contrary.
The High Court observed that under clause (xiv) of sub section (3) of Section 48 of the Act, the Delhi State could impose conditions subject to which its countersignature in relation to a permit covering an inter state route was to be valid, but added that such.
conditions could only be those which were covered by that clause and no others.
It further found that no condition preventing the permit holder from issuing a direct ticket from Delhi to Chandigarh via Karnal was ever imposed by the State Transport Authority, Delhi, and also that such a condition could not be imposed inasmuch as (a) the same would not be relatable to the inter State route and (b) it would not be covered by clause (xiv) aforesaid.
It turned down a plea that the issuance of tickets from Delhi to Chandigarh by the Haryana Roadways affected the identity of the Delhi karnal route or amounted to its extension.
In the result, therefore, the High Court issued a writ of certiorari quashing the orders of the Commission and the Tribunal and restrained the Delhi Administration from interfering with the operation of the Stage carriages of the State of Haryana on the Delhi Haryana inter state routes on the plea that the issue of direct tickets beyond the terminal stations in Haryana on those routes was prohibited either by the provisions of the Act or by any condition attached by the State Transport Authority, Delhi.
Before us, the contentions raised on behalf of the appellant are: (1) The Regional Transport Authority, Delhi, had the power under sub sec.
(2) of Sec. 63 read with clause (xiv) above mentioned to impose, while according its counter signature to a permit relating to an inter State route, a condition to the effect that tickets shall not be issued for any station beyond the two specified termini and such a condition could be spelt out of the counter signature above extracted by necessary implication.
(2) The counter signatures covered only inter State routes having specified termini and the issuance of tickets by the Haryana Roadways for stations beyond the terminus located in the Haryana State and specified in a particular permit (which has been countersigned by the Delhi State authorities) amounted to an extension of the route which the Act did not permit.
We find no force in either of these contentions for the reasons which follow and which are substantially the same as advanced by the High Court in the detailed judgment under appeal.
Sub section (2) of Section 63 of the Act states: "(2) A Regional Transport authority when countersigning the permit may attach to the permit any condition which it might have imposed if it has granted The 'permit, .
and may likewise vary any condition attached to the permit by the Authority by which the permit was granted.
" The conditions which a Regional Transport Authority may attach to a permit while granting it are contained in clause (xiv) above mentioned which runs thus: (xiv) that tickers bearing specified particulars shall be is sued to passengers and shall show the fares actually charged and that records of tickets, issued shall he kept in a specified manner;" According to this clause, the conditions attached to the grant of a permit may be (a) that the tickets issued to passengers shall bear specified particulars; 77 (b) that the tickets shall show the fares actually charged; A and (c) that records of the tickets issue(l shall be kept in the manner specified.
None of these conditions embraces a restriction on the permit holder that he shall not ply his vehicle beyond the specified inter state route even if that is done under another permit which is valid according to law, and we, therefore, do not see how clause (vix) as above extracted read with sub sec.
(2) of section 63 of the Act helps the case of the appellant.
Nor can we agree with the plea that the counter signature above extracted could be construed as laying down a condition that the permit holder could not ply his vehicle beyond the specified terminus in the State of Haryana.
Learned counsel for the appellant has laid emphasis on the words "Tickets will be issued for the destinations between Delhi and Karnal.
Destination boards should be exhibited," and wants us to interpret them as implying a prohibition on the use of the concerned vehicles beyond Karnal.
We are of the opinion, however, that no such interpretation can be placed on them.
They merely lay down positive instructions which the permit holder had to carry out, namely, that he would not refuse the issue of a ticket between the two termini, i.e., Delhi and Karnal, and that he would also exhibit a board stating that the vehicle in question would cover the route from Delhi to Karnal.
Beyond that the words do not go and cannot be construed to mean that the vehicle could not ply beyond p Karnal or that a board saying that it was going to Chandigarh via Karnal cloud not be exhibited, or that tickets could not be issued for any stations except those lying between Delhi and Karnal.
In fact, the authority counter signing the permit had no concern at all with any route beyond Karnal.
The playing J of the vehicle from Karnal to Chandigarh would be governed not by the permit covering the Delhi Karnal route or by the counter signature on it but by another permit issued by the authority competent to deal with the route between Karnal and Chandigarh.
The first contention raised on behalf of the appellant is, therefore, found to be without substance.
We also find no force in the plea that the plying of vehicles by the Haryana Roadways beyond the inter State route under valid permits issued by the competent authority would amount to an 78 "extension" of the route such as is prohibited by the Act.
Reliance in support of the plea was placed on sub section
(8) of section 57 of the Act which lays down: "(8) An application to vary the conditions of any permit, other than a temporary permit, by the inclusion of Ba new route or routes or a new area or, in the case of a stage carriage permit, by increasing the number of trips above the specified maximum or by altering the route covered by it or in the case of a contract carriage permit or a public carrier 's permit, by increasing the number of vehicles covered by the Permit, shall be treated as an application for the grant of a new permit: Provided that it shall not be necessary so to treat an application made by the holder of a stage carriage permit who provides the only service on any route Or in any area to increase the frequency of the service so provided, without any increase in me number of vehicles.
" As pointed out by the High Court, the language of the sub section applies only to a case where the permit holder applies for the variation of the conditions of his permit by inclusion of a new route or routes or a new area or by increasing the number of services above the specified maximum.
In the case before us this situation does not arise at all inasmuch as the Haryana Roadways has not applied for the variation of any permit in any way and has, on the other hand, taken and exploited quite another permit for an entirely different route from another competent authority.
Apart from sub sec.
(8) above mentioned, we have not been referred to any provision of the Act in support of the plea under consideration which, therefore, fails.
Learned Counsel for the appellant drew our attention to a Possible unfortunate situation which might result from the conclusions which the High Court has reached and, in our opinion, reached rightly.
His apprehension was that in order to make more money and to avoid inconvenience to itself the Haryana Roadways, while operating under the permit pertaining to the Delhi Karnal route, would perhaps not issue any tickets to passengers bound for stations lying II in between Delhi and Karnal so long as it could find customers travelling directly from Delhi to Chandigarh and that in that event the real purpose of the counter signature would be wholly defeated.
We 79 would certainly not approve of such a situation but then it is nobody 's A case that the Haryana Roadways has been plying its buses on the Delhi Chandigarh route or, for that matter, any other route, in that fashion.
However, we may make it clear that if any long distance passengers are given preference over those leaving Delhi for a station lying between the termini specified in any permit bearing the countersignature of the Delhi State authorities, a peremptory condition attach ed to the counter signature would have been violated, and that State would be entitled to take such action as may be open to it under the law.
subject to this observation, the appeal fails and is dismissed, but with no order as to costs.
S.R. Appeal dismissed.
| IN-Abs | The Governments of the States of Punjab and Delhi entered into an agreement about 30 years back providing for the running of public service vehicles on routes which covered each of the two States so that every one of such routes had one terminus in one of the States and the other in the other.
In Pursuance of the agreement one of the Governments would issue permits under the and the same would be countersigned by the other State before the former plied its buses on the routes covered by such routes.
One such permit related to the Delhi Karnal route and was countersigned by the State 'Transport Authority, Delhi.
The routes were extend d by the Punjab State authorities under permits granted by them for intra state routes connecting different towns in the State of Punjab itself.
Thus a permit was issued in favour of the Punjab Roadways for the route from Karnal to Chandigarh so that the bus operating on the Delhi Karnal route would carry passengers from Delhi to Chandigarh via Karnal.
In 1966, the appellant objected to the exploitation by the State of Punjab of the inter State routes in the manner above stated, that is, by extending them beyond the termini specified in That behalf under the counter signatures made by the State of Delhi, and approached the Inter State Transport Commission constituted under section 63 A of M.V. Act With a request for interference.
The Commission answered it in favour of the appellant State, and held that it would not be in order that if one vehicle operating of two permits for two routes were to book direct passengers travelling on both the routes.
Operations which would contravene this advice should be stopped and the services be so regulated to ensure that the provisions of the are not violated".
The State of Punjab went up in appellate to the Inter State Transport Appellate Tribunal under rule 24 of the Inter State Transport Commission Rules 1960.
The appeal was dismissed and the respondent State filed a writ petition in the Delhi High Court which was allowed by the Division Bench.
Dismissing the appeal by certificate the Court, ^ HELD: (1) According to clause (xiv) of sub section (3) of section 48 of the Motor Vehicles Act, 1959, the conditions attached to the grant of permit, under section 63(2) ibid, may be; (a) that the tickets issued to passengers, shall bear specified particulars; (b) that the tickets shall show the fares actually charged; and (C) that records of the tickets issued shall be kept in the manner specified.
None of these conditions embraces a restriction on the permit holder that he shall not ply his vehicles beyond the specified inter state route even if that is done under another permit which is valid according to law and, therefore, clause (xiv) of section 48(3) read with section 63(2) of the Act will be of no avail.
[76H, 77A C] 71 (2) 'The words "Tickets will be issued for the destinations between Delhi and Karnal.
Destination boards should be exhibited" merely lay down positive instruction which the permit holder had to carry out, namely, that he would not refuse the issue of a ticket between the two termini, i.e, Delhi and Karnal.
and that he would also exhibit a board stating that the vehicle in question would cover the route from Delhi to Karnal.
Beyond that the words do not go and cannot be construed to mean that the vehicle could not ply beyond Karnal or that a board saying, that it was going to Canceling via Karnal could not be exhibited, or that tickets could not be issued for any stations except those lying between Delhi and Karnal.
In fact, the authority counter signing the permit had no concern at all with any route beyond Karnal.
The plying to the vehicle from Karnal to Chandigarh would be governed not by the permit covering the Delhi Karnal route or by the counter signature on it by another permit issued by the authority competent to deal with the route between Karnal and Chandigarh.
[77D H] (3) The plying of vehicles by the Haryana,.
Roadways beyond the inter state route.
under valid permits issued by the competent authority does not amount to an "extension" of the route such as is prohibited by the Act.
[77H. 78A] The language of sub section (8) of section 57 of the Act applies only to a case Where the permit holder applies for variation of the conditions of his permit by inclusion of a new route or routes or a new area or by increasing the number of services above the specified maximum In the instant case, this situation does not arise at all inasmuch as the Haryana.
Roadways has not applied for The vacation of any permit in any way and has, on the other hand, taken and exploited quite another permit for an entirely different rout from another competent authority.
[78E F] OBSERVATlON: [If any long distance passengers arc given preference over those leaving Delhi for a station Lying between the termini; specified in any permit bearing the counter signature of the Delhi state authorities.
a peremptory condition attached to the counter signature would have been violated and that State would l be entitled to take such action as may be open to it under the law].
|
CIVIL Appeal No 2475 of 1968.
From the Judgment and order dt.
5 7 67 of the Bombay High Court (Nagpur Bench) in S.C.A. No. 893 of 1965 T. section Desai and M. N. Shroff for the Appellants section V. Deshpande and section Balakrishnan for the Respondent Nos. 1 6 and 8 20 A. G Ratnaparkhi for the Respondent 7(i) and 7(ii) The Judgment of the Court was delivered by JASWANT SINGH, J.
This appeal by certificate granted under Article 133(1)(c) of the Constitution by the High Court of Judicature at Bombay (Nagpur Bench) which is directed against its judgment and order dated July 5, 1967 in Special Civil Application 165 No. 893 of 1965 raises an important question of law as to the right A of the State to levy and collect water charges from the respondents under the Central Provinces Irrigation Act, 1931 (Act No. IlI of 1931) for appropriation for irrigation purposes of water from Navegaon Bandh Tank in Tehsil Sakoli, District Bhandara.
The facts giving rise to this appeal are: As already.
indicated, there is in village Navegaon, Tehsil Sakoli, District Bhandara, which formed part of the erstwhile State of Madhya Pradesh, a very large reservoir of water called Navegaon Bandh Tank which is said to have been constructed some 300 years ago by one Kawdu Patel.
The tank which is over an area of Land admeasuring nearly 3200 acres has, since the time of its construction, been the main source of supply of water to the rice and sugarcane growing areas of five villages viz, Mouza Navegaon, Deolgaon, Mungli, Yerandi and Kholi comprising about 2688 acres of land which is held partly by the quondam Malguzars including respondents 1 to 8 and partly by the tenants including respondents 9 to 20.
The said tank came to vest in the State under the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals and Alienated Lands) Act, 195() (Act No. 1 of 1951).
In May, 1965, the State Government called upon the respondents who are ex proprietors and occupancy tenants to execute agreements in writing undertaking to pay Rs. 7/ per acre for rice and Rs. 45/ per acre for sugarcane irrigation as charges for the use of water from the Navegaon Bandh Tank.
The respondents thereupon brought the aforesaid writ petition challenging the levy by the State of the said charges as well as its demand for execution of the aforesaid agreements and seeking the issue of twin writs viz (1) of prohibition forbidding the appellants from` insisting on the respondents to execute agreements in the State 's favour for payment of water charges for irrigating their lands and (2) of Mandamus directing the appellants to allow free irrigation of their fields from Navegaon Bandh Tank.
The case of the respondents was that the right of taking water for irrigation purposes free of charge from the said tank had been enjoyed by the holders of land from generation to generation for the last 300 years with the only obligation of keeping the tank in proper repairs; that the tank was the Property of the descendants of the said Kawdu Patel who were recognised as Malguzars of all The aforesaid five villages; that the right of the aforesaid holders of land or appropriating water of the tank was recognised and recorded in the Wajib ul Arz whereunder an obligation was cast on the Malguzars to allow the tenants to irrigate free of charge their lands for rice 166 (dhan) and sugarcane cultivation; that the Malguzars as well as the tenants had thus been using the water of the tank for irrigating their fields and raising crops as of right without any payment either to the State or to any one also; that in the year, 1950, the Madhya Pradesh Legislature passed an Act called "the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals and Alienated Lands) Act, 1980 (Act No. I of 1981)" (hereinafter referred to as 'the Abolition of Proprietary Rights Act ' with a view to eliminate the intermediaries (variously called as Malguzars, Zamindars and Jagirdars) between the State and the tillers of the soil and to acquire from a specified date for the purpose of the State free of all encumbrances the rights of properties in estates, mahals, alienated villages and alienated lands comprised in a notified area in Madhya Pradesh; that in the Notification issued under section 3 of the Abolition of Proprietary Rights Act, the area vesting in the State was shown as the whole area of the aforesaid villages and the Mahals or Estates comprised therein; that thus the State was substituted in place of Malguzars with the same rights and liabilities; that the only consequence of vesting according to section 4 of the Abolition of Proprietary Rights Act was to do away with the encumbrances of mortgages, if any, on proprietary lands and to fasten the same on the amount of compensation payable by the State to the proprietors; that the said vesting which took place as a result of the abolition of Proprietary Rights Act and the Notification issued thereunder did not affect, curtail or extinguish the aforesaid rights of free irrigation of the holders of land in the aforesaid five villages i.e., of the Malguzars who were cultivating their home farm lands or of other persons who were in occupation of lands as occupancy tenants at the time of the coming into force or the Abolition of Proprietary Rights Act and on the contrary, sections 45 46 and 47 of the Abolition of Proprietary Rights Act preserved those rights; that the right to free irrigation was recognised and recorded at various settlements and in the Wajib ul Arz of 1919; that notwithstanding the enactment and enforcement of the Abolition of Proprietary Rights Act, the State continued upto 1964 to recognise The respondents ' right of taking water free of charge for irrigation purposes from the aforesaid tank which had been enjoyed by the respondents and their ancestors for the last 300 years and never made any demand on account of water charges; that the respondents were entitled to take water from the aforesaid tank for such lands as it had been irrigated as per entries in the Wajib ul Arz which is an authentic record of rights of the cultivators of the villages in question; that in November, l 965, the officials of the State Government in charge of the Irrigation Department by reference to section 26 of 167 the Central Provinces Irrigation Act, 1931, which had no relevance.
A declined to allow the respondents to take water from the aforesaid tank unless they executed the aforesaid agreements and that the action of the State Government and its officials was without any legal authority and encroached upon their fundamental rights.
In the return filed by them in opposition to the writ petition`, the appellants while admitting that the tenants as well as the proprietors could avail of the right of irrigating their paddy lands on condition that they would maintain the Navegaon Bandh Tank in proper repairs and keep the irrigation channels clear from obstruction and sediment inter alia maintained that on and from the 31st of March? 1951 the date specified in the Notification No. 627 XII dated 27th January, 1951 issued under section 3 of the Abolition of Proprietary Rights Act all rights, title and interest vesting in the quondam proprietors in the notified area including lands, tanks etc.
which were not their private property ceased and stood vested in the State free of all encumbrances; that consequently, the right of the outgoing proprietors and tenants of free use for the aforesaid irrigation purposes of water of Navegaon Bandh Tank (which was held by ex Malguzars, not as their private property but as proprietors) was extinguished and the State became competent to impose the water charges on persons taking water from Navegaon Bandh Tank more so when on finding that though for many years, the proprietors as well as the tenants had been taking advantage of the irrigation facilities, they had all along been neglecting to keep the said tank and irrigation channels in proper repairs (which was an essential condition for enjoyment of the right of irrigation), it had, for ensuring proper irrigation facilities, to recondition the tank as well as the water channels (which have a water spread of 2688 acres of land) at an expense of about 22.76 lakhs of rupees; that sections 45, 46 and 47 of the Abolition of the Proprietary Rights Act have no relevance as they had been repeal ed by section 238 of the Madhya Pradesh Land Revenue Code read with Schedule III thereto and that such of the respondents as were proprietors had, after the coming into force of the Abolition of Proprietary Rights Act, accepted and withdrawn without any reservation the compensation determined by the Compensation officer in respect of the proprietary rights over lands and, tanks etc.
including the Navegaon Bandh Tank which is comprised in the notified area resulting in the vesting of the said Tank in the State free of all encumbrances including the obligation to supply water free of charge to the respondents as well as of all restrictions on Government 's right to renovate the tank.
On a consideration of material existing on the record, the High Court allowed the writ petition holding that the right to appropriate water free of charge was a customary right which was preserved and was not destroyed either by the Abolition of Proprietary Rights Act or by the 168 Madhya Pradesh Land Revenue Code and that the State was not competent to levy any water charges under the Central Provinces Irrigation Act, 1931.
At the hearing of the appeal the learned for counsel for the appellants urged that the relevant provisions of the Abolition of Proprietary Right Act have been wrongly construed by the High Court; that under section 4 of the Abolition of Proprietary Rights Act, all the rights title and interest of the erstwhile proprietors in the lands and tanks comprised in the notified area vested in the State on and from the date specified in the Notification issued under section 3 of the Act viz. from 31 st March 1951 with the result that the respondents could not claim the right of free irrigation after such vesting; that the original right of free irrigation from the talk was not saved by any provision of the Abolition of proprietary Rights Act; that even assuming without admitting that the respondents ' right of free irrigation continued after 1950, it was finally destroyed by the Madhya Pradesh Land Revenue Code which came into force in 1953 and neither section 7 of the Madhya Pradesh General (clauses Act nor section 225 of the Madhya Pradesh Land Revenue Code saved the same; that the State was empowered under the provisions of the C.P. Irrigation Act, 1931 to recover charges for the supply of water for irrigation from the Navegaon Bandh Tank which had come to vest in it with effect from 31st March, 1951, and that in any event respondents 1 to 8 who were the original owners (ex proprietors) could not claim the right of free irrigation.
On the other hand, it is contended on behalf of the respondents that the right of irrigation from the tank in question evidenced by entries in the wajib ul arz is preserved and protected by sections 45 to 47 of the Abolition of Proprietary Rights Act; that tho protection far from being taken away subsequently is alleged by the appellants was preserved by the M.P. Land Revenue Code; that repeal by Schedule III to the MP.
Land Revenue Code of sections 45 to 47 of the Abolition of Proprietary Rights Act did not affect any vested right which accrued under the repealed provisions of the Abolition of the Proprietary Rights Act and accordingly the respondents ' right of appropriating the water of Navegaon Bandh Tank free of charge for irrigating their fields was not in any way affected by the aforesaid provisions of the M.P. Land Revenue Code; that the C.P. Irrigation Act, 1931 has no application to the instant case and that the case of respondents 1 to 8 as regards free irrigation stands on the same footing as that of respondents 9 to 20.
For a proper appreciation and determination of the points involved in the case, it is necessary to have a clear idea of the scheme of the Abolition of Proprietary Rights Act which as already stated was enacted to provide for the acquisition of the rights of proprietors in estates.
169 Mahals, alienated villages and alienated lands in Madhya Pradesh and A to make provision for other matters connected therewith.
Sub section (1) of section 3 of the Abolition of Proprietary Rights Act lays down that on and from a date to be specified by a notification by the State Government in this behalf, all proprietary rights in an estate, mahal, alienated village or alienated land, as the case may be, in the area specified in the notification, vesting in a proprietor of such estate, mahal, alienated village, alienated land, or in a person having interest in such proprietary right through the proprietor, shall pass from such proprietor or such other person to and vest in the State for the purposes of the State free of all circumstances.
This provision, as evident from its opening words has been expressly made subject to savings as provided in the Act.
The consequences ensuing from the beginning of the date specified in the notification which is made by the State Government under section 3(1) are set out in section 4(1) of the Abolition of Proprietary Rights Act which again is subject to exceptions provided in the Act.
One of such consequences is that all rights, title and interest vesting in the proprietor or any person having interest in such proprietary right through the proprietor in such area including land (cultivable or barren), grass land, scrub jungle, forest, trees, fisheries, wells, tanks, ponds, water channels, ferries, pathways, village sites, hats, bazaars and meals; and in all subsoil, including rights, if any, in mines and minerals, whether being worked or not cease and vest in the State for purposes of the State free of all encumbrances and the mortgage debt or charge on any proprietary right becomes a charge on the amount on compensation payable for such proprietary right to the proprietor under the provisions of the Act.
Now as observed by this Court in Chhotabhai Jethabai Patel & Co. vs The State of Madhya Pradesh(1) that last part of clause (a) of section 4(1) of the Abolition of Proprietary F Rights Act indicates that mortgage debts and charges on the proprietary right are what are meant by the term encumbrances.
Subsection (2) of section 4 of the Abolition of Proprietary Rights Act which is in the nature of a non obstante provision says that notwithstanding anything contained in sub section (1), the proprietor shall continue to retain the possession of his home stead, home farm land,(2) and in the Central Provinces also of land brought under cultivation by him after the agricultural year 1948 49 but before the sate of vesting.
(1) ; (2) For the purposes of the present case "home farm land" as defined in section 2(g) means (i) land recorded as sir and khudkasht in the name of a proprietor in the annual papers for the year 1948 49, and(ii) land acquired by a proprietor by surrender from tenants after the year 1948 49 till the date of vesting.
12 520 SCI/78 170 Section 38(1) of the Abolition of Proprietary Rights Act which confers the rights of malik makbuza on proprietors provides thus: "38.
(1) Every proprietor who is divested of his proprietary rights in an estate or mahal shall, with effect from the date of vesting, be a malik makbuza of the home farm land in his possession.
" Section 39 (1) of the Abolition of Proprietary Rights Act lays down that where the proprietary rights held by a protected thekadar or other thekadar or a protected headman or by any other under tenure vast in the State under section 3, the Deputy Commissioner may reserve to such proprietor the rights of an occupancy tenant in the whole or part of the home farm land and shall determine the rent thereon Sub section (2) of section 39 of the Abolition of Proprietary Rights Act provides that any person becoming an occupancy tenant under sub section (1) shall be a tenant of the State.
Section 40 of the Abolition of Proprietary Rights Act which confers rights of a lessee on the proprietor in certain lands provides that any land not included in home farm but brought under cultivation by the proprietor after the agricultural year 1948 49 shall continue in the possession of such proprietor and shall be deemed to be settled with him by the State Government on such terms and conditions as may be prescribed.
Section 41 of the Abolition of Proprietary Rights Act lays down that except in such areas as the State Government may, by notification, exclude from the operation of this section, every absolute occupancy tenant who, at any time before the date of vesting or within six months the reform, or such further period as the State Government may from time to time notify pays to the State Government an amount equal to three times the annual rent for the time being payable by him for his holding and every occupancy tenant who likewise pays to the State Government an amount equal to ' four times such rent, shall, on and from the date of vesting or the date of such payment, which ever is later, be declared in the prescribed manner to be malik makgbuza of the land comprised in his holding.
Section 45, 46 and 47 of the Abolition of Proprietary Rights Act which are material for the purpose of this case may be conveniently reproduced at this stage.
These sections run thus: "45.
(1) Subject to the provisions of section 41, any person who immediately before the date of vesting was in possession of any holding as an absolute occupancy tenant or an occupancy tenant shall, on and from the date of vesting, 171 be deemed to be a tenant of the State and shall hold the land in the same rights and subject to the same restrictions and liabilities as he was entitled or subject to immediately before the date of vesting.
(2) Any person holding land as village service land shall be deemed to be holding it from the State and shall be governed by the provisions contained in sections 42 to 48 of the Central Provinces Tenancy Act, 1920.
(3) Any person holding land other than sir land from the proprietor on favourable terms for service rendered by him shall from the date of vesting be declared to be an occupancy tenant of the State and the Deputy Commissioner shall fix the rent to be paid by him.
(4) The rent payable to tho State by such a tenant shall for the purpose of its recovery be rent within the meaning of clause (a) of section 225 of the Central Provinces Land Revenue Act, 1917.
Every person deemed or declared to be a malik makbuza under section 38 or section 41 and every other malik makbuza in a mahal shall be entitled to any right which a tenant has under the village wajib ul arz and any reference to a tenant in the wajib ul arz shall be deemed to include a reference to every such malik makbuza.
(1) The Deputy Commissioner shall, in regard to lands vesting in the State or remaining with the proprietor under this Act, ascertain in the prescribed manner the custom in respect of (a) the rights of persons resident in the estate or village or holding lands comprised in the mahal; (b) the rights to irrigation, right of way and other easements; (c) the rights to trees and to produce; (d) any other rights and customs which the State Government may direct to be recorded.
(2) The Deputy Commissioner shall record in the wajib ul arz, the customs so ascertained and if necessary modify any entries therein.
" The rules which the Deputy Commissioner is required to follow in ascertaining custom in relation to the rights mentioned in the above 172 noted section 47 appear to have been made vide Notification Np.
70 XXVIII dated 3rd March, 1951.
The said rules may also be re produced here for facility of reference: " 1.
(1) In the Central Provinces, excluding merged territories, the Deputy Commissioner shall issue a proclamation in Form A appended to these rules asking the villagers to apply by a specified date if they consider inadequate the existing customs recorded in the Village Administration Paper in respect of any heads specified in rule 2 or desire to have recorded therein any new custom under any head specified in rule 2.
(2) In the merged territories, the Deputy Commissioner shall issue a proclamation in Form appended to these rules asking the villagers to state by a specified date what customs in respect of the heads specified in rule 2 should be recorded in the Village Administration Paper.
Customs shall be ascertained under the following heads and due regard shall be had to the conditions entered in the Village Administration Paper, if any, and the objections urged by the residents of the village: Heads under which customs can be recorded.
(VIlI) Irrigation (IX) other water rights . . " A plain reading of section 45 reproduced above would show that the Abolition of Proprietary Rights Act could not affect the tenancy rights of absolute occupancy tenants and occupancy tenants created by the outgoing landlords.
On the contrary, it guaranteed the continuity of absolute occupancy tenants and occupancy tenants by clothing them with the status of tenants under the State and confer ring on them the same rights as were being enjoyed by them before the date of vesting.
The words "in the same rights" occurring in sub section (1) of section 45 are very significant.
They leave no room for doubt that the absolute occupancy tenants and occupancy tenants were to continue to enjoy the irrigation and other water rights which were enjoyed by them before the date of vesting.
Section 46 puts the Malik makbuza at par with the tenants in regard to customary rights under the wajib ul arz.
It ordains that every person deemed or declared to be a malik makbuza under sec 173 tion 38 or section 41 and every other malik makbuza in a mahal is A entitled to the same customary right as a tenant under the village wajib ul arz.
Section 47 emphasises the importance of custom in relation to the right to irrigation by making it imperative for the Deputy Commissioner to ascertain in accordance with the aforementioned rules and record in the village wajib ul arz the custom in respect of the right to irrigation and certain other rights in regard to the lands vesting in the State or remaining with the proprietor under the Abolition of Proprietary Rights Act.
It may be stated here that wajib ul arz which was prepared at the time of settlement under the C.P. Land Revenue Act, 1917 contained the following entries: "Term No. 13(2) of the Wajib ul arz of the year 19 20 of mouza Navegaon Bandh P.H. No. 35. 13.
Water of tank No. 883/1 is taken for irrigation to Villages Muza Mungli, Deolgaon, Yerandi and Kholi for Veblaf (?) of also and Sadshiv son of Istari of Mouza is entitled for Sugar Cane free of charge.
Term No. 18(2) of the Wajib ul arz: Water of tank No. 883/1 is taken free of rate for paddy irrigation both by the Malguzars and tenants.
Details are given in the Walit Parcha.
Water of this tank for one day and night is taken by Sitaram Patil for mahal No. 1 and Kanhu son of Sambhu Patil also takes one day and one night for Mahal No.
It is free to Malik Mukhiya only for Sugar Cane Irrigation.
" From the foregoing, it becomes crystal clear that the occupancy tenants and malik makbuza who were appropriating the water of Navegaon Bandh Tank for raising paddy and sugarcane crops before the date of vesting under the Abolition of Proprietary Rights Act were to continue to enjoy those rights without any let or hindrance even after the date of vesting.
Let us now proceed to determine whether there was any change in this position as a result of the enactment of the Madhya Pradesh Land Revenue Code, 1954 (hereinafter referred to as 'the Code ') which received the assent of the President on the 5th February, 1955 and was adapted and modified at first by the Bombay (Vidarbha Region) Adaptation of Laws (State and Concurrent Subjects) order, 174 1956 and later on by the Maharashtra Adaptation of Laws (State and Concurrent Subjects) order, 1960 because it has been contended by learned counsel for the appellants during the course of his submissions that with effect from 12th February, 1955 when the aforesaid assent accorded by the President to the Code was published in the Madhya Pradesh Gazette Extraordinary there was an automatic extinction of the aforesaid right of irrigation enjoyed by the occupancy tenants and malik makhuza in consequence of the repeal of sections 45 to 47 of the Abolition of Proprietary Rights Act by virtue of section 238 of the Code, read with Schedule III thereto.
The contention is, in our opinion, wholly untenable as it proceeds on a misconception of the true legal position and overlooks the provisions of section 239 of the Code which runs thus: 239.
ALL rules, assessments, appointments and transfers made, notifications and proclamations issued, authorities and powers conferred, farms and leases granted, records of rights and other records framed or Confirmed, rights acquired, liabilities incurred, times and places appointed, and other things done under any of the enactments hereby re pealed shall, so far as may be, be deemed to have been respectively made, issued, conferred, granted, framed, revised, confirmed, acquired, incurred, appointed and done under this Code.
" It is worthy of note that section 239 of the Code did not destroy the right of free irrigation enjoyed by the respondents.
On the contrary, it fully protected and preserved the same.
The words ` all rights acquired" occurring in the said section of the code are comprehensive enough to take in the irrigation and other rights acquired by the tenants and malik makbuza under sections 45 to 47 of the Abolition of Proprietary Rights Act which stood repealed by virtue of section 238 of the Code.
This view is in consonance with the decision of this Court in State of Punjab vs Mohar Singh(1) where it was held that the line of enquiry would be, not whether the new Act expressly keeps alive old rights and liabilities but whether it manifests an intention to destroy them.
Examining the matter in the light of this principle, we have no doubt in our mind that the right of free irrigation which accrued to the occupancy tenants and malguzars under the aforesaid sections 45 to 47 of the Abolition of Proprietary Rigllts Act were not only not destroyed but were also saved by section 239 of the Code and are, therefore, to continue to be enjoyed by the occupancy tenants and malguzars without being, affected, curtailed (1) [1955]1 S.C.R. 893. 175 or whittled down in any manner despite the repeal of sections 45 to A 47 of the Abolition of Proprietary Rights Act by section 238 of the Code.
The last contention advanced by the learned counsel for the appellants that the Government was competent to recover water charges by virtue of the provisions contained in section 26 of the Central Provinces Irrigation Act, 1931 is also devoid of substance.
The said section, it would be noticed, vests in the Government all rights in the water or any river, natural stream or natural drainage channel, natural lake or other natural collection of water.
As in the instant case, it is clear not only from the averments of the respondents but also of the appellants themselves that the tank in question is not a natural lake, section 26 of the Central Provinces Irrigation Act, 1931 can be of no avail to the appellants and the water rights which could be acquired by custom as indicated in Harrop vs Hirst(1) and were in fact acquired by custom by the respondents in the instant case as shown above and were recognised and preserved both under the Abolition of Proprietary Rights Act and the Code cannot in any manner be interfered with by the appellants.
The importance attached to the need for recognition of the right to irrigation may also be gleaned from tax following observations made by Chief Justice Callaway in Allen vs Petrick (69 Mont, 373, 377, 379, 380, , 452, 453 (1924) : E "The appropriator does not own the water He has a right of ownership in its use only.
The use of water in Mautana is vital to the prosperity of our people.
Its use, even by an individual, to irrigate a farm, is so much a contributing factor to the welfare of the State that the people, in adopting the Constitution, declared it to be a public use.
For the foregoing reasons, we do not find any merit in this appeal which is dismissed with costs.
S.R. Appeal dismissed .
| IN-Abs | Respondents are the ex proprietors, and occupants of the agricultural lands within their Malguzari villages situated in Sakoli Tahsil of District Bhandara in Maharashtra State.
Since the construction of the reservoir called Navegaon Bandh by one Kawdu Patel three hundred years earlier, the holders or the lands including the respondents were enjoying the right of irrigation from generation to generation free of charge with the only obligation which is inherent in the right viz. putting the tank in proper repairs.
In the Wazib Ul Arz an obligation was put on the Malgluzars to allow the tenants to irrigate their fields for rice (dhan) and sugar cane cultivation free of charge.
The respondents, therefore, were using the water of this reservoir for irrigating their fields as of right without any payments a right acquired by them by custom, grant or agreement or by prescription, duly recorded in the Wazib ul Arz at the time of the various settlements and as recognised as such by the State Government till 1964 i.e. even after the said Tank came to vest in the State under Madhya Pradesh Act 1 of 1951.
Thereafter, the appellant purporting to act under the Central Provinces Irrigation Act, 1931 (CP Act III of 1931) declined to allow taking of water to the respondents unless they executed an agreement in writing agreeing to pay Rs. 7/ per acre for rice cultivation and Rs. 45 per acre for sugar cane as charges for the use of water from Navegaon Bandh.
The respondents, therefore, challenged the levy of the said charges and asked for the appropriate writ against the appellants.
The High Court of Bombay allowed the writ petition and held that (a) the right to free water was a customary right recognised and recorded in Wazib ul Arz.
(b) the said right was preserved and was not destroyed by M.P. Abolition of Proprietary Rights Act, 1980 or by the M.P. Land Revenue Code, 1954 and (c) the State Government was not.
competent under the Irrigation Act to levy the water charges.
However.
the High court granted a certificate under article 133(1)(c) of the Constitution Dismissing the appeal, the Court ^ HELD: The provisions of Sections 45, 46 and 47 of the Abolition of Proprietary Rights Act read with the entries made in the Wazib ul Arz which was prepared at the time of the settlement under the Land Revenue Act 1917, make it crystal clear that the occupancy tenants and malik makbuza who were appropriating the water.
Of Navegaon Bandh tank for raising paddy and sugar cane crops before the date of vesting under Abolition of Proprietary Rights Act were 164 to continue lo enjoy those rights without any let or hindrance even after the date of vesting. 'The wounds "in the same rights" occurring in sub section 1 of section 45.
in fact leave no room for doubt that the absolute occupancy tenants and occupancy tenants were to continue to enjoy the irrigation and other water rights which were enjoyed by them before the date of vesting.
[172G 173F G] (2) The right of free irrigation which accrued lo the occupancy tenants and malguzars under sections 45 to 47 of the Abolition of Proprietary Rights Act were not only destroyed but were also saved by section 239 of the Madhya Pradesh Land Revenue Code.
1954 and, are therefore.
to continue to be enjoyed by the occupancy tenants and malguzars without being affected.
curtailed or whittled lower in any manner despite the repeal of section 45 to 47 of the Abolition of Proprietary Rights Act by section 238 of the Code.
[174G H, 175A] The words "all rights acquired" occurring in Section 239 of the Code are comprehensive enough to take in the irrigation and other rights acquired by the tenants and malik makbuza under sections 45 to 47 of the Abolition of Proprietary Rights Act which stood repealed by virtue OF section 238 of the Code.
thus fully protecting and preserving the said right of free irrigation.
[174E G] State of punjab V. Mohar Singh ; , reiterated (3) Section 26 of the Central Provinces Irrigation Act, 1931 vests in the Government all rights in the water of any river natural stream or natural drainage channel natural lake or other natural collection of water.
[175B] In the instant case, the tank being not a natural like, the Government was not competent to recover water charges by virtue of section 26 of the Central Provinces lrrigation Act, 1931.
the water rights which could be acquired by custom and were, in fact, acquired by custom by the respondents and were recognised and preserved both under the Abolition of Proprietary Rights Act and the Code cannot in any manner be interfered with by the appellants.
[175C D] Harrop v Hirst ; Allen V Petrick, 69 Mont. 373, 377, 379, 380 452, 453 (1924); quoted with approval.
|
Civil Appeal No. 1265 of 1969.
From the Judgment and order dt.
3 1 1969 of the Andhra Pradesh High Court in Writ Petition No. 2763 of 1968.
section V. Gupte, Att.
General of India, K. N. Bhatt and R. N. Sachthey for the Appellant.
P. A. Chowdhary and B. Kanta Rao for Respondent No. 1.
The Judgment of the Court was delivered by CHANDRACHUD, C.J.
Respondent 1, Shri N. G. Ranga, was declared elected to the Lok Sabha on April 28, 1967 in a bye election .
From Srikakulam Constituency, defeating respondent No. 3, Shri B. Rajagopalarao.
The Election Commission of India, the appellant herein, called upon respondent 1 by a notice dated July 7, 1967 to show cause why he should not be disqualified for failure to lodge the account of his election expenses within the time and in the manner required by law.
Accepting the explanation submitted by Respondent 1, the appellant condoned the delay caused in submitting the account of election expenses and sent a communication dated August 167 1967 informing respondent 1 that it was decided not to take any further action in the matter.
Respondent 2, who is a voter in the Srikakulam constituency, thereafter submitted a petition to the President of India under Articles 84, 101,102,103 and 104 of the Constitution alleging that respondent 17 who was a sitting member of the Lok Sabha, had become subject to the disqualification mentioned in Article 1 102(1).
The President, exercising his powers under Article 103(2) of the Constitution, sought the opinion of the appellant by an order dated May 18, 1968.
The appellant issued a notice dated June 6, 1968 to respondent 1 calling upon him to submit his reply to the allegations contained in respondent 2 's petition to the President.
On June 26, 1968 respondent l filed writ petition No. 2763 of 1968 in the High Court of Andhra Pradesh asking for a writ Prohibition forbidding the appellant from taking further steps pursuant to the June 6 notice and for a declaration that the appellant had no jurisdiction to inquire into the petition submitted by respondent 2 to the President of India.
By its Judgment dated January 3, 1969 the High Court allowed the writ petition and issued a writ of Prohibition as prayed for.
It has granted to the Election Commission certificate of fitness under Article 133(1)(e) of the Constitution to appeal to this Court.
213 The narrow question for consideration is whether the appellant had jurisdiction to issue the notice to respondent 1 calling upon him to submit his explanation in regard to the allegations contained in the petition presented by respondent 2 to the President of India who, in turn, had referred the petition for the opinion of the appellant.
Article 103 of the Constitution read thus at the relevant time: "103(1) If any question arises as to whether a member of either House of Parliament has become subject to any of the disqualifications mentioned in clause (1) of Article 102, the question shall be referred for the decision of the President and his decision shall be final.
(2) Before giving any decision on any such question, the President shall obtain the opinion of the Election Com mission and shall act according to such opinion.
" Upon the presentation of a petition by respondent 2 to the President of India, alleging that respondent 1 had become subject to the disqualifications mentioned in Article 102(1) of the Constitution, 2 question clearly arose as to whether respondent 1 had truly become subject to any of the disqualifications mentioned in that Article.
By clause (2) of Article 103, the President was bound to obtain the opinion of the appellant before giving his decision on the question.
Not only that, but the President was further bound to act according to the opinion given by the appellant.
The President therefore acted both in the exercise of constitutional authority and in the discharge of his constitutional obligation in referring the question raised by respondent 2 's petition for the opinion of the appellant.
The next question for consideration is whether, on receiving the President 's communication asking for its opinion, the appellant committed any error of law or acted beyond its jurisdiction in seeking the explanation of respondent 1.
The Representation of the People Act 43 of 1951, "the Act", confers extensive powers on the Election Commission in regard to inquiries pertaining to questions referred by the President for its opinion under Article 103 of the Constitution.
Section 146(1) of the Act provides, in so far as material, that where in connection with the tendering of any opinion to the President under Article 103, the Election Commission considers it necessary or proper to make an inquiry and if it is satisfied that on the basis of documents produced by the parties it cannot come to a decisive opinion on the matter which is being inquired into, it shall have for the purposes of inquiry the powers which a civil court has while trying a suit in respect, inter alia, of summoning and enforcing the attendance of 214 any person, examining him on oath, the discovery and production of any document and receiving evidence on affidavits.
Sub section (2) of section 146 which is more to the point provides: "The Commission shall also have the power to require any person, subject to any privilege which may be claimed by that person under any law for the time being in force, to furnish information on such points or matters as in the opinion of the Commission may be useful for.
Or relevant to, the subject matter of the inquiry.
" We see no doubt that the Election Commission, by reason of these provisions, had the power and authority to require respondent 1 to furnish information on matters which were relevant to the subject matter of the inquiry, namely, the allegations contained in the petition presented by respondent 2 to the President of India.
Article 103(2), as it stood then, required the President to obtain the opinion of the Election Commission before deciding the question referred to in clause (1) of that Article.
The President was bound to act according to the opinion given by the Commission.
By the Forty second Amendment, Article 103(2) requires the President to consult the Election Commission.
The Amended Article expressly confers power on the Commission to make, for that purpose, "such inquiry as it thinks fit".
The implication of the unamended Article was in truth and substance the same, namely, that since the Commission was charged with the obligation to tender its opinion to the President, it had the power to make such inquiry as it thought fit in order to enable it to express its opinion, which under the law as it stood then, was binding on the President.
The Forty second amendment expressed clearly what was necessarily implicit in the old provision.
If the Constitution envisages that the Commission should have the power to make such inquiry as it thinks fit even when its opinion is not binding on the President who is merely required to "consult" the Commission it cannot be that the Commission could tender its binding opinion without the right and, nay the duty, of making the necessary inquiry.
Respondent 1 rushed to the High Court some what hurriedly, thinking probably that the appellant having already condoned the delay which had occurred in filing the return of the election expenses, he had not incurred or become subject to any disqualification as mentioned in Article 102(1) of the Constitution and therefore the appellant had no justification for calling upon him to submit his explanation.
That however is a different thing from saying that either the President of India or the appellant exceeded his or its jurisdiction when the 215 former referred the matter for the opinion of the latter and the latter sought an explanation from respondent 1.
The appellant could and should have in the first instance verified from its own record whether there was any justification for the grievance made by respondent 2.
But in giving to respondent 1 an opportunity to submit his explanation.
the appellant, far from acting beyond the scope of its statutory and constitutional powers, acted in conformity with the principles of natural justice.
Article 103 (1) gives finality to the President 's decision which, under the old provision, had to be in conformity with the opinion of the Election Commission.
Before giving an opinion which thus had finality, the Commission acted but fairly in asking respondent 1 to submit his say.
As stated above, it had the power to ascertain what explanation respondent I had to give an answer to respondent 2 's allegations.
The High Court misdirected itself in reaching the conclusion that the appellant acted beyond its jurisdiction in issuing the notice to respondent 1 calling upon him to submit his explanation in regard to the allegations made by respondent 2 in his petition to the President.
According to the High Court, "facts leading to disqualification under section 10A" of the Act, "cannot be the subject matter of inquiry and decision under Article 103 of 'the Constitution '?.
It is impossible to accept this statement of law in view of the express provision contained in Article 103(1) (a) that if any question arises as to whether a member of either House of Parliament has become subject to any of the disqualifications mentioned in Article 102(1), the question shall be referred for the decision of the President.
Article 102(1) provides by sub clause (e) that a person shall be disqualified for being chosen as, and for being, a member of either House of Parliament if he is so disqualified by or under any law made by Parliament.
By section 10(A) of the Act, the Election Commission has the power to declare a person to be disqualified if it is satisfied that he has failed to lodge an account of election expenses within the time and in the manner required by or under the Act and has no good reason or justification for the failure.
A declaration of disqualification made in pursuance of power conferred by section 10(A) is a declaration made by the Election Commission under a law made by Parliament.
It, therefore, attracts Article 102(1)(e) and consequently Article 103(1) of the Constitution.
The High Court thereafter proceeded to hold that the question whether respondent 1 had become subject to any disqualification under section 10(A) of the Act did not arise on the facts stated in the petition by respondent.
We do not see our way to accepting this statement.
216 Though respondent 2 was not in a position to make a categorical assertion in his petition that respondent 1 had incurred a specific disqualification he did make allegations generally in regard to disqualifications said to have been incurred by respondent 1.
Upon the making of these allegations a question arose or contemplated by Article 103(1)(a) of the Constitution and the President had to obtain the opinion of the Election Commission on that question.
Respondent 2 's petition could not have been rejected by the President without reference to the Election Commission on the ground that the allegations made by respondent 2 were unfounded or unsubstantial.
A similar question arose before this Court in Brundaban Nayak vs Election Commission of India and Anr.(1) Article 191(1) of the Constitution provides that a person shall be disqualified for being chosen as, and for being, a member of the Legislative Assembly or Legislative Council of a State if, inter alia, he is so disqualified by or under any law made by Parliament.
Article 192(1), as it then stood, provided that if any question arises as to whether a member of a House of the Legislature of a State has become subject to any of the disqualifications mentioned in clause (1) of Article 191, the question shall be referred for he decision of the Governor and his decision shall be final.
By Article 192(2) the Governor had to obtain the opinion of the Election Commission before giving his decision and he was also under an obligation to act according to the Commission 's opinion.
These provisions correspond to Articles 102 and 103 respectively with which we are concerned.
While dealing with an argument as to whether it could be said that the question as contemplated by Article 192(1) had arisen, Gajendragadkar, C.J. speaking on behalf of the Court observed that the first clause of Article 192(1) P did not permit of any limitations and that all that the clause required was that a question should arise.
How the question arose, by whom it was raised and under what circumstances it was raised were not relevant for the purpose of the application of the clause.
The Court took notice of the fact that complaints made to the Governor could be frivolous or fantastic, but it held that if they were of such a character, the Election Commission would have no difficulty in expressing its opinion that they should be rejected.
That however did not mean that a question as contemplated by Article 192(1) did not arise.
Lastly it was urged in that case that it is the Governor and not the Election Commission who had to hold the enquiry since the Constitution required the Governor to decide the particular question.
This contention was rejected on the ground that it was the opinion of the (1) ; 217 Election Commission which in substance was decisive and therefore it was legitimate to assume that when the complaint received by the Governor was forwarded by him to the Election Commission, the latter had the power and the jurisdiction to go into the matter which meant that it had the authority to issue notice to the person against whom the complaint was made, calling him to file his statement and produce evidence in support of his case.
The High Court was in error in seeing "nothing" in this decision which was contrary to its view.
; For these reasons we allow the appeal filed by the Election Commission and direct that the writ petition filed in the High Court by respondent 2 shall stand dismissed.
There will be no order as to costs.
S.R. Appeal allowed.
| IN-Abs | Constitution of India, 1950, Arts, 84, 101, 102.
1O3(2) and 1O4 Scope of Powers of the Election Commission under Sections 10A, 146 (1) (2) of the Representation of the People Act, read with article 103 (2) of the constitution.
Respondent No. 2 who is a voter in the Srikakulam Constituency submitted a petition to the President of India under Articles 84, 101.
103 and 104 of the Constitution of India alleging that respondent No. 1, a returned candidate to the Lok Sabha on April 28, 1967 in a bye election from that constituency, had become subject to the disqualifications contained in Article 102(1).
The President.
exercising his powers under Article 103(2) of the Constitution.
sought the opinion of the appellant by an order dated May 18, 1968.
The appellant issued a notice dated June 6, 1968 to respondent No. 1 calling upon him to submit his reply to the allegations contained in respondent 's petition lo the President.
Earlier to this, the appellant condoned the delay in submission; of account of election expenses by respondent No. 1.
On June 26, 1968, respondent No. 1, therefore, filed a Writ Petition in the Andhra Pradesh High Court asking for a writ of prohibition forbidding the appellant from taking further action pursuant to the Notice dated June 6 and for a declaration that the appellant had no jurisdiction to inquire into the petition submitted by respondent No. 2 to the President.
The High Court allowed the petition and issued a writ of Prohibition.
It has granted to the appellant a certificate of fitness under Article 133(1)(c) of the Constitution.
Allowing the appeal, the Court ^ HELD: 1.
The President acted both in the exercise of constitutional authority and in the discharge of his constitutional obligation in referring the question raised by respondent No. 2 's petition for the opinion of the appellant.
Upon the presentation of a petition by respondent 2 to the President of India;,. alleging that respondent 1 had become subject to the disqualifications mentioned in article 102(1) of the Constitution, a question clearly arose as to whether respondent 1 had truly become subject to any of the disqualifications mentioned in that article.
By clause (2) of article 103 the President was bound to obtain the opinion of the appellant before giving` his decision on the question.
Not only that, but the President was further bound to act according to the opinion given by the appellant.
[213D E] 2.
The Election Commission, by reason of the provisions of Section 146(1) and (2) of the Representation of the People Act, 1951, had the power and authority to require respondent 1 to furnish information on matters which were relevant to the subject matter of the inquiry, namely, the allegations contained in the petition presented by respondent 2 to the President of India. [214B C] (a) The Representation of the People Act, 1951, confers extensive powers on the Election Commission in regard to inquiries pertaining to the questions referred by the President for its opinion under Article 103 of the Constitution.
[213F G] 211 (b) article 103(2), as it stood then, required the President to obtain the opinion of the Election Commission before deciding the question referred to in clause (1) of that article.
The President was bound to act according to the opinion given by the Commission.
By the Forty second Amendment Article 103(2) requires the President to consult the Election Commission.
The Amendment Article expressly confers power on the Commission to make? for that purpose, "such inquiry as it thinks fit".
The implication of the unamended Article was in truth and substance the same namely.
that since the Commission was charged with the obligation to tender its opinion to the President, it had the power to make such inquiry as it thought fit in order to enable it to express its opinion.
which under the law as it stood then, was binding on the President.
The Forty second amendment expressed clearly what was necessarily implicit in the old provision.
If the Constitution envisages that the Commission should have the power to make such inquiry as it thinks fit even when its opinion is not binding on the President who is merely required to "consult` ' the Commission, it cannot be that the Commission could tender its binding opinion without the right and pay the duty, of making, the necessary inquiry.
[214D G] (c) Article 103(1) gives finality to the President 's decision which, under old provision, had to be in conformity with the opinion of the Election Commission.
Before giving an opinion which thus had finality, the Commission acted but fairly in asking respondent l to submit his say.
In giving to respondent I an opportunity to submit his explanation.
the appellant, far from acting beyond the scope of the statutory and constitutional powers acted in conformity with the principles of natural justice.
[215B] 3.
In the instant case? though respondent 2 was not in a position to make a categorical assertion in his petition that respondent 1 had incurred a specific disqualification, he did make allegations, generally, in regard to disqualifications said to have been incurred by respondent 1. Upon the making of those allegations a question arose as contemplated by Article 103(1)(a) of the Constitution and the President had to obtain the opinion of the Election Commission on that question.
Respondent 2 's petition could not have been rejected by the President without reference to the Election Commission on the around that the allegations made by respondent 2 were unfounded or unsubstantial.
The High Court was not correct when it held that the question whether respondent 1 had become subject to any disqualification under Section 10A of the Representation of the People Act did not arise on the facts stated in the petition by respondent No. 2.
[215H, 216A B] Brundeban Nayak vs Election Commission of India and Anr., ; ; discussed and applied.
(b ) By Section 10A of the Representation of the People Act.
the Election Commission has the power to declare a person to be disqualified if it is satisfied that he has failed to lodge an account of election expenses within the time and in the manner required by or under the Act and has no good reason or justification for the failure.
A declaration of disqualification made in pursuance of power conferred by section 10(A) is a declaration made by the Election Commission under a law made by Parliament.
It, therefore, attracts Article 102(1) (e) and consequently article 103(1) of the Constitution.
The High Court therefore misdirected itself in reaching the conclusion that the appellant acted beyond 212 its jurisdiction in issuing notice to respondent I in calling upon him to submit his explanations in regard to the allegations made by respondent No. 2 in his petition to the President.
[215C D, F H]
|
Special Leave Petition (Criminal) No. 408 of 1978.
From the Judgment and order dated 22 11 1973 of the Bombay High Court in Criminal Appeal No. 747/ 72 with Criminal Review Application No. 685/72.
In person for the Petitioner H. R. Khanna and M. N. Shroff for the Respondent.
The order Gr the Court was delivered by KRISHNA IYER, J. A short paragraph might perhaps have been sufficient as obituary note on this Special Leave Petition but two basic issues one of prison justice and the other of sentencing caprice challenge our attention and deserve more elaboration.
The facts, more flabbergasting than fantasy, present themselves in this Special Leave Petition.
The appeal is against a conviction con currently rendered for a novel and daring set of crimes and follow up sentence of three year prison term. 'The offence is bizarre, the 196 offender perplexing, the sentence incredibly indiscreet at the Sessions Court stage but reasonably just at the High Court level and, to cap it all the delay in seeking leave from this Court is doubly shocking be cause it is inordinate and implicates the prison administration.
A miniaturised version of the prosecution, which has culminated in the conviction, is all that is necessary in view of the ultimate order we propose to make.
The petitioner, a Reader in the Saurashtra University, claims to be a Ph. D. Of Karnataka University, although there is a controversy as to this high academic qualification being a fabrication.
In the present case we are not concerned with it directly.
His moot academic proficiency apart, his abortive enterprise in an other field has landed him in the present criminal case.
According to the prosecution, Dr. Hoskot, the petitioner, approached Dabhol kar, a block maker of Bombay, placed an order to prepare an embossing seal in the name of the Karnataka University, Dharwar, and forged a letter of authority purporting to have been signed by the Personal Assistant to the Vice Chancellor of the said University authorisig him to get the seals made.
This Project Counterfeit Degrees, if we may so call it, had, perhaps, as its object the concoction of certificates of degrees by the Karnataka University.
A degree hungry community like ours offers a happy hunting ground for professionals in the fine art of fabricating academic distinctions.
If the expertise is perfect and its exercise undetected there is more money in it that in an honest doctorate.
Anyway, the petitioner 's mis adventure was intercepted before it could fulfil itself because Dabholkar, the Bombay block maker, was too clever a customer.
He gave pre emptive information to the police leading to the unearthing in time of the criminal scheme.
The Sessions court tried the petitioner and held as proved beyond reasonable doubt that the petitioner was guilty of the grave offences charged, namely, under sections 417 read with 511 I.P.C. section 467 I.P.C., section 468 I.P.C. and sections 471 read with 467 I.P.C. After having rendered this draconian verdict against a person who was a Reader in a University and claimed to be M.Sc., Ph. D., around 30 years old and coming from a middle class family beyond economic compulsions to make a living by criminal means, the court swerved towards a soft sentence of simple imprisonment till the rising of the court and some fine.
We are scandalized by this soft justice syndrome vis a vis white collar offenders.
It stultifies social justice and camouflages needed severity with naive leniency.
However, two appeals were carried to the High Court, one by the petitioner against his conviction and the other by The State against the naive sentence.
The High Court dismissed the appeal against the conviction and, in allowance of the State 's 197 prayer for enhancement, imposed rigorous imprisonment for three years.
The present petition for special leave to appeal is against this heavy sentence.
The High Court 's judgment was pronounced in November 1973 but the Special Leave Petition has been made well over four years later.
This hiatus may appear horrendous, all the more so because the petitioner has undergone his full term of imprisonment during this lengthy interregnum.
The explanation offered by him for condonation of the delay, if true, discloses a disturbing episode of prison injustice.
To start with the petitioner complained that the High Court granted a copy of the judgment of 1973 only in 1978, a further probe disclosed that a free copy had been sent promptly by the High Court, meant for thc applicant, to the Superintendent.
Yeravada Central Prison, Pune.
The petitioner denies having been served that copy and there is nothings on record which bears his signature in token of receipt of the High Court 's judgment.
The Prison Superintendent on The other hand, would have us believe that a clerk of his office did deliver it to the prisoner but took it back for the purpose of enclosing L it with a mercy petition to the Governor for remission of sentence.
This exonerative story may be imaginary or true but there is no writing to which the petitioner is a party to validate this plea.
The fact remains that prisoners are situationally at the mercy of the prison 'brass ' but their right to appeal, which is part of the constitutional process to resist illegal deprivation of liberty, is in peril, if district jail officials ' ipse dixit that copies have been served is to pass muster without a title of prisoner 's acknowledgment.
What is more, there is no statutory provision for free legal serives to a prisoner, in absence of which, a right of appeal for the legal illiterates is nugatory and therefore, a negation of that fair legal procedure which is implicit in article 21 of the Constitution, as made explicit by this Court in Maneka Gandhi(1).
Having narrated the necessary facts which project the two profound but neglected problems of criminal jurisprudence we should have proceeded to discuss the merits of the evidence to decide whether leave should be granted to this petitioner.
Indeed, although the court had assigned a lawyer to render free legal service to the petitioner and argue the case on his behalf, Dr. Hoskot decided to dispense with legal assistance and argued on his own.
Of course, he has presented his case capably and with analytical precision in his endeavor to controvert the correctness of the findings of the courts below.
We have listened to him at some length since this Court is the last in the (1) [1978 2 S.C.R. 621.
198 Indian pyramid of justice and a party in person elicits from us extra solicitude so that he may not suffer from a sense of handicap due to the absence of professional legal service.
Nevertheless this Court has laid down certain fundamental principles governing its jurisdiction when special leave is sought.
We cannot depart from these criteria 13 lest the endless chase for justice by every defeated litigant, civil and criminal, should flood this Court into dysfunction by a docket flood.
It is dangerous to be too good.
The recent pronouncement of a Bench of This Court, through the Learned Chief Justice, settles with clarity the decisive jurisdictional guideline.
We quote: "In view of the concurrent findings of the Sessions Court and the High Court on the principal issues arising in the case we see no justification for granting special leave for a reconsideration of the question as regards the guilt of the petitioners.
There is hardly a case, civil or criminal, which does not raise some question of law or the other.
But no question of law of general public importance is involved in these petitions.
It is time that it was realised that the jurisdiction of this Court to grant special leave to appeal can be invoked only in very exceptional circumstances.
A question of law of general public importance or a decision which shocks the conscience of the court are some of the prime requisites for the grant of` special leave.(1) [Ujjagar Singh & Anr.
vs State (Delhi Admn. ) ] Bearing this policy in mind, coupled with the efficacy of concurrent findings of Fact, we decline the request for leave even assuming there are some improbabilities in the prosecution case or errors in the con current holdings.
In this view, we do not examine the merits further but insist on clarifying the two larger questions lying half hidden.
No observations made by us should be understood as affecting the petitioner 's plea in any other criminal case he may be facing.
The Sessions Court.
having found a university professor guilty of organising (abortively though) a scheme of making bogus degrees suddenly slumped at the sentencing stage and, awarded a single day 's simple imprisonment.
The reasons given arc symptomatic or chaotic sentencing and confusion about the correctional orientation of punishment.
The court observed: "Accused is a young man.
He has no previous conviction .
He has a good family background.
His father was a Deputy Collector and Magistrate in the Mysore State.
He (1) order in SLP(Crl.
No.1319ete.
Of 1977dt.31 7 1978(unreported case) 199 struck mc as having intelligence above the average.
He is not a person with a criminal tenancy.
It is suggested by the learned P.P. that possibly accused did this in a fit of despartion as he was given notice of discharge by The Saurashtra University regarding his Readership in Mathematics.
The modern emphasis on the corrective aspect of punishment cannot be ignored in this case which determining the adequacy of sentence, having regard to the nature of the offence and the background of the accused, I think that I should give one chance for the accused to improve.
Hence I do not think it desirable to send him to jail as he might return as a confirmed criminal? which may he a liability to the society.
If, on the other hand, mercy is shown to him at this stage of his first impact with justice, then it is probable that he may be reclaimed as a good citizen who call harness his talent for desirable activities.
In view.
of this T propose to pass the following order to which the learned Spl.
Public prosecutor has no objection Substantive sentences of one day S.I. to run concurrently.
(emphasis added) It is surprising that the Public Prosecutor has consented, on behalf of the State, to this unsocial softness to an anti social offender on conviction for grave charges.
Does the Administration sternly view white collar offenders, or abet them by agreeing to award of token punishment, making elaborate trials mere tremendous trifles ? Social defence is the criminological foundation of punishment.
The trial judge has confused between correctional approach to prison treatment and nominal punishment verging on decriminalisation of serious social offences.
The first is basic, the second pathetic.
That Court which ignores the grave injury to society implicit in economic crimes by the upper berth 'mafia ' ill serves social justice.
Soft sentencing justice is gross injustice where many innocents are the potential victims.
It is altogether a different thing to insist on therapeutic treatment, hospital setting and correctional goals inside the prison (even punctuated by parole, opportunities for welfare work, meditational normalisation and healthy self expression), so that the convict may be humanised and, on release? rehabilitated as a safe citizen.
This Court has explained the correctional strategy of punishment in Giasuddin 's case(1).
Coddling is not correctional, any more than torture is deter rent.
While iatrogenic prison terms are bad because they dehumanize, (1) Mohammad Giasuddin vs State of Andhra Pradesh [1978]1 S.C.R.153.
200 it is functional failure and judicial pathology to hold out a benignly self efeating non sentence to deviants who endanger the morals and morale, the health and wealth of society.
The 47th Report of the Law Commission of India noticed this weakness for economic offenders in the judicial personnel (of course, also in the administrative and legislative actors) and recommended: "18.2.
Suggestions are often made that in order that the lower Magistracy may realise the seriousness of some of the social and economic offences, some method should be evolved of making the judiciary conscious of the grave damage caused to the country 's economy and health by such anti social crimes.
The frequency and emphasis with which these suggestions have been made, and the support which they have received from very high officers has caused some anxiety to us.
But we hope that the higher courts are fully alive to the harm, and we have no doubt that on appropriate occasions, such as, judicial conferences, the subject will receive attention.
It is of utmost importance that all State instrumentalities involved in the investigation, prosecution and trial of these offences must be oriented to the philosophy which treats these economic Offence as a source or grave challenge to the material wealth of the nation.
We hope we shall not be misunderstood if we suggest that even the holding of periodical meetings on sentencing may be beneficial, not in the context of economic offences only, but in the evolution of a rational and consistent policy of sentencing.
Experience of England is, by now, familiar to those interested in the subject.
A meeting of over 100 judges was held in the Royal Courts of Justice in London on January 7 8, 1965 to take part in exercises designed to increase the uniformity of sentencing.
The Lord Chief Justice expressed the hope that the meeting would be a model for similar ones throughout the country.
Conferences between judges, magistrates and penal administrators are, in England, organised with increasing frequency in many parts of the country with an annual conference in London for judges of the Supreme Courts.
Besides holding councils on sentencing, it may be worthwhile to hold "workshops ' which would be less formal 201 but equally useful and likely to give concrete results.
Such workshops could, for example, be attended by all Special Judges or other officers concerned with economic offences.
National courses on sentencing strategies vis a vis social justice is a neglected cause and the Administration is, as yet, 'innocent ' of this imperative need.
The second profound issue, thrown up accidentally by Dr. Hoskot 's sojourn in the Yeravada jail, disturbs us more because less capable men most prisoners in this country belong to the lower, illiterate bracket suffer silent deprivation of liberty caused by unreasonableness, arbitrariness and unfair procedures behind the 'stone walls ' and 'iron bars '.
Freedom is what freedom does, and here we go straight to article 21 of the Constitution, where the guarantee of personal liberty is phrased with superb amplitude: article 21: Protection of life and personal liberty: No person shall be deprived of his life or personal liberty except according to procedure established by law.
(emphasis added). 'Procedure established by law ' are words of deep meaning for all lovers of liberty and judicial sentinels.
Amplified, activist fashion, 'procedure ' means 'fair and reasonable procedure ' which comports with civilised norms like natural justice rooted firm in community consciousness, not primitive processual barbarity nor legislated normative mockery.
In a land mark case, Maneka Gandhi(1), Bhagwati, J. (on this point the Court was unanimous) explained: "Does Article 21 merely require that there must be some semblance of procedure, howsoever arbitrary or fanciful.
prescribed by law before a person can be deprived of his personal liberty or that the procedure must satisfy certain requisites in the sense that it must be fair and reasonable ? Article 21 occurs in Part III of the Constitution which confers certain fundamental rights".
"Is the prescription of some sort of procedure enough or must the procedure comply with any particular requirements ? obviously, the procedure cannot be arbitrary, unfair or unreasonable.
This indeed was conceded by the learned Attorney General who with his usual candour frankly (1) [1978] 1 SCC 248 at 277, 281 and 284 14 520 SCI/78 202 stated that it was not possible for him to contend that any procedure howsoever arbitrary, oppressive or unjust may be prescribed by the law." "The principle of reasonableness, which legally as well.
as philosophically, is an essential element of equality or nonarbitrariness pervades Article 14 like a brooding omnipresence and the procedure contemplated by Article 21 must answer the test of reasonableness in order to be in conformity with Article 14.
It must be "right and just and fair and not arbitrary, fanciful or oppressive; otherwise it would be no procedure at all and the requirement of Article '21 would not be satisfied.
Any procedure which permits impairment of the constitutional right to go abroad without giving reasonable opportunity to show cause can not but be condemned as unfair an(3 unjust and hence, there is in the present case clear infringement of the requirement of Article 21".
One of us in his separate opinion there observed(u): "Procedure established by law", with its lethal potentiality, will reduce life and liberty to a precarious plaything it we do not ex necessitate import into those weighty words an adjectival rule of law, civilised in its soul, fair in its heart and fixing those imperatives of procedural protection absent which the processual tail will wag the substantive head.
Can the sacred essence of the human right to secure which the struggle for liberation, with 'do or die ' patriotism, was launched be sapped by formalistic and pharisaic prescriptions, regardless of essential standards ? An enacted apparition is a constitutional illusion.
Processual justice is writ patently on Article 21.
Procedure which deals with the modalities of regulating; restricting or even rejecting a fundamental right falling with in Article 21 has to be fair, not foolish, carefully designed to effectuate, not to subvert, the substantive right itself.
Thus understood, 'procedure ' must rule out anything arbitrary, freakish or bizarre.
A valuable constitutional right II can be canalised only by civilised process.
What is fundamental is life and liberty.
What is procedural is the manner (1) per Krishna lyer, J. at 337, 338.
203 of its exercise.
This quality of fairness in the process is emphasised by the strong word 'established ' which means 'settled firmly ' not wantonly or whimsically.
If it is rooted in the legal consciousness of the community it becomes 'established ' procedure.
And 'law ' leaves little doubt that it is normae regarded as just since law is the means and justice is the end.
Procedural safeguards are the indispensable essence of liberty.
In fact, the history of personal liberty is largely the history of procedural safeguards and right to a hearing has a human right ring.
In India, because of poverty and illiteracy, the people are unable to protect and defend their rights; observance of fundamental rights is not regarded as good politics and their transgression as bad politics.
To sum up, 'procedure ' in Article 21 means fair, not formal procedure. 'Law ' is reasonable law, not any enacted piece. '` one component of fair procedure is natural justice.
Generally speaking and subject to just exceptions, at least a single right of appeal on facts, where criminal conviction is fraught with long loss of liberty is basic to civilised jurisprudence.
It is integral to fair procedure, natural justice and normative universality save in special cases like the original tribunal being a high bench sitting on Lt collegiate basis.
Ill short, a first appeal from the Sessions Court to the High Court, as provided in the Criminal Procedure Code, manifests this value upheld in article 21.
What follows from the appellate imperative ? Every step that makes the right of appeal fruitful is obligatory and every action or in action which stultifies it is unfair and, ergo, unconstitutional ( In a sense, even article 19 may join hands with article 21, as the Menka Gandhi reasoning discloses).
Pertinent to the point before us are two requirements: (1) service of a copy of the judgment to the prisoner in time to file all appeal and (ii) provision of free legal ser vices to a prisoner who is indigent or otherwise disabled from securing legal assistance where the ends of justice call for such service.
Both these are State responsibilities under article 21.
Where the procedural law provides for further appeals what we have said regarding first appeals will similarly apply.
In the present case there is something dubious about the delivery of the copy of the judgment by the Jailor to the prisoner.
A simple proof of such delivery is the latter 's written acknowledgment.
Any 204 jailor who, by indifference or vendetta, withholds the copy thwarts the court process and violates article 21, and may pave the way for holding the further imprisonment illegal.
We hope that Jail Manuals will be updated to include the mandate, if there be any omission, and deviant jail officials punished.
And courts, when prison sentence is imposed, will make available a copy of the judgment if he is straight marched into the prison.
All the obligations we have specificated are necessarily implied in the right of appeal conferred by the Code read with the commitment to procedural fairness in article 21.
Section 363 of the Cr.
P. Code is all activist expression of this import of article 21 and is inviolable.
We say no more because we have condoned the delay in the present case although it is pathetic that for want of a copy of judgment the leave is sought after the sentence has been served out.
The other ingredient of fair procedure to a prisoner, who has to seek his liberation through the court process is lawyer 's services.
Judicial justice, with procedural intricacies, legal submissions and critical examination of evidence, leans upon professional expertise; and a failure of equal justice under the law is on the cards where such supportive skill is absent for one side.
Our judicature, moulded by Anglo American models and our judicial process, engineered by kindred legal technology, compel the collaboration of lawyer power or steering the wheels of equal justice under the law.
Free legal services to the needy is part of the English criminal justice system.
And the American jurist, Prof. Vance of Yale, sounded sense for India too when he said(1): "What does it profit a poor and ignorant man that he is equal to his strong antagonist before the law if there is no one to inform him what the law is ? or that the courts are open to him on the same terms as to all other persons when he has not the wherewithal to pay the admission fee ?" Gideon 's trumpet has been heard across the Atlantic.
Black, J: there observed(2): "Not only those precedents but also reason and reflection require us to recognise that ill our adversary system of criminal justice, any person haled into court, who is too poor to hire a lawyer, cannot be assured a fair trial unless counsel is provided for him.
This seems to us to be an obvious truth.
Governments, both State and Federal, quite (1) Justice and Reform, Earl Johnson Jr. p. 11.
(2) Processual Justice to the People (May, 1973) p. 69.
205 properly spend vast sums of money to establish machinery to try defendants accused of crime.
Lawyers to prosecute are everywhere deemed essential to protect the public 's interest in an orderly society.
Similarly, there.
are few defendants charged with crime who fail to hire the best lawyers they can get to prepare and present their defences.
That government hires lawyers to prosecute and defendants who have the money hire lawyers to defend are the strongest indications cf the widespread belief that lawyers in criminal courts are necessities, not luxuries.
The right of one charged with crime to counsel may not be deemed fundamental and essential to fair trials in some countries, but is in ours.
From the very beginning, our state and national constitutions and laws have laid great emphasis on procedural and substantive safeguards designed to assure fair trials before impartial tribunals in which every defendant stands equal before the law.
This noble idea cannot be realised if the poor man charged with crime has to face his accusers without a lawyer to assist him".
The philosophy of legal aid as an inalienable element of fair procedure is evident from Mr. Justice Brennan 's(1) well known words: "Nothing rankles more in the human heart than a brooding sense of injustice.
Illness we can put up with.
But injustice makes us want to pull things down.
When only the rich can enjoy the law, as a doubtful luxury, and the poor, who need it most, cannot have it because its expense puts it beyond their reach, the threat to the continued existence of free democracy is not imaginary but very real, because democracy 's very life depends upon making the machinery of justice so effective that every citizen shall believe in and benefit by its impartiality and fairness".
More recently, the U.S. Supreme Court, in Raymond Hamlin has extended this processual facet of Poverty Jurisprudence.
Douglas, J. there explicated(2): "The right to be heard would be, in many cases, of little avail if it did not comprehend the right to be heard by counsel.
Even the intelligent and educated layman has small and sometimes no skill in the science of law.
If (1) Legal aid and Legal Education p. 94.
(2) United States Supreme Court Reports, Vol.
32 p. 530.
206 charged with crime, he is incapable, generally, of determining for himself whether the indictment is good or bad.
He is unfamiliar with the rules of evidence.
Left without the aid of counsel he may be put on trial without a proper charge, and convicted upon incompetent evidence, or evidence irrelevant to the issue or otherwise inadmissible.
He lacks both the skill and knowledge adequately to prepare his defense, even though he have a perfect one.
He requires the guiding hand of counsel it every step in the proceedings against him.
Without it, though he be not guilty, he faces the danger of conviction because he does not know how to establish his innocence.
If that be true of men of intelligence, how much more true is it of the ignorant and illiterate or those of feeble intellect.
" The right of one charged with crime to counsel may not be deemed fundamental and essential to fair trials in some countries, but it is in ours.
From the very beginning, our state and national constitutions and laws have laid great emphasis on procedural and substantive safeguards designed to assure fair trials before impartial tribunals in which every defendant stands equal before the law.
This noble ideal cannot he realized if the poor man charged with crime has to face his accusers without a lawyer to assist him.
372 US at 344.
9 L Ed 2d at 805; , Both Powell and Gideon involved felonies.
But their rationale has relevance to any criminal trial, where an accused is deprived of his liberty.
The court should consider the probable sentence that will follow if a conviction is obtained.
The more serious the likely consequences, the greater is the probability that a lawyer should be appointed. .
The court should consider the individual factors peculiar to each case.
These, of course, would be the most difficult to anticipate.
One relevant factor would be the competency of the individual defendant to present his own case.
(Jon Richard Argersinger vs Raymond Hamlin ; 32L Ed 2d 530 at 535 36 and 554.
(Emphasis added) The American Bar Association has upheld the fundamental premise that counsel should be provided in the criminal proceedings for offences punishable by loss of liberty, except those types of offences for which such punishment is not likely to be imposed.
Thus in 207 America, strengthened by the Powell, Gideon and Hamlin cases, counsel for the accused in the more serious class of cases which threaten a person with imprisonment is regarded as an essential component of the administration of criminal justice and as part of procedural fair play.
This is so without regard to the VIth amendment because lawyer participation is ordinarily an assurance that deprivation of liberty will not be in violation of procedure established by law.
In short, it is the warp and woof of fair procedure in a sophisticated, legalistic system plus lay illiterate indigents aplenty.
The Indian social legal milieu makes free legal service, at trial and higher levels.
an imperative processual piece of criminal justice where deprivation of life or personal liberty hangs in the judicial balance.
The widespread insistence on free legal assistance, where liberty is in jeopardy? is obvious from the Universal Declaration of Human Rights article 8.
Everyone has the right to an effective remedy by the competent national tribunals for acts violating the fundamental rights granted by the Constitution or by law.
article 14(3) of the International Covenant on Civil and Political Rights guarantees to everyone: "the right to be tried in, his presence, and to defend himself in person or through legal assistance of his own choosing; to be informed, if he does not have legal assistance, of his right; and to have legal assistance assigned to him in any case where the interests of justice shall require, and without payment by him in any such case if he does not have sufficient means to pay for it.
" Many high level Indian Committees and Commissions have emphasised the free legal service desideratum as integral to processual fair play for pr sellers.
For example, one such committee has stated(1): 93.
Prisoners, men and women, regardless of means, are a peculiarly handicapped class.
The morbid cell which con fines them walls them off from the world outside.
Legal remedies, civil and criminal, are often beyond their physical and even financial reach unless legal aid is available within the prison as is provided in some States in India and in other countries.
Without legal aid, petitions of appeal, applications for commutation or parole, bail motions and claims (1) Processual Justice to the people May, 1973, p. 34. 208 for administrative benefits would be well nigh impossible.
There is a case for systematised and extensive assistance through legal aid lawyers to our prison population.
The Central Government is evolving a comprehensive programme while many States already have fragmentary schemes.
It needs no argument to drive home this point, now that Arts 39A, a fundamental constitutional directive, states: 39A. Equal Justice and free legal aid.
The State shall secure that the operation of the legal system promotes justice, on a basis of equal opportunity, and shall, in particular, provide free legal aid, by suitable legislation or schemes or in any other way, to ensure that opportunities for securing justice are not denied to any citizen by reason of economic or other disabilities.
(emphasis added) .
This article is an interpretative tool for article 21.
Partial statutory implementation of the mandate is found in Sec.
304, Cr. P. Code, and in other situations courts cannot be inert in the face of article 21 and 39A.
We may follow up the import of Maneka Gandhi and crystallise the conclusion.
Maneka Gandhi 's case has laid down that personal liberty cannot be cut out or cut down without fair legal procedure.
Enough has been set out to establish that a prisoner, deprived of his freedom by court sentence but entitled to appeal against such verdict, can claim, as part of his protection under article 21 and as implied in his statutory right to appeal, the necessary concomitant of right to counsel to prepare and argue his appeal.
If a prisoner sentenced to imprisonment, is virtually unable to exercise his constitutional and statutory right of appeal, inclusive of special leave to appeal, for want of legal assistance, there is implicit in the Court under article 142, read with articles 21, and 39A of the Constitution, power to assign counsel for such imprisoned individual for doing complete justice.
This is a necessary incident of the right of appeal conferred by the Code and allowed by article 136 of the Constitution.
The inference is inevitable that this is a State 's duty and not government 's charity.
Equally affirmative is the implication that while legal services must be free to the beneficiary, the lawyer himself has to be reasonably remunerated for his services.
Surely, the profession has a public commitment to the people but mere philanthropy of its members yields short mileage in the long run.
Their services, 209 especially when they are on behalf of the State, must be paid for.
Naturally, the State concerned must pay a reasonable sum that the court may fix when assigning counsel to the prisoner.
Of course, the court may judge the situation and consider from all angles whether it is necessary for the ends of justice to make available legal aid in the particular case.
In every country where free legal services are given it is not done in all cases but only where public justice suffers otherwise.
That discretion resides in the court.
In the present petition, the party, though proferred legal aid by the court, preferred to argue himself.
Even so we uphold the right to counsel not in the permissive sense of article 22(1) and its wider amplitude but in the peremptory sense of article 21 confined to prison situations.
While dismissing the Special Leave Petition we declare the legal position to put it beyond doubt: 1.
Courts shall forthwith furnish a free transcript of the judgment when sentencing a person to prison term; 2.
In the event of any such copy being sent to the jail authorities for delivery to the prisoner, by the appellate, revisional or other court, the official concerned shall, with quick despatch, get it delivered to the sentence and obtain written acknowledgment thereof from him.
Where the prisoner seeks to file an appeal or revision, every facility for exercise of that right shall be made available by the Jail Administration.
Where the prisoner is disabled from engaging a lawyer, on reasonable grounds such as indigence or incommunicado situation, the Court shall, if the circumstances of the case, the gravity of the sentence, and the ends of justice so requires assign competent counsel of for the prisoner 's defence, provided the party does not object to that lawyer 5.
The State which prosecuted the prisoner and set in motion the process which deprived him of his liberty shall pay to assigned counsel such sum s the court may equitably fix.
These benign prescriptions operate by force of article 21 [strengthened by article 19(1)(d)] read with sub article (5) from the lowest to the highest court where deprivation of life and personal liberty is in substantial peril.
S.R. Petition dismissed.
| IN-Abs | Under section 363(1) of the Criminal Procedure Code, 1973 "when the accused is sentenced to imprisonment, a copy or the judgment shall immediately after the pronouncement of the judgment, be given to him free of cost".
Under section 363(2), "on the application of the accused, a certified copy of the judgment or when he so desires z. translation in his own language if practicable or in the language of the Court, shall be given to him without delay and such copy shall in, every case where the judgment is appealable by the accused be given free of cost: Provided that where the sentence of death is passed or confirmed by the High Court, a certified copy of the judgment shall be immediately given to the accused free of cost whether or not he applies for the same".
section 387 of the Code, these provisions contained in Chapter XXVII are applicable so far as may be practicable to the judgment in appeal by a Court of Sessions or Chief Judicial Magistrate.
section 388, however, requires that the order of the High Court on appeal should be certified to lower court and the court to which the High Court certifies its judgment shall make such orders as are comfortable to the judgment of the High Court.
The petitioner was tried for the various offences under s.417 read with s.511 I.P.C`., section 467 I.P.C. section 468 I.P.C. and 471 read with section 467 I.P.C. by the Sessions Court and found guilty of the said offences but sentenced to a soft sentence of simple imprisonment till the rising of the Court and some fine.
Two appeals were filed one by the petitioner and the other by the State.
The High Court dismissed the petitioner 's appeal and accepting the State 's appeal enhanced the sentence to three years on 22 11 73.
On 26 11 73, in conformity with the Judgement of the High Court, the Sessions Court passed necessary orders to the Central Prison Authority Bombay to take him into custody.
He was later on transferred to Yeravada Jail, Pune.
The petitioner under went the full period of im 193 prisonment and filed the special leave petition with a petition for condonation , of delay contending that on 10 12 73 he had applied under section 363(2) read with section 387 of the Code for a certified copy of the judgment dated 22 11 73 through the jail authorities and that though the copy was received by the jail authorities in March 1 1974 from the High Court it was never delivered to him, with the result he not only lost his right to appeal by special leave but was forced to come up with a condonation petition after obtaining another certified copy from the High Court.
Condoning the delay and dismissing the petition the Court ^ HELD: l. Freedom is what freedom does.
In article 21 of the Constitution the guarantee of the personal liberty is phrased with superb amplitude with the words, "No person shall be deprived of his life or personal liberty except according to procedure established by law".
"Procedure established by law" are words of deep meaning for all lovers of liberty and judicial sentinels.
Amplified activist fashion, 'procedure ' means 'fair and reasonable procedure ' which comports with civilised norms like natural justice rooted firm in community consciousness not primitive processual barbarity nor legislated normative mockery.
[201C E] 2.
One component of 'fair procedure ' is natural justice.
Generally speaking and subject to just exceptions, at least a single right of appeal on facts, where criminal conviction is fraught with long loss of liberty, is basic to civilized jurisprudence.
It is integral to fair procedure, natural justice and normative universality save in special cases like the original tribunal being a high bench sitting on a collegiate basis.
In short, a first appeal from the Sessions Court to the High Court, as provided in the Criminal Procedure Code, manifests this value upheld in article 21.
Every step that makes the right of appeal fruitful is obligatory and every action or inaction which stultifies it is unfair and, ergo, unconstitutional (In a sense, even article 19 may join hands with article 21, as the Maneka Gandhi reasoning discloses).
Maneka Gandhi 's case has laid down that personal liberty cannot be cut out or down without fair legal procedure.
[197F, 203D E. F 208E] Pertinent to the point in the case are two requirements: (i) service of a copy of the judgment to the prisoner in time to file an appeal an(l (ii) provision of free legal services to a prisoner who is indigent or otherwise disabled from securing legal assistance where the ends of justice call for such service.
Both these are.
State responsibilities under article 21 and apply where procedural law provides.
for further appeals as well.
[203F G] Maneka Gandhi vs Union of India , referred to.
Judicial Justice with procedural intricacies, legal submissions and critical examination of evidence, leans upon professional expertise; and a failure of equal justice under the law is on the cards where such supportive skill is absent for one side.
Our Judicature and Judicial Process, engineered by kindred legal technology, compel the colloboration of lawyer power for steering the wheels of equal justice under the law.
[204C D] If a prisoner who is sentenced to imprisonment is virtually unable to exercise his constitutional and statutory right of appeal, inclusive of special leave to appear for want of legal assistance, there is implicit in the Court under article 142 194 read with Articles 21 and 39A of the Constitution power to assign counsel for such imprisoned individual "for doing complete justice".
This is a necessary incident of the right of appeal conferred by the Code and allowed by article 136 of the Constitution.
The accused has a right to counsel not in the permissive sense of article 22(1) and its wider amplitude but in the peremptory sense of article 21 confined to prison situations.
[28F G, 209C] 4.
Where the prisoner seeks to file an appeal or revision every facility for exercise of that right shall be made available by the jail administration.
[209E] (a)Courts shall forthwith furnish free transcript copy OF the judgment when sentencing a person to prison term.
In the event of any such copy being sent to the jail authorities for delivery to the prisoner by the appellate, unrevisional or other Court, the official concerned shall with quick despatch.
get it delivered to the sentence and obtain written acknowledgement thereof from him.
Any jailor who by indifference or vendetta, withholds the copy thwarts the Court process and violates article 21 and may pavc the way for holding the further imprisonment illegal.
These obligations are necessary implied in the right of appeal conferred by the Code read with the commitment to procedural fairness in article 21.
section 363 of the Cr.
P.C. is an activist expression of this import of article 21 and is inviolable.
[204A B & 209DE] John Richard Argersinger vs Raymond Hamlin, ; 530 at 535 36 and 554, quoted with approval.
article 8 of the Universal Declaration on Human Rights and article 14(3) of the International Covenant on Civil and Political Rights referred to.
(b) The State which prosecuted the prisoner and set in motion the process which deprived him of his liberty shall pay to the assigned counsel such sum as the Court may equitably fix.
the Court may judge the situation and consider from all angles whether it is necessary in the ends of justice to make available legal aid in the particular.
That discretion resides in the Court.
[209A B, & G] (c) These benign prescriptions operate by force of article 21 "strengthened by article 19(1)(d) read with sub article (5) from the lowest to the highest Court where deprivation of life and personal liberty is in substantial peril.
[209H] 5.
Since the Supreme Court is the last in Indian pyramid of justice every party in person elicits from the Court extra solicitude so that he may not suffer from a sense of handicap due to the absence of professional legal service.
The present petition, the party though proffessional legal aid by the Court preferred to argue himself [1971H. 198A, 209B] 6.
(a) The Supreme Court has laid down certain fundamental principles its governing its jurisdiction when special leave is sought under article 136 of the Constitution.
The Court cannot depart from this criteria lest the endless chase for justice by every defeated litigant, civil and criminal should flood it into dysfunction.[198A B] 195 Ujjagar Singh & Anr.
vs State (Delhi Admn), order in S.L.P. (Crl.) No. A 1319 etc.
Of 1977 dt. 31 7 78 (unreported case).
(b) The soft justice syndrome vis a vis white collar offenders scandalizes the Court.
It stultifies social justice and camouflages needed severity with naive leniency.
[196G] (c) Social defence is the criminological foundation of punishment.
In the instant case, the trial judge has confused between correctional approach to prison treatment and nominal punishment verging on decriminalisation of serious social offences.
The first is basic and the second pathetic.
That Court which ignores the grave injury to society implicit in economic crimes by the upperberth 'mafia ' ill serves social justice.
Soft sentencing justice is gross injustice where many innocents are the potential victims.
It is altogether a different thing to insist on therapeutic treatment, hospital setting and correctional goals inside the prison "even punctuated by parole, opportunities for welfare work meditational normalisation and healthy self expression so that the convict may be humanised and on release rehabilitated as a safe citizen.
Coddling is not correctional any more than torture is deterrent.
While iatrogenic prison terms are bad because they dehumanize, it is functional failure and judicial pathology to hold out a benignly self defeating non sentence to deviants who endanger the morals and morale, the health and wealth of society.
[199E H, 200A] Mohammad Giasuddin vs State of Andhra Pradesh [1978] I SCR 153.
applied.
|
ivil Appeal No. 1 278 of 1978.
Appeal by special leave from the Judgment and Order 15 11 1976 of the Delhi High Court in Civil Writ No. 96 of 1971.
B. Dutta for the Appellant.
Soli J. Sorabjee, Addl.
General and R. N. Sachthey for Respondents 1 and 2.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
We granted special leave and heard arguments on the limited question whether "brick earth" is a 'minor mineral ' within the meaning of that expression as defined in Section 3 (e) of the .
The definition is as follows: "Minor mineral ' means building stones, gravel? ordinary clay, ordinary sand other than sand used for prescribed purposes, and any other mineral which the Central Government may, by Notification in the official Gazette declare to be minor mineral ;" In exercise of the power conferred by Section 3(e) of the Act, the Central Government declared the following minerals to be minor minerals "Boulder, Shingle, Chalcedony pebbles used for ball mill purposes only, limeshell kanker and limestone used for lime burning, murrum, brick earth, fuller 's earth, bentonite road metal, reh matti, slate and shale when used for building material;" The submission of the learned Counsel for the appellant was that a substance had to be a mineral before it could be notified as a minor mineral pursuant to the power under Section 3(e) of the .
He urged that brick earth was not a mineral and, therefore, it could not be notified a minor mineral.
We agree with the learned Counsel that a substance must first be a mineral before it can be notified as a minor mineral pursuant to the power vested in the Central Government under Section 3(e) of the Act.
The question, therefore, is whether brick earth is a mineral.
The expression "Minor Mineral" as defined in Section 3(e) includes 'ordinary clay ' and 'ordinary sand '.
If the expression "minor mineral" as defined in Section 3(e) of the Act includes 'ordinary clay ' and 273 `ordinary sand ', there is no reason why earth used for the purpose A of making bricks should not be comprehended within the meaning of the word "any other mineral" which may be declared as a "minor mineral" by the Government.
The word "mineral" is not a term of article It is a word of common parlance, capable of a multiplicity of meaning depending upon the context.
For example the word is occasionally used in a very wide sense to denote any substance that is neither animal nor vegetable.
Sometimes it is used in a narrow sense to mean no more than precious metalls like gold and silver.
Again, the word "minerals" is often used to indicate substances obtain .
ed from underneath the surface of the earth by digging or quarrying.
But this is not always so as pointed out by Chandrachud, J (as he then was) in Bhagwan Dass vs State of Uttar Pradesh,(1) where the learned judge said (at p. 874): 'It was urged that the sand and gravel are deposited on the surface of the land and not under the surface of the soil and therefore they cannot be called minerals and equally so, any operation by which they are collected or gathered cannot properly be called a minerals operation.
It is in the first place wrong to assume that mines and minerals must always be sub soil and that there can be no minerals on the surface of the earth.
Such an assumption is contrary to informed experience.
In any case, the definition of mining operations and minor minerals in section 3(d) and (e) of the Act of 1957 and Rule 2(S) and (7) of the Rules of 1963 shows that minerals need not be subterranean and that mining operations cover every operation undertaken for the purpose of "Winning" any minor mineral.
"Winning" does not imply a hazardous or perilous activity.
The word simply means extracting a mineral" and is used generally to indicate, any activity by which a mineral is secured.
"Extracting" in turn means drawing out or obtaining.
A tooth is 'extracted ' as much as the fruit juice and as much as a mineral.
Only that the effort varies from tooth to tooth, from fruit to fruit and from mineral to mineral".
We may also refer to Northern Pacific Railway Company vs John A. Sodrberg(2) where the Supreme Court of United States observed as follows (at page 581): "The word 'mineral ' is used in so many senses, dependant upon the context, that the ordinary definitions of the dictionary throw but little light upon its significance in a (1) ; (2) 47 L. Fd.575 274 given case.
Thus, the scientific division of all matter into the animal, vegetable, or mineral kingdom would be absurd as applied to a grant of lands, since all lands belong to the mineral kingdom, and therefore, could not be excepted from the grant without being destructive of it.
Upon the other hand, a definition which would confine it to the precious metals gold and silver would so limit its application as to destroy at once half the value of the exception.
Equally subversive of the grant would be the definition of minerals found in the Century Dictionary: as "any constituent of the earth 's crust" ; and that of Beinbridge on Mines: "All the Sub stances stances that now form, or which once formed, a part of the solid body of the earth".
Nor do we approximate much more closely to the meaning of the word by treating minerals as substances which are ""mined"" as distinguished from those are "quarried", since many valuable deposits of gold, copper, iron, and coal lie upon or near the surface of the earth, and some of the most valuable building stone, such for instance, as the Caen stone in France, is excavated from mines running far beneath the surface.
This distinction between under ground mines and open workings was expressly repudiated in Midland C. vs Haunchwood Brick & Tile Co. (L.R 20 Ch.
552) and in Hext vs Gill (L.R. 7 Ch.
699)" The Supreme Court of United States also referred to several English cases where stone for road making or paving was held to be 'minerals ' as also granite, sandstone, flint stone, gravel, marble, fire clay, brick clay, and the like.
It is clear that the word 'mineral ' has no fixed but a contextual connotation.
The learned Counsel for the appellant invited our attention to the decision of the Court of Appeal in Todd Birleston and Co. vs The North Eastern Railway Co.(l) and to Stoud 's Judicial Dictionary to urge that clay, brick earth and the like have sometimes been held not to be minerals by English Courts.
As we said earlier the word mineral is an elastic word whose meaning depends upon the setting in which it is used.
For instance, in the case cited, the question was whether clay forming the surface or subsoil, and constituting the "land" compulsorily taken for the purposes of a railway, was not a mineral WITH the meaning of Sections 77, 78 or 79 of the Railway Clauses Consolidation Act.
The answer was that 'clay ' was not a mineral for the purposes of the Railway Clauses Consolidation Act.
Any other conclusion, in the context of the Act, would have led to the absurd (1) [1903] I K.B. 603 .
275 result that the original owner whose land had been taken would be entitled to dig and take away the clay from the land on which the Railway was constructed, thus defeating the very object of the compulsory taking.
On the other hand, as noticed by the Supreme Court of the United States, in several English cases clay, gravel, sand, stone etc. has been held to be minerals.
That is why we say the word mineral has no definite meaning but has a variety of meanings, depending on the context of its use.
In the context of the Mines and Minerals (Regulation & Development) Act, we have no` doubt that the word 'mineral ' is of sufficient amplitude to include 'brick earth '.
As already observed y us, if the expression 'minor mineral ' as defined in the Act includes 'ordinary clay ' and 'ordinary sand '.
there is no earthly reason why 'brick earth ' should not be held to be 'any other mineral ' which may be declared as 'minor mineral.
We do not think it necessary to pursue the matter further except to say that this was The view taken in Laddu Mal vs State of Bihar(l) Amar Singh Modilal vs State of Haryana(2) and Sharma & Co. vs State of U.P.(3).
We do not agree with the view of the Calcutta High Court in State of West Bengal vs Jagadamba Prasad (4) that because speaks of 'ordinary earth ' as a mineral it is not a minor mineral as defined in the Mines and Minerals (Regulation & Development) Act.
The appeal is accordingly dismissed with costs.
S.R. Appeal dismissed (1) A.I.R 1965 Patna 491 (2) A.I.R 1972 Punj.
& Har. 356 (3) A.I.R. 1975 All. 86.
(4) A.I.R. 1969 Cal.
| IN-Abs | section 3(e) of the Mines and Mineral (Regulation and Development) Act, 1957 defines " 'Minor Mineral ' as meaning building stones, gravel, ordinary clay, ordinary sand other than sand used for prescribed purposes, and any other mineral which the Central Government may, by Notification in the official Gazette declare to be a minor mineral".
In exercise of the power conferred by section 3(e) of the Act the Central Government declared inter alia brick earth as a 'minor mineral '.
Dismissing the appeal by special leave the Court ^ HELD: ( I ) The word 'mineral ' has no fixed but a contextual connotation.
If 'mineral ' is not a term of art it is a word of common parlance, capable of multiplicity of meanings depending upon the context.
The word is occasionally used in a very wide sense to denote any substance that neither animal nor vegetable Sometimes it is used in a narrow sense to mean no more than precious metals like gold and silver.
Again the word 'minerals ' is often used to indicate substances obtained from underneath the surface of the earth by digging or quarrying.
though it is not always so.
[273 A C, 274 F] In the context of the ', the word Mineral is of sufficient amplitude to include brick earth.
If the expression 'minor mineral ' as defined in the Act, includes 'ordinary clay` and 'ordinary sand '.
there is no earthly reason why brick earth should not be held to be 'any other mineral ' which may, be declared as a 'minor mineral '.
[1275 B C] Bhagwan Das vs State.
Of U.P., ; , applied Laddu Mal vs State of Bihar, AIR 1965 Pat. 491; Amar Modilal Singh vs State of Haryana, AIR 1972 Punjab and Haryana 356; Sharma & Co. vs State of U.P., AIR 1975 All. 386 approved.
State of West Bengal vs Jagdamba Prasad, AIR 1969 Cal.
281; overruled.
Todd Birleston & Co. vs The North Eastern Railway Co., [1903] I K.B. 603; quoted with approval.
(2) A substance must first be a mineral before it can be notified as a minor mineral pursuant to the power vested in the Central Government under section 3(e) of the Act.
Brick earth being a mineral.
the Central Government has correctly notified it as a 'minor mineral '.
[272 G H] 272
|
646 of 1954.
Petition under Article 32 of the Constitution of India.
C. R. Jagadisan, Naunit Lal and T. V. Balakrishnan, (T. V. Balakrishnan, with the permission of the court) for the petitioners.
C. K. Daphtary, Solicitor Genral of India, (G. N. Joshi, B. Ganapathy lyer and R. H. Dhebar, with him) for the respondents.
December 20.
BHAGWATI J.
This petition under Article 32 of the Constitution also raises the question about the constitutionality of section 5(1) of the Taxation on Income Investigation Commission Act, 1947 (XXX of 1947).
1250 The facts which led to the filing of this petition may be shortly stated.
Sir M. Ct.
Muthiah Chettiar who carried on a flourishing banking business in India and foreign countries died in or about 1929 leaving behind him two sons M. Ct. M. Chidambaram Chettiar (since deceased) and M. Ct. M. Muthiah Chettiar, petitioner 3, and his widow Devanai Achi.
M. Ct.
M. Chidambaram Chettiar continued the ancestral banking business and also started several commercial enterprises.
He died by an accident while traveling in a plane in the year 1954 leaving behind him his two sons, the petitioners 1 & 2.
Devanai Achi had predeceased him.
The petitioners 1 & 2 are the legal representatives of the deceased M. Ct. M. Chidambaram Chettiar and also the representatives of their grandmother Devanai Achi.
The Central Government, in exercise of its powers under section 5(1) of Act XXX of 1947, referred to the Income tax Investigation Commission R. C. Nos.
516, 517 and 518 relating to M. Ct. M. Chidambaram Chettiar, M. Ct.
M. Muthiah Chettiar, petitioner 3, and Devanai Achi.
The Commission, after holding an enquiry in all the three cases, recorded their findings and held that an aggregate sum of Rs. 10,07,322 4 3 represented the undisclosed income during the investigation period and directed distribution of this sum over the several years in the manner indicated by them in Schedule A to their report.
This report was submitted by the Commission to the Government on the 26th August 1952.
The Central Government considered the report and, purporting to act under section 8(2) of the Act directed by their order No. 74 (26) I.T./52 dated the 16th September 1952 that appropriate action under the Indian Income tax Act be taken against the assessees with a view to assess or re assess the income which had escaped assessment for the years 1940 41 to 1948 49.
In pursuance of the said directions of the Central Government the Income tax Officer, City Circle 1, Madras, issued notices under section 34 of the Indian Income tax Act and made the reassessment for the 1251 years 1940 41, 1941 42 and 1943 44 to 1948 49 based upon the findings of the Commission which were treated as final and conclusive.
The assessment orders for the years 1940 41, 1941 42 and 1948 49 were served on the assessees on the 20th February 1954.
Assessment orders for the years 1943 44 to 1947 48 were served on the 12th May 1954.
There assessment order for the year 1942 43 was Dot made though notices under section 34 of the Indian Income tax Act had been issued by the Income tax Officer on the assessees on the 19th March 1954.
It appears that these re assessment proceedings for the year 1942 43 are yet pending and no assessment order in respect of that year has yet been served on the petitioners.
In regard to the assessment orders which were served on the 20th February 1954, the petitioners preferred on the 18th May 1954 applications to the Commissioner of Income tax, Madras, under section 8(5) of the Act for references to the High Court on questions of law arising out of those re assessment orders passed by the Income tax Officer.
Similar applications were preferred thereafter in respect of the re assessment orders which were served on the petitioners on the 12th May 1954.
These applications are still pending.
On the 6th December 1954, the petitioners filed the present petition contending that the provisions of the Act XXX of 1947 were illegal, ultra vires and unconstitutional mainly on the ground that they were violative of the fundamental right guaranteed under article 14 of the Constitution.
The grounds urged in support of this contention were not felicitously expressed.
The petitioners appear to have mixed up the contentions which could be urged as a result of our judgments in Suraj Mall Mohta vs A. V. Visvanatha Sastri and Another(1) and Shree Meenakshi Mills Ltd. vs A. V. Visvanatha Sastri and Another(2).
They contended in the first instance that after the amendment of section 34 of the Indian Income tax Act by Act XXXIII of 1954, which inter (1)[1955] 1 S.C.R. 448. 158 (2) 1252 alia, added sub sections (1 A) to (1 D) to section 34, the provisions of section 5(1) of the Act became discriminatory, as on a reading of both the enactments, Act XXX of 1947 and the Income tax Act as amended in 1954 showed that they applied to the same category of persons and there was nothing in section 5 (1) of the Act or any other provision of the said Act disclosing any valid or reasonable classification.
The provisions of Act XXX of 1947 could not, therefore,be sustained on the ground of classification to avoid the mischief of article 14 of the Constitution.
The petitioners obviously relied upon our decision in Shree Meenakshi Mill 's case, supra, in support of this contention.
The petitioners thereafter proceeded to set out their alternative contention based upon our decision in Suraj Mall Mohta 's case, supra, though it was not so stated in express terms.
They contended that Act XXX of 1947 enabled the Central Government to discriminate between one person and another inasmuch as they were authorised to pick and choose cases of persons who fell within the group of those who had substantially evaded taxation on income, that the act of the Government in referring some evaders to the Commission was wholly arbitrary and there was nothing to eliminate the possibility of a favouritism or a discrimination against an individual by sending or not sending cases to the Commission as between two persons both of whom might be within the group of those who have evaded the payment of tax to a sub stantial extent.
They further contended that the procedure prescribed under the impugned Act was substantially more prejuducial and more drastic to the assessee than the procedure prescribed under the Indian Income tax Act.
There was no reasonableness or justification that one person should have the advantage of the procedure prescribed by the Indian Income tax Act while another person similarly situated should be deprived of it.
They, therefore, contended that section 5(1) of the Act was discriminatory and violative of article 14 of the Constitution and asked for the issue of a writ of 1253 certiorari or any other appropriate writ, direction or order quashing the report of the Income tax Investigation Commission dated the 29th August 1952 enclosed as Annexure A to the petition and the assessment orders of the Income tax Officer for the years 1940 41, 1941 42, and 1943 44 to 1948 49 as being unconstitutional, null and void and also of a writ of prohibition calling upon the Commissioner of Income tax, Madras, respondent 1 and the Income tax Officer, City Circle 1, Madras, respondent 2 or their subordinate officers to forbear from implementing the findings of the Investigation Commission with regard to the year 1942 43.
This petition was heard along with Civil Appeals Nos. 21 and 22 of 1954, A. Thangal Kunju Musaliar vs M. Venkitachalam Potti & Another and M. Venkitachalam Potti & Another vs A. Thangal Kunju Musaliar(1), which also raised inter alia the cognate question about the constitutionality of section 5(1) of the Travancore Act XIV of 1124 which was in pari materia with section 5(1) of Act XXX of 1947.
In regard to the question whether there is a rational basis of classification to be found in the enactment of section 5(1) of the Act, the preamble and the relevant provisions of Act XXX of 1947 are the same as were considered by us in considering this question in relation to the Travancore Act XIV of 1124, The words "substantial extent" also have been used in both the Acts and in the present case as in the cases of the Travancore petitioners concerned in the Evasion Cases Nos.
I and 2 of 1125 (M.E.), Gauri Shanker, Secretary, Income tax Investigation Commission made an affidavit dated the 21st September 1955 wherein he set out the events and circumstances under which Act XXX of 1947 came to be passed.
In paragraph 4 of that affidavit he stated: "It was found that during the period of the last war large fortunes had been made by businessmen.
Controls imposed by Government on prices and distribution, were often evaded and secret profits were made and kept outside the books and often kept invested in shares and real property acquired in the (1) ; 1254 names of benamidars or in cash purchases of gold, silver and jewellery.
The machinery of Income tax administration was unable to cope with the large number of complex cases that had to be dealt with, during the war years and a few years after its termination.
As there had been a large scale evasion of tax during this period, it became necessary in the public interests to investigate cases of evasion of in come tax and bring under assessment huge profit that had escaped assessment.
As a preliminary step in this direction, a demonetisation Ordinance was passed in January 1946 sterilising the High Denomination Notes in which secret profits earned during the war years had been partly kept and calling for a statement regarding the source of such profits.
This was followed by the Income tax Investigation Commission Bill.
In view of the prolonged and complicated enquiries that bad to be made to unearth these secret war profits and bring them under assessment a special Commission was constituted to enquire into the profits made since 1939 but which had escaped assessment.
I say that what is intended to investigate is evasion of payment of taxation which could reasonably be called "Substantial" and therefore the classification is real classification.
The statute merely leaves the selective application of the law to be made by the executive authorities in accordance with the standards indicated in the Act itself".
This affidavit furnished the background and the surrounding circumstances obtaining at the time when Act XXX of 1947 was enacted and if this background is taken into account it would be obvious that the substantial evaders of payment of income tax whose cases were referred by the Central Government to the Commission formed a class by themselves and there was a rational basis of classification in the enactment of section 5(1) of the Act.
The argument that the terms of section 5(1) enabled the Central Government to pick and choose the cases of particular individuals falling within that category leaving the cases of other persons falling within the same category to be dealt with in accord 1255 ance with the provisions of section 34(1) of the Indian Income tax Act as it stood prior to the amendment of 1948 has been already dealt with in our judgment in A. Thangal Kunju Musaliar vs M. Venkitachalam Potti & Another, supra, while dealing with the corresponding provisions of section 5(1) of the Travancore Act XIV of 1124 and section 47 of the Travancore Act XXIII of 1121 and we have pointed out that so far as the Indian Income tax Act as it was in existence on the 18th April 1947 (which was the date on which Act XXX of 1947 received the assent of the Governor General) stood unamended by Act XLVIII of 1948, the cases of persons who fell within the category of substantial evaders of incometax within the meaning of section 5(1) of the Act could not have been dealt with under the provisions of section 34(1) of the Indian Income tax Act and, therefore, there was no discrimination and no violation of the fundamental right guaranteed under article 14 of the Constitution.
The other argument that the selection of the persons whose cases were to be referred by the Central Government for investigation to the Commission was left to the unguided and uncontrolled discretion of the executive or the administrative officials also has been dealt with in that judgment and we need not repeat our reasons for rejecting the same.
If the provisions of section 34(1) of the Indian Income tax Act as it stood unamended by Act XLVIII of 1948 (which corresponded with the provisions of section 47 of the Travancore Act XXIII of 1121) had been the only provisions to be considered we would have reached the same conclusion as we did in A. Thangal Kunju Musaliar vs M. Venkitachalam Potti& Another, supra.
The position, however, in the present case is materially affected by reason of the two amendments which were made in section 34 of the Indian Income tax Act, one in 1948 by the enactment of Act XLVIII of 1948 and the other in 1954 by the enactment of Act XXXIII of 1954.
Section 34 as amended by Act XLVIII of 1948 read as under; 1256 "Section 34 (1): If (a) the Income tax Officer has reason to believe that by reason of the omission or failure on the part of an assessee to make a return of his income under section 22 for any year or to disclose fully and truly all material facts necessary for his assessment for that year, income, profits or gains chargeable to income tax have escaped assessment for that year, or have been under assessed or assessed at too low a, rate, or have been made the subject of excessive relief under the Act, or excessive loss or depreciation allowance has been computed, or (b) notwithstanding that there has been no omission or failure as mentioned in clause (a) on the part of the assessee, the Income tax Officer has in consequence of information in his possession reason to believe that income, profits or gains chargeable to income tax have escaped assessment for any year, or have been under assessed, or assessed at too low a rate, or have been made the subject of excessive relief under this Act, or that excessive loss or depreciation allowance has been computed, he may in cases falling under clause (a) at any time within eight years and in cases falling under clause (b) at any time within four years of the end of that year, serve on the assessee, or, if the assessee is a company, on the principal officer thereof, a notice containing all or any of the requirements which may be included in a notice under sub section (2) of section 22 and may proceed to assess or re assess such income, profits or gains or recompute the loss or depreciation allowance; and the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that sub section: Act XXXIII of 1954 introduced into section 34 sub sections (1 A) to (1 D).
Section 34(1 A) which is material for our purposes provided: "Section 34 (1 A): If, in the case of any assessee, the Income tax Officer has reason to believe (i) that income, profits or gains chargeable to income tax have escaped assessment for any year in 1257 respect of which the relevant previous year falls wholly or partly within the period beginning on the 1st day of September, 1939, and ending on the 31st day of March, 1946; and, (ii)that the income, profits or gains which have so escaped assessment for any such year or years amount, or are likely to amount, to one lakh of rupees or more; he may, notwithstanding that the period of eight years or, as the case may be, four years specified in sub section (1) has expired in respect thereof, serve on the assessee, or, if the assessee is a company, on the principal officer thereof, a notice containing all or any of the requirements which may be included in a notice under sub section (2) of section 22, and may proceed to assess or re assess the income, profits or gains of the assessee for all or any of the years referred to in clause (i), and thereupon the provisions of this Act (excepting those contained in clauses (i) and (iii) of the proviso to sub section (1) and in sub sections (2) and (3) of this section) shall, so far as may be, apply accordingly: Provided that the Income tax Officer shall not issue a notice under this sub section unless he has recorded his reasons for doing so, and the Central Board of Revenue is satisfied on such reasons recorded that it is a fit case for the issue of such notice: Provided further that no such notice shall be issued after the 31st day of March, 1956".
Amended section 34(1) of the Indian Income tax Act was substantially different from the old section 34(1) which was in operation up to the 8th September 1948.
The words "if in consequence of definite information which has come into his possession the Income tax Officer discovers that income, profits or gains chargeable to income tax have escaped assessment in any year " which appear in the old section were substituted by the words "If the Incometax Officer has reason to believe that by reason of the omission or failure on the part of the assessee . . . income, profits or gains chargeable to income tax have escaped assessment ".
The 1258 requisites of (i) "definite" information (ii) which had " come into" possession of the Income tax Officer and in consequence of which (iii) he "discovers" that income, profits or gains chargeable to income tax had escaped assessment, were no longer necessary and the only thing which was required to enable the Incometax Officer to take proceedings under section 34(1) as amended was that he should have reason to believe that by reason of the omission or failure on the part of the assessee income, profits or gains chargeable to income tax had escaped assessment for a particular year.
Whereas before this amended section 34(1) came to be substituted for the old section 34(1) there was no comparison between the provisions of section 5(1) of Act XXX of 1947 and section 34(1) of the Indian Income tax Act as it then stood, the provisions of section 34(1) as amended after the 8th September 1948 could stand comparison with the provisions of section 5(1) of Act XXX of 1947 and the cases which were covered by section 5(1) of Act XXX of 1947 could be dealt with under the procedure laid down in section 34(1) of the Indian Income tax Act.
After the 8th September 1948, therefore, even in the case of substantial evaders of income tax who were a distinct class by themselves intended to be treated by the drastic and summary procedure laid down by Act XXX of 1947, some cases that were already referred by the Central Government for investigation by the Commission could be dealt with under that Act and other cases, though falling within the same class or category, could be dealt with under the procedure prescribed in the amended section 34(1) of the Indian Income tax Act.
The persons who were thus dealt with under section 34(1) of the Indian Incometax Act had available to them the whole procedure laid down in that Act including the right to inspect documents and the right to question the findings of fact arrived at by the Income tax Officer by the procedure of appeal and revision and ultimate scrutiny by the Income tax Appellate Tribunal which was denied to those persons whose cases had been referred by the Central Government for investigation by the 1259 Commission under section 5(1) of Act XXX of 1947.
The juxtaposition of dates is also very instructive.
It may be noted that in Act XXX of 1947 as it was originally enacted, the period up to which the Central Government could make the references to the Commission for investigation was laid down in section 5(1) of the Act to be 30th June 1948.
This period was extended to the 1st September 1948 by the Taxation on Income (Investigation Commission) Second Amendment Act, 1948 (XLIX of 1948).
Act XLIX of 1948 was passed by the Central Legislature and received the assent of the Governor General on the 8th September 1948, the same day on which Act XLVIII of 1948 which amended section 34(1) of the Indian Income tax Act also received the assent of the Governor General.
Both these Acts, viz., Act XLVIII of 1948 and Act XLIX of 1948 were passed simultaneously and obviously with a view to bring the provisions of section 5(1) of Act XXX of 1947 and section 34(1) of the Indian Income tax Act in tune with each other.
It appears to have been realized that the substantial evaders of income tax in respect of whom the Central Government had prima facie reasons for believing that they had to a substantial extent evaded payment of taxation on income could not have their cases referred for investigation by the Commission after the 30th June 1948, that having been the time limit originally prescribed in section 5(1) of the Act.
It also appears to have been felt that the period could not possibly be extended beyond the 1st September 1948 with the result that apart from the cases of substantial evaders of income tax which were referred by the Central Government for investi gation to the Commission up to the 1st September 1948 there would be a large number of such cases which though they could not be referred for investigation to the Commission would have to be dealt with under the ordinary provisions for taxation of income that had escaped assessment available in section 34 and the cognate sections of the Indian Income tax Act.
As section 34(1) then stood, the requisites of 159 1260 definite information coming into the possession of the Income tax Officer in consequence of which be discovered that income, profits or gains chargeable to income tax had escaped assessment would certainly not have availed the Government in tracking down these substantial evaders of income tax and it appears, therefore, to have been thought necessary that section 34(1) of the Indian Income tax Act should be amended so as to enable the Income tax Officer to take proceedings thereunder if he had reason to believe that by reason of omission or failure on the part of the assessee. . income, profits or gains chargeable to income tax had escaped assessment for the relevant period.
An amendment of section 34(1) in this manner would enable Government to pass on the requisite information which they had obtained in regard to the substantial evaders of income tax to the Income tax Officers concerned and ask the Income tax Officers to take proceedings against those evaders of income tax under the amended section 34(1) of the Indian Income tax Act.
That appears to have been the real object of the amendment of section 34(1) of the Indian Income tax Act with effect from the 8th September 1948.
The Commission would proceed with the references which were made to them up to the 1st September 1948 and the Income tax Officers concerned would take the requisite proceedings under section 34(1) of the Indian Income tax Act as amended after the 8th September 1948 against all persons whose income, profits or gains had escaped assessment including substantial evaders of income tax whose cases would certainly have been referred by the Central Government for investigation to the Commis sion if it had been possible for them to do so before the first September 1948.
After the 8th September 1948, there were two procedures simultaneously in operation, the one under Act XXX of 1947 and the other under the Indian Income tax Act with reference to persons who fell within the same class or category, viz., that of the substantial evaders of income tax.
After the 8th September 1948, therefore, some persons who fell within the class of substantial evaders of 1261 income tax were dealt with under the drastic and summary procedure prescribed under Act XXX of 1947, while other persons who fell within the same class of substantial evaders of income tax could be dealt with under the procedure prescribed in the Indian Income tax Act after service of notice upon them under the amended section 34(1) of the Act.
Different persons, though falling under the same class or category of substantial evaders of income tax, would, therefore, be subject to different procedures, one a summary and drastic procedure and the other a normal procedure which gave to the assessees various rights which were denied to those who were specially treated under the procedure prescribed in Act XXX of 1947.
The legislative competence being there, these provisions, though discriminatory, could not have been challenged before the advent of the Constitution.
When, however, the Constitution came into force on the 26th January 1950, the citizens obtained the fundamental rights enshrined in Part III of the Constitution including the right to equality of laws and equal protection of laws enacted in article 14 thereof, and whatever may have been the position before the 26th January 1950, it was open to the persons alleged to belong to the class of substantial evaders thereafter to ask as to why some of them were subjected to the summary and drastic procedure prescribed in Act XXX of 1947 and others were subjected to the normal procedure prescribed in section 34 and the cognate sections of the Indian Income tax Act, the procedure prescribed in Act XXX of 1947 being obviously discriminatory and, therefore, violative of the fundamental right guaranteed under article 14 of the Constitution.
It would be no answer to suggest that those substantial evaders whose cases were referred by the Central Government for investigation by the Commission before the 1st September 1948 formed a class by themselves leaving others though belonging to the same class or category of substantial evaders of 1262 income tax to be dealt with by the ordinary procedure prescribed in the Indian Income tax Act without infringing the fundamental right guaranteed under article 14 of the Constitution.
A similar argument had been, advanced before us by the learned Attorney General appearing for the Commission in Shree Meenakshi Mills case, supra.
The ground which he had urged was "that the class of persons dealt with under section 5(1) of Act XXX of 1947 was not only the class of substantial tax dodgers but it was a class of persons whose cases the Central Government, by 1st September, 1948, had referred to the Commission and that class had thus become determined finally on that date, and that class of persons could be dealt with by the Investigation Commission under the drastic procedure of Act XXX of 1947 while section 34 of the Indian Income tax Act as amended empowered the Income tax Officer to deal with cases other than those whose cases had been referred under section 5(1) to the Investigation Commission . . " Mahajan, C. J. who delivered the judgment of the Court dealt with this argument at page 795(1) as under: "As regards the first contention canvassed by the learned Attorney General it seems to us that it cannot stand scrutiny.
, The class of persons alleged to have been dealt with by section 5(1) of the impugned Act was comprised of those unsocial elements in society who during recent years prior to the passing of the Act had made substantial profits and bad evaded payment of tax on those profits and whose cases were referred to the Investigation Commission before 1st September, 1948.
Assuming that evasion of tax to a substantial amount could form a basis of classification at all for imposing a drastic procedure ' on that class, the inclusion of only such of them whose cases had been referred before 1st September, 1948, into a class for being dealt with by the drastic procedure, leaving other tax evaders to be dealt with under the ordinary law will be a clear discrimination for the reference of the case within a particular time (1) , 795.
1263 has no special or rational nexus with the necessity for drastic procedure. .
These observations were made to repel the particular argument of the learned Attorney General but they did not lay down that in fact section 5(1) was confined to such a limited class.
We are further supported in this view by the fact that by the later amendment of section 34 of the Indian Income tax Act effected by Act XXXIII of 1954, the time limit for the issue of notice under section 34(1 A) of the Indian Income tax Act has been fixed as the 31st day of March 1956.
It is, therefore, clear that the period originally fixed for the reference of the cases of substantial evaders of income tax for investigation by the Commission, viz. 30th June, 1948 or the extended period, viz., I St September, 1948 pro vided in section 5(1) of Act XXX of 1947 or the period fixed by the new section 34(1 A) of the Indian Income tax Act, viz., 31st day of March 1956 was not a necessary attribute of the class of substantial evaders of income tax but was merely an accident and a measure of administrative convenience and was not an element in the formation of the particular class of substantial evaders of income tax.
It follows, therefore, that after the inauguration of the Constitution on the 26th January, 1950, the persons whose cases were referred for investigation by Central Government to the Commission up to the 1st September, 1948 could, to use the words of Mabaian C. J. in Shree Meenakshi Mills case, supra, at page 794ask: ". . why are we now being dealt with by the discriminatory and drastic procedure of Act XXX of 1947 when those similarly situated as ourselves can be dealt with by the Income tax Officer under the amended provisions of section 34 of the Act? Even if we once bore a distinctive label that distinction no longer subsists and the label now borne by us is the same as is borne by persons who can be dealt with under section 34 of the Act as amended; in other words, there is nothing uncommon either in properties or in characteristics between us and those evaders of 1264 income tax who are to be discovered by the Incometax Officer under the provisions of amended section 34".
We may also add, adopting the same phraseology, that in our judgment, no satisfactory answer can be returned to this query because the field on which the amended section 34(1) operated from and after the 26th January 1950 included the strip of territory which was also occupied by section 5(1) of Act XXX of 1947 and two substantially different laws of procedure, one being more prejudicial to the assessee than the other, could not be allowed to operate on the same field in view of the guarantee of article 14 of the Constitution.
The result, therefore, is that barring the cases of persons which were already concluded by reports made by the Commission and the directions given by the Central Government under section 8(2) of Act XXX of 1947 culminating in the assessment or reassessment of the escaped income, those cases which were pending on the 26th January 1950 for investigation before the Commission as also the assessment or reassessment proceedings which were pending on the 26th January 1950 before the Income tax Officers concerned in pursuance of the directions given by the Central Government under section 8(2) of the Act would be hit by article 14 of the Constitution and would be invalidated.
The R. C. Cases 516, 517 and 518 relating to M. Ct. M. Chidambaram Chettiar, M. Ct.
Muthiah Chettiar and Devanai Achi were pending before the Commission on the 26th January 1950, the report therein not having been made by the Commission till the 26th August 1952 and the Commission had, after the 26th January 1950, no jurisdiction to complete the investigation and make their report, the whole procedure being violative of the fundamental right guaranteed to the petitioners under article 14 of the Constitution.
This position was not in terms argued before us by the learned counsel for the petitioners.
It was urged in the first instance that the case was governed by our decision in Shree, Meenakshi Mills ' case, supra, on 1265 the basis that by reason of the applications to the Commissioner of Income tax, Madras, made by the petitioners under section 8(5) of the Act for reference to the High Court on questions of law arising out of the Income tax Officer 's re assessment orders above referred to, the proceedings under Act XXX of 1947 had not become final and the petitioners were, therefore, entitled to relief on the ratio of our judgment in that case.
Reliance was placed in support of this position on the provisions of section 8(4) of the Act: "In all assessment or re assessment proceedings taken in pursuance of a direction under sub section (2), the findings recorded by the Commission on the case or on the points referred to it shall, subject to the provisions of sub sections (5) and (6), be final; but no proceedings taken in pursuance of such direction shall be a bar to the initiation of proceedings under section 34 of the Indian Income tax Act,1922 (XI of 1922)".
Sub section (5) has reference to, the application made by the assessee to the Commissioner of Income tax to refer to the High Court any question of law arising out of the assessment or re assessment orders and sub section (6) has reference to the power of the Commission either of their own motion or on the application of the person concerned or of the Central Government to correct clerical or arithmetical mistakes in their report or errors therein arising from any accidental slip or omission. . .
These provisions contained in sub sections (5) and (6), however, would not make the findings recorded by the Commission any the less final.
These findings were invested with finality subject to this that if the High Court, on reference under sub section (5), gave any opinion which would require a revision of those findings or if any clerical or arithmetical mistakes were found or errors were detected arising from accidental slip or omission within the meaning of sub section (6) which also required some alterations in the findings, these findings would be divested of their finality and would have to be revised accordingly.
The assessment or re assessment orders made by the Income 1266 tax Officers based upon those findings would also be binding on the assessees subject only to the result of the reference, if any, made to the High Court on questions of law arising out of such orders.
If this was the true position, it could not be urged that by reason of the pendency of the applications for reference to the High Court the proceedings under Act XXX of 1947 had not been concluded against the petitioners and it could not also be urged that when Act XXXIII of 1954 was enacted introducing section 34(1 A) in the Income tax Act with effect from the 19th July 1954, the R.C. Cases 516 to 518 were pending and the whole proceedings under Act XXX of 1947 against the petitioners were invalidated.
As a matter of fact the report had been made by the Commission against the petitioners as early as the 26th August 1952, the Central Government had given the directions under section 8 (2) for re assessment of the petitioners on the 16th September 1952 and the re assessment orders for all the years except the year 1942 43 had been made by the Income tax Officer against them by the 12th May 1954 which was long before the Act XXXIII of 1954 came into operation.
All these re assessments had thus become binding on the petitioners and were not affected by the mere pendency of the applications for reference to the High Court made by them to the Commissioner of Incometax, Madras, under section 8(5) of the Act.
There is also a further point to be considered in this connection and it is that whatever discriminatory procedure the petitioners were subjected to by reason of the reference of their cases by the Central Government to the Commission under section 5(1) of the Act had been completed long before the Act XXXIII of 1954 came into operation and the only further procedure which they would be subjected under the provisions of Act XXX of 1947 would be that of a reference to the High Court on questions of law arising out of the orders of re assessment if these applications were granted either by the Commissioner of Income tax, Madras, or by the High Court on further application.
In the event of such reference being 1267 made, the petitioners had the additional advantage of having their references heard by the High Court in a Bench constituted of not less than three Judges as contrasted with the normal procedure obtaining under sections 66 and 66 A of the Indian Income tax Act under which the references could be beard a Division Bench of the High Court.
Whatever was, therefore, the procedure to which the petitioners would be subjected under Act XXX of 1947, after the coming into operation of Act XXXIII of 1954 it was, instead of being prejudicial to them, really advantageous to them, and following our decisions in the cases of Syed Qasim Razvi vs The State of Hyderabad and Others(1) and Habeeh Mohamed vs The State of Hyderabad(2), we are of the opinion that the further proceedings, if any, which could be taken under the provisions of Act XXX of 1947 would not be at all discriminatory and violative of the fundamental right guaranteed under article 14 of the Constitution.
The only relief which the petitioners would have been entitled to in that event would have been one in regard to the re assessment proceedings for the year 1942 43 which were pending before the Incometax Officer by virtue of the notice under section 34 issued by him to the petitioners on the 19th March 1954.
Reliance was placed upon a decision of the Allahabad High Court reported in Gangadhar Baijnath and others vs Income tax Investigation Commission, etc.(3) in support of this position.
The learned Solicitor General did not contest this position but undertook on behalf of the Income tax authorities that they will not proceed against the petitioners for the re assessment for the year 1942 43 in pursuance of the notice under section 34 served upon them in that behalf.
This would have been the only relief to which the petitioners would have become entitled on the main contention urged by them in their petition.
The petitioners are, however, entitled to succeed on the alternative contentions which were raised by them as (1) (2) ; (3) A.I.R. 1955 All.
160 1268 the result of the conclusion which we have reached above in regard to the proceedings pending before the Commission having become discriminatory after the 26th January 1950 by reason of section 5(1) of the Act having become unconstitutional after the inauguration of the Constitution,on that date.
In the result, the petitioners will be entitled to the issue of a writ of certiorari quashing the report of the Income tax Investigation Commission dated the 29th August 1952 and the assessment orders of the Incometax Officer for the years 1940 41, 1941 42 and 1943 44 to 1948 49 as being unconstitutional, null and void, and also to the issue of a writ of prohibition against the respondents from implementing the findings of the Investigation Commission referred to above with regard to the ear 1942 43 and we do order that such writs do issue against the respondents accordingly.
The respondents will pay the petitioners ' costs of this petition.
JAGANNADHADAS J.
This petition raises the question whether section 5(1) of the Taxation on Income (Investigation Commission) Act, 1947 (Act XXX of 1947) (hereinafter referred to as the Investigation Commission Act) is unconstitutional as offending article 14 of the Constitution and has therefore become void on the coming into force of the Constitution on the 26th January, 1950.
This question was specifically left open in the two previous decisions of this Court, viz. in Suraj Mall Mohta & Co. vs A. Y. Visvanatha Sastri(1) and Shree Meenakshi Mills Ltd. vs A. V. Visvanatha Sastri(2).
Almost the identical question arose in the Travancore Appeals(3) in which judgment has just now been delivered.
The provision with which we were concerned in those appeals is section 5(1) of Travancore Act XIV of 1924 which is almost in identical terms as section 5(1) of the Investigation Commission Act.
We have held that this section of the Travancore Act did not, on the coming (1) ; (2) (3) A. Thangal Kunju Musaliar Y. Authorised Official, I. T. ; 1269 into operation of the Constitution, violate article 14 thereof and that it accordingly continued to be valid.
This result was based on the following conclusions.
(a) The expression "a person who has to a substantial extent evaded payment of taxation on income" has to be interpreted having regard to the background or the circumstances that preceded at the time the section came to be enacted and which were disclosed in the affidavit filed in this Court by the Secretary of the Investigation Commission and so interpreted the word "substantial" indicates with reasonable certainty the class of persons intended to be subjected to the drastic procedure of the Act.
(b) The selective application of the law to persons in this class cannot be considered invalid since the selection is guided by the very objective set out in section 5(1) itself (c) The fact that some persons may escape the ap plication of the law is not necessarily destructive of the efficacy of the provision.
It was also held, on a comparison with section 47 of the Travancore Act XXIII of 1121, corresponding to section 34 of the Indian Income tax Act, 1922 (XI of 1922) as it stood prior to its amendment in 1948, that the persons who fall under the class of substantial evaders of income tax within the meaning of section 5(1) of the Investigation Commission Act were not intended to be and could not have been dealt with under the provisions of section 47 of the Travancore Act XXIII of 1121 and that therefore there would be no discriminatory application of two parallel statutory provisions.
In the present case, however, the majority of the Court has taken the view that section 5(1) of the Investigation Commission Act has become unconstitutional by the date of the Constitution in comparison with section 34 of the Income tax Act as amended in 1948.
It was pointed out that section 47 of the Travancore Act XXIII of 1121 which was the same as section 34 of the Income tax Act as it stood from 1939 to 1948 did not undergo any amendment by the date of the Constitution but continued as be 1270 fore and it is said that this makes a difference.
I feel constrained, however, with the utmost respect, to hold, on a careful consideration that there is no room for making any such distinction which is relevant for the purposes if this question.
Undoubtedly it is true that section 34 of the Income tax Act as it stood prior to 1948 is more restrictive in its operation than the same section as amended in 1948.
But I am unable to see how the class falling under section 5(11) of the Investigation Commission Act is still not different from that which falls within amended section 34 of the Income tax Act.
Under section 5 (1) of the Investigation Commission Act the requirement is that the Central Government has "prima facie reasons for believing that a person has to a substantial extent evaded payment of taxation on income".
This is quite different from the criterion applicable under the amended section 34 of the Income tax Act.
In the first place, section 34 of the Income tax Act relates to cases of evasion however small, while section 5(1) of the Investigation Commission Act relates only to large scale evaders comprised within the term "substantial evasion".
Secondly, the belief of the Government as to the existence of evasion need not satisfy any rigorous standard because it need not be based on any material directly connected with the suspected evasion.
It is enough if it is a "prima facie reason to believe" which having regard to the scheme of the Act would cover cases in which tell tale appearances may call for probing and effective investigation.
This may well be no more than "well grounded reason to suspect".
This is quite different from the standard of "reason to believe" required of the Income tax Officer under section 34 of the Income tax Act.
"Prima facie reason to believe" and "reason to believe" are as different from each other as "prima facie proof" and "proof".
Therefore "reason to believe" is something definitely higher than "reason to suspect".
Indeed it is difficult to compare the standards required under the two sections.
Though no doubt the power exercisable by the Central Government under,, section 5(1) of the 1271 Investigation Commission Act and that exercisable by the Income tax Officer under section 34 of the Income tax Act have this in common that both have reference to "reason to believe", the standard of belief and the basis of belief is expressed in such different terminology that it is not possible to compare the two and equate the two as being the same.
Nor indeed can it be posited that every case of the class comprised in section 5(1) of the Investigation Commis sion Act must necessarily fall within section 34 of the Income tax Act.
Apart, however, from any question as to the comparison between the two sections and as to the standards and basis of the belief required, once it is accepted (as has been done in the Travancore Appeals(1) ) that substantial evasion is a definite legal standard determinative of a distinct class, it is clear that the class comprised thereunder is not identical with the class comprised under section 34 of the, Income tax Act.
In the alternative, it is a select group of a wider class.
If the smaller grouping is on a rational basis relevant to the policy of the Act, it would form a distinct class by itself for purposes of article 14.
It is necessary at this stage to bear in mind the entire scope of the Investigation Commission Act in order to determine what the class is which is contemplated and covered by it.
Five main features may be noticed of the scheme of the Investigation Commission Act.
(1) It relates only to those in respect of whom the Government have ".prima facie reason to believe that there has been substantial evasion of tax".
(2) The belief does not result straightaway in proceedings for reassessment (unlike under section 34 of the Income tax Act) but the question of reassessment (i.e., reopening of the assessment) depends on investigation into the correctness of that belief.
The first step in the scheme is section 5(2) which contemplates that the investigation may result in substantial (1) A. Thangal Kunju Musaliar vs Authorised official I.T.; , 1272 evasion not being revealed.
If so the further proceedings would be dropped on a report by the Commission to that effect.
Hence no reassessment starts in such a case.
(3) An effective procedure for investigation is provided to bring out all the necessary and relevant facts and material to substantiate the evasion and quantum thereof (4) Proceedings for reassessment are taken only on the emergence of such material and on a report to that effect and that too on a further direction by the Government as to the exact nature of the proceedings to be taken and as to the exact period to be covered falling within the limits of 31st December, 1938 and 1st September, 1948.
(See sections 8(2) and 5(3) of the Investigation Commission Act).
(5) A reference could be made by the Government to the Commission only up to a specified date line statutorily determined.
If all these facts which are essential part of the scheme under the Investigation Commission Act are borne in mind it becomes apparent that the class contemplated under section 5(1) of the Investigation Commission Act for reassessment is totally different from that which could be got at either under section 34 of the Income tax Act as it stood between 1939 and 1948 or as it stands since 1948.
One has only to compare the provisions in the Income tax Act relating to the means by which the normal income tax authorities can get information or obtain material which might lead to a reopening of the assessment under section 34 of the Income tax Act to appreciate that the class contemplated under section 5(1) of the Investigation Commission Act cannot be the same.
The only provisions in the income tax law for the purpose are sections 37, 38 and 39 of the Incometax Act.
The primary scheme of the Income tax Act is that the basic materials for the assessment are the returns and the accounts or other evidence to be furnished by the assessee himself (sections 22 and 23 of the Income tax Act) or the checking material that may be available from the returns and the accounts 1273 of other assessees who have transactions with this assessee.
It may also consist of information received from other public authorities, etc., as well as the examination of persons appearing to have interconnected transactions.
The Income tax Officer has not the power to probe into suspicious features or obtain and seize material in verification or support thereof.
All that normally he can do, where there is room for grave suspicion is to reject the accounts and make his assessment on the basis of "best judgment" ,(see section 23(4) of the Income tax Act) which cannot be sustained if it is a wild guess based on mere suspicion.
Now, the whole scheme of the Investigation Commission Act is obviously inspired by the realisation that the normal machinery available to the Income tax Officer for the reassessment of large scale suppressed income is not adequate.
All the same, the Legislature realising that drastic investigation into the affairs of assessees on seemingly well grounded suspicions might result in serious encroachment of personal liberties, has not chosen to vest the Income tax Officer with any such powers of investigation and has confined this drastic procedure to evasion of income during the period commencing 1st January, 1939 to the 1st September, 1948 (vide sections 8(2) and 5(3) of the Investigation Commission Act) and limited the same to cases of substantial evasion.
In considering, therefore, what is the ambit of the class contemplated by section 5(1) of the Investigation Commission Act, it is necessary to remember these features of the scheme.
It would follow that the class comprised in section 5 (1) is the class of substantial evaders whose evasion appeared 'to the Government to call for a high powered machinery for effective investigation, not available to an ordinary Income tax Officer functioning under section 34 of the Income tax Act.
So understood it is quite clear, to my mind, that section 5(1) of the Investigation Commission Act relates to a class totally different from what can be brought in under section 34 of the Income tax Act as it, either stood before, or stands after, 1948.
That this class was 1274 really contemplated to be distinct is also indicated by the following provision of section 8(4) of the Investigation Commission Act.
"No proceedings taken in pursuance of such direction (direction made under section 8(2) for reassessment) shall be a bar to the initiation of proceedings under section 34 of the Indian Income tax Act".
This seems to indicate the possibility of concurrent assessment proceedings as against any particular assessee under section 34 of the Income tax Act as also under section 8(2) of the Investigation Commission Act.
The idea appears to be that section 34 proceedings may go on in respect of such income of the assessee the escaping of which comes to the knowledge of the officer by the normal procedure, and that the reassessment under the Investigation Commission Act is expected to be in respect of such evaded income which is to be discovered only as a result of regular and effective investigation.
It has been suggested in the course of arguments that no objection could be taken to Government taking only sufficient powers for investigation in appropriate cases, without any question arising as to discrimination or classification but that this cannot justify discriminatory procedure as regards actual reassessment.
That raises a different aspect of the matter which will be presently dealt with.
Assuming however that substantial evaders contemplated under section 5(1) of the Investigation Commission Act fall also within the larger class of evaders who fall within the class contemplated by section 34 of the Income tax Act as it stands, what follows? The selective group under section 5(1) of the Investigation Commission Act is determined with reference to the criteria (1) that they are substantial evaders of income tax, and (2) that they are assessees within the period 1939 to 1948 which is well known to be the period of war profits and black marketing and in respect of whom the Government get information before 1st September, 1948, justifying investigation.
This is by itself a well defined class and the 1275 classification has a reasonable relation to the object to be achieved, viz., the catching up of the escaped black market war profits, for assessment.
It is to be assumed that the Government would have made their references to the Investigation Commission of all the cases of persons about whom they have the requisite belief or information before 1st September, 1948.
If there are any war profiteers of that period against whom there was no information by then and against whom information becomes available later, it will be probably found that the information so received is not such as to enable the ordinary Income tax Officer to rope him in.
It may turn out that he has evaded once for all.
But even if, in some cases, the Incometax Officer could by the ordinary process get the escaped income of such assessees for reassessment, that by itself is no ground for thinking that a classification of substantial war profiteers who have evaded income tax and against whom there was information up to a specified date is not in itself a valid classification.
It is well recognised that a classification otherwise reasonable is not invalid by reason of the classi fication not being comprehensive.
In Joseph Patsone vs Commonwealth of Pennsylvania(1) the Supreme Court of the United States of America laid down that "a state may classify with reference to the evil to be prevented, and that if the class discriminated against is or reasonably might be considered to define those from whom the evil mainly is to be feared, it properly may be picked out.
A. lack of abstract symmetry does not matter.
The question is a practical one dependent upon experience. . .
It is not enough to invalidate the law that others may do the same thing and go unpunished, if, as a matter of fact, it is found that the danger is characteristic of the class named".
Again in West Coast Hotel Co. vs Ernest Parrish(2) the same Court stated "This Court has frequently held that the legisla (1) , 144; ; , 543.
(2) ; , 400: ; , 718.
161 1276 tive authority, acting within its proper field, is not bound to extend it 's regulation to all cases which it might possibly reach.
The legislature 'is free to recognize degrees of harm and it may confine its restrictions to those classes of cases where the need is deemed to be clearest '.
If 'the law presumably hits the evil where it is most felt, it is not to be overthrown because there are other instances to which it might have been applied '.
There is no 'doctrinaire requirement ' that the legislation should be couched in all embracing terms".
It is substantially the above view of permissible classification for the purposes of article 14 that has been recognised by this Court in Sakhawat Ali vs The State of Orissa(1) where this Court laid down as follows: "Legislation enacted for the achievement of a particular object or purpose need not be all embracing.
It is for the legislature to determine what categories it would embrace within the scope of legislation and merely because certain categories which would stand on the same footing as those which are covered by the legislation are left out would not render legislation which has been enacted in any manner discriminatory and violative of the fundamental right guaranteed by article 14 of the Constitution".
Even if therefore section 34 of the Income tax Act as amended in 1948 is wide enough in its ambit to catch up any and every case which could be dealt with under section 5(1) of the Investigation Commission Act, it is still a distinctive and selective group out of a larger group and is a class by itself determined with reference to the criteria above indicated.
It is no objection to the constitutionality of that classification that some out of them who may have been left out may be taken up later for being proceeded against under the amended section 34 of the Income tax Act.
The class falling within the scope of the Investigation Commission Act is a class closed with reference to the date line, 1st September, 1948, and it appears to me difficult to envisage the possibility of any member (1) , 1010.
1277 of that class being available to be dealt with by the Income tax Officer under the amended section 34 of the Income tax Act which came into operation from after that date line except by imputing mala fides to the Government in the selective application of section 5(1) of the Investigation Commission Act.
It is true that the date line was changed by legislature from 30th June, 1948 to 1st September, 1948.
But it was an essential part of the whole scheme of the legislation that there was to be no reference beyond a dateline to be fixed by the legislature, so as to limit the application of the Act.
Hence it is also an attribute of the class contemplated by the Act.
I am aware that there are observations in Suraj Mall Mohta 's case(1) and Shree Meenakshi Mills ' case(2) which appear not to have accepted the idea of the class being with reference to a date line.
But the actual decision in Suraj Mall Mohta 's case(1) was based on the distinction between section 5(4) and section 5(1) of the Investigation Commission Act and the consequential parallelism between the class falling under section 5(4), of the Investigation Commission Act and section 34(1) of the Income tax Act.
In Meenakshi Mills ' case(2) the decision was rested on the parallelism between section 5(1) of the Investigation Commission Act and section 34(1) of the Income tax Act as amended in 1954.
The decision in neither of these cases was based on any final determination of the scope of the class contemplated by section 5(1) of the Investigation Commission Act.
The actual decisions in those cases are of course binding but not necessarily all the reasoning therein.
Besides, with great respect, the relevancy of the date line in section 5(1) as having been related to the then contemplated date for the lapse, in 1948, of the controls under the Essential Supplies (Temporary Powers) Act, 1946 (Act XXIV of 1946) was not noticed.
The principle of Sakhawat Alis case(3) was not also by then laid down by this Court (that case having been decided later in November, 1954).
(1) ; (2) (3) , 1010, 1278 Further, even if the date line is not an essential part of the classification under section 5(1) of the Investigation Commission Act, the other four essential features of the scheme of the class contemplated in section 5(1) as set out by me above are by themselves enough to constitute a complete and rational differentiation of the class comprised under section 5(1) of the Investigation Commission Act from that under section 34(1) of the Income tax Act as amended in 1948.
If on such a classification some cases of substantial evasion happen to have escaped the machinery of the Investigation Commission Act, that would not invalidate the classification on the principle accepted in Sakhawat Ali 's case(1).
I am in any case unable to visualise the reasonable possibility of any person falling within the category contemplated under section 5(1) of the Investigation Commission Act, being taken up for reassessment under section 34 of the Income tax Act as amended in 1948 and consequently of two parallel reassessment proceedings relating to such persons remaining pending by the 26th January, 1950, so as to bring about discriminatory operation between them and to render section 5(1) of the Investigation Commission Act ultra Vires in respect of such pending matters.
It appears to me, therefore, that section 5(1) of the Investigation Commission Act and the other sections following thereupon cannot be declared unconstitutional on the ground of absence of reasonable classification.
One other matter has been relied upon as being relevant.
It was pointed out that the amendment of section 34 of the Income tax Act in 1948 was simultaneous with the amendment of section 5(3) of the Investigation Commission Act, extending the time for a reference under section 5(1) by the Central Government up to the 1st September, 1948.
It has been suggested that this clearly shows the intention of the legislature to the effect that after the 1st September, 1948, all cases which might have fallen under section 5(1) of the Investigation Commission Act are left to be dealt with under section 34 of the (1) , 1010.
1279 Act as amended.
It appears to me with respect that there is no basis for this inference.
On the other hand it appears to me (if what I have said above as being the scheme of the Investigation Commission Act is correct) that the legislature deliberately limited the application of the Investigation Commission Act by a date line, realising the seriousness of its continued operation.
It did not want to perpetuate the drastic provisions thereof to any new cases in view of the fact that the official war period ended and controls had been lessened by the above date line, if not totally abolished.
It may be mentioned that by proclamation, the war situation was formally terminated as from the 1st April, 1946, and that the Control Orders under the Defence of India Act ceased to be operative from the 1st October, 1946, and that the Essential Supplies (Temporary Powers) Act, 1946, was passed in substitution thereof This 1946 Act was intended originally to be in operation only until March, 1948.
(See Joylal Agarwala vs The State(1).
The date line of 1st September, 1948, in section 5(1) seems to be related to this situation.
It appears to me that with the full consciousness that any new cases of the same category, if any, are not likely to be caught up under the normal procedure, the legislature merely purported by virtue of the amended section 34 of the Incometax Act to remove certain lacuna in the normal machinery, which had been noticed and reported upon by the income tax administration and by the Investigation Commission, with reference to section 34 as it stood between 1939 to 1948.
(See paragraph 22 of the General Report of the Income tax Investigation Commission issued in 1948 making its recommendations for the improvement of the machinery at page 8 of that report and Appendix A thereto which would show that amendment of section 34 was not connected with the extension of the date for making references under section 5(1) of the Investigation Commission Act).
I am unable, therefore, to assume that the simultaneous enactment of section 34 of the Incometax Act and the amendment of Investigation Com (1) ; , 130.
1280 mission Act in 1948 have a bearing on the question at issue.
Undoubtedly the re assessment proceedings under the Investigation Commission Act appear to deprive the assessee of certain procedural advantages.
He is deprived of an appeal on facts to the Appellate Assistant Commissioner and to the Income, tax Appellate Tribunal.
He is given the right of appeal only on points of law by means of a reference to the High Court.
But such reference is to be heard by a Bench of not less than three Judges.
Now, once there is a valid classification the nature and extent of the actual discrimination which results under the scheme of legislation relating thereto is largely a question of policy, which the courts have nothing to do with, except possibly where the discrimination has no reasonable relation to the policy and purpose of the classification.
The policy underlying the Investigation Commission Act is, as already stated, to catch up for reassessment large scale evasions of income tax of the war period.
It is obvious that having regard to the magnitude of the interests that would be in volved therein, it was quite legitimate that the matters concerned therewith, should be entrusted to a highly qualified and high powered authority, and not to the ordinary machinery.
No grievance can be made if the legislature thought fit not to entrust the responsibility for fact finding to the normal machinery involving lesser qualifications and experience.
It is true that the investigation might have been placed in the bands of one authority and the fact finding on the material so gathered in the hands of another authority or that at least there might have been provided one appeal on facts also to a high placed authority like the High Court.
It may also appear somewhat disquieting that the same body is invested both with the power of investigation and the power of fact finding and that there is no appeal provided as against its findings on facts.
But these are all matters of policy and cannot be said to be either unreasonable or unrelated to the purpose and policy of the classification.
Investigation is a com 1281 prehensive term and it will be seen that the investigation procedure itself under the Act is in two stages, one before the authorised official at which the assessee is not entitled to be represented and the other before the Investigation Commission at which the assessee is entitled to be represented by a pleader, a registered accountant or an authorised employee (vide section 7(3) and the proviso thereto).
These two stages may be taken roughly, though not necessarily, to indicate two parts of the investigation, (1) the process of probing into the evasion and collecting the material in support of it, and (2) arriving at conclusions with reference to the material so collected and presented.
The latter is the judicial part at which the Commission is directed under section 7(2) to follow the principles of the Indian Evidence Act and to give the assessee a reasonable opportunity of rebutting evidence and generally to act in accordance with the principles of natural justice.
The procedure relating to this stage is assimilated to a judicial enquiry in a larger measure than is the procedure before the Income tax Officer or the Appellate Assistant Commissioner, in respect of whose proceedings there is no provision that they must follow as far as practicable the principles of the Indian Evidence Act, (See section 23 of the Income tax Act).
It is wellsettled that the assessment proceedings by the Income tax Officer under section 23 of the Incometax Act and hence also under section 34 therefore not regulated by the technical standards of evidence though of course they cannot be based on caprice or suspicion.
It would, therefore, appear that according to the scheme of the Investigation Commission Act, the judicial part of it approximates much more to judicial standards than the assessment proceedings by the income tax authorities and that though in theory there is a combination of the func tions of an investigator and the judge in the Investigation Commission, in normal practice it is likely to be kept distinct by the appointment of an authorised official to conduct the first portion.
It is also to be remembered that the combination of the investigator 1282 and judge is inherent even in the normal income tax machinery where the Income tax Officer and the Assistant Income tax Commissioner are in the nature of Judges interested in their own cause.
It has been suggested that there is something opposed to ordinary canons of judicial procedure or natural justice in the matter of making relevant documents available to the assesee in the proceedings before the Investigation Commission.
It appears to me, with respect, that this is based on a misapprehension.
It is true that section 7(4) of the Investigation Commission Act says: "No person shall be entitled to inspect, call for, or obtain copies of, any documents, statement or papers or materials furnished to, obtained by or produced before the Commission or any authorised official in any proceedings under this Act; but the Commission, and after the Commission has ceased to exist ,such authority as the Central Government may in this behalf appoint, may, in its discretion, allow such inspection and furnish such copies to any person", and section 6(8) of the Investigation Commission Act says: "All material gathered by the Commission or the authorised official and materials accompanying the reference under sub section (1) of section 5 may be brought on record at such stage as the Commission may think fit".
But these provisions have to be read subject to the proviso to section 7(4) and to the opening part of section 7(2) of the Investigation Commission Act.
The proviso to section 7(4) is as follows: "Provided that, for the purpose of enabling the person whose case or points in whose case is or are being investigated to rebut any evidence brought on the record against him, he shall, on application made in this behalf and on payment of such fees as may be prescribed by Rules made under this Act, be furnished with certified copies of documents, statements, papers and materials brought on the record by the Commission".
Further, the opening part of section 7(2) says: 1283 "In making an investigation under clause (b) of section 3, the Commission shall act in accordance with the principles of natural justice, shall follow as far as practicable the principles of the , and shall give the person whose case is being investigated a reasonable opportunity of rebutting any evidence adduced against him. . .
The above provisions preclude the possibility of the Commission pushing in into the final record on which the report is to be based any ex parte material to which the assessee has had no access.
These also preclude the possibility of depriving him of the use of any relevant material in the Commission 's possession which the assessee may call for.
All that section 7(4) implies is that the assessee is not entitled to a roving inspection of the material gathered by the Investigation Commission in the course of investigation, which may relate to the affairs of various other persons.
Such a provision is not opposed to natural justice for even in the matter of criminal judicial trials the accused is not entitled to a roving inspection of the material gathered by the police during investigation.
(I may notice, with very great respect, that the observation in Suraj Mall Mohta 's case(1) at page 464 that "the proceedings before the Income tax Officer are judicial proceedings and (that therefore) all the incidents of such judicial proceedings have to be observed, i.e., in other words, the assessee should be entitled to inspect the record and all relevant documents" seems to have failed to note that section 37(1) specifically limits the judicial character of the proceedings to the purposes covered by sections 193, 196 and 228 of the Indian Penal Code and also that the said section vests in the Income tax authorities, the powers of a court only for specified purposes).
If, therefore ' in view of all these circumstances the Legislature thought fit to entrust the combined responsibility for investigation and fact finding to a single high powered and highly qualified body consisting of three members of whom one is or has been a Judge of the High Court and made their findings of (1) ; 162 162 1284 fact final, without providing for access to the regular heirarchy of appeals to the Assistant Commissioner and a Bench of two members of the Income tax Appellate Tribunal, there appears to be nothing unreasonable therein.
On the other hand there are counter,balancing features with reference to the composition of the Commission and the statutory standards by which the judicial part of its proceedings have to be governed.
I am, therefore, unable to feel that the discrimination brought about in the procedure relating to assessment calls for any such adverse reaction as to be a reasonable basis for founding thereon an inference of unconstitutional inequality.
However, as I have already said above, this appears to be ultimately a question of policy.
Once the classification is found to be justified and reasonably related to the clearly underlying policy of the Investigation Commission Act, I am unable to feel that section 5(1) of the Investigation Commission Act can be struck down as ultra vires in relation to its supposed concurrent operation with section 34 of the Income tax Act as amended in 1948.
I hold, therefore, that section 5(1) of the Investigation Commission Act was not hit by article 14 of the Constitution notwithstanding amendment of section 34 of the Income tax Act in 1948 and that it continued to be valid.
On all other points urged on behalf of the petitioners, I agree with the view expressed in the judgment delivered by my learned brother Justice Bhagwati on behalf of the majority of the Court.
It is therefore, unnecessary for me to deal with them.
In the result, in my opinion, this petition must be dismissed with costs except as regards the incomplete reassessment for 1942 43 for which the learned Solicitor General has given an undertaking not to proceed with it under the provisions of the Investigation Commission Act, as stated in the judgment of my learned brother.
ORDER BY THE COURT: In accordance with the Judgment of the majority the petition is allowed and it is ordered that a writ of certiorari do issue quashing the 1285 report of the Income tax Investigation Commission dated the 26th August 1952 and the assessment orders of the Income Tax Officer for the years 1940 41, 1941 42 and 1943 44 to 1948 49, and that a writ of prohibition do issue against the respondents restraining them from implementing the findings of the investigation Commission with regard to the year 1942 43.
The respondents do pay the petitioners ' costs of their petition.
| IN-Abs | Held (Per section R. DAs, ACTING C.J., VIVIAN BOSE, BHAGWATI and B.P. SINHA, JJ.
JAGANNADHADAS J., dissenting) that section 5(1) of the Taxation on Income (investigation Commission) Act, 1947 (Act XXX of 1947) is ultra vires the Constitution as it is discriminatory and violative of the fundamental right guaranteed by article 14 of the Constitution by reason of two amendments which were made in section 34 of the Indian Income Tax Act, 1922 (Act XI of 1922) one in 1948 by the enactment of the Income Tax and Business Profits Tax 1248 (Amendment) Act, 1948 (Act XLVIII of 1948) and the other in 1954 by the enactment of the Indian Income Tax (Amendment) Act, 1954 (Act XXXIII of 1954).
If the provisions of section 34(1) of the Indian Income tax Act as it stood before its amendment by Act XLVIII of 1948 had been the only provisions to be considered, the Court would have reached the same conclusion as it did in A. Thangal Kunju Musaliar vs M. Venkitachalam Potti & Anr., ([1955] 2 S.C.R. 1196), but the position was materially affected by reason of two amendments made in that section by two Acts, one in 1948 and the other in 1954.
Amended section 34(1) of the Indian Income tax Act was substantially different from the old section 34(1) which was in operation up to the 8th September 1948.
The words "if in consequence of definite information which has come into his possession the lncome tax.
Officer discovers that income, profits or gains chargeable to income tax have escaped assessment in any year. . . which appear in the old section were substituted by the words "if the Income tax Officer has reason to believe that by reason of the omission or failure on the part of the assessee. . income, profits or gains chargeable to income tax have escaped The requisites of (i)"definite" information (ii) which had " come into" possession of the Income tax Officer and in consequence of which (iii) he "discovers" that income, profits or gains chargeable to income tax bad escaped assessment, were no longer necessary and the only thing which was required to enable the Income tax Officer to take proceedings under section 34(1) as amended was that he should have reason to believe that by reason of the omission or failure on the part of the assesses income, profits or gains chargeable to income tax had escaped assessment for a particular year.
Whereas before this amended section 34(1) came to be substituted for the old section 34(1) there was no com parison between the provisions of section 5(1) of Act XXX of 1947 and section 34(1) of the Indian Income tax Act as it then stood, the provisions of section 34(1) as amended after the 8th September 1948 could stand comparison with the provisions of section 5(1) of Act XXX of 1947 and the cases which were covered by section 5(1) of Act XXX of 1947 could be dealt with under the procedure laid down in section 34(1) of the Indian Income tax Act.
After the 8th September 1948, therefore, even in the case of substantial evaders of income tax who were a distinct class by themselves intended to be treated by the drastic and summary procedure laid down by Act XXX of 1947, some cases that were already referred by the Central Government for investigation by the Commission could be dealt with under that Act and other cases, though falling within the same class or category, could be dealt with under the procedure prescribed in the amended section 34(1) of the Indian Income tax Act.
The persons who were thus dealt with under section 34(1) of the Indian Income tax Act had available to them the whole procedure laid down in that Act including the right to inspect documents and the right to question the findings of fact arrived at 1249 by the Income tax Officer by the procedure of appeal and revision and ultimate scrutiny by the Income tax Appellate Tribunal which was denied to those persons whose cases had been referred by the Central Government for investigation by the Commission under s.5(1) of Act XXX of 1947.
Different persons, though falling under the same class or category of substantial evaders of income tax, would, therefore, be subject to different procedures, one a summary and drastic procedure and the other a normal procedure which gave to the assessees various rights which were denied to those who were specially treated under the procedure prescribed in Act XXX of 1947.
Per JAGANNADHADAS J.
The class of persons falling under section 5(1) of the Taxation on Income (Investigation Commission) Act, 1947 (Act XXX of 1947) is totally different from that which falls within amended section 34 of the Indian Income Tax Act 1922 (Act XI of 1922) and therefore section 5(1) of Act XXX of 1947 is not unconstitutional as offending article 14 of the Constitution.
Suraj Mall Mohta vs A. V. Visvanatha Sasttrii and Another ([1955] 1 S.C.R. 448), Shree Meenakshi Mills Ltd. vs A. V. Visvanatha Sastri and Another ([1955] 1 S.C.R. 787), A. Thangal Kunju Musaliar vs M. Venkitachalam Potti & Anr.
and M. Venkitachalam Potti & Anr.
vs A. Thangal Kunju Musaliar, ([1955] 2 S.C.R. 1196), Syed Qasim Bazvi vs The State of Hyderabad and Others ([1953] S.C.R. 581), Habeeb Mohamed vs The State of Hyderabad ([1953] S.C.R. 661) and Gangadhar Baijnath and others vs Income tax Investigation Commission, etc.
(A.I.R. 1955 All. 515), referred to.
|
titions Nos.
4021 4022, 4024 4025, 4027 4032, 4037, 4040 4041, 4045 4047, 4049 4075, 4078 4092, 4099, 4103 4111, 4120 4126, 4129 4140, 4142 4143, 4155 4157, 4184, 4187, 4188 4190, 4192, 4202, 4203, 4205, 4206, 4212, 4214, 4217, 4223, 4231, 4234 4235, 4245, 4250, 4252, 4300, 4308 of 1978 and 4226 of 1978.
(Under article 32 of the Constitution of India.) AND Writ Petitions Nos. 966 971, 3643 3650, 3884 3896, 3900 3921, 3965, 3975 3990, 4001 4020, 4034, 4100, 4127 to 4128, 4186, 4193, 4208, 4271, of 1978 and 3968 3971, 4191, 4221 and 4272 4275 of 1978.
(Under article 32 of the Constitution of India.
AND Writ petitions: 4154, 4209, 4242, 4243, 4247, 4248, 4253, 4254, 4310 and 4314 of 1978.
(Under article 32 of the Constitution of India.) A. K. Sen and Mrs. Rani Chhabra in W.P. 4021/78 for the Petitioners.
Yogeshwar Parshad and Mrs. Rani Chhabra in W.P. Nos.
4022, 4024, 4025, 4027 4032, 4037, 4040, 4041, 4045, 4047, 4046, 4064 4067, 4078, 4079, 4092, 4142, 4143, 4187, 4090, 4092 and 4231 of 1978.
V. C. Mahajan and Mrs. Urmila Sirur for the Petitioners in W.P. 4049 63, 4080 91, 4108 to 4111/78.
K K. Mohan, section K. Sabharwal, Pramod Swarup and Shreepal Singh for the Petns.
in W.P. Nos. 103, 4140, 4184, 4202 and 4234 of 1978.
126 O. P. Sharma, N. N. Sharma, A. K. Srivastava, Amlan Ghosh and P. K. Ghosh.
in W.P. Nos.
4190 92 and 4226 of 1978.
O. P. Sharma for the Petitioner in W.P. 4226/78.
K. B. Rohtgi for the Petitioners in W.P. 3975 76 and 4274 75/ 78.
O. P. Singh in W.P. 966 71 of 1978 for the Petitioners.
A. L. Trehan for the Petitioner in W.P. 4100/78.
section K. Sabharwal for the Petitioner in W.P. 4214/78.
M. Qamaruddin for the petitioner in W.P. 4193 of 1978.
R. K. Jain, K. K. Mohan and Rajiv Dutt, L. R. Singh for the Petitioners in W.P. 4271 73/78.
section N. Kacker, Sol.
Genl., O. P. Rana for the State of U.P. Soli J. Sorabjee Addl.
of India and Hardev Singh for the State of Punjab, J. D. Jain and B. R. Kapoor in W.P. Nos.
4242 4244, 4247 4228, 4209 and 4308 of 1978.
B. R. Kapoor and section K. Sabharwal for the Petitioners in W.P. 4150 4254/78.
M. P. Jha for the Petitioner in W.P. 4252/78.
section K. Sabharwal for the Petitioner in W.P. 4245, 4253 and 4310/78.
Shreepal Singh for the Petitioners in W.P. 4235/78.
Hardev Singh on behalf of R. N. Sachthey for the State of Punjab.
The Judgment of the Court was delivered by KRISHNA IYER, J.
What are we about? A raging rain of writ petitions by hundreds of merchants of intoxicants hit by a recently amended rule declaring a break of two 'dry ' days in every 'wet ' week for licensed liquor shops and other institutions of inebriation in the private sector, puts in issue the constitutionality of section 59(f)(v) and Rule 37 of the Punjab Excise Act and Liquor Licence (Second Amendment) Rules, (hereinafter, for short, the Act and the Rules).
The tragic irony of the legal plea is that Article 14 and 19 of the very Constitution, which, in Article 47, makes it a fundamental obligation of the State to bring about prohibition of intoxicating drinks, is pressed into service to thwart the State 's half hearted prohibitionist gesture.
Of course, it is on the cards that the end may be good but the means may be bad, constitutionally speaking.
And there is a mystique about legalese beyond the layman 's ken ! 127 To set the record straight, we must state, right here, that no frontal attack is made on the power of the State to regulate any trade (even a trade where the turnover turns on tempting the customer to take reeling rolling trips into the realm of the jocose, belliocose, lachrymore and comatose).
Resort was made to a flanking strategy of anathematising the statutory regulatory power in section 59(f)v) and its offspring, the amended rule interdicting sales of tipay ecstasy on Tuesdays and Fridays, as too naked, unguided and arcane and, resultantly, too arbitrary and unreasonable to comport with articles 14 and 19.
Our response at the first blush was this.
Were such a plea valid, what a large communication exists between lawyer 's law and judicial justice on the one hand and life 's reality and sobriety on the other, unless there be something occultly unconstitutional in the impugned Section and Rule below the visibility zone of men of ordinary comprehension.
We here recall the principle declared before the American Bar Association by a distinguished Federal. .
Judge William Howard Taft in 1895: "If the law is but the essence of common sense, the protests of many average. men may evidence a defect in a legal conclusion though based on the nicest legal reasoning and profoundest learning.
" The Facts The Punjab Excise Act, 1914, contemplates grant of licences, inter alia, for trading in (Indian) foreign and country liquor.
There are various conditions attached to the licences which are of a regulatory and fiscal character.
The petitioners are licence holders and have, on deposit of heavy licence fee, been permitted by the State to vend liquor.
The conditions of the licences include restrictions of various types, including obligation not to sell on certain days and during certain hours.
Under the former rule 37 Tuesday upto 2 p.m. was prohibited for sale; so also the seventh day of the month.
The licences were granted subject to rules framed under the Act and Section 59 is one of the provisions empowering rule making.
Rule 37 was amended by a notification whereby, in the place of Tuesdays upto 2 p.m. plus the 7th day of every month, Tuesdays and Fridays in every week were substituted, as days when liquor vending was prohibited.
Under the modified rules a consequential reduction of the licence fee from Rs. 12,000/ to Rs. 10,000 was also made, probably to compensate for the marginal loss caused by the two day closure.
Aggrieved by this amendment the petitioners moved this 128 Court challenging its vires as well as the constitutionality of section 59(f)(v) which is the source of power to make rule 37.
If the Section fails the rule must fall, since the stream cannot rise higher that the source.
Various contentions based on article 19(g) and (6) and article 14 were urged and stay of operation of the new rule was granted by this Court.
We will presently examine the tenability of the argument and the alleged vice of the provisions; and in doing so we adopt, as counsel desired, a policy of non alignment on the morality of drinking since law and morals interact and yet are autonomous; but, equally clearly, we inform ourselves of the plural 'pathology ' implicit in untrammelled trading in alcohol.
He who would be a sound lawyer, Andrea Alciati, that 16th century Italian humanist, jurist, long ago stressed, should not limit himself to the letter of the text or the narrow study of law but should devote himself also to history, sociology, philology, politics, economics, nostics and other allied sciences, if he is to be a jurist priest in the service of justice or legal engineer of social justice.(1) This is our perspective because, while the forensic problem is constitutional, the Constitution itself is a human document.
The integral yoga of law and life once underlined, the stage is set to unfold the relevant facts and focus on the precise contentions.
Several counsel have made separate submissions hut the basic note is the same with minor variations in emphasis.
Why drastically regulate the drink trade ? the Social rationale on Brandies brief Anywhere on our human planet the sober imperative of moderating the consumption of inebriating methane substances and manacling liquor business towards that end, will meet with axiomatic acceptance.
Medical, criminological and sociological testimony on a cosmic scale bears out the tragic miscellany of traumatic consequences of, shattered health and broken homes, of crime escalation with alcohol as the hidden villain or aggressively promotional anti hero, of psychic breakdowns, insane cravings and efficiency impairment, of pathetic descent to doom sans sense, sans shame, sans everything, and host of other disasters individuals, familial, genetic and societal.(2) We need hot have dilated further on the deleterious impost of unchecked alcohol intake on consumers and communities but Shri Mahajan advocated regulation as valid with the cute rider that even (1) Encyclopaedia of the Social Sciences, Vol.
J ll p. 618.
(2) Ibid p. 619 27.
129 water intake, if immoderate, may affect health and so regulation of liquor trade may not be valid, if more drastic than for other edibles.
The sequitur he argued for was that the two day ban on liquor licensees was unreasonable under article 19(g) read with article 19(6).
He also branded the power to restrict the days and hours of sale of liquor without specification of guidelines as arbitrary and scouted the submission of the Addl.
Solicitor General that the noxious nature of alcohol and the notorious fall out from gentle bibbing at the beginning on to deadly addiction at the end was inherent guideline to salvage the provision from constitutional casualty.
Innocently the equate alcohol with aqua is an exercise ill intoxication and straining judicial credibility to absurdity.
We proceed to explain why alcohol business is dangerous and its very injurious character and mischief potential legitimate active policing of the trade by any welfare State even absent article 47.
The alcoholics will chime in with A.E. Houseman(1): ' "And malt does more than Milton can to justify God 's ways to man.
But the wisdom of the ages oozes through Thomas Bacon who wrote: "For when the wine is in, the wit is out." Dr. Walter Reckless, a criminologist of international repute who had worked in India for years has in "The Crime Problem" rightly stressed "Of all the problems in human society, there is probably none which is as closely related to criminal behaviour as is drunkenness.
It is hard to say whether this close relation ship is a chemical one, a psychological one, or a situational one. ' Several different levels of relationship between ingestion of alcohol and behaviour apparently exist.
A recent statement by the National Council on Crime and Delinquency quite succinctly describes the effect of alcohol on behaviour: Alcohol acts as a depressant; it inhibits self control before it curtails the ability to act; and an individual 's personality and related social and cultural factors assert themselves during drunken behaviour .
Although its dangers are not commonly understood or accepted by the public, ethyl alcohol can have perhaps the most serious con sequences of any mind and body altering drug.
It causes (1) Makers of Modern world by Louis Untermeyer p. 275.
(2) The Crime Problem (Fifth Edition) Walter C. Reckle Page 115, 116 & 117.
130 addiction in chronic alcoholics, who suffer consequences just as serious, if not more serious than opiate addicts.
It is by far the most dangerous and the most widely used of any drug." (emphasis added).
The President 's Commission on Law Enforcement and Administration of Justice made the following pertinent observation: The figures show that crimes of physical violence are associated with intoxicated persons.
Thus the closest relationship between intoxication and criminal behaviour (except for public intoxication) has been established for criminal categories involving assaultive behaviour.
This relationship is especially high for lower class Negroes and whites.
More than likely, aggression in these groups is weakly controlled and the drinking of alcoholic beverages serves as a triggering mechanism for the external release of aggression.
There are certain types of key situations located in lower class life in which alcohol is a major factor in triggering assaultive behaviour.
A frequent locale is the lower class travern which is an important social institution for the class group.
Assaultive episodes are triggered during the drinking situation by quarrels that center around defaming personal honor, threats to masculinity, and questions about one 's birth legitimacy.
Personal quarrels between husband and wife, especially after the husband 's drinking, frequently result in assaultive episodes, in the lower lower class family.", The steady flow of drunkenness cases through the hands of the police, into our lower courts, and into our jails and workhouses has been labelled the "revolving" door, because a very large part of this flow of cases consists of chronic drinkers who go through the door and out, time after time.
On one occasion when the author was visiting a Saturday morning session of a misdemeanor court, there was a case of an old "bum" who had been in the local workhouse 285 times previously." An Indian author, Dr. Sethna dealing with society and the criminal, has this to say :(1) Many crimes are caused under the influence of alcohol or drugs.
The use of alcohol, m course of time, causes great and irresistible craving for it.
To retain the so called (1) Society and the Criminal by M. J. Sethna 3rd Edn.
P. 164.
131 'satisfaction ', derived from the use of alcohol or drugs, the drunkard or the drug addict has got to go on increasing the quantities from time to time; such a state of affairs may lead him even to commit thefts or frauds to get the same otherwise.
If he gets drunk so heavily that he cannot understand the consequences of his acts he is quite likely to do some harmful act even an act of homicide.
Every often, crimes of violence have been committed in a state of intoxication.
Dr. Hearly is of the opinion that complete elimination of alcohol and harmful drug habits would cause a reduction in crime by at least 20 per cent; not only that, but there would also be cumulative effect on the generations to come, by diminishing poverty, improving home conditions and habits of living and environment, and perhaps even an improvement in heredity itself.
Abstinence campaigns carried out efficiently and in the proper manner show how crime drops.
Dr. Hearly cites Baer, who says that Father Mathew 's abstinence compaigns in Ireland, during 1837 1842, reduced the use of spirits SO per cent, and the crimes dropped from 64,520 to 47,027.
According to Evangeline Booth, the Commander of the Salvation Army, "In New York before prohibition, the Salvation Army would collect from 1,200 to 1,300 drunkards in a single night and seek to reclaim them.
Prohibition immediately reduced the gathering to 400 and the proportion of actual drunkards from 95 per cent to less than 20 per cent".
And "a decrease of two thirds in the number of derelicts, coupled with a decrease in the number of drunkards almost to the Vanishing point, certainly lightened crime and charity bills.
It gave many of the erstwhile drunkards new hope and a new start".
So says E. E. Covert, in an interesting article on Prohibition.
The ubiquity of alcohol in the United States has led to nationwide sample studies and they make startling disclosures from a criminological angle.
For instance, in Washington, D.C. 76.5 % of all arrests in 1965 were for drunkenness, disorderly conduct and vagrancy, while 76.7% of the total arrests in Atlanta were for these reasons(1) Of the 8 million arrests in 1970 almost one third of these were alcohol related.
Alcohol is said to affect the lives of 9 million persons (1) Society, Crime and Criminal Careers by Don C. Gibbons p. 427 428.
132 and to cost 10 billion in lost work time and an additional 15 billion health and welfare costs. ' '(1) Richard D. Knudten stated "Although more than 35% of all annual arrests in the United States are for drunkenness, additional persons committing more serious crimes while intoxicated are included within the other crime categories like drunken driving, assault, rape and murder.(2) President Brezhnev bewailed the social maladies of increasing alcoholism.
Nikita Krushchev was unsparing: "Drunks should be 'kicked out of the party ' not moved from one responsible post to another.
"(3) Abraham Lincoln, with conviction and felicity said that the use of alcohol beverages had many defenders but no defence and intoned: "Whereas the use of intoxicating liquor as a beverage is productive of pauperism, degradation and crime, and believing it is our duty to discourage that which produces more evil than good, we, therefore, pledge ourselves to abstain from the use of intoxicating liquor as a beverage.
"(4) In his famous Washington 's birthday address said: "Whether or not the world would be vastly benefited by a total and final banishment from it of all intoxicating drinks seems to me not now an open question.
Three fourths of mankind confess the affirmative with their lips, and I believe all the rest acknowledge it in their hearts.
"(5) Jack Hobbs, the great cricketer, held: "The greatest enemy to success on the cricket field is the drinking habit." And Don Bradman, than whom few batsmen better wielded the willow, encored and said: "Leave drink alone.
Abstinence is the thing that is what made me.
"(6) (1) Current perspectives on Criminal Behaviour edited by Abraham S Blumberg P.23.
(2) crime in a complex society by Richard D. Knudten P.138.
(3) Report of the study Team on Prohibition Vol.
L. P. 344.
(4) Ibid p.34s.
(5) Ibid p.345.
(6) Report of the Study Team on Prohibition vol.
I. P.347.
133 Sir Andrew Clark, in Lachrymal language spun the lesson from hospital beds: "As I looked at the hospital wards today and saw that seven out of ten owed their diseases to alcohol, I could but lament that the teaching about this question was not more direct, more decisive, more home thrusting than ever it had been.
"(1) George Bernard Shaw, a provocative teetotaller, used tart words of trite wisdom. 'If a natural choice between drunkenness and sobriety were possible, I would leave the people free to choose.
But then I see an enormous capitalistic organisation pushing drink under people 's noses of every corner and pocketing the price while leaving me and others to pay the colossal damages, then I am prepared to smash that organisation and make it as easy for a poor man to stay sober, if he wants to as it is for his dog.
Alcohol robs you of that last inch of efficiency that makes the difference between first rate and second rate.
I don 't drink beer first, because I don 't like it; and second, because my profession is one that obliges me to keep in critical training, and beer is fatal both to training and to criticism.
only teetotallers can produce the best and sanest of which they are capable.
Drinking is the chloroform that enables the poor to endure the painful operation of living.
It is in the last degree disgraceful that a man cannot pro vide his own genuine courage and high spirits without drink.
I should be utterly ashamed if my soul had shrivelled up to such an extent that I had to go out and drink a whisky.
(2) The constitutional test of reasonableness, built into article 19 and of arbitrariness implicit in article 14, has a relativist touch.
We have to view the impact of alcohol and temperance on a given society; and (1) Ibid P. 347.
(2) Report of the study Team on Prohibition Vol.
I P. 346.
134 for us, the degree of constitutional restriction and the strategy of meaningful enforcement will naturally depend on the Third World setting, the ethos of our people, the economic compulsions of today and of human tomorrow.
Societal realities shape social justice.
While the universal evil in alcohol has been indicated the particularly pernicious consequence of the drink evil in India may be useful to R r remember while scanning the.
rationale of an Indian temperance measure.
Nearly four decades ago, Gandhiji, articulating the inarticulate millions ' well being, wrote: "The most that tea and coffee can do is to cause a little extra expense, but one of the most greatly felt evils of the British Rule is the importation of alcohol. that enemy of mankind, that curse of civilisation in some form or an other.
The measure of the evil wrought by this borrowed habit will be properly gauged by the reader when he is told that the enemy has spread throughout the length and breadth of India, in spite of the religious prohibition for even the touch of a bottle containing alcohol pollutes the Mohammedan, according to his religion, and the religion of the Hindu strictly prohibits the use of alcohol in any form whatever, and yet alas ! the Government, it seems, instead of stopping, is aiding and abetting the spread of alcohol.
The poor there, as everywhere, are the greatest sufferers.
It is they who spend what little they earn in buying alcohol instead of buying good food and other necessaries It is that wretched poor man who has to starve his family, who has to break the sacred trust of looking after his children, if any, in order to drink himself into misery and premature death.
Here be it said to the credit of Mr. Caine, the ex Member for Barrow, that, he undaunted, is still carrying on his admirable crusade against the spread of the evil, but what can the energy of one man, however, powerful, do against the inaction of an apathetic and dormant Government.
"(1) Parenthetically speaking, many of these thoughts may well be regarded by Gandhians as an indictment of governmental policy even to day.
The thrust of drink control has to be studied in a Third World country, developing its; human resources and the haven if offers to the poor, especially their dependents.
Gandhiji again: "For me the drink question is one of dealing with a growing social evil against which the State is bound to (1) The Collected Works of Mahatma Gandhi pp.29 30 135 provide whilst it has got the opportunity.
The aim is patent.
We want to wean the labouring population and the Harijans from the curse.
It is a gigantic problem, and the best resources of all social workers, especially women, will be taxed to the utmost before the drink habit goes.
The prohibition I have adumbrated is but the beginning (undoubtedly indispensable) of the reform.
We cannot reach the drinker so long as he has the drink ship near his door to tempt him ' '(l) Says Dr. Sethna in his book already referred to: "And in India, with the introduction of prohibition we find a good decline in crime.
There are, however, some per sons who cannot do without liquor.
Such persons even so to the extent of making illicit liquor and do not mind drinking harmful rums and spirits.
The result is starvation of children at home, assaults and quarrels between husband and wife, between father and child, desertion, and other evils resulting from the abuse of alcohol.
The introduction of prohibition in India actually caused considerable fall in the number of crimes caused by intoxication.
Before prohibition one often had to witness the miserable spectacle of poor and Ignorant persons mill hands.
Labourers, and even the unemployed with starving families at home frequenting the pithas (liquor and adulterated toddy shops) drinking burning and harmful spirits, and adulterated toddy, which really had no vitamin value; these persons spent the little they earned after a hard day 's toil, or what little that had remained with them or what they had obtained by some theft, trick, fraud or a borrowing they spent away all that, and then, at home, left wife and children starving and without proper clothes, education, and other elementary necessaries of life.
"(2) (emphasis added) The Labour Welfare Department or the State Governments and of the Municipalities are rendering valuable service, through their labour welfare officers who work at the centres assigned to them, impressing upon the people how the use of alcohol is ruinous and instructing them also how to live hygienically; there are lectures on the evils of drug and drink habits.
(1) The Collected Works of Mahatma Gandhi, Vol.
(2) Society and the Criminal by M. J. Sethna 3rd Edn.
p. 165, 166 & 168 169.
136 Partial prohibition of hot country liquors was introduced by the Congress Ministries in Bombay, Bihar, Madras (in Salem, Chittor, Cuddaph and North Arcot Districts) when they first came into power.
In C. P. and Berar, prohibition covered approximately one fourth of the area and population of the State.
In Assam, prohibition is directed mainly against opium.
In Deccan Hyderabad on 3rd January, 1943, a Firman as issued by his Exalted Highness the Nizam, supporting the temperance movement.
Jammu and Kashmir came also on the move towards prohibition.
Since 1949 State Governments determined the policy of introduction of total prohibition.
On April 10, 1948, the Central Advisory Council for Railways, under the Chairmanship of the Hon 'ble Dr. John Matthai, agreed to the proposal to ban the serving of liquor in refreshment rooms at railway stations and dining cars.
In Madras, prohibition was inaugurated on 2nd October 1948, by the Premier.
the Hon 'ble Mr. O. P. Ramaswami Reddiar who pronounced it a red letter day.
In 1949, West Punjab took steps for the establishment of prohibition.
In 1949, nearly half the area of the Central Provinces and Berar got dry, and it was proposed to enforce prohibition throughout the State.
In Bombay the Prohibition Bill was passed and became Act in 1949, and Bombay got dry by April 1950.
The number of offences; under the Abkari Act is notoriously high.
It shows the craving of some persons for liquor in spite of all good efforts of legal prohibition.
The remedy lies in making prohibition successful through education (even at the school stage), suggestion re education.
The Tek Chand Committee(1) surveyed the civilizations from Babylon through China, Greece, Rome and India.
X rayed the religions of the world and the dharmasastras and concluded from this conspectus that alcoholism was public enemy.
Between innocent first sour sip and nocent never stop alcoholism only time is the thin partition and, inevitability the sure nexus, refined arguments to the contrary notwithstanding(2).
In India, some genteel socialities have argued for the diplomatic pay off from drinks and Nehru has negatived it: (1) Report of the Study Team on Prohibition.
(2) Ibid p. 345.
137 "Not only does the health of a nation suffer from this (alcoholism), but there is a tendency to increase conflicts both in the national and the international sphere.
" I must say that I do not agree with the statement that is sometimes made even by our ambassadors that drinks attract people to parties and if there are no drinks served people will not come.
I have quite B: frankly told them that if people are only attracted by drinks, you had better keep away such people from our missions.
I do not believe in this kind of diplomacy which depends on drinking. and, if we have to indulge in that kind of diplomacy, others have had more training in it and are like to win.(1) Of course, the struggle for Swaraj went beyond political liberation and demanded social transformation.
Redemption from drink evil was woven into this militant movement and Gandhiji was the expression of this mission.
"I hold drink to be more damnable than thieving and perhaps even prostitution.
Is it not often the parent to both ? I ask you to join the country in sweeping out of existence the drink revenue and abolishing the liquor shops.
Let me, therefore, re declare my faith in undiluted prohibition before I land my self in deeper water.
If I was appointed dictator for one hour for all India, the first thing I would do would be to close without compensation all the liquor shops destroy all the toddy palms such as I know them in Gujarat, compel factory owners to produce humane conditions for the workmen and open refreshment and recreation rooms where these workmen would get innocent drinks and equally innocent amusements.
I would close down the factories if the owners pleaded for want of funds.
"(2) It has been a plank in the national programme since 1920.
It is coming, therefore, in due fulfillment of the national will definitely expressed nearly twenty years ago.(3) Sociological Journey to interpretative Destination.
This long excursion may justly be brought to a close by an off repeated but constitutionally relevant quotation from Field, J. irresistible attractive for fine spun feeling and exquisite expression.
"There is in this position an assumption of a fact which does not exist, that when the liquors are taken in excess the injuries are confined to the party offending.
The injury, if it is true, first falls upon (1) Report of the Study Team on prohibition Vol.
I P. 345.
(2) Ibid P. 344.
(3) Collected Works of Mahatma Gandhi Vol.
10 520SCI/78 138 him in his health, which the habit undermines; in his morals, which it weakens; and in the self abasement which it creates.
But as it leads to neglect of business and waste of property and general demoralization, it affects those who are immediately connected with or dependent upon him.
By the general concurrence of opinion of every civilised and Christian community, there are few sources of crime and misery to society equal to the dram shop, where intoxication liquors, in small quantities, to be drunk at the time, are sold indiscriminately to all parties applying.
The statistics of every State show a greater amount of crime and misery attributable to the use of ardent spirits obtained at those retail liquor saloons than to any other source.
The sale of such liquors in this way has therefore, been, at all times, by the courts of every State, considered as the proper subject of legislative regulation.
Not only may a licence be exacted from the keeper of the saloon before a glass of his liquors can be thus disposed of.
but restrictions may be imposed as to the class of persons to whom they may be sold, and the hours of the day, and the days of the week, on which the saloons may be opened.
Their sale in that form may be absolutely prohibited.
It is a question of Public Expediency and public morality, and not of federal law.
The police power of the State fully competent to regulate the business to mitigate its evils or to suppress it entirely, there is no inherent right in a citizen to thus sell intoxicating liquors by retail, it is not a privilege of a citizen of the State or of a citizen of the United States.
As it is a business attended with danger to the community, it may as already said, be entirely prohibited, or be permitted under such conditions as will limit to the utmost its evils.
The manner and extent of regulation rest in the discretion of the Governing authority.
That authority may vest in such officers as it may deem proper and power of passing upon applications for permission to carry it on, and to issue licenses for that purpose.
It is a matter of legislative will only.
"(1) The Panorama of views, insights and analyses we have tediously.
projected serves the sociological essay on adjudicating the reasonableness and arbitrariness of the impugned shut down order on Tuesdays and Fridays.
Whatever our personal views and reservations on the philosophy, the politics, the economics and the pragmatics of prohibition, we are called upon to pass on the vires of the amended order.
"We, the people of India ', have enacted article 47 and 'we, the Justices of India ' cannot 'lure it back to cancel half a life ' or 'wash out a word of it ', especially when progressive implementation of the policy of prohibition is, by Articles 38 and 47 made fundamental to the country 's governance.
The Constitution is the property of the people (1) Crowely vs Christensen, ; , 623.
139 and the courts know how is to apply the constitution, not to assess it.
In the process of interpretation, Part IV of the Constitution must enter the soul of Part III and the laws, as held by the Court in State of Kerala & Anr.
vs N. M. Thomas & Ors.(1) and earlier.
The dynamics of statutory construction, in a country like ours, where the pre Independence Legislative package has to be adapted to the vital spirit of the Constitution, may demand that new wine be poured into old bottles, language permitting.
We propound no novel proposition and recall the opinion of Chief Justice Winslow of Wisconsin upholding as constitutional a Workmen 's Compensation Act of which he said: "when an eighteenth century constitution forms the charter of liberty of a twentieth century government, must its general provisions be construed and interpreted by an eighteenth century mind surrounded by eighteenth century conditions and ideals ? Clearly not.
This were a command of half the race in its progress, to stretch the state upon a veritable bed of Procrustes.
Where there is no express command or prohibition, but only general language of policy to be considered, the conditions prevailing at the time of its adoption must have their due weight hut the changed social, economic and governmental conditions of the time, as well as the problems which the changes have produced, must also logically enter into the consideration and become influential factors in the settlement of problems of construction and interpretation.
"(2) In short, while the imperial masters were concerned about the revenues they could make from the liquor trade they were not indifferent to the social control of this business which, if left unbridled, was fraught with danger to health, morals, public order and the flow of life without stress or distress.
Indeed even collection of revenue was intertwined with orderly milieu; and these twin objects are reflected in the scheme and provisions of the Act.
Indeed, the history of excise legislation in this country has received judicial attention earlier and the whole position has been neatly summarised by Chandrachud J. (as he then was) if we may say so with great respect, as a scissor and paste operation is enough for our purpose: (1) [1976] I S.C.R. 906.
(2) Borgnis vs The Falk Co. 147 Wisconsin Reports P. 327 at 348 et See (1911).
That this doctrine is to be deemed to apply only to "due process ' and "police Power" determinations, see especially concurring opinions of Marshalle, and Barness, J. 140 "Liquor licensing has a long history.
Prior to the passing of the Indian Constitution, the licensees mostly restricted their challenge to the demand of the Government as being in excess of the condition of the licence or on the ground that the rules in pursuance of which such conditions were framed were themselves beyond the rule making power of the authority concerned.
The provisions of the Punjab Excise Act, 1914, like the provisions of similar Acts in force in other States, reflect the nature and the width of the power in the matter of liquor licensing.
We will notice first the relevant provisions of the Act under consideration.
Section S of the Act empowers the State Government to regulate the maximum or minimum quantity of any intoxicant which may be sold by retail or wholesale.
Section 8(a) vests the general superintendence and administration of all matters relating to excise in the Financial Commissioner, subject to the control of the State Government.
Section 16 provides that no intoxicant shall be imported, exported or transported except after payment of the necessary duty or execution of a bond for such payment and in compliance with such conditions as the State Government may impose.
Section 17 confers upon the State Government the power to prohibit the import or export of any intoxicant into or from Punjab or any part thereof and to prohibit the transport of any intoxicant.
By section 20(1) no intoxicant can be manufactured or collected, no hemp plant can be cultivated no tari producing tree can be tapped, no tari can be drawn from any tree and no person can possess any material or apparatus for manufacturing an intoxicant other than tari except under the authority and subject.
to the terms and conditions of a licence granted by the Collector.
By sub section (2) of section 20 no distillery or brewery can be constructed or worked except under the authority and subject to the terms and conditions of a licence granted by the Financial Commissioner.
Section 24 provides that no person shall have in his possession any intoxicant in excess of such quantity as the State Government declares to be the limit of retail sale, except under the authority and in accordance with the terms and conditions of a licence or permit.
Sub section (4) of section 24 empowers the State Government to prohibit the posses 141 sion of any intoxicant or restrict its possession by imposing such conditions as it may prescribe.
Section 26 prohibits the sale of liquor except under the authority and subject to the terms and conditions of a licence granted in that behalf.
Section 27 of the Act empowers the State Government to "lease" on such conditions and for such period as it may deem fit or retail, any country liquor or intoxicating drug within any specified local area.
On such lease being granted the Collector, under sub section (2), has to grant to the lessee a licence in the form of his lease.
Section 34(1) of the Act provides that every licence, permit or pass under the Act shall be granted (a) on payment of such fees, if any, (b) subject to such restrictions and on such conditions, (c) in such form and containing such particulars, and (d) for such period as the Financial Commissioner may direct.
By section 35(2), before any licence is granted for the retail sale of liquor for consumption on any premises the Collector has to ascertain local public opinion in regard to the licensing of such premises.
Section 36 confers power on the authority granting any licence to cancel or suspend it if, inter alia; any duty or fee payable thereon has not been duly paid.
Section 56 of the Act empowers the State Government to exempt any intoxicant from the provisions of the Act.
By section 58 the State Government may make rules for the purpose of carrying out the provisions of this Act.
Section 59 empowers the Financial Commissioner by clause (a) to regulate the manufacture, supply, storage or sale of any intoxicant.
xxx xxx xx The Prohibition and Excise Laws in force in other States contain provisions substantially similar to those contained in the Punjab Excise Act.
Several Acts passed by State Legislatures contain provisions rendering it unlawful to manufacture export, import, transport or sell intoxicating liquor except in accordance with a licence, permit or pass granted in that behalf.
The Bombay Abkari Act 1878; the Bombay Prohibition Act 1949, the Bengal Excise Acts of 1878 and 1909; the Madras Abkari Act 1886; 142 the Laws and Rules contained in the Excise Manual United Province, the Eastern Bengal and Assam Excise Act 1910; the Bihar and orissa Excise Act 1915; the Cochin Abkari Act as amended by the Kerala Abkari Laws Act 1964; the Madhya Pradesh Excise Act 1915, are instances of State legislation by which extensive powers are conferred on the State Government in the matter of liquor licensing.
(1) In this background, let us read section 59(f)(v) and Rule 37 before and after the impugned amendment: "59(f)(v).
The fixing of the days and hours during which any licensed premises may or may not be kept open, and the closure of such premises on special occasions; Rule 37(9).
Conditions dealing with licensed hours Every licensee for the sale of liquor shall keep his shop closed on the seventh day of every month, on all Tuesdays upto 2 p.m.
On Republic day (26th January), on Independence day (15th August), on Mahatma Gandhi 's birthday (2nd October) and on such days not exceeding three in a year as may be declared by the Government in this behalf.
He shall observe the following working hours.
hereinafter called the licensed hours, and shall not, without the sanction of the Excise Commissioner, Punjab or other competent authority, keep his shop open outside these hours The licensed hours shall be as follows: xx xx xx After amendment 37(9).
Conditions dealing with licensed hours.
Every licensee for the sale of liquor shall keep his shop closed on every Tuesday and Friday, on Republic Day (26th January), on Independence day (15th August), on Mahatma Gandhi 's birthday (2nd October) and on such days not exceeding three in a year as may be declared by the Government in this behalf.
He shall observe the following working hours, hereinafter called the licensed hours, and shall not, without the sanction of the Excise (1) Har Shankar & Ors. etc.
vs Dy.
Excise & Taxation Commr. and ors.
[1975 ], 3 S.C.R. 254 at 266 267. 143 Commissioner, Punjab or other competent authority, keep his shop open outside these hours.
The licensed hours shall be as follows: * * * Note: The condition regarding closure of liquor shops on very Tuesday and Friday shall not be applicable in the case of licenses of tourist bungalows and re sorts being run by the Tourism Department of the State Government.
Before formulating the contentions pressed before us by Shri A. K. Sen, Shri Mahajan and Shri Sharma, we may mention that Shri Seth, one of the Advocates who argued innovatively, did contend that the Act was beyond the legislative competence of the State and if that tall contention met with our approval there was nothing more to be done.
To substantiate this daring submission the learned counsel referred us to the entries in the Seventh Schedule to the Constitution.
All that we need say is that the argument is too abstruse for us to deal with intelligibly.
To mention the plea is necessary but to chase it further is supererogatory.
The main contention The primary submission proceeded on the assumption that a citizen had a fundamental right to carry on trade or business in intoxicants.
The learned Addl.
Solicitor General urged that no such fundamental right could be claimed, having regard to noxious substances and consequences involved and further contended that, notwithstanding the observations of Subba Rao, C.J. in Krishna Kumar Narula etc.
vs The State of Jammu & Kashmir & ors.(I) the preponderant view of this Court, precedent and subsequent to the 'amber ' observations in the aforesaid decision, has been that no fundamental right can be claimed by a citizen in seriously obnoxious trades, offensive businesses or outraging occupations like trade in dangerous commodities, trafficking in human flesh, horrifying exploitation or ruinous gambling.
Even so, since the question of the fundamentality of such right is before this Court in other batches of writ petitions which are not before us, we have chosen to proceed on the footing, arguendo, that there is a fundamental right in liquor trade for the petitioners.
Not that we agree nor that Shree Sorabjee concedes that there is such a right but that, (1) [1961] S S.C.R. SO. 144 for the sake of narrowing the scope of the colossal number of writ petitions now before us, this question may well be skirted.
The Bench and the Bar have, therefore, focussed attention on the vires of the provision from the standpoint of valid power of regulation of the liquor trade vis a vis unreasonableness, arbitrariness and vacuum of any indicium for just exercise.
Essentially, the point pressed was that section 59(f)(v) vested an unguided, uncanalised, vague and vagarious power in the Financial Commissioner to fix any days or number of days and any hours or number of hours as his fancy or humour suggested.
There were no guidelines, no indicators, no controlling points whereby the widely worded power of the Excise Commissioner on whom Government has vested the power pursuant to Sec. 9) should be geared to a definite goal embanked by some clear cut policy and made accountable to some relevant principle.
Such a plenary power carried the pernicious potential for tyrannical exercise in its womb and would be still born, judged by our constitutional values.
If the power is capable of fantastic playfulness or fanciful misuse it is unreasonable, being absolute, tested by the canons of the rule of law.
And if, arguendo, it is so unreasonably wide as to imperil the enjoyment of a fundamental right it is violative of article 19(1)(g) and is not saved by article 19(6).
Another facet of the same submission is that if the provision is an arbitrary armour, the power wielder can act nepotistically, pick and choose discriminatorily or gambol goodily.
Where a law permits discrimination, huff and humour, the guarantee of equality becomes phoney, flimsy or illusory article 14 is outraged by such a provision and is liable to be quashed for that reason.
An important undertaking by the State We must here record an undertaking by the Punjab Government and eliminate a possible confusion.
The amended rule partially prohibits liquor sales in the sense that on Tuesdays and Fridays no hotel, restaurant or other institution covered by it shall trade in liquor.
But this prohibition is made non applicable to like institutions run by the Government or its agencies.
We, prima face, felt that this was discriminatory on its face.
Further, article 47 charged the State with promotion of prohibition as a fundamental policy and it is indefensible for Government to enforce prohibitionist restraints on others and itself practise the opposite and betray the constitutional mandate.
It suggests dubious dealing by State Power.
Such hollow homage to article 47 and the Father of the nation gives diminishing credibility mileage in a democratic polity The learned Additional Solicitor General, without going into the correctness of propriety of 145 our initial view probably he wanted to controvert or clarify readily agreed that the Tuesday Friday ban would be equally observed by the State organs also.
The undertaking recorded, as part of the proceddings of the Court, runs thus: "The Additional Solicitor General appearing for the State of Punjab states that the Punjab State undertakes to proceed on the footing that the 'Note ' is not in force and that they do not propose to rely on the 'Note ' and will, in regard to tourist bungalows and resorts run by the Tourism Department of the State Government observe the same regulatory provision as is contained in the substantive part of Rule 37 Sub rule 9.
We accept this statement and treat it as an undertaking by the State.
Formal steps for deleting the 'Note ' will be taken in due course." Although a Note can be law, here the State concedes that it may not be treated as such.
Even otherwise, the note is plainly severable and the rule independently viable.
Shri A. K. Sen who had raised this point at the beginning allowed it to fade out when the State 's undertaking was brought to his notice.
The vice of discrimination, blotted out of the law by this process, may not be sufficient, if the traditional approach were to be made to striking down; but if restructuring is done and the formal process delayed, there is no reason to quash when the correction is done.
Courts try to save, not to scuttle, when allegiance to the Constitution is shown.
In short, Tuesdays and Fridays, so long as this rule remains (as modified in the light of the undertaking) shall be a holiday for the liquor trade in the private Or public sector throughout the State.
We need hardly state that if Government goes back on this altered law the consequences may be plural and unpleasant.
Of course, we do not expect, in the least, that any such apprehension will actualise.
one confusion that we want to clear up is that even if section 59 and Rule 37 were upheld in toto that does not preclude any affected party from challenging a particular executive act pursuant thereto on the ground that such an act is arbitrary, mala fide or unrelated to the purposes and the guidelines available in the Statute.
If, for instance, the Financial Commissioner or the Excise Commissioner, as the case may be declares that all liquor shops shall be opened on his birthday or shall remain closed on his friend 's death anniversary, whatever our pronouncement on the vires of the impugned provisions, the executive order will be sentenced to death.
The law may be good, the act may be corrupt and then it cannot be saved.
146 The only question seriously canvassed before us is as to whether the power under section 59(f)(v) unguided and the rule framed there under is bad as arbitrary.
We will forthwith examine the soundness of that proposition.
An irrelevant controversy consumed some court time viz., that the two day shut down rule meant that a substantial portion of the year for which the licence was granted for full consideration would thus be sliced off without compensation.
This step was iniquitous and inflicted loss and was therefore 'unreasonable ' therefore void.
The Additional Solicitor General refuted this charge on facts and challenged its relevance in law.
We must not forget that we are examining the vires of a law, not adjudging a breach of contract and if on account of a legislation a party sustains damages or claims a refund that does not bear upon the vires of the provision but be longs to another province.
Moreover, the grievance of the petitioners is mere 'boloney ' be cause even their licence fee has been reduced under the amended rule to compensate, as it were, for the extra closure of a day or so.
We do not delve into the details nor pronounce on it as it is not pertinent to constitutionality.
But a disquieting feature of the rule, in the background of the purpose of the measure, falls to be noticed.
Perhaps the most significant social welfare aspect of the closure is the prevention of the ruination of the poor worker by drinking down the little earnings he gets on the wage day.
Credit sales are banned and cash sales spurt on wage days.
Any Government, with workers ' weal and their families ' survival at heart, will use its police power ' under article 19(6) read with Sec.
59(f)(v) of the Act to forbid alcohol sales on pay days.
Wisely to save the dependent women and children of wage earners the former unamended rule had forbidden sales on the seventh day of every month (when, it is well known, the monthly pay packet passes into the employees ' pocket).
To permit the tavern or liquor bar to transact business that tempting days is to abet the dealer who picks the pocket of the vulnerables and betray the Gandhian behest.
And yet, while bringing in the Tuesday Friday forbiddance of sales, the ban on sales on the seventh of every month was entirely deleted an oblique bonus to the liquor lobby, if we look at it sternly, an unwitting indiscretion, if we view it indulgently.
The victims are the weeping wives and crying children of the workers.
All power is a trust and its exercise by governments must be subject to social audit and Judas exposure. 'For whom do the constitutional bells toll ? ' this court asked in an earlier 147 judgment relating to Scheduled Castes.(1) We hope Punjab will rectify the error and hearten the poor in the spirit of article 47 and not take away by the left hand what the right hand gives.
We indicated these thoughts in the course of the hearing so that no one was taken by surprise.
Be that as it may, the petitioner can derive no aid and comfort from our criticisms which are meant to alert the parliamentary auditors of subordinate legislation in our welfare 1 State.
The Scheme and the subject matter supply the guidelines We come to the crux of the matter.
Is Section 59(f)(v) 'bad for want of guidelines ? Is it over broad or too bald ? Does it lend itself to naked, unreasonable exercise? We were taken through a few rulings where power without embankments was held bad.
They related to ordinary items like coal or restrictions where guidelines were blank.
Here, we are in a different street altogether.
The trade is instinct with injury to individual and community and has serious side effects recognised everywhere in every age.
Not to control alcohol business is to abdicate the right to rule for the good of the people.
Not to canalise the age and sex of consumers and servers, the hours of sale and cash and carry basis, the punctuation and pause in days to produce partially the 'dry ' habit is to fail functionally as a welfare State.
The whole scheme of the statute proclaims its purpose of control in time and space and otherwise.
Section 58 vests in Government the power for more serious restrictions and laying down of principles.
Details and lesser constraints have been left to the rule making power of the Financial Commissioner.
The complex of provisions is purpose oriented, considerably reinforced by article 47.
Old statutes get invigorated by the Paramount Parchment.
Interpretation of the text of pre constitution enactments can legitimately be infused with the concerns and commitments or the Constitution, as an imperative exercise.
Thus, it is impossible to maintain that no guidelines are found in the Act.
We wholly agree with the learned Additional Solicitor General that the search for guidelines is not a verbal excursion.
The very .
subject matter of the statute intoxicants eloquently impresses the Act with a clear purpose, a social orientation and a statutory strategy.
If bread and brandy are different the point we make argues itself.
The goal IS promotion of temperance and, flowing there out, of sobriety, public order, individual health, crime control, medical bills, family welfare, curbing of violence and tension, restoration of the addict 's mental, moral and physical personality and interdict on (1) [1977] 1.S.C.R. 906.
148 impoverishment, in various degrees, compounded.
We have extensively quoted supportive literature; and regulation of alcohol per se furnishes a definite guideline.
If the Section or the Rule intended to combat an evil is misused for a perverse, ulterior or extraneous object that action, not the law, will be struck down.
In this view, discrimination or arbitrariness is also excluded.
A final bid to stigmatize the provision [Sec. 59 (f)(v)] was made by raising a consternation.
The power to fix the days and hours is so broad that the authority may fix six out of seven days or 23 out of 24 hours as 'dry ' days or closed hours and thus cripple the purpose of the licence.
This is an ersatz apprehension, a caricature of the provision and an assumption of power run amok.
An Abkari law, as here unfolded by the scheme (chapters and Sections further amplified by the rules framed thereunder during the last 64 years) is not a Prohibition Act with a mission of total prohibition.
The obvious object is a to balance temperance with tax, to condition and curtail consumption without liquidating the liquor business, to experiment with phased and progressive projects of prohibition without total ban on the alcohol trade or individual intake.
The temperance movement leaves the door half closed, not wide, ajar; the prohibition crusade banishes wholly the drinking of intoxicants.
So it follows that the limited temperance guideline writ large in the Act will monitor the use of the power.
Operation Temperance, leading later to the former, may be a strategy within the scope of the Abkari Act.
Both may be valid but we do not go into it.
Suffice it to say that even restrictions under article 19 may, depending on situations, be pushed to the point of prohibition consistently with reasonableness.
The chimerical fear that 'fix the days ' means even ban the whole week, is either pathological or artificial, not certainly real under the Act.
We are not to be understood to say that a complete ban is without the bounds of the law it turns on a given statutory scheme.
While the police power as developed in the American jurisprudence and constitutional law, may not be applicable in terms to the Indian Constitutional law, there is much that is common between that doctrine and the reasonableness doctrine under article 19 of the Indian Constitution.
Notes an American Law Journal: "The police power has often been described as the "least limitable" of the governmental powers.
An attempt to define its reach or trace its outer limits is fruitless for each case turns upon its own facts.
The police power must be used to promote the health, safety, or general welfare of the public, and the exercise of the power must be 149 "reasonable".
An exercise of the police power going beyond these basic limits is not constitutionally permissible.
Noxious Use Theory: .
This theory upholds as valid any regulation of the use of property, even to the point of total destruction of value, so long as the use prohibited is harmful to others.
" (1) In a Law Review published from the United States 'police power ' with reference to intoxicant liquors has been dealt with and is instructive: "Government control over intoxicating liquors has long been recognized as a necessary function to protect society from the evils attending it.
Protection of society and not the providing of a benefit of the license holder is the chief end of such laws and regulations.
There is no inherent right in a citizen to sell intoxicating liquors as retail.
It is a business attended with danger to the community and it is recognised everywhere as a subject of regulation.
" As to the legislative power to regulate liquor, the United States Supreme Court has stated: "If the public safety or the public morals require the discontinuance of the manufacture or traffic (of intoxicating liquors) the hand of the legislature cannot be stayed from providing for its discontinuance, by any incidental inconvenience which individuals or corporations may suffer." The States have consistently held that the regulation of intoxicants is a valid exercise of its police power.
The police power stands upon the basic principle that some rights must be and are surrendered or modified in entering into the social and political state as indispensible to the good government and due regulation and well being of society.
In evaluating the constitutionality of a regulation within the police power, validity depends on whether the regulation is designed to accomplish a purpose within the scope of that power.
"(2) (1) South Western Law Journal Annual Survey of Texas Law, vol. 30 No. I, Survey 1976 pp.
725 26.
(2) Idaho Law Review, Vol. 7, 1970 p. 131.
150 It is evident that there is close similarity in judicial thinking on the subject.
This has been made further clear from several observations of this Court in its judgments and we may make a reference to a recent case, Himmatlal, and a few observations therein: "In the United States of America, operators of gambling sought the protection of the commerce clause.
But the Court upheld the power of the Congress to regulate and control the same.
Likewise, the pure Food Act which prohibited the importation of adulterated food was upheld.
The prohibition of transportation of women for immoral purposes from one State to another or to a foreign land was held valid.
Gambling itself was held in great disfavour by the Supreme Court which roundly stated that 'there is no constitutional right to gamble`.
Das, C.J., after making a survey of judicial thought, here and abroad, opined that freedom was unfree when society was exposed to grave risk or held in ransom by the operation of the impugned activities.
The contrary argument that all economic activities were entitled to freedom as 'trade ' subject to reasonable restrictions which the Legislature might impose, was dealt with by the learned Chief Justice in a sharp and forceful presentation; "on this argument it will follow that criminal activities undertaken and carried on with a view to earning profit will be protected as fundamental rights until they are restricted by law.
Thus there will be a guaranteed right to carry on a business of hiring out goodness to commit assault or even murder, of house breaking, of selling obscene pictures, of trafficking in women and so on until the law curbs or stops such activities.
This appears to us to be completely unrealistic and incongruous.
We have no doubt that there are certain activities which can under no circumstances be regarded as trade or business or commerce although the usual forms and instruments are employed therein.
To exclude those activities from the meaning of those words is not to cut down their meaning at all but to say only that they are not within the true meaning of those words.
Learned Counsel has to concede that there can be no 'trade ' or business in crime but submits that this principle should not be extended . " (1) Fatehchand Himmatlal vs Maharashtra ; at 839 840.
151 We have no hesitation, in our hearts and our heads, to hold that every systematic, profit oriented activity, how ever sinister, suppressive or socially diabolic, cannot, ipso facto, exalt itself into a trade.
Incorporation of Directive principles of State policy casting the high duty upon the State to strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice social, economic and political shall inform all the institutions of the national life, is not idle print but command to action.
We can never forget, except at our peril, that the Constitution obligates the State to ensure an adequate means of livelihood to its citizens and to sec that the health and strength of workers men and women, are not abused, that exploitation, normal and material, shall be extradited.
In short State action defending the weaker sections from social injustice and all forms of exploitation and raising the standard of living of the people, necessarily imply that economic activities, attired as trade or business or commerce, can be de recognised as trade or business.
At this point, the legal culture and the public morals of a nation may merge, economic justice and taboo of traumatic trade may meet and jurisprudence may frown upon day dark and deadly dealings.
The Constitutional refusal to consecrate exploitation as 'trade ' in a socialist Republic like ours argues itself.
" A precedentral approach to the ultra vires argument.
The single substantive contention has incarnated as triple constitutional infirmities.
Counsel argued that the power to make rules fixing the days and hours for closing or keeping open liquor shops was wholly unguided.
Three invalidatory vices flowed from this single flaw viz. (i) excessive delegation of legislative power, (ii) unreasonable restriction on the fundamental right to trade in intoxicants under article 19(1) (g), and (iii) arbitrary power to pick and choose, inherently violative of article 14.
Assuming the legality of the triune lethal blows, the basic charge of uncanalised and naked power must be established.
We have already held that the statutory scheme is not merely fiscal but also designed to regulate and reduce alcoholic habit.
And, while commodities and situations dictate whether power, in given statutory provisions, is too plenary to be other than arbitrary or is instinct with inherent limitations, alcohol is so manifestly deleterious that the nature of the guidelines is written in invisible ink.
152 A brief reference to a few rulings cited by counsel may not be inept.
It is true that although the enactment under consideration is more than five decades old, its validity can now be assailed on the score of unconstitutionality: "When India became a sovereign democratic Republic on 26th January, 1950, the validity of all laws had to be tested on the touchstone of the new Constitution and all laws made before the coming into force of the Constitution have to stand the test for their validity on the provisions of Part Ill of the Constitution. ' '(1) This is why the principle of excessive delegation, that is to say, the making over by the legislature of the essential principles of legislation to another body, becomes relevant in the present debate.
Under our constitutional scheme the legislature must retain in its own 'hands the essential legislative functions.
Exactly what constitutes the essential legislative functions is difficult to define.
"The legislature must retain in its own hands the essential legislative function.
Exactly what constituted "essential legislative function", was difficult to define in general terms, but this much was clear that the essential legislative function must at least consist of the determination of the legislative policy and its formulation as a binding rule of conduct.
Thus where the law passed by the legislature declares the legislative policy and lays down the standard which is enacted into a rule of law, it can leave the task of subordinate legislation which by its very nature is ancillary to the statute to subordinate bodies, i.e., the making of rules, regulations or bye laws.
The subordinate authority must do so within the frame work of the law which makes the delegation.
and such subordinate legislation has to be consistent with the law under which it is made and cannot go beyond the limits of the policy and standard laid down in the law.
Provided the legislative policy is enunciated with sufficient clearness or a standard is laid down, the courts should not interfere with the discretion that undoubtedly rests with the legislature itself in determining the extent of delegation necessary in a particular case.
"(2) (1) Suraj Mall Mohta and Co.v.
A.V. Visvanatha Sastri and another ; at 457.
(2) Municipal Corporation of Delhi vs Birla Cotton, Spinning and Weaving Mills Delhi & Anr. ; at 261 153 In Vasanthlal Maganbhai Sajanwal vs The State of Bombay(1) the same point was made: "A statute challenged on the ground of excessive delegation must therefore be subject to two tests, (1) whether it delegates essential legislative function or power and (2) WHETHER the legislature has enunciated its policy and principle for the guidance of the delegate.
" Likewise, if the State can choose any day or hour for exclusion as it fancies and there are no rules to fix this discretion, plainly the provision [Sec.59(f)(v)] must offend against Art.14 of the Constitution.
(See Saghir Ahmed 's case)(2) Another aspect of unguided power to affect the citizen 's fundamental rights in the province of article 19 since imposition of unreasonable restrictions on the right lo carry on business is violative of article 19(1)(g).
Patanjali Sastri, C.J., in V. G. Row 's case observed(2) "The test of reasonableness, wherever prescribed should l) applied to each individual statute impugned and no abstract standard or general pattern of reasonableness can be Laid down as applicable to all cases.
The nature of the right alleged to have been infringed, the underlying purpose of the restriction imposed, the extent or urgency of the evil sought to be remedied thereby, the disproportion of imposition, the prevailing conditions at the time should enter into the judicial verdict" This Court, in R. M. Seshadri,(4) dealt with unreasonable restrictions on showing of films by theatre owners and struck down the provisions.
Similarly, in Harichand(5) an unreasonable restriction on the right to trade was struck down because the regulation concerned provided no principles nor contained any policy and this Court observed: "A provision which leaves an unbridled power to an authority cannot in any sense be characterised as reasonable.
Section 3 of the Regulation is one such provision and is therefore liable to be struck down as violative of article 19(1)(g)".
(1) (2) ; (3) ; (4) [1955]1 S.C.R. 686.
(S) LALA Hari Chand Sarda vs Mizo District Council & Anr [1967]1 S.C.R. 1012 11 520 SCI/78 154 other decisions in the same strain were cited.
Indeed an annual shower of decisions on this point issues from this Court.
But the essential point made in all these cases is that unchannelled and arbitrary discretion is patently violative of the requirements of reasonableness in article 19 and of equality under article 14, a proposition with which no one can now quarrel.
lt is in the application of these principles that disputes arise as Patanjali Sastri, C.J. clarified early in the day in V. G. Row 's case (cited Supra).
Reasonableness and arbitrariness are not abstractions and must be tested on the touchstone of principle pragmatism and living realism.
It is in this context that the observations of this Court in Nashirwar(1) become decisive.
While considering the soundness of the propositions advanced by the advocate for the petitioners the Additional Solicitor General rightly shielded the statutory provisions i question by drawing our attention to the crucial factor that the subject matter of the legislation was a deleterious substance requiring restrictions in the direction of moderation in consumption.
regulation regarding the days and hours of sale and appropriateness in the matter of the location of the places of sale.
If it is coal or mica or cinema, the test of reasonableness will be stricter, but if it is an intoxicant or a killer drug or a fire arm the restrictions must be stern.
When the public purpose is clear and the policing need is manifest from the nature of the business itself, the guidelines are easy to find.
Shri Mahajan 's reliance on the Coal Control Case( ') or Shri A. K. Sen 's reliance on the Gold Control case (3)is inept.
Coal and gold are as apart from whisky and toddy as cabbages are from kings.
Don 't we feel the difference between bread and brandy in the field of trade control ? Life speaks through Law.
Counsel after counsel has pressed that there is no guideline for the exercise of the power of rule making and the Addl.
Solicitor General has turned to the history, sociology and criminology relating to liquor.
In support of his contention, Shri Soli Sorabjee for the State has drawn our attention to the following passages in Nashirwar which are quoted is extenso because of the persistence of counsel on the other side in pressing their point about unbounded power: "In our country the history of excise shows that the regulations issued between 1790 1800 prohibited manufacture or sale of liquors without a licence from a Collector.
In 1 808 a regulation was introduced in tile Madras Presidency (1) ; (2) ; (3) ; 155 Which provided that the exclusive privilege of manufacturing and selling arrack should be farmed in each district.
In 1820 the law was amended to authorise the treatment of toddy and other fermented liquors in the same way as spirits by allowing Collectors to retain the manufacture and sale under direct management if deemed preferable to farming.
In 1884 a Committee was appointed to investigate the excise system.
The recommendations of the Committee were adopted.
Under the new system the monopoly of manufacture was let separately from that of sale.
The former was granted on condition of payment of a fee per shop or a number of shops, or on payment of a fee determined by auction.
In the Bombay Presidency the monopoly of the retail sale of spirits and the right to purchase spirits was formed.
In 1857 the Government declared its future policy to be the letting by auction of each shop, with its still, separately.
In 1870 71 a change was made.
The rule at that time was that the Collector would fix the number and locality of the different shops and determine their letting value according to the advantages possessed by each.
It was not intended that they should, as a rule, be put up to public competition; but competition might be resorted to by the Collector and taken into account in determining the same at which each would be leased.
This rule remained in force for many years.
The practice of putting the shops up to auction was, thereafter followed.
The history of excise administration in our country before the Independence shows that there was originally the farming system and thereafter the central distillery system for manufacture.
The retail sale was by auction of the right and privilege of sale.
The Government of India appointed an Excise Committee in 1905.
The measures recommended by the Committee were the advances of taxation, the concentration of distillation the extended adoption of the contract distillery system.
The Committee suggested among other things the replacement of the then existing excise law by fresh legislation on the lines of the Madras Abkari Act.
(See Dr. Pramatha Nath Banerjee: History of Indian Taxation P. 470 seq.).
Reference may be made to the Taxation Enquiry Commissioner Report 1953 54 Vol. 3.
At page 130 following there is a discussion of State excises.
Among the major sources of revenue which are available to the State Government there is a duty on alcoholic liquors for human consumption.
At page 132 of the Report it is stated that in addition 156 to the excise duties, licence fees are charged for manufacture or sale of liquor or for tapping toddy trees etc.
Similarly, several fees like permit fees, vend fees, outstill duties are also levied.
Manufacture or sale of liquor is forbidden except under licences which are generally granted by auction to the highest bidders.
The manufacture of country spirit is done in Government distilleries or under the direct supervision of the excise staff.
All supplies are drawn from Government warehouses which ensures that the liquor is not more than of the prescribed strength.
The licensed sellers have to sell the country spirit between fixed hours and at fixed selling rates.
As in the case of country spirit, the right of tapping and selling toddy is also auctioned.
In addition to the licence, in some States the licensee has to pay a tree tax to Government.
Traditionally tobacco, opium and intoxicating liquors have been the subject matter of State monopoly.
(See section IV of the Madras Regulation XXV of 1 802 relating to permanent settlement of land revenue).
Section IV states that the Government having reserved to itself the entire exercise of its discretion in continuing or abolishing, temporarily or permanently, the articles of revenue included, according to the custom and practice of the country, under the several heads inter alia of the abkary, or tax on the sale of spirituous liquors and intoxicating drugs, of the excise on articles of consumption, of taxes personal and professional, as well as those derived from markets, fairs, or bazars.
of lakhiraj lands (or lands exempt from the payment of public revenue), and of all other lands paying only favourable quit rents, the permanent assessment of the land tax shall be made exclusively of the said articles now recited.
The excise revenue arising out of manufacture and sale of intoxicating liquors is one of the sources of State revenue as is customs and excise.
In England sale of intoxicating liquors although perfectly lawful at common law is subject to certain statutory restrictions.
These restrictions are primarily of two kinds; those designed for the orderly conduct of the retail trade and those designed to obtain revenue from the trade r whether wholesale or retail.
Trade in liquor has historically stood on a different footing from other trades.
Restrictions which are not permissible other trades are lawful and reasonable so far as the trade 157 in liquor is concerned.
That is why even prohibition of the trade in liquor is not only permissible but is also reasonable.
The reasons are public morality, public interest and harmful and dangerous character of the liquor.
The State possesses the right of complete control over all aspects of intoxicants, viz., manufacture, collection, sale and consumption.
The State has sight in order to raise revenue.
That is the view of this Court in Bharucha 's case (supra) and jaiswal 's case ( supra) .
The nature of the trade is such that the State confers the right to vend liquor by farming out either in auction or on 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 ii the consideration for the agreement for grant of privilege by the Government." (pp.
869 871) The guide lines.
Now that we have held that the provision [Section 59(f)(v)] is valid on a consideration of the criteria controlling the wide words used therein there is a minor matter remaining to be disposed of.
The extract from the Section, as will be noticed, contains a clause which runs: "and the closure of such premises on special occasions".
Thus, rules may be made by the Financial Commissioner for fixing the closure of licensed premises on 'special occasion '.
Shri Mahajan insisted that 'special occasions ' may mean anything and may cover any occasion dictated by humour, political pressure or other ulterior considerations.
It is thus a blanket power which is an unreasonable restriction on the licensee 's trade.
Certainly if 'special occasions ' means any occasion which appeals to the mood of the Financial Commissioner or has other casual fascination for him the rule may suffer from arbitrary and unreasonable features.
Gandhiji 's birthday and also Vinobaji 's birthday have been included in the licence itself. 'Special occasions ' contemplated by Sec.
59(f) (v) are not stricken by such a vice for the obvious reasons we have elaborately given in the earlier part of our argument.
The occasion must be special from the point of view of the bread considerations of national solemnity.
public order, homage to national figures, the likelihood of eruption of inebriate violence On certain days on account of meals, festivals or frenzied situations or periods of tension.
Bapuji 's birthday, election day, hours of procession by rival communities when tensions prevail or festivals where colossal numbers of people gather and outbreak of violence is on the agenda, are clear illustrations. 'Special occasions ' cannot be equated with fanciful occasions but such as promote the policy of the statute as expounded by us earlier.
There is no merit in this argument either and we reject it.
158 As between temperance and prohibition it is a policy decision for the Administration.
Much may be said for and against total prohibition as an American wit has cryptically yet sarcastically summed up(1): "The chief argument against prohibition is that it does not prohibit.
This is also the chief argument in favour of it." This survey of the law ways of article 19 and the police power is sufficient in our view to clinch the issue.
our conclusions may now be set out.
(a) Section 59(f)(v) of the Punjab Excise Act, 1914, is perfectly valid; (b) The regulation of the number of days and the duration of the hours when supply of alcohol by licensees shall be stopped is quite reasonable, whether it be two days in a week or even more.
We leave open the question as to whether prohibition of the number of days and the number of hours, if it reaches a point of substantial destruction of the right to vend, will be valid, since that question arises in other writ petitions; (c) The exercise of the power to regulate, including to direct closure for some days every week, being reasonable and calculated to produce temperance and promote social welfare, cannot be invalidated on the imaginary possibility of misuse.
The test of the reasonableness of a provision is not the theoretical possibility of tyranny; and (d) There is enough guideline in the scheme and provisions of the Punjab Excise Act to govern the exercise of the power under Secs.
58 and 59.
In a few beer bar cases the grievance ventilated is regarding the manipulation of hours of sale.
Nothing has been made out to hold that the readjustment of the hour of beer bidding is unrelated to the statutory guidelines or destructive of the business.
We reject the objection.
We have reasoned enough to justify the ways of the Constitution and the law to the consumers of social justice and spirituous potions.
The challenge fails and the Writ Petitions Nos.
4108 4109 tc.
, of 1978 are hereby dismissed with costs (one hearing fee).
May we hopefully expect the State to bear true faith and allegiance to that Constitutional orphan, article 47 ? N V.K Petitions dismissed.
(1) "Reconsiderations H. L. Meneken Anti All Kinds of Blah by Lila Ray appeared in "Span" Aug. 1978 p. 41.
| IN-Abs | The Punjab Excise Act 1914 contemplates grant of licences for trading in (Indian) foreign and country liquor.
Section 59(f) (v) of the Act provides for the fixing of the days during which any licensed premises may or may not be kept open for sale of liquor and the closure of such premises on special occasions.
The conditions of the licence includes restrictions of various types including obligation not to sell liquor on certain days and during certain hours.
Rule 37(a) as it originally stood prohibited sale of liquor on Tuesdays upto 2 p.m. and also on tho 7th day of every month.
This rule was amended by a notification whereby in place of "Tuesdays upto 2 p.m. plus the 7th of every month" "Tuesday and Friday in every week", was substituted as the days when liquor vending was prohibited.
"Note" appended to the said rule exempted tourist bungalows and.
rest houses run by the Department of tho State Government from the operation of the condition regarding closure.
Consequent upon the change of days, the .
Licence fee payable by a vendor was reduced from Rs. 12,000/ to Rs. 10,000/ to compensate for the marginal loss caused by two days ' closure.
The petitioners who were licensed vendors of liquor in the State challenged the constitutionality of section 59(f)(v) and the vires of Rule 37 on the ground that section 59(f)(v) vested an unguided, uncanalised, vague and vagarious power in the Financial Commissioner to fix the days or number of days and hours or number of hours without laying down any guidelines, indicators or controlling points.
The State on the other hand contended that the subject matter of the legislation being a deleterious substance (liquor), requiring restrictions in the direction of moderation in consumption, regulation regarding the days and hours of sale and appropriateness in the matter of location of the places of sale, reasonableness and arbitrariness must be tested on the touchstone of principled pragmatism and living realism, Dismissing the writ petitions, ^ HELD: (a) Section 59(f)(v) of the Punjab Excise Act 1914 is valid.
[158 C] 123 (b) The regulation of the number of days and the duration of the hours when supply of alcohol by licensees shall be stopped is quite reasonable whether it be two days in a week or more.
[158D] (c) The exercise of the power to regulate, including to direct closure for some days every week, being reasonable and calculated to produce temperance and promote social welfare, cannot be invalidated on the imaginary possibility of misuse.
The test of the reasonableness of a provision is not the theoretical possibility of tyranny.
[158E] (d) There is enough guideline in the scheme and provisions of the Punjab Excise Act to govern the exercise of the power under sections 58 and 59.
[158E] (1) (a) The Constitutional test of reasonableness, built into Article IV and of arbitrariness implied in Article 14 has a relativist touch.
The degree of constitutional restriction and the strategy of meaningful enforcement will naturally depend on the Third World setting, the ethos of our people, the economic compulsions of today and of human tomorrow.
While scanning the rationale of an Indian temperance measure it would be useful to remember the universal evil in alcohol and the particularly pernicious consequences of the drink evil in India.
Societal realities shape social justice.
[133H, 134A B] (b) "We, the people of India" have enacted Article 47 and "we the Justices of India" cannot 'lure it back to cancel half a life ' or 'wash out a word of it especially when progressive implementation of the policy of prohibition is, by Articles 38 and 47, made fundamental to the country 's governance.
[138H] (c) The Constitution is the property of the people and the court 's know how is to apply the Constitution not to assess it.
In the process of interpretation Part IV of the Constitution must enter the soul of Part m and the laws.[138H, 139A] State of Kerala & Others vs N. M. Thomas & Others ; referred to.
(d) Even restrictions under Article 19 may, depending on situations be pushed to the point of prohibition consistently with reasonableness.
While the police power as developed in the American Jurisprudence and Constitutional law.
may not be applicable in terms to the Indian Constitutional law, there is much that is common between that doctrine and the reasonableness doctrine under Article 19 of the Indian Constitution.
There is also a close similarity in judicial thinking on the subject.
[148F, G] South Western Law Journal Annual Survey of Texas Law Vol.
30 No. 1.
Survey 1976 pp.
725 26.
Idaho Law Review Vol. 7 1970 p. 131, Fatehchand Himmatlal vs Maharashtra ; at 839 848 referred to.
(e) The statutory scheme of the Act is not merely fiscal but also designed to regulate and reduce alcoholic habit.
While commodities and situation dictate whether power, in given statutory provisions, is too plenary to be other than arbitrary or is instinct with inherent limitations, alcohol is so manifestly deleterious that the nature of the guidelines is written in invisible ink.
[151 G H] 124 (f) The subject matter of the legislation is a deleterious substance (alcohol) requiring restrictions in the direction of moderation in consumption, regulation regarding the days and hours of sale and appropriateness in the matter of the location of the places of sale.
If it is coal or mica or cinema, the test of reasonableness will be strict, but if it is an intoxicant or a killer drug or a fire arm the restrictions must be stern.
Just as the difference between bread and brandy is felt in the field of trade control, coal and gold are as apart from whisky and toddy as cabbages are from kings.
Life speaks through law.
[ 154D F] Nashirwar vs M.P. State ; at 869 71 referred to.
(2) Even if section 59 and Rule 37 were upheld in toto that does not preclude any affected party from challenging a particular executive act pursuant Thereto on the ground that such an act is arbitrary, malafide or unrelated to the purposes and the guidelines available in the statute.
To illustrate, if the Financial Commissioner or the Excise Commissioner as the case may be declares that all liquor shops shall be opened on his birthday or shall remain closed on his Friend 's death anniversary, the executive order will be invalid.
The law may be good, but the executive action may be corrupt and then it cannot be sustained.
[145G H] (3) The most significant social welfare aspect of the closure is the prevention of the ruination of the poor worker by drinking down the little earnings he gets on the wage day.
Any government with worker 's weal and their families ' survival at heart will use its 'police power ' under Article 19(6) read with.
section 59(f)(v) of the Act to forbid alcohol sales on pay days.
To save the dependent women and children of wage earners the former unamended rule had forbidden sales on the 7th day of every month the day the monthly pay packet passes into the employees ' pocket.
While bringing in the Tuesday Friday for biddance of sales, the ban on sales on the seventh of every month was entirely deleted.
The victims of the change are the weeping wives and crying children of the workers.
All power is a trust and its exercise by governments must be subject to social audit and Judas exposure.
[146E H] (4) The liquor trade is instinct with injury to individual and community aud has serious side effects recognised everywhere in every age.
Not to control alcohol business is to abdicate the right to rule for the good of the people.
Not to canalize the age and sex of the consumers and servers, the hours of sale and cash and carry basis, the punctuation and pause in days, to produce partially the 'dry ' habit it to fail functionally as a welfare state.
The whole scheme of the statute proclaims its purpose of control in time and space and otherwise.
Section 58 vests in government the power for more serious restrictions and laying down of principles.
Details and lesser constraints have been left to the rule making power of the Financial Commissioner.
The complex of provisions is purpose oriented, considerably reinforced by Article 47.
Old statutes get invigorated by the Paramount Parchment.
Interpretation of the text of preconstitution enactments can legitimately be infused with the concerns and commitments of the Constitution as an imperative exercise.
It is impossible 'to maintain that no guidelines are found in the Act.
[147D F] (5) While the forensic problem is constitutional, the Constitution itself is a human document.
The Court has justified the ways of the Constitution and the law to the consumers of social justice and spirituous potions.
[128D, 158G] 125 (6) As between temperance and prohibition it is a policy decision for the Administration.
Hopefully it is expected of the State to bear true faith and allegiance to that Constitution orphan, Article 47.
[158A, G] The Collected Works of Mahatma Gandhi pp 29 30.
Society and the Criminal by M. J. Sethna 3rd Edn.
P. 165, 166 & 168 69 .
Society, Crime and Criminal Career by Don C. Gibbars p. 427 428.
Har Shankar & others etc.
vs Dy.
Excise & Taxation Commissioner & others ; at 266 267 referred to.
Report of the Study Team on Prohibition Vol.
344. 346, 347
|
Civil Appeal No. 2030 of 1968.
Appeal by special leave from the Judgment and Decree dated 23 5 1968 of the Delhi High Court at New Delhi in R.F.A. No. 147D of 1968.
section N. Andley, Mahinder Narain and Rameshwar Nath, for the Appellant.
Hardyal Hardy, H. section Parihar and 1.
N. Shroff, for Respondents Nos. 1 and 2.
The following Judgments were delivered: FAZAL ALI, J.
This appeal by special leave is directed against the judgment of the Delhi High Court dated 23rd May, 1967 affirming the decree of the District Judge, Delhi and dismissing the plaintiff 's suit for damages against the defendants on the ground that they had violated the copyrighted work of the plaintiff which was a drama called 'Hum Hindustani '.
The facts have been succinctly stated by the District Judge in his judgment and summarised by the High Court, and, therefore, it is not necessary for us to repeat the same all over again.
We would, however, like to give a brief resume of some of the striking facts in the case which may be germane for the purpose of deciding the important issues involved in this appeal.
We might mention here that the High Court as also the District Judge negatived the plaintiff 's claim and prima facie the appeal appears to be concluded by finding of fact, but it was rightly argued by Mr. Andley appealing for the appellant that the principles of violation of copy right in the instant appeal have to be applied on the facts found and the inferences from proved facts drawn by the High Court which is doubtless a question of law and more particularly as there is no clear authority of this Court on the subject, we should be persuaded to go into this question without entering into findings of facts.
Having heard counsel for the parties, we felt that as the case is one of first impression and needs to be decided by this Court, we should enter into the merits on the basis of the facts found and inferences drawn by the High Court and the District Judge.
It is true that both the District Judge and the High Court have relied upon some well established principles to determine whether or not in a particular case a violation of copy right has taken place, but learned counsel for the appellant has challenged the validity of the principles enunciated by the High Court.
226 The plaintiff is an architect by profession and is also a playwright, dramatist and producer of stage plays.
Even before Hum Hindustani the plaintiff had written and produced a number of other plays like Des Hamara, Azadi and Election which were staged in Delhi.
The subject matter of the appeal, however, is the play entitled 'Hum Hindustani '.
According to the plaintiff, this play was written by him in Hindi in the year 1953 and was enacted by him for the first time on 6th, 7th, 8th and 9th February, 1954 at Wavell Theatre, New Delhi under the auspices of the Indian National Theatre.
The play proved to he very popular and received great approbation from the Press and the public as a result of which the play was re staged in February and September, 1954 and also in 1955 and 1956 at Calcutta.
In support of his case the plaintiff has referred to a number of comments appearing in the Indian Express, Hindustan Times, Times of India and other papers.
Encouraged by the success and popularity of the aforesaid play the plaintiff tried to consider the possibility of filming it.
In November, 1954 the plaintiff received a letter dated 19th November, 1954 from the second defendant Mr. Mohan Sehgal wherein the defendant informed the plaintiff that he was supplied with a synopsis of the play by one Mr. Balwant Gargi a common friend of the plaintiff and the defendant The defendant had requested the plaintiff to supply a copy of the play so that the defendant may consider the desirability of making a film on it.
The plaintiff, however, by his letter dated 30th November? 1954 informed the defendant that as the play had been selected out of 17 Hindi plays for National Drama Festival and would be staged on 11th December, 1954, the defendant should take the trouble of visiting Delhi and seeing the play himself in order to examine the potentialities of making a film, and at that time the matter could be discussed by the defendant with the plaintiff.
The plaintiff 's case, however, is that some time about January, 1955 the second and the third defendants came to Delhi, met the plain tiff in his office where the plaintiff read out and explained the entire play to the defendants and also discussed the possibility of filming it.
The second defendant did not make any clear commitment but promised the plaintiff that he would inform him about his re action after reaching Bombay.
Thereafter the plaintiff heard nothing from the defendant.
Sometime in May, 1955 the second defendant announced the production of a motion picture entitled "New Delhi".
One Mr. Thapa who was one of the artists in the play produced by the plaintiff happened to be in Bombay at the time when the picture 'New Delhi ' was being produced by the defendant and informed the plaintiff that the picture being produced by the defendant was really based on the 227 plaintiff 's play 'Hum Hindustani '.
The plaintiff thereupon by his letter dated 30th May, 1955 wrote to the second defendant expressing serious concern over the adaptation of his play into a motion picture called 'New Delhi '.
The defendant, however, by his letter dated 9th June, 1955 informed the plaintiff that his doubts were without any foundation and assured the plaintiff that the story treatment, dramatic construction, characters etc.
were quite different and bore not the remotest connection or resemblance with the play written by the plaintiff.
The picture was released in Delhi in September, 1956 and the plaintiff read some comments in the papers which gave the impression that the picture was very much like the play 'Hum Hindustani ' written by the plaintiff.
The plaintiff himself saw the picture on the 9th September, 1956 and he found that the film was entirely based upon the said play and was, therefore, convinced that the defendant after having heard the play narrated to him by the plaintiff dishonestly imitated the same in his film and thus committed an act of piracy so as to result in violation of the copy right of the plaintiff.
The plaintiff accordingly filed the suit for damages, for decree for accounts of the profits made by the defendants and a decree for permanent injunction against the defendants restraining them from exhibiting the film 'New Delhi '.
The suit was contested by defendants No. 1 and 2 as also by other defendants who adopted the pleas raised by defendants No. 1 and 2.
The defendants, inter alia, pleaded that they were not aware that the plaintiff was the author of the play 'Hum Hindustani ' nor were they aware that the play was very well received at Delhi.
Defendant No. 2 is a film Director and is also the proprietor of defendant No. 1 Delux Films.
The defendants averred that in November, 1954 the second defendant was discussing some ideas for his new picture with Mr. Balwant Gargi who is a play wright of some repute.
In the course of the discussion, the second defendant informed Mr. Gargi that the second defendant was interested in producing a motion film based on 'provincialism ' as its central theme.
In the context of these discussions Mr. Gargi enquired of defendant No. 2 if the latter was interested in hearing the play called 'Hum Hindustani ' produced by the plaintiff which also had the same theme of provincialism in which the second defendant was interested.
It was, therefore, at the instance of Mr. Gargi that the second defendant wrote to the plaintiff and requested him to send a copy of the script of the play.
The defendant goes on to state that the plaintiff read out the play to the second defendant in the presence of Rajinder Bhatia and Mohan Kumar, Assistant Directors of the second defendant when they had 228 come to Delhi in connection with the release of their film "Adhikar".
The second defendant has taken a clear stand that after having heard the play he informed the plaintiff that though the play might have been all right for the amateur stage, it was too inadequate for the purpose of making a full length commercial motion picture.
The defendants denied the allegation of the plaintiff that it was after hearing the play written by the plaintiff that the defendants decided to make a film based on the play and entitled it as 'New Delhi '.
The defendant thus submitted that there could be no copy right so far as the subject of provincialism is concerned which can be used or adopted by any body in his own way.
He further averred that the S motion picture was quite different from the play 'Hum Hindustani ' both in contents, spirit and climax.
The mere fact that there were some similarities between the film and the play could be explained by the fact that the idea, viz., provincialism was the common source of the play as also of the film.
The defendant thus denied that there was any violation of the copy right.
On the basis of the pleadings of the parties, the learned trial Judge framed the following issues: 1.
Is the plaintiff owner of the copyright in the play 'Hum Hindustani ' ? 2.
Is the film 'New Delhi ' an infringement of the plaintiff 's copyright in the play 'Hum Hindustani ' ? 3.
Have defendants or any of them infringed the plaintiff 's copyright by producing, or distributing or exhibiting the film 'New Delhi ' ? 4.
Is the suit bad for misjoinder of defendants and cause of action ? 5.
To what relief is the plaintiff entitled and against whom ? Issue No. 1 was decided against the defendants and it was held by the trial Judge that the plaintiff was the owner of the copy right in the play 'Hum Hindustani '.
Issue No. 4 was not pressed by the defendants and was accordingly decided against them.
The main case however turned upon the decision on issues No. 2 and 3 which were however decided against the plaintiff as the learned Judge held that there was no violation of the copyright of the plaintiff.
The plaintiff then went up in appeal to the Delhi High Court where a Division Bench of that Court affirmed the decision of the District Judge and upheld the decree dismissing the plaintiff 's suit.
The findings of fact arrived at by the learned trial Judge and the High Court 229 have not been assailed before us.
The only argument advanced by h the appellant was that the principles enunciated and the legal inferences drawn by the courts below are against the settled legal principles laid down by the courts in England, America and India.
It was also submitted by Mr. Andley that the two courts have not fully understood the import of the violation of copy right particularly when the similarities between the play and the film are so close and sundry that would lead to the irresistible inference and unmistakable impression that the film is nothing but an imitation of the play.
On the other hand, it was argued by Mr. Hardy counsel for the respondents that the two courts below have applied the law correctly and it is not necessary for this Court to enter into merits in view of the concurrent findings.
of fact given by the two courts.
He further submitted that even on the facts found it is manifest that there is a vast difference both in the spirit and the content between the play 'Hum Hindustani ' and the film 'New Delhi ' and no question of violation of the copy right arises.
In order to appreciate the argument of both the parties it may be necessary to discuss the law on the subject.
To begin with there is no decided case of this Court on this point.
Secondly, at the time when the cause of action arose Parliament had not made any law governing copy right violations and the courts in the absence of any law by our Parliament relied on the old law passed by the British Parliament, namely, the Copy Right Act of 1911.
Section 1 sub section (2) (d) defines 'copy right ' thus: "(2) For the purposes of this Act, copy right ' means the sole right to produce or reproduce the work or any substantial Part thereof in any material form whatsoever to perform, or in the case of a lecture to deliver, the work or any substantial part thereof in public.
If the work is unpublished, to publish the work or any substantial part thereof; and shall include the sole right, (d) in the case of a literary, dramatic, or musical work, to make any record, perforated roll, cinematograph film, or other contrivance by means or which the work may be mechanically performed or delivered".
Section 2 provides the contingencies where a copy right could be infringed and runs thus : "2(1) Copyright in a work shall be deemed to be in fringed by any person who, without the consent of the 230 owner or the copyright, does anything the sole right to do which is by this Act conferred on the owner of the copy right".
It is, therefore, clear that the Act of 1911 defines 'copyright ' and also indicates the various contingencies where copy right cannot be in fringed.
The statute also provides exceptions which would not amount to violation of copyright.
In the instant case the play written by the appellant falls within section 1(2)(d) because it is a dramatic work.
The learned District Judge has rightly held that emotions like mere ideas are not subject to pre emption because they are common property.
Quoting from the law of copyright and Movie rights by Rustom R. Dadachanji the learned Judge observed as follows: "It is obvious that the underlying emotion reflected by the principal characters in a play or look may be similar and yet that the characters and expression of the same emotions be different.
That the same emotions are found in plays would not alone be sufficient to prove infringement but if similar emotions are portrayed by a sequence of events presented in like manner expression and form, then infringement would be apparent".
Similarly in the case of Hanfstaengl vs W. H. Smith and Sons(1) it has been held by Bayley, J. that "a copy is that which comes so near to the original as to give to every person seeing it the idea created by the original".
In Halsbury 's Laws of England by Lord Hailsham Fourth Edition the following observations are made: "only original works are protected under Part I of the Copyright Act 1956, but it is not requisite that the work should be the expression of original or inventive thought, for Copyright Acts are not concerned with the originality of ideas, but with the expression of thought, and, in the case of a literary work, with the expression of thought in print or writing. .
There is copyright in original dramatic works and adaptations thereof, and such copyright subsists not only in the actual words of the work but in the dramatic incidents created, so that if these are taken there may be an infringement although no words arc actually copies.
There cannot be copyright in mere science effects or stage situations which are not reduced into some permanent form".
(1) 231 Similarly, it was pointed out by Copinger in his book on Copyright 11th Edition that what is protected is not the original thought but expression of thought in a concrete form.
In this connection, the author makes the following observations based on the case law: "What is protected is not original thought or information, but the original expression of thought or information in some concrete form.
Consequently, it is only an in fringement if the defendant has made an unlawful use of the form in which the thought or information is expressed.
The defendant must to be liable, have made a substantial use of this form; he is not liable if he has taken from the work the essential, ideas however original, and expressed the idea in his own form, or used the idea for his own purposes.
" The author also points out that there is no infringement unless the plaintiff 's play wrighted work has been actually used so, that it may be said that the latter work reproduces the earlier one.
In this connection the author observes as follows: "A further essential matter, and one which rather strangely is not anywhere precisely stated in the Act of 1956 is that there can be no infringement unless use has been made, directly or indirectly, of the plaintiff 's work".
Moreover, it seems to us that the fundamental idea of violation of copyright or imitation is the violation of the Eighth Commandment: "Thou shalt not steal" which forms the moral basis of the protective provisions of the Copyright Act of 1911.
It is obvious 11 ' that when a writer or a dramatist produces a drama it is a result of his great labour, energy, time and ability and if any other person is allowed to appropriate the labours of the copy righted work, his act amounts to theft by depriving the original owner of the copy right of the product of his labour.
It is also clear that it is not necessary that the alleged infringement should be an exact or verbatim copy of the original but its resemblance with the original in a large measure, is sufficient to indicate that it is a copy.
In Article 418 Copinger states thus: "In many cases the alleged infringement does not consist of an exact, or verbatim copy, of the whole, or any part, of the earlier work, but merely resembles it in a greater or lesser degree".
232 In Article 420 the author lays down the various tests to determine whether an infringement has taken place and observes as follows: "Various definitions of 'copy ' have been suggested, but it is submitted that the true view of the matter is that, where the court is satisfied that a defendant has, in producing the alleged infringement, made a substantial use of those features of the plaintiff 's work in which copyright subsists, an infringement will be held to have been committed, if he has made such use, he has exercised unlawfully the sole right which is conferred upon the plaintiff.
" Ball in "Law of Copyright and Literary Property '` page 364 points out that where the defendant materially changes the story he cannot be said to have infringed the copyright.
In this connection, the author observes as follows: "In such a composition the story is told by grouping and representing the important incidents in the particular sequence devised by the author whose claim to copyright must depend upon the particular story thus composed; and not upon the various incidents, which, if presented individually, without such unique sequential arrangement, would be common literary property.
Consequently another dramatist who materially changes the story by materially varying the incidents should not be held to be infringer '.
It is also pointed out by Mr. Ball that sometimes even though there may be similarities between the copy righted work and the work of the defendant they may be too trivial to amount to appropriation OF copyrighted material.
The author observes thus: "When two authors portray in literary or dramatic form the same occurrence, involving people reacting to the same emotions under the influence of an environment constructed of the same materials.
similarities in incidential details necessary to the environment; or setting are inevitable; but unless they are accompanied by similarities in the dramatic development of the plot or in the lines or action .
Of the principal characters, they do not constitute evidence of copying.
They are comparable to similarities in two works of art made by different artists from the same original subject, and in the usual case are` too trivial and unimportant to amount to a substantial appropriation of copyrighted material".
233 The author further says that unless there is any substantial identity A between the respective works in the scenes, incidents and treatment a case of infringement of copyright is not made and observes thus: "But there was no substantial identity between the respective works in the scenes, incidents, or treatment of the common Them, the court held that the plaintiff 's copyright were not infringed by the defendant 's photoplays".
Dealing with the infringement of copyright of a play by a motion picture which appears to be an identical case in the present appeal.
the author observes as follows: "In an action for the alleged infringement of the copy right of a play by a motion picture, wherein it appeared that both authors had used life in a boys ' reform school as a background, but the only similarity between the two productions consisted to a few incidents and points in dialogue, such as one would expect to find in stories set against the same background, there was no infringement of copyright" To the same effect are the following observations to` the author: "Where the only evidence of similarities between two plays was based upon the author 's analysis and interpretation of an extensive list of "parallel", from which he infer red that many incidents, scenes and characters in the alleged infringing play were adapted from the plaintiff 's copy righted play but no such resemblance would be apparent i. to an ordinary observer, it was held that the meaning or interpretation which the author gives to his literary work cannot be accepted as a deciding test of plagiarism; and that, in the absence of any material resemblance which could be recognised by an ordinary observation.
each play must be regarded as the independent work of the named author" Similar observations have been made in Corpus Juris Secundum VOL 18 at page 139 where it is observation as follows : "An author has, at common law, a property in his intellectual production before it has been published, and may obtain redress against anyone who deprives him of it, or, by improperly obtaining a copy, endeavours to publish or to use it without his consent".
16 520 SCI/78 234 "This right exists in the written seenario of a motion picture photoplay and in the photoplay itself as recorded on the photographic film.
There is, however, no common law literary property right in the manner and postures of the actors used by them in performing the play". "Infringement of a copyright is a trespass on a private domain owned and occupied by the owner of the copyright, and, therefore, protected by law, and infringement of copy right, or piracy, which is a synonymous term in this connection consists in the doing by any person, without the con sent of the owner of the copyright, of anything the sole right to do, which is conferred by the statute on the owner of the copyright.
" This view was taken by the U.S. Supreme Court in the case of Bobbs Merrill Company vs Isidor Straus and Nathan Straus.(1) In the American Jurisprudence also it is pointed out that the law does not recognize property rights in abstract idea, nor is an idea protected by a copyright and it becomes a copyright work only when the idea is given embodiment in a tangible form.
In this connection the following observations are made: "Generally speaking, the law does not recognize property rights in abstract ideas and does not accord the author or proprietor the protection of his ideas.
which the law does accord to the proprietor of personal property '.
"In cases involving motion pictures or radio or television broadcasts, it is frequently stated that an idea is not protected by a copyright or under the common law, or that there is no property right in an idea, apart from the manner in which it is expressed".
"When an idea is given embodiment in a tangible form, it becomes the subject of common law property rights which are protected by the courts, at least when it can be said to be novel and new".
It was also pointed out in this book as to what constitutes colorable imitation.
In this connection, the following observations have been made: "Infringement involves a copying, in whole or in part, either in haec verba (sic) or by colorable variation .
A copy (1) 21 O U.S .
339. 235 as used in copyright cases, signifies a tangible object which is a reproduction of the original work.
The question is not whether the alleged infringer could have obtained the same information by going to the same source used by the plaintiff in his work, but whether he did in fact go to the same source and do his own independent research.
In other words, the test is whether one charged with the infringement made an independent production, or made a substantial and unfair use of the plaintiff 's work".
"Intention to plagiarise is not essential to establish liability for infringement of a copyright or for plagiarism of literary property in unpublished books, manuscripts, or plays.
One may be held liable for infringement which is unintentional or which was done unconsciously".
Similarity of the alleged infringing work to the author 's or proprietor 's copyrighted work does not of itself stablish copyright infringement, if the similarity results from the fact that both works deal with the same subject or have the same common source .
Nevertheless, it is the unfair appropriation of the labour of the author whose work has been infringed that constitutes legal infringement, and while identity of language will often prove that the offence was committed, it is not necessarily the sole proof; on the other hand, relief will be afforded, irrespective of the existence or non existence of any similarity of language, if infringement in fact can be proved.
" "The appropriation must he of a 'substantial ' or 'material ' part of the protected work .
The test is whether the one charged with the infringement has made substantial and unfair use of the complainant 's work.
Infringement exists when a study of two writings indicates plainly that the defendant 's work is a transparent rephrasing to produce essentially the story of the other writing, but where there is no textual copying and there are differences in literary style, the fact that there is a sameness in the tricks of spinning out the yarn so as to sustain the reader 's suspense, and similarities of the same general nature in a narrative of a long, complicated search for a lost article of fabulous value, does not indicate infringement. ' 236 We shall now discuss some of the authorities that have been cited at the Bar as also some others with whom we have come across and which throw a flood of light on the point in issue.
Dealing with the question of similarities Lord Kekewich, J. in Hanfstaengl case (Supra) described various qualities of a copy and observed as follows: "In west vs Francis(1) Bayley J. uses language coming, as Lord Watson says, nearer to a definition than anything which is o be found in the books.
It runs thus: "A copy is that which comes so near to the original as to give to Every person seeing it the idea created by the original .
; If it were altered thus "a copy is that which comes so near to the original as to suggest that original to the mind of every person seeing it" the substance of the definition would be preserved and Lord Watson 's criticism would be avoided.
The learned Judge aptly pointed out that an imitation will be a copy which comes so near to the original as to suggest the original to the mind of every person seeing it.
In other words, if after having seen the picture a person forms a definite opinion and gets a dominant impression that it has been based on or taken from the original play by the appellant that will be sufficient to constitute a violation of the copy right.
In the case of Ladbroke (Football) Ltd. vs William Bill (Foot ball) Ltd Reid made the following pertinent observations .
But, in my view, that is only a short out, and more correct approach is first to determine whether the plaintiff 's work a whole is 'original ' and.
protected by copyright, rand then to inquire whether the part taken by the defendant is substantial.
A wrong result can easily be reached if one begins by dissecting the plaintiff 's work and asking, could section A be the subject of copyright if it stood by itself, could section be protected it stood by itself, and so on.
To my mind, it does not follow that, because the fragments taken separately would not be copyright, therefore the whole cannot be".
(1) [1822] r. B. & Ald. 737, 743.
(2) 237 Lord Hodson expressed similar views at p. 475 in the following A words: The appellants have sought to argue that the coupons can be dissected and that on analysis no copyright attaches to any of their component parts and accordingly no protection is available.
In my opinion this approach is wrong and the coupons must be looked at as a whole.
Copy right is a statutory right which by the terms of section 2 of the Act of 1956 would appear to subsist, if at all, in the literary or other work as one entity".
This case clearly lays down that a similarity here or a similarity there is not sufficient to constitute a violation of the copyright unless the imitation made by the defendant is substantial.
In the case of Corelli vs Gray(1) Sargent, J. Observed as follows: "The plaintiff 's case is entirely founded on coincidences or similarities between the novel and the sketch.
Such coincidences or similarities may he due to any one of the four hypotheses namely (1) to mere chance, or (2) to both sketch and novel being taken from a common source: (3) to the novel being taken from the sketch, or (4) to the sketch being taken from the novel.
Any of the first three hypothesis would result in the success of that defendant; it is the fourth hypothesis alone that will entitle the plaintiff to succeed".
Looking now at the aggregate of the similarities between the sketch and the novel, and the case is essentially one in which the proof is cumulative.
I am irresistibly forced to the conclusion that it is quite impossible they should be due to mere chance coincidence and accordingly that they must be due to a process of copying or appropriation by the defendant from the plaintiff 's novel".
Thus it was pointed out in this case where the aggregate of the similarities between the copyrighted work and the copy lead to the cumulative effect that the defendant had imitated the original and that the similarities between the two works are not coincidental, a reasonable inference of colorable imitation or of appropriation of the labour of the owner of the copyright by the defendant is proved.
This case was followed by the Master of Rolls in the case of Corelli vs
Gray (2) .
(1) (2) 238 The case of Hawkes and Son (London) Limited vs Paramount Film Service Limited(1) was whether a musical composition made by the owner was sought to he imitated by producing a film containing the said composition.
An action for violation of the copyright was fired by the owner.
Lord Hansworth, M. R. found that the quantum taken was substantial and a substantial part of the musical copyright could be reproduced apart from the actual film.
In this connection, Lord Hansworth observed as follows: Having considered and heard this film I am quite satisfied that the quantum that is taken is substantial, and although it might be difficult, and although it might be difficult and although it may be uncertain whether it will be ever used again, we must not neglect the evidence that a substantial part of the musical copy right could be reproduced apart from the actual picture film." Similar observations were made by Lord Slesser which may be extracted thus: "Any one hearing it would know that it was the march called "Colonel Bogey" and thought it may be that it was not very prolonged in its reproduction, it is clearly, in my view, a substantial, a vital and an essential part which is there reproduced.
That being so, it is clear to my mind that a fair use has not been made of its that is to say, there has been appropriated and published in a form which will or may materially injure the copyright that in which the plaintiffs have a proprietary right".
In the case of Harman Pictules N.V. vs Osborne & ors.(a) it was held that similarities of incidents and situation undoubtedly afforded prima facie evidence of copy and in the absence of any explanation by the defendant regarding the sources, the plaintiffs must succeed.
It: was however held that there was no copyright in ideas, schemes or systems or method and the copyright is confined only to the subject.
In this connection Coff, J. Observed as follows: "There is no copyright in ideas or schemes or systems or methods; it is confined to their expression. .
But there is a distinction between ideas (which are not copy right) and situations and incidents which may be. . . one must, however, be careful not to jump to the (1) [1934]1 Ch. D. 593.
(2) [196711 W.L.R. 723.
239 conclusion that there has been copying merely because of A similarity of stock incidents, or of incidents which are to be found in historical, semi historical and fictional literature about characters in history.
In such cases the plaintiffs, and that includes the plaintiffs in the present case, are in an obvious difficulty because of the existence of common sources".
"But I have read the whole of the script very carefully and compared it with the book and I find many similarities of detail there also. .
Again it is prima facie not without significance that apart from the burial of Captain Nolan the play ends with The very quotation which Mrs. Wodham Smith used to end her description of the battle . . .
As Sir Andrew Clark points out, some of these might well be accounted for as being similar to other events already in the scripts, and in any event abridgment was necessary, but that may not be a complete answer." Similarly in the case of Donoghue vs Allied Newspapers(1) it was pointed out that there was no copyright in an idea and in this connection Farwell, J. Observed as follows: This.
at any rate, is clear, and one can start with This beyond all question that there is no copyright in an idea, or in ideas. . . of the idea, however brilliant and however clever it may be, is nothing more than an idea, and is not put into any form of words, or any form of expression such as a picture or a play, then there is no such thing as copyright at all.
It is not until it is (If I may but it in that way) reduced into writing, or into some tangible form, that you get any right to copyright at all, and the copyright exists in the particular form of language in which, or, in the case of a picture, in the particular form of the picture by which, the information or the idea is conveyed to those who are intended to read it or look at it".
Similarly in the case of Bobl and Anr.
vs Palace Theatre (Limited) and Anr.(2) Justice Hamilton observed as follows . "If similarity between two works was sufficiently strong the evidence of copying would be so cogent that no one would believe any denial, but here the intrinsic evidence was (1) (2) 240 really the other way. .
The matter had been considered by Justice Scrutton in his book on Copyright, and the conclusion there come (sic) to (Note h p. 83 of fourth edition) was that to which his own reflection during the progress of this case would have led him.
He considered, therefore, that where the similarity was a mere coincidence there was no breach of copyright." In the case of Tate vs Fullbrook(1) Lord Vaughan Williams observed as follows: '.
I do not think that I need go at length through the similarities and dissimilarities of the two sketches.
It is practically admitted that, so far as the words are concerned the similarity is trifling.
All that we find here is a certain likeness of stage situation and scenic effect, which, in my opinion, ought not to he taken into consideration at all where there is appreciable likeness in the words".
In the case of Frederick B. Chatterton and Benjamin Webster vs Joseph Arnold Cave(2) Hatherley observed as follows: "And if the quantity taken be neither substantial nor material if, as it has been expressed by some Judges, "a fair use only be made of the publication, no wrong is done and no action can be brought.
It is not, perhaps, exactly the same with dramatic performances.
They are not in tended to be repeated by others or lc be used in such a way as a book may be used, but slill the principle de minimis non curat lex applies to a supposed wrong in Laking a part of dramtic works, as well as in reproducing a part of a book.
"I think.
my Lords, regard being had to the whole of this case to the finding of the Lord Chief Justice that the parts which were so taken were neither substantial nor material parts, and the impossibility of damage being held to have accrued to the plaintiff from such taking, and the concurrence of the other Judges before whom the case was, brought that this appeal should be dismissed, and dismissed with costs ' '.
In the case of Sheldon vs Metro Gclden Pictures Corporation(3) Judge Learned Hand stated that while considering a case which is very similar to the case in this appeal observed as follows: (1) (2) (3) 241 "But it is convenient to define such a use by saying that others may "copy" the "theme" or "ideas", or the like, of a work, though not its "expression".
At any rate so long as it is clear what is meant, no harm is done Finally, in concluding as we do that the defendants used the play pro tanto, we need not charge their witnesses with perjury.
With so many sources before them they might quite honestly forget what they took; nobody knows the origin of his inventions; memory and fancy merge even in adults.
Yet unconscious plagiarism is actionable quite as much as deliberate." "The play is the sequence of the confluents of all these means, bound together in an inseparable unity; it may often be most effectively pirated by leaving out the speech, for which a substitute can be found, which keeps the whole dramatic meaning.
That as it appears to us is exactly what the defendants have done here; the dramatic significance of thevwcenes we have recited is the same, almost to the letter . . .
It is enough that substantial parts were lifted; no plagiarist can excuse the wrong by showing how much of his work he did not pirate.
" In the aforesaid case the Court held that there was no plagiarism or violation of the copyright.
In the case of Shipman vs R. K. O. Radio Pictures(l) which holding that an idea cannot be the subject of copyright great stress was laid on the impression which the audience forms after seeing the copy.
In this connection, Menton, J. Observed as follows. "The Court concluded that it was the idea or impression conveyed to the audience which was the determining factor, and since the impressions were the same, held there was an infringement. .
From this case stand the modern law of copyright cases, with the result that it is now held that ideas are not copyrightable but that sequence of events is; the identity of impression must be capable of sensory perception by the audience".
In the case of Michael V. Moretti vs People of the State of Illinois(2) It was held that law does not recognise property rights in ideas but only in the expression of the same in a particular manner adopted by the author.
A writ of certiorari was taken against this judgment to the U.S. Supreme Court which was denied.
To the (1) (2) ; U.S. 947 242 same effect is an earlier decision in the case of Funkhouser vs Loew 's(1) where the following relevant observations were made on the various aspects of the matter: "We are also mindful that the test used to determine infringement in cases of this case is whether ordinary observation of the motion picture photoplay would cause it to be recognised as a picturisation of the compositions allow ed to have been copied, and not whether by some hypercritical dissection of sentences and incidents seeming similarities are shown to exist. . .
It recognised that there were similar incidents in the productions, but such similarities were due to the nature of the subject matter and not to copying.
Both the motion picture and plain tiff 's story 'old John Santa Fe ' were set in the same geo graphical area and both had the typical western back ground. . . . .
Appellant 's attempt to show similarities by comparing a word or phrase taken from his` manuscript with the word or words appearing in the lyrics of a song in appellee 's motion picture is not in conformity with the test used in infringement cases and to which we have referred to above.
We find no merit in the contention that any of the songs in defendant 's movie were taken from plaintiff 's manuscripts. .
Considering that both the movie and the manuscript presented activities of Harvey Girls, and information concerning them was received from the same source, we think it reasonable that some similarities in character portrayal could be discovered".
In view of the aforesaid observation too much stress cannot always be laid on similarities or similar situations.
A writ of certiorari against the judgment of the U.S. Courts Appeal to the U.S. Supreme Court was taken but the certiorari was denied and the petition was rejected in limine as it appears from This was also a case where a film was made on the basis of a play claimed to have been written by the plaintiff.
The case of Warner Bros. Pictures vs Columbia Broadcasting System(2) is another illustration of the manner in which a copyright can be violated.
Dealing with this aspect of the matter Stephens, J observed as follows: "It is our conception of the area covered by the copy right statute that when a study of the two writings is made and it is plain the study that one of them is not in fact the (1) 208 F 2d 185.
(2) ; 243 creation of the putative authority, but instead has been copied in substantial part exactly or in transparent phrasing to produce essentially the story of the other writing, it in fringes".
A writ of certiorari was taken against the decision to the U.S. Supreme B, Court but was denied as reported in 348 U.S. 971.
In the case of Otto Eisenchiml vs Fowcett Publications(1) Duffy, Chief Judge observed as follows: "An infringement is not confined to literal and exact repetition or reproduction; it includes also the various modes in which the matter of any work may be adopted, imitated, transferred, or reproduced, with more or less colorable alterations to disguise the piracy.
Paraphrasing is copying and an infringement, if carried to a sufficient extent The question of infringement of copyright is not one of quantity but of quality and value".
A writ of certiorari against this decision was taken to the U.S. Supreme Court but was denied which was reported on U.S. 907.
In the case of Dorsey vs Old Surety Life Ins.
Co.(2) Phillips, J. 1 observed as follows: "The right secured by a copyright is not the right to the use of certain words, nor the right to employ ideas expressed thereby.
Rather it is the right to that arrangement or words which the author has selected to express his ideas To constitute infringement in such cases a showing of appropriation in the exact form or substantially so of the copy righted material should be required".
Similar observations were made in the case of Twentieth Century Fox Film Corporation vs Stonesifer(3) which are as follows: "In copyright infringement cases involving original dramatic compositions and motion picture productions, in as much as literal or complete appropriation of the protected property rarely occurs, the problem before the court is concrete and specific in each case to determine from all the facts (1) 246 2d 598.
(2) 98 2d 872.
(3) 140 2d 579 244 and circumstances in evidence whether there has been a substantial taking from an original and copyrighted property, and therefore an unfair use of the protected work The two works involved in this appeal should be considered and tested, not hypercritically or with meticulous scrutiny, but by the observations and impressions of the average reasonable reader and spectator.
We find and conclude, as did the court below, that the numerous striking similarities in the two works cannot in the light of all the evidence be said to constitute mere chance.
The deduction of material and substantial unlawful copying of appellee 's original play in appellant 's motion picture is more in consonance with the record and with the probabilities of the situation therein disclosed".
This authority lays down in unmistakable terms the cases where an infringement of the copyright would take place and as pointed out that before the charge of plagiarism is levelled against the defendant it must be shown that the defendant has taken a substantial portion of the matter from the original and have made unfair use of the protective work The two works involved must be considered and tested not hypercritically but with meticulous scrutiny.
Similarly, in the case of Oliver Wendell Holmes vs George D. Hirst(1) Justice Brown speaking for the Court and describing the incidents of a violation of the copyright observed as follows: "It is the intellectual production of the author which the copyright protects, and not the particular form which such production ultimately takes".
The Judicial Committee in the case of Macmillan & Company Limited vs K. and J. Cooper(2) while pointing out the essential ingredients of the infringement of copyright Lord Atkinson observed as follows: "Third, that to constitute piracy of a copyright it must be shown that the original has been either substantially copied or to be so imitated as to be a mere evasion of the copyright".
(1) ; (2) 51 I.A. 109.
245 In the case of Florence A. Deeks vs H. G. Wells & ors(1) Lord Atkin speaking for the Judicial Committee summarised the nature of the evidence required to prove as a violation of copyright and observed as follows: "Now their Lordships are not prepared to say that in the case of two literary works intrinsic evidence of that kind may Br not be sufficient to establish a case of copying, even if the direct evidence is all the other way and appears to be evidence that can be accepted; but such evidence must be of the most cogent force before it can be accepted as against the oath of respectable and responsible people whose evidence otherwise would be believed by the Court".
In the case of N.T. Raghunathan & Anr.
vs All India Reporter Ltd., Bombay(2) it was held that copyright law did not protect ideas but only the particular expression of ideas.
In that case, the Bombay High Court however held that the defendant had copied not only the ideas but also the style of abridgment, the expression of ideas and the form in which they were expressed and thus held that a case for violation of copyright was made out.
K. R. Venugopalan Sarma vs Sangu Ganesan(3) was a case of infringement of copyright in picture and it was held that an infringement of the copyright was complete even though the reproduction was not exact, but the effect on the mind by study of the two pictures was that the respondent 's picture was nothing but a copy of the plaintiff 's picture.
The Court while applying the various tests Observed as follows: "Applying this test, the degree of resemblance between the two pictures, which is to be judged by the eye, must be such that the person looking at the respondents ' pictures must get the suggestion that It is the appellant 's picture. . one picture can be said to be a copy of another picture only if a substantial part of the former picture finds place in the reproduction".
To the same effect is an earlier decision of the Division Bench of the Madras High Court in the case of The Daily Calendar Supplying Bureau, Sivakasi vs The United Concern(4) where the Court observed as follows (1) 60 I.A. 26.
(2) A.I.R. 1971 Bom.
(3) (4) A.T.R. 246 "What is essential is to see whether there is a reproduction of substantial part of the picture.
There can be no test to decide what a substantial part of a picture is.
One useful test, which has been followed in several decisions of Courts, is the one laid down by Lord Herschel, L.C. in Hanjastaengl vs Bains & Co. (1) ". . it depends really, on the effect produced upon the mind by a study of the picture and of that which is alleged to be a copy of it, or at least of its design".
In the case of C. Cunniah and Co. vs Balraj & Co.(2) the Court applying the test of resemblance observed as follows: "Applying this test, the degree of resemblance between the two pictures, which is to be judged by the eye, must be such that the person looking at the respondents ' picture must get the suggestion that it is the appellant 's picture.
In this sense, the points of similarity or dissimilarity in the picture assume some importance .
We agree that this could not be the sole test, though, incidentally, the points of resemblance and dissimilarity assume some importance in the case of finding out whether, taken as a whole, the respondents ' picture produces the impression in the mind of any observer, which amounts to a suggestion of the appellants ' picture".
"one picture can be said to be a copy of another picture only if a substantial part of the former picture finds place in the reproduction".
In the case of Mohendra Chandra Nath Ghosh and ors.
vs Emperor(3) the Court while defining what a copy is held that a copy is one which is so near the original as to suggest the original to the mind of the spectator and observed as follows: "But the question is whether the offending pictures are copies of substantial portions of the copyright picture The figures may have been reduced in the offending pictures and slight modifications may have been introduced, or the clothes and colours may have been different, but there can be no doubt whatsoever that the main figures have an identi (1) , 25.
(2) A.I.R. 1961 Mad. 111.
(3) A.I.R. 1928 Cal 359.
247 cal pose.
These are not, in my opinion, coincidences due to A the pictures being produced to represent common stock idea.
" Similarly in the case of S.K. Dutt vs Law Book Co. & ors.(l) it was held that in order to be an infringement of a man 's copyright there must be a substantial infringement of the work.
A mere fair dealing with any work falls outside the mischief of the Copyright Act.
Similarly, in the case of Romesh Chowdhry & Ors.
vs Kh.
Ali Mohamad Nowsheri & Ors.(2) the Division Bench of the Court to which one of us (Fazal Ali, J.) was a party and had written the leading judgment it was thus observed : "It is well settled that in order to be actionable the infringement must be a colorable imitation of the originals with the purpose of deriving profit".
In the case of Mohini Mohan Singh & Ors.
vs Sita Nath Basak(3) a Division Bench of the Calcutta High Court while laying down the necessary concomitants of a colorable imitation Mukherji, J. Observed as follows: "The question there is where a colorable imitation has been made.
Whether a work is a colorable imitation of another must necessarily be a question of fact.
Similarly is a great point to be considered in this connection but mere similarity is not enough as it may be due to any one of four hypotheses as Copinger points out at p. 134, Edn. 6, viz., (1) to mere chance, (2) to both works being taken from a common force, (3) to plaintiff 's work being taken from the defendant 's and (4) defendant 's work; being taken from the plaintiff 's and each case must depend upon its own circumstances".
Guha, J. Observed as follows: "It has to be determined whether in a particular case the work is a legitimate use of another man 's publication in the fair exercise of a mental operation deserving the character of original work".
(1) A.I.R. 1954 All. 570, (2) A.I.R. 1965 J & K. 101.
(3) A.I.R. 1931 Cal.
248 Thus, the position appears to be that an idea, principle, theme, or subject matter or historical or legendary facts being common property cannot be the subject matter of copyright of a particular person.
It is always open to any person to choose an idea as a subject matter and develop it in his own manner and give expression to the idea by treating it differently from others.
Where two writers write on the same subject similarities are bound to occur because the central idea of both are the single but the similarities or coincidences by themselves cannot lead to an irresistible inference of plagiarism or piracy.
Take for instance the great poet and dramatist Shakespeare most of whose plays are based on Greek Roman and British mythology or legendary stories like Mer chant of Venice, Hamlet, Romeo Juliet, Jullius Caesar etc.
But the treatment of the subject by Shakespeare in each of his dramas is so fresh, so different, so full of poetic exuberance.
elegance and erudition and so novel in character as a result of which the end product be comes an original in itself.
In fact, the power and passion of his expression, the uniqueness, eloquence and excellence of his style and pathos and bathos of the dramas become peculiar to Shakespeare and leaves precious little of the original theme adopted by him.
It will thus be preposterous to level a charge of plagiarism against the great play wright.
In fact, thoughout his original thinking, ability and incessant labour Shakespeare has converted an old idea into a new one, so that each of the dramas constitutes a master piece of English literature.
It has been rightly said that "every drama of Shakespeare is an extended metaphor".
Thus, the fundamental fact which has to be determined where a charge of violation of the copyright is made by the.
plaintiff against the defendant is to determine whether or not the defendant not only adopted the idea of the copyrighted work but has also adopted the manner, arrangement, situation to situation, scene to scene with minor changes or super additions or embellishment here and y there.
Indeed, if on a perusal of the copyrighted work the defendant 's work appears to be a transparent rephrasing; or a copy of a substantial and material part of the original, the charge of plagiarism must stand proved.
Care however must be taken to see whether the defendant has merely disguised piracy or has actually reproduced the original in a different form, different tone, different tenor so as to infuse a new life into the idea of the copyrighted work adapted by him.
In the latter case there is no violation of the copyright.
Thus, on a careful consideration and elucidation of the various authorities and the case law on the subject discussed above, the following propositions emerge: 1.
There can be no copyright in an idea, subject matter, themes, plots or historical or legendary facts and violation of the copyright in 249 such cases is confined to the form, manner and arrangement and expression of the idea by the author of the copyright work.
Where the same idea is being developed in a different manner, it is manifest that the source being common, similarities are bound to occur.
In such a case the courts should determine whether or not the similarities are on fundamental or substantial aspects of the mode of expression adopted in the copyrighted work.
If the defendants work is nothing but a literal imitation of the copyrighted work with some variations here and there it would amount to violation of the copyright.
In other words, in order to be actionable the copy must be a substantial and material one which at once leads to the conclusion that the defendant is guilty of an act of piracy.
One of the surest and the safest test to determine whether or not there has been a violation of copyright is to seeing the reader, spectator or the viewer after having read or seen both the works is clearly of the opinion and gets an unmistakable impression that the subsequent work appears to be a copy of the original.
Where the theme is the same but is presented and treated differently so that the subsequent work becomes a completely new work, no question of violation of copyright arises.
Where however apart from the similarities appearing in the two works there are also material and broad dissimilarities which negative the intention to copy the original and the coincidences appearing in the two works are clearly incidental no infringement of the copyright comes into existence.
As a violation of copyright amounts to an act of piracy it must be proved by clear and cogent evidence after applying the various tests laid down by the case law discussed above.
Where however the question is of the violation of the copyright of stage play by a film producer or a Director the task of the plaintiff becomes more difficult to prove piracy.
It is manifest that unlike a stage play a film has a much broader prospective, a wider field and a bigger background where the defendants can by introducing a variety of incidents give a colour and complexion different from the manner in which the copyrighted work has expressed the idea.
Even so, if the viewer after seeing the film gets a totality of impression that the film is by and large a copy of the original play, violation of the copyright may be said to be proved.
17 520 SCI/78 250 We would now endeavour to apply the principles enunciated above and the tests laid down by us to the facts of the present case in order to determine whether or not the plaintiff has been able to prove the charge of plagiarism and violation of copyright levelled against the dependant by the plaintiff.
The learned trial Judge who had also had the advantage of seeing the picture was of the opinion that the film taken as a whole is quite different from the play written by the plaintiff.
In order to test the correctness of the finding of the trial Court we also got the play read to us by the plaintiff in the presence of counsel for the parties and have also seen the film which was screened at C.P.W.D. Auditorium, Mahadev Road, New Delhi.
This was done merely to appreciate the judgment of the trial Court and the evidence led by the parties and was not at all meant to be just a substitute for the evidence led by the parties.
To begin with, we would like to give a summary of the play Hum Hindustani which is supposed to have been plagiarized by the defendants.
The script of the play exhibit P.1 has been placed before us and we have gone through the same.
The main theme of the play is provincialism and the prejudice of persons belonging to one State against persons belonging to other States.
In the play however the author chooses two families, viz., a Punjabi family and a Madrasi family to show what havoc can be caused by provincial parochialism possessed by the two families.
The Punjabi family and the Madrasi family were living as close neighbours having good and cordial relations and are on visiting terms with each other.
The Punjabi consists of Dewan Chand, contractor, his wife Krishna, their grown up daughter Chander and son Tinnu aged about 8 or 10 years.
The Madrasi family however consists of Subramaniam, Government officials, his wife Minakshi and grown up son Amni and daughter Pitto who is aged about 8 or 10 years.
As a result or the close association between the two families it appears that Amni the son of Subramaniam falls in love with Chander the daughter of Dewan Chand of the Punjabi family.
When the parents are out Amni and Chander meet and talk.
Unfortunately, however, the parents of both Amni and Chander arc extremely adverse to the matrimonial union of Amni and Chander because the two families belong to two different provinces.
When they get some scent of the love affair between Amni and Chander the parents of Chander make a serious attempt to find a suitable match for her amongst their own caste namely Punjabis.
Similarly, the parents of Amni also try to arrange a match for him amongst Madrasis.
For this purpose, the services of a marriage broker named Dhanwantri are enlisted by both the parties without knowing 251 that Dhanwantri was trying to negotiate marriages for both the couples.
Later on, when this fact is discovered the relations of the two families become strained.
Amni and Chander also persuade Dhanwantri to assist there in bringing about their marriage by persuading their parents to agree.
This gives a chance to Dhanwantri to make a lot of money out of the two couples.
Dewan Chand and his wife Krishna in sheer desperation hurriedly arranged the marriage of their daughter Chander to Bansi, a simpleton, son of Murari Lal who is a friend of Dewan Chand.
In fact, Dewan Chand is not very impressed with Bansi but in view of the critical situation arising out of the love affair between his daughter and Amni he prefers Bansi to the Madrasi boy.
When Chander and Amni come to know of this Chander asked Amni to speak to his parents in a free and frank manner and express his strong desire to marry Chander.
Amni who appears to be a cowardly fellow prefers to commit suicide rather than dare to talk out this matter with his parents.
Realising that no hope is left for Chander and Amni to go through the marriage ceremony both of them entered into a suicidal pact and wrote letters to their parents indicating their intention to commit suicide because they were not prepared to marry anybody else.
Dhanwantri, however, intervenes and persuades Chander and Amni not to commit suicide as according to him they were not destined to die unless they had been actually married.
Meanwhile, the parents of Amni and Chander on getting the suicide note mourn the loss of their children and it now dawns upon them that they had committed the saddest mistake of their life in refusing to marry the couple and repent for their act.
Just at that time Amni and Chander appear on the scene after having been married to each other.
The marriage was performed by Dhanwantri himself.
Thus ends the story with the realisation by both the families that provincialism helps nobody.
This in short is the story of the play written by the appellant.
We might mention that before the play starts the author show some voices reciting various persons proclaiming that they come from different States like the slogan that they belong to a particular state rather than that they belong to India.
Analysing therefore the essential features of the play the position is as follows: 1.
That the central idea of the play is based on provincialism and parochialism.
The evils of provincialism are illustrated by the cordial relations of the two families being married because of an 252 apprehended marriage tie which according to both the families was not possible where they belonged to different States.
That the Madrasi boy Amni is a coward and in spite of his profound love for Chander he does not muster sufficient courage to talk the matter out with his parents.
That in sheer desperation while the parents of the families are trying to arrange a match for the couple belonging to the same State Amni and Chander enter into a suicidal pact and write letters to their parents intimating their intention.
It was only after the letters are perused by the parents that they realise the horror of parochialism and arc repentant for having acted so foolishly.
That after this realisation comes the married couple Amni and Chander appear before the parents and thus all is well that ends well.
As the play was read to us by the appellant we find that it was very exquisitely presented and the plot was developed with great skill.
It must be noted however that the author in writing out the play has concentration only on one aspect of provincialism namely whether there can be a marriage between the persons belonging to one State with those belonging to other States.
This is the only aspect of provincialism which has been stressed in the play.
The play does not touch any other aspect nor does it contain anything to throw light on the evils of society or that of dowry etc.
We have mentioned these acts particularly because the film revolves around not only the aspect of marriage but other aspects also which are given the same importance as the problem of marriage.
We shall now give the summary of the film.
The script of which is exhibit D 2.
The film starts showing Anand a young graduate from Punjab who comes to New Delhi for a course in Radio Engineering.
At the Railway Station Anand meets a Madrasi girl Janaki and due to some misunderstanding an altercation between the two takes place, as a result of which Janaki feels that Anand was trying to tease her.
Thereafter Anand comes and stays in a Sarai opposite the Railway Station, but he is allowed to stay there only for three days after which he was expected to find accommodation elsewhere.
Thereafter Anand runs from house to house trying to get some accommodation but is sadly disappointed because wherever he goes he finds that in every case the landlord is not prepared to give the house to any person who 253 does not belong to his province.
We might mention here that this is one of the very important aspect of provincialism which pervades through the entire film, viz., that so parochial are the landlords that they were not even prepared to let out their houses or rooms to any person coming from outside their State.
This particular aspect is completely absent from the story revealed in the play written by the appellant.
One Kumaraswamy a South Indian attendant at the Sarai comes to the rescue of Anand and suggests to him that he should attire as a South Indian and then go to any South Indian landlord to get the house.
Thereafter Anand disguised as a South Indian approaches one Iyer for giving him accommodation and Iyer is only too glad to accommodate Anand on the ground that Anand is also a South Indian.
Anand then meets Subramaniam father of Janaki the girl with whom he had all altercation at the station.
The film then proceeds involving several sequences of the meeting between Anand and Janaki, Murli Dhar the Principal of a Dancing School takes Anand is his student and there he is introduced to Janaki who is a Professor of Dance and Music in that Institute.
Janaki then discovers that Anand is a good singer and is slowly and gradually attracted towards him.
Janaki invited him to her house for the celebration of Pongal festival and Anand goes there as usual attired as South Indian to witness the dance performance of Janaki.
He also comes to know that Janaki 's father Subramaniam does not hold any good opinion about the Punjabis.
Thereafter Anand leaves the place after making an appointment with Janaki to meet near Rashtrapati Bhawan the following day.
When Anand returns to his house he comes to know that his father Daulat Ram had been transferred to New Delhi and was expected at any moment.
Daulat Ram was posted as Manager in the same commercial company in which Subramaniam was employed ill a subordinate position.
Anand receives his parents and his grown up sister Nikki at the railway station and takes them to his house.
He also brings Kumaraswamy, the attendant, at the Sarai to his own house as a cook.
Thereafter Anand goes out on the pretext of taking his sister Nikki around the city.
When they reach the Red Fort he meets Ashok Banerjee, a young Bengali painter whom he had met earlier in connection with the search for accommodation of the house but was refused accommodation because Anand did not happen to be a Bengali.
Ashok Banerjee is impressed by Nikki and requests her to allow him to make Nikki 's portrait.
Leaving his sister there Anand meets Janaki and both of them come to the Red Fort.
When Anand and Janaki meet Nikki and Ashok, Anannd in order to conceal his real identity tells Janaki that Nikki is the daughter of his father 's friend, which naturally angers Nikki hut later Anand apologies to her and 18 520 SCI/78 254 explains that he did not want Janaki or her father lo know that he was not a Madrasi and thus upset the love affair between Anand and Janaki.
Subramaniam, father of Janaki takes a fancy for Anand and asks Janaki to invite Anand 's father to the house so that he could negotiate Janaki 's marriage with Anand.
This puts Anand in a most awkward position In order to save the situation Anand hits upon an idea by introducing his cook Kumaraswamy to Subramaniam as his father.
Just at that time Daulat Ram happens to pass through Subramaniam 's house and is called in by Subramaniam, but the situation is saved by Kumaraswamy feigning illness as a result of which he is taken to a room where he hides his face in a blanket.
Anand leaves the house and returns with a false beard posing as a doctor.
Similarly, Ashok and Nikki get attached to each other and Ashok receives a telegram from his father summoning him to Calcutta.
Before he leaves Ashok frankly declares his love to Nikki and gets her consent to marry him.
The love affair of Nikki however is not in the knowledge of her parents.
Murli Dhar, Principal of the Institution of Dance and Music arranges a performance in which the principal role is played by Anand and Janaki.
Up to this time neither Janaki nor her father Subramaniam had ever known the real identity of Anand but both of them had taken him to be a South Indian.
We might like to add that here the picture makes a complete departure from the story contained in the play where both the parents of the couple knew the identity of each other.
Before the performance starts Anand tries to disclose his identity to Janaki but is unable to do so because Janaki is in a hurry.
The performance is applauded by The audience which includes Subramaniam, Daulat Ram and Kumaraswamy.
In the theater hall where the performance is staged Kumaraswamy is given a prominent place as he is taken to be the father of Anand.
Daulat Ram resents this fact because Kumaraswamy was his servant.
After the performance Murli Dhar introduces Subramaniam Janaki 's father to the audience.
Murli Dhar then calls Kumaraswamy and introduces him to the audience as the father of Anand.
This infuriates Daulat Ram who comes to the stage and gives a thrashing to Kumarswamy.
It is at this stage that the entire truth is revealed and both Subramaniam and Janaki come to know that Anand was not a South Indian hut a Punjabi and his father was Daulat Ram.
Daulat Ram also does not like the relations of his son with Janaki because he thinks that if the son marries outside the caste that will create difficulties for the marriage of his daughter Nikki Subramaniam then starts negotiation for Janaki 's marriage with a South Indian boy.
Anand goes to Janaki and asks her to delay the negotiations for about a month or two till Nikki 's marriage is over after which he would marry Janaki.
255 Janaki feels completely let down and when she goes home she is given a serious rebuke by her father.
In utter frustration Janaki decides to commit suicide and leaves suicide note.
She proceeds to Jamuna river.
Before she is able to jump into the river she is saved by Sadhu Ram, a Punjabi Ghee Merchant, and a friend of Subramaniam Sadhu Ram scoffs at the people 's preference for provincialism and their lack of appreciation of intrinsic human values.
He takes Janaki to his own house and tells Daulat Ram that she is her niece and on that basis negotiates for the marriage of Janaki with Anand.
Daulat Ram accepts the proposal because Janaki appears as a Punjabi girl on receiving the suicide note Subramaniam feels extremely sorry and realises his mistake.
In the meanwhile when Daulat Ram returns to his house he finds Ashok Banerjee on very intimate terms with Nikki Daulat Ram gets furious and turns out Ashok from his house.
Thereafter Daulat Ram arranges the marriage of his daughter Nikki with the son of one Girdhari Lal.
After the marriage party comes to the house of Daulat Ram, Girdhari Lal insists upon Rs. 15,000 as dowry from Daulat Ram.
Daulat Ram does not have such a large sum of money and implores Girdhari Lal not to insist and to save his honour but Girdhari Lal is adamant.
Daulat Ram tries to enlist the support of his caste men but no one is prepared to oblige him.
At this juncture Ashok Banerjee appears on the scene and offers his mother 's jewellery to Daulat Ram to be given in dowry to Girdhari Lal and thus seeks to save the honour of Daulat Ram.
This act of Ashok Banerjee brings about a great mental change in the attitude of Daulat Ram, who stops Nikki 's marriage with Girdhari Lal 's son and turns them out along with the men of his brotherhood.
Daulat Ram declares his happiness that he has found a bigger brotherhood, namely, the Indian brotherhood and asks Ashok to marry Nikki at the same marriage Pandal.
At that time Sadhu Ram requests Daulat Ram that Mohini who is none other than Janaki should also be married to Anand.
Sadhu Ram discloses the true identity of Janaki and then Daulat Ram realises his short sightendness and welcomes the idea of the marriage of Anand with Janaki.
Subramaniam who is present there feels extremely happy and blesses the proposed marriage.
Ashok and Nikki as also Anand and Janaki are then married and thus the film ends.
Analysing the story of the film it would appear that it protrays three main themes: (1) Two aspects of provincialism viz. the role of provincialism in regard to marriage and in regard to renting out accommodation (2) Evils of a caste ridden society, and (3) the evils of dowry.
So far as the last two aspects are concerned they do not figure at all in the play written by the plaintiff/appellant.
A close 256 perusal of the script of the film clearly shows that all the three aspects mentioned above are integral parts of the story and it is very difficult to divorce one from the other without affecting the beauty and the continuity of the script of the film.
Further, it would appear that the treatment of the story of the fills in many respects different from the story contained in the play.
Learned counsel for the appellant however drew our attention to para 9 of the plaint at pages 18 19 of the paper book wherein as many as 18 similarities have been detailed.
The similarities may be quoted thus: (i) Before the actual stage play, the producer gives a narrative.
He states that although we describe ourselves as Hindustanis we are not really Hindustanis.
He questions their audience as to what they are and various voices are heard to say in their own provincial language that they are Punjabis, Bengalis, Gujratis, Marathas, Madarasis, Sindhis, etc.
In the said film the same idea is conveyed and the hero of the picture is shown searching for a house in New Delhi and wherever he goes he is confronted by a landlord who describes himself not as Hindustanis but as a Punjabi, Bengali Gujrati, Maratha, Madarasi or Sindhi.
(ii) Both the said play and the said film deal with the subject of provincialism.
(iii)Both the said play and the said film evolve a drama around the lives of two families, one a Punjabi and the other a Madrasi family.
(iv) In both the said play and the said film the name of the Madrasi father is Subramanyam.
(v) Both the said play and the said film have their locale in New Delhi.
(vi) Both the said play and the said film show cordiality of relations between the two families.
(vii)Both the said play and the said play and the said film show the disruption of cordial relations as soon as the head of the families discover the existence of love affairs between their children.
(viii)In both the said play and the said film, both the parents warn their respective children not to have anything to do with each other on pain of corporal punishment.
257 (ix) The entire dialogue in both the said play and the said film before and after the disruption is based upon the superiority of the inhabitants of one Province over the inhabitants of the others.
(x) In both the said play and the said film the girl is shown to be fond of music and dancing.
(xi) In both the said play and the said film the hero is shown as a coward to the extent that he has not the courage to go to his parents and persuade them to permit him to marry a girl hailing from another Province.
(xii) Both in the said play and in the said film, when the parents of the girl are discussing marrying her off to some body the girl is listening to the dialogue from behind a curtain.
Thereafter the girl runs to the boy and explains the situation to him.
(xiii)In both the said play and the said film, the girl writes a letter of suicide.
(xiv)In the said play reconciliation takes place when the children of the two families, who were in love, go out to commit suicide by drowning etc., whereas in the said film, it is only the daughter who goes out to commit suicide by drowning herself in the Jamuna.
(xv) In the said play the children are stopped from commit ting suicide by an astrologer whereas in the said film the girl is stopped from committing suicide by a friend of the family.
(xvi)In the said play reconciliation between the two families takes place only after they have experienced the shock of their children committing suicide on account of their provincial feelings whereas in the film, the father of the girl realised his mistake after experiencing the shock of his daughter committing suicide.
(xvii)In both the said play and the said film, stress is laid on the fact that although India is one country, yet there is acute feeling of provincialism between persons hailing from its various States even though they work together and live as neighbors.
(xviii)Both in the said play and in the said film, even tho dialogue centres around the same subject of provincialism.
258 In the course of the argument also our attention was Drawn to a comparative compilation of the similarities in the film and the play.
The learned trial Judge after considering the similarities was of the opinion that the similarities are on trivial points and do not have the effect of making the film a substantial and material imitation of the play.
Moreover apart from the fact that the similarities and coincidences mentioned above are rather insignificant as pointed out by the trial Judge and the High Court, in our opinion, they are clearly explainable by and referable to the central idea, namely, evils of provincialism and parochialism which is common to both the play and the film.
Nothing therefore turns upon the similarities categorised by the plaintiff (in para 9 of the plaint), in the peculiar Facts and circumstances of this case.
After having gone through the script of the play and the film we are inclined to agree with the opinion of the Courts below.
We have already pointed out that mere similarities by themselves are not sufficient to raise in inference of colourable imitation on the other hand, there are quite a number of dissimilarities also, for instance: (i) In the play provincialism comes on the surface only when the question of marriage of Amni with Chander crops up but in the picture it is the starting point of the story when Anand goes around from door to door in search of accommodation but is refused the same because he does not belong to the State from which the landlord hails as a result ' thereof Anand has to masquerade him self as a Madrasi.
This would, therefore, show that the treatment of the subject of provincialism in the film is quite different from that in the play and is actually a new theme which is not developed or stressed in the play.
(ii) Similarly, in the play the two families are fully aware of the identity of each other whereas in the film they are not and in fact it is only when the dance performance of Janaki and Anand is staged that the identity of the two ( families is disclosed which forms one of the important climaxes of the film.
Thus, the idea of provincialism itself is presented in a manner or form quite different from that adopted in the play.
(iii)In the film there is no suicidal pact between the lovers but only a suicide note is left by Janaki whereas in the play both the lovers decide to end their lives and enter into a suicidal pact and leave suicide note to this effect.
259 Furthermore, while in the play Amni and Chander get married and then appear before the parents in the picture the story takes a completely different turn with the intervention of Sadhu Ram who does not allow Janaki to commit suicide but keeps her with him disguised as his niece and the final climax is reached in the last scene when Janaki 's real identity is disclosed and Subramaniam also finds out that his daughter is alive.
(iv) The story in the play revolves around only two families, namely, the Punjabi and the Madrasi families, but in the film there are three important families, namely, the Punjabi family, the Madrasi family and the Bengali family and very great stress is laid down in the film on the role played by Ashok Banerjee of the Bengali family who makes a supreme sacrifice at the end which turns the tide and brings about a complete revolution in the mind and ideology of Daulat Ram.
D (v) The film depicts the evil of caste ridden society and exposes the hollowness of such a society when, in spite of repeated requests no member of the brotherhood of Daulat Ram comes to his rescue and ultimately it is left to Ashok Banerjee to retrieve the situation.
This aspect of the matter is completely absent in the play.
(vi) The film depicts another.
important social evil, namely, the evil of dowry which also appears to be the climax of the story of the film and the horrors of dowry are exhibited and demonstrated in a very practical and forceful fashion.
The play however does not deal with this aspect at all.
The aspects mentioned above which are absent from the play are not mere surplusage or embellishments in the story of the film but are important and substantial parts of the story.
The effect of the dissimilarities pointed out above clearly go to show that they tar outweigh the effect of the similarities mentioned in para 9 of the plaint set out above.
Moreover, even if we examine the similarities mentioned by the plaintiff they are trifling and trivial and touch insignificant points and do not appear to be of a substantial nature.
The mere fact that the name of the Madrasi father was Subramaniam in both the film and the play, is hardly of any signifi 260 cance because the name of a particular person cannot be the subject matter of copyright because these are common names.
After careful consideration of the essential features of the film and the play we are clearly of the opinion that the plaintiff has not proved by clear and cogent evidence that the defendants committed colourable imitation of the play and have thus violated the copyright of the plaintiff.
It was lastly contended by counsel For the appellant that the correspondence between the plaintiff and the defendant would show that defendant No. 2 himself was aware of the story contained in the play even before he proceeded to make the film in New Delhi.
This is undoubtedly so because defendant No. 2 admits in his evidence that he had come to Delhi and the entire play was narrated to him by the plaintiff.
There is however a serious controversy on the question as to whether the defendant after hearing play said that the play was not suitable for being filmed as alleged.
The plaintiff, however, seems to suggest that defendant No. 2 was undoubtedly Attracted by the play and it was on the basis of this play that he decided to make the film.
However, there is no reliable evidence to show that defendant No. 2 at any time expressed his intention to film the play written by the plaintiff.
There can be no doubt that defendant No. 2 was aware of the story contained in the play and a part of the film was undoubtedly 6 to some extent inspired by the play written by the plaintiff.
But the definite case of defendant No. 2 also is that he was in search of story based on provincialism and the play written by the plaintiff may have provided the opportunity for defendant No. 2 to produce his film though with a different story, different theme, different characterisation and different climaxes.
Thus, applying the principles enunciated above and the various tests laid down to determine whether in a particular case there has been a violation of the copyright we are of the opinion that the film produced by the defendants cannot be said to be a substantial or material copy of the play written by the plaintiff.
We also find that the treatment of the film and the manner of its presentation on the screen is quite different from the one written by the plaintiff at the stage.
We are also satisfied that after seeing the play and the film no prudent person can get an impression that the film appears to be a copy of the original play nor is there anything to show that the film is a substantial and material copy of the play.
At the most the central idea of the play, namely, provincialism is undoubtedly the subject matter of the film along with other ideas also but it is well settled 261 that a mere idea cannot be the subject matter of copyright.
Thus, the present case does not fulfil the conditions laid down for holding that the defendants have made a colourable imitation of the play.
On a close and careful comparison of the play and the picture but for the central idea (provincialism which is not protected by copyright), from scene to scene, situation to situation, in climax to anti climax.
pathos, bathos, in texture and treatment and purport and presentation, the picture is materially different from the play.
As already indicated above, applying the various tests outlined above we are unable to hold that the defendants have committed an act of piracy in violating the copyright of the play.
Apart from this the two courts of fact, having considered the entire evidence, circumstances and materials before them have come to a finding of fact that the defendants committed no violation of the copyright.
This Court would be slow to disturb the findings of fact arrived at by the courts below particularly when after having gone through the entire evidence, we feel that the judgment of the courts below are absolutely correct.
The result is that the appeal fails and is accordingly dismissed.
But in the circumstances there will be no order as to costs in this Court only.
JASWANT SINGH, J. Bearing in mind the well recognised principles and tests to determine whether there has been an infringement of the law relating to copyright in, a particular case which were brought to our notice by the counsel on both sides and which have been elaborately considered and discussed by my learned brother Murtaza Fazal Ali in the course of the judgment prepared by him, we proceeded at the re quest of the counsel to hear the script of the play "Hum Hindustani ' which WAS read out to us by the plaintiff himself in a dramatic style and to see the film "New Delhi" produced by defendants 1 and 2, the exhibition of which was arranged by the defendants themselves.
On a careful comparison of the script of the plaintiff 's copyrighted play with the aforesaid film, although one does not fail to discern a few resemblances and similarities between the play and the film, the said resemblances are not material or substantial and the degree of similarities is not such as to lead one to think that the film taken as a whole constitutes an unfair appropriation of the plaintiff 's copyrighted work.
In fact, a large majority of material incidents, episodes and situations portrayed by defendants I and 2 in their aforesaid film are substantially different from the plaintiff 's protected work and the two social evils viz. caste system and dowry system sought to be exposed 262 and eradicated by defendants 1 and 2 by means of their aforesaid film do not figure at all in the plaintiff 's play.
As such I am in complete agreement with the conclusions arrived at by my learned brother Murtaza Fazal Ali that there has been no breach on the part of the defendants of the plaintiff 's copyright and concur with the judgment proposed to be delivered by him.
PATHAK, J.
It appears from a comparison of the script of the stage play "Hum Hindustani" and the script of the film "New Delhi" that the authors of the film script have been influenced to a degree by the salient features of the plot set forth in the play script.
There can be.
little doubt from the evidence that the authors of the film script were aware of the scheme of the play.
But on the other hand, the story portrayed by the film travels beyond the plot delineated in the play In the play, the theme of provincial parochialism is illustrated only in the opposition to a relationship by marriage between two families hailing from different parts of the country.
In the film the theme is also illustrated by the hostile attitude of proprietors of lodging accommodation towards prospective lodgers who do not belong to the same provincial community.
The plot then extends to the evils of the dowry system, which is a theme independent of provincial parochialism.
There are still other themes embraced within the plot of the film.
Nonetheless, the question can arise whether there is an infringement of copyright even though the essential features of the play can be said to correspond to a part only of the plot of the film.
This can arise even where changes are effected while planning the film so that certain immaterial features in the film differ from what is seen in the stage play.
The relative position in which the principal actors stand may be exchanged or extended and embellishments may be introduced in the attempt to show that the plot in the film is entirely original and bears no resemblance whatever to the stage play.
All such matters fell for consideration in relation to the question whether the relevant part of the plot in the film is merely a colourable imitation of the essential structure of the stage play.
If the treatment of the theme in the stage play has been made the basic of one of the themes in the film story and the essential structure of that treatment is clearly and distinctly identifiable in the film story, it is not necessary, it seems to me, for the Court to examine all the several themes embraced within the plot of the film in order to decide whether infringement has been established.
In the attempt to show that he is not guilty of infringement of copyright, it is always possible for a person intending to take advantage of the intellectual effort and labours of another to so develop his own product that it covers a wider field than the area included within the scope of the earlier product, and in the common area covered by the two productions 263 to introduce changes in order to disguise the attempt at plagiarism.
If a reappraisal of the facts in the present case had been open in this court, I am not sure that I would not have differed from the view taken on the facts by the High Court, but as the matter stands, the trial Court as well as the High Court have concurred in the finding that such similarities as exist between the stage play "Hum Hindustani" and the film "New Delhi" do not make out a case of infringement.
The dissimilarities, in their opinion, are so material that it is not possible to say that the appellant 's copyright has been infringed.
This Court is extremely reluctant to interfere with concurrent findings of fact reached by the Courts below and for that reason I would allow the judgment under appeal to stand.
In another, and perhaps a clearer case, it may be necessary for this Court to interfere and remove the impression which may have gained ground that the copyright belonging to an author can be readily infringed by making immaterial changes, introducing insubstantial differences and enlarging the scope of the original theme so that a veil of apparent dissimilarity is thrown around the work now produced.
The court will look strictly at not only blatant examples of copying but also at reprehensible attempts at colourable imitation.
The appeal is dismissed, but without any order as to costs.
P.H.P. Appeal dismissed.
| IN-Abs | The appellant plaintiff is a playwright, dramatist and producer of stage plays.
The appellant had written and, produced a number of plays.
The subject matter of the appeal however, is the play entitled (Hum Hindustani '.
This play was written by him in the year 1953 and was enacted in the year 1954 and thereafter the play proved to be popular.
In November 1954 the appellant received a letter from the second defendant Mr.
Mohan Sehgal requesting the appellant to supply a copy of the play so that he could consider the desirability of making, a film on it.
Thereafter, the appellant and defendant No. 2 met at Delhi.
In May, 1955 the second defendant announced the production of a motion picture entitled "New Delhi".
The picture was released in Delhi in September 1956.
The appellant saw the picture.
The appellant filed a suit alleging that the film "New Delhi" was entirely based upon the play "Hum Hindustani", that the play was narrated by the appellant to defendant No. 2 and he dishonestly imitated the same in his film and thus committed an act of piracy as to result in violation of the copy right of the plaintiff.
The appellant, therefore, filed the suit for damages, for decree for accounts of the profits made by the defendant and a decree for permanent inujunction against the defendants restraining them from exhibiting the film.
The suit was contested by the defendants.
The defendants pleaded that defendant No. 2 is a film director and producer and director of Delux Films defendant No. I that at the instance of a common friend Mr. Gargi the defendant No. 2 met the appellant and saw the script of the play, that the play was inadequate for The purpose of making of a full length commercial motion picture.
The defendants contended that there could be no copy right so far as the subject of provincialism is concerned which can be used or adopted by anybody in his own way.
The defendants further contended that the motion picture was quite different from the play both in contents, spirit and climax.
The mere fact of some similarities between the firms and the play could be explained by the Fact that the idea, provincialism was the common source of the play as also of the film.
The trial court raised several issues and came to the conclusion that the appellant was the owner of the copy right in 'Hum Hindustani ' but there was no violation of copy right of the appellant.
Thereafter the appellant filed an appeal in the Delhi High Court.
A Division Bench of the Delhi High Court upheld the decree dismissing the appellant 's suit.
The counsel for the appellant contended (1) that the principles enunicated and the legal inference drawn by the courts below are against the settled legal principles laid down by the courts in England, America and India (2) the two 219 courts have not fully understood the imports of the violation of copy right particularly when the similarities between the play and The film are so close that would lead to the irresistible inference and unmistakable impression that the film is nothing but an imitation of the play.
The counsel for the respondents submitted (1) that the two courts below have applied the law correctly.
(2) This Hon 'ble Court may not enter into the merits in view of the concurrent findings of fact given by the two courts.
(3) Even on the facts found it is manifest that there is a vast difference both in the spirit and the contents between the play and the film.
Dismissing the appeal by special leave the Court ^ HELD: (a) In order to appreciate the argument of the parties the court discussed the law on the subject.
At the time when the cause of action arose in the present suit, the Indian Parliament had not made any law governing copyright violation and therefore the court relied on the old law passed by the British Parliament viz., the Copyright Act of 1911.
section 1 sub sec.
(2)(d) defines copyright as including in the case of a literary, dramatic or musical work, to make any record, performed roll.
cinematograph film, or other contrivance by means of which the work may be mechanically performed or delivered.
section 2(i) defines that copyright in a work shall be deemed to be infringed by any person who without the consent of the owner of the copyright, does anything, the sole right to do which is by this Act conferred on the owner of the copyright.
The play written by the appellant falls within the definition of copyright.
[229 D H 230 A B] The following is summary of the decided cases in England, America and India on the question of copyright.
There can be no copyright in an idea, subject matter, themes, plots or historical or legendary facts and violation of the copyright in such cases is confined to the form, manner and arrangement and expression of the idea by tile author of the copy righted work.
[248 H, 249 A] 2.
Where the same idea is being developed in a different manner, it is manifest that the source being common, similarities are bound to occur.
In such a case the courts should determine whether or not the similarities are on fundamental or substantial aspects of the mode of expression adopted in the copyrighted work.
If the defendant 's work is nothing but a literal imitation of the copyrighted work with some variations here and there it would amount to violation of the copyright.
In other words, in order to be actionable the copy must be a substantial and material one which at once leads to the conclusion that the defendant is guilty of an act of piracy.
1249 A C] 3.
One of the surest and the safest test to determine whether or not there has been a violation of copyright is to see if the reader, spectator or the viewer after having read or seen both the works is clearly of the opinion and gets an unmistakable impression that the subsequent work appears to be a copy of the original.
[249 C D] 4.
Where the theme is the same but is presented and treated differently so that the subsequent work becomes a completely new work, no question of violation of copyright arises.
[249 D] 220 5.
Where however apart from the similarities appearing in the two works there are also material and broad dissimilarities which negative the intention to copy the original and the coincidences appearing in the two words are clearly incidental no infringement of the copyright comes into existence.
[249 E] 6.
As a violation of copyright amounts to an act of piracy it must be proved By clear and cogent evidence after applying the various tests laid down by decided cases [249 F] 7.
Where however the question is of the violation of the copyright of a stage play by a film producer or a Director the task of the plaintiff becomes more difficult to prove piracy.
It is manifest that unlike a stage play a film has a much broader prospective, wider field and a bigger background where the defendants can by introducing a variety of incidents give a colour and complexion different from the manner in which the copyrighted work has expressed the Idea.
Even so, if the viewer after seeing the film gets a totality of impression that the film is by and large a copy of the original play, violation of the copyright may be said to be proved.
[249 F H] Hanfstaengl vs W. H. Singh & Sons, [1905] 1 Chancery Division 519; Bobbs Merill Co. vs Isdor Straus and Nathan Strau, ; ; West Francis, , 743; Ladbroke (Football) Ltd. vs William Hill (Football) Ltd. ; Corelli vs Gray, ; Hawkes & Son (London) Ltd. vs Paramount Film Service Ltd., ; Harman Pictures N. V. vs Osborne & Ors., ; Donoghue vs Allied Newspapers Ltd. ; Bobl & Anr.
vs Palace Theatre (Ltd.) & Alir.
; Tate vs Fullbrook, 77 Law Journal Reports 577; Frederick.
B. Chatterton & Benjamin Webster vs Joseph Arnold Cave, ; Sheldon vs Metro Goldwyn Pictures Corp., 81 2d 19; Shipman vs R.K.o.
Radio Pictures, 100 2d 533, Michael vs Moretti vs People of the State of Illionois, 248 2d 799=356 U.S. 947, Warner Bros. Pictures vs Columbia Broadcasting System, ; Otto Eisenchiml vs Fawcett Publications, 246 2d 598; Dorsey vs Old Surety.
Life Ins., Co., ; Twentieth Century Fox Film Corporation vs Stonesifer, 140 2d 579; Oliver Wendel Homes vs George D. Hurst, ; ; Macmillan & Co. Ltd. vs K. & J. Cooper, 51 I.A. 109; Florerlce A Deeks vs H. G. p Wells & Ors., 60 I.A. 26; N. T. Ragllunathan & Anr.
vs All India Reporter Ltd., Bombay, A.I.R. 1971 Bom.
48, K. R. Venugopala Sarma vs Sangu Ganesan, ; The Daily Calendar Supplying Bureau, Sivakasi vs The United Concern, A.I.R. 1967 Mad. 381; Hantsiaenql vs Bains & Co., (25); C. Gunniah & Co. vs Balraj & Co., A.I.R. 1961 Mad.
111; Mohendra Ghundra Nath Ghosh & ors.
vs Emperor, A.I.R. 1928 Cal.
section K. Dutt vs Law Book Co. & Ors.
A.I.R. 1954 All. 570; Romesh Chowdhry & Ors vs Kh.
Ali Mohammad Nowsheri & Ors., AIR 1965 J. & K.101 and Mohini Mohan Singh & Ors vs Sita Nath Basak, AIR 1931 Cal.
238; referred to.
The learned trial Judge who had the advantage of seeing the picture was of the opinion that the film taken as a whole is quite different.
from the play written by the appellant.
This Court also got the play read to the learned Judges and the learned Judges also saw the film.
The Court came to the conclusion that the essential features of the play are as under: [250 A B, 251 G] 1.
That the central idea of the play is based on provincialism and parochialism.
[251 G] 221 2.
The evils of provincialism are illustrated by the cordial relations of the two families being marred because of an apprehended marriage tie which according to both the families WAS not possible where they belonged to different States.
[251 H, 252 A] 3.
That the Madrasi boy Amni is a coward and in spite of his profound love 'or Chander he does not muster sufficient courage to talk the matter out with his parents.
[252 A B] 4.
That in sheer desperation while the parents of the families are trying to arrange a match for the couple belonging to the same State Amni and Chander enter into a suicidal pact and write letters to their parents intimating their intention.
[252 B C] 5.
It was only after the letters are perused by the parents that they realise he horror of parochialism and are repentant for having acted so foolishly.
[252 C] 6.
That after this realisation comes the married couple Amni and Chander appear before the parents and thus all is well that ends well.
[252 D] The Court came to the conclusion that the essential features of the film are as under: (1) Two aspects of provincialism viz. the role of provincialism in regard to marriage and in regard to renting out accommodation (2) Evils of a caste ridden society, and (3) the evils of dowry.
[255 H] It is true that there are following similarities in the two.
[256 A] (i) Before the actual stage play, the producer gives a. narrative.
He states that although we describe ourselves as Hindustanis we are not really Hindustanis.
He questions the audience as to what they are and various voices are heard.
To say in their own provincial language that they are Punjabis, Bengalis, Gujarati, Marathas, Madrasis, Sindhis etc.
In the said Film the same idea is conveyed and the hero of the picture is shown searching for a house in New Delhi and wherever he goes he is confronted by a landlord who describes himself not as a Hindustani but as a Punjabi, Bengali, Gujarati, Marathi, Madarasi or Sindhi.
[256 C D] (ii) Both the said play and the said film deal with the subject of Provincialism.
[256 E] (iii)Both the said play and the said film evolve a drama around the lives of two facilities, one a Punjabi and the other a Madrasi family.
1256 E] (iv) In both the said play and the said film the name of the Madrasi father is Subramanyam .[256 F] (v) Both the said play and the said film have their locale in New Delhi.
[256 F] (vi) Both the said play and the said film show cordiality of relations between the two families.
[256 F G] (vii)Both the said play and the said film show the disruption of cordial relations as soon as the heads of the families discover the existence of a love affair between their children.
[256 G] (viii) In both the said play and the said film, both the parents warn their respective children not to have anything to do with each other on pain of Corporal punishment.
1256 Hl.
222 (ix) The entire dialogue in both the said play and the said film before and after the disruption is based upon the superiority of the inhabitants of one Province over the inhabitants of the others.
[257 A] (x) In both the said play and the said film the girl is shown to be fond of music and dancing.
[257 B] (xi) In both the said play and the said film the hero is shown as a coward to the extent that he has not the courage to go to his parents and persuade them to permit him to marry a girl hailing from another Province.
[257 B C] (xii) Both in the said play and in the said film, when the parents of the girl are discussing marrying her off to some body the girl is listening to the dialogue from behind a curtain.
Thereafter the girl runs to the boy and explains the situation to him.
[257 C] (xiii) In both the said play and the said film, the girl writes a letter of suicide.
[257 D] (xiv) In the said play reconciliation takes place when the children of the two families, who were in love, go out to commit suicide by drowning etc., whereas in the said film, it is only the daughter who goes out to commit suicide by drowning herself in the Jamuna.
[257 D E] (xv) In the said play the children are stopped from committing suicide by an astrologer whereas in the said film the girl is stopped from committing suicide by a friend of the family.
[257 E F] (xvi) In the said play reconciliation between the two families takes place only after they have experienced the shock of their children committing suicide on account of their provincial feelings whereas in the film, the father of the girl realised his mistake after experiencing the shock of his daughter committing suicide.
[257 F G] (xvii) In both the said play and the said film, stress is laid on the fact that although India is one country, yet there is acute feeling of provincialism between persons hailing from its various States even though they work together and live as neighbours.
[257 G] (xviii) Both in the said play and in the said film even the dialogue centres around the same subject of provincialism.
[257 H] However, the Court found following dissimilarities: (i) In the play provincialism comes on the surface only when the question of marriage of Amni with Chander crops up but in the picture it is the starting point of the story when Anand goes around from door to door in search of accommodation but is refused the same because he does not belong to the State from which the landlord hails as a result thereof Anand has to masquerade himself as a Madrasi.
This would therefore show that the treatment of the subject of provincialism in the film is quite different from that in the play and is actually a new theme which not developed or stressed in the play[258 D F] (ii) similarly in the play the two families are fully aware of the identity of each other whereas in the film they are not and in fact it is only when the dance Performance of Janki and Anand is staged that the identity of the two families 223 is disclosed which forms one of the important climaxes of the film.
Thus, the idea of provincialism itself is presented in a manner or form quite different from that adopted in the play.
[258 F G] (iii) In the film there is no suicidal pact between the lovers but only a suicide note is left by Janki whereas in the play both the lovers decide to end their lives and enter into a suicidal pact and leave suicide note to this effect.
Furthermore, while in the play Amni and Chunder get married and then appear before the parents in the picture the story takes a completely different turn with the intervention of Sadhu Ram who does not allow Janki to commit suicide but keeps her with him disguised as his niece and the final climax is reached in the last scene when Janki 's real identity is disclosed and Subramaniam also finds out that his daughter is alive [258 H, 259 A B] (iv) The story in the play revolves around only two families, namely, the Punjabi and the Madrasi families but in the film there are three important families, namely, the Punjabi family, the Madrasi family and the Bengali family and very great stress is laid down in the film on the role played by Ashok Banerjee of the Bengali family who makes a supreme sacrifice at the end which turns the tide and brings about a complete revolution in the mind and ideology of Daulat Ram.
[259 B D] (v) The film depicts the evil of caste ridden society and exposes the hollowness of such a society when in spite of repeated requests no member of the brotherhood of Daulat Ram comes to his rescue and ultimately it is left to Ashok Banerjee to retrieve the situation.
This aspect of the matter is completely absent in the play.
[259 D E] (vi) The film depicts another important social evil, namely, the evil of dowry which also appears to be the climax of the story of the film and the horrors of dowry are exhibited and demonstrated in a very practical and forceful fashion.
The play however does not deal with this aspect at all.
The aspects mentioned above which are absent from the play are not mere surplusage or embellishments in the story of the film but are important and substantial part of the story.
[259 E G] The Court came to the conclusion that the number of similarities by themselves are not sufficient to raise an inference of colourable imitation.
The similarities are trivial and touch insignificant points and do not appear to be of substantial nature.
The appellant has failed to prove that the defendants committed colourable imitation of the play.
[259 G H, 260 B] Applying the principles mentioned above to determine whether in this particular case there has been a violation of the copy right, the Court came to the conclusion that the film produced by the defendants cannot be said to be a substantial or material copy of the play written by the plaintiff.
The treatment of the film and the manner of its presentation on the screen is quite different from the play written by the appellant at the stage.
No prudent person can get the impression that the film appears to be a copy of the original play nor is there anything to show that the film is a substantial and material copy of the play.
At the most the central idea of the play viz. provincialism is undoubtedly the subject matter of the film along with other ideas also.
It is well settled that a mere idea cannot be the subject matter of copy right.
[260 G H, 261 A B] 224 The two courts of fact having considered the entire evidence, circumstances and materials before them have come to a, finding of fact that defendants committed no violation of the copyright.
This Court would be slow to disturb the findings of fact arrived at by the courts below particularly when after having gone through the entire evidence the court finds that the judgments of the court below are absolutely correct.
[261 C D] (Jaswant Singh, 1.
concurring) On a careful comparison of the script of the plaintiff 's copyright play with the film, although one does not fail to discern a few resemblances and similarities between the play and the film, the said resemblances are not material or substantial and the degree of similarities is not such as to lead one to think that the film taken as a whole constitutes an unfair appropriation of the appellant 's copyright word;.
In fact a large majority of material `incidents, episodes and dramatic situations portrayed by defendants 1 and 2 in their aforesaid film are substantially different from the plaintiff 's protected work and the two social evils viz. caste system and dowry system sought to be exposed and eradicated by defendants 1 and 2 by means of motion film, do not figure at all in the appellant 's play.
There has been no breach on the part of the defendants of the appellant 's copyright.
[261 G H, 262 A] (Pathak, J. concurring) lt appears from a comparison of the script of the play 'Hum Hindustani ' and the script of the film 'New Delhi ' that the authors of the film have been influenced to a degree by the salient features of the plot set forth in the play script.
There can be little doubt from the evidence that the auth ors of.
the film script were aware of the scheme of the play.
But, the story portrayed by the film travels beyond the plot delineated in the play.
The theme of provincial parochialism is illustrated only in the opposition to a relationship by marriage between two families hailing from different parts of the country.
In the film the theme is also illustrated by the hostile attitude of proprietors` of lodging accommodation towards prospective lodgers who do not belong to the same provincial community.
The plot then extends to the evils of the dowry system which is a theme independent of provincial parochialism.
There are still other themes embraced within the plot of the film.
The question can arise whether there is an infringement of copyright even though the essential features of the play can be said to correspond to a part only of the plot of the film.
In the attempt to show that he is not guilty of infringement of copy right it is always possible for a person intending to take advantage of the intellectual efforts and labour of another to so develop his own product that it covers a wider field than the area included within the scope of the earlier product and in the common area covered by the two productions to introduce changes in order to disguise the attempt at plagiarism.
If a. reappraisal of the facts in the present case were open to this Court, the Court perhaps would have differed from the view taken on the facts by the High Court but in view of the concurrent findings of the two courts below to the effect that the appellant 's copy right has not been infringed this Court is extremely reluctant to interfere with the concurrent findings of fact reached by the Courts below.
In another, and perhaps a clearer case it may be necessary for this Court to interfere and remove the impression which may have gained ground that the copy right belonging to an author can be readily infringed by making immaterial changes, introducing in substantial differences and enlarging the scope of the original theme.
so that a veil of appa 225 rent dissimilarity is thrown around the work now produced.
The court will look A strictly at not only blatant examples of copying but also at reprehensible attempts at colourable imitation.
[262 B H, 263 A C]
|
Civil Appeal No. 1553 of 977, Appeal by Special Leave from the Judgment and order dated 5 4 1977 of the Gujarat High.
Court in Civil Revision Application No. 847 of 1975.
Soli J. Sorabjee, Addl.
General and P. H. Parekh for the Appellant.
D. V. Patel, Badri Das Sharma and M. N. Shroff for Respondent No. 5.
The Judgment of the Court was delivered by DESAI, J.
This appeal by special leave raises a narrow but interesting question on the nature of proceedings under section 31 and 2 of the ( 'Act ' for short) which has a direct impact on the question of court fees tc be paid on an application that may be made under section 31 of the .
The question arose in the context of the following facts: The state of Gujarat set up the Gujarat state Financial corporation ( 'Corporation ' for short), the appellant herein, under section 3 of the .
The Corporation was set up inter alia for granting or guaranteeing tile loans to be raised by industrial concerns either from scheduled banks or state co operative banks or those floated in the public market.
The Corporation guaranteed numerous such loans, advanced to the industrial concerns in the state of Gujarat on certain terms and conditions agreed between the parties.
When the industrial concern defaults in repayment of loan or fails to comply with the terms of the agreement the Corporation is entitled to make an application to the District Judge within the limits of whose jurisdiction the industrial concern carries on the whole or substantial part of its business for one or more of the reliefs set out in section 31(1) of the .
The Corporation appears to have, made applications purporting to be under section 31(1) of the in various District Courts in the State of Gujarat against different industrial concerns.
A question was raised in the District Courts about the proper court fee payable on such applications.
The Corporation contended that the application would be governed by Article 1 (of Schedule II o the Bombay Court) Fee Act, 1959, and a fixed court fee in the amount of 65 paise would be payable in respect of the application.
On the other hand, the State contended that application would be governed either by 375 Article I Schedule I or at any rate by Article 7 of Schedule I and the court fee payable would be ad valorem on the amount of value of the subject matter in dispute or on the amount of the monetary gain or loss to be prevented according to the scale prescribed under Article I of Schedule I.
It appears that except for the Distt.
Judge, Broach, all other District Judges accepted the contention on behalf of the State.
The Distt.
Judge, Broach was of the opinion that the application under section 31(1) was in the nature of an execution application and it would be governed by Article l(c) of Schedule II.
The Corporation preferred revision applications to the High Court questioning the correctness of the decisions directing levy of ad valorem court fee.
The State of Gujarat also preferred a revision application against the decision of the Distt.
Judge, Broach holding that the application under section 31 (1) of the Act was in the nature of an execution application.
The High Court by a common judgment held that the application under section 31 (1) should bear ad valorem court fee.
In reaching this conclusion the High Court treated the application under section 31(1) of the Act on par with a suit by a mortgagee to enforce the mortgage debtor sale of the mortgaged property which is being treated as a money suit falling within the purview or Article I of Schedule I. Alternatively, it was held that even if the application under section 31 (1) is not a plaint within the meaning of Article 1 of Schedule I, it would fall within the purview of Article 7 of Schedule I which provides an ad valorem court fee on an application made for obtaining substantive relief which is capable of being valued in terms of monetary gain or prevention of monetary loss because to all intents and purposes the application is one for recovery of the outstanding claim of the Corporation.
In accordance with these findings the revision applications preferred by the Corporation were dismissed and the one preferred by the State was allowed.
Mr. Sorabji, learned counsel who appeared for the appellant Corporation contended that the view taken by the learned Judge of the High Court that on an analogy the application under section 31(1) by the Corporation is akin to a suit by a mortgagee to enforce his mortgage debt by sale of mortgaged property and, therefore, money suit, falling within the purview of Article 1 of Schedule I of the Bombay Court Fee Act, 1959, or the observation that the substantive relief claimed in the application is one which is capable of being value in terms of monetary gain or prevention of monetary loss and would attract Article 7 of Schedule I, is not correct.
The , was enacted by the Parliament with a view to enabling the State Governments to establish a Financial Corporation for enhancing the pace of industrialisa 376 tion by providing credit on easy terms for setting up industrial concerns and/or for expanding the activities of the existing industrial concerns.
Section 25 enables the Financial Corporation to carry on and transact any of the business set out therein which includes guaranteeing on such terms and conditions as may be agreed upon (i) loans raised by industrial concerns which are repayable within a period not exceeding 20 years and are floated in the public market or (ii) loans raised by industrial concerns from scheduled banks or State Co operative Banks.
It can also underwrite the issue of stock, shares, bonds or debentures by an industrial concern.
The Corporation can either guarantee the loan raised by the industrial concern or may even grant itself a loan on such terms and conditions as may be agreed upon between the Corporation and the industrial concern.
Section 29 confers upon Financial Corporation, in case of default by industrial concern, the right to take over the management of possession or both of the industrial concern as well as the right to transfer by way of lease or sale and realise the property pledged, mortgaged, hypothecated or assigned to the Financial Corporation, and any transfer of property made by the Corporation in exercise of the power conferred by section 29 shall vest in it all rights in or to the property transferred as if the transfer had been made by the owner of the property.
The relevant two sections with which we are concerned In this appeal are sections 31 and 32.
Section 31 provides as under: "31.
(1) Where an industrial concern, in breach of any agreement, makes any default in repayment of any loan or advance or any instalment thereof or in meeting its obligations in relation to any guarantee given by the Corporation or otherwise fails to comply with the terms of its agreement with the Financial Corporation or where the Financial Corporation requires an industrial concern to make immediate repayment of any loan or advance under section 30 and the industrial concern fails to make such repayment, then, without prejudice to the provisions of section 29 of this Act and of section 69 of the , any officer of the Financial Corporation, generally or specially authorised by the Board in this behalf may apply to the district judge within the limits of whose jurisdiction the industrial concern carries on the whole or a substantial part of it business for one or more of the following reliefs, namely: (a) for an order for the sale of the property pledged, mortgaged, hypothecated or assigned to the 377 Financial Corporation as security for the loan or advance; or (b) for transferring the management of the industrial concern to the Financial Corporation; or (c) for an ad interim injunction restraining the industrial concern from transferring or removing its machinery or plant or equipment from the premises of the industrial concern without the permission of the Board, where such removal is apprehended.
(2) An application under sub section (1) shall state the nature and extent of the liability of the industrial concern to the Financial Corporation, the ground on which it is made and such other particulars as may be prescribed." Section 32(1) provides that when an application is made seeking reliefs mentioned in clauses (a) and (c) of sub section
(1) of section 31, it is obligatory upon the District Judge to pass an ad interim order attaching the security or so much of the property of the industrial concern as would on being sold realise an amount equivalent in value to the outstanding liability of the industrial concern to the Financial Corporation together with the costs of the proceedings with or without an ad interim injunction restraining the industrial concern from transferring or removing its machinery, plant or equipment.
If the applicant seeks relief mentioned in clause (b) of sub section (1) of section 31, the District Judge shall pass an order of ad interim injunction restraining the industrial concern from transferring or removing its machinery, plant or equipment.
A notice accompanied by copies of the interim order and the application is required to be served upon the industrial concern calling upon it to show cause why ad interim order of attachment should not be made absolute or the injunction confirmed or the management transferred to the Corporation.
If no cause is shown on or before the specified date, the order is to be made absolute.
Sub section (6) of section 32 provides that if the industrial concern shows cause, the Distt.
Judge is required to investigate the claim of the Financial Corporation in accordance with the provisions contained in the Code of Civil Procedure, 1908, in so far as such provisions may be applied thereto.
On completing the investigation the District Judge may either confirm the order or vary the order or release the property from attachment.
An order of attachment or sale of property has to be carried into effect as far as practicable in the manner provided in the Code of Civil Procedure, 1908, for the attachment or sale of property in execution of a decree as if the Financial Corporation were the decree holder.
378 Article 1 of Schedule I of the Court fees Act provides for ad valorem court fee on plaint or memorandum of appeal (not otherwise provided for in the Act) or of cross objections presented to any civil or revenue court, to be levied according to the scale set out in the Schedule on the value of the subject matter in dispute.
Article 7 provides for court fees on a plaint or application or petition other than those provided in the earlier Articles to obtain substantive relief capable of being valued in terms of monetary gain or prevention of monetary loss including cases where an application or petition is treated either as a plaint or a described as the mode of obtaining the relief as aforesaid, the fee to be calculated on the amount of the monetary gain or monetary loss to be prevented according to the scale prescribed under Article 1.
Section 31(1) prescribes a special procedure for enforcement of claims by the Financial Corporation The Corporation is to make an application for the reliefs set out in section 31 (1) .
The reliefs that a Court can grant under section 31(1) are the sale of the property mortgaged, etc.
to a Financial Corporation as security for the loan or advance; transfer of the management of the industrial concern to the Financial Corporation or restraining the industrial concern from transferring or removing its machinery or plant or equipment from the premises of the industrial concern without the permission of the Board of the Financial Corporation.
An application for such a relief is certainly not a plaint in a suit for recovery of mortgage money by sale of mortgaged property.
On a breach of an agreement by an industrial concern the Corporation can seek one or more of the three reliefs set out in section 31(1).
If the Corporation seeks the relief of transferring the management of the industrial concern to the Financial Corporation it could hardly be said that the application purports to be a plaint for recovering the mortgage money by sale of mortgaged properly.
It would be inappropriate to say that on an analogy an application under section 31(1) is something akin to a suit by a mortgagee to recover mortgage money by sale of mortgaged property.
At any rate, in an application under section 31 (1) the Corporation does not and cannot pray for a decree for its outstanding dues.
It can make an application for one of the three reliefs, none of which, if granted, results in a money decree, or decree for recovery of outstanding loan or advance.
Section 31(1) of the Act, in the circumstances therein set out, permits the Corporation to seek one or more of the three reliefs therein stated.
It is difficult to comprehend that merely the form of relief would attract one or the other Article of Court fees Act.
If relief of sale of mortgaged property is sought which permits an argument that the application is nothing but a suit for realising mortgage money by sale of mortgaged property and, therefore, 379 ad valorem court fees is payable, then what would be the nature of the application when instead of sale of mortgaged property the relief asked for is transfer of the management of the industrial concern or an interim injunction restraining the industrial concern from transferring or removing its machinery, plant or equipment from the premises cf the industrial concern without the permission of the Board? In the last mentioned two cases the relief is incapable of any monetary evaluation.
The High Court got over this difficult question by merely observing that this need not be answered in the petitions before the High Court.
Frankly speaking, they shed some light on the nature of the proceedings contemplated by section 31, and section 32 of the Act clearly points to, the conclusion that the proceedings are not in the nature of a money recovery proceedings.
Article 1 of Schedule I would, therefore, not be attracted and we must say in fairness to Mr. D.V. Patel, learned counsel for the respondent State of Gujarat who specifically stated that the application would not fall under Article I of Schedule I but it would be governed by Article of Schedule.
I. Developing the contention, Mr. Patel urged that the substance of the matter is that even if the Corporation applies for an order of sale of mortgaged property, the substantive relief is one of sale of mortgaged property so that the Corporation may reimburse itself of the loan advanced to the industrial concern thereby acquiring monetary gain or at any rate preventing monetary loss.
The outward form, it was said may be different but the substance of the matter is that the Corporation seeks to recover its loan by sale of mortgaged property.
It was said that at any rate either the Corporation by the substantive relief seeks to make a monetary gain of reimbursing itself in respect of the loan advanced by it or prevents the loss that it may suffer if the loan is not repaid, by bringing the mortgaged property to court auction and appropriate the sale price towards its loan.
Section 31(1) enables the Corporation in the event of breach of agreement or default in payment of loan or advance or an Instalment thereof to make an application not merely for sale of mortgaged property but even for transferring the management of the industrial concern to the Financial Corporation or merely injunct the industrial concern from transferring or removing its machinery or plant or equivalent from the premises of the concern without the permission of the Board.
An application for transfer of management of the industrial concern could by no stretch of imagination, be said to be an application for repayment of the loan though Mr. Patel did say that the management can only be retained till such time as the Corporation reimburses itself.
Further, if an application under section 31(1) is merely for an injunction restraining the industrial concern from transferring or removing its machinery or plant or equipment with 380 out the permission of the Board, it could hardly, or even remotely.
be said that such a relief substantively provides for repayment of the loan or it is a relief to prevent an anticipatory loss.
Let it he recalled at this stage that if the Court fees Act is a taxing statute its provisions have to be construed strictly in favour of the subject litigant (vide State of Maharashtra vs Mishrilal Tarachand Lodha & ors.,) In a taxing statute the strict legal position as disclosed by the form and not the substance of the transaction is determinative of its taxability (vide Joint Commercial Tax Officer, Harbour Div.
II, Madras vs Young Men 's Indian Association (Regd.), Madras & ors.
If it is a fee, the enormity of the exaction will be more difficult to sustain.
While we do not pronounce, we indicate the implication of the High Court 's untenable view.
What then is the nature of proceedings contemplated by section 31(1) if it is not a suit by the mortgagee for recovery of mortgage money by sale of mortgaged property.
Section 31 would to some extent provide a clue to this question.
On an application under section 31(1) being made it is obligatory upon the Court to make an interim order attaching the security with or without interim injunction restraining the industrial concern from transferring or removing its plant.
machinery or equipment without the permission of the Board of the Corporation.
If the relief claimed in the application is transfer of the management of the industrial concern to the Corporation it is obligatory upon the Distt.
Judge to grant an ad interim injunction restraining the industrial concern from transferring or removing its machinery, plant or equipment.
In either event a notice notifying the industrial concern to show cause why the order should not be made absolute is required to be served upon the industrial concern.
It was said that if cause is shown by the industrial concern it is obligatory upon the Distt.
Judge to investigate the claim of the Financial Corporation in accordance with the provision contained in the Code of Civil Procedure, 1908, in so far as such provisions may be applied thereto.
The contention is that once an industrial concern shows cause and contests the application of the Corporation there arises a lis between the parties which would include the investigation of the monetary claim of the Corporation and per se it would be a suit between the mortgagee and the mortgagor in which the ultimate relief is sale of mortgaged property for repayment of the mortgage money.
Sub section
(6) of section 32 of the Act has to be read in the context in which it is placed.
The claim of the Corporation is not the monetary claim to be investigated though it may become necessary to 381 specify the figure for the purpose of determining how much of the security should be sold.
But the investigation of the claim does not involve all the contentions that can be raised in a suit.
The claim of the Corporation is that there is a breach of agreement or default in making repayment of loan or advance or instalment thereof and, therefore, the mortgaged property should be sold.
It is not a money claim.
The contest can be that the jurisdictional fact which enables the Corporation to seek the relief of sale of property is not available to it or no case is made out for transfer of management of the industrial concern.
Sub section
(7) of section 32 prescribes what reliefs can be given after investigation under sub section
(6) is made, and it clearly gives a clue to the nature of contest under Sub section
Sub section
(8) of section 32 only prescribes the mode and method for executing the order of attachment or sale of property as provided in the Code of Civil Procedure.
Sub sections
(6), (7) and (8) of section 32 read together would give an opportunity to the industrial concern to appear and satisfy the District Judge what the situation envisaged by section 31(13 has not arisen and the relief should not be granted.
In the absence of a provision giving such an opportunity to the industrial concern to whose detriment the order is required to be made, a serious question may arise about the constitutional validity of the procedure prescribed under section 31(1) inasmuch as it would be violative of principles of natural justice and that too in a proceeding in a Court of Law.
The provision contained in sub section
(6) does not expand the contest in the application made under section 31(1) as to render the application to be a suit between a mortgagee, and the mortgagor for sale of mortgaged property.
If that were so, the Corporation would not be limited to specified reliefs only and if the contract permits it may seek to enforce personal liability of mortgage which it cannot enforce in an application under Sec. 31 ( 1).
It may be, as contended by Mr. Patel, that in the ultimate analysis the result would be that the property will be sold for repayment of the loan or advance taken by the, industrial concern from the Corporation but it could not be said that it is a substantive relief claimed by the Corporation which can be valued in terms of monetary gain or prevention of monetary loss as envisaged by Article 7 of Schedule I of Court fees Act.
The substantive relief in an application under section 31(1) is something akin to an application for attachment of property in execution of a decree at a stage posterior to the passing of the decree.
We are unable to appreciate the view taken by the High Court that the proceeding is not in the nature of execution of a decree because the question of enforcement of the order of attachment or sale would only arise after the same is made absolute under Sub section
One has to look at the whole conspectus of provisions in section 32 coupled with the nature of relief sought under section 31(1) 382 and it becomes clear that special provision is made for certain types of reliefs that can be obtained by a Corporation by an application under section 31(1) which could not be styled as substantive relief for repayment of mortgage money by sale of mortgaged property.
Nor can it be said to be a proceeding to obtain substantive relief capable of being valued in terms of monetary gain or prevention of monetary loss.
The form of the application, the nature of the relief, the compulsion to make interim order, the limited enquiry contemplated by Sub section 6 of section 32 and the nature of relief that can be granted and the manner of execution clearly show that the application under section 31(1) is neither a plaint as contemplated by Article 1 of Schedule I nor an application in a nature of a plaint as contemplated by Article 7 of Schedule I of Court fees Act.
Once Article 7 of Schedule I of the Court fees Act is excluded there was (and could be) no dispute that an application under section 31(1) of the Act would be covered by the residuary Article l(c) of Schedule II of the Court fees Act and it should bear a fixed court fee in the sum of 65 paise.
Therefore, the High Court was clearly in error in holding that the application should bear ad valorem court fee.
When dealing with a question of court fee, the perspective should be informed by the spirit of the magna carta and of equal access to justice which suggests that a heavy price tag on relief in Court should be regarded as unpalatable.
In this view of the matter this appeal is allowed and the order made by the High Court as well as the orders made by the various District Judges except the District Judge, Broach, are set aside.
On the question of costs, we looked at the specimen applications filed by the Corporation disclosing a clear lack of wisdom on the part of the Corporation in asking for a decree for certain amount which could not be granted under section 31 (1).
Therefore, there was a misconception on either side and the proper order should be that the parties shall bear their own costs.
S.R. Appeal allowed.
| IN-Abs | The appellant Corporation, which grants or guarantees the loan to be raised By industrial concerns either from the scheduled banks or state Cooperative Banks or those floated in public market, is entitled to make, for one or more of the reliefs set out in Section 31 ( 1 ) of the state Financial Cooperation Act, an application to the District Judge within the limits of whose jurisdiction the industrial concern carries on the whole or substantial part of its business, when any such concern defaults in repayment of loan or fails to comply with the terms of the agreement.
The Corporation made several applications purporting to be under Section 31(1) of the Act in various district courts in the State of Gujarat.
question was raised in the District Courts about the proper court fee payable on sch applications. ' The Corporation contended that the application would be governed k Article 1 (c) of Schedule II of the Bombay Court Fees Act, 1959 and a fixed court fee in the amount of 65 paise would be payable in respect of the application.
But the state contended that the application could be governed either by Article I of Schedule I or at any rate Article 7 of Schedule I and the court fee payable would be ad valorem on the amount of value o the subject matter in dispute or on the amount of the monetary gain or loss to be prevented according to the scales prescribed under Article 1 of Schedule I.
All the district courts except Broach accepted the contention of the state; but the Broach district court opined that the application under Section 31(1) was in the nature of an execution application and it would be governed by Article I (c) of Schedule II.
Both the Corporation and state of Gujarat went in revision before the High Court.
The High Court by a common judgment held that an appellation under Section 31(1) should bear an ad valorem court fee.
In reaching this conclusion, the High Court treated the application under Section 31(1) of the Act on par with a suit by a mortgagee to enforce the mortgage debt by sale of the mortgaged property which is being treated as a money suit falling within the purview of Article I of Schedule I. Alternatively, it was held the even if the application under Section 31(1) is not plaint within the meaning of Article I of Schedule I it would fall within the purview o Article 7 of Schedule I.
Allowing the appeal, by special leave the Court ^ HELD: 1.
The form of the application, the nature of the relief, the compulsion to make interim order, the limited enquiry contemplated by sub section (6) of Section 32 and the nature of relief that can be granted and the manner of execution clearly show that the application under Section 31 (1) is neither a plaint as contemplated by Article 1 of Schedule I nor an application in the nature of a plaint as contemplated by Article 7 of the Court Fees Act.
182 B C] 373 Once Article 7 of the Schedule I of the Court Fees Act is excluded there A was (and could be) no dispute that an application under Section 31(1) of trill Act would be covered by the residuary Article 1 (c) of Schedule II of the Court Fees Act and it should bear a fixed court fee in the sum of 65 paise.
[382 D] 2.
Section 31(1) of the Act prescribes a special procedure for enrichment of the claims of the Financial Corporation.
The Corporation is to make an application for the reliefs set out Indecision 31(1).
The reliefs that a Court can gram are the sale of the property mortgaged etc.
to a Financial Corporation as security for the loan or advance; transfer of the management of the industrial concern to the Financial Corporation; or restraining the industrial concern from transferring or removing its machinery or plant or equipment from the industrial concern without the permission of the Board of the Financial Corporation.
An application for such a relief is certainly not a plaint in a suit for recovery of mortgage loan.
It is not even something akin to a suit by a mortgage to recover mortgage money by sale of mortgaged property.
The distinguishing features noticeable between a suit for recovery of mortgage money by sale of mortgaged property and an application under section 31 for one or more of the relief specified therein lares that even if the Corporation as applicant so chooses, it cannot in the application, pray for a preliminary decree for accounts or a final decree for payment of money nor can it seek to enforce any personal liability even if such one is incurred under the contract of mortgage.
At any rate in an application under Section 31 ( 1 ) the Corporation does not and cannot pray for a decree for its outstanding dues.
It can make an application for one of the three reliefs, none of which, if granted, results in a money decree or decree for recovery of outstanding loans or advance.
The foreign of the relief by itself would not attract one or the other Article of Court Fees Act.
Section 32 of the Act clearly points to the conclusion that the proceedings under Section 31(1) of the Act are not in the nature of a money recovery proceedings.
Article 1 of Schedule I would, therefore not be attracted.
attracted 3.
The whole conspectus of provisions in Section 32 coupled with the nature relief sought under section 31(1) makes it clear that special provision is made for certain types of reliefs that can be obtained by a Corporation by an application under Section 31 ( I ) which could not be styled as substantive relief for repayment of mortgage money by sale of mortgaged property.
Nor can it be said to be a proceeding to obtain substantive relief capable of being valued in terms of monetary gain or prevention of monetary loss.
The substantive myself in an application under Section 31(1) is something akin to an application for attachment of property in execution of a decree at a stage posterior to the passing of the decree.
It may be that in the ultimate analysis the result would be that the property will be sold for repayment of the loan or advance taken by the industrial concern from the Corporation but it could not be said that it is substantive relief claimed by the Corporation which can be valued in terms of monetary gain or prevention of monetary loss as envisaged by Article 7 of Schedule I of Court Fees Act.
[382 A C & 381G H] Sub section (6) of Section 32 of the Act has to be read in the context in which it is placed.
It does not expand the contest in the application as if it is suit between a mortgagee and the mortgagor for sale of mortgaged property.
[38 I E] 374 Observation: [When dealing With a question o court fee, the perspective should be informed by the spirit of the magna carta and of equal access to justice which suggests that a heavy price tag on relief in Court should be regarded as unplayable.] [382E]
|
N: Criminal Appeal Nos.
59 and 60 of 1972.
Appeals by Special Leave from the Judgment and order dated 23 9 1971 of the Punjab and Haryana High Court in Cr1.
A. 512 of 1970.
R. L. Kohli and U. P. Singh for the Appellants.
A. section Sohal, Hardev Singh and R. section Sodhi for the Respondent.
The Judgment of the Court was delivered by KAILASAM, J.
The two criminal appeals Nos. 59 and 60 of 1972 are by special leave.
Criminal Appeal No. 59 of 1972 is, preferred by Sarwan Singh, Karnail Singh, Zora Singh and Malkiat Singh, while Criminal Appeal No. 60 of 1972 is by Bachan Singh against their conviction and sentence imposed on them by the trial court and confirmed by the Punjab and Haryana High Court in Criminal Appeal No. 512 of 1970.
This Court granted special leave in both cases limited to the question as to whether the offence committed by the appellants is one punishable under section 300 I.P.C. or under any part of section 304 I.P.C. The facts necessary for determining what offence the accused were guilty of may be stated.
Sant Singh is the father of Sarwan Singh, Bachan Singh and Mewa Singh.
Sarwan Singh is the first appellant in Criminal Appeal No. 59 of 1972 and Bachan Singh is the sole appellant in Criminal Appeal No. 60 of 1972.
The deceased Mewa Singh is their brother.
Sarwan Singh had two sons, Zora Singh and Karnail Singh who are appellants Nos. 3 and 2 in Criminal Appeal No. 59 of 1972.
Sarwan Singh 's daughter was married to Malkiat Singh who is the fourth appellant in Criminal Appeal No. 59 of 1972.
Pending appeal, Sarwan Singh and Bachan Singh have died and their appeals have abated.
We are therefore concerned only with Karnail Singh, Zora Singh and Malkiat Singh who are appellants Nos. 2, 3 and 4 in Criminal Appeal No. 59 of 1972.
The deceased is the brother of the two accused and paternal uncle of the two other accused.
The dispute was over a common Khal of the land and a pahi.
The deceased Mewa Singh put an application before the Revenue authority against the accused and the matter was pending when the occurrence took place.
On the date of the occurrence, 8 9 1969, at about 3 P.M., PW. 3, Mohinder Singh, went to Amar Singh, P.W. 5, who is Lambardar of his village in connection with the mutation of his land.
Amar Singh was grazing his cattle near the minor canal just opposite to the well 386 of the accused and the deceased Mewa Singh.
When P.W. 3 was 20 Kadams away from the place where Amar Singh was grazing his cattle, he heard a Raula coming from the side of tube well of Mewa Singh.
Hearing the noise, P.W. 3 ran towards their place of the occurrence.
He also saw P.W. 5, Amar Singh and Mohinder Singh, son of Thakar Singh, P.W. 4 also running towards the place of occurrence.
The three witnesses and Ujagar Singh, P.W. 9 who are eye witnesses spoke to the actual incident as follows: "When they reached near the place of occurrence they heard Zora Singh shouting to Mewa Singh.
Zora Singh was armed with a Gandasi, Karnail Singh was holding a Takwa, Malkait Singh was armed with a Gandasi and Sarwan Singh and Bachan Singh were having a Lathi each.
Zora Singh gave a Gandasi blow to Mewa Singh who raised his hands to ward off the blow and sustained injury.
Karhail Singh then gave a Takwa blow to Mewa Singh which he warded off by raising his hands and got an injury on his hand.
Zora Singh and Karnail Singh gave more injuries with their respective weapons.
Therefore, all the accused started causing injuries to Mewa Singh with their respective weapons while he was Lying on the ground.
" On the evening at about 8.30 P.M., P.W. 14 saw Mewa Singh and enquired from the doctor whether he was in a fit condition to, make a statement.
The doctor gave his opinion that Mewa Singh was not fit to make a statement.
Mewa Singh 's condition was found to be not satisfactory and therefore he was moved to Civil Hospital, Ludhiana.
He died at 5.40 p.m.
On 9 9 1969.
The doctor noted 27 injuries on the person of Mewa Singh.
According to the doctor, the cause of death was shock and haemorrhage and the injuries were ante mortem and sufficient in the ordinary course of nature to cause death.
Dr. Jagjit Singh, P.W. 5, examined Mewa Singh on admission to the hospital at 6.45 p.m.
On 8 9 1969 and found 27 injuries on Mewa Singh, of which injuries 2 and 3 were grievous.
Injuries at 3, 5 to 9, 11 to 17 were caused by sharp edged weapons.
All the injuries, except 2 and 3 were simple in nature.
The trial court was of the view that the question for consideration was whether the accused intended to inflict the injuries in question and if once the existence of injuries sufficient to cause death is proved, the intention to cause death will be presumed unless the evidence or the circumstances warrant an opposite conclusion.
In this view, the trial court found all the accused guilty under section 302 read with section 149 of the Indian Penal Code.
The High Court found that 387 the common object was clearly to kill the deceased and the offence fall under section 300.
Thirdly, read with section 34, Indian Penal Code.
The facts of the case disclose that five accused armed with various weapons caused the injuries to the deceased which resulted in his death.
If a person causes an injury with the intention of causing bodily injury to any person and when the bodily injury intended to be inflicted is sufficient in the ordinary course of nature to cause death, the offence would fall under clause (iii) of section 300 and would be punishable under section 302 of the Indian Penal Code.
The five accused were convicted by the trial court for an offence under section 302 read with section 149 I.P.C.
In order to find the person guilty of offence under section 302 read with section 149, the prosecution must establish that the offence was, committed by any member of an unlawful assembly in prosecution of the common object of the assembly or such as the members of that assembly knew to be likely to be committed in prosecution of the common object.
It is, therefore necessary for the prosecution to establish that the common object of the unlawful assembly was to commit an offence under section 300 or that the members of the assembly knew it to.
be likely that an offence under section 300 would be committed in prosecution of the common object.
The cumulative effect of the injuries was no doubt found to have been sufficient in the ordinary course of nature to cause death.
If the injuries that are sufficient in the ordinary course of nature to cause death are traced to a particular accused, he will be guilty of an offence punishable under section 302 without the aid of section 149, when the injuries caused are cumulatively sufficient to cause death, it is necessary before holding each of the accused guilty under section 302 read with Section 149 to find that the common object of the unlawful assembly was to cause death or that the members of the unlawful assembly knew it to be likely that an offence punishable under section 302 I.P.C. would be committed in prosecution of the common object.
In order to determine this question, it is necessary to refer to the injuries caused in some detail: Two grievous injuries are injuries 2 and 3 described in exhibit PD.
Injury No. 2 is an incised wound 3/4" x 1/4" bone deep on the right little finger at its middle and injury No. 3 is incised wound 1/3" distal to injury No. 2 at the right little finger cutting the bone underneath.
The grievous injury is the fracture and cutting of the Light little finger caused by a sharp edged weapon.
All the other injuries are simple in nature.
The injuries Nos. 1 to 3, 5 to 9, 11 to 17 were caused by sharp edged weapon.
Injury No. 1 is incised wound 1/2 " x 1/6" muscle deep on the left palm in between the left thumb and index 388 finger.
Injury No. 2 is incised wound 3/4" x 1/4" bone deep on the right little finger at its middle.
Injury No. 3 is incised wound 1/3" distal to Injury No. 2 at the right little finger cutting the bone underneath.
Injury No. 5 is incised wound 2" x 1/4" muscle deep on the left shin at its middle areas.
Injury No. 6 is incised wound 1/2" x 1/4" on the left shin.
Injury No. 7 is incised wound 1/3" x 1/4" muscle deep on the left shin.
Injury No. 8 is incised wound 1/3"x 1/4" muscle deep on the left shin.
Injury No. 9 is incised wound 3/4" x 1/3" muscle deep on the left shin.
While Injury No. 1 is on The left palm in between the left thumb and index finger, injuries Nos. 2 and 3 on the right little finger at its middle, injuries Nos. 5 to 9 are in the area of the left shin.
Most of the injuries are only 1/4" deep while injury No. 9 is 1/3" deep, and injury No. 1 is 1/6" in depth.
The other injuries Nos. 11 to 17 are on the right shin and are incised wounds, most of which are of the size of 1 3/4" x 1/4".
The other injuries are contusions in the chest area on the right and the left side, the with not exceeding 3/4 of an inch.
Injury No. 26 is on the head of the dimension of 1 3/4" X 1/4" muscle deep on the left side of the head 3" above the left ear.
All the injuries are described by the do tor as simple.
The depth of the incised injuries is not more than of an inch and the width of the contusions is not more than 3/4".
The area of the injury cannot be said to be a vital part of the body.
The injury on the head is only 1" in depth and has not caused any damage.
On an analysis of the injuries it cannot be said that any of the persons that inflicted injuries intended to cause death or such injury as is sufficient in the ordinary course of nature to cause death.
If the common object of the unlawful assembly was to commit murder and in prosecution of the common object of the unlawful assembly any member caused an injury which is sufficient in the ordinary course of nature to cause death, the members of the assembly would be liable for an offence under section 302 I.P.C. read with 149 I.P.C. but on a consideration of the injuries we are not satisfied that the common object of the unlawful assembly was to cause death.
Taking the circumstance that the unexpected quarrel was between the members of the same family over a dispute as to water rights, we are unable to held that offence under section 302 read with section 149 is made out.
On a consideration of the circumstances and the nature of the injuries, it is not possible to hold that the common object of the assembly was to cause bodily injury which is sufficient in the ordinary course of nature to cause death.
It can be said that the common object of the assembly was to cause bodily injury as is likely to cause death.
Though the doctor has stated that the injuries were sufficient in the ordinary course of nature to cause death, we find it difficult to hold that the injuries, cumulatively, were sufficient in the ordinary course of nature 389 to cause death.
The common object of the assembly in the circumstances can only be said to cause injuries which are likely to cause death which will be an offence punishable under section 304(1) of the Indian Penal Code.
In the circumstances we set aside the conviction under section 350 read with section 34 I.P.C. but find the appellants are guilty of an offence punishable under section 304(1) read with section 149 I.P.C. and sentence them to five years rigorous imprisonment and a fine of Rs. 3,500/ each.
In this case, the death was caused by the brothers in a quarrel regarding water rights.
From the records we are satisfied that the accused are possessed with sufficient funds to compensate, at least to some extent, the loss that has been suffered by the dependants of the deceased.
The law which enables the Court to direct compensation to be paid to the dependants is found in section 357 of the Code of Criminal Procedure (Act 2 of 1974).
The corresponding provision in the 1898 Code was section 545.
Section 545 of the Code of Criminal Procedure (Act 5 of 1898) was amended by Act 18 of 1923 and by Act 26 of 1955.
The amendment which is relevant for the purpose of our discussion is 525(1)(bb) which, for the first time was inserted by Act 26 of 1955.
By this amendment the court is enabled to direct the accused, who caused the death of another person, to pay compensation to the persons who are, under the Fatal Accidents Act, entitled to recover damages from the persons sentenced, for the loss resulting to them from such death.
In introducing the amendment, the Joint Select Committee stated "when death has been caused to a person, it is but proper that his heirs and dependants should be compensated, in suitable cases, for the loss resulting to them from such death, by the person who was responsible for it.
The Committee proceeded to state that though section 545 of the Code as amended in 1923 was intended to cover such cases, the intention was not however very clearly brought out and therefore in order to focus the attention of the courts on this aspect of the question, the Committee have amended section 545 and it has been made clear that a fine may form a part of any sentence including a sentence of death and it has also been provided that the persons who are entitled under the , to recover damages from the person sentenced may be compensated out of the fine imposed.
It also expressed its full agreement with the suggestion that at the time of awarding judgment in a case where death has resulted from homicide, the court should award compensation to the heirs of the deceased.
The Committee felt that this will result in settling the claim once for all by doing away with the need for a further claim to a civil Court, and avoid needless worry and expense 390 to both sides.
The Committee further agreed that in cases where the death is the result of negligence of the offender, appropriate compensation should be awarded to the heirs.
By the introduction of clause (bb) to section 545(1), the intention of the legislature was made clear that, in suitable cases, the heirs and dependents should be compensated for the loss that resulted to them from the death, from a person who was responsible for it.
The view was also expressed that the court should award compensation to the heir of the decease so that their claims would be settled finally.
This object is sought to be given effect to by section 357 of the new Code (Act 2 of 1974).
Section 357(3) provides that when a court imposes a sentence, of which fine does not form a part, the Court may, when passing judgment, order the accused person to pay, by way of compensation, such amount, as may be specified in the order, to the person who has sufered any loss or injury by reason of the act for which the accused person has been so sentenced.
The object of the section therefore, is to provide compensation payable to the persons who are entitled to recover damages from the person sentenced even though fine does not form part of the sentence.
Though section 545 of 1898 Code enabled the court only to pay compensation out of the fine that would be imposed under the law, by section 357(3) when a Court imposes a sentence, of which fine does not form a part, the Court may direct the accused to pay compensation.
In awarding compensation it is necessary for the court to decide whether the case is a fit one in which compensation has to be awarded.
If it is found that compensation should be paid, then the capacity of the accused to pay a compensation has to be determined.
In directing compensation, the object is to collect the fine and pay it to the person who has suffered the loss.
The purpose will not be served if the accused is not able to pay the fine or compensation for, imposing a default sentence for non payment of fine would not achieve the object.
If the accused is in a position to pay the compensation to the injured or his dependents to which they are entitled to, there could be no reason for the Court not directing such compensation.
When a person, who causing injury due to negligence or is made vicariously liable is bound to pay compensation it is only appropriate to direct payment by the accused who is guilty of causing an injury with the necessary Mens Rea to pay compensation for the person who has suffered injury.
In awarding compensation as cautioned by this Court in a decision reported in Palaniappa Gounder vs State of Tamil Nadu, the Court should not first consider what compensation ought to be awarded to the heirs of the deceased and then impose a fine which is higher than the compensation.
It is the duty of the Court to take into account the 391 nature of the crime, the injury suffered, the justness of the claim for compensation, the capacity of the accused to pay and order relevant circumstances in fixing the amount of fine or compensation.
After consideration of all the facts of the case, we feel that in addition to the sentence of 5 years rigorous imprisonment, a fine of Rs. 3,500/ on each of the accused under section 304(1) I.P.C. should be imposed.
The fine will be paid as compensation to the widow of the deceased, Mewa Singh.
Tn default of payment of fine, the accused will undergo further Simple imprisonment for 6 months.
S.R. Appeals dismissed.
| IN-Abs | The deceased Mewa Singh is the brother of the two accused Sarwan Singh and Bachan Singh and the paternal uncle of two other accused Karnail Singh and Zora Singh sons of Sarwan Singh, Malkait Singh the other accused is the son in law of Sarwan Singh.
They are thus close relatives and there was dispute over a common khal of the land and pahi.
The deceased had put an application before the Revenue Authority against the accused and the matter was pending when the occurrence took place on 8 9 1969.
The deceased was attacked by the accused with deadly weapons resulting in as many as 27 injuries of which injuries 2 and 3 were grievous.
The deceased died the next day in the civil hospital.
The cause of death was shock and haemorrhage and the injuries were ante mortem and sufficient in the ordinary course of nature to cause death.
The trial court found all the five accused guilty under section 302 read with section 149 I.P.C. and punished them taking the view that once the existence of injuries sufficient to cause death is proved, the intention to cause death will be presumed unless the evidence or the circumstances warrant an opposite conclusion.
The High Court in appeal from that the common object was clearly to kill the deceased and that the offence fell under section 300.
Thirdly read with section 34 IPC and accepted the trial court 's Judgment.
Dismissing the appeals by special leave the Court, ^ HELD: (1) If a person causes an injury with the intention of causing bodily injury to any person and when the bodily injury intended to be inflicted is sufficient in the ordinary course of nature to cause death, the offence would fall under clause (iii) of section 300 and would be punishable under section 302 I.P.C. [387 B] (2) In order to find the person guilty of offence under section 300 read with section 149, the prosecution must establish that the offence was committed by any member of an unlawful assembly in prosecution of the common object of the assembly or such as the members of that assembly knew it to be likely to be committed in prosecution of the common object.
It is, therefore, necessary for the prosecution to establish that the common object of the unlawful assembly was to commit an offence under section 300 or that the members of the assembly knew it to be likely that an offence under section 300 punishable under section 302 IPC would be committed in prosecution of the common object.
[387 B D] (3) If the injuries that are sufficient in the ordinary course of nature to cause death are traced to a particular accused, he will be guilty of an offence under section 300 punishable under section 302 without the aid of section 149, when the injuries caused are cumulatively sufficient to cause death, it is necessary before holding 384 each of the accused guilty under section 300 read with section 149 to find that the common object of the unlawful assembly was to cause death or that the members of the unlawful assembly knew it to be likely that an offence punishable under section 302 IPC would be committed in prosecution of the common object.
[387 D F] In the instant case, on an analysis of the injuries (a) it cannot be said that any of the persons that inflicted injuries intended to cause death or such injury as is sufficient in the ordinary course of nature to cause death.
(b) The circumstance that unexpected quarrel was between the members of the same family over a dispute as to water rights shows that no offence under section 300 read with sec.
149 IPC punishable under section 302 IPC has been made out.
(c) the common object of the assembly was to cause bodily injury as is likely to cause death.
Though the doctor has stated that the injuries were sufficient in the ordinary course of nature to cause death, it is difficult to hold that the injuries, cumulatively, were sufficient in the ordinary course of nature to cause death.
The common object of the assembly in the circumstances can only be said to cause injuries which are likely to cause death which will be an offence punishable under section 304(1) of the Indian Penal Code.
[388 E H 389 A] (4) (a) The object of section 357(3) is to provide compensation payable to the persons who are entitled to recover damages from the person sentenced even though fine does not form part of the sentence.
Though section 545 of 1898 Code enabled the court only to pay compensation out of the fine that would be imposed under the law, by section 357 (3) when a court imposes a sentence, of which fine does not form a part, the Court may direct the accused to pay compensation.
[390 D E] (b) In awarding compensation it is necessary for the court to decide whether the case is a fit one in which compensation has to be awarded.
If it is found that compensation should be paid, then the capacity of the accused to pay a compensation has to be determined.
In directing compensation, the object is to collect the fine and pay it to the person who has suffered the loss.
The purpose will not be served if the accused is not able to pay the fine or compensation for, imposing a default sentence for non payment of fine would not achieve the object.
If the accused is in a position to pay the compensation to the injured or his dependent to which they are entitled to, there could be no reason for the court not directing such compensation When a person, who caused injury due to negligence or is made vicariously liable is bound to pay compensation it is only appropriate to direct payment by the accused who is guilty of causing an injury with the necessary mens rea to pay compensation for the person who has suffered injury.
[390 E G] (c) The court should not first consider what compensation sought to be awarded to the heirs of the deceased and then impose a fine which is higher than the compensation.
It is the duty of the court to take into account the nature of the crime, the injury suffered, the justness of the claim for compensation.
the capacity of the accused to pay the other relevant circumstances in fixing the amount of fine or compensation.
[390 G H, 391 A] Palaniappa Gounder vs State of Tamil Nadu, ; applied.
[The Court altered this conviction of offence punishable under section 304(1) read 385 with section 149 and sentenced to 5 years R I and a fine of Rs. 3500/ each, the fine to be paid as compensation to the widow of the deceased]
|
Civil Appeal No. 2199 of 1977.
From the Judgment and Decree dated 29 11 1976 of the Allahabad High Court in Special Appeal No. 378 of 1974.
G. B. Pai and O. P. Rana for the Appellant.
R. K. Garg, V. J. Francis) , Madan Mohan, K.P. Aggarwal and Mrs. Manju Gupta, for Respondents Nos. 1 and 2.
Manoj Swarup and Miss Lalita Kohli for the Intervener.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
The case is primarily concerned with the age of retirement of two obscure workmen but it raises question of general importance concerning workmen employed by most statutory bodies and corporations.
It is on such chances that the development of our law depends.
The two workmen were originally employed by Messrs Seth Ram Gopal and Partners who were licensees for the distribution of electricity under the .
There were certified Standing orders for the industrial establishment of M/s. Seth Ram Gopal and partners.
The certified Standing orders did not prescribe any age of superannuation for the employees.
I ht, according to the workmen meant that they could continue to work as long as they were fit and able to discharge their duties.
The electricity undertaking of Ms. Seth Ram Gopal and Partners was purchased br The U.P. State Electricity Board, with effect from 15 12 1964, under The provisions of the .
The employees of Seth Ram Gopal and Partners became the employees of the U.P. the Electricity Board.
The U.P. State Electricity Board which it is no longer disputed is an industrial establishment to which the Industrial Employment (Standing orders) Act, 1946, applies, neither made nor got certified any Standing orders as it was bound so to do under that Act.
But it is evident, though no admitted from two letters, one from the Superintending Engineer in reply to a letter dated 31 12 166 from the Executive Engineer and the other from the Certifying officer for Standing orders and Labour Commissioner to the General Secretary of the Employees ' Union that the Board and the workmen considered the certified Standing orders of the establishment of Seth Ran 359 Gopal and Partners as applicable to them even after the purchase of the undertaking by the Board.
This, however, is not very material.
The Board, as we said earlier, made and not certified no standing orders either in regard to age or superannuation or in regard to any other matter Mentioned in the schedule to the Standing orders Act.
We may mention here that by reason of a notification dated 17 1 1959 "age of superannuation or retirement, rate of pension or ally other facility which the employers may like to extend or may be agreed upon between the parties ' is one of` the matters in respect of which an employer to whom the Standing orders Act applies is bound to make Standing orders and get them certified.
However, on May 28, 1970.
the Governor of Uttar Pradesh notified.
under Section 13 B of the Industrial Employment (Standing orders) Act, 1946.
a regulation made by the U.P. State: Electricity Board under Section 7(c) of the , ]948.
The notification was as Follows. "No. 3822 2/70/XXIII PB 15EH 67 May 28, 1970.
In pursuance of the provision of Section 13 B of the Industrial Employment (Standing Orders) Act, 1948 (Act No. 20 of 1946), the Governor is pleased to notify in the official Gazette that the U.P. State Electricity Board has made the following Regulations under sub section (c) of Section 79 of the ) (Act No. 54 of 1948) ``Notwithstanding any rule if one order or practice hitherto followed, the date of compulsory retirement of an employee of the Board will be the date on which he attains the age of 58 years; provided that (i) in the case of the inferior servants of the Board, whose counterparts under State Government are at present entitled to serve upto the age of 60 years, the age of compulsory retirement will be the date on Which they attain the age of 60 years.
(ii) the Board or its subordinate appointing authority may require an employee to retire after he attains or has attained the age of 55 years on three months ' ' notice or three months ' salary in lieu thereof without assigning any reason".
Acting in pursuance of this regulation as notified by the Governor, the Board sought to retire the two respondents on July 2, 1972 and July 7, 1972 respectively on their attaining the age of 58 years.
The respondents thereupon filed a writ petition in the Allahabad High Court challenging the regulation mad by the Board and its notification by 360 the Governor.
Their contention was that the Board was not competent to make a regulation in respect of a matter covered by the Industrial Employment (Standing orders) Act.
The writ petition as dismissed by a learned Single Judge.
The respondents preferred a special appeal and the Division Bench which heard the Special Appeal in the first instance referred the following three questions tc a Full Bench: " (1) Whether the Industrial Employment (Standing orders) Act, 1946 applies to the Industrial establishments of the State Electricity Board ? (2) Whether the standing orders framed for an Industrial establishment of an electrical undertaking cease to be operative on the purchase of the undertaking by the Board or on the framing of regulations under section 79(c) of the ? (3) Whether section 13 B of the Industrial Employment (Standing orders) Act, 1946, applies only to industrial establishments of the Government or also to other industrial establishments ? The Full Bench answered the questions as follows: "l.
The Industrial Employment (Standing orders) Act 1946 applies to the industrial establishments of the Ste Electricity Board.
The Standing Orders framed in an industrial establishment by an electrical undertaking do not cease to b operative on the purchase of the undertaking by the Board or on framing of the regulations under section 79(c) of the . 3.
Section 13 B of the , applies only to the industrial establishments of the government and to no other establishments".
Following the opinion of the Full Bench, the Division Bench allowed the Special Appeal and issued a Writ quashing the notification dated May 28, 1970 and directing the U.P. State Electricity Board not to enforce the regulation against the appellants before them.
The U.P. State Electricity Board, having obtained a Certificate from the High Court under Article 133(1) of the Constitution, has preferred this appeal.
361 Shri G. B. Pai learned Counsel for the appellant did not canvass A the correctness of the answer of the Full Bench to the first question referred to it.
He confined his attack to the answers to the second and third questions.
Relying upon the decisions of this Court in Sukhdev Singh vs Bhagat Ram(1), and Rajasthan Electricity Board vs Mohan Lal(2), Shri Pai argued that the U.P. State Electricity Board was an authority within the meaning of Article 12 of the Constitution and that the regulations made b the Board under Section 79(c) of the Act had the 'full force and effect of the statute and the force of law" so as to displace, over ride or supersede Standing Orders made and certified under the Industrial Employment (Stanching orders) Act.
which, he submitted wee mere contractual conditions of service subjected to a quasi judicial process and which, therefore, could not take precedence over legislative processed regulations.
The learned Counsel further submitted that Section 79(c) of the Electricity Supply Act was a special law and that it prevailed over the provisions of the Industrial Employment Standing orders Act.
Alternately, he submitted, the notifying of the regulation regarding age of superannuation under Section 13 B of the Industrial Employment Standing orders Act excluded the applicability of that Act in regard to the subject of age of superannuation.
He urged that Section 13 B was no confined in its application to Government undertakings only or to cases where there were comprehensive sets of rules, as was thought by the High Court.
Shri R. K. Garg, for the Workmen contended that the Industrial Employment (Standing orders) Act was an act specially designed to define and secure reasonable conditions of service for workmen in industrial establishments employing one hundred or more workmen and to that end to compel employers to make Standing orders and to et them certified by a quasi judicial authority.
It was, therefore, a special Act with reference to its subject matter.
The Electricity Supply Act, on the other hand, was intended "to provide for the rationalisation of the production and supply of electricity, and generally for taking measures conducive to electrical development. ' ' It was not specially designed to define the conditions of service of employees of Electricity Board or to displace the Standing orders Act.
The power given to an Electricity Board under Section 79(c) to make regulations providing for "the duties of officers and servants of the Board and their salaries, allowances and other conditions of service" was no more than the usual, general power possessed by every (1) ; (2) ; 362 employer.
Shri Garg argued that the Industrial Employment Standing orders Act was a special Act which dealt with the special subject of conditions of employment of workmen in industrial establishments and, therefore, in the matter of conditions of employment of workmen in industrial establishments, it prevailed over the provisions of the Electricity Supply Act.
He urged that under Section 13 B of the Standing orders Act, Government undertakings which had a comprehensive set of rules alone could be excluded from the applicability of the Act.
He submitted that to permit a single rule or regulation made for limited purpose to be notified under Sec.
13 B would have the disastrous effect of excluding the applicability of the whole of the Standing Orders Act.
Before examining the rival contentions, we remind ourselves that the Constitution has expressed a deep concern for the welfare of workers and has provided in Art, 42 that the State shall make provision for securing just and humane conditions of work and in article 43 that the State shall endeavour to secure, by suitable legislation or economic organization or in any other way, to all workers, agricultural or otherwise, work, a living wage, conditions of work ensuring a decent standard of life and full enjoyment or leisure etc.
These are among the "Directive Principles of State Policy".
The mandate of Article 37 of the Constitution is that while the Directive Principles of State Policy shall not be enforceable by any Court, the principles are `nevertheless fundamental in the governance of the country ' and `it shall be the duty of the State to apply these principles in making laws '.
Addressed to Courts, what the injunction means is that while Courts are not free to direct the making of legislation, Courts are bound to evolve, affirm and adopt principles of interpretation which will further and not hinder the goal set out in the Directive Principle of St Policy.
This command or the Constitution must be over present n the minds of judges when interpreting statutes which council them selves directly or indirectly with matters et out in the Directive principles of State Policy Let us now examine the various provisions their proper contact with a view to resolve the problem before us.
l the , 194(.
Before the passing of the Act conditions or service of industrial employees s were invariably ill defined and were hardly over know with even a slight Degree of precision to the employees.
There was no uniformity of conditions of service f(hr employees discharging identical duties in fl the same establishment.
Conditions of service were generally e and the result of oral arrangements which left the employees t Te mercy of the employer.
With the growth of the trade union move 363 ment and the right of collective bargaining, employees started putting A forth their demands to end this sad and confusing state of affairs.
Recognising the rough deal that was being given to workers 1 employers who would not define their conditions of service and he inevitability f industrial strife in such a situation, the legislature intervened and enacted the Industrial Employment Standing Orders Act.
It was stated in the statement of objects and reasons; "Experience has shown that "Standing orders" defining the conditions of recruitment, discharge, disciplinary action, holidays, leave etc., go a long way towards minimising, friction between the management and workers ill industrial undertakings.
Discussion on the subject at the tripartite Indian Labour Conferences revealed a consensus of opinion in favour of legislation.
The Bill accordingly seeks to pr vide for the framing of "Standing orders" in all industrial establishments employing one hundred and more workers".
It was, therefore, considered, as stated in the preamble "expedient to require employers in industrial establishments to define with sufficient precision the conditions of employment under them and to make the said conditions known to workmen employed by them".
The scheme or the Act, as amended in 1956 and as it now stands, requires every employer of an industrial establishment as defined in the Act to submit to the Certifying officer draft Standing orders, that is, "Rules relating to matters set out in the schedule", proposed by him for adoption in his industrial establishment.
This is mandatory.
It has to be done within six months after the commencement of the Act. 'Failure to do so is punishable and is further made a continuing offence.
The draft Standing orders are required to cover every matter set out in the schedule.
The schedule enumerates the matters to be provided in the Standing orders and they include classification of workmen, Shift working, attendance and late coming.
Leave and holidays, termination of employment, suspension or dismissal for misconduct, means of redress for wronged workmen etc.
Item No. 11 of the Schedule IS "Any other matter which may be prescribed".
By a notification dated 17 1959 the Government of Uttar Pradesh has prescribed "Age o superannuation or retirement, rate of pension or any other facility which the employer may like to extend or may be agreed upon between the parties" as a matter requiring to be provided in the Standing orders.
On receipt o the draft Standing Orders from the employee, the Certifying officer is required to forward a copy of the same to the trade union concerned or the workmen inviting them to prefer objections, if any.
Thereafter the Certifying officer is required to give a hearing to the employer and the trade union or workmen as the case may be 7 526SCI/78 364 and to decide "whether or not any modification of or addition to the draft submitted by the employer is necessary to render the draft Standing orders certifiable under the Act '.
Standing orders are certifiable under the Act only if provision i made therein for every matter set out in the schedule, if they are in conformity with the provisions of the Act and if the Certifying officer adjudicates them as fair and reason 3 able.
The Certifying officer is invested with the powers of a Civil Court for the purposes of receiving evidence, administering oaths, enforcing the attendance of witnesses etc.
The order of the Certifying Officer is subject to an appeal to the prescribed appellate authority.
The Standing orders as finally certified are required to be entered in a Register maintained by the Certifying officer.
The employer is required to prominently post the Certified Standing orders on special boards in.
maintained for that purpose.
This is the broad scheme of the Act.
The Act also provides for exemptions.
About that, later.
The Act, as originally enacted, precluded the Certifying officer from adjudicating upon the fairness or reasonableness of the draft Standing orders submitted by the employer but an amendment introduced in 1956 now casts a duty upon the Certifying officer to adjudicate upon the fairness or reasonableness of the Draft Standing orders.
The Scheme of the Act has ben sufficiently explained by this Court in Associated Cement t Co. LTD.
vs f. D. Vyas(l), Rohtak Hissar District Electricity Supply Co. Ltd '.
vs State of U.P. & Ors.(2), and Western dia Match Co. Ltd. vs Workmen.
The Industrial Employment (Standing orders) Act is thus seen he an Act specially designed to define the terms of employment of workman in industrial establishments, to give the workmen a collective voice in defining the terms of employment and to subject the terms of employment to the scrutiny of quasi judicial authorities by the application of the test of fairness and reasonableness.
It is ar Act giving recognition and form to hard won and precious rights of workman.
We have no hesitation in saying that it is a Special Act expressly and exclusively dealing with the schedule enumerated conditions (hf service of workmen in industrial establishments.
Turning net to the Electricity Supply Act, it is, as its preamble says.
An Act to provide for the rationalisation of the production and supply of electricity, and generally for taking measures conducive to electrical development".
The statement of objects and reasons and a lance at the various provisions of the Act show that the primary object (1) ; (2) ; (3) [1974] I SCR 434 365 Of the Act is to provide for the coordinated, efficient and economic development of electricity in India on a regional basis consistent with the needs of the entire region including semi urban and rural areas.
Chapter II of the Act provides for the constitution of the Central Electricity Authority and Chapter III for the constitution of state Electricity Boards.
Chapter IV prescribes the powers and duties of state Electricity Boards, and Chapter V the Boards ' works and trading procedure.
n Chapter VI deals with the Board 's finance, Accounts and Audit.
Chapter VII (from S, 70 to section 83) which is headed "Miscellaneous" contains various miscellaneous provisions amongst Which are section 78 which empowers the Government to make rules and section 79 which empowers the Board to make regulations in respect of matters specific in clauses (a) to (k) of that Section.
Clause (c) of section 79 is "the duties of officers and servants of the Board, and their salaries, allowances and other conditions of` service".
This, of course is no more than the ordinary general power, with which every employer is invested in the first instance, to regulate the conditions of service of his employees.
It is an ancillary or incidental power of every employer, The Electricity Supply Act does not presume to be an Act to regulate the conditions of service of the employees of state Electricity Boards.
It is an act to regulate the coordinated development of electricity.
It is a special Act in reread to the subject of development of electricity, even as the Industrial Employment (Standing orders) Act is a special Act in regard to the subject of Conditions of Service of workmen in industrial establishments.
If Sec.
79(c) of the Electricity Supply Act generally provides for the making of regulations providing for the conditions of service of tile employees of the Board, it can only be regarded as a general provides which must yield to the special provisions of the Industrial Employment (Standing orders) Act in respect of matters covered by the latter Act.
The maim "Generalia specialibus non derogant" is quite well known.
The rule flowing from the maxim has been explained in Mary Seward vs The owner of the "Vera Cruz"(l) as follows: "Now if anything be certain it is this, that where there are general words in a later Act capable of reasonable and sensible application without extending them to subjects specially dealt with by earlier legislation, you are not to hold that earlier and special legislation indirectly repealed, altered, or derogated from merely by force of such general worlds without any indication of a particular intention to do so".
(1) at 68.
366 The question in Seward vs Vera Cruz was whether Sec. 7 of the Admiralty Court Act of 1861, which gave jurisdiction to that Court over "any claim for damage done by any ship" also gave jurisdiction over claims for loss of life which would otherwise come under the Fatal Accidents Act.
It was held that the general words o Sec. 7 of the Admiralty Court Act did not exclude the applicability of the Fatal Accidents Act and therefore, the Admiralty Court had no jurisdiction to entertain a claim for damages for loss of life.
The reason for the rule that a general provision should yield to a specific provision is this: In passing a Special Act, Parliament devotes its entire consideration to a particular subject.
When a General Act is subsequently passed, it is logical to presume that Parliament has not repealed or modified the former Special Act unless it appears that the Special Act again received consideration from Parliament.
Vide London and Blackwall Railway vs Lighthouse District board o Works(l) and Thorpe vs Adams(2).
In J. K. Cotton Spinning & Weaving Mills Co. Ltd. vs state f Uttar Pradesh(3), this Court observed (at p. 1174): "The rule that general provisions should yield to specific provisions is not an arbitrary principle made by lawyers and judges but springs from the common understanding of men and women that when the same person gives two directions one covering a large number of matters in general and an other to only some of them his intention is that these latter directions should prevail as regards these while as regards us the rest the earlier direction should have effect".
We have already shown that the Industrial Employment (Standing orders) Act is a Special Act dealing with a Specific subject, namely the conditions of service, enumerated in the Schedule, of workmen in industrial establishments.
It is impossible to conceive that Parliament sought to abrogate the provisions of the Industrial Employment (Standing orders) Act embodying as they do hard won and precious rights of workmen and prescribing as they do an elaborate procedure, including a quasi judicial determination, by a general, incidental provision like Sec.
79(c) of the Electricity Supply Act.
It is obvious that Parliament did not have before it the Standing orders Act when it passed the Electricity Supply Act and Parliament never meant that the Standing orders Act should stand protanto re pealed by Sec.
79(c) of the Electricity Supply Act.
We are clearly of the view that the provisions of the Standing orders Act must prevail over section 79(c) of the Electricity Supply Act, in regard to matters to which the Standing orders Act applies.
(1) = ; (2) (1871) L. R. (3) A. r. R.
367 Shri G. B. Pai, relying on what was said in the Rajasthan state A Electricity Board case and Sukhdev Singh & Ors 's case argued that the regulations made under Sec.
79(c) of the Electricity Supply Act being statutory in nature stood on so high a pedestal as to override, by their very nature, the Standing orders made under the Standing orders Act.
The observations on which he relied are, in the Rajasthan State Electricity Bard case: "The state, as defined in article 12, is thus comprehended to include bodies created for the purpose of promoting the educational and economic interests of the people.
The State, as constituted by our Constitution, is further specifically empowered under article 298 to carry on any trade or business.
The circumstance that the Board under the Electricity Supply Act is required to carry on some activities of the nature of trade or commerce does not, therefore, give any indication that the Board must be excluded from the scope of the word "state" as used in article 12.
On the other hand, there are provisions in the Electricity Supply Act which clearly Show that the powers conferred on the Board include power to give directions, the disobedience of which is punishable as a criminal offence.
In these circumstances, we do not consider it at all necessary to examine the cases cited by Mr. Desai to urge before us that the Board cannot be held to be an agent or instrument of the Government.
The Board was clearly an authority to which the provisions o Part III of the Constitution were applicable".
and in Sukhdev Singh 's case (at p. 627): "Rules, regulations, schemes, Bye laws, orders made under statutory powers are all comprised in delegated legislation" at p. 628) "Subordinate legislation has, if validly made, the full force and effect of a. statute" and (at p. 684 685) "Rules and Regulations of the oil and Natural Gas Commission, Life Insurance Corporation, Industrial Finance Corporation have the force of law.
The employees of these statutory bodies have a statutory status and they are entitled to a declaration o being in employment when their dismissal or removal is in contravention of statutory provisions.
368 These statutory bodies are authorities within the meaning of article 12 o the Constitution".
The proposition that statutory Bodies are 'authorities ' within the meaning of article 12 of the Constitution, that the employees of these bodies have a statutory status and that regulations made under the statutes creating these bodies have the force of law are not in dispute before us.
The question is not whether the employees and the Board have a statutory status; they undoubtedly have.
The question is not whether the regulations made under Sec.
79 have the force of law; again, they undoubtedly have.
The question is whether Sec.
79(c) of the Electricity Supply Act is a general law and therfore regulations cannot be made under it in respect of matters covered by the Industrial employment (Standing order) Act, a special law.
That question we have answered and the answer to that question makes irrelevant the submissions based on the statutory status of the employees and the statutory force of the regulations.
Next, we turn to the submission based on the notification made under Sec.
13 B of the Standing orders Act.
Section 13 B reads as follows: "13B. Nothing in this Act shall apply to an industrial establishment in so far as the workmen employed therein are persons to whom the Fundamental and Supplementary Rules, Civil Services (Classification, Control and Appeal) Rules, Civil Services (Temporary Service) Rules, Revised Leave Rules, Civil Service Regulations, Civilians in Defence, Service (Classiffication, Control and Appeal) Rules or the Indian Railway Establishment Code or any other rules or regulations that may be notified in this behalf by the appropriate Government in the official Gazette, apply".
The notification made by the Government has already been extracted by us.
Some doubts were expressed whether the U.P. state electricity Board had in fact made the regulation and whether the Government merely notified the relation without applying its mind.
The learned counsel appearing for the Board and the Government placed before us the relevant records and note files and we are satisfied that the Board did make the regulation and the Government did apply its mind.
The High Court expressed the views that the expression any other rules or regulations" should be read ejusdem generis with the expressions "Fundamental and Supplementary Rules", "Civil Services, Control, Classification and Appeal Rules" etc.
So read, it was said, the provisions of Section 13 B could only be applied to industrial establish 369 ments in which the workmen employed could properly be described as Government servants.
We are unable to agree that the application of the ejusdem generis rule leads to any such result.
The true scope of the rule of "ejusdem generis" is that words of a general nature following specific and particular words should be construed as limited to things which are of the same nature as those specified.
But the rule is one which has to be "applied with caution and not pushed too far".
It is a rule which must be confined to narrow bounds so as not to unduly or unnecessarily limit general and comprehensive words.
If a broad based genus could consistently be discovered, there is no warrant to cut down general words to dwarf size.
If giant it cannot be, dwarf it need not be.
It is true that in Sec.
13 B the specie specie spacifically mentioned happen to be Government servants.
But they also possess this common characteristic that they are all public servants enjoying a statutory status, and governed by statutory rules and regulations.
If the legislature intended to confine the applicability of Sec.
13 B to industrial undertakings employing Government servants only nothing was easier than to say so instead of referring to various rules specifically and following it up with a general expression like the one before us.
The words 'rules and regulations ' have come to acquire a special meaning when used in statutes.
They are used to describe subordinate legislation made by authorities to whom the statute delegates that function.
Te words can have no other meaning in Sec.
1 3 B. Therefore, the expression "workmen . t whom. any other rules or regulations that may be notified in this behalf means, in the context of Sec.
13 B, workmen enjoying a statutory status, in respect of whose conditions of, service the relevant statute authorities the making of rules or regulations.
The expression cannot be construed so narrowly as to mean Government servants only; nor can it be construed so broadly as to mean workmen employed by whomsoever including private employers, so long a their conditions of service are notified by the Government under Sec.
13 B. Shri Garg relied on certain observations of the Madras High Court in Raman Nambissan vs State Electricity Board(l), and Thiruvenkataswami vs Coimbatore Municipality().
In Raman Nambissan 's case it was held that the mere fact that the Electricity Board had adopted the rules and regulations if the Government of Madras a its transitory rules and regulations did not bring the workmen employed in industrial establishments under the Board within the mischief of Sec.
1 3 P. Of the Industrial Establishment 's (Standing order) ct.
In Thiru Venkataswami 's '.
ca it was held that rules made by the Government fl (1) [1967] I L.L.J. 252.
(2) [1968] I L.L.J. 361 370 under the District Municipalities Act could not be considered to he rules notified under Se.
13 B of the Standing orders Act merely because the rules were made by the Government and published in the Government Gazette.
We agree with the conclusion in.
both case.
In Thiru Venkataswami case Kailasam J., also observed that the industrial employment (Standing order) Act was a special act relating exclusively to the service conditions of persons employed in industrial establishments, and, therefore, its provisions prevailed over The provisions of the District Municipalities Act.
We entirely agree.
But, the learned judge went on to say "section 13 B cannot be availed of for purposes of framing rules to govern the relationships in an industrial establishment under private management or in a statutory Corporation.
This rule can apply only to industrial establishments in respect of which the Government is authorised to frame rules and regulations relating to the conditions of employment in industrial establishments".
There we disagree.
Our disagreement is only in regard to industrial establishment in statutory Corporations and not those under private management.
Our reasons are mentioned in the previous paragraph.
Shri Garg suggested that the rules, and regulations specific mention of which has been made in Sec.
13 B were all comprehensive sets of rules.
, and, therefore, "any other rules or regulations" that might be notified by the Government should also satisfy the test of eomprehensiveness.
He argued that a single rule or regulation could not be notified under Sec.
13 B as it would be too much to say, he said, that the notifying of a single rule or regulation would exclude the applicability of all the provisions of the Standing orders Act.
We do not think that the notifying of one or many regulations has the effect that Shri Garg apprehends it has.
The words 'Nothing in this Act shall apply ' are not to be interpreted too literally as to lead to absurd results and to what the legislature never intended.
In our view the only reasonable construction that we can put upon the language of Sec.
13 B is that a rule or regulation, if notified by the Government, will exclude the applicability of the Act to the extent that the rule or regulation corse the field.
To that extent and to that extend only 'nothing in the Act shall apply '.
To understand Sec.
13B in by other manner will lead to unjust and uncontemplated results.
For instance, most of the Service Rules and Regulations expressly mentioned in Sec.
13 B do no deal with a large number of the matters enumerated in the schedule such as 'Manner of intimating to workman periods and hour 11 of work, holidays, pay days and wage rates ', 'shift working ', 'Attendance and late coming ', 'conditions o, procedure in applying for, and e authority which may grant leave and holidays '. 'Closing and 371 reopening of Sections of the industrial establishments and temporary stoppages of work and the rights and liabilities of he employer and workman arising therefrom ' etc.
To exclude the applicability of Standing orders relating to all these matters because the Fundamental Rules, the Civil Service Rules or the Civil Services Control, Classification an Appeal Rules provide for a few.
matters like 'Classification of workmen ' or 'suspension or dismissal for misconduct ' would be to reverse the processes of history, apart from leading to unjust and untoward results.
It will place workmen once again at the mercy of the employer be he ever so benign and it will certainly promote industrial strife.
We have indicated what according to us is h proper construction of Sec.
13 B. That is the only construction which gives meaning and sense to Sec.
13 B and that is a construction which can legitimately be said to conform to the Directive Principles of state Policy proclaimed in Articles 42 and 43 of the Constitution.
We, therefore, hold that the Industrial Employment (Standing orders) Act is a special law in regard to the matters enumerated in the schedule and the regulations made by the Electricity Board with respect to any of those matters are of no effect unless such regulations are either notified by the Government under Sec.
13 B or certified by The Certifying officer under Sec.
5 o the Industrial Employment (Standing orders) Act.
In regard to matters in respect of which regulations made by the Board have not been notified by the Governor or in respect o which n regulations have been made by the Board, the Industrial Employment (Standing orders) Act shall continue to apply.
In the present case the regulation made by the Board with regard to age o superannuation having been duly notified by the Government, the regulation shall have effect notwithstanding the fact hat it is a matter which could be the subject matter s) Standing orders under the Industrial Employment (Standing orders) Act.
The respondents were therefore, properly retired when they attained the age of is years.
the appeal is, therefore, allowed.
The Writ Petition field in the Light Court is dismissed.
The appellants will pay the costs of the respondents as directed by this Court on 28 9 1977.
The costs are quantified at Rs. 3,500/ .
S.R. Appeal allowed.
| IN-Abs | Respondents were two workmen originally employed by M/s Seth lam Gopal and Partners, who were licensees for the distribution of electricity under the Electricity Act, 1910.
There were certified Standing orders for the industrial establishment of the said licensees; but they did not prescribe any age of superannuation for the employees with the result the workmen could continue to hours long as they were fit and able to discharge their duties Pursuant to The purchase by the appellant with effect from 1 12 1964 of the electricity undertaking of M/s Seth Ram Gopal, the employees in their industrial establishment including the respondents became the employee of the appellant.
I he appellant board which ii admittedly an industrial establishment to which the Industrial Employment (Standing orders Act.
1946 applies neither made nor got certified any standing orders as it was bound so to do under hat Act.
The Board however considered the certified Standing orders of the establishment Seth Ram Gopal as applicable to their employees even after the purchase of the undertaking by the Board.
However.
On lay 2. 1970 the Governor of Uttar Pradesh notified under Section 13 B o the Industrial Employment (Standing orders) Act, 1946.
a regulation made by the U.P. State Electricity Board under Section 79(c) of the electricity Suppl.
Act, 1948 fixing the age of superannuation as S and 60 on a par with the other State Govt.
employees.
Action in pursuance of the regulation as notified by the Governor the appellant sought to retire the respondents on July 2, 1972 and July 7. 1972 respectively.
On their attaining the age of 58 years.
The respondents filed a Writ Petition in the Allahabad High Court challenging the regulation male by the Board and its notification by the Governor which was dismissed.
But the Division Bench which heard the special appeal preferred by then.
Referred three questions to a Full Bench The Full Bench answered the questions as follows: ``(l) The Industrial Employment (Standing Orders 1946 applies to the industrial establishment of the State Electricity Board.
(2) The Standing Orders framed, in an industrial establishment by an electrical undertaking, do not cease to be operative on the purchase of the undertaking by the Board or on framing of the Regulations under Section 79(c) of the electricity (Supply) Act 1918 and (3) Section 13 B of the Industrial Employment (Standing orders Act.
applies only to the industrial establishments of the Government and to no other establishments.
356 Following the opinion of the Full Bench, the Division Bench allowed the special Appeal and issued a writ quashing the notification dated May 28, 197) and directing the appellant not to enforce the regulation against the respondents.
he appellant obtained a certificate under article 133(1) of the Constitution and has preferred the appeal.
Allowing the appeal, the Court ^ HELD : 1.
The Industrial Employment (Standing orders) Act.
1946 (Act 20) is a special law in regard to the matters enumerate(l in the schedule and the regulations made by the Electricity Board with respect to my of those matters are of no effect, unless such regulations are either notified by the Government under Section 13 B or certified by the certifying officer under Section 5 of the Industrial Employment (Standing orders) Act, 1946.
In regard to matters in respect of which regulations made by the Board have not been notified by the Governor or in respect of which no regulations have been made by the Board the Industrial Employment (Standing Orders Act shall continue to apply.
In the present case, the regulation made 1.
the Board with retired to the age of superannuation having been duly notified by the government , the regulation shall have effect.
notwithstanding the fact that it is a matter which could be the subject matters of Standing orders under the Industrial Employment (Standing Orders) Act.
The respondents were, therefore, properly retired when they attained the are of 58 years.
[371A F] 2.
The Industrial Employment (Standing Orders) Act is an Act specially designed to define the terms of employment of workmen in industrial establishment, to give the workmen a collective voice in defining the terms of employment and to subject the terms of employment to the scrutiny of quasi judicial authorities by the application of the test of fairness and reasonableness.
It is an Act giving recognition and hard won and precious right of workmen.
It is a Special Act expressly and exclusively dealing with the schedule enumerated conditions of service or workmen in industrial establishment.
[364E G] Associated Cement Co. Ltd. vs P. D. Vyas, [196(] 2 S.C.R. 974; Rohtak Hissar district Electricity Supply Co. Ltd. vs , State of U.P. an(l ors.
; , ; Western India Match Co. Ltd. vs Workmen, [1974] 1 S.C.R. 434; referred to.
The Electricity Supply Act does not presume to be an Act to regulate the conditions of service of the employees of State Electricity Board.
It is an act to regulate the coordinated development of electricity.
It is a special Act in regard to the subject of development of electricity, even as the Industrial Employment (Standing orders) Act is a special act in regard to the subject of conditions of service of workmen in industrial establishments.
If section 79 of he Electricity Supply Act generally provides for the making o regulations providing for the conditions of service of the employees of the Board, it can only be regarded as a general provision which must yield o the special provisions of the Industrial Employment (Standing orders) Act in respect of matters covered by the latter.
[365D F] 4.
The reason for the rule "Generalis specialibus non derogant", that a general provision should yield to specific provision is this: In passing a special Act, Parliament devotes its entire consideration to a. particulars subject.
When a 357 General Act is subsequently passed, it is logical to presume that Parliament has A not repealed or modified the former special Act unless it appears that the Special Act again levied consideration from Parliament [366 D] The provisions of the Standing orders Acts therefore, must prevail over Section 79(c) of the Electricity Supply Act in regard to matters to which the Standing (Orders Act applies.
It is impossible to conceive that Parliament sought to abrogate the provisions of the Industrial Employment (Standing orders) Act, embodying as they do hard won and precious rights of workmen and prescribing as they do an elaborate procedure, including a quasi judicial determination, by a general, incidental provision like Section 79(c) of the Electricity Supply Act.
lt is obvious that Parliament did not have before it the Standing orders Act, when it passed the Electricity Supply Act and Parliament never meant that the Standing orders Act should stand pr alto repealed by Section 79(c of the Electricity Supply Act.
[366F H] Sukhdev Singh vs Bhagat Ram, ; ; Rajasthan Electricity Board n. Mohan Lal, [1967] 3 S.C.R. 277; held inapplicable.
The true scope of the rule of "ejusdem generis" is that words of a general nature following specific and particular words should be so construed as limited t things which are of the same nature as those specified.
But the rule is one which has to be "applied with caution aud not pushed too far".
It is a rule which must be confined to narrow bounds so as not to unduly or necessarily limit general and comprehensive words.
If a broad based genus could consistently be discovered there is no warrant to cut down general words to dwarf size.
If giant it cannot be, dwarf it need not be.
[369 A B] It is true that in Section 1 3 B the specie specifically mentioned happen to be Government servants.
But they also possess this common characteristic that they are all public servants enjoying a statutory status and governed by statutory rules and regulations.
If the legislature intended to confine the applicability of Section I 3 B to industrial undertakings employing government servants only nothing was easier than to say so instead of referring to various rules specially and following it up with a general expression like the one in the instant case.
[369B D] 6.
The words 'rules and regulations ' have come to acquire a. special meaning when used in statutes.
They are used to describe subordinate legislation made by authorities to whom the statute delegates that function.
The words can have MV other meaning in Sec.
1 3 B. Therefore, the expression "workmen .
whom . any other rules or regulations that may be notified in this behalf means, in the context of Sec.
13 B, workmen enjoying a statutory status, in respect of whose conditions of service the relevant statute authorises the making of rules or regulations.
The expression cannot be construed so narrowly as to mean Government servants only; nor can not be construed so broadly as to mean workmen employed by whomsoever including private employers, so long as their conditions of service are notified by the Govt.
under Sec.
13 B [369D F] The words 'nothing in this Act shall apply ' are not to be interpreted to literally as to lead to absurd results.
The only reasonable construction that an be put upon the language of Section 13 B is that a rule of regulation, it 358 notified by the Government, will exclude the applicability of the Act to the extent that the rule or regulation covers the field.
To that extent and to that extent only "nothing in the Act shall apply".
[307 F G] Raman Nambissan vs State Electricity Board and Thiruvenkataswami vs Coimbatore Municipality, explained.
|
Criminal Misc.
Petition 1649 of 1978.
Application for bail.
section section Khanduja for the Appellant.
I. N. Shroff and section K. Gambhir for the Respondent.
V. M. Tarkunde, K. T. Harinder Nath, R. K. Jain and H.K. Puri for the Intervener The order of the Court was delivered by KRISHNA IYER, J. '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", lampooned Anatole France.
The reality of this caricature of equal justice under the law, whereby the poor are priced out of their liberty in the justice market, is the grievance of the petitioner.
His criminal appeal pends in this Court and he has obtained an order for bail in his favour "to the satisfaction of the Chief Judicial Magistrate".
The direction of this Court did not spell out the details of the bail, and so, the magistrate ordered that a surety hl a sum of Rs. 10,000/ be produced which, in actual impact, was a double denial of the bail benefit.
For one thing the miserable mason.
the petitioner before us, could not afford to procure that huge sum or manage a surety of sufficient prosperity.
Affluents do not befriend indigents.
For another, the magistrate made an odd order refusing to accept the suretyship of the petitioner 's brother because he and his assets were in another district.
If mason and millionaire were treated alike, egregious inegality is an inevitability.
Likewise, geographic allergy at the judicial level makes mockery of equal protection of the laws within the territory of India.
India is one and not a conglomeration of districts, untouchably apart.
When this Court 's order for release was thus frustrated by magisterial intransigence the prisoner moved this Court again to modify the original order "to the extent that petitioner be released 338 on furnishing surety to the tune of Rs. 2,000/ or on executing a personal bond or pass any other order or direction as this Hon 'ble Court may deem fit and proper".
From this factual matrix three legal issues arise ( 1 ) Can the Court, under the Code of Criminal Procedure, enlarge, on his own bond without sureties, a person undergoing incarceration for a non bailable offence either as undertrial or as convict who has appealed or sought special leave ? (2) If the Court decides to grant bail with sureties, what criteria should guide it in quantifying the amount of bail, and (3) Is it within the power of The court to reject a surety because he or his estate is situate in a different district or State ? This formulation turns the focus on an aspect of liberty bearing on bail jurisprudence.
The victims, when suretyship is insisted on or heavy sums are demanded by way of bail or local bailors alone are presona grata, may well be the weaker segments of society like the proletariat, the linguistic and other minorities and distant denizens from the far corners or our country with its vast diversity.
In fact the grant of bail can be stultified or made impossibly inconvenient and expensive if the court is powerless to dispense with surety or to receive an Indian bailor across the district borders as good or the sum is so excessive that to procure a wealthy surety may be both exasperating and expensive.
The problem is plainly one of the human rights, especially freedom vis a vis the lowly.
This poignant import of the problem persuaded the Chamber Judge to invite the Supreme Court Bar Association and the Citizens for Democracy to assist the Court in decoding the Code and its provisions regarding bail.
The Kerala State Bar Federation was permitted to intervene and counsel for the parties also made submissions.
We record our appreciation of the amici curiae for their services and proceed to discuss the triple issues formulated above.
There is already a direction for grant of bail by this Court in favour of the petitioner and so the merits of that matter do not have to be examined now.
It is a sombre reflection that many little Indians are forced into long cellular servitude for little offences because trials never conclude and bailors are beyond their meagre means.
The new awareness about human rights imparts to what might appear to be a small concern relating to small men a deeper meaning.
That is why we have decided to examine the question from a wider perspective bearing in mind prisoner 's rights in an * Justice V. R. Krishna Iyer.
339 international setting and informing ourselves of the historical origins and contemporary trends in this branch of law.
Social Justice is the signature tune of our Constitution and the little man in peril of losing his liberty is the consumer of Social Justice.
There is no definition of bail in the Code although offences are classified as bailable and non bailable.
The actual Sections which deal with bail, as we will presently show, are of blurred semantics.
We have to interdict judicial arbitrariness deprivatory of liberty and ensure 'fair procedure ' which has a creative connotation after Maneka Gandhi.
(1) Before we turn to the provisions of the Code and dwell on the text of the Sections we may as well remember what Justice Frankfurter said: "there is no surer way to misread a document than to read it literally.
"2 Speaking generally, we agree with the annotation of the expression 'bail ' given in the American Jurisprudence (2nd Edn.
Vol. 8, article 2, p. 783): "The term 'bail bond ' and 'recognizance ' are used inter changeably in many bail statutes, and quite generally without distinction by the courts, and are given a practically identical effect." According to the American Jurisprudence, article 6, p. 785, there is power in the court to release the defendant without bail or on his own recognizance.
Likewise, the definition of bail as given in Webster 's Third New International Dictionary: "The process by which a person is released from custody.
" The concept of bail has a long history briefly set out in the publication on 'Programme in Criminal Justice Reform ': "The concept of bail has a long history and deep roots in English and American law.
In medieval England, the custom grew out of the need to free untried prisoners from disease ridden jails while they were waiting for the delayed trials conducted by travelling justices.
Prisoners were bailed, or 'delivered, to reputable third parties of (l) [1978] 2 S.C.R. 621 [1978] 1 S C.C. 248.
(2) Massachusetts B. and Insurance Co. vs U S, ; 138.
340 their own choosing who accepted responsibility for assuring their appearance at trial.
If the accused did not appeal, his bailor would stand trial in his place.
Eventually it became the practice for property owners who accepted responsibility for accused persons to forfeit money when their charges failed to appear for trial.
From this grew the modern practice of posting a money bond through a commercial bondsman who receives a cash premium for his service, and usually demands some col lateral as well.
In the event of non appearance the bond is forfeited, after a grace period of a number of days during which the bondsman may produce the accused h court.
"(1) It sounds like a culture of bonded labour, and yet are we to cling to it ! of course, in the United States, since then, the bondsman emerged as a commercial adjunct to the processes of criminal justice, which, in turn, bred abuses and led to reform movements like the Manhattan Bail Project.
This research project spurred the National Bail Conference, held in 1964, which in its crucial chain reaction provided the major impetus to a reform of bail law across the United States.
The seminal statutory outcome of this trend was the enactment of the Bail Reform Act of 1966 signed into law by President Lyndon B. Johnson.
It is noteworthy that Chief Justice Earl Warren, Attorney General Robert Kennedy and other legal luminaries shared the view that bail reform was necessary.
Indeed, this legislative scenario has a lesson for India where a much later Criminal Procedure Code 1973 has largely left untouched ancient provisions on this subject, incongruous with the Preamble to the Constitution.
An aside.
Hopefully, one wishes that socio legal research projects in India were started to examine our current bail system.
Are researchers and jurists speechless on such issues because pundits regard these small men 's causes not worthwhile ? Is the art of academic monitoring of legislative performance irrelevant for India ? The American Act of 1966 has stipulated, inter alia, that release should be granted in non capital cases where there is reasonable assurance that the individual will reappear when required; that the Courts should make use of a variety of release options depending on the circumstances; that information should be developed about the individual on which intelligent selection, of alternatives should be based.
(1) Vera Institute of Justice Ten year Error 1961 71 r. 20.
341 The Manhattan Bail Project, conducted by the Vera Foundation and the Institute of Judicial Administration at New York University School of Law, found that about sixty five percent of all felony defendants interviewed could be recommended for release without bail.
Of 2.195 defendants released in this way less than one percent failed to appear when required.
In short, risk of financial loss is all insubstantial deterrent to flight for a large number of defendants whose ties with the community are sufficient to bring them to court.
The consequences of pre trial detention are grave.
Defendants presumed innocent are subjected to the psychological and physical deprivations of jail life, usually under more onerous conditions than are imposed on convicted defendants.
The jailed defendant loses his job is he has one and is prevented from contributing to the preparation of his defence.
Equally important, the burden of his detention frequently falls heavily on the innocent members of his family.
It is interesting that American criminological thinking and research had legislative response and the Bail Reforms Act, 1966 came into being.
The then President, Lyndon B. Johnson made certain observations at the signing ceremony: "Today, we join to recognize a major development in our system of criminal justice: the reform of the bail system.
This system has endued archaic, unjust and virtually unexamined since the Judiciary Act of 1789.
The principal purpose of bail is to insure that an accused person will return for trial if he is released after arrest.
How is that purpose met under the present system ? The defendant With means can afford to pay bail.
He can afford to buy his freedom.
But the poorer defendant cannot pay the price He languishes in jail weeks, months and perhaps even years before trial.
He does not stay in jail because he is guilty.
He does not stay in jail because any sentence has been passed.
He does not stay in jail because he is any More likely to flee before trial.
He stays in jail for one reason only because he is poor. " (emphasis added) 342 Coming to studies made in India by knowledgeable Committees we find the same connotation of bail as including release on one 's own bond being treated as implicit in the provisions of the Code of Criminal Procedure.
The Gujarat Committee from which we quote extensively, dealt with this matter in depth: "The bail system, as we see it administered in the criminal courts to day, is extremely unsatisfactory and needs drastic change.
In the first place it is virtually in possible to translate risk of non appearance by the accused into precise monetary terms and even its basic premise that risk of financial loss is necessary to prevent the accused from fleeing is of doubtful validity.
There are several considerations which deter an accused from running away from justice and risk of financial loss is only one of them and that too not a major one.
The experience of enlightened Bail Projects in the United States such as Manhattan Bail Project and D. C. Bail Project shows that even without monetary bail it has been possible to secure the presence of the accused at the trial in quite a large number of cases.
Moreover, the bail system causes discrimination against the poor since the poor would not be able to furnish bail on account of their poverty while the wealthier persons otherwise similarly situate would be able to secure their freedom because they can afford to furnish bail.
This discrimination arises even if the amount of the bail fixed by the Magistrate is not high, for a large majority of those who are brought before the Courts in criminal cases are so poor that they would and it difficult to furnish bail even in a small amount." (emphasis added) The vice of the system is brought out in the Report: "The evil of the bail system is that either the poor accused has to fall back on touts and professional sureties for providing bail or suffer pre trial detention.
Both these consequences are fraught with great hardship to the poor.
In one case the poor accused is fleeced of his moneys by touts and professional sureties and sometimes has even to incur debts to make payment to them for securing his release; in the other he is deprived of his liberty without trial and conviction and this leads to grave consequences, namely: (1) though presumed innocent he is subjected to 343 the psychological and physical deprivations of jail life; (2) he loses his job, if he has one, and is deprived of an opportunity to work to support himself and his family with the result that burden of his detention falls heavily on the innocent members of the family, (3) he is prevented from contribution to the preparation of his defence; and (4) the public exchequer has to bear the cost of maintaining him in the jail.(1) The Encyclopaedia Britannica brings out the same point even in more affluent societies: "bail, procedure by which a judge or magistrate sets at liberty one who has been arrested or imprisoned, upon receipt of security to ensure the released prisoner 's later appearance in court for further proceedings .
Failure to consider financial ability has generated much controversy in recent years, for bail requirements may discriminate against poor people and certain minority groups who are thus deprived of an equal opportunity to secure their free dom pending trial.
Some courts now give special consideration to indigent accused persons who, because of their community standing and past history, are considered likely to appear in court.
"( ') "We should suggest that the Magistrate must always bear in mind that monetary bail is not a necessary element of the Criminal process and even if risk of monetary loss is a deterrent against fleeing from justice, it is not the only deterrent and there are other factors which are sufficient deterrents against flight.
The Magistrate must abandon the antiquated concept under which pre trial release could be ordered only against monetary bail.
That concept is out dated and experience has shown that it has done more harm than good.
The new insight into the subject of pre trial release which has now been developed in socially advanced countries and particularly the United State should now inform the decisions of the Magistrates in regard to pre trial release.
Every other feasible method of (1) Report of the Legal Aid Committee appointee.
by the Govt.
Of Gujarat 1971, and headed by the then Chief Justice of the State, Mr. Justice P.N. Bhagwati p 185.
(2) Encyclopaedia.
Britannica, Vol.
I, P. 736 (15th Edn) Micro edn.
344 pre trial release should be exhausted before resorting lo monetary bail.
The practice which is now being followed in the United States is that the accused should ordinarily be released on order to appear or on his own recognizance unless it is shown that there is substantial risk it is appearance or there are circumstances justifying imposition of conditions on release .
If a Magistrate is Satisfied after making an enquiry into the condition and background of the accused that the accused has his roots in the community and is nor likely to abscond, he can safely release the accused on order to appear or on his own recognizance . "(1) (emphasis added) A latter Committee with Judges, lawyers, members of Parliament and other legal experts.
came to the same conclusion and proceeded on the assumption that release on bail included release on the accused 's own bond: " .
We think that a liberal policy of conditional re lease without monetary sureties or financial security and release on one 's own recognizance with punishment provided for violation will go a long way to reform the bail system and help the weaker and poorer sections of the community to get equal justice under law.
Conditional release may take the form of entrusting the accused to the care his relatives or releasing him on supervision.
The court or the authority granting bail may have to use the discretion judiciously.
When the accused is too poor to find sureties, there will be no point in insisting on his furnishing bail with sureties, as it will only compel him to be in custody with the consequent handicaps in making his defence.
"(2) Thus, the legal literature, Indian and Anglo American, on bail jurisprudence lends countenance to the contention that bait.
loosely used, is comprehensive enough to cover release on ones own bond with or without sureties.
We have explained later that the power of the Supreme Court to enlarge a person during the pendency of a Special Leave Petition or of an appeal is very wide, as order 21 Rule 27 of the Supreme Court Rules discloses.
In that sense, a consideration of the question (1) Report of the Legal Aid Committee appointed by the Govt.
Of Gujarat (2) Report of the Expert Committee on Legal Aid Processual Justice to the People, May 1973.
345 as to whether the High Court or the subordinate courts have powers to enlarge a person on his own bond without sureties may not strictly arise.
Even so, the guidelines which prevail with the Supreme court when granting suspension of sentence must, in a broad sense, have relevance to what the Code indicates except where special circumstances call for a different course.
Moreover, the advocates who participated many of them did covered the wider area of release under the Code, whether with or without sureties, and that is why we consider the relevant provisions of the Code in some detail.
Let us now examine whether there is anything in the Provisions of the Code which make this meaning clearly untenable.
A semantic smog overlays the provisions of bail in the Code and prisoners ' rights, when cast in ambiguous language become precarious.
Where doubts arise the Gandhian talisman becomes a tool of interpretation: "Whenever you are in doubt. apply the following test.
Recall the face of the poorest and the weakest man whom you may have seen, and ask yourself, if the step you contemplate is going to be of any use of him.
" Law, at the service of life, must respond interpretatively to raw realities and make for liberties.
Primarily Chapter XXXIII is the nidus of the law of bail.
436 of the Code speaks of bail but the proviso makes a contradistinction between 'bail ' and 'own bond without sureties '.
Even here there is an ambiguity, because even the proviso comes in only if, as indicated in the substantive part, the accused in a bailable offence is prepared to give bail '.
Here, 'bail ' suggests 'with or without sureties '.
And, 'bail bond ' in Sec.
436(2) covers own bond.
437(2) blandly speaks of bail but speaks of release on bail of persons below 16 years o age, sick or infirm people and women.
It cannot be that a small boy or sinking invalid or pardanashin should be refused release and suffer stress and distress in prison unless sureties are haled into a far off court with obligation for frequent appearance ! 'Bail ' there suggests release, the accent being on undertaking to appear when directed, not on the production of sure ties.
But Sec.
437(2) distinguishes between bail and bond without sureties.
445 suggests, especially read with the marginal note that deposit of money will do duty for bond 'with or without sureties.
441(1) of the Code may appear to be a stumbling block in the way of the liberal interpretation of bail as covering own bond with and without sureties.
Superficially viewed, it uses the words 'bail ' and 'own bond ' as antithetical, if the reading is literal.
Incisively 346 understood, Sec.
441(1) provides for both the bond of the accused and the undertaking of the surety being conditioned in the manner mentioned in the sub section.
To read 'bail ' as including only cases of release with sureties will stultify the sub section; for then, an accused released on his own bond without bail, i.e., surety, cannot be conditioned to attend at the appointed place.
441(2) uses the word 'bail ' to include 'own bond ' loosely as meaning one or the other or both.
Moreover, an accused in judicial custody, actual or potential, may be released by the court to further the ends of justice and nothing in Sec.
44 1( 1 ) compels a contrary meaning.
441(2) and (3) use the word 'bail ' generically because the expression is intended to cover bond with or without sureties.
The slippery aspect is dispelled when we understand the import of Sec.
389(1) which reads: 389 (1): Pending any appeal by a convicted person the Appellate Court may, for reasons to be recorded by it in writing, order that the execution of the sentence or order appealed against be suspended and, also, if he is in confinement, that he be released on bail, or on his own bond.
The court of appeal may release a convict on his own bond without sureties.
Surely.
it cannot be that an under trial is worse of than a convict or that the power of the court to release increases when the guilt is established.
It is not the court 's status but the applicant 's guilt status that is germane.
That a guilty man may claim judicial liberation pro tempore without sureties while an undertrial cannot is a reduetio ad absurdam.
Likewise, the Supreme Court 's powers to enalage a prisoner, as the wide words of order 21 Rule 27 (Supreme Court Rules) show, contain no limitation based on sureties.
Counsel for the State agree that this is so, which means that a murderer, concurrently found to be so may theoretically be released on his own bond without sure .
ties while a suspect, presumed to be innocent, cannot be.
Such a strange anomaly could not be, even though it is true that the Supreme Court exercises wider powers with grater circumspection.
The truth, perhaps, is that indecisive and imprecise language is unwittingly used, not knowing the draftsman 's golden rule: "In drafting it is not enough to gain a degree of precision which a person reading in good faith can understand, but it is necessary to attain if possible to a degree of precision which a person reading in bad faith cannot misunderstand." (Lux Genthum Lex Then and Now 1799 1974, p. 7) 347 If sureties are obligatory even for juveniles, females and sickly accused while they can be dispensed with, after being found guilty if during trial when the presence to instruct lawyers is more necessary, an accused must buy release only with sureties while at the appellate level, suretyship is expendable, there is unreasonable restriction on personal liberty with discrimination writ on The, provisions.
The hornet 's nest of Part 111 need not be provoked it read 'bail ' to mean that it popularly docs, and lexically and in American Jurisprudence is stated to Mean, viz., a generic expression used to describe judicial release from Custodia.
Bearing in mind the need for liberal interpretation in areas of social justice, individual freedom and indigent 's rights, we hold that bail covers both release on one 's own bond, with or without sureties.
When sureties should be demanded and what sum should be insisted on are dependent on variables.
Even so, poor men Indians in monetary terms indigents young persons infirm individual and women are weak categories and courts should be liberal in releasing them on their own recognisances put whatever reasonable condition you may.
It Shocks one conscience to ask a mason like the petitioner to Furnish sureties for Rs. 100,000/ The magistrate must be given the benefit of doubt for not fully appreciating that our Constitution.
enacted by 'We the People of India ' ' is meant for the butcher , the baker and the candle stick maker shall we add , the bonded labour and pavement dweller.
To add insult to injury, the magistrate has demanded sureties from his own district.
(We assume the allegation in the petition).
What is a Malayalee, Kannadiga, Tamilian or Andhra to do if arrested for alleged misappropriation or them or criminal trespass in Bastar , Port Blair ,Port Blair .
Pahalgaam of Chandni Chowk? He cannot have sureties owning properties in these distant places.
He may not know any one there and might have come in a batch or to seek a job or in a morcha .
Judicial disruption of Indian unity is surest achieved buy such provincial allergies.
What law prescribes sureties from outside or non regional linguistic, some times legalistic.
applications? What law prescribes the geographical discrimination implicit in asking for sureties from the court district? This tendency takes many forms, sometimes, geographic , sometimes linguistic, some times legalistic.
Art 14 protects all Indians qua Indians, within the territory of India.
Art 350 sanctions representation to any authority.
including a court, for redress of grievances in any language used in the Union of India .
Equality before the law implies theat even a vakalat 6 526 SCI/78 348 or affirmation made ill any State language according to the law in that State must be accepted everywhere in the territory of India save where a valid legislation to the contrary exists.
Otherwise, an adivasi will be unfree in Free India, and likewise many other minorities.
This divagation has become necessary to still the judicial beginnings, and to inhibit the process of making Indians aliens in their own homeland.
Swaraj is made of united stuff.
We mandate the magistrate to release the petitioner on his own bond in a sum of Rs. 1,000/ .
An After word We leave it to Parliament to consider whether in our socialist republic, with social justice as its hallmark, monetary superstition, not other relevant considerations like family ties, roots in the community, membership of stable organizations, should prevail for bail bonds to ensure that the 'bailee ' does not flee justice.
The best guarantee of presence in court is the reach of the law, not the money tag.
A parting thought.
If the indigents are not to be betrayed by the law including bail law re writing of many processual laws is in urgent desideratum; and the judiciary will do well to remember that the geo legal frontiers of the Central Codes cannot be disfigured by cartographic dissection in the name of language of province.
S.R. Petition allowed.
| IN-Abs | Pursuant to the directions of the Supreme Court for releasing the petitioner appellant "on hail to the satisfaction of the Chief Judicial Magistrate," the Magistrate ordered that a surety in a sum of Rs. 10,000/ be produced.
When the petitioner produced one.
the magistrate made an odd order refusing to accept the suretyship of the petitioner 's brother because he and his asset were in another district.
Frustrated by magisterial intransigence the prisoner moved, this Court again to modify the original order "to the extent that the petitioner be released on furnishing surety to the tune of Rs. 2,000/ or on executing a personal bond or pass any other order or direction as this Hon 'ble Court may deem fit and proper".
Directing the Magistrate to release the petitioner on his own bond in a sum of Rs. 1,000/ the Court, ^ HELD: (1) Social Justice is the signature tune of our Constitution and the littleman in peril of losing his liberty is the consumer of social justice.
And the grant of bail can be stultified or made impossibly inconvenient and expensive if the Court is powerless to dispense with surety or to receive an Indian bailor across the district borders as good or the sum is so excessive that to procure a wealthy surety may be both exasperating and expensive.
The problem is plainly one of human rights, especially freedom vis a vis, the lowly and necessitates the Supreme Court to interdict judicial arbitrariness deprivatory of liberty and ensure "fair procedure" which has a creative connotation after Maneka Gandhi [1978] 2 SCR 621.
[338 C F. 339 A B] (2) Bail covers release on one 's own bond with or without sureties, as the legal literature, Indian and Anglo Amemrican on bail jurisprudence lends countenance and the need for liberal interpretation in areas of social justice, individual freedom and indigent 's rights justifies.
When sureties should be demanded and what sum should be insisted on are dependent on variables.
[344 G, 347 C] (3) A semantic smog overlays the provisions of bail in the Code and prisoners ' rights, when cast in ambiguous language become precarious.
[345 C] (a).
'Bail ' in section 436 of the Criminal Procedure Code suggests 'with or without sureties.
And, 'bail bond` in section 436(2) covers own bond.
[345 E] (b) 'Bail ' in section 437 (2) suggests release, the accent being on undertaking to appear.
when directed, not on the production of sureties.
But section 137(2) distinguishes between bail and bond, without sureties.
[345 F G] 336 (c) Section 445 suggests, especially read with the marginal note that deposit of money will do duty for bond 'with or without sureties '.
[345 G] (d) Superficially viewed, section 441 ( 1 ) uses the words 'bail ' and 'own bond ' as antithetical, if the reading is liberal.
Incisively understood, Section 441(1) provides for both the bond of the accused and the undertaking of the surety being conditioned in the manner mentioned in the sub section.
To read "ail" as including only cases of release with sureties will stultify the sub section, for then, an accused released on his own bond without bail, i.e. surety, cannot be conditioned to attend at the appointed place.
Section 441(2) uses the word 'bail ' to include 'own bond ' loosely as meaning one or the other or both.
Moreover, an accused, in judicial custody, actual or potential, may be released by the Court to further the ends of justice and nothing in s 441(1) compels a contrary meaning.
section 441(2) and (3) use the word 'bail ' generically because the expression is intended to cover bond with or without sureties; [345 H, 346 A C] (e) When the Court of appeal as per the import of section `389(1) may release a convict on his own bond without sureties, surely, it cannot be that an undertrial is worse off than a convict or that the power of the Court to release increases when the guilt is established.
It is not the Court 's status but the applicant guilt status that is germane.
That a guilty man may claim judicial liberation pro tempore without sureties while an undertrial cannot, is a reductio ad absurdum.
[346 D E] (5) The Supreme Court 's powers to enlarge a prisoner, as the wide words of order 21 Rule 27 (Supreme Court Rules 1966) show, contain no limitation based on sureties, which means that a murderer, concurrently found to be so, may.
theoretically be released on his own bond without sureties while a suspect, presumed to be innocent cannot be.
Such a strange anomaly could not be, even though it is true that the Supreme Court exercises wider powers with greater circumspection.
[346 F G] (6) If sureties are obligatory even for juveniles, females and sickly accused while they can be dispensed with.
after being found guilty, if during the trial when the presence to District lawyers is more necessary, an accused must buy release only with sureties while at the appellate level, suretyship is expendable, there is unreasonable restriction on personal liberty with discrimination writ on the provisions.
The hornet 's nest of Part III need not be provoked if the Court reads 'bail ' to mean that it popularly does.
and lexically and in American Jurisprudence is stated to mean, viz. a generic expression used to describe under release from custodia juris.
[347 A B] (7) article 14 protects all Indians qua Indians, within the territory of India.
article 350 sanctions representation to any authority, including a Court, for redress of grievances in any language used in the Union of India.
Equality before the law implies that even a vakalat or affirmation made in and State language according to the law in that State must be accepted everywhere in the territory of India, same where a valid legislation to the contrary exists.
Otherwise, an Adivasi will be unfree in Free India, and likewise many other minorities.
The process of making Indians aliens in their own homeland should be inhibited.
Swaraj is made out of united stuff.
The best guarantee of presence in Court is the reach of law, not the money tag.
[347 G H, 348 A B, D] The Court left open to the Parliament to consider whether in our socialist republic with social justice as its hallmark, monetary supersti 337 tion, not other relevant consideration like family ties, roots in the community, membership of stable organisations should prevail or bail bonds to ensure that the 'bailee ' does not flee justice.]
|
tition No. 4305 of 1978.
Under Article 32 of the Constitution.
N. M. Ghatate and section V. Deshpande.
for the Petitioner Soli J. Sorabjee, Addl.
General and Girish Chandra for the Respondent.
The order of the Court was delivered by KRISHNA IYER, J. A litigation with a social dimension, even in a blinkered adversary system, serves a larger cause than the limited lis before the court.
This petition, with non specific reliefs, is One such.
Sobraj, the petitioner, by the frequency of his forensic com plaints against incarceratory torture and Dr. Ghatate, his counsel by the piquancy of his hortative advocacy of freedom behind bars.
have sought to convert the judicial process from a constitutional sentinel of prison justice which, emphatically, it is into a meticulous auditor general of jail cells which, pejoratively, it is not although, on occasions, 'thin partition do their bounds divide`.
Often, as here, the fountain of confusion in penitentiary jurisprudence is forgetfulness of fundamentals.
Once the legal basics are stated, Sobraj, with his disingenuous, finical grievances, will be out of court.
What are the governing principles, decisionally set down by this court in Batra and Sobraj? Has the court jurisdiction to decide prisoners ' charges of violation of rights ? If it has, can it meddle with the prison administration and its problems of security and discipline from an 'innocent ' distance ? Put tersely, both the 'hands off.
doctrine and the 'take over ' theory have been rebuffed as untenable extremes and a middle round has been found of intervening when constitutional rights or statutory prescriptions are transgressed to the injury of the prisoner and declining where lesser matters of institutional order and man management, though irksome to some, are alone involved.
Contemporary profusion of prison torture reports makes it necessary to drive home the obvious, to shake prison top brass from the callous complacency of unaccountable autonomy within that walled off world of human held incommunicado.
Whenever fundamental rights are flouted or legislative protection ignored, to any prisoner 's prejudice, this Court 's writ will run, breaking through stone walls and iron bars, to right the wrong and restore the rule of law.
Then the 515 parrot cry of discipline will not deter, of security will not scare of discretion will not dissuade, the judicial process.
For if courts 'cave in" when great rights are gouged within the sound proof, sight proof precincts of prison houses, where, often, dissenters and minorities are caged, Bastilles will be re enacted.
When law and tyranny begins: and history whispers, iron has never been the answer to the rights of men.
Therefore we affirm that imprisonment does not spell farewell to fundamental rights although, by a realistic re appraisal, courts will refuse to recognise the full panoply of Part III enjoyed by a citizen.
This proposition was not contested by the learned Additional Solicitor General Sri Soli Sorabjee.
Nor does its soundness depend, for us, upon the Eighth Amendment to the U.S. Constitution.
article 21, read with article 19(1) (d) and (5), is capable of wider application than the imperial mischief which gave its birth and must draw Its meaning from the evolving standards of decency and dignity that mark the progress of a mature society, as Batra and Sobraj have underscored and the American judges have highlighted.
Fair procedure is the soul of article 21, reasonableness of the restriction is the essence of article 19(S) and sweeping discretion degenerating into arbitrary discrimination is anathema for article 14.
Constitutional kurana is thus injected into incarceratory strategy to produce prison justice.
And as an annotation of article 21, this Court has adopted, in Kharak Singh 's case(I) that expanded connotation of 'life ' given by Field, J. which we quote as reminder: "Something more than mere animal existence.
the inhibition against its deprivation extends to all those limbs and faculties by which life is enjoyed.
The provision equally prohibits the mutilation of the body by the amputation of an arm or leg, or the putting out of an eye, or the destruction of any other organ of the body through which the soul communicates with the outer world".
The next axiom of prison justice is the court 's continuing duty and authority to ensure that the judicial warrant which deprives a person of his life or liberty is not exceeded, subverted or stultified lt is a sort of solemn covenant running with the power to sentence.
The U.S. Courts have intensified their oversight of State penal facilities reflecting a heightened concern with the extent to which the ills that plague so called correctional institutions violate basic rights.
points out Edward section Crowin.
Although.
the learned author, and.
(1) [1964] I SCR 357.
(2) Supplement to Edward section Corwin 's "The constitution ' and What it means Today; 1976 Edn.
p. 245.
516 indeed, the decisions show that reliance is placed on the Eighth: Amendment, as we have earlier pointed out.
the same.
sensitized attention and protective process emanate from the humane provisions of Part III of our Constitution.
Viewed differently, supposing, a court sentences a person to simple imprisonment or assigns him 'B ' class treatment and the jail authorities unwittingly or vindictively put him under rigorous imprisonment or subject him to 'C ' class treatment, does it not show contempt of the court 's authority and deprivation of liberty beyond a degree validated by the court warrant ? Likewise, where a prisoner is subjected to brutality, exploiting the fact that he is helplessly within the custody of the Jail Administration, does it not deprive the prisoner of his life and liberty beyond the prescribed limits set by the court ? Yet again, where conditions within a prison are such that inmates incarcerated therein will inevitably and necessarily become more sociapathic than they were prior to the sentence, is not the court ' punitive purpose, charged with healing hope, stultified by the prison authorities ? of course, where a prison practice or internal instruction places harsh restrictions on jail life, breaching, guaranteed rights.
the court directly comes in.
Every prison sentence is a conditioned deprivation of life and liberty, with civilised norms built in and unlimited trauma interdicted.
In this sense, judicial policing of prison practices is implied in the sentencing power.
The Criminal judiciary have thus a duty to guardian their sentences and visit prisons hen necessarily.
Many of them do not know or exercise this obligation.
Another jurisdictional facet may be touched upon in view of the widely worded relief sought to treat Sobraj 'in a human and dignified manner, keeping in view the adverse effect of` his confinement upon his mental and physical conditions .
The penological goals which may be regarded as reasonable justification For restricting the right to move freely within the confines of a penitentiary are now well settled.
And if prisoners have title to Article 19, 21 and 14 rights, subject to the limitation we have indicated, there must be some correlation between deprivation of freedom and the legitimate functions of a correctional system.
It is now well settled, as a stream of rulings of courts proves, that deterrence, both specific and general, rehabilitation and institutional security are vital considerations.
Compassion wherever possible and cruelty only where inevitable is the art of correctional confinement.
When prison policy advances such a valid goal, the court will not intervene officiously.
517 This overall attitude was incorporated as a standard by the American National Advisory Commission on Crimine Justice Standards and Goals: '. .
A rehabilitative purpose is or ought to be implicit in every sentence of an offender unless ordered otherwise by the sentencing court ' '.(l) The U.S. Supreme Court summed up: "In a series of decisions this court has held that, even though the governmental purpose be legitimate anti substantial, that purpose cannot be pursued by means that broadly stifle fundamental personal liberties when the and can by more narrowly achieved.
The breadth of legislative abridgment must be viewed in the light of less drastic means for achieving, the same basic purpose."( ') But when an inmate is cruelly restricted in a manner which supports no such relevant purpose the restriction becomes unreasonable and arbitrary and unconstitutionality is the consequence.
Traumatic ` futility is obnoxious to pragmatic legality.
Social defence is the raison of the penal code and bears upon judicial control over prison administration.
If a whole atmosphere of constant fear of violence, frequent torture and denial of opportunity to improve oneself is created or if medical facilities and basic elements of care arid comfort necessary to sustain life are refused then also the humane jurisdiction of the court will become operational based on article 19 '.
Other forms of brutal unreasonableness and anti rehabilitative attitude violative of constitutionality may be thought of in n penal system but we wish to lay down only a broad guideline that where policies.
with a 'Zoological touch ', which do not serve valid penal objectives are pursued in penitentiaries so as to inflict conditions so unreasonable as to frustrate the ability of inmates to engage in rehabilitations.
the court is not helpless.
However as prison system may make rational distinctions in making assignments to inmates of vocational.
educational Land work opportunities available but it is constitutionally impermissible to do sc without as functional classification system.
The mere fact that a prisoner is poor or rich, high born or ill bred, is certainly irrational as a differential ill a secular socialist high republic '.
Since the petitioner charges the jail staff with barbaric and inhuman treatment in prison we are called upon to delineate the broad boundaries of judicial jurisdiction vis a vis prison administration and prisoner 's rights.
(I) "To solve The age old Problem of crime" Roger Lanphear; J. D. p 19 (2) Ibid pr 21 518 The court is reluctant to intervene in the day to day operation of the State penal system; but undue harshness and avoidable tantrums, under the guise of discipline and security, gain no immunity from court writs.
The reason is, prisoners retain all rights enjoyed by free citizens except those lost necessarily as an incident of confinement.
Moreover, the rights enjoyed by prisoners under Articles 14, 19 and 21, though limited, are not static and will rise to human heights when challenging situations arise.
Cooper(1) and Menaka Gandhi(2) have thus compulsive consequence benignant to prisoners.
The petitioner in the present case has contended that barbaric and inhuman treatment have been hurled at him and that intentional discrimination has been his lot throughout.
These allegations invited us to examine the limits and purpose of judicial jurisdiction but we have to apply the principles so laid down to the facts of the present case.
Starry abstractions do not make sense except in the context of concrete facts.
That is why we agree with the propositions Of law urged by Dr. Ghatate but disagree with the distress and discrimination his client wails about.
True, confrontedm with cruel conditions of confinement, the court has an expanded role.
True, the light to life is more than mere animal existence, or vegetable subsistence.(3) True, the worth of the human person and dignity and divinity of every individual inform articles 19 and 21 even in a prison setting.
True, constitutional provisions and municipal laws must interpreted in the light of the normative laws of nations, wherever possible and a prisoner does not forfeit his Part lII rights.
But that are the facts here ? Charles Sobraj is no longer an under trial.
having to serve two sentence of long imprisonment.
He is given all the amenities of .1 'B ' class prisoner.
He goes on hunger strike but medical men take care of him.
Ward I, where he is lodged, gives him the facilities of wards XIll and XIV where he wants to he moved.
He has record of one escape and one attempt at suicide and Interpol reports of many crimes abroad.
There are several cases pending in India against him.
Even so, the barbarity of bat fetters inflicted on him lay a qualmless jail staff was abandoned under orders of this Court.
he seeks the other extreme of of coddling as if a jail were a country club or good hotel.
Give me finer foreigners as companions.
he demands.
Don 't keep convict cooks and warders as (1) [1971] l SCR Sl2.
(2) [1978] l SCR 248 (3) Mohammed Giasuddin vs State of Andhra Pradeh.
; 519 jailmated in my cell he rails.
Remove me from a high security ward like Ward I to a more relaxed ward like Ward 14 or 13, he solicits.
These delicate and genteel requests from a prisoner with his record and potential were turned down by the Superintendent and the reasons for such rejection, based on security, rules and allergy of other inmates to be his risky fellow inmates have been stated on oath.
We cannot be critical of the Administration if it makes a classification between dangerous prisoners and ordinary prisoners.
In the present case, the Superintendent swears, and it is undisputed, that the petitioner is not under solitary confinement.
We further aver that a distinction between under trials and convicts is reasonable and the petitioner is now a convict.
In fact, lazy relaxation on security is a professional risk inside a prison.
The court must not rush in where the jailor fears to tread.
While the country may not make the prison boss the sole sadistic arbiter of incarcerated humans, the community may be in no mood to hand over central prisons to be run by courts.
Each instrumentality must sanction within its province.
We have no hesitation to hold that while Sobraj has done litigative service for prison reform, he has signally failed to substantiate any legal injury.
We, therefore, dismiss the writ petition, making it clear that strictly speaking the petitioner being a foreigner cannot claim rights under article 19, but we have discussed at some length the import of Articles 14, 19 and 21 because they are interlaced and in any case apply to Indian citizens.
, Petition dismissed.
S.R. Petition dismisses.
| IN-Abs | The petitioner a convict having to serve two sentences of long imprisonment, plus record of one escape and one attempt of suicide and interpol.
reports of many crimes abroad in addition to several cases pending in India against him, through this writ petition contended that barbarity and inhuman treatment have been hurled at him and that intentional discrimination has been his lot throughout and, therefore sought the assistance or this Court for directing the jail authorities to give him finer foreigner as companions, and to remove him from a high security ward like Ward l to a more relaxed ward, be invoking the provisions of Articles 14, 19 and 21 of the Constitution.
Dismissing the Writ Petition the Court, ^ HELD: (1) Imprisonment does not spell farewell to fundamental rights although, by a realistic re appraisal,, Courts will refuse to recognise the full panoply of Part lII of the Constitution enjoyed by a free citizen.
Whenever fundamental rights are flouted or legislative protection ignored to any prisoner 's prejudice, this Court 's writ will run breaking through stone walls and iron bars, to right the wrong and restore the rule of law.
Then the parrot cry of discipline thrill not deter, of security will not scare, of discretion will not dissuade, the judical process.
For if courts 'cave in ' when great rights and sound within the sound proof, sight proof precincts of prison houses where often disenters and minorities are caged, Bastilles will be re enacted.
When law ends tyranny begins, and history whispers, iron has never ben the answer to the rights of men.[514 H, 515 A Bl (2) article 21 of the Constitution read with article 19(1)(d) and (5) is capable of wider application than the imperial mischief which give its birth and must draw its meaning from the evolving standards of decency and dignity that mark the progress of a mature society.
Fair procedure is the soul of article 21, reasonableness of the restriction is the essence of article 19(5) and sweeping discretion degenerating into arbitrary discrimination is anthema for article 14.
Constitutional Karuna is thus injected into incarceratory strategy to produce prison justice.
[ 515 CD] Sunil Batra vs Delhi Admn.
& ors.
and Charles Gurumukh Sobraj.
State of Delhi [1979] I SCR 392 referred to, 513 Kharak Singh vs State of U.P. ; applied.
(3) Prison justice implies Court 's continuing duty and authority to ensure that the judicial warrant which deprives a person of his life or liberty is not exceeded, subverted or stultified.
It is a sort of solemn covenant running with the power to sentence.
Where a prison practice or internal instruction places harsh restrictions on jail life, breaching guaranteed rights, the Court directly comes in.
Every prison sentence is a conditioned deprivation of life auld liberty.
with civilized norms built in and unlimited trauma interdicted.
In this sense judicial policy of prison practices is implied in the sentencing power.
The Criminal judiciary have thus a duty to guardian their sentences and visit prisons when necessary.
The penological goals which may be regarded as reasonable justification for restricting the right to move freely within the confines of a penitentiary are now well settled.
And if prisoners have title to Articles 19, 21 and 14 rights, subject to the limitations, there must be some correlation between depriviation of comfort and legitimate function of a correctional system.
[515 G, 516 E, F G] (4 ) Deterrence, both specific and general rehabilitation, and institutional security are vital considerations.
Compassion wherever possible and cruelty only where inevitable is the art of correctional confinement.
When prison policy advances such a valid goal, the Court will not intervene officiously.
But when an inmate is cruelly restricted in a manner which supports no such relevant purpose, the restriction becomes unreasonable and arbitrary, and unconstitutionality is the consequence.
Traumatic futility is obnoxious to pragmatic legality.
Social defence is the raison d 'etre of the penal code and bears upon judicial control over prison administration.
If a whole atmosphere of constant fear of violence, frequent torture and denial of opportunity to improve oneself is created or if medical facilities and basic elements of care and comfort necessary to sustain life are refused, then also the humane jurisdiction of the Court will become operational based on article 19.
[516 G H, 517 D E] 5) Prisoners retain all rights enjoyed by free citizens except those lost necessarily as an incident of confinement.
Rights enjoyed by prisoners under Arts 14, 19 and 21 though limited are not static and will rise to human heights when challenging situations arise.
[518 A B] R. C. Cooper vs Union of India, ; Menaka Gandhi vs F Union of India & Anr., , Mohammad Giasuddin vs State of Andhra pradesh ; referred to.
(6) However, a prison system may make rational distinctions in making assignments to inmates of vocational, educational and work opportunities available but it is constitutionally impermissible to do so without a functional classification system.
Courts cannot be critical of the administration if it makes a classification between dangerous prisoners and ordinary prisoners.
A distinction between the under trials and convicts is reasonable.
In fact lazy relaxation on security is a professional risk inside a prison.
[517 F, (G, 519 B, Cl 'The petitioner being a foreigner cannot claim rights under article 19.
Moreover he is now a convict and is not in solitary confinement.
[519 D] OBSERVATlON: [The Court must not rush in where the jailor fears to tread.
While the country may not make the prison boss the sole sadistic arbiter of incarcerated 514 human, the community may be in no mood to handover central prisons to be run by Courts Each instrumentality must function within its province)
|
Civil Appeal No. 1083 of 1978.
Appeal by Special Leave from the Judgment dated 23 2 77 of the Madras High Court in C.R.P. No. 356 of 1977 Y. section Chitale, Vineet Kumar and A. K. Srivastava for the Appellant.
A. V. Rangam for the Respondent.
553 The Judgment of the Court was delivered by A KRISHNA IYER, J.
Arbitrary orders and mystical directions have poor mileage in this Court when irrelevance and unreason are writ on their face even though the sanctity of concurrent error may give them some shelter.
To ply a contract carriage is a fundamental right hut it can be restricted reasonably as has been done by the .
The perspective is that what is fundamental is the right, not the restriction .
Here , one Mudaliar.
the appellant, owner a luxury coach, plied it for public benefit under a permit of 1971 for five years.
The statutory criteria for grant of such permits is set out in section 50 and renewals of permits must be governed by the same considerations, the procedure being regulated by section 58.
There is no grievance made that procedure violations are involved here.
All that we know is that the permit was to expire in March 1976 and so a renewal application was made two months earlier.
The State Transport Authority (for short, S.T.A.) rejected the request for renewal on the score that the 'ITDC has expanded its activities ' and has in the field many tourist vehicles.
Then the Authority added: 'lt is said that the utilization of these vehicles is in the range of 90 to 100 per cent during the tourist season only (November to February) and that it is just 60 to 70%" during" other periods '.
The Tamil Nadu State 's transport system also has vehicles on the road and some spare buses.
All told, a few hundred motor vehicles, some of which arc stage carriages and some contract carriages, serve the travelling, public on these statements, the conclusion was reached: 'The State Transport Authority therefore considers that the facilities provided by these public sector undertakings are adequate.
Renewal of the applicants permit will not only be redundant in the circumstances but also result in healthy competition '.
The order does not indicate that anyone appeared and objected.
The State Transport Appellate Tribunal (S.T.A.T., to use an acronym ).
On appeal under section 64 affirmed the rejection, using the same reasoning.
About the abundant transport facilities developed since 1971 the Tribunal said: 'The learned counsel for the appellant has no doubt stated that there is no material to hold the details (occurring at para 2 of the order) to be correct.
The State Transport Authority is dealing with the provision of transport in the State level and he is expected to be in touch with the details of the availability of service from different sources and those particulars furnished by the S.T.A, could not also be said to be in anyway strange.
As the authority is having these details readily available it was open to the authority, to 554 rely upon those details before coming to conclusion bout the need for renewal as asked for by appellant.
It is not therefore proper to comment on the details made available in para 2 of the order '.
He obscurely encored, without any facts, that there would be 'unhealthy competition.
What is truly occult is the casual dismissal of unanswerable factor: 'The appellant has stated in his affidavit that in as much as applications have been called for, for the grant of 100 tourist cabs, 15 omni buses and 10 omni tourist buses for the State of Tamil Nadu, the comment about the absence of need for renewing the permit as made by the State Transport Authority is not proper .
The Departmental Representative has filed a Memo.
Of objection stating that application ave been called for the sinner of permits valid to ply throughout India and the same is not relevant material, as the applicant 's permit is in respect of the State of Tamil Nadu alone.
The learned counsel for the appellant would contend that for the limited purpose of making out that there is need for additional service, this factor may also be considered '.
No doubt, it is admitted that applications have been called for, for the issue of permits to be effective all over India.
The appellant 's permit is having a restricted application within the State.
As such as fact that applications have been called for the grant of All India Permits does not in any way become relevant or important and the same can be ignored '.
The STAT has countered the appellants claim of meritorious service by reference to past infirmities not adverted to anywhere in the order of the STA The High Court, in revision, washed its hands off the case by the observation: 'It is not for this court to traverse into these questions of fact And find out whether there is any need for adequacy under the revisional jurisdiction.
How many permits the India Tourism Development Corporation should have been granted is not the subject matter of this revision petition.
This concerns merely with the refusal to renew the permit which, in my view, has been done on very valid and tenable reasons '.
The whole issue has been made more fishy by the STA granting two contract carriage permits in 1978 after rejecting the renewal application holding there were already too many vehicles.
Should the court interfere under article 136 ? ordinarily, No. But if ' a small man, whose heavy investment in a tourist coach is to be sterilised altogether it is a social trauma; 'and if fundamental rights are disposed of as if by executive fiats, this Court must intervene to uphold the credibility hl the rule of law and prevent its derailment.
The touch stone is not the little man and his little lis but the Large issue and the deep portent.
555 S.50 specifies the guidelines.
The transport tribunals function quasi judicially and this imports some imperatives.
You must tell the men whose fundamental right you propose to negative the materials you may use in your decision.
You must act on relevant considerations, properly before you, not on rumour or hearsay, ex cathedra assertions or inscrutable hunch.
The Authority must, remember that a permit holder has an ordinary right of renewal unless it is shown that outweighing reasons of public interest lead to a contrary result.
Permits are not bounty but right, restricted reasonably by the .
The key criterion when a contract carriage permit is sought, is to ask oneself whether an extra vehicle is unnecessary or undesirable in the public interest, and whether, further, the permits already granted are sufficient for or in excess of the needs of the region.
After all, a few hundred vehicles admittedly ply and one contract carriage operator is asking for a single permit.
What makes it unnecessary or undesirable in the public interest ? ordinarily, having regard to the explosive increase in traffic in our country, more vehicles are needed.
Of course if the roads are in a precarious condition or competitive racing or reckless driving on the roads make for hazards or if the operator is otherwise disqualified one may reduce the number of vehicles and refuse permit or renewal.
Nothing of the sort is mentioned in any of the orders rejecting the permit.
Assuming there are around 300 or 400 motor vehicles, how does one more become too many ? It is a preposterous proposition to say so, in the absence of some evidence.
If there is no evidence to warrant such a conclusion.
the right to the permit must prevail.
Is there any evidence in this case ? The Authority asserts that the utilisation of existing vehicles is of the order of '90 to 100 per cent ' during the tourist season.
This indicates that at least during the tourist season one more tourist coach will be welcome to relieve congestion.
The Authority further states that it is said . "just 60 to 70 per cent" Is utilised during the other period.
"It is said" by whom, to whom, when, how, and was it put to the applicant ? All this is shrouded in mystery.
Whatever is said by someone, somewhere, is not material here.
It must be on the record.
While the STA may know the total number of vehicles on the road it must have made a study of specific materials to ascertain whether there is unused vehicular potential.
Merely to rely on 'it is said ' 'in the passive voice is not judicial.
Moreover, not to put it to the applicant before rejecting his renewal is not fair.
The bare ipse dixit that the 'State Transport Authority considers the facilities provided by public sector undertakings are adequate ', is 556 not intelligible, without some basis.
Nor does 'public sector ' and 'private sector ' enter the picture.
Some objective assessment to exclude the petitioner based on tangible data is the minimum for a judicial negation of a fundamental right.
The reference to 'unhealthy competition ' is baffling.
If there are 300 or more buses and one more is sought to be added, what is the ill health in the traffic system that will be injected by this addition ? We must remember that the tourist coach of the petitioner is to travel all round Tamil Nadu and so the image of a particular route overcrowded with too many buses making for cut throat competition and imperilling passenger 's lives does not arise.
The STA has no research staff to investigate the untapped transport or traffic potential and if it has any, such report must be put to the applicant.
Moreover.
, it is obvious that the State Transport Authority should have granted one permit less to the ITDC, if its case of redundancy were true.
For, the appellant had a current permit then Another circumstance effectively negating the story of super numerary vehicles is the admitted fact that applications for more permits have been invited and some granted.
And before us two orders granting permits for contract carriages since the impugned refusal have been filed.
And yet Mudaliar goes to the wall, on a cavalier `no ' to his application for renewal.
Fair consideration of his claim has been denied to the appellant; his huge investment has gone to waste because of non renewal.
We see no relevant ground justifying the order; there is breach of natural justice; there is importation of non materials; there is unawareness of the fact that a fundamental right is involved and that a costly coach is condemned to non use.
The basic reason for quashing the order of refusal is the untenable reason assigned to support the order.
We allow the appeal, set aside the refusal of renewal and having regard to the 'long delay and absence of disqualifications direct the State Transport Authority to reconsider the grant or renewal within two weeks of receipt of this order.
We repeat for emphasis that ordinarily this Court is loath to reinvestigate questions relating to motor vehicle permits; but every rule has an exception even as every case has a martyr.
M.R. Appeal allowed.
| IN-Abs | The appellant plied a luxury coach for public benefit under a permit o 1971 for five years, in the Tamil Nadu State.
He applied for a renewal of the permit two months prior to its expiry, but was refused the same by the State Transport Authority, on the ground that the facilities provided by tho public sector undertakings were adequate, and the renewal of the applicant 's permit would be redundant in the circumstances and also result in unhealthy competition.
Applications for more permits were invited and some granted since the impugned refusal.
On appeal u/s 64 of the .
the State Transport Appellate Tribunal affirmed the rejection, using the same reasoning.
Thereafter the High Court rejected the appellant 's revision application, refusing to go into questions of fact.
Allowing the appeal, the Court, ^ HELD: 1.
If a small man, whose heavy investment in ll tourist coach is to be sterilised altogether, it is a social trauma, and if fundamental rights are disposed of as if by executive fiats, this Court must intervene under article 136, to uphold the credibility in the rule of law and prevent its derailment.
The touchstone is not the little man and his little lis.
but the large issue and the deep portent.
[554 G H] 2.
The Authority must remember that a permit holder 1st has an ordinary right of renewal unless it is shown that outweighing reasons of public interest lead to a contrary result.
The bare ipse dixit that the S.T.A. considers the facilities provided by public sector undertakings are adequate is not intelligible, without some basis.
Some objective assessment to exclude the petitioner, based on tangible data is the minimum for a judicial negation of a fundamental right.
Another circumstance effectively negating the story of supernumerary vehicles is the admitted fact that applications for more permits have been invited and some granted.
The basic reason for quashing the order of refusal is the untenable reason assigned to support the order.
[555 A, H, 556 A, D, F]
|
Civil Appeal No. 656 of 1978.
Appeal by Special Leave from the Award dated 21 9 1977 of the Labour Court, Meerut in Adjudication Case No. 160/74.
G. B. Pia, L. R. Singh, R. P. Singh, R. K. lain, Suman Kapoor and Sukumar Sahu for the Appellant.
R. K. Garg, V. J. Francis and Madan Mohan for Respondent No. l. G. N. Dikshit and o. P. Rana for Respondents 2 3.
The Judgment of the Court was delivered by F DESAI J.
This appeal by special leave, limited to the question of grant of back wages, raises a very humane problem in the field of industrial jurisprudence, namely, where termination of service either by dismissal, discharge or even retrenchment is held invalid and the relief of reinstatement with continuity of service Is awarded what ought to be the criterion for grant of compensation to the extent of full wages or a Part of it ? A few relevant facts will highlight the problem posed.
Appellant is a private limited Company having set up an industrial unit in engineering industry.
The raw material for its manufacturing process is tin plates.
The appellant served notice of retrenchment on 56 workmen in February 1974 alleging non availability or raw material to utilise the full installed capacity, power shedding limiting the 566 working of the Unit to 5 days a week, and the mounting loss.
Subsequently, negotiations took place between the Union and the appellant leading to an agreement dated 1st April 1974 whereby the workmen who were sought to be retrenched were taken back in service with continuity of service by the appellant and the workmen on their part agreed to co operate with the management in implementing certain economy measures and in increasing the productivity so as to make the undertaking economically viable.
Simultaneously, the workmen demanded a revision of the wage scales and the appellant pleaded its inability in view of the mounting losses.
Some negotiations took place and a draft memorandum of settlement was drawn up which provided for revision of wages on the one hand and higher norms of production on the other, but ultimately the settlement fell through.
Appellant thereafter on 1st July, 1974 served a notice of retrenchment on 43 workmen.
The Tin Workers ' Union, Ghaziabad, espoused the cause of such retrenched workmen and ultimately the Government of Uttar Pradesh by its notification dated 9th october 1974, issued in exercise of the power conferred by Section 4 K of the U.P. lndustrial Disputes Act, 1947.
referred the industrial dispute arising out of retrenchment of 43 workmen, between the parties, for adjudication to the Labour Court.
Names of the retrenched workmen were set out in an Annexure to the order of reference.
The Labour Court, after examining the evidence led on both sides and considering various relevant circumstances, held that the reasons stated in the notice dated 1st July, 1974, Ext.
E 2, viz., heavy loss caused by non availability of tin plates, persistent power curbs and mounting cost of production were not the real reasons for affecting retrenchment but the real reason was the annoyance felt by the management consequent upon the refusal of the workmen to agree to the terms of settlement contained in the draft dated 5th April, 1974 and, therefore, the retrenchment was illegal.
The Labour Court by its award directed that all the workmen shall be reinstated in service from 1 st August, 1974 with full back wages, permitting the appellant to deduct any amount paid as retrenchment compensation from the amount payable to the workmen as back wages.
the Appellant challenged the Award in this appeal.
When the special` leave petition came up for admission Court rejected the special leave petition with regard to the relief of reinstatement but limited the leave to the grant of full back wages.
The question whether the workmen who were retrenched were entitled to the relief of reinstatement is no more open to challenge.
Another words.
it would mean that the retrenchment of workmen was invalid for the reasons found by the Labour Court and the workman were 567 entitled to the relief of reinstatement effective from the day on which A they were sought to be retrenched.
The workmen were sought to be retrenched from 1st August, 1974 and the Labour Court has directed their reinstatement effective from that date.
The Labour Court has also awarded full back wages to the workmen on its finding that the retrenchment was not bona fide and that the non availability of the raw material or recurrent power shedding and lack of profitability was a mere pretence or a ruse to torment the workmen by depriving them of their livehood, the real reason being the annoyance of the appellant consequent upon the refusal of the workmen to be a party to a proposed settlement by which work load was sought to be raised(l.
Mr. Pai, learned counsel for the appellant in his attempt to persuade us to give something less than full back wages, attempted to re open the controversy concluded by the order of this Court while granting limited leave that the retrenchment was inevitable in view of the mounting losses and falling production for want OF raw material and persistent power shedding.
It was said that for the limited purpose of arriving at a just decision on the question whether the workmen should be awarded full back wages, we should look into the compelling necessity for m retrenchment of the workmen.
Once leave against relief of reinstatement was rejected, the order of the Labour Court holding that retrenchment was invalid and it was motivated and the relief of reinstatement must follow, has become final.
Under no pretext or guise it could now be re opened.
Before dealing with the contentions in this appeal we must bear in mind the scope of jurisdiction of this Court under Article 136 of the Constitution vis a vis the Awards of the Industrial Tribunals.
Article 136 of the Constitution does not envisage this Court to be a regular Court of appeal but it confers a discretionary power on the Supreme Court to grant special leave to appeal, inter alia, against the Award of any Tribunal in the territory of India.
The scope and ambit of this wide constitutional discretionary power cannot be exhaustively defined.
lt cannot obviously be so construed as to confer a right to a party which he has none under the law.
The Court will entertain a petition for special leave in which a question of general public importance is involved or when the decision would shock the conscience of this Court.
the lndustrial Disputes Act is intended to be a self contained one and it seeks to achieve social justice on the basis of collective bargaining, collaboration and arbitration.
Awards are given on circumstances peculiar to each dispute and the Tribunals are to a large extent free from resrtrictions of technical considerations imposed on courts.
A free and 568 liberal exercise of the power under Article 136 may materially affect the fundamental basis of such decisions, viz., quick solution of such disputes to achieve industrial peace.
Though Article 136 is couched in widest terms, it is necessary for this Court to exercise its discretionary jurisdiction only in cases where Awards are made in violation of the principles of natural justice causing substantial and grave injustice to parties or raises an important principle of industrial law requiring elucidation and final decision by this Court or discloses such other exceptional or special circumstances which merit consideration of this Court (See Bengal Chemical & Pharmaceutical Works Ltd., Calcutta vs Their Workman) (1) The question in controversy which fairly often is raised in this Court is whether even where reinstatement is found to be an appro priate relief, what should be the guiding considerations for awarding full or partial back wages.
This question is neither new nor raised for the first time.
It crops up every time when the workman questions the validity and legality of termination of his service howsoever brought about, to wit, by dismissal, removal, discharge or retrenchment, and the relief of reinstatement is granted.
As a necessary corollary the question immediately is raised as to whether the workman should be awarded full back wages or some sacrifice is expected of him.
Let us steer clear of one controversy whether where termination of service is found to be invalid, reinstatement as a matter of course should be awarded or compensation would be an adequate relief.
That question does not arise in this.
appeal.
Here the relief of reinstatement has been granted and the award has been implemented and the retrenched workmen have been reinstated in service.
The only limited question is whether the Labour Court in the facts and circumstances of this case was justified in awarding full back wages.
It is no more open to debate that in the field of industrial jurisprudence a declaration can be given that the termination of service is bad and the workman continues to be in service.
The spectre of common law doctrine that contract of personal service cannot be specifically enforced or the doctrine of mitigation of damages does not haunt in this branch of law.
The relief of reinstatement with continuity of service can be granted where termination of service is found to be invalid.
It would mean that the employer has taken away illegally the right to the work of the workman contrary to the relevant law or in breach of contract and simultaneously deprived deprived workman of his earnings.
if (1) [1959]] Suppl.
2 SCR 136 at 140.
569 thus the employer is found to be in the wrong as a result of which the workman is directed to be reinstated, the employer could not shirk his responsibility of paying the wages which the workman has been deprived of by the illegal or invalid action of the employer.
Speaking realistically, where termination of service is questioned as invalid or illegal and the workman has to go through the gamut of litigation, his capacity to sustain himself throughout the protracted litigation is itself such an awesome factor that he may not survive to see the day when relief is granted.
More so in our system where the law 's proverbial delay has become stupefying.
If after such a protracted time and energy consuming litigation during which period the workman just sustains himself, ultimately he is to be told that though he will be reinstated, he will be denied the back wages which would be due to him, the workman would be subjected to a sort of penalty for no fault of his and it is wholly undeserved.
Ordinarily, therefore.
a workman whose service has been illegally terminated would be entitled to full back wages except to the extent he was gainfully employed during the enforced idleness.
That is the normal rule.
Any other view would be a premium on the unwarranted litigating activity of the employer.
If the D employer terminates the service illegally and the termination is motivated as in this case, viz ., to resist the workman 's demand for revision of wages.
the termination may well amount to unfair labour practice.
In such circumstances reinstatement being the normal rule, it should be followed(l with full back wages.
Articles 41 and 43 of the Constitution would assist us in reaching a just conclusion in this respect.
By a suitable legislation, to wit, the U.P. , the State has endeavored to secure work to the workmen.
In breach of the statutory obligation the services were terminated and the termination is found to be invalid; the workmen though willing to do the assigned work and earn their livelihood, were kept away therefrom.
On top of it the were forced to litigation upto the apex Court and now they are being told that something less than full back wages should be awarded to them.
If the services were not terminated the workmen ordinarily would have continued to work and would have earned their wages.
When it was held that the termination of services was neither proper nor justified, it would not only show that the workman were always willing to serve but if they rendered service they would legitimately be entitled to the wages for the same.
If the workman were always ready to work but they were kept away therefrom on account of invalid act of the employer, there is no justification for not awarding them full back wages which were very legitimately due to them.
A Division Bench of the Gujarat High Court in Dhari Gram Panchayat vs Safai Kamldar Mandal(1), and a Division Bench of the Allahabad (1) 11 971] I Labour Law Journal 508 570 High Court in Postal Seals Industrial Co operative Society Ltd. vs Labour Court 11, Lucknow & ors.(l), have taken this view and we are of the opinion that the view taken therein is correct.
The view taken by us gets support from the decision of this Court in workman of Calcutta Dock Labour Board & Anr.
Employers in relation to Calcutta Dock Labour Board & ors.(2).
In this case seven workmen had been detained under the Defence of India Rules and one of the disputes was that when they were released and reported for duty, they were not taken in service and the demand was For their reinstatement.
The Tribunal directed reinstatement of five out of seven workmen and this part of the Award was challenged before this Court.
This Court held that the workmen concerned did not have any opportunity of explaining why their services should not be terminated and, therefore, reinstatement was held to be the appropriate relief and Act aside the order of the Tribunal.
It was observed that there was to justification for not awarding full back wages from the day they offered to resume work till their reinstatement.
Almost an identical view was taken in Management of Paniltole Tea Estate vs The Workmen(3).
In the very nature of things there cannot to a straight jacket formula for awarding relief of back wages.
All relevant considerations will enter the verdict.
More or less, it would be a motion addressed to the discretion of the Tribunal.
Full back wages would be the normal rule and the party objecting to it must establish the circumstances necessitating departure.
At that stage the Tribunal will exercise its discretion keeping in view all the relevant circumstances.
But the discretion must be exercised in a judicial and judicious manner.
The reason for exercising discretion must be cogent and convincing and must appear on of the face of.
the record.
When it is said that something is to be done within the discretion of the authority, that something is to be done according to the rules of reason and justice? according to law and not humor.
It is not to be arbitrary, vague and fanciful but legal and regular (See Susannah Sharm v.Workfild(4).
It was, however, very strenuously contended that as the appellant company is suffering loss and its carry forward loss as on 31st March 1978 is Rs. 8,12,416.90, in order to see that the industry survives and the workmen continue to get employment, there must be come sacrifice on the part of workmen.
If the normal rule in a case like this is to award full back wages, the burden will be on the appellant employer (l) [1971] I Law Journal, 327.
(2) (3) ; (1) 31 179.
571 to establish circumstances which would permit a departure from the A normal rule.
To substantiate the contention that this is an exceptional case for departing from the normal rule it was stated that loss is mounting up and if the appellant is called upon to pay full back wages in the aggregate amount of Rs. 2,80,0OO/ , it would shake the financial viability of the company and the burden would be unbearable.
Often when some monetary claim by the workmen is being examined, this financial inability of the company consequent upon the demand being granted is voiced.
Now, undoubtedly an industry is a common venture, the participants being the capital and the labour.
Gone arc the days when labour was considered a factor of production.
Article 43A of the Constitution requires the State to take steps to secure the participation of workmen in the management of the undertaking, establishments or other organisations engaged in any industry.
Thus, from being a factor of production the labour has become a partner in industry.
lt is a common venture in the pursuit of desired goal.
Now? if a Sacrifice is necessary in the overall interest of the industry D or a particular undertaking, it would be both unfair and iniquitous to expect only one partner of the industry to make the sacrifice.
Pragmatism compels common sacrifice on the part of both.
The sacrifice must come from both the partners and we need not state the obvious that the labour is a weaker partner who is more often called upon to make the sacrifice.
Sacrifice for the survival of an industrial undertaking cannot be an unilateral action.
It must be a two way traffic.
The management need not have merry time to itself making the workmen the sacrificial goat.
If sacrifice is necessary, those who can afford and have the cushion and the capacity must bear the greater brunt making the shock of sacrifice as less poignant as possible for those who keep body and soul together with utmost difficulty.
F The appellant wants us to give something less than full back wages in this case which the Labour Court has awarded.
There is nothing to show whether the Managing Director has made any sacrifice; whether his salary and perks have been adversely affected; whether the managerial coterie has reduced some expenses on itself.
If there is no such material on record, how do we expect the workmen, the less affording of the weaker segment of the society, to make the sacrifice, because sacrifice on their part is denial of the very means of livelihood.
We have also found that since 1976 77 the appellant is making profit.
A Statement of Account certified by the Chartered Accountants of the company dated 25th July, 1978 shows that the appellant has been making profit since 1976 77.
The unit is, therefore, looking up.
572 One relevant aspect which would assist us in reaching a just con clusion is that after retrenching 43 workmen effective from 1st August 1974, 36 of them were recalled for service on large number of days in 1975 1976 and 1977, the maximum being the case of Jai Hind who was given work for 724 1/4 days, and the minimum being Harsaran s/o Baldev who was given work for 15 days.
An amount of Rs. 74,587.26 was paid to these 36 workmen for the work rendered by them since the date of retrenchment.
Certainly, the appellant would get credit for the amount so paid plus the retrenchment compensation it must have paid.
Even then we were told that the employer will have to pay Rs. 2,80,OOO/ by way of back wages.
We were also told that the appellant had offered to pay by way of settlement 50% of the back wages.
Therefore, the only question is whether we should confirm the Award for full back wages.
Now, undoubtedly the appellant appears to have turned the corner.
The industrial unit is looking up.
It has started making profits.
The workmen have already been reinstated and therefore, they have started earning their wages.
It may, however, be recalled that the appellant has still not cleared its accumulated loss.
Keeping in view all the facts and circumstances of this case it would be appropriate to award 75% of the back wages to the workmen to be paid in two equal instalments.
It may well be that in appropriate cases the Court may, in the spirit of labour and management being partners in the industry, direct scaling down of back wages with some sacrifice on management 's part too.
We were, even here, inclined to saddle the condition that till the loss is totally wiped out the Managing Director and the Directors shall not charge any fee for the services rendered as Director, no dividend shall be paid to equity shareholders, and the Managing Director shall not be paid any overriding commission, if there be any, on the turnover of the company since this will account for the pragmatic approach of common sacrifice in the interest of the industry.
We indicate the implications of Article 43A in this area of law but do not impose it here for want of fuller facts.
The Award shall stand accordingly modified to the effect that the retrenched workmen who are now reinstated shall be paid 75% of the back wages after deducting the amount paid to them as wages when recalled for work since the date of retrenchment and adjustment of the retrenchment compensation towards the amount found due and pay able.
The appellant shall pay the costs of the respondents as directed while granting special leave.
N.V.K. Appeal dismissed.
| IN-Abs | Awarding full or partial back wages Plinciples for awarding Employee 's financial viability to pay baek wages lf could be a factor for not awarding full back wage,s.
The management (Appellant) retrenched 56 of its worl;tnell alleging nonavailability of raw material to ntilise the fnll installed capacity, power shcdding limiting the working of the unit to 5 days a week and mounting losses.
As a result of negotiations between the parties, the retrenched workmen were taken back in service.
A few days later, however, the workmen demanded revision of wage scales, but the appellant pleaded inability to revise the pay scales in view of the mounting losses.
Thereafter, the employer reternched 43 workmen.
The dispute resulting out of the retrenchment was referred to adjudication under section 4k of the U.P.
The Labour Court held that the real reason for retrenchment was annoyance felt by the management when the employees refused to agree to the terms oil settlement and that it was not for the reasons stated by the employer.
The Labour Court ordered reinstatement of the retrenched workmen with full back wages.
In the Special leave petition the employer questioned the correctness of the Labour Court 's view that the retrenched workmen should be reinstated.
This Court rejected this prayer and limited the special leave to the question of granting back wages to the retrenched workmen ordered to be reinstated.
^ HELD: 1.
Since the emoloyer 's prayer in the special ieave petition that the retrenched workmen should not be reinstated was rejected by this Court it meant that the Labour Court 's view that retrenchment was unjusified was correct.
For the reasons found by the Labour Court retrenchment was motivated and so invalid.
The workmen were entitled to the relief of reinstatement from the date they were sought to be retrenched.
The order of the Labour Court on the question of reinstatement became final.
[567 C E] 2.
Article 136 of the Constitution does not envisage this Court to be a regular Court of Appeal but it confers a discretionary power on it to grant special leave to appeal, inter Ala, against the Award of any Tribunal.
The scope and ambit of this vide constitutional discretionary power cannot be 564 exhaustively defined.
It cannot be so construed as to confer a right to a party when he has none under the law.
The Court will entertain a petition for special leave in which a question of general public importance is involved or when the decisions would shock the conscience of this Court.
The is intended to be a self contained code and it seeks to achieve social justice on the basis of collective bargaining, conciliation and arbitration.
Awards are given on circumstances peculiar to each dispute and the Tribunals are to a large extent free from restrictions of technical consider rations imposed on Courts.
A free and liberal exercise of the power under Article 136 may materially affect the fundamental basis of such decisions, viz., quick solution of such disputes to achieve industrial peace.
[567 F 568 A] Bengal Chemical & Pharmaceutical Works Ltd, Calcutta vs Their Workmen [1959] Suppl.
2 SCR 136 at 140 referred to.
In the field of industrial jurisprudence a declaration can be given that the termination of service is bad and the workman continues to be in service.
The common law doctrine that contract of personal service cannot be specifically enforced or the doctrine of mitigation of damages does not haunt in this branch of law.
The relief of reinstatement with continuity of service can be granted where termination of service is found to be invalid.
[568 G H] 3.
Where termination of service is questioned as being invalid or illegal and the workman has to go through the litigation, his capacity to sustain himself throughout the protracted litigation is itself so precarious that he may not survive to see the day when relief is granted.
If after such prolonged litigation the workman is not paid his back wages it would amount to a penalty for no fault of his.
The workman whose service has been illegally terminated would be entitled to full back wages except to the extent he was gainfully employed during the enforced idleness.
If the termination is illegal or motivated it may amount to unfair labour practice.
Tn such circumstances reinstatement being the normal rule it should be done with full back wages.
[569 B D] Workmen of Calcutta Dock Labour Board & Anr.
vs Employers in relation to Calcutta Dock Labour Board & ors. , referred to.
Management of Panitole Tea Estate vs The Workmen referred to.
Dhari Gram Panchayat vs Safai Kamdar Mandal approved.
Postal Seals Industrial Co operative Society Ltd. vs Labour Court ll Luck now & Ors.
approved.
For awarding relief of back wages all relevant considerations will enter The verdict of the Tribunal.
Full back wages would be the normal rule and the party objecting to it must establish the circumstances necessitating departure.
The Tribunal will then exercise its discretion But the discretion must be exercised in a judicial and judicious manner.
The reason for exercising discre tion must be cogent and convincing and must appear on the face of the record.
It should not be arbitrary, vague and fanciful but legal and regular.
[570 GE] Susannah Sharn vs Wakefield at 179 referred to.
565 on the question of the employer 's financial viability to pay back wages view of mounting losses the Supreme Court held.
Industry is a common venture, the participants being capital and labour Article 43A. requires the State to take steps to secure participation of workman in the management.
From being a factor of production labour has become a partner in industry.
It is a common venture in pursuit of a desired goal.
If sacrifice is necessary in the overall interest of the industry it would be unfair to expect only labour to make the sacrifice.
It should be common sacrifice.
If sacrifice is necessary those who can afford and have the capacity must bear the brunt.
[571 A F] (b) In the present case there is nothing to show that the Managing Director has made any sacrifice.
In the absence such information the weaker section of society cannot be expected to make a greater sacrifice than the directors In an appropriate case it would be appropriate to direct that till the loss is wiped out the managing directors shall not charge any fees for the services rendered and no dividend shall be paid.
[571 G. 572 E F] (c) As the appellant has turned the corner, and the industrial unit is looking up and started making profits, the retrenched workmen having already been reinstated and started earing their wages it would be appropriate to award 75% of the backs wages to the workmen to be paid in two equal instalments.
[572 D]
|
Civil Appeal No. 2419 of 1968.
From the Judgment and Order dated 25 9 67 of the Punjab and Haryana High Court in Civil Writ No. 1630/62.
1280 section K. Mehta, P. N. Puri, K. R. Nagaraja and G. Lal for the Appellants.
K. L. Narula, District Attorney, Haryana, R. B. Datar and Girish Chandra for Respondent No.1.
E. C. Agarwala for Respondent No. 14 (Rest of the Respondents Ex parte) The Judgment of the Court was delivered by JASWANT SINGH, J.
The litigation culminating in the present appeal (by certificate under Article 133(1)(b) of the Constitution) which is directed against the judgment and order dated September 25, 1967, of the Punjab and Haryana High Court in C.W.N. 1630 of 1962 setting aside the allotment dated May 23, 1960 made by Naib Tehsildar cum Managing Officer, Fatehabad, District Hissar in favour of Madan Mohan and others, and orders dated April 18, 1962 and July 21, 1962 of the Assistant Settlement Commissioner and Chief Settlement Commissioner respectively on the finding that "no part of the holding which formed part of the land allotted to respondent No. 14, Mehta Lal Chand, (hereinafter referred to as 'the respondent ') could, during the subsistence of such allotment and without its cancellation, be allotted to any one else" has had a very chequered career extending over well nigh two decades.
It appears that the respondent who is a displaced person from Pakistan was found entitled to an allotment of 113 standard acres and 3 units of land in lieu of 120 acres of land held by him as owner in Bhawalpur (Pakistan).
Against the aforesaid entitlement, the respondent was allotted 90 standard acres and 6 units of evacuee land between 1953 and 1958 in different villages of Tehsil Fatehabad, District Hissar including two areas measuring (1) 13 standard acres and 3 1/2 units and (2) 13 standard acres and 13 1/2 units in village Bahmniwala allotment of which was made on March 1, 1957 and October 10, 1958 respectively.
Pursuant to the above allotment of 13 standard acres and 3 1/2 units made in his favour in village Bahmniwala vide Sanad dated March 6, 1957 (Annexure 'C ' to the writ petition), the respondent was given possession of the plots of land comprised in khasra Nos.
1411 min, 1412 min, 1472 min, 1241 min, 1242, 1243, 1244, 1245, 1246, 1247, 1621, 1622 to 1635 (14 khasras), 1642, 1644, 1645 on June 17, 1957.
The respondent continued to remain in possession of the aforesaid plots of land till Rabi 1960 when consolidation of holdings were undertaken in village Bahmniwala.
Without caring to look into the revenue record, the Consolidation Officer instead of showing the aforesaid allotted area in Bahmniwala in the name 1281 of the respondent included the same in the kurrah (area) of the Custodian.
On coming to know about this irregularity, the respondent filed objections before the Consolidation Officer and requested him to rectify the mistake.
The Consolidation Officer by his order dated March 23, 1960 consigned the objection petition of the respondent to the record room observing that in the absence of the relevant record which, as per the report of the Wasal Baqi Nawis is has been despatched to Jullundur for checking purposes, the factum of allotment cannot be verified and as it is necessary to take proceedings under section 21(2) of the Consolidation of Holdings Act in village Bahmniwala in this very month, the record cannot be awaied any further.
The Consolidation Officer further observed that since it appeared from a perusal of the copy of the Sanad (allotment) that the entire kurrah consisted of almost evacuee land bearing khasra numbers mentioned in the Sanad of allotment, the respondent could, on the receipt of the record, get the area at the place where, according to him, the evacuee land mentioned by him in his application was situate.
By his order dated May 23, 1960, the Naib Tehsildar cum Managing Officer, Fatehabad, however, made the following allotments out of an area of 58 standard acres and 7 units situate in Bahmniwala which included the khasra numbers already allotted to the respondent but which according to the Fard Fazla (statement of surplus area) prepared by the concerned Patwari appeared to be available for allotment: In favour of Bagga Singh, S/o Pokhar Singh: 5 1/2 units " " " Inder Singh, S/o Mit Singh : 7 Standard acres 1 1/2unit " " " M. dan Mohan Singh, S/o Puran Singh, " " " Odin Singh and Harduman Singh, 20 Standerd acres 2 units Sons of Madan Mohan Singh, Predecessor in interest of the appellants Aggrieved by this order of the Naib Tehsildar cum Managing Officer which adversely affected the allotment already made in his favour, the respondent preferred an appeal to the Assistant Settlement Commissioner (with powers of Settlement Commissioner), Punjab, Jullundur contending that 13 standard acres and 3 1/2 units of land in Bahmniwala allotted to him in 1957 had been erroneously included in the 'kurrah ' of the Custodian at the time of the Consolidation operations and that the same had now been erroneously allotted without his knowledge to Bagga Singh, Inder Singh, Madan 1282 Mohan Singh and his sons.
Curiously enough, the Assistant Settlement Commissioner (with powers of Settlement Commissioner) while conceding that the aforesaid 13 standard acres and 3 1/2 units and 13 standard acres and 13 1/2 units in village Bahmniwala were allotted in favour of the respondent on June 17, 1957 and October 10, 1958 respectively and that there was no cancellation order in respect thereof and that the consolidation authorities should not have withdrawn the area from the name of the respondent who had through no fault of his been put to a lot of difficulty and that it was just and proper that the matter of allotment to which he was entitled be settled once for all in such a way that whole of the area is given to him permanently in one village, rejected the appeal by his order dated April 18, 1962 observing that there was no good ground for interfering with the allotment of the appellants and that it would be open to the respondent to apply to the Naib Tehsildar cum Managing Officer to make up the shortfall in his area by allotment of some other land which may be available in that village.
Dissatisfied with the order of the Assistant Settlement Commissioner, the respondent took the matter in revision to the Deputy Secretary (Rehabilitation) exercising the powers of the Chief Settlement Commissioner who also after paying lip sympathy dismissed the revision on the ground that it was time barred.
Aggieved by these orders, the respondent moved the High Court of Punjab and Haryana by means of the aforesaid petition under Articles 226 and 227 of the Constitution.
The High Court by its judgment and order dated September 25, 1962 set side the aforesaid thee impugned orders holding that they were wholly without jurisdiction and the Tehsildar cum Managing Officer was not authorised to allot to the appellants the land which was already comprised in a subsisting valid allotment of the respondent.
It is against this judgment and order of the High Court that the present appeal is directed.
On the appeal coming up before us on July 19, 1978, we heard counsel for the parties at considerable length and felt it necessary for clarification of certain points which had been left vague the courts below to have before us the entire record relating to the allotment made in favour of the respondent.
Accordingly, with the consent of counsel for the parties, we adjourned the hearing of the case and directed the Union of Indian to instruct the Chief settlement Commissioner, State of Haryana, either to appear himself before us with all the relevant record relating not only to the allotment originally made in favour of the respondent vide Sanad No. HS4/ 1957/11202 dated March 1, 1957 but also with the record pertaining to all the subsequent allotments made in his favour upto date or 1283 cause the appearance of a responsible officer with the aforesaid record.
To obviate delay in disposal of the case, we also directed the Chief Settlement Commissioner to have in readiness a factual statement showing the net area in terms of standard acres to which the respondent was entitled as a displaced person, the particulars of the field initially allotted in his favour including the survey numbers and the extent of the area thereof, particulars of the survey numbers of the fields taken out of the respondent 's allotment vide Naib Tehsildar cum Managing Officer, Tehsil Fatehabad 's order dated May 23, 1960 and particulars of all the subsequent allotments made upto date in the respondent 's favour in different villages of District Hissar including village Bahmniwala as also the extent of the allotted area which is at present held by him.
Accordingly, the Chief Settlement Commissioner has caused the attendance of K. L. Narula, Deputy District Attorney, Rehabilitation Department, Haryana, Chandigarh who has also filed an affidavit relating to the points on which information was required by us.
We have perused the entire material and have again heard counsel for all the sides.
Two questions arise for determination in this case (1) whether the respondent acquired any enforceable right as a result of the allotment made in his favour on March 1, 1957 and delivery in pursuance thereof to him of possession of the aforesaid khasra numbers on June 17, 1957 and (2) whether the parcels of land which already stood allotted in favour of the respondent vide allotment order dated March 1, 1957 could be allotted by the Naib Tehsildar cum Managing Officer, Fatehabad in favour of Madan Mohan Singh and others without notice to the respondent and without affording him in opportunity of being heard.
The first question has to be considered in the light of the judgment of this Court in Amar Singh vs Custodian Evacuee Property, Punjab where the whole history of the legislative measures devised from time to time in the erstwhile State of Punjab to combat the gigantic problems created as a result of the mass migration of non Muslim land holders to East Punjab is traced.
A perusal of the judgment reveals that in exercise of the rule making power vested in it under clauses (f) and (ff) of sub section (2) of section 22 of the East Punjab Evacuees ' (Administration of Property) Act, 1947 (E. P. Act No. XIV of 1947) as amended in 1948, the Punjab Government issued Notification Nos. 4891 S and 4892 S on July 8, 1949 1284 setting out the conditions regulating allotment by the Custodian of the land which vested in him.
The first incident of allotment deducible from the notification is hereditability of the rights of the allottee which constitute quasi permanent allotment.
The statement of conditions published under Notification Nos.
4891 S and 4892 S of July 8, 1949 was continued in force as the Administration of Evacuee Property (Rural) Rules framed by the Provincial Government under sub section (2) of section 53 of the Central Ordinance No. XXVII of 1949 under delegation from the Central Government under Notification No. 3094 A/Cus/49 dated December 2, 1949 subject to certain modifications and amendments.
On repeal of the Central Ordinance by Central Act XXXI of 1950, the aforesaid rules were continued by virtue of section 58 of the Act as though made under that Act.
Later in exercise of the delegated rule making power vested in the Provincial Government under section 55 of the Central Act, the Punjab Government framed rules dated August 29, 1951 entitled "Instructions for review and revision of land allotment" which affected the rules of July 8, 1949 only to the extent that they were inconsistent with the earlier rules.
A reference to the earlier and subsequent rules would show that the later rules do not concern any of the matters provided by the earlier rules of 1949 (and 1950) excepting as regards resumption which virtually is cancellation of allotment.
The position that emerges from the foregoing is that the rules of July, 1949 continued in force except to the extent of inconsistency.
(The next set of rules are those made under Central Act XXXI of 1950).
Then came the rules dated August 29, 1951 made by the Punjab Government in exercise of the powers delegated to it by the Central Government under section 55(1) of the Central Act XXXI of 1950.
It will be seen that the rules of August 29, 1951 are substantially the same as those enumerated in clause (6) of July 8, 1949 notification as regards resumption and only supplement the notification of July 8, 1949 as regards eviction in certain contingencies.
The rights and incidents enjoyed by the allottees under the quasi permanent scheme introduced by the aforesaid notification of July 8, 1949 are catalouged at page 823 of the aforesaid judgment of this Court in Amar Singh vs Custodian, Evacuee Property, Punjab (supra).
They are: "1.
The allottee is entitled to right of use and occupation of the property until such time as the property remains vested in the Custodian.
[Clause 3(1).
The benefit of such right will ensure to his heirs and successors.
(Definition of 'allottee ').
His enjoyment of the property is on the basis of paying land revenue thereupon and ceases for the time being.
1285 Additional rent may be fixed thereupon by the Custodian.
If and when he does so, the allottee is bound to pay the same.
[Clause 3(3).
He is entitled to quiet and undisturbed enjoyment of the property during that period.
(Clause 8).
He is entitled to make improvements on the land with the assent of the Custodian and is entitled to compensation in the manner provided in the Punjab Tenancy Act.
(Clause 7).
He is entiled to exchange the whole or any part of the land for other evacuee land with the consent of the Custodian.
(Clause 5).
He is entitled to lease the land for a period not exceeding three years without the permission of the Custodian and for longer period with his consent.
But he is not entitled to transfer his rights by way of sale, gift, will, mortgage or other private contract.
[Clause 4(c).] 8.
His rights in the allotment are subject to the fairly extensive powers of cancellation under the Act and rules as then in force prior to July 22, 1952, on varied administrative considerations and actions such as the following (Clause 6 and subsequent rules of 1951): (a) That the allotment is contrary to the orders of the Punjab Government or the instructions of the Financial Commissioner, Relief and Rehabilitation, or of the Custodian, Evacuee Property, Punjab; (b) That the claims of other parties with respect to the land have been established or accepted by the Custodian or the Rehabilitation Authority; (c) That it is necessary or expedient to cancel or vary the terms of an allotment for the implementation of resettlement schemes and/or rules framed by the State Government; or for such distribution amongst displaced persons as appears to the Custodian to be equitable and proper; 1286 (d) That it is necessary or expedient to cancel or vary the terms of an allotment for the preservation, or the proper administration, or the management of such property or in the interests of proper rehabilitation of displaced persons.
Then came the two Notifications Nos.
SRO 129 dt.
July 22, 1952 and SRO 351 dated Feb. 13, 1953 amending and recasting sub rule (6) of Rule 14 of the Central Rules of 1950 as under: "(6) Notwithstanding anything contained in this rule, the Custodian of Evacuee Property in each of the States of Punjab and Patiala and East Punjab States Union shall not exercise the power of cancelling any allotment of rural Evacuee property on a quasi permanent basis, or varying the terms of any such allotment, except in the following circumstances: (i) where the allotment was made although the allottee owned no agricultural land in Pakistan; (ii) where the allottee has obtained land in excess of the area to which he was entitled under the scheme of allotment of land prevailing at the time of allotment; (iii)where the allotment is to be cancelled or varied (a) in accordance with an order made by a competent authority under section 8 of the East Punjab Refugees (Registration of Land Claims) Act, 1948; (b) on account of the failure of the allottee to take possession of the allotted evacuee property within six months of the date of allotment; (c) in consequence of a voluntary surrender of the allotted evacuee property, or a voluntary exchange with other available rural evacuee property, or a mutual exchange with such other available property; (d) in accordance with any general or special order of the Central Government; Provided that where an allotment is cancelled or varied under clause (ii), the allottee shall be entitled to retain such portion of the land to which he would have been entitled under the scheme of quasi permanent allotment of land; Provided further that nothing in this sub rule shall apply to any application for revision, made under section 26 or 1287 section 27 of the Act, within the prescribed time, against an order passed by a lower authority on or before 22nd July, 1952.
" Thus the power of resumption or cancellation of quasi permanent allotment was restricted and reduced.
The next legislative measure is the (Act No. XLIV of 1954), important provisions whereof which may be useful in dealing with the first question may be noticed.
Section 4 provides for the time, the manner and the form of making an application for payment of compensation.
Section 10 of the Act inter alia lays down that where any immovable property has been leased or allotted to a displaced person by the Custodian under conditions published by the Notification of the Government of Punjab No. 4891 S or 4892 S dated July 8, 1949 and such property is acquired under the provisions of the Act and forms part of the compensation pool, the displaced person shall so long as the property remains vested in the Central Government, continue in possession of such property on the same conditions on which he held the property immediately before the date of the acquisition.
It further provides that the Central Government may for the purpose of payment of compensation to such displaced persons transfer to him such property on such forms and conditions as may be prescribed.
Section 12 provides: "12.(1) If the Central Government is of opinion that it is necessary to acquire any evacuee property for a public purpose, being a purpose connected with the relief and rehabilitation of displaced persons, including payment of compensation to such persons, the Central Government may at any time acquire such evacuee property by publishing in the official gazette a notification to the effect that the Central Government has decided to acquire such evacuee property in pursuance of this section.
(2) On the publication of a notification under sub section (1), the right, title and interest of any evacuee in the evacuee property specified in the notification shall, on and from the beginning of the date on which the notification is so published be extinguished and the evacuee pro 1288 perty shall vest absolutely in the Central Government free from all encumbrances.
(3) . . . . . " It may be noted that by virtue of Central Government Notification No. S.R.O. 697 dated March 24, 1955, under sub section (1) of this section 12, all evacuee property allotted under the Punjab Government Notification dated July 8, 1949 was acquired by the Central Government excepting certain specified categories in respect of which proceedings were pending.
Section 13 which deals with compensation for evacuee property acquired says: "13.
There shall be paid to an evacuee compensation in respect of his property acquired under section 12 in accordance with such principles and in such manner as may be agreed upon between the Governments of India and Pakistan.
" Section 14 which provides for the constitution of compensation pool runs thus: "14.
(1) For the purpose of payment of compensation and rehabilitation grants to displaced persons, there shall be constituted a compensation pool which shall cosist of: (a) all evacuee property acquired under section 12, including the sale proceeds of any such property and all profits and income accruing from such property; (b) such cash balances lying with the Custodian as may, by order of the Central Government, be transferred to the compensation pool; (c) such contributions, in any form whatsoever, as may be made to the compensation pool by the Central Government or any State Government; (d) such other assets as may be prescribed.
(2) The compensation pool shall vest in the Central Government free from all encumbrances and shall be utilised in accordance with the provisions of this Act and the rules made thereunder.
" Section 16 authorised the Central Government to appoint Managing Officers or constitute Managing Corporations for the custody, management and disposal of compensation pool so that it may be effectively used in accordance with the provisions of the Act.
1289 Section 40 enables the Central Government by notification in the official gazette to make rules.
Whereas sub section (1) of the section confers general power on the Central Government to make rules to carry out the purposes of the Act, sub section (2) of the Section particularities the subjects on which rules may be made by the Central Government without prejudice to the general power contained in sub section (1).
In exercise of this power, the Central Government made rules called the Displaced Persons (Compensation and Rehabilitation) Rules, 1955 and published the same vide Notification dated May 21, 1955.
Rule 3 lays down that an application for compensation may be made by a displaced person having a verified claim or if such displaced person is dead, by his successor in interest.
Rule 4 prescribes the from of application for compensation.
Rule 16 says that compensation shall be payable in accordance with the scale specified in Appendices VIII or IX as the case may be.
Rule 49 as originally made ran thus: "49.
Compensation normally to be paid in the form of land.
Except as otherwise provided in this chapter, a displaced person having verified claim in respect of agricultural land shall, as far as possible, be paid compensation by allotment of agricultural land.
Provided that where any such person wishes to have his claim satisfied against property other than agricultural land, he may purchase such property by bidding for it at an open auction or by tendering for it and in such a case the purchase price of the property shall be adjusted against the compensation due on this verified claim for agricultural land which shall be converted into cash at the rate specified in Rule 56." In 1960, the following explanation was added to the above rule: "Explanation: In this rule and in the other rules of this chapter, the expression 'agricultural land ' shall mean the agricultural land situated in a rural area.
" Rule 51 lays down that the scale for the allotment of land as compensation in respect of a verified claim for agricultural land shall be 1290 the same as in the quasi permanent land Allotment Scheme in the States of Punjab and Patiala and the East Punjab States Union as set out in Appendix XIV.
Rule 67AA provides: "67A. Compensation to displaced persons from West Punjab, etc., in respect of agricultural land.
Notwithstanding anything contained in this Chapter, a displaced person from West Punjab or a displaced person who was originally domiciled in the undivided Punjab, but who before the partition of India had settled in North West Frontier Province, Baluchistan, Bhawalpur or Sind, whose verified claim in respect of agricultural land has not been satisfied or has been satisfied only partially by the allotment of evacuee land under the relevant notification specified in section 10 of the Act shall not be paid compensation in any form other than the transfer of acquired evacuee agricultural land and rural houses and sites in the State of Punjab or Patiala and East Punjab States Union in accordance with the scales specified in the quasi permanent allotment scheme operating in those States: Provided that if any person has been allotted land in a State other than Punjab and his land claim has not been satisfied fully, he may, for the remaining claim, either be allotted land due to him in that State or issued a Statement of Account which he may utilise for purchase of property forming part of the compensation pool or for adjustment of public dues.
" Rule 68 is to the following effect: "68.
Grant of Sanad for transfer of agricultural land Where any agricultural land is transferred to any person under these rules, the transferee shall be granted a Sanad in the form specified in Appendix XV (with such modifications as may be necessary in the circumstances of any particular case), or the transfer may be effected in any other manner in conformity with the provisions of any local or special law relating to transfer of agricultural land in force in the area where such agricultural land is situated.
" Rule 71 casts an obligation on every person to whom any immoveable property has been allotted by the Custodian under any of the notifications specified in section 10 of the Act to file a declara 1291 tion in the form specified in Appendix XVI in the office of the Settlement Officer or before the authorised officer in the village concerned on the date and place notified under sub rule (4).
Rule 72(1) provides for an enquiry where the allottee has no verified claim.
Rule 72(2) lays down that if the Settlement Officer is satisfied that the allotment is in accordance with the quasi permanent scheme, he may pass an order transferring the land allotted to the allottee in permanent ownership as compensation and shall also issue to him a sand in the form specified in Appendix XVII or XVIII, as the case may be with such modifications as may be necessary in the circumstances of any particular case granting him such right.
After the foregoing conspectus of the various legislative and delegated legislative measures, let us see whether the respondent had any right the enforcement of which he could have sought by means of the above mentioned writ petition.
From the material on the record it is abundantly clear that the respondent migrated to India from West Punjab in the wake of the partition of the Sub Continent in 1947 and that the settlement and rehabilitation authorities satisfied themselves that he was entitled to an allotment of 113 Standard acres and 3 units of land in lieu of the land left behind by him in Bhawalpur.
Since the respondent migrated from Bhawalpur where he had indisputably settled before the partition of the Sub Continent and his verified claim in respect of agricultural land had been only partially satisfied, he could not according to rule 67A of the Displaced Persons (Compensation and Rehabilitation) Rules, 1955, be paid compensation in any form other than by transfer of acquired evacuee agricultural land in accordance with the scale specified in the quasi permanent allotment scheme.
Consequently, it was the duty of the Settlement officer under Rule 72(2) of the Displaced Persons (Compensation and Rehabilitation) Rules, 1955 to pass an order transferring the land allotted to the respondent in permanent ownership as compensation and had to issue him a Sanad in the prescribed form.
It also appears that by virtue of Notification No. 697 dated March 24, 1955 issued under sub section (1) of section 12 of the , all evacuee property allotted under the Punjab Government Notification dated July 8, 1947 (excepting certain specified categories in respect of which proceedings were pending) was acquired by the Central Government.
It is in view of this unchallengable position that we 1292 find from the record particularly the copy of Dharam Chand Patwari 's statement dated April 6, 1962 made before the Assistant Settlement Commissioner (Annexure 'A ' to the petition at pages 24 and 25 of the printed Paper Book) that allotment on permanent proprietary basis of 13 standard acres and 3 1/2 units of land situate in village Bahmniwala was made in favour of the respondent on March 1, 1957 that Sanad evidencing allotment of the aforesaid 28 kila numbers was issued in favour of the respondent on the same date; that possession of the aforesaid area of 13 standard acres and 3 1/2 units was handed over to the respondent on June 17, 1957; that entry regarding delivery of possession of the aforesaid 28 kila numbers was made by the Patwari in the Roznamcha Waqaati on June 17, 1957; that entries exist in khasra girdawaries of village Bahmniwala regarding the respondent 's possession of the aforesaid fields from June 17, 1957 upto Rabi 1960 when due to carelessness on the part of the Consolidation Officer, Ratia, Rectangle No. 133 (kila Nos.
4min, 5min, 6min, 7min, 14min, 15, 16, 17min, 24 and 25) and Rectangle No. 134 (kila Nos.
8min, 9min, 18min, 19min, 20, 21min and 22min) which were allotted in exchange of the aforesaid 28 kila numbers were entered not in the name of the respondent but in the kurrah of the Custodian and subsequently due to the carelessness on the part of the Naib Tehsildar cum Managing Officer were allotted to Madan Mohan Singh and others.
In view of the foregoing, we are of the opinion that the respondent has succeeded in establishing that permanent proprietary allotment of the aforesaid 28 kila numbers of village Bahmniwala was validily made in his favour vide aforesaid allotment order dated March 1, 1957.
Accordingly, we have no hesitation in holding that the respondent had an enforceable right in respect of the aforesaid 28 kila numbers of village Bahmniwala.
In view of our aforesaid finding that permanent proprietary allotment of the aforesaid 28 kila numbers was validly made in favour of the respondent which conferred an enforceable right on him, the answer to the second question cannot but be in the negative.
The view that we have formed is reinforced by the provisions of section 19 of the and Rule 102 of the Displaced Persons (Compensation and Rehabilitation) Rules, 1955 which provide as under: "19.
Powers to vary or cancel allotment of any property acquired under this Act. (1) Notwithstanding anything contained in any contract or any other law for the 1293 time being in force but subject to any rules that may be made under this Act, the managing officer or managing corporation may cancel any allotment or amend the terms of any allotment under which any evacuee property acquired under this Act is held or occupied by a person, whether such allotment was granted before or after the commencement of this Act. " 102.
Cancellation of allotments : "A managing officer or a managing corporation may in respect of the property in the compensation pool entrusted to him or to it, cancel an allotment or vary the terms of any such allotment if the allottee (a) has sublet or parted with the possession of the whole or any part of the property allotted to him without the permission of a competent authority, or (b) has used or is using such property for a purpose other than that for which it was allotted to him without the permission of a competent authority, or (c) has committed any act which is destructive of or permanently injurious to the property, or (d) for any other sufficient reason to be recorded in writing.
Provided that no action shall be taken under this rule unless the allottee has been given a reasonable opportunity of being heard." Though in view of the above quoted provisions, it may, in certain contingencies, be open to the Managing Officer or Managing Corporation to cancel the allotment under the aforesaid section 19 of the read with Rule 102 of the Displaced Persons (Compensation and Rehabilitation) Rules, 1955, it cannot be done unless an allottee is given a reasonable opportunity of being heard.
In the present case, it is clear from the record that no action for cancellation of allotment was taken under the aforesaid provisions of the Act and the Rules.
It is not understood how without complying with the aforesaid provisions, the Naib Tehsildar cum Managing Officer allotted the aforesaid parcel of land which already stood allotted in the name of the respondent to the appellants.
The action on the part of the Naib Tehsildar cum Managing Officer was evidently in flagrant violation of the clear and unequivocal provisions of law.
Accordingly, 1294 we agree with the High Court that the impugned orders are manifestly illegal, arbitrary, unjust and cannot be sustained.
However, taking into consideration all the facts and circumstances of the case particularly the fact that the appellants appear to have purchased the area in question from Madan Mohan Singh for a huge sum of Rs. 40,000/ and invested a considerable amount on the construction of a house, we think that it will be eminently just and fair if the appellants are allowed to retain Rectangle No. 134 comprising kila Nos.
8min, 9min, 10min, 11, 12, 13min, 18min, 19min, 20, 21min and 22min on which their house also stands and Rectangle No. 133 comprising kila Nos.
4min, 5min, 6min, 7min, 14min, 15, 16, 17min, 24 and 25 is given over to the respondent.
The learned counsel for the parties also agree to this course being adopted in the interest of justice.
The respondent shall be at liberty to approach the settlement authorities for allotment of some other suitable land in lieu of Rectangle No. 134 comprising kila Nos.
8min, 9min, 10min, 11, 12, 13min, 18min, 19min, 20, 21min and 22min to make up the deficiency, if any, in the land to which he may be entitled and if the latter i.e. the settlement authorities find that the area already held by the respondent if added to the area now ordered to be given to him still falls short of his entitlement, they will be free to allot him an area which will make up his unsatisfied claim provided he is found otherwise authorised to hold the said area on allotment or occupy the same under any other law in force in the State.
The allotment of the area to which the respondent may be found entitled to shall, as far as possible, be made in the vicinity of the area already held by him.
Subject this modification, the rest of the judgment and order of the High Court will stand.
The appeal is disposed of accordingly.
| IN-Abs | The respondent, who was a displaced person from West Pakistan, was allotted certain land in India and was given its possession.
At the time of consolidation of holdings in 1960 the Consolidation Officer included a part of this land comprising 13 odd acres in the area of the Custodian.
The respondent 's representations protesting against the action of the Consolidation Officer having failed at the different levels, the respondent moved the High Court under article 226 of the Constitution.
The High Court set aside the impugned orders of the Consolidation Officer on the ground that they were wholly without jurisdiction and that the concerned officer was not authorised to allot to the appellant the land which was already comprised in a subsisting valid allotment made to the respondent.
On the question whether the land in dispute which had already stood allotted in favour of the respondent could be allotted in favour of others without notice to the respondent and without affording an opportunity of being heard.
^ HELD: The respondent had succeeded in establishing that permanent proprietary allotment of the land in dispute was validly made in his favour.
Therefore the respondent had enforceable right in respect of the land and it could not be allotted in favour of others.
[1292F G] Although in certain contingencies it would be open to the Managing Officer or the Managing Corporation to cancel the allotment under section 19 of the read with Rule 102 of the Displaced Persons (Compensation and Rehabilitation) Rules 1955, it can not be done unless the allottee is given a reasonable opportunity of being heard.
[1293F] In the instant case no action for cancellation of allotment was taken under the provisions of the Act and the Rules.
The action of the Naib Tehsildar cum Managing Officer in allotting to the appellant the land which had already stood in the name of the respondent without complying with the relevant provisions of the Act was in flagrant violation of the provisions of the law.
Therefore, the impugned orders were manifestly illegal, arbitrary and unjust and could not be sustained.
[1293H]
|
Criminal Appeal No. 104 of 1955.
Appeal by special leave from the judgment and order ' dated September 9, 1953, of the Patna High Court in Jury Reference No. I of 1952 arising out of the ReferencE made on February 16, 1952, by the Assistant Sessions Judge, 2nd Court, Chapra, in connection with Sessions Trial No. 81 of 1951.
section P. Verma, for the appellants Nos. 2 and 3.
B. K. Saran and R. C. Prasad, for the respondent.
January 30.
The Judgment of the Court was delivered by BHAGWATI J.
The appellants Nos. 2 and 3, who are the surviving appellants after the death of appellant No. 1 during the pendency of this appeal, were charged with having committed offences under sections 435 and 436 of the Indian Penal Code and were tried by the Second Assistant Sessions Judge of Saran, Chapra, with the aid of a jury.
The jury returned a majority verdict that both of them were guilty of the offences under those sections.
The Assistant Sessions Judge disagreed with the said verdict and made a reference to the High Court of Judicature at Patna, 275 under section 307 of the Code of Criminal Procedure.
The said reference was heard by a Division Bench of that High Court.
The learned judges of the High Court overruled the contentions which were urged before them in regard to the charge to the jury being defective and further held that the reference was, in the circumstances, not competent.
They, however, without anything more accepted the majority verdict and held the appellants guilty of the offences under sections 435 and 436 of the Indian Penal Code and sentenced them to six months ' rigorous imprisonment each.
The appellants obtained from this Court special leave to appeal under article 136 of the Constitution and hence this appeal.
The facts leading up to this appeal may be shortly stated as follows: There was a dispute between the parties as to title to plot No. 1100 of village Rampur, Tengrahi.
One Kailash Rai claimed to be the owner of that plot and also claimed to be in possession of a Palani standing in a portion of that plot as also of a Punjaul, i.e., a haystack in its vicinity.
There had been proceedings under section 144 of the Code of Criminal Procedure in regard to this area leading up to a title ,suit being T.S. No. 58/8 of 1948 /50 filed by Kailash Rai against the appellants in regard to the same.
A decree had been pawed on December 16, 1950, in that title suit dismissing the claim of Kailash Rai.
An appeal had been filed by Kailash Rai against that decree and that appeal was pending at the date of the occurrence.
On March 4, 1951, Kailash Rai was sitting in the Palani and at about 3 to 4 p.m. a mob consisting of about 100 to 125 persons including the appellants all armed with lathes, bhallas and pharsas came to the Palani and began to demolish the same.
Kailash Rai remonstrated and the deceased appellant No. 1, ordered that the Palai should be set on fire.
The appellant No. 2 thereupon set fire to the Palani with a match stick and the appellant No. 3 set fire to the Punjaul.
The first information report of this occurrence was lodged at Gopalganj Police Station at 8 p.m. the same night.
The officer in charge of Gopalganj Police Station investigated the case and 276 challaned the appellants charging them with having committed, offences under sections 435 and 436 of the Indian Penal Code.
The Committing Court found a prima facie case made out against the appellants and sent them up for trial by the Assistant Sessions Judge, Second Court, Chapra, who tried them by a jury.
The jury returned a majority verdict of guilty against the appellants.
The Assistant Sessions Judge, however, disagreed with that verdict and made a reference to the High Court stating in the letter of reference that on the evidence recorded before him the appellants had been in possession of the Palani and the Punjaul but were dispossessed of the same some time prior to the passing of the decree in the title suit on December 16,1950, and were therefore justified in taking steps for recovery of possession thereof from Kailash Rai on March 4, 195 1, and if in that process the appellants set fire to the Palani and the Punjaul they were only destroying their own property and were not guilty of the offence of committing mischief by fire as alleged by the prosecution.
The Assistant Sessions Judge tried to analyse the working of the minds of the jury in arriving at the verdict which they did and though he agreed with the alleged finding of fact reached by the jury in regard to the possession of the Palani and the Punjaul, disagreed with the law as allegedly applied by the jury and therefore disagreed with the majority verdict.
When the reference was heard before the High Court, the counsel for the appellants only contended that the charge addressed by the Assistant Sessions Judge to the jury was defective and he did not invite the High Court, as he should have done, to consider the entire evidence and to acquit or convict the appellants of the offences of which the jury could have convicted them upon the charges framed and placed before it, after giving due weight to the opinions of the learned Sessions Judge and the jury as required by a. 307 (3) of the Code of Criminal Procedure.
The High Court, therefore, only considered the objections which had been urged by the learned counsel for the appellants before it in regard to the charge being defective and 277 overruled them, accepted the majority verdict, convicted the appellants and sentenced them as above.
We are of opinion that in so doing the High Court was clearly in error and acted in violation of the provisions of section 307 (3) of the Code of Criminal Procedure.
Section 307 (3) provides: In dealing with the case so submitted the High Court may exercise any of the powers which it may exercise on an appeal, and subject thereto it shall, after considering the entire evidence and after giving due weight to the opinions of the Sessions Judge and the jury, acquit or convict such accused of any offence of which the jury could have convicted him upon the charge framed and placed before it; and, if it convicts him, may pass such sentence a,% might have been passed by the Court of Sessions.
" We had occasion to consider this provision in Akhlakali Hayatalli vs The State of Bombay(1) where we approved of the following observations of their Lordships of the Privy Council in Ramanugrah Singh vs The Emperor(2): " The powers of the High Court in dealing with the reference are contained in sub section (3).
It may exercise any of the powers.
which it might exercise upon an appeal, and this includes the power to call fresh evidence conferred by section 428.
The Court must consider the whole case and give due weight to the opinions of the Sessions Judge and jury, and then acquit or convict the accused.
In their Lordships ' view, the paramount consideration in the High Court must be whether the ends of justice require that.
the verdict of the jury should be set aside.
In general, if the evidence is such that it can properly support a verdict either of guilty, or. not guilty according to the view taken of it by the trial Court, and if the jury take one view of the evidence and the, judge thinks that they should have taken the other, the view of the jury must prevail, since they are the judges of fact.
In such a case a reference is not justified, and it is only by accepting their view that the High Court can give due weight to the opinion of the jury.
It, however, (I) ; 442.
(2) A.I.R. 1946 P.C. 151, 154.
278 the High Court considers that upon the evidence no reasonable body of men could have reached the conclusion arrived at by the jury, then the reference was justified and the ends of justice required that the verdict be disregarded.
" This wag pronounced by us to be the correct method of approach in a reference under section 307 of the Code of Criminal Procedure.
It was incumbent on the High Court when the reference was heard by it to consider the entire evidence and come to its own conclusion whether the evidence was such that it could properly support the verdict of guilty against the appellants.
If the High Court came to the conclusion that the evidence was such that it was possible for the jury to take the view that it did even though the judge thought that they should have taken another view the reference would not have been justified and the High Court should have accepted the opinion of the jury.
If the High Court was however of opinion upon the evidence that no reasonable body of men could have reached the conclusion arrived at by the jury the reference would have been quite justified and the ends of justice required that the verdict should be disregarded.
The High Court, however, only considered the arguments in regard to the defect in the charge to the jury addressed before it by the learned counsel for the appellants and did not consider the entire evidence which was on the record before it.
In not having done so, we are clearly of opinion that it violated the provisions of section 307 (3) of the Code of Criminal Procedure.
We are accordingly of opinion that the judgment of the High Court accepting the majority verdict and convicting the appellants and sentencing them as above without considering the entire evidence was clearly wrong and the conviction of the appellants and the sentences passed upon them should be set aside.
We were invited by learned counsel for the parties appearing before us to consider the entire evidence for ourselves and come to the conclusion which, according to the provisions of section 307 (3) of the Code of Criminal Procedure, I he High Court should have done.
We do 279 not think that is the proper procedure to adopt and we therefore allow the appeal, and remand this matter to the High Court to act in accordance with the provisions of section 307 (3) of the Code of Criminal Procedure and deal with the same in accordance with law.
The appellants Will continue on the same bail as before.
Appeal allowed.
| IN-Abs | The appellants were charged under sections, 435 and 436 of the Indian Penal Code and were tried by a jury, who returned a majority verdict of guilty.
The Assistant Sessions judge disagreed with the said verdict and made a reference to the High Court.
At the hearing of the reference the counsel for the appellants only contended that the charge to the jury was defective, and did not place the entire evidence before the judges, who only considered the objections ' urged, and nothing more, and held the 35 274 reference to be incompetent and found the appellants guilty and convicted them.
Held, that in a reference under section 307 of the Code of Criminal Procedure it was the duty of counsel to place, and it was incumbent on the High Court to consider, the entire evidence and the charge as framed and placed before the jury and to come to its own conclusion, after giving due weight to the opinion of the trial judge and the verdict of the jury, and to acquit or convict the accused of the offences of which the jury could have convicted or acquitted him.
It was wrong of the ' High Court to pass judgment without considering the entire evidence.
It is not proper for the Supreme Court to adopt the procedure of considering the entire evidence and come to a conclusion which according to the provisions of s.307(3) of the Code of Criminal Procedure the High Court should have done.
Akhlakali Hayatalli vs The State of Bombay, (1954) S.C.R. 435 and Ramanugrah Singh vs The Emperor, A.I.R. T946 P.C. 151, referred to.
|
Civil Appeal No. 477 of 1976.
Appeal by Special Leave from the Judgment and Order dated 11 4 1975 of the Kerala High Court in T.R.C. No. 59 of 1973.
P. A. Francis and N. Sudhakaran for the Appellant.
Exparte against the Respondent.
The Judgment of the Court was delivered by TULZAPURKAR, J.
The short question raised in this appeal by special leave is whether the Appellate Tribunal has power under section 39(1) of the Kerala General Sales Tax Act, 1963 to enhance the assessment in the absence of any appeal or cross objections by the Revenue ? The respondent firm (M/s. Vijaya Stores) is a dealer in stationery having its head office at Cochin and branches at Ernakulam and Kottayam.
For the assessment year 1965 66 the respondent firm returned a total turnover of Rs. 25,54,974.58 and a net taxable turn over, after claiming exemptions, of Rs. 12,99,996.49.
The Sales Tax officer rejected the Book results on the basis of certain material gathered from a rough note book detected and seized by the Inspecting officer from the Head office at Cochin; it was found that about 50% of the transactions recorded in that rough note book were not entered in the regular books maintained by the assessee; the Sales Tax officer, therefore, made an addition of 10% (Rs. 45,654.73) to the admitted turnover of the Cochin shop and accordingly completed the assessment by his order dated January 16, 1967.
In an appeal preferred by the respondent firm to the Appellate Assistant Commissioner, the assessee raised a two fold contention that the rejection of accounts was not justified and that the addition made on the basis of the rough note book was excessive and arbitrary.
The Appellate Assistant Commissioner by his order dated November 1, 1968 negatived the first contention and 18 526 SCI/78 540 as regards the second he gave relief to the assessee by reducing and limiting the addition to 5% (Rs. 22,823.00) of the admitted turnover of the Cochin shop.
Against the order of the Appellate Assistant Com missioner the respondent firm preferred a second appeal to the Appellate 'Tribunal challenging the addition of 5% to the taxable turnover.
No appeal nor any cross objections were filed by the Revenue to the Tribunal against the said order of the appellate Assistant Commissioner.
The Appellate Tribunal was of the view that the Sales Tax officer and the Appellate Assistant Commissioner had no reason to make addition at any figure less than Rs. 80,218.22 as was seen from the detected rough note book; the Tribunal, therefore, by invoking the power under section 39(4) of the Act issued notice to the assessee to show cause against the proposed enhancement of the turnover and after hearing the objections of the assessee by its order dated May 10, 1973 directed an addition of a sum of Rs. 80,218.22 to the taxable turnover.
The respondent firm preferred a Tax Revision Petition (being T.R.C. 59 of 1973) to the Kerala High Court contesting that the Tribunal had no jurisdiction or power to enhance the assessment in the absence of an appeal or cross objections by the Department and prayed for quashing of the order.
The Kerala High Court by its judgment and order dated April 11,1975 accepted the contention of the respondent firm and set aside the impugned order of the Tribunal and remanded the case for hearing the appeal of the assessee afresh in accordance with law and in the light of what it had said in its judgment; in doing so the High Court relied upon two decisions of the Bombay High Court in Motor Union Insurance Co., Ltd. vs Commissioner of income Tax, Bombay(i) and New India Life Assurance Co. Ltd. vs Commissioner of Income Tax, Excess Profits Tax, Bombay City(2).
The State of Kerala has come up in appeal to this Court.
Counsel for the appellant raised two contentions in support of the appeal.
He first contended that on a true construction of section 39(4) of the Act the Appellate Tribunal should be regarded as possessing the power to enhance the assessment in the absence of any appeal or cross objections by the Department against the Appellate Assistant Com missioner 's order and that the only requirement before making such enhancement was to give a reasonable opportunity of being heard against the proposed enhancement which the Appellate Tribunal had done in this case; secondly, he contended that section 39(4) of the Kerala General Sales Tax Act, 1963 was not in pari materia with section 33(4) of the Indian Income Tax Act, 1922, and, therefore, the High Court ought not to have relied upon the decisions of the Bombay High Court (1) (2) [1957] 31 l.
T.R. 844.
541 rendered under section 33(4) of the Indian Income Tax Act, 1922.
He A also pressed the contrary view taken by the Orissa High Court in the case of Commissioner of Sales Tax, Orissa vs Chunilal Parameshwar Lal(l), for our acceptance.
For the reasons which we shall presently indicate it is not possible to accept either of these contentions urged by counsel for the appellant.
B The question raised before us really turns upon the correct interpretation to be placed on section 39(4) of the Act, but sub sections (1), (2), (3) and (4) of section 39 are material for our purposes which run thus: "39.
Appeal to the Appellate Tribunal.
(1) Any officer empowered by the Government in this behalf or any other person objecting to an order passed by the Appellate Assistant Commissioner under sub section (3) of section 34 and any person objecting to an order passed by the Deputy Commissioner under subsection (1) of section 35, and any person objecting to an order passed by the inspecting Assistant Commissioner under clause (c) of sub section (4) of section 28 may, within a period of sixty days from the date on which the order was served on him in the manner prescribed, appeal against such order to the Appellate Tribunal; Provided that the Appellate 'Tribunal may admit an appeal presented after the expiration of the said period if it is satisfied that the appellant had sufficient cause t`or not presenting the appeal within the said period.
(2) The officer authorised under sub section (1) or the person against whom an appeal has been preferred, as the case may be on receipt of notice that an appeal against the order of the Appellate Assistant Commissioner has been preferred under sub section (1) by the other party, may, notwithstanding that he has not appealed against such order or any part thereof, file, within thirty days of the receipt of the notice, a memo random of cross objections, verified in the prescribed manner against any part of the appellate Assistant Commissioner, and such memorandum shall be disposed of by the Appellate Tribunal as if it were an appeal presented within the time specified in sub section ( 1 ) .
[1961] 12 S.T.C. 677.
19 526 SCI/78 542 (3) The appeal or the memorandum of cross objections shall be in the prescribed form and shall be verified in the prescribed manner, and, in the case of an appeal preferred by any person other than an officer em powered by the Government under sub section (1), it shall be accompanied by such fee not exceeding one hundred rupees as may be prescribed.
(4) In disposing of an appeal, the Appellate Tribunal may, after giving the parties a reasonable opportunity of being head either in person or by a representative.
(a) in the case of an order of assessment or penalty.
(i) confirm, reduce, enhance or annul the assessment or penalty or both; (ii) set aside the assessment and direct the asses sing authority to make a fresh assessment after such further enquiry as may be directed; or (iii)pass such other orders as it may think fit; or (b) in the case of any other order, confirm, cancel or vary such order." Considerable emphasis was laid by counsel for 'the appellant upon sub s.(4) which indicates what things the Appellate Tribunal may do while disposing of an appeal and in particular it was pointed out that under 'sub s.(4)(a)(i) the Appellate Tribunal has been given power 'to enhance the assessment" while disposing of an appeal against an order of assessment after giving the party a reasonable opportunity of being heard and it was urged that such power could be exercised even when the appeal against the Appellate Assistant Commissioner 's assessment order had been preferred by the assessee and not by the Department.
To place such a construction on sub section
(4)(a)(i) would amount to ignoring the scheme of section 39.
Sub section
(1) provides for an appeal being preferred against an assessment order passed by the Appellate Assistant Commissioner under section 34(3) either by the assessee or by the Department through an officer empowered by the Government in that behalf.
Further, sub 3. (2) provides for filling of cross objections by a party, against whom an appeal has been preferred, notwithstanding that he has not himself appealed against the decision or any part thereof and such cross objections are to be disposed of by Appellate Tribunal as if it were an appeal.
Then comes sub section
(4) which enumerates the various powers conferred upon 543 the Appellate Tribunal while disposing of such appeals (including cross objections) and the power conferred upon the Appellate Tribunal under section 4(a) (i) is "to confirm, reduce, enhance or annul the assessment"; the power to enhance the assessment must be appropriately read as relatable to an appeal or cross objections filed by the Department.
The normal rule that a party not appealing from a decision must be deemed to be satisfied with the decision, must be taken to have acquiesced therein and be bound by it.
and, therefore, cannot seek relief against a rival party in an appeal preferred by the latter, has not been deviated from in sub s.(4)(a)(i) above.
In other words, in the absence of an appeal or cross objections by the Department against the Appellate Assistant Commissioner 's order the Appellate Tribunal will have no jurisdiction or power to enhance the assessment.
Further, to accept the construction placed by the counsel for the appellant on sub section
(4)(a)(i) would be really rendering sub section
(2) of section 39 otiose, for if in an appeal preferred by the assessee against the Appellate Assistant Commissioner 's order the tribunal would have the power to enhance the assessment, a provision for cross objections by the Department was really unnecessary.
Having regard to the entire scheme of section 39, therefore, it is clear that on a true and proper construction of sub section
(4) (a) (i) of section 39 the Tribunal has no jurisdiction or power to enhance the assessment in the absence of an appeal or cross objections by the Department.
It is true that the two Bombay decisions reported in and (supra) on which the High Court has relied `have been rendered in relation to section 33(4) of Indian Income Tax Act, 1922 but in our view the said provisions of Income Tax Act is in pari materia with the provision of s.39(4) of the Kerala General Sales Tax Act, 1963.
Moreover, the Bombay High Court has pointed out in those decisions that section 33(4) merely enacted what was the elementary principle to be found in Civil Procedure Code that the respondent who has neither preferred his own appeal nor filed cross objections in the appeal preferred by the appellant, must be deemed to be satisfied with the decision of the lower authority and he will not be entitled to seek relief against a rival party in an appeal preferred by the latter.
In the first mentioned case the elementary principle is stated at page 282 of the report thus: "Apart from statute, it is elementary that if a party appeals, he is the party who comes before the Appellate Tribunal to redress a grievance alleged by him.
If the other side has any grievance, he has a right to file a cross appeal 544 or cross objections.
But if no such thing is done, the other party, in law, is deemed to be satisfied with the decision.
He is, of course, entitled to support the judgment of the first officer on any ground open to him, but he is not entitled to raise a ground so as to work adversely to the appellant and in his favour.
" As regards the decision of the Orissa High Court in Commissioner of Sales Tax, Orissa vs Chunnilal Parmeshwar Lal (supra), the same cannot avail the appellant for the decision in that case was rendered on a concession made by the assessee 's counsel.
In the result we are clearly of the opinion that the High Court was right in the view it took and the appeal.
therefore, fails and is dismissed.
Since the respondent has not appeared, there is no question of any costs N.V.K. Appeal dismissed.
| IN-Abs | On the ground that 50% of the transactions recorded in a rough note book detected and seized by the Inspecting officer from the Head office of the firm were not entered in the regular books of accounts maintained by the assessee, the Sales Tax officer made an addition of 10% to the admitted turnover and completed the assessment.
In an appeal, the Appellate Assistant Commissioner, reduced the addition to 5% of the admitted turnover.
The respondents preferred a second appeal before the Appellate Tribunal.
But the Department neither filed an appeal against the order of the Appellate Assistant Commissioner nor raised any cross objections in the assessee 's appeal After issuing a show cause notice to the assessee, the Tribunal, under section 39(4) of the Kerala General Sales Tax Act 1963, directed the addition of a certain amount to the taxable turnover.
In its Tax Revision Petition, the respondent contended before the High Court that the order of the Tribunal was wrong in that it had no jurisdiction or power to enhance the assessment in the absence of an appeal or cross objections by the Department.
Setting aside the impugned order of the Tribunal the High Court remanded the case for hearing the appeal afresh.
In appeal to this Court, the appellant (Department) contended that on a true construction of section 39(4) of the Act, the Appellate Tribunal should be regarded as possessing the power to enhance the assessment even in the absence of any appeal or cross objections by the Department against the Appellate Assistant Commissioner 's order.
Dismissing the appeal ^ Held: (1) The Tribunal has no jurisdiction or power to enhance the assessment in the absense of an appeal or.
cross objections by the Department.
[543 E] (2) To accept the construction placed by the counsel for the appellant on sub section (4)(a)(i) would be really rendering sub section (2 of section 39 otiose, for if in an appeal preferred by the assesses against, the Appellate Assistant Commissioner 's order, the tribunal would have the power to enhance the assessment, a provision for cross objections by the Department was really unnecessary.
[1543 D] 539 (3) The elementary principle found in the Code of Civil Procedure that the respondent who has neither preferred his own appeal nor filed cross objections in the appeal preferred by the appellant must be deemed to be satisfied with the decision of the lower authority and that he will not be entitled to seek relief against a rival party in an appeal preferred by the latter, is equally applicable to revenue proceedings.[543 G] Motor Union Insurance Co. Ltd. vs Commissioner of Income Tax Bombay and New India Life Assurance Co. vs Commissioner of Income Tax, Excess Profits Tax, Bombay City.
approved.
Commissioner of Sales Tax, orissa vs Chunnilal Parmeshwar Lal (1961) 12 STC 677 distinguished.
|
Civil Appeal Nos.
1768 1769/ 72.
Appeals by Special Leave from the Judgment and order dated 15 7 1971 of the Delhi High Court in Sales Tax Reference No. 8 of 1969.
F. section Nariman, (In CA 1768/72), V. section Desai (in C.A. 1769).
M. C. Bhandare (C.A. 1768/72) and Mrs. section Bhandare and Miss M. Poduval for the Appellants.
P. A. Francis, R. N. Sachthey and Miss A. Subhashini for the Respondent.
Y. section Chitale, Vinay.
Bhasin, A. K. Srivastava and Vineet Kumar for the Interveners.
The Judgment of the Court was delivered by PATHAK, J.
This and the connected appeal are directed against the judgment of the High Court of Delhi disposing of a reference made to it under section 21(3) of the Bengal Finance (Sales Tax) Act, 1941 as extended to the Union Territory of Delhi on the following question: "Whether the service of meals to casual visitors in the Restaurant is taxable as a sale: (i) when charges are lumpsum per meal or (ii) when they are calculated per dish ?" The High Court has answered the question in the affirmative.
The appellant runs a hotel in which lodging and meals are provided on "inclusive terms" to residents.
Meals are served to non residents also in the restaurant located in the hotel.
In the assessment proceedings for the assessment years 1957 58 and 1958 59 under the Bengal Finance (Sales Tax) Act, 1941, the appellant contended that the service of meals to residents and non residents could not be regarded as a sale and therefore sales tax could not be levied in respect thereof.
The contention was rejected by the Sales Tax authorities, who treated a portion of the receipts from the residents and nonresidents as representing the price of the foodstuffs served.
At the instance of the appellant, the High Court called for a statement of the case on two questions.
One was whether the supply of meals to residents, who paid a single all inclusive charge for all services in the 559 hotel, including board, was exigible to sales tax.
The second was the A question set forth above.
The High Court answered the first question in favour of the appellant and the second against it.
And now these appeals by special leave.
Tax is payable by a dealer under section 4 of the Bengal Finance (Sales Tax) Act, 1941 on sales effected by him, and the expression "sale ' has been defined by section 2 (g) of the Act to mean "any transfer of property in goods for cash or deferred payment or other valuable consideration including a transfer of property in goods involved in the execution of a contract. ".
The question is whether in the case of non residents the service of meals by the appellant in the restaurant constitutes a sale of foodstuffs.
It appears to us that after the view taken by this Court in State of Punjab vs M/s Associated Hotels of India Ltd.,(1) the approach to the question before us is clearly indicated.
This is a case where the origin and historical development of an institution as profoundly influenced the nature and incidents it possesses in law.
In the case of an hotelier this Court proceeded on the footing that his position in law was assimilable to that of an inn keeper.
At common law an innkeeper was a person who received travellers and provided lodging and necessaries for them and their attendants and employed servants for this purpose and for the protection of travellers lodging in his inn and of their goods(2).
It was hospitality that he offered, and the many facilities that constituted the components of that hospitality determined the legal character of the transactions flowing from them.
Long ago, in Crisp vs Pratt(3) it was pointed out that innkeepers do not get their living by buying and selling and that although they buy provisions to be spent in their house, they do not sell them but what they do is to "utter" them.
"Their gain", it was added, "is not only by uttering of their commodities, but for the attendance of their servants, and for the furniture of their house, rooms, lodgings, for their guests. '`.
This test went to the root and we find it repeated in Parker vs Flint.(4) In Newton vs Trigg(5) Holt, C.J., defined the true status of an inn keeper by reference to the services afforded by him? that he was an "hospitator", and was "not paid upon the account of the intrinsic value of his provisions, but for other reasons: the recompence he receives, is for care and pains and for protection and security. . but the end of an inn keeper in (1) ; (2) Halsbury 's Laws of England, 3rd Edn.
21 p. 442 paras 932.
(3) [1639] Cro. Car. 549.
(4) [1699] 12 Mod 254.
(5) 3 Mod .
2 549SCI/78 560 his buying, is not to sell, but only a part of the accommodation he is bound to prepare for his guests.
" And for the purpose of the question before us is would be relevant to quote Professor Beale(1): As an inn keeper does not lease his rooms, so he does not sell the food he supplies to the guest.
It is his duty to supply such food as the guest needs, and the corresponding right of the guest is to consume the food he needs, and to take no more.
Having finished his meal, he has no right to take food from the table, even the uneaten portion of food supplied to him, nor can he claim a certain portion of good as his own to be handed over to another in case he chooses not to consume it himself.
The title to food never passes as a result of an ordinary transaction of supplying food to a guest." Having proper regard to those particular considerations, it is not surprising that the principle was extended in England to the service OF food at eating places or restaurants.
The keeper of an eating house, or victualler, was regarded fundamentally as providing sustenance to those who ordered food to eat in the premises.
That eminent and learned Judge, Lord Mansfield, saw no distinction, in Saunderson vs Rowles(2), between an innkeeper and a victualler.
He observed: '.
The analogy between the two cases of an inn keeper and a victualler is so strong that it cannot be got over.
And we are all clear that this man (victualler) is not within these laws; upon the authority of a determined case of an inn keeper, and also upon the reason of the thing.
He buys only to spend in his house, and when he utters it again it is attended with many circumstances additional to the mere selling price.
" Like the hotelier, a restaurateur provides many services in addition to the supply of food.
He provides furniture and furnishings, linen, crockery and cutlery, and in the eating places of today he may add music and a specially provided area for floor dancing and in some cases a floor show.
The view taken by the English law found acceptance on American soil, and after some desultory dissent initially in certain states it very soon became firmly established as the general view of the law.
The first edition of American Jurisprudence sets(3) forth the statement of the law in that regard, but we may go to the case itself, Electa B. Merrill vs James W. Hodson(4), from which the (1) Innkeepers & Hotels, para 169.
(2) (3) Vol.
46 p. 207 para 13.
(4) 561 statement has been derived.
Holding that the supply of food or drink A to customers did not partake of the character of a sale of goods, the Court commented: "The essence of it is not an agreement for the transfer of the general property of the food or drink placed at the com command of the customer for the satisfaction of his desires, or actually appropriated by him in the process of appeasing his appetite or thirst.
The customer does not become the owner of the food set before him, or of that portion which is carved for his use, or of that which finds a place upon his plate, or in side dishes set about it.
No designated portion becomes his.
He is privileged to eat, and that is all.
The uneaten food is not his.
He cannot do what he pleases with it.
That which is set before him or placed at his command is provided tc enable him to satisfy his immediate wants, and for no other purpose.
He may satisfy those wants; but there he must stop.
He may not turn over unconsumed portions to others at his pleasure, or carry away such portions.
The true essence of the transaction is service in the satisfaction of a human need or desire, ministry to a bodily want.
A necessary incident of this service or ministry is the consumption of the food required.
This consumption involves destruction, and nothing remains of what is consumed to which the right of property can be said to attach.
Before consumption title does not pass; after consumption there remains nothing to become the subject of title.
What the customer pays for is a right to satisfy his appetite by the process of destruction.
What he thus pays for includes more than the price of the food as such.
It includes all that enters into the conception of service, and with it no small factor of direct personal service.
It does not contemplate the transfer of the general property in the food supplied as a factor in the service rendered.
" Subsequent cases drew on these observations, notably Mary Nisky vs Childs Company.
(1) The position was radically altered in the United States by the enactment of the Uniform Commercial Code, which provides in effect that the serving for value of food or drink to be consumed either on the premises or elsewhere constitutes a sale.
Nonetheless it is affirmed in the second edition of American Jurisprudence(2) that where the Code does not operate, "in general the pre Code distinction between a contract for sale and one for the giving of services should continue.
" (l) (2) Vol.
67 p. 142 para 33.
562 It has already been noticed that in regard to hotels this Court has in M/s. Associated Hotels of India Limited (supra) adopted the concept of the English law that there is no sale when food and drink are supplied to guests residing in the hotel.
The Court pointed out that the supply of meals was essentially in the nature of a service provided to them and could not be identified as a transaction of sale.
The Court declined to accept the proposition that the Revenue was entitled to split up the transaction into two parts, one of service and the other of sale of foodstuffs.
If that be true in respect of hotels, a similar approach seems to be called for on principle in the case of restaurants.
No reason has been shown to us for preferring any other.
The classical legal view being that a number of services are concomitantly provided by way of hospitality, the supply of meals must be regarded as ministering to a bodily want or to the satisfaction of a human need.
What has been said in Electa B. Merrill (supra) appears to be as much applicable to restaurants in India as it does elsewhere.
It has not been proved that any different view should be taken, either at common law, in usage or under statute.
It was urged for the respondent that in Associated Hotels of India Ltd. (supra) this Court drew a distinction between the case of meals supplied to a resident in a hotel and those served to a customer in a restaurant.
We are unable to find any proposition of law laid down by the court there which could lead to that inference.
We may point 13 out that in the view which appeals to us we find ourselves unable to agree with the observations to the contrary made by the Punjab High Court in M/s. Associated Hotels of India Ltd., Simla vs Excise and Taxation officer, Simla(1) and by the Delhi High Court in Municipal Corporation of Delhi vs Laxmi Narain Tandon and another.
(2), In the result, we hold that the service of meals to visitors in the restaurant of the appellant is not taxable under the Bengal Finance (Sales Tax) Act, 1941, as extended to the Union Territory of Delhi, and this is so whether a charge is imposed for the meal as a whole or according to the dishes separately ordered.
In the circumstances of the case, we make no order as to costs.
N.V.K. Appeals allowed (1) A. I. R. 1966 Punjab 449.
(2) A, I. R. 1970 Delhi 244.
| IN-Abs | The appellant runs a hotel in which meals are served to non residents also in the restaurant located in the hotel.
The sales tax authorities treated a portion of the receipts as representing the price of foodstuffs served and levied tax.
The High Court affirmed the view of the sales tax authorities.
On the question whether the transaction constituted sale of foodstuffs.
Allowing the appeals ^ HELD. 1.
Service of meals to non residents in the restaurant of 'the appellant is not taxable under the Bengal Finance (Sales Ta%) Act 1941, as extended to the Union Territory of Delhi.
This is so whether a charge is imposed for the meal as a whole or according to the dishes separately ordered.
[562 F; 2.
In State of Punjab vs M/s. Associated Hotels of India ; this Court held that there was no sale when food and drink were supplied to guests residing in the hotel.
The Court pointed out that the supply of meals was essentially in the nature of a service provided to the guests and could not be identified as a transaction of sale.
This Court declined to accept the position that the Revenue was entitled to split up the transaction into two parts, one of service and the other of sale of foodstuffs.
If that be true in respect of hotels, a, similar approach seems to be called for on principle in the case of restaurants.
Like the hotelier, a restaurateur provides many services in addition to the supply of food.
He provides furniture and furnishings, linen, crockery and cutlery, and he may add music, an area for floor dancing and in some cases a floor show.
The classical legal view being that a number of services are concomitantly provided by way of hospitality, the supply of meals must be regarded as ministering to a bodily want or to the satisfaction of a human need.
No reason has been shown for preferring any other view.
[562 B, 560 F G, 562 C] State of Punjab vs M/s. Associated Hotels of India Ltd. ; applied.
M/s. Associated Hotels of India Ltd., Simla vs Excise and Taxation Officer Simla not approved.
Municipal Corporation of Delhi vs Laxmi Narain Tandon and Another not approved.
Crisp vs Pratt [1639] Cro.
Car 549, Parker vs Flint [1699] 12 Mod.
254 Newton v .
Trigg 3 Mod.
327, Saunderson vs Rowles Electa B. 558 Merrill vs James W. Hodson , and Mary Nisky vs Child Company SO A.L.R. 227 referred.
|
Civil Appeal No. 2295 of 1968.
From the Judgment and order dated 3 2 1967 of the Madhya Pradesh High Court in Misc.
Petition No. 26 of 1966.
Harbans Singh for the Appellant.
Raghunath Singh and Manojswarup for Respondent No.1.
S.K. Gambhir for Respondents 3 5 and 7.
U. P. Lalit,B.P.Muheshwari and Suresh Sethi for Respondent No. 6.
The Judgment of the Court was delivered by UNTWALTA, J.
In this appeal by certificate granted by the Madhya Pradesh High Court the question of law which Lalls for our determination is whether conferral of Bhumiswalnli rights on Shri Khushi Lal respondent No. 1 in respect of the lands in question in accordance with Section 190 of the Madhya Pradesh Land Revenue Code, 1959, hereinafter referred to as the M.P. Code of 1959, by the Revenue Authorities is correct and sustainable.
Maulana Shamsuddin, the sole appellant in this appeal, was a Muafidar in the erstwhile State of Bhopal of the disputed lands in accordance with the Bhopal State Land Revenue Act, 1932 (for brevity, the Bhopal Act of 1932) .
The first respondent claimed to be a Shikmi of the appellant in respect of the lands in question.
His case was that the appellant was the occupant of the lands within the meaning of the Bhopal Act of 1932.
On the coming into force of the M.P. Code of 1959.
the appellant became a Bhumiswami under clause (c) of section 158 and the respondent became an occupancy tenant under section 185 (1)(i)(iv)(b).Thus he became entitled to conferment of Bhumiswami rights under Section 490.
He applied before the Tahsildar, Huzur, respondent No. 5 for mutation of his name as a Bhumiswami in the Revenue records.
The Tahsildar by his order dated the 24th June, 1963 directed Khushi Lal to deposit compensation equivalent to 15 times of the land revenue on the payment of which his name was to be recorded as a Bhumiswami of the holdings.
It appears his name was so recorded on the deposit of the compensation money.
The appellant filed an appeal before the Sub Divisional officers Huzur, respondent No. 4 from the order of the Tahsildar.
His appeal was dismissed by the Sub Divisional officer on the 12th of December, 1963.
The appellant failed before the Additional Commissioner, Bhopal, respondent No. 3 on the dismissal of his second appeal on the 25th August 1996.
He went in revision before the Board of Revenue, (respondent No. 2 ) .
The revision was allowed on the 6th of July, 1965.
The 584 Board held that the appellant was not an occupant within the meaning of Section 2(15) of the Bhopal Act of 1932 and consequently the first respondent was not a Shikmi under the said Act.
He did not become an occupancy tenant under the M.P. Code of 1959 and, therefore, conferral of Bhumiswami rights on him was erroneous in law.
The first respondent filed a Writ Petition in the High Court and succeeded there.
The High Court held that the Board was not right in its view of the law.
The appellant was an occupant and the respondent No. 1 was a sub tenant (Shikmi) under the Bhopal Act of 1932.
Conscquently he became an occupancy tenant entitled to conferment of Bhumiswami rights under the M.P. Code of 1959.
The appellant has preferred this appeal in this Court to challenge the decision of the High Court and for restoration of the order of the Board of Revenue.
Mr. Harbans Singh, appearing for the appellant, Advanced a very fair and able argument to advocate his cause.
He could now and did not dispute that if the appellant was an occupant, the first respondent was a Shikmi under the Bhopal Act of l932 and if that be so then the order of the High Court is unassailable.
But he vehemently contended that the appellant was not an occupant.
Learned counsel for the respondents controverted his argument.
Prima facie the argument, as presented, for the appellant appeared to have substance and force but on a close scrutiny we had no difficulty in rejecting it.
Section 2 of the Bhopal Act of 1932 is the definition section and as usual at the outset it uses the phrase "in this Act, unless there is nothing repugnant in the subject or context,".
Sub section (5) defines "Alienated land" to mean "land in respect of which, pursuant to a grant made by His Highness the Ruler, Government has, in whole or in part, assigned or relinquished its right to receive land revenue, and includes such village waste and forest as are mentioned in the sanad of the grant " Thereafter the sub section says: "If the land revenue is assigned the person to whom such assignment is made is called a "Jagirdar".
If the land revenue is relinquished the person in whose favour such relinquishment is made is called "Muafidar";".
Subsection ( l S) provides: " "occupant" means a person who holds land direct from the Government or would do so but for the right of collecting land revenue having been assigned or relinquished.
" It would thus be seen that if pursuant to the grant made by His Highness the Ruler of Bhopal, Government 's right to receive land revenue was assigned to the grantee then he was called a Jagirdar and 585 it was relinquished then the person in whose favour such relinquishment was made was called Muafidar.
Under the first part of the definition of "occupant" given in sub section (IS) a person who holds land direct from Government would be an occupant and being not a person in whose favour the right to receive land revenue has either been assigned or relinquished will be required to pay to the Government land revenue or rent.
We are using both the words revenue ' and 'rent ' on the assumption that such an occupant being neither a Jagirdar nor a Muafidar would be required to pay some money to the Government for being in occupation of the land.
Under the second part of the definition a Jagirdar or a Muafidar would also be holding land direct from Government but because the right of collecting land revenue has either been assigned or relinquished, strictly speaking, he does not hold land direct from the Government in the sense of paying any land revenue or rent to it because the Government has parted with the right to collect land revenue from him.
We are of the opinion, in agreement with the High Court, that on a careful analysis of the definition of the term "occupant" in section 2(15), it is legitimate to conclude that even a Jagirdar or a Muafidar is an occupant.
He holds land under the Government; on the resumption of the Jagir or the Muafirights by the Government the land reverts back to it.
Payment of land revenue or rent for holding land under the Government was not a sine qua non for making the holder of the land an occupant.
"Rent" is defined in sub section (19) of Section 2 of the Bhopal Act of 1932 to mean "whatever is payable to an occupant in money, kind or service by a shikmi for the right to use land.
" This would show that strictly speaking a person holding the land direct from the Government within the meaning of the first part of the definition in sub section (IS) is not to pay any money to the Government in the shape of rent but what he will be required to pay would be the land revenue.
But a Jagirdar or a Muafidar holding the land under the Government is not required to pay any land revenue.
sub section (21) defines "Shikmi" to mean "a person who holds land from an occupant and is, or but for a contract, would be liable to pay rent for such land to that occupant, but does not include a mortgagee or a person holding land directly from Government.
" Respondent No. 1 was inducted upon the land by the appellant in the year 1958.
Since then he had been cultivating the land.
He could not but be a Shikmi within the meaning of sub section (21 ) .
Mr. Harbans Singh was not right in saying that he was a mere cultivator and was cultivating the land not as a sub tenant or a Shikmi but must be doing so under some special arrangement of cultivating the land as a servant of the appellant or the like.
There is no warrant for such a contention.
586 Section 46 of the Bhopal Act of 1932 runs thus .
"(l) All land to whatever purpose applied and wherever situate, is liable to the payment of revenue to the Government, except such land as has been wholly exempted from such liability by a special grant on His Highness the Ruler or by a contract with the Government, or under the provisions of any law or rule for the time being in force.
(2) Such revenue is called "Land Revenue"; and that term includes moneys payable to the Government for land, notwithstanding that such moneys may be described as premium, rent, quit rent, or in any other manner in any enactment, rule, contract or deed." This section lends support to the view which we have expressed above that a person holding land directly under the Government and not being a Jagirdar or a Muafidar will be liable to pay land revenue to the Government in whatever name the payment of money may be described such as premium, rent, quit rent etc.
The High Court in its judgment has adverted to some sections contained in Chapter VI of the Bhopal Act of 1932.
Section 51 provided for disposal of unoccupied land.
Sub section (1) of section 52 says that a person acquiring the right to occupy land under section 51 will be called an occupant of such land and under sub section (2) all persons who, prior to the commencement of this Act, had been entered in settlement records as responsible for the payment of land revenue to the Government, or who, but for a special arrangement, would have been to responsible, would be deemed to be occupants within the meaning of Section 52.
In our opinion this special arrangement mentioned in sub section (2) cannot be squarely equated with the assignment or relinquishment of the right to receive land revenue envisaged by the Bhopal Act of 1932.
We do not feel inclined to agree with the High Court that the appellant became occupant under section 52(2) of the Bhopal Act of 1932 because he was a person who was entered into settlementt records prior to the coming into force of that Act.
Firstly it is not clear whether the facts so stated in the judgment of the High Court are (quite correct, and, secondly, it is admitted on all hands that the appellant was a Muafidar and, therefore, in our opinion he was an occupant within the meaning of Section 2(15).
Section 54 provided that the rights of an occupant, meaning thereby the occupant as mentioned.
in Section 52, were to be permanent, transferable and heritable.
Ordinarily and generally the rights of a Jagirdar 587 or a Muafidar being occupants within the meaning of Section 2(15) A read with Section 167 were neither transferable nor heritable and in that sense the rights were not permanent.
In our opinion, therefore, the type of occupant who is dealt with in Chapter VI of the Bhopal Act of 1932 is not the type of occupant having the same kind of incidence as defincd in Section 2(15).
As we have already indicated it is a well established principle of law that a particular term defined in the definition section is subject to anything repugnant in the contact of the other provisions of the Statute.
The provisions of Chapter VI being at variance with the definition clause cannot make the occupant described in that Chapter the same occupant as defined in Section 2(15).
Our attention was drawn by the learned counsel for the appellant to Section 167 of the Bhopal Act of 1932 dealing With the restriction ill the rights of the Jagirdars and Muafidar to transfer such rights or create encumbrances on them.
According to the said Section no Jagirdar or Muafidar could "transfer his rights as Jagirdar or muafidar, or, except for such period as he is in possession of his jagir or muafi create an encumbrance on the income thereof." But inducting a person as Shikmi on the land was not prohibited under Section 167.
On the other hand, Section 194 provide(l that all occupant could make a lease of his holding and under certain circumstances it could n(lt be for a term of more than 12 years.
It was then argued that the right of a Muafidar being in the nature of a life grant was valid only for the Life time of the Muafidar.
So the Muafidar could not induct a person as Shikmi who ultimately could become an occupancy tenant entitled to conferment of Bhumisavami rights later on.
This argument has to be staled merely to be rejected.
It may well be that the right of a Shikmi would not have lasted beyond the duration of the right of the Muafidar.
But then, his rights were enlarged by operation or the welfare legislation enacted by the State Legislature for the benefit of the cultivators of the soil in the year 1959.
Section 185(1)(iv)(b) of the M.P. Code of 1959 says: "(1) Every person who at the coming into force of this Code holds (iv) in the Bhopal region (b) any land as a shikmi from an occupant as defined in the Bhopal State Land Revenue Act, 1932 (IV of 1932): 588 shall be called an occupancy tenant and shall have all the rights and be subject to all the liabilities conferred or imposed upon an occupancy tenant by or under this Code.
" As held by us above the appellant was an occupant as defined in the Bhopal Act of 1932 and thus under clause (c) of Section 158 on the coming into force of the Code he became a Bhumiswami.
But his Bhumiswami rights were liable to be conferred, under certain conditions, on the occupancy tenant under Section 190.
As a matter of fact in accordance with the said provision the Bhumiswami rights were conferred on respondent No. 1 on payment of compensation being in the amount of 15 times of the land revenue for payment to the appellant.
Our attention was drawn to a recital of facts in the Statement of the case of some of the respondents that the appellant had withdrawn the said amount of compensation.
But we are not resting our judgment on that ground as in our opinion, whether he has withdrawn the amount of compensation or not, he cannot challenge the conferment of his Bhumiswami rights on respondent No. l. which have been validly and legally conferred.
We may now briefly deal with a few more short submissions of the appellant.
In section 185(1)(iv)(a) of the M.P. Code of 1959 it is provided that if a person who at the time of coming into force of tba said Code was holding any land as a sub tenant as defined in the Bhopal State Sub tenants Protection Act, 1952 shall also be called an occupancy tenant.
A copy of this Act could not be made available for our perusal.
But what we get from the order of the Board of Revenue is that a Sub tenant as defined in the Bhopal Act of 1952 means a person who holds a parcel of khud kasta land from a Jagirdar.
Along with this our attention was also drawn to the Bhopal State Sub Tenants (of occupants) Protection Act.
In this Act, section 2(b) runs thus: "The expression "occupant" shall have the same meaning as in the Bhopal State Land Revenue Act, 1932 (IV of 1932) and, for the purposes of this Act, it should also include a muafidar, as defined in Bhopal State Land Revenue Act, 1932 (IV of 1932)".
In other sections of the said Act protection against ejectment was given to the Shikmis.
The argument was that protection to the sub tenants of Jagirdars was given in the Bhopal Act of 1952 and protection to such persons was given in case of sub tenants of Muafidar under the Bhopal Act of 1954 by including Muafidar in the expression 'occupant ' occurring in the said Act.
Counsel, therefore, submitted that if the 589 term 'occupant ' in the Bhopal Act of 1932 had included a Muafidar then there was no necessity of expressly and separately including a Muafidar in the definition of the said expression.
in the Act of 1954.
In our opinion this argument has no substance.
It may be by way of abundant precaution or for putting the matter beyond any shadow of doubt that the expression 'occupant ' was defined in a comprehensive manner in the Bhopal Act of 1954.
Section 3 of the said Act shows that even a Muafidar could sub let a land to a person and induct hi as a Shikmi prior to the coming into force of this Act.
Such a Shikmi got the protection against ejectment by operation of law engrafted in the Bhopal Act of 1954.
After the passing of this Act? he no longer could be said to be a Shikmi only during the life time of the Muafidar but was so even beyond it.
The counsel for the appellant called our attention to a decision of this Court in Begum Suriya Rashid and others vs Stale of Andhra Pradesh(l).
In this case it was held that the muafi grants to the predecessor in interest of the appellants before the Supreme Court were not hereditary or perpetual and the appellants could not claim title as Muafidars even though some contradictory arabic expressions had keen used in the document of grant.
This decision does not advance the case of the appellant any further.
For the reasons stated above, we dismiss this appeal but make no order as to costs.
M.R. Appeal dismissed.
| IN-Abs | The appellant was a Muafidar of the disputed land, in the erstwhile Bhopal State, while the first respondent cultivated the said lands as his tenant.
When the M. P. L. R. Code, 1959, came into force, the first respondent claimed that the appellant, as the occupant of the lands within the meaning of S.2 (15) of the Bhopal State Revenue Act, 1932, had become a Bhumiswami u/s 158(C) of the Code of l959, while he himself had become an occupancy tenant u/s 185(1)(iv)(b) and as such, was entitled to conferment of Bhumiswami rights u/s 190 of the same Code.
He ' applied to the Tahsildar, Huzur, for mutation of his name as a Bhumiswarni in the Revenue records.
and was directed to deposit compensation equivalent to 15 times of the land revenue.
Thereafter his name was recorded as a Bhumiswami of the holdings, on the deposit of the compensation money.
The Muafidar appellant 's appeal to the sub Divisional officer, against the Tahsildar 's order, and a second appeal to the additional Commissioner.
were dismissed, but the Board of Revenue allowed his revision application holding that he was not an occupant within the meaning of section 2(15) of the Bop Act of ]932.
and that consequently the first respondent was neither a Chime, nor did he become an occupancy tenant under the M.P. Code of 1959, and therefore conferment of Bhumiswami rights on him was erroneous in law.
, The first respondent filed a writ petition against the Revenue Board 's order, which was allowed by the High Court.
Dismissing the appeal by certificate, the Court ^ HELD: 1.
Under section 2(15) of the Bhopal State Land Revenue Act 1932, a person who holds and direct under the Government would be an ` 'occupant", in whatever name the payment of money may be described such as premium, rent, quit rent etc.
On a careful analysis of the definition, it is legitimate to conclude that a Jagirdar or Muafidar is an occupant.
He holds lands under the Government.
On the resumption of the Jagir or the Muafi rights by the Government, the land reverts back to it.
Payment of land revenue or rent for holding land under the Government was not a sine qua non for making the holder of the land an revenue.
[585 A D, 586 D] Begum Suriya Rashid and Ors.
vs State of Madhya Pradesh [19691] 1 SCR 869 held inapplicable.
The rights of Shikmis were enlarged by operation of tile Madhya Pradesh Land Revenue Code.
Under section 185(l)(iv)(b) a Shikmi became an occupancy tenant, while u/s 190, as an occupancy tenant, he became entitled, under certain conditions, to conferment of Bhumiswami rights of the occupant of he holdings.
A B] 583
|
Civil Appeal No. 2212 of 1977.
Appeal by Special Leave from the Judgment and Order dated 11 5 19 of the Punjab and Haryana High Court in General Sales Tax Reference No 16/74.
A. K. Sen, A. R. Lal and Ashok Grover for the Appellant.
J. D. Jain and M. N. Shroff for the Respondent.
The Judgment of the Court was delivered by BHAGWATI, J.
The short question which arises for determination in this appeal is whether 'dryer felts ' manufactured by the assessee fall within the category of "all varieties of cotton, woollen or silken textiles," specified in Item 30 of Schedule `B ' of the Punjab General Sales Tax Act, 1948 (hereinafter referred to as the Act) If they are covered by this description, they would be exempt from Sales Tax imposed under the provisions of the Act, otherwise they would be liable to sales tax.
The assessing authorities held that the `dryer Felts` manufactured by the assessee were not "textiles" within the meaning of Item 30 of Schedule 'B ' and they were, therefore, not exempt from sales tax.
The 'Tribunal, on appeal, also took the same view and rejected the claim of the assessee to exemption from sales tax in respect of sales of `dryer felts '.
The assessee thereupon moved the Tribunal for making a reference to the High Court and on this application, the following question of law was referred by the Tribunal for the opinion of the High Court: "Whether on the facts and circumstances of the case, the products manufactured by the petitioner are not covered by Item 30 of Schedule 'B ' of the Punjab General Sales Tax Act, 1 1948, and therefore, not exempt from sales tax both under the Punjab General Sales Tax Act, l948 and the Ccntral Sales Tax Act, 1956.
" 547 The Reference was heard by Division Bench and on a difference of opinion between the two Judges constituting the Division Bench, the Reference was placed before a third Judge.
The third Judge held that 'dryer felts ' were not included in the expression 'textiles occurring in Item 30 of Schedule 'B ' of the Act and were, therefore, not exempt from sales tax and on this view the question referred to h Court was answered against the assessee and in favour of the Revenue.
The assessee thereupon preferred the present appeal with special leave obtained from this Court.
It is clear from section 5 sub section (1) of the Act that it levies sales tax on the taxable turnover of a dealer subject to the provisions of the Act.
Sub section (2) of section S defines "taxable turnover" mean that part of a dealer 's gross turnover during any period which remains .after deducting therefrom inter alia his turnover on the sale of goods declared tax free under section 6.
Section 6 provides that no tax should be payable on the sale.
of goods specified in the first column of Schedule 'B ' subject to the conditions and exception, if ' any set out in.
the corresponding entry in the second column thereof any no dealer shall charge sales tax on the sale of goods which are declared tax free from time to time under this section.
Schedule 'B ' sets out in the first column, various categories of goods which are declared tax free under section 6 and Item 30 specifies the folloing category of tax free goods: All Varieties of cotton, woollen or silken textiles including rayon artificial silk or nylon whether manufactured by handloom or powerloom or otherwise but not including pure silk fabrics, carpets, druggets, woollen durees and cotton floor durees. ' ' The question is: whether 'dryer felts ' manufactured by the assesee fell within this category of goods so as to be exempt from sales tax ? Can it be said that 'dryer felts ' constitute a variety of cotton or woollen textiles ? The answer to the question depends on what is the true meaning of the word "textiles ' as used in Item 30 of Schedule `B '.
Now, the word 'textiles ' is not defined in the Act, but it is well settled as a result of several decisions of this Court.
Of which we may mention only a few, namely, Ramavatar Budhaiprasad vs Assistant Sales Tax officer, Akola(1) and M/s Motipur Jamindary Co. Ltd. vs State of Bihar (2) and the State of West Bengal v Washi Ahmed(3) (1) A. T. K. (2) A. I. R. (3) ; 548 that in a taxing statute words of every, day use must be construed not in thier scientific or technical sense but as, understood in common parlance.
The question which arose in Ramavatar 's case (supra) was whether betel leaves are vegetables and this Court held that they are not `irekldel within that term.
,This Court chuoted with approval the following passage from the judgment of the High Court of Madhya Pra desh in Madhya Pradesh Pan Merchant 's Association, Santard Market, Nagpur vs State of Madllya Pradeh(1): In our opinion, the word "vegetables ' ' cannot be given the con lprehellsive mcaning the term bears in natural nistory and has not been given that meaning in taxing statutes beC fore The term "vegetables ' is to be understood as com monly understood denoting thosc classes of vegetable matter which are grown in kitchen gardens and are used for thc table." And observed that "the word 'vegetables ' in taxing statutes is to be understood as in common parlance i.e. denoting class of vegetabies which are grown in a kitchen garden or in a farm and are used for the table.
" This meaning of the worc. 'vegetables ' was reiterated in M/s Motipur Jamindary case where sugarcane was held not to fall witbin Lhe definition of the word 'vegetables ' ancl the same mcaning was given to the word 'vegetables in Washi Ahmed 's case (supra) where greerl ginger was helcl to be 'vegetables ' within thc meaning of that word as used in common parlance.
lt was pointed out by this Court in Washi Ahmed 's case (supIa) that the sarne principle of construction in .elation to words used in a taxing statute has also been adopted in English, Canadiall and Americar Courls.
Pollock B. pointed out in Gretfell vs 1.
R. c.(o).
that if a statutc contains language which is capable of being construed in a p3pular sense, such a statute is to tbe construed according to the strict or technical meaning of the laaguage contained in it, but is to be construed in its popular sense? meaning, of eourse, by the wor(ls "popular sense that which people conversant with the subject matter , w;tl.
wh ich the statute is dealing.
would attribute it." So also the Supreme Court of Canada said Planters Nut and Chocolate Co. Ltd vs 'The King(3) while interpreting the words 'fruits ' and 'vegetables ' in the Excise Act.
" They are ordinary words in every day use and are, therefore to be construed according to their popular sense".
The same rule was expressed in slightly different language by Story, J., in 200 Chests of Tea(4) where the learned Judge said that the parti (1) 7 section T. C. 99 at 102.
(2) [1876] I E. D. 242 at 248.
(3) (4) [1824] 9 Wheaton (US.) 430 at 438.
549 cular words used by the Legislature in the denomination of articles are to be understood according to the common commercial understanding of the terms used, and not in their scientific or technical sense, for the Legislature does "not suppose our merchants to be naturalists, or geologists, or botanists.".
" There call, therefore, be no doubt that the word 'textiles ' in Item 30 of Schedule 'B ' must be interpreted according to its popular sense, meaning "that scene which people conversant with the subject matter with which the statute is dealing would attribute to it".
There we are in complete Agreement with the Judges who held in favour of the Revenue and against the assessee.
But the question is: What result does the application of this test yield ? Are 'dryer felts ' not 'textiles ' within the ordinary accepted meaning of that word ? the word 'textiles is derived from the Latin 'texere ' which means 'to weave ' and it means any woven fabric.
When yarn, whether cotton, silk, woollen, rayon, nylon or of any other description as made out of any other material is woven into a fabric, what comes into being is a 'textile ' and it is known as such.
It may be cotton textile, silk textile, woollen textile, rayon textile, nylon textile or any other hind of textile.
The method of weaving adopted may be the warp and woof pattern as is generally the case in most of the textiles, or it may be any other process or technique.
There is such phenomenal advance in science and technology, so wondrous i. the variety of fabrics manufactured from materials hithereto unknown or unthought of and so many are the new techniques invented for making fabric out of yarn that it would be most unwise to confine the weaving process to the warp and woof pattern.
Whatever be the mode of weaving employed, woven fabric would be 'textiles '.
What is necessary is no more than weaving of yarn and weaving would mean binding or putting together by some process so as to form a fabric.
Moreover a textile need not be of any particular size or strength or weight.
It may be in small pieces or in big rolls: it may be weak or strong, light or heavy, bleach or dyed, according to the requirement of the purchaser.
The use to which it may be put is also immaterial and does not bear on its character as a textile.
It may be used for making wearing apparel, or it may be used as a covering or bedsheet or it may be used as tapestry or upholstery or as duster for cleaning or as towel for drying the body.
A textile may have diverse uses and it is not the use which determines its character as textile.
It is, therefore, no argument against the assessee that 'dryer felts ' are used only as absorbents of moisture in the process of manufacture in a paper manufacturing unit. 'That cannot militate against 'dryer felts ' falling within the category of 'textiles ', if otherwise they satisfy the description of 'textiles '.
550 Now, what.
are 'dryer felts ' ? They are of two kinds, cotton dryer felts and woollen dryer felts.
Both are made of yarn, cotton in one case and woollen in the other.
Some synthetic yarn is also used The process employed is that of weaving according to warp and woof pattern.
This is how the manufacturing process is described by the assessing authority in its order dated 12th November, 1971 "the raw material used by .
the company is cotton and woollen yarn which they themselves manufactured from raw cotton and wool and the finished products called 'felts ' are manufactured on power looms from cotton and woollen yarn." 'Dryer felts ' are, therefore, clearly woven fabrics and must be held to fall within the ordinary meaning of the word 'textiles '.
We do not think that the word 'textiles ' has any narrower meaning in common parlance other than the ordinary meaning given in the dictionary, namely, a woven fabric.
There may be wide ranging varieties of woven fabric and they may go on multiplying and proliferating with new developments in science and technology and inventions of new methods" materials and techniques, but nonetheless they would all be textiles.
The analogy of cases where the word 'vegetables ' was held not to include betel leaves or sugar cane is wholly inappropriate.
There, what was disapproved by the Court was resort to the botanical meaning of the word 'vegetables ' when that word had acquired a popular meaning which was different.
It was said by Holmes, J., in his inimitable style: "A word is not a crystal, transparent and unchanged; it is the skin of a living Thought and may vary greatly in colour and content according to the circumstances and the time in which it is used.
" Where a word has a scientific or technical meaning and also an ordinary meaning according to common parlance, it is in the latter sense that in a taxing statute the word must be held to have been used, unless contrary intention is clearly expressed by the Legislature.
The reason is that as pointed out by Story, J., in 200 Chest.
(of Tea (supra), the Legislature does "not suppose our merchants to be naturalists, or geologists, or botanists".
But here the word 'textiles ' is not sought by the assessee to be given a scientific or technical meaning in preference to its popular meaning.
It has only one meaning.
namely, a woven fabric and that is the meaning which it bears in ordinary parlance.
It is true that out minds are conditioned by old and antiquated notions of what are textiles and, therefore, it may sound a little strange to regard 'dryer felts ' as 'textiles ': But it must be remembered that the concept or 'textiles ' is not a static concept.
It has, having regard to newly developing materials, methods, techniques and processes, a continually expanding content and new kinds of fabric may be invented which may legitimately, without doing any violence to the language, be regarded as 'textiles '.
Take for example rayon and nylon fabrics 551 which have now become very popular for making wearing apparel.
When they first came to be made, they must have been intruders in the field of 'textiles ' because only cotton, silk and woollen fabrics were till then recognized as 'textiles '.
But today no one can dispute that rayon and nylon fabrics are textiles and can properly be described as such.
`We may take another example Which is nearer to the case before his.
It is common knowledge that certain kinds of hats are made out of felt and though felt is not ordinarily used for making wearing , apparel, can it be suggested that felt is not a 'textile ' ? The character of fabric or material as textile does not depend upon the use to which it may be put.
The uses of textiles in a fast developing economy are manifold and it is quite common now to find 'textiles ' being, used even for industrial purposes.
If were look at the , we find in Chapter 59 occurring in section Xl of the First Schedule that there is a reference to 'textile fabrics and textile articles, of a kind commonly used in machinery or plant ' and clause (4) of that Chapter provides that this expression shall be taken to apply inter alia to 'woven textile felts. of a kind commonly used in paper making or other machinery. . . ".
This reference in a statute which is intended to apply to imports made by the trading community clearly shows that 'dryer felts ' which are woven textile felts. of a kind commonly used in paper making machinery" are regarded ill common parlance, according to the sense of ordinary traders and merchants, textile fabrics.
We have, therefore, no doubt that 'dryer felts ' are 'textiles ' within the meaning of that expression in Item 3() of Schedule 'B '.
We accordingly allow the appeal, set aside the Judgment of the High Court and answer the question referred by the Tribunal in favour of the assessee and against the Revenue.
The State will pay to the assessee costs throughout.
S.R. Appeal allowed .
| IN-Abs | The 'any felts ' manufactured by the appellant assessee were held by the assessing authorities to be not 'textiles ' within the meaning of Item 30 of Schedule 'B ' the Punjab General Sales Tax Act, 1318 and thereafter, on appeal the Tribunal and on reference the High Court also confirmed this view.
Allowing the appeal by special leave, the Court ^ HELD: 1. 'Dryer felts ' are 'textiles ' within the meaning of that expression in Item 30 of Schedule 'B ' to the Punjab General Sales Tax Act, 1948.
[551 E] 2.
In a taxing statute words of every day use must be construed not in their scientific or technical sense but as understood in common parlance, meaning "that sense which people conversant with the subject matter with which the statute is dealing would attribute to it." [548 A, F] Ramavatar Budhaiprasad vs Assistant Sales Tax officer, Akola, A.l.R. , M/s.
Motipur Jamindary Co. Ltd. vs State of Bihar, A.l.
R. , State of West Bengal vs Washi Ahmed. ; and Madhya Pradesh Pan Merchant 's Association, Santara Market, Nagpur vs State of Madhya Pradesh, 7 S.T.C. 99 at 102 referred(1 to E Gretfell vs IR.C. [1876)] I exhibit D. 242 at 248, Planters Nut and Choco Co. Ltd. vs The King, [1951] 1 DLH 385 and 200 Chests of 'Tea, (1824) 9 Wheaton (U.S.) 430 at 438; quoted with approval.
Where a word has a scientific or technical meaning and also an ordinary meaning according to common parlance, it is in the latter sense that in a taxing statute the word must be held to have been used, unless contrary intention us clearly expressed by the Legislature.
The reason is that the Legislature does not suppose our merchants to be 'naturalists, or geologists, or botanists".
In the instant case the word 'textiles ' is not sought by the assessee to be given a scientific in preference to its popular meaning.
It has only one meaning namenamely a woven fabric and that is the meaning or technical meaning which it bears in ordinary parlance.
[550 E G].
The concept of 'textiles ' is not a static concept.
It has, having regard to newly developing materials, methods techniques and processes, a continually expanding content and new kinds of fabric may be invented which may legitimately, without doing any violence to the language be regarded as textiles [550 H] The word 'textiles ' is derived from Latin 'texere ' which means 'to weave ' and it means woven fabric.
When yarn, whether cotton, silk.
woollen rayon, nylon or of any other description or made out of any other material is woven into a fabric, what comes into being is a 'textile ' and is known as such.
Whatever be 546 the mode of weaving employed, woven fabric would be 'textile '.
What is necessary is no more than meaning of yarn and weaving would mean binding or putting together by some process so as to form a fabric.
A textile need not be of any particular size or strength or weight.
the use to which it may be put is also immaterial and does not bear on its character as a textile.
The fact that the 'dryer felts ' are used only as absorbents of moisture in the process of manufacture in a paper manufacturing unit, cannot militate against 'dryer felts ' falling within category of textiles, if otherwise they satisfy the description of textiles.
The refers to textile fabrics in this sense.
[549 C D, E F., G H] Ramavatar Budhaiprasad vs Assistant Sales lax officer Akola; , and M/s. Motipur Jamindary Co. Ltd. vs Stale of Bihar, ; , distinguished.
|
Civil Appeal No. 1501 of 1978.
Appeal by Special Leave from the Judgment and Order dated 18 1 1978 of the Delhi High Court in Civil Misc.
Petition No. 1120 W of 1977 and 109/78 in Writ Petition No. 585/77.
Soli J. Sorabjee Addl.
General, Girish Chandra for the Appellant.
13 549 SCI/78 736 section T. Desai, B. P. Maheshwari and Suresh Sethi for Respondent No. 1.
A. K. Sen and Vineet Kumar for Respondent No. 2.
ORDER An ad interim order of stay passed by the High Court of Delhi has been challenged before us in this appeal.
We should have hesitated to interfere with an interlocutory order following the usual practice in this Court.
But, where repercussions are incalculable and the basis of the direction; though interlocutory, is obscure, the ends of justice dominate and we may interfere if public interest so dictates.
Here is an order of the Company Law Board under sec.
408(1) of the , which gives a wealth of facts and a variety of reasons to support an ultimate direction which runs thus: "Since all the three conditions referred to in sub section (1) of sec.
408 of the , are established on the facts and circumstances of the case, the Company Law Board hereby appoint officers for three years, in addition to the existing directors of the company: 1.
Shri B. M. Kaul, Member, Railway Board (Retd.) 5 J 4 Jawahar Nagar, Jaipur.
Shri A. K. Mazumdar, Chief Secretary, Orissa Govt.
(Retd.) 26/2, Dover Road, Apartment No. 4, Calcutta 19. 3.
Shri P. K. Choksi, Senior Partner, Price Water house Pest & Co., B 4, Gillander House, Calcutta 1. 4.
Shri section K. Mitra, President, Institute of Cost & Works Accounts of India, 14 A/6 Western Extension Area, Karol Bagh, New Delhi 5. 5.
Shri P. A. section Rao, Formerly President of the Institute of Company Secretaries of India, C 7/7, Vasant Vihar, New Delhi.
Shri M. C. Bhatt, Joint Secretary, Govt.
of India (Retd.) B 22, Defence Colony, New Delhi 24. 7.
Shri Triloki Nath Sharma, Business Executive, 247, Mohan Nagar, G. T. Road, Sahibabad, Ghaziabad (U.P.) 737 The Company Law Board direct further under sub section (6) of sec.
408 of the Act that Shri B. M. Kaul will act as Chairman of the Board of Directors of the Company.
In accordance with the order passed by the Delhi High Court on 24th August, 1977, referred to hereinbefore the implementation of this order will be subject to any order that may be passed by the Delhi High Court in the matter pending before it." This order, which inducted seven additional directors was based on the ground that the affairs of the company in question "are being conducted in a manner which is prejudicial to the interests of the company and to public interest." The High Court, after hearing counsel on both sides, passed a laconic order that: "We consider that the proper order to be made, in view of the circumstances of the case, is to stay the operation of the order of the Company Law Board, dated 17th December, 1977, except as regards Shri P. K. Choksi, Shri section K. Mitra and Shri P. A. Rao, and also to direct that the said three gentlemen will not vote at the meetings of the Board of Directors till the disposal of the writ petition.
We order accordingly.
" A company of considerable financial dimensions and involved in operations using public resources as investment, naturally becomes the concern not merely of the Company Law Board but also of the economic process of the country.
The specialised body with responsibility to watchdog corporate process, is the Company Law Board.
When it investigates and reaches a definite conclusion and makes a consequential direction, it is entitled to prima facie respect unless there are glaring circumstances to the contrary.
We do not wish to make any observations on the merits of the matter since the High Court is seized of the case.
It may well be that the order of the Board may be vitiated by infirmities, legal or other.
It may also be that the reasoning of the Board and the factual foundation for it is sound.
In such situations, acting at an interlocutory stage, the benefit of reasonable doubt belongs to the specialised body.
Of course, as stated earlier, if there are good grounds to strike down the order, certainly the High Court has jurisdiction to stay its operation.
However, we find nothing stated in the order itself indicating why the High Court prima facie thought it necessary substantially to stay the operation of the Company Law Board 's order of induction of seven persons as directors.
Nor have we any light regarding the total eclipse of four directors and the partial eclipse of the other three.
Unfortunately, the inscrutable face of a sphinx does not go well with the judicial process.
Whatever might have been 738 the basis of the High Court 's order we do not make any comments thereon we are inclined to nullify the interim stay.
Our inclination is explained by the prefatory observations we have earlier made in this order.
To expatiate more may prejudice one side or the other.
To indicate this much is obligatory to explicate ourselves.
There was some argument at the Bar about an order under sec.
18AA of the Industries (Development and Regulation) Act, 1951, and its impact upon the order impugned before us.
Maybe, by virtue of that appointment, the entire company comes under the control of the authorised person appointed under that provision.
It is not for us to explore here the effect and import of the order of the Central Government under section 18AA and we desist from doing so.
All that we need do and that we can do in the present appeal is to allow it so that the Company Board 's direction in regard to seven additional directors will come into full force until the final decision of the High Court.
We allow the appeal.
We may make it clear that the learned Additional Solicitor General did assure the court that nothing which will stultify the two writ petitions before the High Court will be done by the Company Law Board or the Central Government.
We hope the High Court will dispose of the case very expeditiously.
S.R. Appeal allowed.
| IN-Abs | The Company Law Board by its order dt.
17th December, 1977 inducted several additional directors in addition to the existing directors of the respondent company, under section 408(1) of the , since it was of the opinion that the affairs of the company in question "are being conducted in a manner which is prejudicial to the interest of the company and to public interest".
But the Delhi High Court passed an ad interim stay of the said orders, while admitting the writ Petition.
Allowing the appeal by special leave, the Court ^ HELD: Where repercussions are incalculable and the basis of the direction, though interlocutory, is obscure, the ends of justice dominate and the Supreme Court may interfere, if public interest so dictates under article 136 of the Constitution.
[736B] (2) A company of considerable financial dimensions and involved in operations using public resources as investment naturally becomes the concern not merely of the Company Law Board but also all of the economic process of the country.
The specialised body with responsibility to watchdog corporate process is the Company Law Board.
When it investigates and reaches a definite conclusion and makes a consequential direction, it is entitled to prima facie respect unless there are glaring circumstances to the contrary.
It may well be that the order of the Board may be vitiated by infirmities, legal or other.
It may also be that the reasoning of the Board and the factual foundation for it is sound.
In such situations acting at an interlocutory stage, the benefit of reasonable doubt belongs to the specialised body.
If there are good grounds to strike down the order certainly the High Court has jurisdiction to stay its operation.
[737D G]
|
Civil Appeal No. 927 of 1976.
Appeal by Special Leave from the Judgment and order dated 5 3 76 of the Kerala High Court in O.P. No 2469/74.
V. M. Tarkunde, Frank Anthony, R. Satish and E. C. Agrawala for the appellant.
K. T. Harindernath and K. R. Nambiar for Respondents 1 3.
A. section Nambiar, Mrs. Pushpa Nambiar and Miss M. Poduval for Respondent No. 4.
611 Frank Anthony, R. Satish, and E. C. Agarwala for the Intervener Fr. Powathil.
The Judgment of the Court was delivered by UNTWALIA, J.
This is an appeal by special leave from the judgment of the Kerala High Court dismissing the appellant 's writ application for quashing the order dated June S, 1973 of the Regional Deputy Director of Public Instruction, Trivandrum and the order dated May 2, 1974 of the District Education officer issued pursuant to the order aforesaid of the Regional Deputy Director.
The constitutional question involved in this appeal is about the vires of Rule 12(iii) of Chapter VI of the Kerala Education Rules, 1959, hereinafter called the Rules.
The question is whether the said rule is violative of Article 30(1) of the Constitution.
In the year 1947 Dr. A. G. Pereira, a retired Medical officer, opened a High School at Kaniyapuram mainly for the, benefit of the students of the Christian community.
The sanction of the then Government of Travancore for opening the School was accorded to him by letter dated 21st February, 1947, Ext.
Subsequently the School was transferred to the Trivandrum Roman Catholic Diocese.
For the last more than 25 years the School was administered by this Diocese.
The appellant is the corporate Manager of the Schools belonging to the Roman Catholic Diocese of Trivandrum.
It is not in dispute that as a matter of fact only boy students were admitted ill the School till the end of academic year 1971 72.
In the year following the management built a separate building in the School compound to provide accommodation for girl students.
The Manager applied to the Regional Deputy Director for permission to admit girl students in the School, although according to his case, it was strictly not necessary to do so in law.
By letter dated June 5, 1973 Ext.
P 2 the Regional Deputy Director refused to give sanction for admission of the girl students.
The main ground of refusal of the sanction contained in the said letter is that St. Vincent 's High School, Kaniyapuram the School in question, was not opened as a mixed School, that is to say, for imparting education both to boys and girls and that "the School had been running purely as a boys ' School for the last more than 25 years.
where is also facility for the education of the girls of the locality in the near girls ' School situated within a radius of one mile.
" As mentioned in the letter, the Manager of Muslim High School, Kaniyapuram, which was a girl 's School said lo be situated within a radius of one mile from the School in question seems to have objected to the grant of permission for admission of girl students in the St. Vincent 's High School.
The girls ' School was 612 established by the Muslims and was also a minority institution within the meaning of Article 30 of the Constitution.
The appellant filed a revision before the State Government from the order of the Regional Deputy Director and pending revision many girl students were admit ted in the School.
The District Education officer wrote the letter dated 2 5 1974, Ext.
P 4 to the authorities of the St. Vincent 's High School that since the admission of girl pupils had been prohibited by the Regional Deputy Director no girl should be admitted in the School.
The appellant, thereupon, challenged the orders of the educational authorities by filing a Writ Petition in the High Court.
In the judgment under appeal the High Court has said that.
although girls School has been defined in Rule 6 of Chapter II of the Rules, a boys ' School is not defined either in The Kerala Education Act, 1958, hereinafter to be referred to as the Act, or in the Rules, since only boys were, admitted in the School for a long time the self imposed restriction by the management made it a boy 's School.
The authorities of the School could be prevented from admitting the girls in the School under Rule 12(iii) of Chapter VI of the Rules, even though a separate building has been constructed for them in the same compound.
In the opinion of the High Court, to quote its language: "The basis of the rule seems to be that it will be better for the girls to get instruction in girls ' schools as far as possible; and if there is a girls ' school why the parents of the minority community should insist on admission of the girls in boys ' school is ununderstandable.
By the time the child reaches the secondary school stage it would have grown up a little.
At that age to keep them under proper guidance and discipline the rule is made that they should as far as possible be given education in girls ' Schools only.
This is only in the nature of a regulation for discipline and morality.
It does not interfere with the power of administration of an educational institution by a minority community.
" There is no dispute that the School was an existing School within the meaning of Section 2(3) of the Act.
Thus within the permissible limits without violating the protection given to a minority institution under Article 30 of the Constitution, the Act and the Rules came to govern this School also.
As already stated, there is no definition of a boys ' School either in the Act or the Rules.
But in Rule 6 of Chapter II it has been provided "Schools where ad 613 mission to some or all of the Standards is restricted to girls shall be known as Girls ' Schools.
" Rule 12 in Chapter VI reads as follows: "Admission of Boys into Girls ' Schools: (i) All Primary Schools (Lower and Upper) shall be deemed to be mixed Schools and admission thereto shall be open to boys and girls alike.
But under special circumstances the Director may exempt particular institutions from this rule so that admission thereto might be restricted to boys or girls and in the absence of such special circumstances the Director may withdraw such exemption.
(ii) Admission to Secondary Schools which are specifically recognised as Girls ' Schools shall be restricted to girls only, but the Director may issue a general permission to boys below the age of twelve to be admitted to classes not higher than Standard VII in particular Girls ' Schools provided there are no Boys ' Schools in the locality.
But such boys on completing the age of twelve shall not be allowed to continue in such schools beyond the school year in which they complete the age of twelve.
(iii) Girls may be admitted into Secondary Schools for boys in areas and in towns where there are no Girls ' Schools and in such cases adequate arrangements should be made for the necessary convenience.
The admissions will be subject to general permission of the Director in particular Boys ' Schools which will be specified by him.
" The language of clause (i) indicates that in all Primary Schools admission shall be open to boys and girls alike and such Schools shall be deemed to be mixed Schools.
But it is open to the Director to exempt a particular institution from this Rule meaning thereby that if the School authorities so want, they may run the school for the admission of the boys or the girls only.
Similarly clause (ii) of Rule 12 suggests that admission to Secondary Schools which are specifically recognised as Girls ' Schools shall be restricted to girls only, but with the permission of the Director boys below the age of twelve may be admitted.
The purport of impugned clause (iii), however, is to enable the Director to permit the admission of girls into Secondary Schools for boys in areas and towns where there are 614 no girls ' Schools.
In other words if there are other girls ' Schools permission may be refused for admission of the girls in a School which has been run for imparting education to boys only.
The ambit and content of Article 30 of the Constitution has been the subject matter of consideration and pronouncement by this Court in several decisions starting from In Re The Kerala Education Bill, 1957(1) and ending with 9 Judges ' Bench decision of this Court in The Ahmedabad St. Xaviers College Society & anr.
vs State of Gujarat & anr.(2) In State of Kerala, etc.
vs Very Rev. Mother Provincial, etc.
,(3) Hidayatullah, C.J., speaking for the Court has said at page 740: "There is, however, an exception to this and it is that the standards of education are not a part of management as such.
These standards concern the body politic and are dictated by considerations of the advancement of the country and its people.
Therefore, if universities establish syllabi for examinations they must be followed, subject however to special subjects which the institutions may seek to teach, and to a certain extent the State may also regulate the conditions of employment of teachers and the health and hygiene of students.
Such regulations do not bear directly upon management as such although they may indirectly affect it.
Yet the right of the State to regulate education, educational standards and allied matters cannot be denied.
The minority institutions cannot be allowed to fall below the standards of excellence expected to educational institutions, or under the guise of exclusive right of management, to decline to follow the general pattern.
While the management must be left to them, they may be compelled to keep in step with others.
These propositions have been firmly established in the State of Bombay vs Bombay Education Society (1955) 1 S.C.R., 568; The State of Madras vs S.C. Dorairajan, ; ; In re the Kerala Education Bill 1957 (1959) S.C.R. 995; Sidharajbhai vs State of Gujarat (1963) 3 S.C.R. 837; Katra Education Society vs State of U.P. & Ors. (1966) 3 S.C.R., 328; Gujarat University, Ahmedabad vs Krishna Ranganath Mudholkar and ors. (1963) Suppl.
1 S.C.R. 112 and Rev. Father W. Proost & ors.
vs State of Bihar ; In the last case it was said that the (1) [1959] section C. R. 995 (2) ; (3) [!971] I section C. R. 734.
615 right need not be enlarged nor whittled down.
The Constitution speaks of administration and that must fairly be left to the minority institutions and no more.
" In the case of St. Xaviers College, Ahmedabad (supra) the majority decision, although by separate judgments, has converged to the view that the right conferred on the religious and linguistic minorities to administer educational institutions of their choice is not an absolute right.
This right is not free from regulation.
Just as regulatory measures are necessary for maintaining the educational character and content of minority institutions, similarly regulatory measures are necessary for ensuring orderly, efficient and sound administration of the School in the matter of maintaining discipline, health, morality and morality and so forth.
Even the two learned Judges differing from the majority on some of the aspects of the matter under consideration before this Court in St. Xaviers College case did not depart from this fundamental principle.
The difference was mainly in the application of the principle in relation to some of the provisions of the impugned Statute.
As summed up by Das C.J., in the Kerala Education Bill case (supra), the right to administer an educational institution of their choice by a minority cannot mean a right to maladminister.
Of course in the application of the salient principles mentioned above opinions have differed from case to case and may differ.
Let us examine the constitutionality of Rule 12(iii) contained in Chapter VI of the Rules and the validity of the impugned orders contained in Exts.
P 2 and P 4.
The dominant object of the said Rule does not seem to be for the sake of discipline or morality.
Any apprehension of deterioration in the moral standards of students if co education is permitted in Secondary Schools does not seem to be the main basis of this Rule, although it may be a secondary one.
The very fact that girls can be admitted into a boys school situated at a place where there are no girls ' school in the town or the area leads to this conclusion.
It is to be remembered that no category of a school as a boys ' school is specified in the Act or the Rules.
Nor was our attention drawn to any provision enabling the educational authorities to force the school authorities to admit girls in a school where they don 't want to admit them.
The self imposed restriction by the management in vogue for a number of years restricting the admission for boys only, per se, is wholly insufficient to cast a legal ban on them not to admit girls.
The ban provided in Rule 12(iii) as already adverted to is of a very limited character and for a limited purpose.
Permission was granted to Dr. Pereira for opening the school in 1947 616 as a High School.
No restriction in terms was imposed for not admitting any girl students.
If the successor school authorities wanted to depart from the self imposed restriction, they could only be prevented from doing so on valid, legal and reasonable grounds and not otherwise.
As is apparent from the impugned order dated 5 6 1973 of the Regional Deputy Director of Public Instruction as also from the passage of the High Court judgment which we have extracted above the permission sought for by the appellant for admission of girls in the St. Vincent 's School was refused not on the ground of any apprehended deterioration of morality or discipline but mainly; or perhaps, wholly in the interest of the existing Muslim girls ' school, respondent No. 4, in the locality.
The basis of the Rule, as remarked by the High Court, seems to be "that it will be better for the girls to get instructions in girls ' schools as far as possible.
" If that be so, then clearly the Rule violates the freedom guaranteed to the minority to administer the school of its choice.
But, as already stated, in our opinion this is not the dominant object of the rule.
The Christian community in the locality, for various reasons which are not necessary to be alluded to here, wanted the girls also to receive their education in this school and specially of their community.
They did not think it in their interest to send them to the Muslim girls ' school which is an educational institution run by the other minority community.
In that view of the matter the Rule in question in its wide amplitude sanctioning the withholding of permission for admission or girl students in the boy 's minority school is violative of Article 30.
If so widely interpreted it crosses the barrier of regulatory measures and comes in the region of interference with the administration of the institution, a right which is guaranteed to the minority under Article 30.
The Rule, therefore, must be interpreted narrowly and is held to be inapplicable to a minority educational institution in a situation of the kind with which we are concerned in this case.
We do not think it necessary or advisable to strike down the Rule as a whole but do restrict its operation and make it inapplicable to a minority educational institution in a situation like the one which arose in this case.
It follows, therefore, that the impugned orders dated 5 6 1973 and 2 S 1974 passed by the Regional Deputy Director and the District Education officer respectively are bad and invalid and must be quashed.
In the result, we allow this appeal and set aside the judgment and order of the High Court and grant the relief to the appellant to the extent and in the manner indicated above.
In the circumstances, we make no order as to costs.
P.H.P. Appeal allowed .
| IN-Abs | The appellant opened a High School mainly for the benefit of the students of the Christian community in the year 1947.
The necessary sanction was accorded by the Govt.
Of Travancore.
Only boys were admitted in the school till the end of the academic year 1971 72.
In the subsequent year, the management constructed building in the school compound to provide accommodation for girl students.
The Manager applied to the Regional Deputy Director for permission to admit girl students in the school.
The regional Deputy Director refused to give sanction for admission of the girl students.
The main ground of refusal was that the school was not opened as a mixed school and that the school had been running purely as a boy 's school for 25 years.
Another reason given was that there was facility for the education of the girls of the locality in a near by girls school which was established by the Muslims and was also a minority institution.
An appeal filed before the educational authority failed.
Under rule 12(i) of Kerala Education Rules, 1954 all primary schools are deemed to be mixed schools and the admission thereto shall be open to boys and girls alike.
Under the special circumstances the Director may exempt particular institutions so that admission thereto might be restricted to boys or girls.
Rule 12(ii) provides that admission to schools which are specifically recognised as girls ' schools shall be restricted to girls.
However, the Director has power to empower boys below 12 years up to 7th standard to be admitted.
Rule 12(iii) provides that the girls may be admitted in schools for boys if in the town there are no girls ' schools.
The appellant filed a writ petition in the High Court challenging the order of the educational authorities.
The High Court came lo the conclusion that since only boys were admitted in the school for a Long time the self imposed restriction by the management made it a boys ' school and that the authorities have powers under rule 12(iii) to prevent the school from admitting the girls.
The High Court held that the basis of the rules was that as far as possible girls should be given education in girls ' schools only and that it was in the nature of regulation for discipline.
Allowing the appeal the Court, 610 ^ HELD: (1) The ambit and content of article 30 of the Constitution has been the subject matter of consideration and pronouncement by this Court in several decisions.
[614 A] In Re The Kerala Education Bill 1957, [1959] SCR 995; The Ahemdabad St. Xaviers College Society & Anr.
vs State of Gujarat & Anr. ; referred to.
The right conferred on the religious and linguistic minorities to administer educational institutions of their choice is not an absolute right.
The right is not free from regulation.
Just as regulatory measures are necessary for maintaining the educational character and content of minority institutions, similarly regulatory measures are necessary for ensuring orderly, efficient and sound administration of the school in the matter of maintaining discipline, health, morality and so on and so forth.
[615 A C] (2) The dominant object of rule 12 is not for the sake of discipline or morality.
Any appreciation of the deterioration in the moral standard of Students, if co education is permitted in secondary schools, does not seem to be the main basis of the rule, although it may be a secondary one.
[615 E F] (3) The self imposed restriction by the management in vogue for a number of years restricting the administration for boys only is wholly insufficient to cast a legal ban on them not to admit girls.
While granting the permission for opening the school no restriction was imposed for not admitting any girl student.
If the successor school authorities wanted to depart from the self imposed restriction, they could only be presented from doing so on valid, legal and reasonable grounds and not other vise.
The permission in the present case was refused in the interest of the existing Muslim Girls ' School.
If the basis of the rule is that girls should get instructions in girls ' school then the rule violates the freedom guaranteed to the minorities to administer the school of its choice.
However, that is not the dominant object of the rule.
The Christian community in the locality wanted the girls to receive their education in their school.
If rule 12 widely interpreted has empowered the government to prohibit a minority school from admitting girl students for the benefit of another girls ' school, it crosses the barrier of regulatory measures and comes in the region of interference with the administration of the institution, a right which is guaranteed to the minority under article 30.
The rule, therefore, must be interpreted narrowly and should be held not applicable to minority educational institution in a situation like the present one.
The Court.
therefore, quashed the order of the Educational authorities.
[615 G H, 616 A F]
|
N: Criminal Appeal No. 3 of 1977.
Appeal by Special Leave from the Judgment and Order dated 29 9 75 of the Punjab and Haryana High Court in Criminal Misc.
Petition No. 1755 M of 1975.
R. L. Kohli and Mrs. Urmila Sirur for the Appellant.
Hardev Singh and R. section Sodhi for the Respondent.
The Judgment of the Court was delivered by JASWANT SINGH, J.
This appeal by special leave is directed against an order dated the 29th September, 1975 of the Punjab and Haryana High Court at Chandigarh directing prosecution of the appellant for an offence under section 193 of the Indian Penal Code and asking the Registrar of the Court to lodge a complaint in respect of the aforesaid offence in the court of competent jurisdiction.
The circumstances giving rise to this appeal are: On the basis of recovery of the dead body of a minor girl of fourteen or fifteen years of age named Kaushalaya Devi from the residential house of one Bhajan Lal aged 35 years, resident of Abohar (hereinafter referred to as 'the accused ') on the night between the 14th and 15th of March, 1973 when his wife and children were away, the accused was tried for the murder and rape of the said girl.
To start with, the police did not effect the arrest of the accused who from the evidence recorded in the case appeared to be a big landlord.
Later on, however, on the statement of the father of the deceased girl, a case was registered against the accused and he was taken into custody at 1.00 P.M. on the 15th March, 1973.
Dr. C. D. Ohri who conducted the post mortem examination of the dead body of Kaushalaya Devi, deceased opined on the basis of the observations made by him that the death of the deceased had occurred as a result of asphyxia due to constriction of the neck which was ante mortem and sufficient in the ordinary course of nature to cause death The doctor further opined that the deceased had been raped and the person committing the rape on her was bound to receive some scratches on glans penis.
Accordingly at about 5.50 P.M. on the 15th of March, 1973, the police produced the accused before Dr. P. K. Mittal, Medical Officer, Nehru Municipal Hospital, Abohar, and requested him to opine as to (1) the nature of injuries on the person 725 of the accused, (2) the accused 's potency to perform the sexual intercourse and (3) whether the accused had performed sexual intercourse during the last 24 48 hours.
As according to the Govt.
instructions in force at the relevant time, the medico legal cases were to be examined by two doctors Dr. P. K. Mittal examined the accused in the presence of Dr. Mrs. L. K. Grewal who was also attached to his hospital and found the following injuries on his person: "1.
Circular bruise 2 1/2 cm in diameter present on the back of right arm 3 cm lateral to the axillary fold and 14 cm below the top of right shoulder joint, the circle being of upper lower arches with healthy central area.
In each arch there are separate specs of reddish violet bruises suggestive of teeth marks.
in diameter rounded bluish red bruise which is comparatively much fainter, present laterally to bruise No. 1.
It is uniform in appearance all over.
" In the opinion of both the doctors, injury No. 1 was the result of teeth bite but as regards injury No. 2, the doctors expressed their inability to give any definite opinion.
On examination of the private parts of the accused the doctors found that he was potent and capable of performing sexual intercourse.
During the course of the said examination.
the doctors also observed the whole of the glans penis and corona of the accused covered with a thick layer of yellowish material which smelt like smegma.
They, therefore, advised a thorough chemical and microscopic examination of the yellowish material to find out if it was a layer of smegma or not to enable them to answer the third query made by the police and vide their letter No. 426 dated the 15th March, 1973 referred the accused to the appellant who was posted as Chief Medical Officer, Ferozepur.
In their aforesaid forwarding letter, the doctors stated that they had not at all disturbed the layer of sample and had tried to take no sample so that the Chief Medical Officer "would examine the case in its original condition and order the sample of smegma to be taken and sent for chemical examination if he felt like doing so.
" The police, was not however able to take the accused to Ferozepur before the morning of the 17th of March, 1973.
Even on that day, it was only at six in the evening that the police could contact the appellant as he was stated to be away on an official errand.
On the aforesaid docket and the connected papers being put up before him, the appellant wrote back to Dr. P. K. Mittal saying that no special opinion by him was necessary and that he (Dr. Mittal) might send without any further delay the scrapping of the yellowish material mentioned by him 726 from the genitals to the Chemical Examiner, Punjab for opinion.
The communication addressed by the appellant to Dr. P. K. Mittal ran as under: "From Dr. section P. Kohli, Chief Medical Officer, Ferozepur.
To Dr. P. K. Mittal PCMs II, Medical Officer Incharge, Nehru Memorial Hospital, Abohar.
No. NL/Special 1 Dated 17 3 73 Subject: Medical legal examination of Bhajan Lal accused in rape and murder case.
Reference your letter No. 426 dated 15 3 73 on the subject noted above.
Regarding point No. 3 no special opinion by the under signed is necessary.
You may send the scrapping of the yellowish material from the genitals mentioned by you to the Chemical Examiner, Punjab for opinion.
You have already been telephonically instructed through the S.H.O. Police Station Abohar City on 15 3 73 at 6.00 P.M. to do the needful.
Further delay in the case must be avoided.
Report per return after compliance of order.
The full case of the accused is returned herewith.
Sd/ section P. Kohli, Detail attached Chief Medical Officer, (3) three only.
Ferozepur.
Received copy Sd/ Seen at 6.00 P.M.
H.C. No. 1121 Sd/ section P. Kohli, dated 17 3 73 17 3 73.
" On receipt of the aforesaid communication from the appellant, Dr. Mittal carried out the instructions contained therein but not with out a certain amount of resentment as appears from the letter Exh.
CL1/3 which runs as follows: 727 "From The Incharge, Nehru Memorial Hospital, Abohar.
To The Chief Medical Officer, Ferozepur No. 6 Dated 18 3 73 Subject: Medical Examination of Bhajan Lal accused.
Dear Sir, Reference your No. ML SPL /1973 dated 17 3 1973.
The accused Shri Bhajan Lal was presented to me on 18 3 1973 at 9.50 AM and I have done the needful as per instructions given by you.
I had referred the case to your goodself for final opinion as the Lady Doctor refused to give any opinion on the plea that she was not familiar with the appearance and smell of smegma and as for Govt.
instructions where two Doctors are unable to agree on one point the case is to be referred to Chief Medical Officer of the Distt.
for final opinion.
Your goodself verified the same on phone from the Lady Doctor.
I did not remember any instructions for taking the smear through the SHO Police and neither your goodself remember the same on your visit to this Hospital on 16 3 1973 and 17 3 1973 in connection with the same case.
Today again Lady Doctor is on leave and I am alone in the Hospital but still I am doing the needful under your instructions and to avoid any delay on my part.
This is for your information please.
Sd/ P. K. Mittal, 18 3 1973." The Chemical Examiner, Punjab as well as the Professor of Pathology, Medical College, Patiala whose opinion was sought by Dr. P. K. Mittal expressed their inability to carry out any test for smegma as they had no arrangement for the same.
The Additional Sessions Judge, Ferozepur who tried the accused sentenced him to death under section 302 of the Indian Penal Code for the murder of Kaushalaya Devi subject to confirmation by the High Court and to imprisonment for life under section 376 of the Indian Penal Code for committing rape on her but acquitted the other four persons who stood their trial jointly with the accused.
The murder reference and the appeal preferred by the accused against his convictions and sentences were heard 728 by a Division Bench of the High Court.
During the arguments before the High Court, counsel appearing for the accused vehemently contended that the appellant had failed to examine the glans penis of the accused regarding the presence or otherwise of smegma and also if both the doctors failed to examine the glans penis of the accused with a view to find out whether there were any injuries thereon or not, the accused was entitled to the benefit of doubt.
On this argument being raised, the learned Judges constituting the Division Bench felt that it was necessary in the interest of justice to examine the appellant who was working as Civil Surgeon, Ferozepur as in their view, the presence or absence of smegma on the glans penis of the accused was quite vital from the view point of the defence as well as from that of the prosecution.
They, therefore, summoned the appellant as a court witness and recorded his statement.
At the conclusion of the examination of the appellant, the learned Judges constituting the Bench felt that the appellant had intentionally made a false statement with a view to shield his own guilt and to help the accused.
They accordingly ordered the prosecution of the appellant under section 193 of the Indian Penal Code as stated above.
Upon hearing counsel on both sides and examining the record as well as the law bearing on the question in issue, we are satisfied that the impugned order cannot be sustained.
The only three matters regarding which the High Court appears to have thought that the appellant made a false statement are as follows: "(1) that the accused was never referred to or produced before him; (2) that he did not pressurise Dr. Mrs. L. K. Grewal 'to make the endorsement "I agree" on the copy of the medico legal report Exhibit C.W.1/1 '; and (3) that Dr. P. K. Mittal did not tell him on telephone on the 15th March, 1973 that Dr. Mrs. L. K. Grewal had shown her inability to give her opinion regarding the presence of the smegma on the glans penis of the accused.
" We shall deal seriatim with each one of the aforesaid portions of the appellant 's statement which in the opinion of the High Court are the offending portions.
Matter No. 1: Though it cannot be gainsaid that the appellant was not quite accurate in stating before the High Court that the case of the accused was not referred to him, it cannot be said that he intentionally or deliberately made a false statement in that behalf with 729 a view to shield his own guilt or to help the accused as observed by the High Court.
The words used by the appellant in answer to the question put to him by the High Court taken as a whole make it manifest that what the appellant meant to convey was that the accused was never physically produced before him.
We are fortified in this view by the material on the record which unmistakably reveals that the police never caused the appearance of the accused before the appellant at Ferozepur.
In his affidavit dated the 27th August, 1975, Harjit Singh, Head Constable, has categorically stated that it was he who along with Milkhi Ram and Bahadur Singh, Constables, took the accused on the morning of the 17th March, 1973 from Abohar to Ferozepur as he had been referred to the appellant by Dr. P. K. Mittal.
He has further affirmed that on reaching Ferozepur at about 10.00 A.M., he learnt that the appellant was away on tour; that he waited for the appellant and it was on his return from tour that he met him in his office at 6.00 P.M. with the aforesaid letter of reference given to him by Dr. P. K. Mittal; that at the time of his meeting the appellant, the accused was in the custody of the aforesaid two constables in the compound and he did not take him inside the office of the appellant and the S.H.O. Darshan Singh was not with him at the aforesaid time of his interview with the appellant.
The statement of Harjit Singh, Head Constable is fully corroborated by the following entries in the Roznamcha of the Police Station, City Abohar: "20.
Harjit Singh Arrival/Depar 17 3 73 H.C. City Abohar ture accused H.C. himself C. Bahadur Singh 589, Milkhi Ram 378 from P.S. City Abohar proceeded at 7.30 A.M. for Medical Examination by C.M.O. Ferozepur of Sh.
Bhajan Lal accused u/s 302/376 IPC Case No. 49/73 under the super vision of Sh.
Milkhi Ram.
Darshan Sing SI Departure of 3At6 20 A.M. Pro section 17 3 1973 ceeded to Feroze pur with a Lorry Vr.
No. 126268 60 for enquiry by SDM Ferozepur.
Arrival Reported back 40 18 3 19 P.M. after enquiry done by SDM Ferozepur.
730 In face of this strong documentary evidence, it is difficult for us to agree with the High Court that the appellant had intentionally made a false statement.
Re: Matter No. 2: There is also no material worth the name to justify the observations made by the High Court that the appellant had pressurised Dr. Mrs. L. K. Grewal 'to add the words "I agree" in the copy of Medico legal Report Exhibit C.W. 1/1 after the issue of notice to him. ' There was, in our opinion, absolutely no reason for the appellant to feel apprehensive so as to impel him to pressurise Dr. Mrs. L. K. Grewal to make any addition in Exhibit C.W. 1/1 in face of the aforesaid communication No. 426 dated the 15th March, 1973 which was jointly addressed to the appellant by Dr. P. K. Mittal and Dr. Mrs. L. K. Grewal.
In the said letter, there is not the slightest indication of any disagreement or conflict of opinion between Dr. P. K. Mittal and Dr. Mrs. L. K. Grewal.
The fact that there was no disagreement between the two doctors is further borne out from the absence of the words "I agree" (purporting to have been added by Dr. Mrs. L. K. Grewal) in Exhibit C.W. 1/2 as also from the absence of the following words in Exhibits C.W. 1/2 and C.W.1/1 which are copies of Exhibit C.W. 1/5: "Since I have no experience of conducting the examination of males in rape cases, I am not familiar either with the appearance or the smell of smegma.
Therefore, I cannot give any opinion whether the layer present on the glans penis is smegma or not.
Sd/ L. K. Grewal 15 3 1973.
" In view of the foregoing, it is not understandable how the question of disagreement between Dr. P. K. Mittal and Dr. Mrs. L. K. Grewal or of refusal on the part of Dr. Mrs. L. K. Grewal to give any opinion about smegma cropped up subsequently when there was not the slightest whisper about it either in the aforesaid letter dated the 15th March, 1973 jointly addressed by the said two doctors to the appellant or in Exhibits C.W. 1/1 and C.W. 1/2.
It seems that the question of disagreement between the aforesaid two doctors and of refusal on the part of Dr. Mrs. L. K. Grewal to give opinion about smegma were purposely introduced subsequently by some one other than the appellant with some oblique motive.
The remark in the above quoted letter dated the 17th March, 1973 addressed by the appellant to Dr. P. K. Mittal that the examination of smegma was unnecessary was also not without significance.
It 731 is well known in the medical world that the examination of smegma loses all importance after 24 hours of the performance of the sexual intercourse.
The following passage occurring at page 341 in Modi 's Medical Jurisprudence and Toxicology is apposite in this connection: "Presence of Smegma as Negativing Rape. 1.
In July 1921, Mt. Ramdevi aged 15 years, made a report that three young men, viz. Panchu, Dabi and Jodha had committed rape on her.
They were arrested and sent immediately to Modi for examination.
None of them had any mark of injury on their genitals or anywhere else on their bodies.
The first two had smegma on the glans penis covered by the foreskin; this proved that they could not have had sexual intercourse at least during the last twenty four hours.
The girl was also examined and found to have been used to sexual intercourse, at inasmuch as her hymen had old lacerations.
She had no mark of injury to her private parts or to any other part of her body.
The men were released.
On the 23rd February 1923, a man complained at the police station that one Dhani had committed rape on his daughter.
He was immediately arrested and sent to Modi for medical examination.
He found a uniform layer of smegma covering the glands penis, gave an opinion that he could not have had sexual intercourse during the last twenty four hours.
The man was released.
" It seems that the attention of the learned judges of the High Court was not drawn to the above quoted passage for if it had been so, they would have been spared of trouble of dwelling on the matter relating to examination of smegma after two or three days of the occurrence.
Matter No. 3: The observations made and the conclusions arrived at by the High Court in regard to this matter are also not warranted by the material on the record.
As already shown, there was no question of inability on the part of Dr. Mrs.L.K. Grewal to give her opinion regarding the presence or absence of smegma on the glans penis of the accused on the 15th March, 1973 when the aforesaid letter of the even date was written by her to the appellant jointly with Dr. P. K. Mittal.
Accordingly there was hardly any occasion for Dr. P. K. Mittal to tell the appellant on telephone on the 15th March, 1973 that Dr. Mrs. L. K. Grewal had shown her inability to give her opinion regarding the presence of smegma on the glans penis 732 of the accused, or for the appellant to verify the matter from Dr. Mrs. L. K. Grewal on telephone as suggested by Dr. P. K. Mittal in his above quoted letter dated the 18th March, 1973.
As observed earlier, the so called refusal on the part of Dr. Mrs. L. K. Grewal has been introduced by some interested party with an ulterior motive.
The High Court was also in error in adopting a negative approach to the question which it was called upon to determine.
Instead of trying to find out whether there was no prima facie case justifying the issue of notice to the appellant, it adopted a negative approach and tried to find out whether there was no prima facie case against the appellant.
This would be clear from the following observations made by the High Court at page 40 of the Paper Book: "At this stage, from the material which has been referred to above, it is difficult to hold that there is no prima facie case for coming to the conclusion that Dr. Kohli pressurised Dr. Mrs. Grewal to make the endorsement "I agree" on the copy of the medico legal report Exhibit C.D. 1/1.
" It is true that what the courts have to see before issuing the process against the accused is whether there is evidence in support of the allegations made by the complainant to justify the initiation of proceedings against the accused and not whether the evidence is sufficient to warrant his conviction, but this does not mean that the courts should not prima facie be of the opinion that there are sufficient and reasonable grounds for setting the machinery of criminal law in motion against the accused.
The moment this guiding principle is overlooked, the prosecution degenerates itself into persecution which often is fraught with evil consequences.
The language in which the above quoted observations of the High Court about the exercise of pressure by the appellant on Dr. Mrs. L. K. Grewal are couched shows that the High Court was itself not prima facie satisfied about the validity of the action that it was taking.
All this apart, the impugned order cannot be sustained for another reason.
It is now well settled that prosecution for perjury should be sanctioned by courts only in those cases where it appears to be deliberate and conscious and the conviction is reasonably probable or likely.
It is also well recognised that there must be a prima facie case of deliberate falsehood on a matter of substance and the Court should be satisfied that there is reasonable foundation for the charge.
(See Chajoo Ram vs Radhey Shyam & Anr.
In the present case, as the examination of smegma lost all importance after the lapse of 24 hours 733 of the performance of the alleged sexual intercourse as shown above, the aforesaid statement of the appellant was, in our judgment, not on a matter of substance and the appellant does not appear to have made any false statement with a mala fide intention.
In the circumstances, we do not think that any useful purpose will be served by subjecting the appellant to a lengthy vexatious and expensive trial which is not likely to end in his conviction.
For the foregoing reasons, we allow the appeal and set aside the aforesaid order of the High Court.
Before parting with the case, we would like to make a few observations with regard to the show cause notice issued to the appellant.
The said notice runs as follows: "IN THE PUNJAB AND HARYANA HIGH COURT AT CHANDIGARH Court on its own motion Criminal Misc.
No. 1755 M of 1975 Court on its own motion .
Petitioner Versus Dr. section P. Kohli, Civil Surgeon, Ferozepur .
Respondent Proceedings to show cause notice taken up by the Court on its own motion, vide order dated 30 4 1975, passed by Hon 'ble Mr. Justice B. section Dhillon and Hon 'ble Mr. Justice R. N. Mittal in Criminal Appeal No. 911 of 1974/M. Ref.
No. 46 of 1974.
Notice to : Dr. section P. Kohli, Civil Surgeon, Ferozepur.
WHILE disposing Criminal Appeal No. 911/74 and M. Ref.
No. 46 of 1974, the above proceedings have been taken up by this Court on its own motion against you for making a false statement in this Court.
NOTICE is hereby given to you that the case will be laid before this Court on 4 7 1975 (Actual date).
You are hereby directed to take the necessary steps to show cause in person or through counsel as to why proceedings under section 193 I.P.C. shall not be initiated against you: GIVEN under my hand and the seal of the Court, this 16th day of May, 1975.
By order of the High Court, Sd/ Deputy Supdt.
Criminal.
" 734 The notice besides being not happily worded is laconic.
It does not satisfy the essential requirements of law.
Nor does it specify the offending portions in the appellant 's lengthy statement which in the opinion of the High Court were false.
In cases of this nature, it is highly desirable and indeed very necessary that the portions of the witness 's statement in regard to which he has, in the opinion of the Court, perjured himself, should be specifically set out in or form annexure to the notice issued to the accused so that he is in a position to furnish adequate and proper reply in regard thereto and be able to meet the charge S.R. Appeal allowed.
| IN-Abs | In connection with the offences under Sections 302 and 376, medical opinion was sought by the Police as to (1) the nature of injuries on the person of the accused.
(2) the accused potency to perform the sexual intercourse and (3) Whether the accused had performed sexual intercourse during the last 24 28 hours, from one Dr. P. K. Mittal, Medical Officer, Nehru Municipal Hospital Abohar.
As according to the Government instructions in force at the relevant time, medico legal cases were to be examined by two doctors, Dr. P. K. Mittal examined the accused in the presence of Dr. Mrs. L. K. Grewal attached to the same hospital.
On examination of the private parts of the accused, the doctors observed the whole of the glans penis and corona of the accused covered with a thick layer of yellowish material which smelt like stigma.
They therefore advised a thorough chemical and microscopic examination of the yellowish material to find out if it was a layer of smegma or not to enable them to answer third query of the police and referred to the accused to the appellant who was posted as Chief Medical Officer, Ferozepur.
The doctors in their forwarding letter stated that they had not at all disturbed the layer so that the appellant would examine the case in its original condition and order the sample of smegma to be taken and sent for chemical examination if he felt like doing so".
The accused could be taken to Ferozepur by the police only two days later.
On going through the letter, the appellant wrote back saying that no special opinion by him was necessary and that Dr. Mittal himself could take the scrapping of the yellowish material and send the same to the chemical examiner Punjab for opinion.
The chemical examiner Punjab, as well as the Professor of Pathology, Medical College, Patiala, whose opinion was sought expressed their inability to carry out any test for smegma as they had no arrangement for the same.
The accused was convicted and sentenced to death under section 302 I.P.C. subject to confirmation of the High Court and to imprisonment for life under section 376 I.P.C. The accused in his appeal claimed benefit of doubt contending that the appellant as well as the other two doctors failed to examine the glans penis of the accused with a view to find out whether there were any injuries thereon or not.
On this argument being raised, the learned Judges constituting the Division Bench felt that it was necessary in the interest of justice to examine the appellant as a court witness.
They, therefore summoned the appellant as a court witness and recorded his statement.
At the conclusion of the examination of the appellant, the learned Judges felt that the appellant had intentionally made a false statement with a view to shield his own guilt and to help the accused.
They accordingly ordered the prosecution of the appellant under section 193 I.P.C.
Allowing the appeal by special leave the Court.
723 ^ HELD: (1) What the courts have to see before issuing the process against the accused is whether there is evidence in support of the allegations made by the complainant to justify the initiation of proceedings against the accused and not whether the evidence is sufficient to warrant his conviction, but this does not mean that the Courts should not prima facie be of the opinion that there are sufficient and reasonable grounds for setting the machinery of criminal law in motion against the accused.
The moment, this guiding principle is overlooked, the prosecution degenerates itself into prosecution which often is fought with evil consequences.
In the instant case, the language in which the observations of the High Court about the exercise of pressure by the appellant on Dr. Mrs. L. K. Grewal are couched shows that the High Court was itself not prima facie satisfied about the validity of the action that it was taking.
[732D F] (2) Prosecution for perjury should be sanctioned by courts only in those cases where it appears to be deliberate and conscious and the conviction is reasonably probable or likely.
There must be prima facie case of deliberate falsehood on a matter of substance and the court should be satisfied that there is reasonable foundation for the charge.
[732G H] In the present case, as the examination of smegma lost all importance after the lapse of the performance of the alleged sexual intercourse, the appellant 's statement was not a matter of substance and the appellant does not appear to have made any false statement with a malafide intention.
In the circumstances, no useful purpose will be served by subjecting the appellant to a lengthy, vexatious and expensive trial which is not likely to end in his conviction.
[732H, 733A B] Chajoo Ram vs Radhey Shyam & Anr.
[1971] 1 SCC p. 744 referred to.
(3) In the instance case (a) the appellant had not intentionally made a false statement.
The words used by the appellant in answer to the question put to him by the High Court taken as whole make it manifest that what the appellant meant to convey was that the accused was never physically produced before him which fact is amply proved by the strong documentary evidence viz. the affidavit of Harjit Singh Head Constable dt.
27th August, 1975 corroborated by the entries in Roznamacha of the Police Station, city Abhor of dt.
17th March, 1973.
(b) The question of disagreement between that two doctors and of refusal on the part of Dr. Mrs. L. K. Grewal to give opinion about smegma were purposely introduced subsequently by someone other than the appellant with some oblique motive and (c) It is well known in the medical world that the examination of smegma loses all importance after 24 hours of the performance of the sexual intercourse.
Non invitation of this fact to the notice of the learned Judges of the High Court has led to the error, regarding the examination of smegma after two or three days after the occurrence.
[728H, 729A D, 730G, 731A, E F] Observation: The show cause notice besides being not happily worded is laconic.
It does not satisfy the essential requirements of law.
Nor does it specify the offending portions in the appellant 's lengthy statements which in the opinion of the High Court were false.
In cases of this nature, it is highly desirable and indeed very necessary that the portions of the witness 's statement in regard to which he has, in the opinion of the Court, perjured himself, should be speci 724 fically set out in or form annexure to the notice issued to the accused so that he is in a position to furnish an adequate and proper reply in regard thereto and able to meet the charge.
[734A B]
|
ivil Appeal No. 1 770 of 1972.
Appeal by Special Leave from the Judgment and order dated 30th November, 1971 of the Orissa High Court in O.J.C. No. 48 of 1968.
P. K. Chatterjee and Rathin Dass for the Appellant.
section V. Gupte, Attorney General and G. section Chatterjee for the Respondent.
The Judgment of the Court was delivered by TULZAPURKAR, J.
The short question raised in this appeal by special leave is whether section 8(1) of the Orissa Agricultural Income Tax Act, 1947 suffers from the vice of discrimination and as such hit by article 14 of the Constitution ? The appellant is the Mahant of Emar Math at Puri, which is an ancient public Hindu Religious Trust.
The trust owns considerable endowed properties both agricultural and non agricultural.
After the passing of the Orissa Agricultural Income Tax Act, 1947 (hereinafter called 'the Act '), the appellant as a trustee has been assessed in the status of an 'individual ' under the Act for the assessment years 1948 49 to 1967 68 in respect of the income derived from agricultural lands owned by the trust.
It appears that these assessments have been made after granting the exemption under section 8(1) of the Act which provides that "any sum derived from land held under such trust and actually spent for the said purposes (charitable or 658 religious purposes) shall not be included in the total agricultural income of such assessee".
By a Writ Petition No. 48 of 1968, filed under articles 226 and 227 of the Constitution, the appellant challenged the constitutional validity of section 8(1) of the Act under which the assessments were made principally on the ground that section 8(1) was discriminatory and hit by article 14 of the Constitution inasmuch as under the said provision in respect of non Muslim public trusts created for religious or charitable purposes the exemption contemplated therein was confined to such agricultural income as was actually spent for the public purposes of charitable or religious nature while in the case of Muslim trusts (wakfs) the entire agricultural income, whether spent for charitable or religious purposes or not, was exempt from the operation of the Act under section 9 of the Act.
The contention was refuted on behalf of the respondents.
On an examination of the provisions of sections 8 and 9 in the context of the scheme of the Act the Orissa High Court negatived the said contention and dismissed the Writ Petition on November 30, 1971.
The appellant has come up in appeal to this Court.
Since counsel for the appellant raised the self same contention before us in support of the appeal it will be desirable to set out the provisions of sections 8 and 9 of the Act in order to appreciate his submissions on the point.
Section 8 runs thus: "8.
Exemption of charitable or religious trusts: (1) Where the assessee is a trustee and the trust under which he holds the property is a trust, created for public purposes of a charitable or religious nature, any sum derived from land held under such trust and actually spent for the said purposes, shall not be included in the total agricultural income of such assessee.
(2) In this section purposes of a charitable nature include relief of the poor, education, medical relief and advancement of any other object of general public utility.
" Section 9 runs thus: "9.
Exemption of Wakf alal aulad.
All agricultural income of Muslim trusts referred to in section 3 of the Musalman Wakf Validating Act, 1913, created before the commencement of this Act, shall be excluded from the operation of this Act: Provided that the share of a beneficiary under a trust under the aforesaid Act, commonly known as Wakf alal 659 aulad, shall not be exempted and the tax may be realised from the mutawali and the basis of taxation shall be the share of each beneficiary.
Explanation.
For the purposes of this section, a beneficiary means the settler, his family, children and descendants.
" Since section 9 refers to Muslim trusts 'referred to in section 3 of the Musalman Wakf Validating Act, 1913 ', it would be proper to set out the provisions of section 3 of the Musalman Wakf Validating Act, 1913.
Section 3 of that Act runs ac follows. "3.
Power of Mussalmans to create certain wakfs.
It , shall be lawful for any person professing the Mussalman faith to create a wakf which in all other respects is in accordance with the provisions of Musalman law, for the following among other purposes: (a) for the maintenance and support wholly or partially of his family, children or descendants, and (b) where the person creating a wakf is a Hanafi Mussalman, also for his own maintenance and support during his life time or for the payment of his debts out of the rents and profits of the property dedicated: Provided that the ultimate benefit is in such cases expressly or impliedly reserved for the poor or for any other purpose recognized by the Mussalman law as a religious, pious or charitable purpose of a permanent character." Mr. Mukherjee for the appellant contended that the exemption contemplated by section 8(1) of the Act is confined only to such part of the income derived from agricultural lands held under a public charitable or religious trust as is actually spent for the charitable or religious purposes while under section 9 all agricultural income of Musalman trusts (wakfs) irrespective of whether the same is spent on public purposes of charitable or religious nature or not is exempt from the operation of the Act; in other words in the matter of granting exemption between the agricultural income of two types of public trust created for charitable or religious purposes, the Act has practised hostile discrimination against agricultural income of non Muslim public trusts, the classification having no reasonable nexus with the object sought to be achieved by the statute which is to tax agricultural income derived from lands and to exempt the income so derived 660 by a public charitable or religious trust.
According to him though section 9 refers to all agricultural income of Muslim trusts "referred to in section 3 of the Musalman Wakf Validating Act, 1913, (Act VI of 1913), the wakfs contemplated by section 3 of the said Act (Act VI of 1913) include not merely Wakf alal aulad but also other wakfs where property has been permanently dedicated for any purposes recognised by the Musalman Law as religious, pious or charitable and this, he argued, becomes clear from sub clause (a) of section 3 which speaks of wakf created by a Muslim for the maintenance and support wholly or partially of his family, children or descendants; in other words, according to Mr. Mukherjee, section 9 of the Act is not confined to Muslim trusts known as wakf alal aulad but is applicable to all wakfs and, therefore, in case of wakfs other than wakf alal aulad the exemption granted by section 9 of the Act which is in respect of all agricultural income must be regarded as discriminatory as against the exemption granted by section 8(1) of the Act.
He, therefore, urged that section 8(1) which grants a limited exemption would be violative of article 14 of the Constitution.
On the other hand, the learned Attorney General appearing for the respondents contended that section 9 is confined to Muslim trusts commonly known as wakf alal aulad and all other Muslim trusts are covered by section 8(1) of the Act with the result that to all such Muslim trusts, other than wakf alal aulad, the limited exemption is applicable.
He urged that wakfs alal aulad do stand in a class by themselves and as such have been dealt with by section 9 in keeping with the objective of the Act.
He further urged that sections 8(1), 9 and 16 showed the scheme of the Act and if these provisions were considered in light of the main objective of the enactment it was clear that section 8(1) could not be held to be discriminatory or violative of article 14.
Before considering the rival contentions touching the constitutional validity of section 8(1) of the Act it would be proper to keep in mind the main objective as well as the scheme of the Act, particularly in regard to the charging provision and the provisions dealing with exemptions contained therein.
The Act, as its preamble would indicate, has been put on the Statute Book with the object of imposing a tax on agricultural income derived from lands situated in the State of Orissa.
Section 2(a) defines the expression "agricultural income" comprehensively.
The charging provision is contained in section 3 which provides that agricultural income tax at the rate or rates specified in the Schedule shall be charged for each financial year in accordance with and subject to the provisions of this Act on the total agricultural income of the previous year of every person; the proviso, however, states that no agricultural income tax shall be 661 charged on the agricultural income of the Central Government or any A State Government or any local body.
Section 5 prescribes limits of taxable income while section 6 prescribes the method and manner of determining the agricultural income of every assessee.
Then come the two material provisions dealing with exemptions, namely, sections 8 and 9 which have been reproduced above.
The other material section which deals with exemption is section 16 which provides that agricultural income tax shall not be payable by an assessee in respect of any amount actually spent by him out of his total agricultural income for the benefit of the people of the State or for charitable purposes, but this exemption is subject to the proviso that agricultural income tax shall be payable on the remainder of the total agricultural income of such assessee at the rate which would have been applicable if such deduction had not been made.
It is unnecessary to refer to other provisions as they are not material for our purposes.
The scheme if the Act, as disclosed by the aforesaid provision, is that under the charging provision agricultural income tax is levied on the total agricultural income of the previous year of every assessee subject to the exemptions which have been provided for under sections 8, 9 and 16.
It is also clear that whereas the exemption in regard to the amount actually spent for charitable purposes under section 8(1) is in relation to the agricultural income of a public charitable trust, the exemption of similar nature and extent contemplated by section 16 is in regard to the agricultural income of any assessee who may not be a trustee owing lands under a public charitable trust; in other words, in either case the exemption is confined to such part of the agricultural income which is actually spent by the assessee for charitable purposes.
The legislative intent of granting such a limited exemption having been thus clearly brought out by sections 88(1) and 16 of the Act, the question would be whether by enacting section 9 the Legislature really intended to accord or has actually accorded favourable treatment to Muslim trusts in the matter of granting exemption in the manner suggested by counsel for the appellant ? Having regard to the submissions made by counsel for the appellant the question raised for determination may be formulated thus: Whether sections 8 and 9 while providing for exemption to charitable or religious trusts discriminate between agricultural income derived from lands held under non Muslim public trusts and those held under Muslim trusts and accord to the latter a favourable treatment as against the former by confining the exemption in the former case to such income as has been actually spent for public purposes of charitable or religious nature ? In other words is section 8(1) which confers a limited exemption as compared to section 9 hit by article 14 ? It 662 has not been disputed before us that Muslim trusts known as Wakf alal aulad constitute a distinct class from other types of wakfs but the discrimination complained of is founded upon plea that section 9 of the Act covers all Musalman wakfs and not merely wakfs known as the Wakf alal aulad and, therefore, it will be necessary to examine the provisions of section 9 in order to ascertain whether the plea that it covers all Musalman wakfs is warranted or not.
Section 9 in terms says that the exemption thereunder is confined to Muslim trusts "referred to in section 3 of the Musalman Wakf Validating Act, 1913" and the question is what wakfs are referred in section 3 of the Musalman Wakf Validating Act, 1913 (hereinafter called 'the Validating Act ').
The Validating Act, as we shall indicate presently, was enacted only for the purpose of validating wakfs in the nature of wakf alal aulad: As has been pointed out by this Court in Fazlul Rabbi Pradhan vs State of West Bengal and others,(1) wakfs (which were primarily family settlements in which the benefits to charity or religion were either illusory or postponed indefinitely while the property so dedicated was being enjoyed from generation to generation by the family of the wakf were regarded as opposed to the rule against perpetuity as contained in the Indian Succession Act and the Transfer of Property Act.
The leading decision of the Privy Council in that behalf rendered in Abul Fata Mahomed Ishak and others vs Russomoy Dhur Chowdhery and others,(2) caused considerable dissatisfaction in the Muslim community in India resulting in a representation being made to the Government of India and consequently the Validating Act came to be enacted with the primary Object of removing the difficulties created by that decision.
The preamble of the Act makes this very clear.
Section 3 declares the right of a person professing Musalman faith to create a wakf (which in all other respects is in accordance with the provisions of Musalman law) for the maintenance and support wholly or partially of his family, children or descendants and in the case of a Hanafi Mussalman also for his own maintenance and support during the life time or for payment of his debts out of the rents of the property dedicated provided that the ultimate benefit is in such cases expressly or impliedly reserved for the poor or for any other purpose recognised by the Musalman law as a religious, pious or charitable purpose of a permanent character.
Section 4 also declares that no such wakf as is referred to in section 3 shall be deemed to be invalid merely because of remoteness of benefit to charity.
In fact, section 3 s declaratory of a right of a Muslim to (1) A. I. R. (2) 22 Indian Appeals 76.
663 create a valid wakf of the type described therein and the proviso makes it clear that but for the reservation of ultimate benefit to charity that has to be made, such family settlement (private wakfs) would be invalid.
It is conceivable that a deed or instrument of wakf may be a composite one, partly incorporating public wakf and partly private wakf but section 3 of the Validating Act unquestionably refers to that part of the instrument which incorporates a private n wakf wakf alal aulad, the vaildity of which must depend upon whether in that part of the instrument the ultimate benefit is expressly or impliedly reserved for charitable or religious purposes or not.
It is thus clear that section 3 of the Validating Act refers only to Muslim trusts which are in the nature of wakf alal aulad.
The exemption in section 9 of the Act, therefore, clearly applies only to Muslim trusts which are in the nature of wakf alal aulad.
This is also clear from the marginal note to section 9 as well as the proviso to the section.
If that be so then all other wakfs would squarely fall under section 8(1) and to all such wakfs the limited exemption contemplated therein would apply.
Even if the instrument of wakf is a composite one partly incorporating a public wakf and partly a private wakf that part which deals with public wakf will fall under section 8(1) and the other part will be covered by section 9, for, the language d section 8(1) is wide enough to include such a deed to the extent that it incorporates a public wakf.
In other words, Muslim trusts i.e. wakfs other than wakf alal aulad would be covered by section (8) (1) and to such wakfs the limited exemption contemplated by section 8(1) would apply.
If that be so, the gravamen of complaint that all wakfs (Muslim trusts) other than wakf alal aulad are receiving favourable treatment as against non Muslim public charitable trusts must fall to the ground.
As regards Muslim trusts which are in the nature of wakf alal aulad which alone are covered by section 9, the proviso clearly shows that the share of the beneficiary under such a trust far from being exempted is brought to tax and the tax is made realisable from the mutawali and read with the proviso the main provision really confines the benefit or exemption only to ultimate illusory or remote public charitable or religious purpose and is thus completely consistent with the object and scheme of the Act.
In the result, we are clearly of the view that section 8(1) of the Act is free from the vice of discrimination under article 14 of the Constitution and the said provision is perfectly valid and constitutional.
The appeal is.
therefore, dismissed with costs.
S.R. Appeal dismissed.
| IN-Abs | The appellant is the Mahant of Emhar Math of Puri which is an ancient Public Hindu Religious Trust.
Being a trustee, the appellant has been assessed in the status of an "individual" under the Orissa Agricultural Income Tax Act, 1947 for the assessment years 1948 49 to 1967 68 in respect of the income derived from agricultural lands owned by the trust.
These assessments were made after granting the exemption under section 8(1) of the Act which provides that "any sum derived from land held under such trust and actually spent for the said purpose (charitable or religious purposes) shall not be included in the total agricultural income of such assessee.
" The appellant challenged the constitutional validity of section 8 (1) of the Act under which the assessments were made principally on the ground that section 8(1) was discriminatory and hit by article 14 of the Constitution, in as much as under the said provision, in respect of non public muslim trusts created for religious or charitable purposes the exemption contemplated therein was con fined to such agricultural income or was actually spent for the public purposes of charitable or religious nature, while in the case of muslim trusts (Waqfs) the entire agricultural income whether spent for charitable or religious purpose or not, was exempt from the operation of the Act under section 9 of the Act.
The Orissa High Court, negatived the said contention on an examination of the provisions of Sections 8 and 9 in the context of the scheme of the Act and dismissed the Writ Petition.
Dismissing the appeal by special leave the Court.
^ HELD: ( 1 ) section 8 ( 1 ) of the Orissa Agricultural Income tax Act, 1 947 is free from the vice of discrimination under article 14 of the Constitution and the said provision is perfectly valid and constitutional.
[663 G Hl (2) The scheme of the Act is that under the charging provision agricultural income tax is levied on the total agricultural income of the previous year of every assessee subject to the exemption which have been provided for under Sections 8, 9 and 16.
[661 C D] The legislative intent of granting of limited exemption is brought out by Sections 8(1) and 16 of the Act.
Whereas exemption in regard to the amount actually spent for charitable purposes under section 8(1) is in relation to the agricultural income of a public charitable trust, the exemption of similar nature and extent contemplated by section 16 is in regard to the agricultural income of any assessee who may not be a trustee owning lands under a public charitable trust, in other words, in either case, the exemption is confined to such part of the agricultural income which is actually spent.
by the assessee f. charitable purposes.
[661 D E] 657 (3) Section 9 of the Act, in terms, says that the exemption thereunder is confined to Muslim Trusts "referred to in section 3 of the Musalman Waqf Validating Act, 1913".
section 3 of the Validating Act refers only to muslim trusts which are in the nature of Waqf alal aulad.
The exemption in section 9 of the Act, therefore clearly applies only to Muslim Trusts which are in the nature of Waqf alal aulad.
The marginal note to section 9 as well as the proviso to the section make this clear.
[662 B, 633 B C] If that be so, then all muslim trusts other than Waqf alal aulad squarely fall under section 8 ( I ) and to all such waqfs the limited exemption contemplated therein would apply.
If that be so, the gravamen of complaint that all waqfs (Muslim Trusts) other than waqf alal aulad are receiving favourable treatment as against non Muslim public charitable trusts must fall to the ground.
[663 C, E] As regards Muslim trusts which are in the nature of waqf alal aulad which alone are covered by section 9 the proviso clearly shows that the share of the beneficiary under such a trust far from being exempted is brought tb tax and the tax is made realisable from the mutawali and read with the proviso the main provision really confines the benefit of exemption only to ultimate illusory or remote public charitable or religious purpose an(l is thus completely consistent with the object and scheme of the Act.
[663 F G] Fazlul Rabbi Pradhan vs State of West Bengal & ors ; , applied.
|
Civil Appeal No. 1001 Of 1977.
Appeal by Special Leave from the Judgment and order dated 24 2 77 of the Bombay High Court in Sales Tax Reference No. 28 of 1975.
Hemendra K. Shah, M. H. Gami, P. H. Parekh, C. B. Singh and M. Mudgal for the Appellant.
section T. Desai and M. N.Shroff for the Respondent.
The Judgment of the Court was delivered by BHAGWATI, J.
This appeal by special leave raises the vexed question whether a particular contract is a contract of sale or a con tract of work and labour.
This has always been a difficult question, because most of the cases which come before the courts are border line cases and the decisions given by courts are by no means uniform.
But so far as the present case is concerned, it does not present any serious difficulty and is comparatively free from complexity or doubt for there is a decision of this Court which is directly applicable and is determinative of the controversy between the parties.
The assesses who is the appellant before us is a private limited company carrying on business as engineers, contractors, manufacturers and fabricators and in the course of its business, it entered in to a contract dated 28th June, 1972 with M/s C. M. Shah & Co. (P) Ltd. (hereinafter referred to as the Company) for fabrication, supply, 647 erection and installation of Sentinel 's Pull and Push type and reduction Gear type rolling Shutters in sheds Nos. 3 and 4 of the Sidheswar Sahakari Sakar Karkhana belonging to the Company.
The detailed specifications of the Rolling Shutters were given in the contract and the price was stipulated to be Rs. 7/ per sq.
ft. and rft.
for Pull and Push Type Rolling Shutters and Rs. 9/ per sq.
ft. and rft.
for the Reduction Gear Type Rolling Shutters, the price in both cases being inclusive of "erection at site".
The contract was expressed to be subject to the terms and conditions set out in a printed form and there were also certain special terms and conditions which were specifically written out in the contract.
Since considerable reliance was placed on behalf of the Revenue on some of the printed terms and conditions of the contract, we shall set them out in extenso: "2.
Once the delivery of the goods is effected, rejection claims cannot be entertained.
All erection work shall be carried out at Customer 's own risk and no claim for incidental structural breakages, damages to the property of the customers or others shall be entertained.
All masonry works require before and or after erection shall be carried out by customer 's own cost.
All payment shall be on overall measurements only.
Customer desiring to check the correctness of the overall measurements shall notify their intention in advance and shall get the measurements checked before installation.
No dispute on this ground shall be entertained once the erection is completed.
Terms of Business: 50% advance with the order and the balance against delivery of the goods ex work prior t erection, or against through Banks.
" The special terms and conditions provided that the actual transportation charges would be in addition to the price stipulated in the con tract and the delivery would be 6/8 weeks ex works from the date of receipt of the final confirmation of the order.
The terms of payment also formed part of the special terms and conditions and they provided "25% advance, 65% against delivery and remaining 10% after completion of erection and handing over of shutters to the satisfaction" of the Company.
The assesses carried out its part of the contract and manufactured the two types of Rolling Shutters according to the specifications provided in the contract and erected and 648 installed them in sheds Nos. 3 and 4 of the Sidheswar Sahakari Sakar Karkhana.
It does not appear from the record as to when the bill relating to the contract was submitted by the assesses to the Company, but it was dated 19th August 1972 and presumably it was sent by the assessee after the fabrication of the two types of Rolling Shutters was completed, but before they were erected and installed at the premises of the Company.
Since the assessee entertained doubt as to whether the contract was a contract for sale or a contract for work and labour, the assessee made an application dated 16th September 1972 to the Commissioner of Sales Tax for determining this question, for on the answer to it depended the taxability of the amount to be received by the assessee against fulfilment of the contract.
The deputy Commissioner of Sales Tax, who heard the application, took the view that the contract was a contract for sale of the two types of Rolling Shutters and the work of erection and installation was merely incidental to the sale and the assessee was, therefore, liable to pay sales tax on 95% of the amount receivable by it under the contract, since that represented the sale price of the Rolling Shutters, the remaining 5% being attributable to the work and labour involved in erection and installation.
The assessee, being aggrieved by the order passed by the Deputy Commissioner of Sales Tax, preferred an appeal to the Sales Tax Tribunal, but the Sales Tax Tribunal also took the same view and held that the transaction of supply of the two types of Rolling Shutters embodied in the contract amounted to a sale but so far as the price was concerned, the Sales Tax Tribunal observed that since 90% of the amount under the contract was payable at the stage of delivery, that should be taken to be the sale price and the balance of 10% should be held to be "the charges for the work".
The contract was thus held by the Sales Tax Tribunal to be a composite contract consisting of two parts, one for sale of the two types of Rolling Shutters and the other for execution of the work of erection and installation.
This led to an application for a reference by the assessee and on the application, the following question of law was referred for the opinion of the High Court: "Whether having regard to the facts and circumstances of the case the Tribunal was justified in law in coming to the conclusion that the contract in question essentially consisted of two contracts, one for supply of materials for money consideration and the other for service and labour done.
" The High Court made a detailed and exhaustive review of the decided cases and held, agreeing with the Sales Tax Tribunal, that the con tract between the assesses and the Company "was a divisible con 649 tract which essentially consisted of two contracts, one for the supply A of shutters of the aforesaid two types for money and the other for service and labour", and accordingly answered the question in favour of the Revenue and against the assesses.
The assesses thereupon brought the present appeal with special leave obtained from this Court.
Now the question whether a particular contract is a contract for sale or for work and labour is always a difficult question and it is not surprising to find the taxing authorities divided on it.
The difficulty, however, lies not in the formulation of the tests for determining when a contract can be said to be a contract for sale or a contract ' for work and layout, but in the application of the tests to the facts of the case before the Court.
The distinction between a contract for sale and a contract for work and labour has been pointed out by this Court in a number of decisions and some tests have also been indicated by this Court, but it is necessary to point out that these tests are not exhaustive and do not lay down any rigid or inflexible rule applicable D alike to all transactions.
They do not give any magic formula by the application of which we can say in every case whether a contract is a contract for sale or a contract for work and labour.
I`hey merely focus on one or the other aspect of the transaction and afford some guidance in determining the question, but basically and primarily, whether a particular contract is one for sale of goods or for work and labour depends upon the main object of the parties gathered from the terms of the contract, the circumstances of the transaction and the custom of the trade.
It may be pointed out that a contract where not only work is to be done but the execution of such work requires goods to be used may take one of three forms.
The contract may be for work to be done for remuneration and for supply of materials used in the execution of the work for a price: it May be a contract for work in which the use of materials is necessary or incidental to the execution of the work; or it may be a contract for supply of goods where some work is required to be done as incidental to the sale.
Where a contract is of the first type, it is a composite contract consisting essentially of two contracts, one for the sale of goods and the other for work and labour.
The second type of contract is clearly a contract for work and labour not involving sale of goods, while the third type is a contract for sale where the goods are sold as chattels and some work is undoubtedly done, but it is done only as incidental to the sale.
No difficulty arises where a contract is of the first type because it is 650 divisible and the contract for sale can be separated from the con tract for work and labour and the amount payable under the compo site contract can be apportioned between the two.
The real difficulty arises where the contract is of the second or third type, because in such a case it is always a difficult and intriguing problem to decide n in which category the contract falls.
The dividing line between the two types of contracts is some what hazy and "thin partitions do their bounds divide".
But even so the distinction is there and it is very much real and the Court has to perform at times the ingenious exercise of distinguishing one from the other.
The distinction between a contract for sale and a contract for work and labour has been pointed out in Halsbury 's Laws of England Third Edition, Volume 34, Article 3 at page 6 in the following words: "A contract of sale is a contract whose main object is the transfer of the property in, and the delivery of the possession of, a chattel as a chattel to the buyer.
Where the main object of work undertaken by the payee of the price is not the transfer of a chattel qua chattel, the contract is one for work and labour.
The test is whether or not the work and labour bestowed end in anything that can properly become the subject of sale: neither the ownership of the materials, nor the value of the skill and labour as com pared with the value of the materials is conclusive, although such matters may be taken into consideration in determining, in the circumstances of a particular case, whether the contract is in substance one for work and labour or one for the sale of a chattel.
" The primary test is whether the contract is one whose main object is transfer of property in a chattel as a chattel to the buyer, though some work may be required to be done under the contract as ancillary or incidental to the sale or it is carrying out of work by bestowal of labour and service and materials are used in execution of such work.
A clear case of the former category would be a contract for supply of airconditioner where the contract may provide that the supplier will fix up the airconditioner in the premises.
Ordinarily a separate charge is provided in such contract for the work of fixing up but in a given case it may be included in the total price.
Such a contract would plainly be a contract for sale because the work of fixing up the airconditioner would be incidental to the sale.
Then take a contract for constructing a building where considerable quantity of materials are required to be used in the execution of the work.
This 651 would clearly be a contract for work and labour and fall within the latter category.
But, as we pointed out earlier, there may be, and indeed as the decided cases show, there are a large number of cases which are on the border line and it is here that difficulty is often experienced in the application of this primary test.
To resolve this difficulty, the courts have evolved some subsidiary tests.
One such test is that formulated by this Court in Commissioner of Madhya Pradesh vs Purshottam Prentji(1), where it has been said: "The primary difference between a contract for work or service and a contract for sale of goods is that in the former there is in the person performing work or rendering service no property in the thing produced as a whole.
In the case of a contract for sale, the thing produced as a whole has individual existence as the sole property of the party who produced it, at some time before delivery, and the property therein passes only under the contract relating thereto to the other party for price.
" This was the test applied by this Court in the State of Rajasthan vs Man Industrial Corporation(2) for holding that a contract for providing and fixing four different types of windows of certain size according to "specifications, designs, drawings and instructions" set out in the contract was a contract for work and labour and not a contract for sale.
This Court, speaking through Shah, J., analysed the nature of the contract and pointed out: "The contract undertaken by the respondent was to prepare the window leaves according to the specifications and to fix them to the building.
There were not two contracts on.
, of sale and another of service.
"Fixing" the windows to the building was also not incidental or subsidiary to the sale, but was an essential term of the contract.
The window leaves did not pass to the Union of India under the terms of the contract as window leaves.
Only on the fixing of the windows as stipulated, the contract could be fully executed and the property in the windows passed on the completion of the work and not before.
" The contract was not for transfer of property in the window leaves as window leaves.
It was a contract for providing and fixing windows and windows could come into existence only when the window leaves were fixed to the building by bestowing labour and skill.
It was, therefore, held to be a works contract.
The same reasoning was applied by this Court in State of Rajasthan vs Nenu Ram(3) for holding that a contract for supply and (1) 26 S.T.C. 38 (2) [1969] 24 S.T.C. 349 (S.C.) (3) 26 S.T.C. 268 652 fixing of wooden doors and windows with sashes and frames and wooden chawkhats in the Police Lines building was a contract for work and labour.
Let us, therefore, apply this test in order to deter mine what is the nature of the contract in the present case: is it a contract for sale or a contract for work and labour ? Now, it is clear that the contract is for fabrication, supply, erection and installation of two types of Rolling Shutters and not only are the Rolling Shutters to be manufactured according to the specifications, designs, drawings and instructions provided in the contract, but they are also to be erected and installed at the premises of the Company.
The price stipulated in the contract is inclusive of erection and installation charges and the contract does not recognise any dichotomy between fabrication and supply of the Rolling Shutters and their erection and installation so far as the price is concerned.
The erection and installation or the Rolling Shutters is as much an essential part of the contract as the fabrication and supply and it is only on the erection and installation of the Rolling Shutters that the contract would be fully executed.
It is necessary, in order to understand the true nature of the contract, to know what is a Rolling Shutter and how it is erected and installed in the premises.
It is clear from the statement exhibit to the petition for special leave, which statement was submitted before the Sales Tax Tribunal and the correctness of which was at no time disputed before us, that a Rolling Shutter consists of five components parts.
namely, two brackets welded with 'U ' type clamps, one pipe shafting with high tension springs Shutter screen made out of 20G/18G thickness of metal as required by the customer, side guides or guide channels welded with iron clamps to the bottom with provision of locking arrangements with welded handles and tope cover.
These component parts are fabricated by the manufacturer and taken to the site and fixed on the premises and then comes into existence a Rolling Shutter as an identifiable commercial article.
The method of fixing the component parts in position in the premises so as to bring into existence the commercial article known as a Rolling Shutter is fully described in the statement Ext.
C. First of all, certain masonry work is required to be done by the customer and that has to be carried out by the customer at his own cost.
Then the brackets are fixed on either side on the top portion of the opening by grouting holes on the masonry walls and inserting the bolts.
Thereafter the holes are filled with cement and the pipe shafting with high tension springs is inserted into the 'U ' clamps of the brackets.
Then the iron curtain of the Rolling Shutter is hoisted over the high tension springs and tightened by means of nut bolts and guide channels are then fixed 653 by grouting masonry walls where side guide clamps are to be fixed After fixing the clamps to the grouted portion of the wall, the same is plastered and then the iron curtain of the shutter is lowered through the guide channels to operate the shutter manually up and down.
The Rolling Shutter is then 'born ' and it becomes a permanent fixture to the premises.
The Indian Standards Specification Book for Metal Rolling Shutter and Rolling Grills also gives a similar procedure for fixing the component parts of the Rolling Shutter on the premises It clearly shows that a rolling shutter consists of curtain, lock plates, guide channels, bracket plates, rollers, hood covers, gears, worms, fixing bolts, safety devices, anchoring rods, central hasp and staple.
Each guide channel has to be provided with a minimum of three fixing cleats or supports for attachment to the walls or column by means of bolts or screws.
The guide channels are further attached to the jambs, plumb either in the overlapping fashion, projecting fashion or embedded in grooves, depending on the method of fixing.
All these operations take place at the site after despatch of the component parts of the rolling shutter.
Hood cover is fixed in a neat manner and supported at the top at suitable intervals.
This also has to be done at the site.
Item 11.1 of the specifications shows that the rolling shutter curtain and bottom lock plate are interlocked together and rolled in one piece, but the other parts like guide channels, bracket plates, rollers, etc., are despatched separately.
Item ]2.] shows that all the rolling shutters are erected by the manufacturer or his authorised representative in a sound manner, so as to afford trouble free and easy operation, long life and neat appearance".
It will, thus, be seen that the component parts do not constitute a rolling shutter until they are fixed and erected on the premises.
It is only when the components are fixed on the premises and fitted into one another that they constitute a rolling shutter as a commercial article and till then they are merely component parts and cannot be said to constitute a rolling shutter.
The erection and installation of the rolling shutter cannot, therefore, be said to be incidental to its manufacture and supply.
It is a fundamental and integral part of the contract because without it the rolling shutter does not come into being.
The manufacturer would undoubtedly be the owner of the component parts when he fabricates them, but at no stage does he become the owner of the rolling shutter as a unit so as to transfer the property in it to the customer.
The rolling shutter comes into existence as a unit when the component parts are fixed in position on the premises and it becomes the property of the customer as soon as it comes into being.
There is no transfer of property in the rolling shutter by the manufacturer to the customer as a chattel.
It is 654 essentially a transaction for fabricating component parts and fixing them on the premises so as to constitute a rolling shutter.
The contract is thus clearly and indisputably a contract for work and labour and not a contract for sale.
The Revenue leaned heavily on the provision in the contract that the delivery of the goods shall be ex works and once the delivery of the goods is effected, no claim for rejection shall be entertained and relying on this provision, the Revenue contended that under the contract the rolling shutters were to be delivered by the assessee to the company ex works, that is, at the works of the assessee and the property in the rolling shutters passed to the company as soon as they were delivered and hence it was a contract for sale.
We do not think this contention of the Revenue has any force and it must be rejected.
It is clear from the above discussion that a rolling shutter as a complete unit is not fabricated by the manufacturer in his factory but he manufactures only the component parts and it is only when the component parts are fitted into position and fixed on the premises that a rolling shutter comes into being as a commercial article and, therefore, when the contract provides that the delivery of the goods shall be ex works, what is obviously meant is that the component parts shall be delivered to the company at the works of the assessee and once they are delivered, they shall not be liable to be rejected by the company.
But that does not mean that as soon as the component parts are delivered to the company, the contract is Fully executed.
The component parts do not constitute a rolling shutter and it is the obligation of the assessee under the contract to fix the component parts in position on the premises and erect and instal a rolling shutter.
The execution of the contract is not completed until the assessee carries out this obligation imposed upon it under the contract and a rolling shutter is erected and installed at the premises.
It is true that clause (12) of the printed terms and conditions provides that 50% of The amount under the contract shall be paid as advance and the balance against delivery of the goods ex works but this clause is clearly overridden by the special term specifically written out in the contract that 25% of the amount shall be paid by way of advance, 65% against delivery and the remaining 10% after completion of erection and handing over of the rolling shutters to the satisfaction of the company.
This provision undoubtedly stipulates that 90% of the amount due under the contract would be paid before erection and installation of the rolling shutters has commenced, but that would not make it a contract for sale of rolling shutters.
The true nature of the contract cannot depend on the mode of payment of the amount provided in the contract.
The parties may provide by mutual agreement that the 655 amount stipulated in the contract may be paid at different stages of the execution of the contract, but that cannot make the contract one for sale of goods if it is otherwise a contract for work and labour.
It may be noted that the contract in State of Madras vs Richardson & Cruddas Ltd.(1) contained a provision that the full amount due under the contract shall be paid in advance even before the execution of the B, work has started and yet the Madras High Court held, and that view was affirmed by this Court, that the contract was a works contract.
The payment of the amount due under the contract may be spread over the entire period of the execution of the contract with a view either to put the manufacturer or contractor in possession of funds for the execution of the contract or to secure him against any risk of non payment by the customer.
That cannot have any bearing on the determination of the question whether the contract is one for sale or for work and labour.
Here the last portion of the special term in regard to payment of the amount due under the contract also makes it clear that it is only when the component parts are fitted into position in the premises that t a rolling shutter would be complete and this rolling shutter has to ii be to the satisfaction of the company and it is then to be handed over by the assessee to the company and then, and then alone, would the remaining 10% be payable by the company to the assessee.
It is, therefore, clear that the contract is one single and indivisible contract and the erection and installation of the rolling shutter is as much a fundamental part of the contract as the fabrication and supply.
We 'j must, in the circumstances,.hold, driven by the compulsion of this logic, that the contract was a contract for work and labour and not a contract for sale.
This view which we are taking is completely sup ported by the decision of this Court in Vanguard Rolling Shutters & Steel Works vs Commissioner of Sales Tax, U.P.(2) to which one of us (Bhagwati, J.) was a party.
We accordingly allow the appeal, set aside the judgment of the High Court and hold that the contract in the present case was a con tract for work and labour and not a contract for sale and conformably G with this view, we answer the question referred by the Sales Tax Tribunal in favour of the assessee and against the Revenue.
The State will pay the costs of the assessee throughout.
S.R. Appeal allowed.
(1) 21 S.T.C. 245.
(2) 39 S.T.C. 372.
| IN-Abs | The appellant assessee entered into a contract dated 28th June, 1972 for fabrication, supply erection and installation of Sentinel 's Pull and Push type and Reduction Gear type rolling shutters in sheds Nos. 3 and 4 of the Sidheshwar Sahakari Sakar Karkhana belonging to M/s. C. M. Shah & Co. (P) Ltd as per the terms and conditions of the contract.
The special terms and conditions provided that the actual transportation charges would be in addition to the price stipulated in the contract and the delivery would be 6/8 weeks, ex works from the date of receipt of the final confirmation of the order.
The terms of payment also formed part of the special terms an(l conditions and they provided 25% advance, 65% against delivery and remaining 10% after completion of erection and handing over of shutters to the satisfaction of the company.
The assessee carried out its part of the contract by erecting and installing the rolling shutters.
Since the assessee entertained doubt as to whether the contract was a contract for sale or a contract for work and labour, the assessee made an application dated 16 9 72 to the Commissioner of Sales Tax for determining this question.
The Deputy Commissioner of Sales Tax took the view that the contract was a contract for sale of rolling shutters and the work of erection and installation was merely incidental to the sale and the assessee was therefore liable to pay sales tax on 95% of the amount receivable by it under the contract.
In appeal the Sales Tax Tribunal held the contract to be a composite contract consisting of two parts, one for sale of the rolling shutters and the other for execution of the work of erection and installation.
The High Court on a reference agreed with the tribunal and answered it in favour of the Revenue.
Allowing the appeal by special leave the Court ^ HELD: ( 1 ) The contract was a contract for work and labour and not a contract of sale.
The contract is one single and indivisible contract and the erection and installation of the rolling shutter is as much a fundamental part of the contract as the fabrication and supply.
[655 D E] Vanguard Rolling Shutters & Steel Works vs Commissioner of Sales Tax, U.P. 39 STC 372 applied.
Various component parts do not constitute a rolling shutter until they are fixed and erected on the premises.
It is only when the component parts are fixed on the premises and fitted into one another that they constitute a rolling shutter as a commercial article and till then they are merely component parts and cannot be said to constitute a rolling shutter.
The erection and installation of the rolling shutter cannot, therefore, be said to be incidental to its manufacture and supply.
It is a fundamental and integral part of the contract because without it the rolling shutter does not come into being.
The manufacturer would undoubtedly be the owner of the component parts When he fabricates them, but at no stage does he become the owner of the 645 rolling shutter as a unit so as to transfer the property in it to the customer.
The rolling shutter comes into existence as a unit when the component parts are fixed in position on the premises and it, becomes the property of the customer as soon as it comes into being.
There is no, transfer of property in the rolling shutter by the manufacturer to the customer as a chattel.
It is essentially a transaction for fabricating component parts and fixing them on the premises so as to constitute a rolling shutter.
The contract is thus clearly and indisputably a contract for work and labour and not a contract for sale.
[653 H, 654 A] (2) Whether a particular contract is one for sale of goods or for work and labour depends upon the main object of the parties gathered from the terms of the contract, the circumstances of the transaction and the custom of the trade.
[649 D E] (3) A contract where not only work is to be done but the execution of such work requires goods to be used may take one of three forms.
The contract may be for work to be done for remuneration and for supply of materials used in the execution of the work for a price: it may be a contract for work in which the use of materials is accessory or incidental to the execution or the work; or it may be a contract for supply of goods where some work is required to be done as incidental to the sale.
Where a contract is of the first type, it is a composite contract consisting essentially of two contracts, one for the sale of goods and the other for work and labour.
The second type of contract is clearly a contract for work and labour not involving sale of goods.
while the third type is a, contract for sale where the goods re sold as chattels and some work is undoubtedly done, but it is done only as incidental to the sale.
The primary test is whether the contract is one whose main object is transfer of property in a chattel as a, chattel to the buyer, though some work may be required to be done under the contract as ancillary or incidental to the sale or it is carrying out of work by bestowal of labour and service and materials are used in execution of such work.
[649 F H, 650 F G] (4), To resolve the difficulties experienced in application of the primary test courts have evolved some subsidiary tests.
one such test may be formulated as follows: "The primary difference between a contract for work or service and a contract for sale of goods is that in former there is in the person performing work or rendering service no property in tho thing produced as a whole .
In the case of a contract for sale, the thing produced as a whole has individual existence as the sole property of the party who produced it, at some time before delivery, and the property therein passes only under the contract relating thereto to the other party for price".
[651 B C] Commissioner of Madhya Pradesh vs Purushottam Premji 26 S.T.C. 38; State of Rajasthan vs Man Industrial Corporation, 24 S.T.C. 349; State of Rajasthan vs Nenu Ram, 26 STC 268; referred to.
(5) The provision "ex works delivery" in the contract does not make the contract a contract for sale.
A rolling shutter as a complete unit is not fabricated by the manufactures in his factory but he manufactures only the component parts and it is only when the component parts are fitted into position and fixed on the premises that a rolling shutter comes into being as a commercial article and, therefore, when the contract provides that the delivery af the goods shall be ex works, what is obviously meant is that the com 646 ponent parts shall be delivered to the company at the works of the assessee and once they are delivered, they shall not be liable to be rejected by the company.
But that does not mean that as soon as the component parts are delivered to the company, the contract is fully executed.
The component parts do not constitute a rolling shutter and it is the obligation of the assessee under the contract to fix.
the component parts in position on the premises.
and erect and instal a rolling shutter.
The execution of the contract is not completed until the assessee carried out this obligation imposed upon it under the contract and a rolling shutter is erected and installed at the premises.
[654 C F] (6) The true nature of The contract cannot depend on the mode of payment of the amount provided in the contract.
The parties may provide by mutual agreement that the amount stipulated in the contract may be paid at different stages of the execution of the contract, but that cannot make the contract one for sale of goods if it is otherwise a contract for work and labour.
The payment of the amount due under the contract may be spread over the entire period of the execution of the contract with view either to put the manufacturer or contractor in possession of funds for the execution of the contract or to secure him against any risk of non payment by the customer.
That cannot have any bearing on the determination of the question whether the contract is one for sale or for work and labour.
[654 H, 655 A C] State of Madras vs Richardson & Cruddes Ltd., 21 STC 245 referred to.
|
Civil Appeal Nos. 12 and 865 1978.
From the Judgment and order dated 19 12 77 of the Kerala High Court in Eloction Petition No. 16 of 1977.
F. section Nariman, section Narayanan Poti, J. B. Dadachanji and K. J. John for the Appellant, (In CA 12 and Respondent in C.A. 865/ 78) .
Y. section Chitale and N. Sudhakaran for the Respondent (In C.A. 12 and Appellant in C.A. 865/78).
The Judgment of the Court was delivered by FAZAL ALI, J.
This election appeal is directed against the order of the High Court of Kerala dated 19th December, 1977 by which the election of the appellant Haji C. H. Mohammad Koya has been set aside and he has been disqualified from taking part in the elections for a period of six years under the provisions of the Representation of the People Act, 1951 (hereinafter called the Act).
For the purpose of brevity we shall refer to the respondent petitioner as the Petitioner and Haji C. H. Mohammad Koya as the appellant.
668 In the general election held to the Legislative Assembly of Kerala on 20th March, 1977 the petitioner and the appellant were the contesting candidates from No. 34 Malappuram Constituency.
The counting of votes took place on the 20th March, 1977 and The appellant was declared elected on the same date.
The total votes polled were 56,276.
The appellant secured 39,362 votes and thus defeated the petitioner by a margin of 20,000 votes.
Aggrieved by the election results, the petitioner filed an election petition in the High Court alleging that the appellant had committed various corrupt practice falling within the ambit of sections 123(3), (3A) and (4) of the Act.
It was mainly alleged that before the elections, the appellant was the Chief Editor of a Malayalam daily paper called Chandrika which was the official organ of the Muslim League.
It is further alleged by the petitioner that the appellant held shares worth Rs 3 lakhs in the Printing and Publishing Company which published Chandrika.
This paper, according to the petitioner, contains several articles, extracts of speeches and cartoons which tended to ask the Muslims to vote for the appellant on religious and communal grounds and also promoted ill will and hatred between two classes of citizens, namely, the Janasangh and the Muslim League.
It appears, however, that at the hearing the petitioner confined is case only to the corrupt practices alleged by him under section 123(3A) of the Act In this connection, the learned Judge of the High Court observed as follows: "Though in the petition sub sections 3.
3A and 4 of section 123 of the Act are specifically referred to, from the evidence tendered in the case it would appear that applicability of sub section 3A of section l 23 alone falls for the decision".
The petition was contested by the appellant who filed a counter affidavit denying the assertions and averments made by the petitioner and took the stand that he made no speech which offended section 123 (3A) of the Act nor was he aware of any of the offending articles or cartoons published in Chandrika prior to the elections.
The also denied that he was an Editor of Chandrika, but admitted that he was the Chief Editor and that too only in name.
Being an important and an influential person he was able to collect lot of more for Chandrika from the Gulf States and that is why he was assigned an important role in Chandrika as Chief Editor for the purpose of deciding the larger policies of the paper.
The appellant further denied that he had anything to do with the editorial work of Chandrika or the publication of the speeches or articles etc.
It may be pertinent to note here that even the petitioner in his petition has not at all 669 alleged or described the nature of the duties which the appellant performed as Chief Editor nor has he stated that as Chief Editor he was controlling the materials published in the paper so as to ascribe constructive knowledge to him of the articles published in Chandrika.
ALL that the petitioner pleaded in his petition on this subject may be extracted thus: "The respondent is the Chief Editor of Chandrika, a daily newspaper published from Calicut.
It is published by the Muslim Printing and Publishing Company Limited.
The major shares of this company is owned by the Muslim league Party and the respondent holds share worth of Rs. 3 lakhs in the above company.
The daily Chandrika is the official organ of the Muslim League Party.
It is submitted that in the daily Chandrika of which the respondent is the Chief Editor, is published reports and articles appealing to the members of the Muslim community not to vote for the candidates of the Muslim League (opposition) in the name of religion and community".
As regards the speech while the petitioner admitted that he did make a speech as would appear from the extract exhibit P.1(a) but denied that he made any communal allegations against the Janasangh but stated that some of the words used by him in the speech were used purely in a figurative sense.
When the appeal was heard before us counsel for the parties agreed that the only items of evidence which could be relied upon against the appellant were (1) his speech exhibit P.1(a), (2) Cartoon exhibit
P.5 and (3) other offending speeches and articles which were published in the paper of which he was the Chief Editor.
It was conceded by Dr. Chitale, counsel for the petitioner that if he was not able to prove that the appellant was really the Editor of the paper then the presumption under section 7 of the Press and Registration of Books Act 1867 (hereinafter called the Press Act) would not apply and the case of the petitioner would stand or fall on Ex.P.1(a) and Exhibit P.5.
It is also not disputed that although the High Court has relied on a number of articles and extract of speeches published in the various issues of Chandrika yet none of these have been proved according to law by examining the writer or the reporter or producing the original script or the paper.
If, therefore.
the petitioner fails to establish that the appellant was virtually the Editor of Chandrika or at any rate performed the duties of the editor then no constructive knowledge of these articles can be attributed to him.
The High Court framed the following issues: 1.
Whether the petition is maintainable ? 670 2.
Whether the election is vitiated by all or any of the corrupt practices alleged in the petition? 3.
Regarding reliefs and costs.
As regards issue No. 1 the High Court held that the petition was maintainable and decided this issue against the appellant.
This finding has not been challenged by the appellant before us and we there fore affirm the same.
The main issue in the case was issue No. 2 and we should have expected the High Court to have framed a more detailed issue giving the nature and character of the corrupt practices alleged by the petitioner against the appellant in order to give a clear picture to the parties regarding the matters which were to be decided by the court.
However, as both the parties understood what the allegations were and proceeded to trial on that basis the vagueness of the issues framed by the High Court has not caused any prejudice to any of the parties.
The main corrupt practice pleaded against the appellant by the petitioner and which has been vehemently argued before us is to be found in paragraph 5 of the petition which is regarding the inflammatory speech Exhibit P.1(a) said to have been made by the appellant and which according to the petitioner fell within the mischief of section 123 (3A) of the Act.
Another important averment made in the petition was in paragraph 11 of the petition which refers to the cartoon and may be extracted thus: "In Chandrika dated 12 3 1977 on the front page a cartoon is published.
It depicting Jansangh as a Pig and Shri E. M. Sankaran Namboodiripad, the Marxist Leader, cutting to the flesh of the pig and serving it to the Muslim.
This is an attempt to promote feelings of enmity and hatred between different classes of citizens of India on grounds of religion.
It is well known to eat pork is pardial ansthma (haram) for true muslims.
The publication of this cartoon in Chandrika is with the consent and knowledge of the respondent, which promoted hatred of the Muslims against the United Front of Marxist Party and Janata Party and Muslim League (opposition) of which the petitioner is a candidate from the concerned constituency".
It is clearly pleaded that the cartoon was published in Chandrika with the consent and knowledge of the appellant.
Thus, in other cases, consent and knowledge were not expressly pleaded by the petitioner, who sought to rely only on the presumptions to be drawn under section 7 of the Press Act.
671 We shall first take up, therefore, the question whether The petitioner can avail of the presumption to be drawn under section 7 of the Press Act.
The High Court has found that in the circumstances of the case, section 7 of the press Act fully applies to the facts of the present case.
We are however for the reasons that we shall give hereafter unable to agree with the view taken by the High Court.
Before dealing with the various provisions of the Press Act, it may be necessary to divide this question into two parts: (t) the legal aspect and (2) the factual aspect.
The legal aspect concerns the effect of the various provisions of the Press Act and the extent of their applicability to the appellant.
The actual aspect would take within its fold the duties and responsibilities performed by the appellant as the Chief Editor.
We will first take up the legal aspect.
The Preamble to the Press Act runs thus: "Whereas it is expedient to provide for the regulation of printing presses and of newspapers, for the preservation of copies of every book and newspaper printed in India and for the registration of such books and newspaper, it is hereby enacted as follows": It would thus appear that the object of the Press Act was to regulate printing presses and newspapers in order to preserve copies of newspapers and books.
Moreover, in order to avoid multiplicity of suits and uncertainties of liabilities, it was considered necessary to choose one of the persons from the staff and make him liable for all the articles or matters published in the paper so that any person aggrieved may sue only the person so named under the provisions of the Press Act and is relieved from the necessity of making a fishing or roving enquiry about persons who may have been individually responsible for the offending matters published in the paper.
Our opinion in this regard is however re informed be the statement, object and reasons accompanying the Press Act which mark be extracted thus: "Whereas it is expedient to repeal the Indian Press Act, 1910 and the newspapers (Incitements to offences) Act, 1908, and to make further provision in the Press and Registration of Books Act, 1867, for the liability of editors of newspapers in civil and criminal proceedings and to make certain amendments in that Act in order to facilitate the registration of printers and publishers; and to provide in the , the Code of Criminal Procedure, 1898, and the Indian Post office Act, 1898 for the seizure and disposal of certain documents; it is hereby 9 549 S Cl/78 672 encted as follows :" It was with this avowed object that the Press Act clearly defines 'Editor` who has a clear legal status under the Press Act.
Section 1 (1) of the Press Act defines 'Editor ' thus: "Editor" means the person who controls the selection of the matter that is published in a newspaper".
Section 5 of the Press Act provides that no newspaper shall be published except in conformity with the rules hereinafter laid down.
Section 5(1) runs thus: "Without prejudice to the provisions of section 3, every copy of every such newspaper shall contain the names of the owner and editor thereof printed clearly on such copy and also the date of its publication".
It would thus be clear that under section 5(1) of the Press Act the legal requirement is that every newspaper shall contain the name of the owner.
and the editor printed clearly, so that there is no con fusion in the minds of the people on this account.
Sub section (2) of section 5 of the Press Act makes it incumbent on the printer and the publisher to appear before the authorities mentioned in that section and make a declaration.
Sub rule (2) of rule 8 of the Rules made under the Press Act runs thus: "Every copy of every newspaper shall have printed legibly on it the names of the printer, publisher, owner .
and editor and the place of its printing and publication in the following form: Printed by . and published by . on behalf of . (name of owner) . . and printed at . (place of printing) . and published at . (place of publication. Editor . . " "This rule enjoins that the name of the printer, publisher, owner and editor must be clearly indicated.
The note to this rule is extracted thus: "Note: This form may be modified to suit the circumstances of each paper, for example, where The printer, publisher and owner are the same the imprint line can be Printed, published and owned by .
The editor 's name, however, should be given separately in every case".
This requires that the editor 's name however, should be given separately in every case.
Rule 6 requires every publisher to submit an annual statement to the Press Registrar.
It is not disputed in the 673 present case that this statement was not made by the appellant but by P.W. 2 Aboobaker who was the editor, publisher and printer of Chandrika.
The annual statement which has to be filed in form 2 contains one of the columns where the editor 's name has to be shown.
Section 7 of the Press Act runs thus: "In any legal proceeding whatever, as well civil as criminal, the production of a copy of such declaration as is aforesaid, attested by the seal of some Court empowered by this Act to have the custody of such declarations, or, in the case of the editor, a copy of the newspaper containing his name printed on it as that of the editor shall be held (unless the contrary be proved) to be sufficient evidence, as against the person whose name shall he subscribed to such declaration, or printed on such newspaper as the case may be, that the said person was printer or publisher, or printer and publisher (according as the words of the said declaration may be) of every portion of every newspaper whereof the title shall correspond with the title of the newspaper mentioned in the declaration or the editor of every portion of that issue of the newspaper of which a copy is produced.
Section 8(A) of the Press Act provides that where any person 's name has appeared as an editor in a paper although he was not an editor he shall within two weeks of his becoming aware that his name has been so published" appear before the District? Presidency or Sub Divisional Magistrate and make a declaration that his name has been incorrectly published and get a certificate from the Magistrate that the provisions of section 7 shall not apply to him.
It may be interesting to note the following facts here: 1 That the issues of Chandrika shown to US clearly and unmistakably mention the name of Aboobaker as the printer, publisher and editor of Chandrika and does not mention the appellant as the Editor of Chandrika.
The appellant is merely shown as the Chief Editor but this is an officer which is not at all contemplated by the Press Act.
That if the appellant was really the editor of the paper then P.W. 2 Aboobaker ought to have resorted to section 8(A) to correct the mistake in the paper where his name was shown as the editor but no such thing has been done.
One the other hand, P.W. 2 Aboobaker tacitly and clearly admits that he is the editor of the paper.
674 3.
That the petitioner has not at all pleaded in his petition the nature of the duties performed or responsibilities shouldered by the appellant as Chief Editor.
There is no averment at all in the petition that the appellant controls the selection of matter that is published in the newspaper which alone would make him an editor as defined in section 1 (1) of the Press Act.
The word 'Chief Editor ' is clearly absent from the Press Act and in fact foreign to it because the Press Act has selected only one person who has a special status and that is the editor who can be sued, if necessary, or can sue and against whom alone a presumption under section 7 of the Press Act can be drawn.
While holding that the presumption under section 7 of the Press Act is available to the petitioner, the High Court has completely over looked the aforesaid aspects mentioned by us.
The law on the subject is absolutely clear and there are a number of decisions of this Court which have interpreted the relevant sections of the Press Act.
In the case of State of Maharashtra vs Dr. R. B. Chowdhary & Ors.
(1) this Court observed as follows: "The term 'editor ' is defined in the Act to mean person who controls the selection of the matter that is published in a newspaper.
Where there is mentioned an editor as a person who is responsible for selection of the material section 7 raises presumption in respect OF such a person.
The name of that person has to be printed on the copy of the newspaper and in the present case the name of Madane admittedly as printed as the editor of the Maharashtra in the copy of the Maharashtra which contained the defamatory article.
The declaration in Form I which has been produced before us shows the name of Madane not only as the printer and publisher but also as the editor.
In our opinion the presumption will attach to Madane as having selected the material for publication in the newspaper .
In the circumstances not only the presumption cannot be drawn against the others who had not declared themselves as editors of the newspaper but it is also fair to leave them cut because they had no concern with the publishing of the article in question".
(1) ; 675 This case, therefore, clearly holds that where a person is not shown A in the paper to be its editor no such presumption under section 7 of the Press Act can be drawn but it must be held that he has no concern with the publishing of the article.
To the same effect is another decision of this Court in the case of D. P. Misra Kamal Naran Sharma & Ors.(1).
In this case which was also an election matter a newspaper called Mahakoshal was published from Raipur and one Shukla was registered as the printer, publisher and editor with the Press Registrar.
The defence of Shukla was that he had appointed one Tarangi as the editor of Mahakoshal in June 1962 and was not present at the relevant time.
This Court pointed out that the proceedings for naming a person who is found responsible for publication of an offending matter and for constituting a corrupt practice are in the nature of quasi criminal proceedings.
It follows therefore that being a corrupt practice it has to be proved beyond reasonable doubt and not by the measure of preponderance of probabilities.
The Court observed in this connection as follows: "Section 7 raises a presumption that a person whose name is printed in a copy of a newspaper is the editor of every portion of that issue.
The presumption must be re butted by evidence .
The presumption under section 7 of the Press and Registration of Books Act undoubtedly arises, but in a charge under section 123(4) of the Representation of the People Act the presumption under section 7 of the Press and Registration of Books Act, 1867 would come with greater or less force, according to the circumstances to the aid of a person claiming that the editor was responsible for the publication and that the publication was to the knowledge of editor".
"Granting that there was close association between Mishra and Shukla and even granting that Mahakoshal was exclusively carrying on propaganda on behalf of Mishra, unless there is evidence to prove that Shukla had either authorised the publication of the offending matter, or had undertaken to be responsible for all the publications made in the Mahakoshal, no inference that the offending publications were made to the knowledge and with the, consent of Shukla may be raised".
"The statement filed by Shukla is not inconsistent with the case set up by him in this proceeding.
Responsibility for publication was accepted by him but he had clearly stated (1) [1971] 3 section C. R. 257 676 that the publication of news items from the correspondents were attended to by the Sub editors and That he generally laid down the policy of the newspaper and gave general directions.
He admitted his responsibility because he personally had with knowledge published the article which constituted contempt of Court".
We may mention here that in this case Shukla in his statement has clearly stated that the publication of the news items in the paper were attended to by Sub editors and he generally laid down the policy of the newspaper and gave general directions.
No such allegation or evidence is forthcoming in the instant case because it has neither been alleged nor proved that the appellant was in any way controlling selection of the matters published in the paper.
In the case of Narasingh Charan Mohanty vs Surendra Mohanty(1) this Court pointed out that consent or agency could not be inferred but had to be proved affirmatively like any other fact.
In this connection the Court observed as follows :. "Consent or agency cannot be inferred from remote causes.
Consent cannot be inferred from more close friend ship or other relationship or political affiliation.
As pointed out in D. P. Mishra 's case (supra) however close the relationship unless there is evidence to prove that the person publishing or writing the editorial was authorised by the returned candidate or he had undertaken to be responsible for all the publications, no consent can be inferred".
It was further held in this case that the presumption under section 7 of the Press Act is a rebuttable presumption and the so called editor can rebut the presumption by showing that he had nothing to do with t he publication of the editorial or the news report.
In our opinion, even if any presumption is sufficiently rebutted by him not only from the evidence adduced by the appellant but also by the evidence adduced by the petitioner.
We shall presently deal with this facet of the matter, namely the factual aspect of this question.
The court further observed as follows: "When once it is established that neither the editorial (ext. 1) nor the news report (Ext. 2) were published by the respondent or by some one else with his consent or that the speech alleged to be made by Biju Patnaik even if it amounts to corrupt practice, was made without the consent of the respondent, and that Biju Patnaik was not his agent.
It is unnecessary to consider the question whether the (1) 119741 2 section C. R. 39.
677 editorial and the news report as well as the speech of Biju Patnaik did in fact constitute corrupt practice under sub section (3) of section 123 of the Act".
As against this Dr. Chitale, counsel appearing for the petitioner submitted two points before us.
In the first place, he argued that the provisions of rule 8 thereof have not at all been complied with, and, therefore, the appellant cannot escape his liability even though he was the Chief Editor.
It was argued that the note to rule 8 as also the form mentioned in rule 8 sub rule (2) clearly provide that the editor 's name must be separately shown in every paper and in the instant case the issue of the paper Chandrika shows in a composite form that the editor, printer and publisher of the paper was P.W. 2 Aboobaker.
It was thus contended that the provisions of rule 8(2) have not been complied with because the name of the editor has not been separately shown.
In these circumstances, it was argued that as the name of the Chief Editor was separately shown he must be taken lo be the editor of the paper under the provisions of the Press Act and the rules made thereunder.
We are however unable to accept this argument.
In the first place, the paper clearly shows the name of the editor as Aboobaker.
As the printer, publisher and the editor was one and the same person it cannot be said that merely because the name of the editor was not shown at a separate place he was absolved of his responsibilities as the editor.
The intention of the rule is merely to clarify who the editor of the paper is and once this is shown then there is a substantial though not a literal compliance of the rule.
Secondly, the Press Act does not recognise any other legal entity except the editor insofar as the responsibilities of that office are concerned.
Therefore, mere mention of the name of the Chief Editor is neither here nor there, nor does it in any way attract the provisions of the Press Act particularly section 7.
Thirdly, it is not even pleaded in the petition, much less proved, that the appellant being the Chief Editor, it was part of his duty to edit the paper and control the selection of the matter that was published in the newspaper which in fact has been demonstrably disproved by ' the appellant.
Thus? we are unable to accept the finding of the High Court that any presumption under section 7 of the Press Act can be drawn against the appellant.
This brings us to the factual aspect of the matter.
In this connection, the definite case of the appellant is that although he has been shown as the Chief Editor of Chandrika he was not at all connected with any editorial function but his name was lent to the paper because of his past services to Chandrika and because he used to get lot of 678 money for this paper being an influential man.
This has been proved not only by the evidence led by the appellant but also by the evidence adduced by the petitioner.
Before taking the evidence on this point we might mention a few admitted facts which loom large in our minds (1) that the petitioner proceeds on the footing in his petition that the appellant was the Chief Editor and no where he has been mentioned as the editor of Chandrika, (2) there is no pleading by the petitioner that the appellant was an editor within the meaning of section 1(1) of the Press Act particularly when the paper Chandrika was the pivot and the sheet anchor of his case and which clearly showed that the appellant was not the editor but P.W. 2 Aboobaker was officially and factually the editor of the paper and yet there is no positive denial of this fact in the petition; (3) no particulars of the functions, duties and powers of the appellant as Chief Editor have been pleaded.
On the other hand, it has been pleaded that the appellant held shares worth Rs. 3 lakhs in the company but that will not attract the provisions of the Press Act at all; and (4) as Aboobaker was admittedly the editor of the paper Chandrika as clearly admitted by the petitioner himself in his evidence, the onus was clearly on the petitioners to allege and prove that the duties of the editor were actually performed not by P.W. 2 Aboobaker but by the appellant.
In this background we would now discuss the evidence of the parties on this point.
P.W. 1 Thangal (Petitioner) categorically states thus: "V. C. Aboobaker is the editor and printer of Chandrika".
He further admits that Aboobaker 's responsibility is to submit the reports and the speeches supplied by the appellant.
He also admitted that Aboobaker does the editing.
The witness no doubt says that he had seen the appellant in the Chandrika office twice but that by itself would not show that the appellant was the editor of the paper.
Strong reliance was placed by counsel for the petitioner on the statement of P.W. 1 to the effect that the appellant was doing the day to day.
editorial work of Chandrika.
In the first place, this statement does not appear to, be true and is clearly contradicted by the petitioners own witnesses, namely, P.Ws. 2 and 5 who have categorically stated that Aboobaker was the editor and the appellant was not a member of the editorial group and was extremely busy with the elections to be able to devote any time to do the work of the editor.
The evidence of this witness shall be discussed hereafter.
679 Another important aspect of the matter is that as the petitioner was not connected with Chandrika he is not competent to depose to show who did the editing work of Chandrika.
The only competent witnesses on this point are P.Ws. 2 and 5 and the appellant and they have said that the appellant had nothing to do with the editorial work of the paper.
Moreover, it would appear from the evidence of P.W '.
5 that there is a special attendance register for the editorial staff and that the appellant had not signed the said register which clearly shows that the appellant had no concern at all with the editorial group.
Finally, the allegation that the appellant was doing day to day editing work of Chandrika is not merely a piece of evidence but a material fact which ought to have been pleaded in the petition if the petitioner wanted to rely on the presumption under section 7 of the Press Act.
If this fact was within the knowledge of the petitioner there was no reason why he did not mention it in his petition.
In these circumstances, therefore, the statement of P.W. 1 on the point cannot be accepted.
P.W. 2 Aboobaker who has been examined as the petitioner 's own witness categorically states that he is the printer, publisher and editor of Chandrika and his statement on this point is extracted thus: "I am the Printer, Editor and Publisher of the Malayalam Daily Chandrika.
This is published by Chandrika Printing and Publishing Company".
He further states that in this institution (Chandrika) the post of Chief Editor is an ornamental post.
Thus, the witness fully supports the appellant 's case that he was the Chief Editor only in name and his post was purely ornamental.
The witness further admits that all responsibilities are with the editor and Chandrika has no regular Board called the Editorial Board.
He further admits that as an editor he knows what his responsibilities are.
The witness further admits in clearest possible terms that the authority to change the policies from time to time is vested in him.
His statement may be extracted thus: "The authority to change policy from time to time is vested in him.
" He further states that the reports or the news are published only after `he is satisfied about the truthfulness of the report concerned.
This shows clearly that P.W. 2 was both de jure and de facto an editor inasmuch as the control of the policy was vested in him.
He was performing the duties and shouldering the responsibilities of the editor and the reports were published under his authority.
680 Reliance was however placed by counsel for the petitioner on the statement of the witness P.W. 2 which runs thus: "In the Chandrika Office, Chief Editor has got a special room .
He is interested in the maintenance of the standards of Chandrika as a newspaper .
He knows the policy of the paper.
If anything appears against the declared policy of the paper he has got the authority to give necessary direction to me about that".
To show that the appellant was controlling the general policy of the paper.
We are unable to infer from this statement that the appellant was controlling the selection of the matter published in the paper so as to fall within the definition of the word 'editor ' as defined in section 1(1) of the Press Act.
The appellant was no doubt connected with the paper for a long time and there is nothing wrong in his giving directions to the editor if he found that some event took place against the declared policy of the paper.
The witness at a later stage of his evidence has clearly stated that he had not discussed with the appellant the news item which appeared in the paper nor did the appellant give any direction to the witness about the printing and editing of the paper.
This statement may be extracted thus: "I have not discussed with the respondent about the news items which appeared in the paper.
He did not give any direction about the printing and publishing of the paper".
The witness further clarifies that the Chief Editor has no such special ' responsibility.
He further states thus: "In the editorial staff of Chandrika there are 20 persons including me.
This 20 include trainees also.
Under them there are two news editors.
There are two Chief Sub Editors.
5 or 6 Sub Editors.
I have got supervision of their work .
I have only responsibility of editing and printing of the paper".
This clearly shows that the witness was not only entirely responsible.
for the printing and editing of the paper but was also supervising the work of the Sub editors under him.
He also admits that the declaration under the Press Act was filed by him.
To an express question whether the appellant has been selecting or editing any of the day to day matters appearing in the paper the witness categorically denied the same.
The statement may be extracted thus. "The declaration under the Registration of Press and Books Act was filed by me.
Has the respondent been selecting or editing any of the day to day matter appearing 681 in the paper? (Q) No. (Ans.) .
At the time of election because of his responsibility as the Secretary of the Muslim League and as a leader of the United Front, during the months of February and March, the respondent was mostly on tour. on all days when I was present, I sign the register".
It is, therefore, clear that even the witness examined by the petitioner has knocked the bottom out of the case of the petitioner that the appellant had anything to do with the duties and functions of an editor, and the question put to the witness which is denied by him clearly shows that the appellant has demonstrably disproved that he could be an editor of the paper as defined in section 1 of the Press Act.
Further this witness has also admitted that at the time of election because of the appellant 's being the Secretary of the Muslim League and leader of the United Front he was mostly on tour.
This admission goes to show that the appellant was too busy to be ascribed knowledge of the articles or speeches published in Chandrika.
P.W. 3 C. K. Hassan who is a worker of the petitioner merely says that the appellant Haji C. H. Mohd. Koya was the Chief Editor and it was mentioned in the Chandrika paper that the Chief Editor would give speeches.
The witness further says that since it was printed in the Chandrika paper it was understood that the appellant was the Chief Editor.
This takes us nowhere because the witness does not throw any light on the duties performed by the Chief Editor and also does not say who was the editor of Chandrika.
In these circumstance, the evidence of this witness is absolutely valueless on the point in issue.
P.W. 4 Mohammed Ali Shihab Thangal is an important witness being the President of the Muslim League and Managing Director of the Muslim Printing and Publishing Press which published the paper Chandrika.
The witness was fully conversant with the working of the editorial department of the paper.
The witness clearly states that the appellant was the Chief Editor and the editor was under him.
The witness further categorically asserts that the policy of Chandrika is decided by the editorial staff which as has already been seen does not include the Chief Editor.
This fact was admitted by P.W. 2 as reported above.
Even this witness does not say that the appellant as the Chief Editor was a member of the editorial staff.
On a specific question asked to him whether the appellant as the Chief Editor had powers to take decision about the paper, the witness has denied knowledge of the same.
The witness further proves that the appellant as 682 the Chief Editor was drawing a salary of Rs. 700 per month, but the witness admits that the entire management is done by Seethi Sahib as Director in Charge.
Thus, according to this witness, Seethi Sahib who has been examined as P.W. 5 is the most competent witness to prove as to what was the exact nature of the duties of the Chief Editor.
P.W. 5 Seethi Haji is the Director in charge of the Muslim Printing and Publishing Press and admits that he attended to the administrative functions of the Press.
He clearly admits that Aboobaker (P.W. 2) was the editor of Chandrika paper and, his responsibilities are the same as they were in 1974 75.
While explaining the reason why the post of Managing Editor and Chief Editor existed in the establishment, he says that this was because it was thought that the names of big personalities would be prestigious.
In other words, the witness fully corroborates the version given by P.W. 2 that the appellant 's name as Chief Editor was merely ornamental.
The witness also says that although the appellant had a lot of experience in journalism yet that was not the only reason why he was made the Chief Editor but another consideration that swayed with the authorities concerned was that the appellant was a leader of the community.
The witness further asserts thus: "To write 'Chief Editor` has a value of its own that was why the name was inserted.
(Ans.) He is also a leader of the community as well as a journalist.
He is an M.P.
So his name was inserted".
The witness stoutly denied the suggestion put to him that there was an impression among the public that Chandrika and everything about it constitutes the responsibility of the appellant.
The witness says that from 1967 to 1974 the appellant was in Chandrika but there is no such impression in the public.
The appellant is a shale holder having invested Rs. 400 whereas Rs. 3 lakhs has been invested in the name of the Muslim League.
Another important suggestion which is denied by the witness was an answer to the following question: "Will you work out the policy of the paper on your own accord without the knowledge of C.H. ?" the witness answer is as follows: "I do things now, after consulting P.W. 2.
Till now I have not asked C.H." It is, therefore, clear that even in matters of policy the witness who was in charge of the administration of the paper would not consult the appellant but only P.W. 2 who was admittedly the editor of the 683 paper.
In other words, it is clear that the appellant had nothing to do with the policy of the paper much less the editing part of it.
To a question that except Chief Editor the appellant has got any other official position in this company the witness answered 'nothing '.
The witness further stated that the Chief Editor had not raised any objection to him about any news item published in Chandrika or the policy matter of the paper from which he inferred that the Chief Editor had approved the policy for if he had no objection he would have told him.
Again, the witness makes a very significant statement which runs thus. "I am present in the office on almost all days.
I was in charge of going through the publications appearing everyday in the paper and checking up as to whether they are in conformity with the declared policies and interests of the paper.
It was my responsibility to place objections, if any, if they were against the declared policies".
The witness further stated that the Manager had nothing, to do with the editing and printing of the Paper but categorically asserted that P. W. 2 is selecting and editing everyday 's matters in the Chandrika.
Thus, on the admission of this witness who was fully conversant with the working of the paper P.W. 2 alone fulfils the requirements of the definition of an editor as given in section 1 of the Press Act and totally excludes the appellant from the scope and ambit of an editor as defined in the aforesaid, section.
The witness further admits that there is a special attendance register for the editorial staff and when the register is shown to him he admits that this is the same register since January 1977.
This register is marked Exhibit R 7.
The witness further admits that the register is for the entire editorial staff including P.W. 2.
The witness further asserts that the appellant who was the Chief Editor had not signed in this register.
This therefore clearly and conclusively proves and unmistakably shows that the appellant was not a part of the editorial staff at all and had no concern with that department.
This is all the evidence led by the petitioner and from this evidence it has not at all been proved that the appellant as the Chief Editor performed any functions of the Editor or was an editor within the meaning of section ] of the Press Act.
Before concluding this part of the case was might refer to the evidence of the appellant himself.
But before we do that it would he necessary to analyze the pleading of the appellant.
684 In para 4 of the counter affidavit which is really a substitute tor the written statement the appellant avers as follows: "The actual functions of the editor are being looked after by Sri V. C. Aboobaker who is the editor, printer and publisher of the Chandrika.
This respondent has very little time to perform the functions of the Chief Editor as he is pre occupied with other important activities on account of his membership of Parliament and his being the Secretary of the Indian Muslim League, both all India and State The actual editing and publishing were entirely looked after by Sri V. C. Aboobaker".
In the evidence given by the appellant as his own witness what he has stated in his counter affidavit is fully proved and further supported by the evidence of P.s. 1 to 5 as discussed above.
At any rate the appellant himself has made the entire position clear in his evidence which is fully corroborated by the witnesses of the petitioner examined by him.
On a specific question put to him as to whether he worked as Chief Editor during those days, the witness has categorically denied the same.
The witness further stated that he became the Chief Editor in 1971 and continued to be so till 1977.
He has further clarified that when he became the Chief Editor he was not doing the editing work which he was doing before.
According to the witness, he joined the paper as far back as 1944 as Sub Editor.
It is, therefore, natural that in the early stages of his career he was a part of the editorial staff and must be performing editorial duties when he became the editor.
But what we have to see is what was the position in 1977 after he became the Chief Editor.
On this point, the witness has categorically stated that as Chief Editor he was not doing any editing work.
The witness has further explained that when he became the Chief Editor he was also an M.P. and so he did not get any time for doing the editorial work.
The witness then goes on to state that from 1974 to 1977 till the Lok Sabha was dissolved he was in Delhi as an M.P. and even during that time his name used to be printed in the paper as Chief Editor but he was not doing any editing work.
He further states that as leader of the United Front and of the Muslim League he had much work to do during the election time and he was very busy with the election speeches.
Explaining the responsibilities and duties of an editor the witness stated thus: "The responsibility of editing Chandrika is of P.W. " Aboobaker.
There is a large staff of Chief Sub Editors and Sub Editors to assist him.
There are two Chief Sub Editors, 685 including Sub Editors there are about 10, 20 persons.
The A work of these persons is supervised and co ordinated by PSHAW. 2".
The witness further states that the Chief Editor has No. room in the editorial section.
He further corroborates PSHAW.
2 by stating that PSHAW.
2 has given the declaration under the Press Act.
Regarding the nature of the functions which he actualy performed the witness asserted thus. "You had no difference of opinion with the reports and articles which appeared in Ext.
P. 1 to 11 .
Having read I did not think that any of those would constitute corrupt practices.
If I had thought so I would have tried to rectify them".
He further stated that he did not belong to the regular staff.
He further admitted that he collected funds from the Gulf countries to finance the paper Chandrika and the Muslim League holds the shales in the name of the witness.
Learned counsel for the petitioner laid very great stress on exhibit P. 2 a letter signed by the appellant to show that he was doing the editorial work.
This letter was sent to one of the correspondents of the paper Chandrika and the appellant has explained in his statement that in the absence of the editor P.W. 2 the Manager requested the appellant to sign the letter and so he signed it This was just an act of official accommodation which was totally unconnected with the duties performed by the appellant.
After all the appellant was a high officer in the said organisation and if the letter had to be sent to one of the correspondents and was a little urgent instead of waiting for the editor to come there could be no harm if the Manager asked the appellant as Chief Editor to sign it.
Such a casual act on the part of the appellant done, not voluntarily, but at the request of the Manager cannot clothe him with the legal status of an editor.
Thus, this fact alone would not show that he was performing any editorial functions.
The witness further states that the Chandrika has no editorial Board but there is an editorial group consisting of Editor, Sub Editor and others.
This is the relevant part of the evidence of the appellant on this question.
Thus, on a close and careful consideration of the evidence discussed above.
the following inescapable conclusions emerge: 1.
P.W. 2 Aboobaker was admittedly the editor of Chandrika, fulfilled all the conditions of section 1(1) of the 686 Press Act and his name was printed as editor in the of Chandrika. 2.
P.W. 2 as the editor of the paper supervised the editorial staff, controlled the selection of materials to be published in the paper, approved the policies to be followed in publication and was wholly in charge of the editorial group.
The appellant was never shown or referred to as the editor anywhere.
Even the register which is meant to be signed by the editor and the other staff on the editorial rial group was not signed by the appellant as he had nothing to do with the editorial work.
The appellant had been appointed as Chief Editor because he was a Member of Parliament and an influential man who could get finance for the paper from the Gulf States but he had no hand at all in any of the functions and duties performed by the editor.
The appellant was no doubt shown as Chief Editor in the issues of the Chandrika but the Press Act as held by us does not recognise any such legal entity and the only person who is recognised by the Press Act is the editor who in this case was P.W. 2 and who had admittedly filed the declaration under section 5(2) of the Press Act.
Although section 8A was the specific provision under which a person could apply for a certificate that he 1. ' ceased to be the editor no such action was taken by P.W. 2 to get his name struck off from the roll of editor.
This clearly shows that P.W. 2 alone was the editor and the appellant was merely a name lender and his post was purely ornamental.
The petitioner himself has not at all anywhere pleaded in his petition that the appellant was the editor nor has he mentioned the duties or responsibilities which were performed by the appellant as Chief Editor so as to bring him within the fold of section 1 of the Press Act.
From the facts established above, it is manifest that the petitioner has miserably failed to prove either that the appellant was the editor of the paper or that he was performing the functions.
duties or 687 shouldering the responsibilities of the editor.
It is obvious that a presumption under section 7 of the Press Act could be drawn only if the person concerned was an editor within the meaning of section l of the Press Act.
Where however a person does not fulfil the conditions of section 1 of the Press Act an(l does not perform the functions of an editor whatever may be his description or designation the provisions of the Press Act would have no application.
In these circumstances, therefore, the High Court had no legal justification to draw a presumption against the appellant under section 7 of the Press Act in holding that he was proved to be the editor of Chandrika and! therefore, must be deemed to be aware of the articles published in the said paper.
Even if, for the sake of argument, it is assumed that the appellant was the editor it has been pointed out by this Court that the presumption to be drawn under section 7 of the Press Act is rebuttable and the evidence and the circumstances of this case discussed above show that this presumption has been sufficiently rebutted.
The next question that arises for consideration is that if the finding of the High Court on this point is rejected as it must be then can the petitioner be liable for the materials or speeches published in the paper Chandrika.
The publication of the materials promoting hatred between two classes of citizens is undoubtedly a corrupt practice and` it is well settled by long course of decisions of this Court that such practices must be clearly alleged with all the necessary particulars and proved not by the standard of preponderance of probabilities but beyond reasonable doubt.
We are fortified in our view by the decision of this Court in the case of Mohan Singh vs Bhanwar Lal & Ors.(1) where this Court observed as follows: "The onus of establishing a corrupt practice is undoubtedly on the person who sets it up, and the onus is not discharged on proof of mere preponderance of probability, as in the trial of a civil suit, the corrupt practice must be established beyond reasonable doubt by evidence which is clear and unambiguous.
" To the same effect is a decision of this Court in the case of Magraj Patodia vs R. K. Birla & Ors.(2) where this Court observed as follows: "But the fact remains that burden of proving the com mission of the corrupt practice pleaded is on the petitioner (1) A. 1.
R. (2) ; 10 549 SCI/78 688 and he has to discharge that burden satisfactorily.
In doing so he cannot depend on preponderance of probabilities.
Courts do not set at naught the verdict of the electorate except on good grounds".
ln the case of D. Venkata Reddy vs R. Sultan & Ors.(1) this Court after reviewing most of the previous decisions of this Court observed as follows: "In a democracy such as ours, the purity and sanctity of elections, the sacrosanct and sacred nature of the electoral process must be preserved and maintained.
The valuable verdict of the people at the polls must be given due respect and candour and should not be disregarded or set at naught on vague, indefinite, frivolous or fanciful allegations or on evidence which is of a shaky or prevaricating character.
lt is well settled that the onus lies heavily on the election petitioner to make out a strong case for setting aside an election.
In our country election is a fairly costly and expensive venture and the Representation of the People Act has provided sufficient safeguards to make the elections fair and free.
In these circumstances, therefore, election results t cannot be lightly brushed aside in election disputes. .
Another principle that is equally well settled is that the election petitioner in order to succeed must plead all material particulars and prove them by clear and cogent evidence.
The allegations of corrupt practice being in the nature of a quasi criminal charge the same must be proved beyond any shadow of doubt".
In the case of Ramanbhai Nagjibhai Patel vs Jaswantsingh Udesingh Dabhi & ors.(2) this Court observed as follows: "We may state that the charge of bribery is in the nature of a criminal charge and has got to be proved beyond doubt.
The standard of proof required is that of proving a criminal or a quasi criminal charge.
A clear cut evidence, wholly ! credible and reliable is required to prove the charge beyond doubt.
Evidence merely probabilising and endeavouring to prove the fact on the basis of preponderance of probability is not sufficient to establish such a charge".
In the light of these decisions we shall now proceed to decide the next question.
In view of our finding that the appellant has not been (I ) 11976] 3 section C. R. 445.
(2) A. 1.
R. 689 proved to be the editor of the paper Chandrika Ext.
P. 2 to P. 11 excepting Ext.
P. 5 will have to be totally excluded from consideration because those are speeches and articles of various persons published in Chandrika and the constructive knowledge of this has been ascribed to the appellant by virtue of the allegation that he was the editor of the paper.
As however this has not been proved it was incumbent on the petitioner to prove knowledge of these articles or speeches like any other fact.
The admitted position appears to be that neither the writer of the article nor the speaker who delivered the speech nor the reporter nor even the manuscripts of the speeches have been produced before the Court.
In these circumstances, therefore, all these articles and speeches are inconsequential until they are shown to have been made with the knowledge and consent of the appellant.
Even in the pleading the petitioner has not averred that the appellant had any independent knowledge of these things or that these speeches or articles were written with his express or implied consent.
The petitioner has based his case entirely on the footing that as the appellant was the editor he must be deemed to be aware of these articles and speeches and if the speeches contained offending matters and promoted hatred and ill will between two classes of citizens the appellant must be deemed to have committed the corrupt practice under section l 23 (3A) of the Act.
As the entire edifice built by the petitioner for the admissibility of exhibit P. 2 to P. ll except P. 5 collapses, the allegation of the petitioner on this score is clearly disproved.
Moreover, we are fortified in our view by the decision of this Court in the case of Samant N. Balakrishna etc.
vs George Fernandez Ors.
etc.(1) where this Court observed as follows: "The best proof would have been his own speech or some propaganda material such as leaflets or pamphlets etc but none was produced .
A news item without any further proof of what had actually happened through witnesses is of no value.
It is at best a second hand secondary evidence.
It is well known that reporters collect information and pass it on to the editor who edits the news item and then publishes it.
In this process the truth might get perverted or garbled.
Such news items cannot be said to prove them selves although they may be taken into account with other evidence if the other evidence is forcible".
We might also mention here that the High Court rejected EXT.
P. 12 rand P. 13 by finding that these documents did not fall within the mischief of section 123(3A) of the Act.
Some reliance was however (1) [ ; 690 placed on exhibit P. l(d) which is said to have been written by the appellant.
This document cannot be taken into consideration for two reasons.
In the first place, this was undoubtedly a material particular if it was an article actually written by the appellant and contained offending matter, and, therefore, it was necessary that it should find place in the petition before being considered by the Court.
Secondly, it has not been proved to have been written by the appellant at all.
This document is in the nature of an editorial written on 1 3 1977.
The appellant has already denied that he had anything to do with the editorial work and was too busy with the election work as an M.P. and had no time to devote to these things.
The learned Judge of the High Court has wrongly mentioned in his judgment at page 28 of the paper book Vol.
l that the petitioner had made out a case that Ext.
P. 1 (d) was written by the appellant.
There is no such averment in the petition at all and the High Court has committed a clear error of record.
Thirdly, the appellant stated that he could not say after such length of time that the editorial was written by him.
But on reexamination the appellant categorically asserted that the editorial written could not be in his language and thus denied having written the editorial.
Although P.W. 2 the editor of the paper was examined by the petitioner and being the editor he was the best person to know whether or not this editorial was written by the appellant yet this document was not put to him.
In these circumstances, this document has not been proved according to law, and, therefore, must be excluded from consideration.
Counsel for the petitioner also did not press us to consider these documents Ext.
P. 2 to 1 '.
ll except P. S if we find that the appellant was nor the editor of the paper Chandrika or that the presumption is not available to the petitioner.
Reliance was however placed by counsel for the petitioner as also by the High Court on two documents, namely, exhibit
P. l(a) which was an extract of a speech delivered by the appellant at one of the election meetings where he is said to have made certain observations which tended to promote hatred or ill will between the Janasangh and the Muslim League.
Reliance was further placed on exhibit P. S which was a cartoon printed in the paper Chandrika and it was alleged by the petitioner that it was done with the knowledge and consent of the appellant.
The cartoon, according to the High Court, did contain offending matter inasmuch as it tried to promote feelings of hatred between two classes of citizens.
So far as exhibit P. l(a) the speech of the appellant is concerned the petitioner made the following averments in the petition which may be extracted thus: 691 "The respondent is the Chief Editor of Chandrika, a daily newspaper published from Calicut.
It is published by the Muslim Printing and Publishing Company Limited.
The major shares of this company is owned by the Muslim League Party and the respondent holds share worth of Rs. 3 lakhs in the above company.
The daily Chandrika is the official organ of the Muslim League Party.
It is submitted that in the daily Chandrika of which the respondent is the Chief Editor, is published reports and articles appealing to the members of the Muslim community not to vote for the candidates of the Muslim League (opposition) in the name of religion and community".
The analysis of the averment clearly discloses the following facts: 1.
The petitioner has not mentioned the name of a single person who had actually heard the speech and made a report.
According to the evidence of P.W. 1 he was present at the place where the speech was delivered by the appellant and yet this fact, though a very material particular, does not find mention in the averment in the petition referred to above.
It is not indicated in the petition as to how and in what manner the speech tended to promote feelings of enmity or hatred between two classes of citizens.
Even the classes of citizens against whom hatred was preached by the speaker has not been mentioned.
From the infirmities mentioned above, it is clear that so far as the speech is concerned the allegations made in the petition are vague.
Assuming however that para S may amount to an allegation as contemplated by section 123(3A) of the Act, we shall proceed now to determine how far the petitioner has been able to prove his case within the four corners of the aforesaid section.
No evidence was produced by the petitioner to prove whether the extract of the speech was correct and was a reproduction of the very words used by the appellant.
Although the witnesses for the petitioner admitted that his speeches were reported to the paper by the reporters neither the script of the speech nor the reporter concerned was examined as a witness to prove that the contents were the transcript of the speech delivered by the appellant.
The entire case of the petitioner on this point rests on an admission made by 692 the appellant in his statement in court that the extract printed in the paper was more or less the correct reproduction of his speech.
Thus, it is clear that the petitioner relies on this part of the case solely on the admission of the appellant.
It is well settled that an admission unless it is separable has to be taken as a whole or not at all.
In the case of Hanumant vs The State of Madhya Pradesh(l) this Court observed as follows: "It is settled law that an admission made by a person whether amounting to a confession or not cannot be split up and part of it used against him.
An admission must be used either as a whole or not at all".
To the same effect is the decision of this Court in the case of Palvinder Kaur vs The State of Punjab(i ') where Mahajan, J. speaking.
for the Court observed as follows: "The court thus accepted the inculpatory part of that statement and rejected the exculpatory part.
In doing so it contravened the well accepted rule regarding the use of confession and admission that these must either be accepted as a whole or rejected as a whole and that the court is not competent to accept only the inculpatory part while rejecting the exculpatory part as inherently incredible".
The same view was taken in a recent decision of this Court in the case of Dadarao vs The State of Maharashtra(3) where this Court observed as follows: "It may not, however, be overlooked that the admission made by the appellant must be read as a whole, for what he has stated is that he had made his signature in the.
account books of the branch office after an audit objection was raised that he ought to have signed the books at the end of every day in his managerial capacity.
The statement of the appellant on this aspect is not capable of dissection because the particular part thereof on which the High Court relies is inextricably connected with the other part which the High Court has not taken into consideration".
In view of the settled law on the question, it is manifest that the petitioner would fail or succeed on the admission of the appellant and the admission will have to be read in the light of what the (1) [1952] S.C.R. 1091.
(2) (3) 693 appellant has himself stated in his statement unless there are other A satisfactory reasons for taking a contrary view.
To begin with the offending words of the extract may be quoted thus: "C.H. declared emphatically that the assassins who dissected the community are now canvassing votes for the United Front of Janasangh and R.S.S. who were thirsting for Muslim blood.
He loudly declared that the community should rest only after completely flooring this front in the ring of the elections.
C.H. exhorted the gathering to cut down the fascist scarecros to the extent that they cannot rise again".
Out of the entire speech this is the only portion against which offence has been taken as falling within the mischief of section 123 (3A) of the Act.
It was suggested by counsel for the petitioner that the words used by the speaker clearly indicate that the party of the United Front of Jana Sangh and R.S.S. was after Muslim blood and the Muslim community should not rest unless this party is obliterated from the election.
Strong exception has been taken by counsel for the petitioner to the use of the words 'assassins ' for describing the Muslim who had gone over to the side of the United Front.
This passage was put to the appellant who stated thus: "In Ext.
P. 1(a) second paragraph it is said 'Murderers who split the community ' which community was split (Q).
I was referring to the split in the Muslim League (Ans.). .
The speech was at 2 o 'clock in the night.
I do not know whether the words which I exactly used have come in the paper.
The general idea is the same.
I say that you used these very words; can you deny (Q.).
I am not sure (Ans.).
When a speech is made different versions will come in the paper.
I do not usually prepare my speeches.
I speak extempore".
"I cannot say that I used the very same words.
But I have strongly urged that the opposition Front be defeated.
(Ans.) Have you said "RSS Jana Sangh which was thirsting for the Muslim blood".
(Q) The speech was made a year ago.
I do not remember the actual words used.
exhibit P. 1(a) report was written by Chandrika reporters.
The ideas were mine.
The phrase 'thirsting for blood ' was used in figurative language (Ans.).
" It is clear that the appellant does not admit that the extract contains the very words which were used by him in his speech particularly when the appellant had delivered an extempore speech.
As the 694 speech was delivered a year before by the appellant, it is quite natural that he would not have been able to remember the actual words used by him.
The appellant however makes it clear that the phrase 'thirsting for Muslim blood ' was used in a figurative sense and not literally.
That must obviously have been so.
He has further stated that he used the words 'thirsting for blood ' in a figurative sense and not in the sense of drinking blood.
What he meant was to give the Muslim community a warning that it would guard itself against such undesirable candidates by defeating them in the election.
It was, therefore, a speech in a political matter.
Further while explaining the words 'Getting into the battle field ' the witness has stated that he used the same in the sense of getting ready for a political contest.
This is how the appellant has explained his speech and the explanation given by him can not be rejected because no other evidence has been produced by the petitioner excepting the statement of the appellant regarding the interpretation of the speech.
Furthermore, the extract of the speech quoted above also shows that there does not appear to be any intention on the part of the speaker to preach hatred or enmity between two classes of citizens, namely, Janasangh, RSS and the Muslim League.
We might mention that a good deal of argument was advanced before us by counsel for the appellant as to the nature, character and significance of the term 'citizen ' and it was contended that political parties having a particular ideology could not be treated as a class of citizens as contemplated by section 123(3A) of the Act.
In the view which we have taken it is not necessary for us to examine this question.
We shall assume for the sake of argument that Janasangh, R.S.S. and the Muslim League were different classes of citizens, but even then that does not advance the case of the petitioner any farther.
We feel ourselves in complete agreement with the interpretation given by the appellant regarding the speech made by him.
In the first place, being the speaker the appellant was the best person to say what he meant by the speech he delivered.
Secondly, the petitioner has not produced either the reporter who was present at the meeting when the appellant spoke nor has he called for the script of the speech the extract of which was given in the newspaper.
It is very difficult to interpret a part of the speech completely torn from its context.
Furthermore, the words 'thrist for Muslim blood ' have been used for a particular purpose as explained by the appellant, because the words following, namely, 'he loudly declared that the community should rest only after completely flooring this front in the ring of the elections ' clearly show that what the speaker meant 695 was that as Jana Sangh and R.S.S. were against the Muslims they A should muster all efforts to get them defeated and teach a lesson to the dissident Muslims who had joined the Janasangh party.
There does not appear to be any element of hatred or enmity in the extract of the speech of the appellant reported above.
There is no exhortation by the speaker to the Muslims to attack the Janasangh or the R.S.S. Or to do any kind of harm or violence. 'the entire speech is made against a political background and for a political purpose.
Another intrinsic circumstance which takes the speech out of the ambit of section 123(3A) of the Act is the conduct of the petitioner.
The petitioner admits in his evidence that he heard the speech of the appellant but did not take down the same.
He further clearly admits that the speech excited religious sentiments which is an election offence and yet he did not complain to any one about the speech of the appellant.
In this connection, the petitioner stated thus: "It is a speech which excites the religious sentiments.
That is an election offence.
I had not complained to any authority about the speech of the respondent".
the petitioner has not examined any independent member of the public belonging to the place where the speech was delivered and who had heard the same to prove that the speech tended to promote hatred or enmity between different communities, nor is there any such evidence consisting of the members of the people to show what impact the speech made on them.
On the other hand, it was rightly pointed out by Mr. Nariman, counsel for the appellant that there is reliable evidence to show that the speech was not treated to be an offending one or one that fell within the mischief of section 123(3A) of the Act.
P.W. 1 admits in his statement that a paper called 'Mathrubhumi ' dated 1 3 1977 which was shown to him contains the correct reproduction of the speech of the appellant.
In this connection, the witness state as follows: "I read the Mathrubhumi also.
`Mathrubhumi ' dated 1 3 1977 shown to witness.
Is not the news item under the heading the United Front will return to power on 696 page 3 in this about the same news P. l(a) meeting (Q).
A copy of paper shown to witness.
The witness reads the passage.
The report about the meeting may be correct.
Does it give an exact report of the speech of the respondent on that day (Q) Yes (A).
" This extract in the Mathrubhumi is exhibit R l and runs thus: "C.H. Mohammed Koya expressed the opinion that the fate of those who condemned and denigrated the leaders of the community and those who stabbed the organisation from behind the back will be known by the next election".
A perusal of this extract would clearly show that the appellant never preached any hatred or enmity between two classes of citizens, but had merely condemned the dissident leaders of the community who had stabbed the organisation, namely, the Muslim League in the back and who were seriously condemned for their defection.
Had the speech been understood by the public and the intellectuals as promoting hatred or enmity between two parties, some comment on this aspect must have been found in the paper Mathrubhumi which be longed neither to the Jana Sangh nor to the Muslim League.
Furthermore, there is another paper 'League Time ' which is exhibit R 14 and which clearly mentions that in the last election communalism has not played any part at all.
The relevant extract may h ' be quoted thus: "Communalism has not played any part in the election.
Mr. Rajagopal pointed out this is a hopeful situation".
Thus, both these papers found no communal tinge nor any sermon! preaching hatred or enmity between Janasangh and Muslim League in any of the speeches delivered by the appellant at the various meetings in the course of the elections.
In view of the circumstances, therefore, the only evidence from which the court can find that the appellant had committed a corrupt practice as contemplated by section 123(3A) of the Act is the evid 697 ence of the appellant containing the explanation and the ramifications of his speech which being an admission has, in the facts and circumstances of this case, to be taken as a whole or not at all.
Moreover, as the offending, extract of the speech is an integral part of the speech of the appellant it cannot be dissected.
In other words.
a corrupt practice must be proved beyond reasonable doubt and applying this standard we must hold that the petitioner has failed to prove that the speech given by the appellant promoted or attempted to promote hatred or enmity between two classes of citizens.
In these circumstances.
stances, the allegation in para S of the petition against the appellant has not been proved.
None of the aspects discussed by us have been adverted to by the High Court which seems to have proceeded on presumptions and assumptions.
Lastly we come to the next item on which reliance is placed which is exhibit P. 5, the cartoon.
The allegation regarding the cartoon is made by the petitioner in para 11 of the petition which may be extracted thus: "In Chandrika dated 12 3 1977 on the front page a cartoon is published.
It is depicting Jana Sangh as a Pig and Shri E. M. Sankaran Namboodiripad, the Marxist leader, cutting the flesh of the pig and serving it to the Muslim.
This is an attempt to promote feelings of enmity and hatred between different classes of citizens of India on grounds of religion.
It is well known to eat pork is pardial ansthma (haram) for true Muslims The publication of this cartoon in Chandrika is with the consent and knowledge of the respondent which promoted hatred of the Muslims against the United Front of Marxist Party and Janata Party and Muslim League (opposition) of which the petitioner is a candidate from the concerned constituency".
It may be pertinent to note that in this averment the petitioner has pleaded that the cartoon was published with the consent and knowledge of the petitioner a fact which the petitioner has miserabIy failed to prove.
There is absolutely no evidence on record to show that the cartoon was shown to the appellant and his approval was obtained before it was published, nor is there any evidence to show that the appellant had any knowledge direct or indirect about the cartoon before its publication in Chandrika.
We might indicate 698 here that the term 'consent ' is a much stronger word than knowledge because it implies conscious assent and there is nothing to show that the appellant at any time gave his consent to the publication of the cartoon.
The actual cartoon seems to depict Janasangh as a pig and Shri E. M. section Namboodiripad the Marxist Leader cutting the flesh of the pig and serving it to Muslims It is well known that pork is strictly prohibited by Islam and the very act of offering pig to a Muslim is extremely abhorrent to the Muslim so the cartoon no doubt attempts to promote feeling of hatred between the Hindus and the Muslims and the High Court was right in coming to this finding.
But this does not conclude the matter because it must be affirmatively provide by the petitioner that this cartoon was shown to the appellant or was within his knowledge or had his consent before its publication.
on this there is no evidence at all.
Indeed if there is any evidence it is to negative this fact.
The petitioner has mainly relied on the statement of P.W. 2 the editor which is to the effect that the copy of Chandrika used to be sent to the appellant.
That by itself would not show that the appellant must have read all the issues of Chandrika including the one which contained the cartoon.
In fact, as indicated above, P.W. 2 has himself admitted that at the time of election because of his responsibilities as the Secretary of the Muslim League and as a leader of the United Front during the months of February and March the appellant was mostly on tour.
The appellant has also admitted that during the relevant time he never got time to read the paper completely.
He has also stated categorically as indicated by us while dealing with his evidence that he was extremely busy and has stated l thus: "As a leader of the United Front and the leader of the Muslim League I got much work to be done during election time.
During this time were you very busy with your election speeches ? (Q) Yes (Ans.) I was very busy".
He has further admitted that although a copy of Chandrika was sent to him yet he did not get time to read fully.
The statement runs thus: "As Chief Editor one issue of Chandrika used to be sent to me.
Did you have time to read Chandrika and other newspapers during election time ? (Q) l do not get time to read fully (Ans.)" This is all the evidence that has been produced in the court to show that the cartoon was printed with the knowledge and consent of the appellant.
Putting however the case of the petitioner at the 699 highest all that has been shown is that the appellant may have seen A or received the paper and at the same time it is equally possible that in view of his pre occupation the appellant may not have read or seen the paper at all.
In such a situation, the onus of proof being on the petitioner to prove that the appellant had knowledge of the publication of the cartoon, and applying the standard of proof by the doctrine B of benefit of doubt, the allegation of the petitioner that the appellant was aware of the cartoon or gave his consent to its publication stands disproved for the appellant will get the benefit of doubt if two clear possibilities are available.
Thus, it is impossible for us to jump to the conclusion that the appellant had any knowledge of the publication of the cartoon before its publication, or that he gave his consent C to its publication merely from the fact that the appellant was the Chief Editor and received a copy of Chandrika every day particularly hen the appellant has explained that he was too busy and did not find time to read the paper fully.
As the allegation regarding the cartoon is also a corrupt practice it has to be proved by clear and cogent evidence which is wholly wanting in this case.
It is true that the appellant was shown the cartoon while he was deposing in court and was asked to give his impression but whatever he might have said in court is totally irrelevant because that would not show that he had any knowledge of the cartoon prior to its publication.
He gives his impression only when the cartoon is shown to him.
On a careful consideration of the evidence we are clearly of the opinion that the petitioner has not been able to prove the corrupt practice alleged against the appellant.
There is no legal or satisfactory evidence to prove that the speech Ext.
P.L(a) made by the appellant promoted or attempted to promote feeling of enmity and hatred between two classes of citizens, namely, the Janasangh and R.S.S.
On the one side and the Muslim League on the other.
Similarly, there is no reliable evidence to show that the appellant had any knowledge or had given prior consent to the publication of the cartoon exhibit P. section Thus, the petitioner has miserably failed to prove the allegation made by him in paragraphs S and 11 of the petition which alone have been pressed before us.
We have also come to the conclusion that the presumption under section 7 of the Press Act is not available to the appellant and the learned Judge was wrong in relying on the same.
The result is that the appeal is allowed with costs.
The judgment of the High Court setting aside the election of the appellant and unseating him is quashed as also the order of the High Court disquali 700 fying the appellant from contesting the election for a period of sixyears.
The election petition filed by the petitioner before the High Court is dismissed.
Civil Appeal No. 865 of 1978 FAZAL ALI, J.
In view of our decision in the case of Haji C. H. Mohammed Koya vs T. K. section M. A. Muthukoya (Civil Appeal No. 12 of 1978), the appeal is dismissed but without any order as to costs.
P.H P. C. A. No. 12/78 allowed.
C.A. No. 865/78 dismissed.
| IN-Abs | In the General Election to the Legislative Assembly of Kerala in March 1977 the petitioner and the appellant were the contesting candidates from Malappuram constituency.
The Appellant was declared elected by polling 56,276 votes defeating the petitioner who secured 39,362 votes.
The petitioner filed an election petition alleging that the appellant had committed various corrupt practices falling within the ambit of section 123(3),(3A) and (4) of the Representation of People Act 1951.
The main allegation was that the appellant was the Chief Editor of Malayalam daily paper called 'Chandrika ' which was the official organ of the Muslim League According to the petitioner the paper contained articles, extracts of speeches and cartoons which tended to ask the muslims to vote for the appellant on religious and communal grounds and also promted ill will and hatred between two classes of citizens, namely, the Janasangh and the Muslim League.
At the hearing, the petitioner confined his case only to the corrupt practices alleged by him under section 123(3A).
The petition was contested by the appellant.
He took the stand that he made no speech which offended section 123(3A) of the Act, nor was he aware of any of the offending articles or cartoons published in Chandrika prior to the election.
He denied that he was an editor of Chandrika and admitted that he was the Chief Editor and.
that too.
Only in name.
, He denied that he had to do any thing with the editorial work of Chandrika or the publication of the speeches.
The High Court held that the petition was maintainable.
According to the High Court, the appellant was really the editor of the paper and the presumption under section 7 of the Press and Registration of Books Act 1867 would apply.
Allowing the appeal the Court, ^ HELD: The object of the Press Act is to regulate printing presses and newspapers in order to preserve copies of newspapers and books.
In order to avoid multiplicity of suits and uncertainties of liabilities, it was considered necessary to choose one of the persons from the staff and make him liable for all the articles or matters to be published in the paper so that any person aggrieved may sue only the person so named under the provisions of Press Act and a litigant is relieved from the necessity of making a fishing or roving enquiry.
Under section 1 ( 1 ) the Editor is defined to mean the person who controls the selection of the matter that is to be published in a newspaper.
Section 5(1) requires that every copy of every newspaper shall contain the names of the owner and editor, printed clearly on such copies and also the 665 date of the publication.
Section 8A provides that where any person 's name A has appeared as an editor in a newspaper, although he was not an editor, he shall, within two weeks of his becoming aware that his name has been so published, appear before a magistrate and make a declaration that he has been incorrectly published.
In the present case, the following are the 1.
That the issues of Chandrika shown to us clearly and unmistakably mention the name of Aboobaker as the printer, publisher and editor of Chandrika and does.
not mention the appellant as the Editor of Chandrika.
The appellant is merely shown as the Chief Editor but this is an officer which is not at all contemplated by the Press Act.
That if the appellant was really the editor of the paper then P.W. 2 Aboobaker ought to have resorted to section 8(A) to correct the mistake in the paper where his name was shown as the editor but no such thing has been done.
On the other hand, P.W. 2 Aboobaker tacitly and clearly admits that he is the editor of the paper.
That the petitioner has not at all pleaded in his petition the nature of the duties performed or responsibilities shouldered by the appellant as Chief Editor;.
There is no averment at all in the petition that the appellant controls the selection of matter that is published in the newspaper which alone would make him an editor as defined in section 1(1) of the Press Act.
The word 'Chief Editor ' is clearly absent from the Press Act and in fact foreign to it because the Press Act has selected only one person who as a special status and that is the editor who can be sued if necessary or can sue and against whom alone a presumption under section 7 or the Press Act can be drawn.
While holding that the presumption under section 7 is available the High Court has completely overlooked the aforesaid aspect.
[671 D E, 672 A C673 E H, 674 A C] State of Maharashtra vs Dr. R. B. Chowdhury and ors. ; and D. P. Mishra vs Kamal Narain Sharma and ors.
[1971] 3 S.C.R 257 and Narasingh Charan Mohanty vs Surendra Mohanty [19741 2 S.C.R. 39; relied on.
In the present case, the paper clearly shows the name of Shri Aboobakar as the editor.
There is sufficient evidence both led by the petitioner and the appellant that Aboobaker was incharge of the paper and that he was functioning as the editor.
The Court came to this conclusion on a detailed appreciation of the evidence of witnesses examined by both the sides.
[685 H, 686 A The petitioner failed to prove either that the appellant was an editor of the paper or that he was performing the functions, duties or shouldering the responsibilities of the editor.
The presumption under section 7 of the Press Act could be drawn that only the person concerned was the editor within the meaning of the Press Act.
The High Court had 'no justification to draw a presumption against the appellant under section 7 of the Act.
[686 H, 687 A B] 666 Even if it is assumed that the appellant was the editor the presumption under section 7 is rebuttable and the evidence in the case shows that the presumption has been sufficiently rebutted.
[687 B C] The publication of the material promoting hatred between two classes of citizens is undoubtedly.
a corrupt practice.
It is well settled by long course of decisions of this Court that such practices must be clearly alleged and all the necessary particulars must be proved not by the standard of preponderance of probabilities but beyond reasonable doubt.
Mohan Singh vs Bhanwar Lal and ors.
; , Magrai Patodia vs R. K. Birla and Ors.
[19711 2 S.C.R. 118, Dr Venkata Reddy vs R. Sultan & ors ; Ramanbhai Nagibhai Patel vs Jaswant Singh Udesingh Dabhi and ors A.I.R. 1968 S.C. 1162: relied on.
Neither the writer of the article nor the speaker who delivered the speech, nor the reporter, nor even the manuscript of the speeches, had been produced before the Court.
All these articles and speeches are inconsequential until they are shown, to have been made with the knowledge and consent, of the appellant.
[689 B C] The following facts meaningly emerge: 1.
The petitioner has not mentioned the name of a single person who had actually heard the speech and made a report.
According to the evidence of P. W. 1 he was present at the place where the speech was delivered by the appellant and yet this fact, though a very material particular, does not find mention in the avernment in the petition referred to above.
3.It is not indicated in the petition as to how and in what manner the speech tended to promote feelings of enmity or hatred between two classes of citizens against whom hatred was preached by the speaker has not been mentioned.
[691 C E]` The allegations in the petition are vague.
No evidence was produced by the petitioner to prove whether the extract of the speech was correct and was a reproduction of the very words used by the appellant.
It is well settled that the admission unless it is separable has to be taken as a whole or not at all.
[691 F, G, 692 A] Hanumant vs The State of Madhya Pradesh , Palvinder Kaur.
vs The State of Punjab and Dadarao vs The State of Maharashtra ; relied on.
Even from the extract of the speech it is clear that the speech was not intended to preach hatred or enmity between the two classes of citizens. 'The petitioner has not produced either the reporter who was present at the meeting when the appellant spoke, nor has he called for the script of the speech, the extract of which was given in the newspaper.
It is very difficult to interpret a part of the speech completely torn from its context.
The entire speech was made against political background and for a political purpose.
The petitioner has not examined any independent member of the public belonging to the place where a speech was delivered to show that the speech tended to promote enmity or hatred between different communities.
[694 C, D, F G H, 969 D] 667 The reliance placed on the cartoon in para 11 of the petition is as under: "In Chandrika dated 12 3 1977 on the front page a cartoon is published.
lt is depicting Janasangh as a Pig and Shri E. M. Sankaran Namboodiripad the Marxist Leader, cutting the flesh of the pig and serving, it to the Muslim.
This is an attempt to promote feelings of enmity, and hatred between different classes of citizens of India on grounds of religion, It is well known that to eat pork is pardial ansthma (haram) for true Muslims.
The publication of this cartoon in Chandrika is with the consent and knowledge of the respondent which promoted hatred of the Muslims against the United Front of Marxist Party and Janta party and Muslim League (opposition) of which the petitioner is a candidate from the concerned constituency.
" The petitioner has failed to prove that the cartoon was published with the consent and knowledge of the appellant.
The term consent is a much stronger word than Knowledge because it implies assent.
There is nothing to show that the appellant gave his consent to the publication of the cartoon at any time.
There is no evidence either of consent or knowledge.
On the contrary, there is evidence to negative this fact.
[697 F, H, 698 A C] The Court came to the conclusion that the petitioner has not been able to establish the corrupt practices alleged against the appellant.
There is no legal or satisfactory evidence to prove that the speech made by the appellant promoted or tended to promote a feeling of enmity and hatred between two classes of citizens.
There is no evidence to prove the knowledge or consent of the appellant to the publication of the cartoon.
[699 B C, E G]
|
396 of 1955.
Under Article 32 of the Constitution for a writ in the nature of Habeas Corpus.
R. Patnaik, for the petitioner.
M. C. Setalvad, Attorney General of India, C. K. Daphtary, Solicitor General of India, Raja Jaswant Singh, Advocate General, Jammu and Kashmir ( P. A. Mehta and R. H. Dhebar, with them) for the respondent.
M. C. Setalvad, Attorney General of India (P. A. Mehta and R. H. Dhebar, with him) for the Intervener.
December 20.
The Judgment of the Court was delivered by SINHA J.
This application for a writ of habeas corpus is directed against the State of Jammu and Kashmir which has by its order dated the 4th October, 1955, directed the detention of the petitioner under section 3 of the Jammu and Kashmir Preven 1103 tive Detention Act, (Jammu and Kashmir Act IV of 2011), hereinafter to be referred to as "the Act".
Originally the sole respondent impleaded was the State of Jammu and Kashmir.
After a rule nisi was issued to the respondent, the Union of India intervened because the petitioner had challenged the validity of the Constitution (Application to Jammu and Kashmir) Order, 1954.
The petitioner, P. L. Lakhanpal, aged approximately 28 years, describing himself as the Chairman, End Kashmir Dispute Committee, has moved this Court against the order of the State detaining him in Kothi Bagh sub jail in Srinagar.
The application is based on the following allegations.
The petitioner is normally a resident of 9821, Nawabganj, Delhi 6.
He went to Kashmir on a permit on the 24th September this year "on a study cum pleasure trip".
He has been evincing keen interest in Kashmir politics since the year 1946, when as General Secretary of the Congress Socialist Party, Lahore, be was closely associated with the "Quit Kashmir movement".
Last year he wrote a book entitled I 'Communist Conspiracy in Kashmir", copies of which had been seized by the Delhi Police but were subsequently released.
The petitioner in the book aforesaid, as also elsewhere in the press and on the platform, claims to have been making "trenchant criticism of the Kashmir cabinet headed by Bakshi Ghulam Mohammed and also of the Government of India 's policy in regard to Kashmir".
He claims to be known as the supporter of Sheikh Mohd. Abdullah, the former Prime Minister of Kashmir, and to have expressed the opinion that he "has been the victim of a heinous conspiracy motivated by lust for power between the communists and the rightists on the one hand and Bakshi Ghulam Mohammed, the present Kashmir Prime Minister, on the other".
He also claims to have been advocating the cause of the ex Prime Minister aforesaid of Kashmir whose detention has been severely criticized by him.
He has "also publicly exposed and denounced the brutal excesses committed by the police and authorities under the Bakshi Government throughout 1104 the State".
He has characterized the State Constituent Assembly as having forfeited the confidence of the people.
He claims to have "declared that the Bakshi cabinet, which in his view is dominated by the communists, is the corruptest, the most tyrannical and the most hated Government that the State has ever had".
Similar views were expressed by him in telegrams said to have been sent to the Sadar i Riyasat of Jammu and Kashmir, to the President of India and to the Prime Minister of India.
He claims to have organized a "persistent campaign to secure support for his views on Kashmir among the public and leaders of political thought".
The aforesaid activities of the petitioner, he further claims, have "provoked a bitter controversy between him and the Indian Prime Minister".
In this connection he makes reference to certain statements said to have been made by the Prime Minister of India which it is not necessary to detail here except the following: "During the last few months, however, I have become aware of his (the petitioner 's) activities and have inquired into them.
These inquiries led me to the conclusion that these activities are of a most objectionable character which can only help the enemies of our country".
The petitioner also claims to be the General Secretary of the World Democratic Peace Congress.
In this connection he makes certain other allegations against the Prime Minister of India which are not relevant to the case.
He also makes a grievance that it was reported in a daily newspaper of Srinagar called Khidmat that the present Prime Minister of Jammu and Kashmir had described him as "a traitor and an enemy of the nation".
He then describes his activities during three days in Srinagar meeting people from various walks of life, including editors of the newspapers and members of the State Assembly.
On the 29th September, he says, be left Srinagar for Anantnag in the company of the alleged leader of the opposition in the Assembly and President of the Jammu and Kashmir Plebiscite Front, named Mirza Afzal Mohd. Beg, who, it may be added, has also 1105 been in detention under the orders of the Jammu and Kashmir Government, as stated by the Advocate General of that State.
At Anantnag he claims to have spent two days as the guest of Mr. Beg meeting people of the town and neighbouring areas "listening to their harrowing tales of woe".
On the 30th September be "addressed an informal meeting of the Plebiscite Front Workers at Mr. Beg 's residence".
He came back to Srinagar on the 1st October and left for Sopore on the 2nd October.
There he addressed an informal gathering of a few hundred workers on the same lines as he had done at Anantnag.
On the 3rd October he personally banded to the P.A. to the Chief Secretary of Jammu and Kashmir an application seeking permission for an interview with Sheikh Abdullah in the Kud jail where he has been in detention.
During his stay in Srinagar, he states, he made unsuccessful attempts to contact the State Prime Minister for a meeting.
In the afternoon of the 4th October be held a press conference at which he "made a written statement" complaining of "such barbaric brutalities, such insecurity of life, property and honour and such callousness on the part of the administration as are evidenced in your valley only go to show that the Bakshi Government is just another name for legalized lawless, disorder, corruption and nepotism".
In the early hours of the morning of the 5th October the Superintendent of Police, Srinagar, read out to him the order of detention passed by the Cabinet and took him into custody and detained him in the sub jail Kothi Bagh.
The order of detention (Annexure "D" at page 20 of the paperbook) is in these terms: "GOVERNMENT OF JAMMU AND KASHMIR CHIEF SECRETARIAT (GENERAL DEPARTMENT) Subject: Detention of P. L. Lakhanpal, Chairman, End Kashmir Dispute Committee at present residing in Kashmir Guest House, Lal Chowk, Amira Kadal, Srinagar, under section 3(1)(a)(i) of the Jammu and Kashmir Preventive Detention Act, 2011.
1106 Read: Memorandum No. IS 164 D/55 dated 4 10 1955, from the Minister Incharge, Law and Order.
Order No. 1644 C of 1955 Dated 4th October, 1955.
The Government having considered the facts stated in the memo of the Minister Incharge, Law and Order are satisfied that it is necessary to detain P. L. Lakhanpal, Chairman, End Kashmir Dispute Committee at present residing in Kashmir Guest House, Lal Chowk, Amira Kadal, Srinagar, with a view to preventing him from acting in any manner prejudicial to the security of the State.
Accordingly the Government hereby accord sanction to the Order annexed hereto and authorize the Chief Secretary to Government to issue the same over his signature.
By Order of the Cabinet, , Sd.
G.M. Bakshi Prime Minister".
The order actually 'served on the petitioner is an annexure to the cabinet order (Annexure 'E ' at page 21 of the paper book) which is in these terms: "GOVERNMENT OF JAMMU AND KASHMIR.
Annexure to Cabinet Order No. 1644 C of 1955, dated 4 10 1955.
O r d e r.
Whereas the Government are satisfied with respect to P. L. Lakhanpal, Chairman, End Kashmir Dispute Committee, at present residing in Kashmir Guest House, Lal Chowk, Amirakadal, Srinagar that with a view to preventing him from acting in a manner prejudicial to the security of the State it is necessary to make an order directing that the said P. L.Lakhanpal be detained: Now, therefore in exercise of the powers conferred by sub section (1) of section 3 of the Jammu and Kashmir Preventive Detention Act, 2011, the Government are pleased to order that the said P. L. 1107 Lakhanpal be detained in sub jail, Kothibagh, Srinagar; Notice of this Order shall be given to the said P. L. Lakhanpal by reading over the same to him.
By order of Government.
Ghulam Ahmad Chief Secretary to Government".
It is this order which the petitioner challenges as "malicious, mala fide, vague and capricious, illegally depriving the petitioner of his fundamental right to life and personal liberty guaranteed under article 21 of the Constitution as extended to the State of Jammu and Kashmir".
The order of the petitioner 's detention is also challenged as unwarranted and illegal as the order sent to the jail authorities does not bear the signature of the Prime Minister of Jammu and Kashmir and also because the petitioner has not been supplied, in spite of demands made by him, with the grounds on which the order of his detention is based, "in clear violation of his fundamental rights guaranteed under clause (5) of article 22 of the Con stitution as extended to the State of Jammu and Kashmir by the Constitution (Application to Jammu and Kashmir) Order, 1954".
The State has filed an answer to the petitioner 's affidavit in support of his petition.
The affidavit filed on behalf of the State is sworn to by Shri Pirzada Ghulam Ahmad, Chief Secretary to the Government.
In this affidavit he denies that the petitioner had come to Kashmir on a study cum pleasure trip as alleged by him.
He further states that the petitioner during his stay in Kashmir "actually engaged him self in activities prejudicial to the security of the State" and that the Government was "satisfied that it is not in the public interest to communicate to the petitioner the grounds of the said detention order".
The affidavit further states that the petitioner 's "detention was ordered by the Cabinet not for any collateral purpose but because the Government was satisfied that the activities of the petitioner were calculated to prejudice the security of the State" 140 1108 The allegations of improper motive and mala fides made by the petitioner are denied as wholly "unfounded and baseless".
It is also denied that the petitioner 's detention was illegal or that the provisions of the Act under which the order had been passed were unconstitutional.
The affidavit ends by stating that it is apprehended that if the petitioner were to be released, he is "likely to indulge further in activities which would greatly jeopardize the security of the State" and that the detention order had been made solely with a view to preventing the petitioner from doing any further mischief.
The Act impugned in this case provides that it shall remain in force for a period of five years from the date of its commencement.
The relevant portion of section 3 is in these terms: (1) The Government may (a) if satisfied with respect to any person that with a view to preventing him from acting in any manner prejudicial to (i) the security of the State; or. . it is necessary so to do, make an order directing that such person be detained".
The main attack against the orders served upon the petitioner is against the following paragraph in the order dated the 7th October 1955: "Now, therefore, the Government, in exercise of the powers conferred by the proviso to sub section (1) of section 8 of the said Act, hereby declare that it would be against the public interest to communicate to the said P. L. Lakhanpal the grounds on which the detention order has been made".
That part of the order of detention passed against the petitioner is in consonance with section 8 of the Act which is in these terms: "(1) When a person is detained in pursuance of a detention order, the authority making the order shall, as soon as may be, communicate to him the grounds on which the order has been made, and shall afford him the earliest opportunity of making a representation against the order to the Government; Provided that nothing contained in this sub sec 1109 tion shall apply to the case of any person detained with a view to preventing him from acting in any manner prejudicial to the security of the State if the Government by order issued in this behalf declares that it would be against the public interest to communicate to him the grounds on which the detention order has been made.
(2)Nothing in sub section (1) shall require the authority to disclose facts which it considers to be against the public interest to disclose".
The proviso to the section just quoted makes provision for such cases as come within the purview of section 3(1) (a) (i) of the Act; that is to say, a person in the position of the petitioner who has been detained for preventing him from acting in any manner prejudicial to the security of the State of Jammu and Kashmir is outside the general rule laid down in section 8(1) if the Government declares as it has done in this case, that it would be against the public inte rest to communicate to him the grounds on which the detention order has been made.
It is not contended that the orders served upon the petitioner are not justified by the terms of the section quoted above.
But it has been argued by the learned counsel for the petitioner that the terms of the section are unconstitutional inasmuch as they are inconsistent with the provisions of articles 21 and 22 of the Constitution and are therefore to the extent of such in consistency void in view of the provisions of article 13 of the Constitution.
This argument presupposes that the petitioner can invoke the aid of those articles.
It has not been contended on behalf of the petitioner that apart from the provisions of Part III of the Constitution the petitioner has any fundamental rights guaranteed to him, Therefore, if articles 21 and 22 are out of the way, as will presently appear, the argument is without any force.
The Constitution does not apply to the State of Jammu and Kashmir in its entirety.
On the 14th May, 1954, the President of India in exercise of the powers conferred by clause (1) of article 370 of the Constitution made and promulgated with the concur 1110 rence of the Government of the State of Jammu and Kashmir, the Constitution (Application to Jammu and Kashmir) Order, 1954 (which shall be described hereinafter as "The Order").
It came into force on the same day and superseded the Constitution (Application to Jammu and Kashmir) Order, 1950.
By its terms the Order provides that in addition to articles I and 370, the specified provisions of the Consti tution shall apply to the State of Jammu and Kashmir subject to the exceptions and modifications indicated therein.
In so far as those exceptions and modifications are relevant to our present purpose, it is provided that in clauses (4) and (7) of article 22 "The Legislature of the State of Jammu and Kashmir" shall be substituted for "Parliament", so that the Legislature of the State of Jammu and Kashmir is competent to legislate in respect of preventive detention.
In article 35, clause (c) has been added, which is in these terms: "No law with respect to preventive detention made by the Legislature of the State of Jammu and Kashmir, whether before or after the commencement of the Constitution (Application to Jammu and Kashmir) Order, 1954, shall be void on the ground that it is inconsistent with any of the provisions of this Part, but any such law shall, to the extent of such inconsistency, cease to have effect on the expiration of five years from the commencement of the said Order, except as respects things done or omitted to be done before the expiration thereof".
The effect of this modification in article 35 of the Constitution is that such of the provisions of the Act as are inconsistent with Part III of the Constitution shall be valid until the expiration of five years from the commencement of the Order.
This is an exception which has been engrafted on the Constitution in respect of fundamental rights relating to personal liberty for the limited period of five years.
The Act itself has a limited life of five years.
Thus the exception aforesaid is co extensive with the life of the Act itself.
Hence, so long as the Act continues in force in its present form, the provisions of articles 21 and 22 in 1111 so far as they are inconsistent with the Act are out of the way of the respondent and the petitioner cannot take advantage of those provisions.
Therefore, there is no question of the provisions of section 8 of the Act being unconstitutional by reason of their being inconsistent with articles 21 and 22 of the Constitution; and consequently article 13 is of no assistance to the petitioner.
We have assumed that article 32 of the Constitution under which this application has been made to this Court is available to the petitioner, though the Attorney General who appeared to show cause on behalf of the respondents, ' went to the length of suggesting that even the benefit of article 32 of the Constitution is not available to the petitioner.
As he did not raise this point by way of a preliminary objection and as we did not hear the petitioner 's counsel on this aspect of the case, because in our view clause (c) added to article 35 of the Constitution by the President 's Order was enough to deprive the petitioner of the benefit of articles 21 and 22 at least, we have not thought it necessary to examine and pronounce upon that extreme proposition.
Realizing the difficulty in the petitioner 's way in view of the provisions of clause (c) added as a afore said to article 35 of the Constitution, the learned counsel for the petitioner faintly suggested that clause (c) of article 35 added by the President 's Order was itself bad inasmuch as, so the argument further ran, that provision was in excess of the powers conferred on the President by article 370 of the Constitution.
No attempt was made on behalf of the petitioner to show how the Order promulgated by the President was in excess of his powers under article 370 of the Constitution.
It was not contended that that article did not authorise the President to promulgate the Order.
What was suggested was that in promulgating the Order which the President was authorized to make under article 370 he had exceeded his powers.
Beyond saying so, no tangible reason was adduced in support of this extreme position.
It is manifest that article 370(1)(c) and (d) authorizes the President by Order 1112 to specify the exceptions and modifications to the provisions of the Constitution (other than articles I and 370) subject to which the Constitution shall apply to the State of Jammu and Kashmir.
Clause (c) as indicated above has been added to article 35 of the Constitution only so far as the State of Jammu and Kashmir is concerned.
Section 8 of the Act is not in excess of or inconsistent with the provisions of clause (c) so added to article 35 of the Constitution.
That being so the orders as served upon the petitioner are not inconsistent with or in excess of such provisions of Part III of the Constitution as apply to the State of Jammu and Kashmir.
It must therefore be held that the petitioner was not entitled to know the grounds upon which he had been detained beyond what is disclosed in the order itself It was argued that the order of detention served on the petitioner or the order sent to the officer in charge of the jail where he was detained, did not bear the signature of the Prime Minister of Jammu and Kashmir.
But no provisions of any law have been brought to our notice which require that the Prime Minister himself should have signed the copy of the order to be served on the detenu or the copy of the order which was forwarded to the officer in charge of the jail.
Even the long petition submitted by the petitioner which is not characterized by sobriety of language or strict accuracy does not contain any the least suggestion to that effect; and no material in sup port of it has been shown to us.
We cannot, therefore, take notice of such an irresponsible and unfounded suggestion.
It must therefore be held that all the grounds of law urged or suggested in support of the petition are without any substance.
We may add that we did not call upon the Attorney General who appeard on behalf of the respondents to show cause with reference to the allegations of the order impugned being malicious or wanting in bona fides because no foundation had been laid in the petition on the facts stated in the affidavit which could lead us even remotely to make such an inference, 1113 For the reasons aforesaid it must be held that there is no merit in the application and the rule is accordingly discharged, and the application is dismissed.
| IN-Abs | The petitioner was detained in Kothibagh sub jail in Srinagar by the order of Jammu and Kashmir Government under the provisions of section 3(1)(a)(i) of the Jammu and Kashmir Preventive Detention Act, 2011, 1102 The petitioner challenged the order of detention on the grounds, inter alia, (i) that it encroached on his fundamental right to life and personal liberty guaranteed to him under article 21 of the Constitution as extended to the State of Jammu and Kashmir, (ii) that it violated his fundamental right guaranteed to him under clause (5) to article 22 of the Constitution as extended to Jammu and Kashmir State inasmuch as the petitioner was not supplied with the grounds on which the order of detention was based.
It was contended that section 8(1) Proviso, of Jammu and Kashmir Preventive Detention Act, 2011, under which the grounds of detention were not supplied to him, was unconstitutional as being inconsistent with articles 21 and 22 of the Constitution and thus void to the extent of that inconsistency in view of the provisions of article 13 of the Constitution.
Held (overruling the contention) that section 8 (1) Proviso is not unconstitutional in view of the provisions of Constitution (Application to Jammu and Kashmir) Order, 1954 which supersedes the Constitution (Jammu and Kashmir) Order, 1950, and of clause (c) which has been added to article 35 of the Constitution.
The effect of the modification of article 35 by the addition of clause (c) thereto is that such of the provisions of the Act as are inconsistent with Part III of the Constitution shall be valid until the expiration of five years from the commencement of the Order.
|
: Criminal Appeal No. 43 of 1972.
From the Judgment and Order dated 11 5 71 of the Rajasthan High Court in D.B. Criminal Appeal No. 478/67.
Nemo: for the Appellant.
S.M. Jain for the Respondent.
The Judgment of the Court was delivered by JASWANT SINGH, J.
This appeal under section 2(a) of the (Act 28 of 1970) raises a short question as to the nature of the offence made out against the appellant on the basis of the evidence adduced in Sessions Case No. 64 of 1966.
The Sessions Judge, Udaipur, who tried the appellant found on a consideration of the evidence led in the case including the direct testimony of Mst.
Jelki (P.W. 3) and Mst.
Modan (P.W. 8) that the appellant attacked his wife, Mst.
Gajri with dagger (Exh. 1) and caused injuries on her person out of which injury No. 2 which had injured the liver and caused the perforation of the large colon was sufficient to cause her death in the ordinary course of nature.
Despite this finding, the Sessions Judge convicted the appellant under section 304 of the Indian Penal Code and acquitted him of the charge under section 302 of the Penal Code in view of the fact that Dr. Laxmi Narain (P.W. 1) who conducted the post mortem examination of the body of Mst.
Gajri had said in the course of his examination that if immediate expert treatment had been available and emergency operation had been performed, there were chances of her survival.
The Sessions Judge agreeing with the contention raised on behalf of the defence also found that according to the case of the prosecution itself, the accused had gone to the village of his in laws to fetch Mst.
Gajri and it was only on her refusal to accompany him that the incident took place; that he had no intention to kill Mst.
Gajri and that at best what could be attributed to the appellant was the knowledge that the injury he was inflicting on the deceased was likely to cause her death.
746 On the matter being taken in appeal by the State, the High Court found that the Sessions Judge was in error in acquitting the appellant of the offence under section 302 of the Indian Penal Code ignoring the evidence to the effect that a penetrating wound 11/2" X1/2" was caused by the appellant with a dagger on the posterior axillary line 10" from the top of the shoulder and 5" from the spine which had caused injury to the liver and perforation of the large colon and was sufficient to cause death in the ordinary course of nature.
Accordingly, the High Court altered the conviction of the appellant from the one under section 304 Part II of the Indian Penal Code to that under section 302 of the Penal Code and sentenced him to imprisonment for life.
Mr. K.K. Luthra who was appointed as amicus curiae in the case not having cared to appear despite long and anxious waiting, we have gone through the entire record with the assistance of counsel for the respondent.
The grounds of appeal submitted by the appellant which are very inartistically drafted can at best be interpreted to urge only one thing viz. that the High Court went wrong in upsetting the judgment and order of the Sessions Judge and convicting the appellant under section 302 of the Indian Penal Code instead of under section 304 Part II of the Penal Code as ordered by the Sessions Judge.
This contention, in our judgment, is entirely misconceived.
It completely overlooks the circumstances attending the commission of the offence viz. that the appellant went armed with a dagger and despite the willingness expressed by Mst.
Gajri to accompany him next morning, he inflicted without the slightest provocation two injuries on her person (1) which landed on her right palm 3/4" above the second metacarpo phalangeal joint in the process of warding off the blow and (2) a penetrating wound, as stated above.
The whole affair appears to be pre planned and pre meditated and as such the case squarely falls within the purview of clause thirdly of section 300 of the Indian Penal Code.
We are fortified in this view by two decisions of this Court viz. Virsa Singh vs The State of Punjab and State of Andhra Pradesh vs Rayavarapu Punnayya & Anr.
In Virsa Singh vs The State of Punjab (supra) where the accused thrust a spear into the abdomen of the deceased which resulted in his death and in the opinion of the doctor, the injury was sufficient to cause death in the ordinary course of nature, it was held that even if the intention of the accused was limited to the infliction of a bodily injury sufficient to cause death in the ordinary course of nature and did not extend to the intention 747 of causing death, the offence would be murder.
The following observations made by this Court in that case are worth quoting: "If there is an intention to inflict an injury that is sufficient to cause death in the ordinary course of nature, then the intention is to kill and in that event, clause 'thirdly ' would be unnecessary because the act would fall under the first part of the section, namely "If the act by which the death is caused is done with the intention of causing death.
" In our opinion, the two clauses are disjunctive and separate.
The first is subjective to the offender: "If it is done with the intention of causing bodily injury to any person.
" It must, of course, first be found that bodily injury was caused and the nature of the injury must be established, that is to say, whether the injury is on the leg or the arm or the stomach, how deep it penetrated, whether any vital organs were cut and so forth.
These are purely objective facts and leave no room for interference or deduction: to that extent the enquiry is objective; but when it comes to the question of intention, that is subjective to the offender and it must be proved that he had an intention to cause the bodily injury that is found to be present.
Once that is found, the enquiry shifts to the next clause "and the bodily injury intended to be inflicted is sufficient in the ordinary course of nature to cause death.
" The first part of this is descriptive of the earlier part of the section, namely, the infliction of bodily injury with the intention to inflict it, that is to say, if the circumstances justify an inference that a man 's intention was only to inflict a blow on the lower part of the leg, or some lesser blow, and it can be shown that the blow landed in the region of the heart by accident, then, though an injury to the heart is shown to be present, the intention to inflict an injury in that region, or of that nature, is not proved.
In that case, the first part of the clause does not come into play.
But once it is proved that there was an intention to inflict the injury that is found to be present, then the earlier part of the clause we are now examining 748 "and the bodily injury intended to be inflicted" is merely descriptive.
All it means is that it is not enough to prove that the injury found to be present is sufficient to cause death in the ordinary course of nature; it must in addition be shown that the injury is of the kind that falls within the earlier clause, namely, that the injury found to be present was the injury that was intended to be inflicted.
Whether it was sufficient to cause death in the ordinary course of nature is a matter of inference or deduction from the proved facts about the nature of the injury and has nothing to do with the question of intention.
In considering whether the intention was to inflict the injury found to have been inflicted, the enquiry necessarily proceeds on broad lines as, for example, whether there was an intention to strike at a vital or a dangerous spot, and whether with sufficient force to cause the kind of injury found to have been inflicted.
It is, of course, not necessary to enquire into every last detail as, for instance, whether the prisoner intended to have the bowels fall out, or whether he intended to penetrate the liver or the kidneys or the heart.
Otherwise, a man who has no knowledge of anatomy could never be convicted, for if he does not know that there is a heart or a kidney or bowels, he cannot be said to have intended to injure them.
Of course, that is not the kind of enquiry.
It is broad based and simple and based on commonsense: the kind of enquiry that "twelve good men are true" could readily appreciate and understand.
To put it shortly, the prosecution must prove the following facts before it can bring a case under section 300, "thirdly"; First, it must establish, quite objectively, that a bodily injury is present; Secondly, the nature of the injury must be proved; These are purely objective investigations.
Thirdly, it must be proved that there was an intention to inflict that particular bodily injury, that is to say, that it was not accidental or unintentional, or that some other kind of injury was intended.
Once these three elements are proved to be present, the enquiry proceeds further and, 749 Fourthly, it must be proved that the injury of the type just described made up of the three elements set out above is sufficient to cause death in the ordinary course of nature.
This part of the enquiry is purely objective and inferential and has nothing to do with the intention of the offender.
Once these four elements are established by the prosecution (and, of course, the burden is on the prosecution throughout) the offence is murder under section 300, thirdly.
It does not matter that there was no intention to cause death.
It does not matter that there was no intention even to cause an injury of a kind that is sufficient to cause death in the ordinary course of nature (not that there is any real distinction between the two).
It does not even matter that there is no knowledge that an act of that kind will be likely to cause death.
Once the intention to cause the bodily injury actually found to be present is proved, the rest of the enquiry is purely objective and the only question is whether, as a matter of purely objective inference, the injury is sufficient in the ordinary course of nature to cause death.
No one has a licence to run around inflicting injuries that are sufficient to cause death in the ordinary course of nature and claim that they are not guilty of murder.
If they inflict injuries of that kind, they must face the consequences; and they can only escape if it can be shown, or reasonably deduced that the injury was accidental or otherwise unintentional.
" Similar view was expressed by this Court in State of Andhra Pradesh vs Rayavarapu Punnayya & Anr.
(Supra).
In the present case, the appellant appears to have intended to cause the death of Mst.
Gajri otherwise there was no necessity for him to carry the dagger with him when he went to the village of his in laws to fetch his wife.
That the appellant intended to cause the death of the deceased is further clear from the fact that he inflicted a through and through penetrating wound on the posterior axillary line which seriously injured the vital organs of the deceased viz. the liver and the large colon leading to internal haemorrhage and shock.
The injury in the opinion of the doctor being sufficient in the ordinary course of nature to cause the death of the deceased, the case squarely fell within the ambit of clause thirdly of section 300 of the Indian Penal Code as held by this Court in the decisions referred to above.
The mere fact that if immediate expert treatment had been available and the emergency operation had been performed, there were chances of survival of the deceased can be of no avail to the appellant.
750 Explanation 2 to section 299 of the Indian Penal Code clearly lays down that where death is caused by bodily injury, the person who causes such bodily injury shall be deemed to have caused the death, although by resorting to proper remedies and skilful treatment the death might have been prevented.
For the foregoing reasons, we are of the view that the Sessions Judge was wholly wrong in convicting the appellant under section 304 Part II of the Indian Penal Code and acquitting him of the charge under section 302 of the Penal Code and the High Court was wholly right in convicting the appellant under section 302 of the Penal Code instead of under section 304 Part II of the Penal Code.
In the result, we do not find any merit in this appeal which is dismissed.
S.R. Appeal dismissed.
| IN-Abs | The appellant was charged and tried for the offence under Section 302 I.P.C. for causing the murder of his wife.
The Sessions Judge though on a consideration of the evidence led in the case including the direct testimony of Mst.
Jelki(PW 3) and Mst.
Modan (PW 8) found that the appellant attacked his wife.
Gajri with dagger (Ext.
I) and caused injuries on her person out of which injury No. 2 which had injured the liver and caused the perforation of the large colon was sufficient to cause her death in the ordinary course of nature, convicted him under Section 304 Part II I.P.C. and acquitted him of the charge under Section 302 Penal Code, in view of the fact that Dr. Laxmi Narain (PW 1) who conducted the postmortem examination of the body of Mst.
Gajri had said in the course of his examination that "if immediate expert treatment had been available and emergency operation had been performed there were chances of the survival".
In State appeal, the High Court altered the conviction of the appellant from one under Section 304 Part II I.P.C. to that under Section 302 I.P.C. and sentenced him to imprisonment for life.
Hence the appeal under Section 2(a) of the Supreme Court(Enlargement of Criminal Appellate Jurisdiction) Act (Act 28) 1970.
Dismissing the appeal, the Court ^ HELD: 1.
Explanation 2 to Section 299 of the Indian Penal Code clearly lays down that where death is caused by bodily injury the person who causes such bodily injury shall be deemed to have caused the death, although by resorting to proper remedies and skilful treatment the death might have been prevented.
The mere fact that if immediate expert treatment had been available and the emergency operation had been performed, there were chances of survival of the deceased can be of no avail to the appellant.
[749H. 759A] 2.
The injury in the opinion of the doctor being sufficient in the ordinary course of nature to cause death of the deceased, the case squarely fell within the ambit of clause, Thirdly of Section 300 I.P.C. [749G] In the instant case, the appellant appears to have intended to cause the death of Mst.
Gajri otherwise there was no necessity for him to carry the dagger with him when he went to the village of his in laws to fetch his wife.
745 That the appellant intended to cause the death of the deceased is further clear from the fact that he inflicted a through and through penetrating wound on the posterior axillary line which seriously injured the vital organs of the deceased viz. the liver and the large colon leading to internal haemorrhage and shock.
[749F G] Virsa Singh vs The State of Punjab; , and State of Andhra Pradesh vs Rayavarapu Punnayya and Anr., ; ; reiterated.
|
ivil Appeal Nos.
728 730 of 1975.
823 Appeals by Special Leave from the Judgment and Order dated 19 7 1973 of the Kerala High Court in S.A. Nos. 340 and 341/73 and A.S. No. 176/73.
M. K. Ramamurthy, Amicus Curiae, section Balakrishnan, Amicus Curiae, Miss R. Vaigai and Lilly Kurian (In person) for the Appellant.
V. A. Seyid Muhammed and K. R. Nambiar for the State of Kerala.
L. N. Sinha (for RR 1, 2 and 11 in CA 728), M. I. Joseph (CA 729), P. P. Singh, (C.A. 729, 728 and 730/78) A. G. Puddissery (C.A. 730/75) and K. M. K. Nair for RR 1, 2, 11 and 12 in C.A. 728, RR. 3, 11, 12 and 13 and RR 1, 3 5 in C.A. 730/75.
P. K. Keshava Pillai, Frank Anthony, M. K. D. Namboodiry, K. R. Choudhury, Baby Krishnan, B. Parthasarthi and Panduranga Rao for the Interveners.
The Judgment of the Court was delivered by SEN, J.
These appeals by special leave directed against the Judgment of the Kerala High Court dated July 19, 1973, raise a question of far reaching importance.
The question is whether an educational institution established and managed by a religious or linguistic minority is bound by the provisions of Ordinance 33(4), Chapter LVII of the Ordinances framed by the Syndicate of the University of Kerala, under section 19(j) of the Kerala University Act, 1957.
Lilly Kurian, the appellant herein, was appointed as Principal of the St. Joseph Training College for Women, Ernakulam in the year 1957.
The College was established by the Congregation of the Mothers of Carmal, which is a religious society of Nnus belonging to the Roman Catholic Church, and is affiliated to the University of Kerala.
It is administered by a Managing Board, and the Provincial of the Congregation is its President.
On October 30, 1969, there was an unfortunate incident between the appellant and one P. K. Rajaratnam, a lecturer of the College, placed on deputation by the Government.
On the basis of a complaint by Rajaratnam, the Managing Board initiated disciplinary proceedings against the appellant and appointed a retired Principal of the Maharaja 's College, Ernakulam, to be the Enquiry Officer.
The appellant did not participate in the proceedings.
The attitude adopted by the appellant unfortunately was one of supreme indifference, taking the stand that the Managing Board had no competence whatsoever to initiate any such disciplinary action.
The Enquiry Officer by his 824 report dated November 27, 1969, held the appellant guilty of misconduct.
The Secretary of the Managing Board accordingly served her with a notice dated December 2, 1969 stating that a meeting of the Board was to be held on December 19, 1969, to consider the representation, if any, made by her and also the punishment to be imposed, on the basis of the findings recorded by the Enquiry Officer.
In the wake of the disciplinary action, on December 16, 1969, the appellant filed a suit O.S. No. 819 of 1969 in the Munsiff 's Court, Ernakulam, challenging the validity of the proceedings of the Managing Board.
On December 19, 1969 the Munsiff issued an interim injunction restraining the Management from implementing the decision, if any, taken by it at the meeting to be held on that day.
A meeting of the Board had, in fact, been held and a decision was taken to remove the appellant from service.
The Provincial of the Congregation by virtue of her office as the President of the Managing Board, by order dated January 2, 1970, dismissed the appellant from service.
It was stated that the Managing Board had after giving due notice to the appellant, and on a careful consideration of the enquiry report, and the findings thereon, found that the charges of misconduct were proved.
The appellant was accordingly directed to hand over all papers, files, vouchers and documents connected with the College to Sr.Lewina, Professor, without further delay, stating that the order for her dismissal from service would be implemented immediately after the decision of the Munsiff on the application for temporary injunction.
On January 17, 1970, the Munsiff held that the dismissal of the appellant was free from any infirmity and was by the competent authority, that is the Managing Board, and, therefore, she had no prima facie case.
The Munsiff accordingly vacated the injunction with a direction that temporary injunction already issued will remain in force for two weeks to enable the appellant, if she wanted to move the Vice Chancellor and obtain from him a stay of the order of dismissal.
The appellant had, in the meanwhile, on January 9, 1970; already filed an appeal before the Vice Chancellor under Ordinance 33(4), Chapter LVII of the Ordinance framed by the Syndicate, against the order of dismissal.
The Vice Chancellor by his order dated January 24, 1970, stayed the operation of the order of dismissal.
The suit filed by the appellant was subsequently dismissed by the Munsiff as withdrawn.
It appears that the appellant was all the while functioning as principal of the College.
It was brought to light that she had sent two communications dated October 6, 1969, and November 5, 1969, to 825 the Secretary to the Government, Education Department, calling for termination of deputation of Rajaratnam, appointed as a Lecturer in the College by the Management, as a result of which his deputation was cancelled by the Government on December 9, 1969.
The Managing Board viewed the sending of these communications by the appellant without reference to it as an act of insubordination, and, therefore, decided to conduct an enquiry against the appellant and she was suspended pending enquiry.
A substitute Principal, Sr.Lewina, was appointed and the appellant was relieved of the duties on April 10, 1970.
On April 13, 1970 the appellant filed an appeal to the Vice Chancellor against the order of suspension under Ordinance 33(1) of Chapter LVII, and the Vice Chancellor by his order dated April 20, 1970 directed that the status quo be maintained.
In view of this order, the Management was presumably apprehensive that the appellant might force herself upon the College.
The substitute Principal, Sr.Lewina, appointed by the Management in place of the appellant accordingly on July 2, 1970 filed the suit O.S. No. 405 of 1970 in the Munsiff 's Court, Ernakulam for an injunction restraining the appellant from functioning and from interfering with her discharging the duties as Principal.
The Munsiff granted a temporary injunction, in the terms prayed for, which was subsequently confirmed.
The Vice Chancellor, University of Kerala, by his two orders dated October 19, 1970 held that the order of dismissal from service and the order of suspension passed against the appellant were in breach of the rules of natural justice and fair play and were consequently illegal and null and void, and accordingly directed the Management to allow her to function as Principal.
Before the orders were communicated, the Management filed the suit O.S. No. 110 of 1970 in the Munsiff 's Court, Ernakulam on October, 22, 1970, seeking an injunction restraining the appellant from functioning as Principal of the College and obtained a temporary injunction.
While these two injunctions were in force, the appellant wrote to the Superintendent of the Post Offices demanding delivery of letters addressed to the Principal at her residence.
The non delivery of letters created a dead lock in the administration of the College.
On July 22, 1972, the substitute Principal, Sr.Lawine accordingly filed a suit O.S. No. 569 of 1972 in the Munsiff 's Court, Ernakulam against the appellant and the Postal Authorities for prohibiting the one from receiving and the other from delivering, the postal articles addressed to the Principal of the College.
All the three suits pending in the Munsiff 's Court, Ernakulam were transferred, by the order of the District Judge, Ernakulam to the 1st Additional Sub Court, Ernakulam for disposal.
826 The trial court by its judgment dated December 6, 1972 dismissed the suits holding that the appellate power conferred on the Vice Chancellor by cls.
(1) and (4) of Ordinance 33, Chapter LVII of the Ordinance framed by the Syndicate under section 19(j) of the Act, was a valid conferment of power on the Vice Chancellor and even after the commencement of the Kerala University Act, 1969, both the Vice Chancellor and the Syndicate had concurrent powers of appeal.
It, therefore, upheld the orders of the Vice Chancellor directing reinstatement of the appellant in service.
On appeal, the District Judge, Ernakulam by his judgment dated March 17, 1973 held that the orders of the Vice Chancellor were perfectly valid and within jurisdiction, and that his direction to the Management to continue the appellant as Principal in her office was also legal.
He, accordingly dismissed the appeals.
The Kerala High Court, however, by its judgment dated July 19, 1973 reversed the judgment and decree of the court below and decreed the plaintiffs ' suit holding that (i) the conferment by the Syndicate of a right of appeal to a teacher against his order of dismissal from service to the Vice Chancellor cannot be said to be in excess of the permissible limits of the power to prescribe the duties and conditions of service of teachers in private colleges in terms of section 19(j) of the Act, and (ii) the provisions for a right of appeal contained in Ordinance 33(1) and (4), Chapter LVII of the Ordinance were not violative of the rights guaranteed to the religious minorities under Article 30(1), and were, therefore, valid, following certain observations of its earlier Full Bench decision in V. Rev. Mother Provincial vs State of Kerala.
According to the High Court, although the Vice Chancellor had the power to hear an appeal against an order of dismissal under Ordinance 33(4), he had not, expressly or impliedly, the power to order reinstatement or even to grant a declaration that the services of the appellant had been wrongly terminated.
It held that a statutory tribunal like the Vice Chancellor could not grant such a relief as the same would amount to specifically enforcing the contract of service.
In reaching the conclusion, the High Court observes that this, in effect, "amounts to eviscerating the right of appeal to the Vice Chancellor, but the remedy lies elsewhere", in the light of the authorities cited by it.
The Kerala University Act, 1957, "the Act", as the preamble shows, was enacted to reconstitute the University of Travancore into a teaching University for the whole of the State of Kerala.
Section 2(a) defines "college" to mean a college maintained by, or affiliated 827 to the University.
The definition of "teacher" in section 2(j) of the Act is wide enough to take in a Principal, as any 'other person imparting instruction '.
Section 5(viii) confers power on the University to affiliate to itself colleges within the State in accordance with the conditions to be prescribed in the statutes regarding management, salary and terms of service of members of the staff, and other such matters, and to withdraw affiliation from colleges.
Section 15(2)(ii) enjoins that the Senate shall make, amend or repeal statutes of its own motion or on the motion of the Syndicate.
The powers of the Syndicate are enumerated in section 19, the relevant provisions of which read: "19.Powers of the Syndicate Subject to the provisions of this Act and the Statutes, the Executive Authority of the University including the general superintendence and control over the institutions of the University shall be vested in the Syndicate; and subject likewise, the Syndicate shall have the following powers, namely: (a) to affiliate institutions in accordance with the conditions prescribed in the Statutes; (b) to make Ordinance and to amend or repeal the same; x x x x x x x x (j) to fix the emoluments and prescribe the duties and the conditions of service of teachers and other employees in Private Colleges.
" The Kerala University Act, 1957 was repealed by the Kerala University Act, 1969 which came into force with effect from February 28, 1969.
Section 75(2) of the Act provides that the statutes, ordinances, rules and byelaws in force immediately before the commencement of the Act shall, in so far as they are not inconsistent with its provisions, continue to be in force unless they are replaced.
The material provisions of Ordinance 33, Chapter LVII of the Ordinances framed by the Syndicate under section 19(g) are as follows: "33(1) Suspension: The management may at any time place a teacher under suspension where a disciplinary proceedings against him is contemplated or is pending.
He shall be paid subsistence allowance and other allowances by the management during the period of suspension at such rates as may be specified by the University in each case.
The teacher shall have right to appeal against the order of suspension to the Vice Chancellor of the University within a period of two months from the date on which he receives the order of suspension.
(2) Nature of penalties: The following penalties may for good and sufficient reasons be imposed on a teacher by the Management: (i) Censure.
(ii) Withholding of increment.
(iii) Recovery from pay of any pecuniary loss caused to the institution/monetary value equivalent to the amount of increment ordered to be withheld.
(iv) Reduction to a lower rank in the seniority list or to a lower grade or post.
(v) Dismissal from service.
The Management shall be the Disciplinary Authority in imposing the penalties.
X X X X X X X X (4) Appeal: A teacher shall be entitled to appeal to the Vice Chancellor of the University against any order passed by the management in respect of the penalties referred to in items (ii) to (v).
Such appeal shall be submitted within a period of 60 days the appellant receives the order of punishment.
" The expression "conditions of service" covers a wide range, as explained by the Privy Council in N.W.F. Province vs Surai Narain which was approved by this Court in State of U.P. vs Babu Ram.
These decisions and also a later decision of this Court in State of M.P. & Ors.vs Shardul Singh have made it clear that the expression conditions of service ' includes everything from the stage of appointment to the stage of termination to service and even beyond, and relates to matters pertaining to disciplinary action.
Thus, the expression 'conditions of service ' as explained in the decisions of the Privy Council and of this Court includes the power to take disciplinary action.
The rules regarding these matters are contained in Chapter LVII of the Ordinances.
The Management of a private college under Ordinance 33(2) is constituted the appointing and the disciplinary 829 authority in respect of imposition of punishment.
In the course of any disciplinary proceeding, a right of appeal before the Vice Chancellor is given to a teacher dismissed from service under Ordinance 33(4) of the Ordinances.
The High Court thus rightly held that the right of appeal conferred by Ordinance 33(4) forms part of the 'conditions of service ' and, therefore, is valid.
The High Court was, however, wrong in two ways.
Firstly, it fell into an error in holding that the Vice Chancellor while exercising the appellate powers under Ordinance 33(4), had not the power to direct reinstatement of a teacher or grant a declaration that his dismissal was wrongful.
It also fell into an error in holding that a right of appeal before the Vice Chancellor given to the teachers of private colleges under Ordinance 33(1) and (4), in the matter of suspension and dismissal, was not violative of the rights of religious minorities under article 30(1) of the Constitution.
Under Ordinance 33(1), a teacher placed under suspension, has a right of appeal against the order of suspension to the Vice Chancellor.
Under Ordinance 33(4), a teacher shall be entitled to appeal to the Vice Chancellor against any order passed by the management in respect of penalties referred to in items (ii) to (v) of Ordinance 33(2).
Merely because a right of appeal is provided without defining the powers of the appellate authority, it cannot be implied that such right does not include the power to direct reinstatement.
The conferment of a power to hear an appeal necessarily invests the appellate authority with the power to annul, vary or set aside the order appealed from.
Such power is incidental to or is implied in, the power to hear an appeal.
It necessarily has the power to grant an appropriate relief.
Indeed, the extent of the appellate power under Ordinance 33(4) is not defined.
When a teacher is dismissed from service, the Vice Chancellor can not only direct reinstatement but also modify the nature of Punishment.
The whole matter is at large before him.
In V. Rev. Mother Provincial vs State of Kerala (supra) a Full Bench of the Kerala High Court while dealing with section 56(4) of the Kerala University Act, 1969, observed that the right of appeal to the Syndicate, which being a large body comprising of as many as seventeen members will be subject to pulls and pressures, was not a body which could be entrusted with a judicial function of this nature.
In that view, it held that sub section (4) suffers from the defect of the appeal being to a forum which seems to be entirely unsuitable for the purpose, being unreasonable, and so much against the interests of the 830 institution, that it can hardly be justified either as a regulation of, or as a reasonable restriction on the power of the management.
Incidentally, it observed: "Though the appeal lies not, as one would have expected, to a judicial or quasi judicial tribunal but to an executive body which, having regard to its composition, would hardly be able to produce what is ordinarily called a speaking order."
The High Court has read more into the Full Bench decision than there is, and from the mere observation that the proper remedy against any abuse of the disciplinary power would be an appeal, seem to assume that a provision like Ordinance 33(4) would not affect the right guaranteed to a minority under Article 30(1), in matters pertaining to discipline.
On the contrary, the Full Bench observed: "The Vice Chancellor can hardly be expected to have the time to deal with such matters, and in any case, the long delay that will necessarily be involved would, by itself render the managing body 's powers of disciplinary control largely ineffectual.
" It is contended on behalf of the appellant that the right to administer guaranteed by Article 30(1) of the Constitution does not carry with it a 'right to maladminister '.
It is urged that while autonomy in administration means right to administer effectively and to manage and conduct the affairs of the institution, the University will always have a right to see that there is no maladministration.
If there is maladministration, the University must take steps to cure the same.
The right to administer is, therefore to be tampered with regulatory measures to facilitate smooth administration.
Regulations which will serve the interests of the students, regulations which will serve the interests of the teachers are of paramount importance under good administration.
Regulations in the interest of efficiency of teachers, discipline and fairness in administration are necessary for preserving harmony among affiliated institutions.
It is urged that if the State has any role to play in the system of general education, its power cannot be confined merely to the laying down of a prescribed standard of education for minority educational institutions but should also extend to all necessary measures to secure an orderly, efficient and sound administration of such institutions.
Once the role of the State in the system of general education is properly understood its regulatory power over the minority educational institutions, it is submitted, would depend upon the nature or type of the educational institutions set up by a minority and all other relevant factors, and no universal or general test can be 831 laid down.
The degree of permissive State control must depend upon the circumstances of each case.
The right under Article 30(1) forms part of a complex and inter dependent group of diverse social interests.
There cannot be any perpetually fixed adjustment of the right and those social interests.
They would need adjustment and readjustment from time to time and in varying circumstances.
Undoubtedly, the management of a minority institution could not be displaced by the regulatory measure.
But the State has a power to regulate through the agency of the University the service conditions of teachers and to secure a fair procedure in the matter of disciplinary action against them.
These safeguards must necessarily result in the security of tenure of teachers and must attract competent and qualified staff and thus could ultimately improve the excellence and efficiency of the educational institution.
It is further urged that the reconciliation of minority rights in education with wider social and educational objectives is inevitably necessary and this involves the judicial task of balancing the guaranteed rights under Article 30(1) with social, national or educational values sought to be regulated or protected by the impugned legislation.
It has to be kept in mind that today the education has to be so designed which would subserve not only the well being of the citizens in the intellectual, ethical and financial spheres but would inculcate amongst them a senses of individual and social consciousness to contribute to the welfare and prosperity of an egalitarian society.
It is, therefore, urged that Ordinance 33(4).
Chapter LVII of the Ordinances farmed by the Syndicate under s.19(j) of the Act is not violative of Article 30(1) as it seeks to ensure justice and fair play to the teachers against arbitrary actions of the management.
It is next urged that the Vice Chancellor, while exercising his appellate power under Ordinance 33(4) is indeed clothed with the State 's inherent judicial power to deal with disputes between the parties and determine them on the merits, fairly and objectively.
It is urged that the contention that the impugned order passed by the Vice Chancellor under Ordinance 33(4) affects the fundamental rights of minority religious institutions under Article 30(1), is based on a complete misconception about the true nature and character of judicial process and of judicial decisions.
If this basic and judicial aspect of the judicial process is borne in mind, it is submitted, it would be plain that the decision given by the Vice Chancellor cannot be said to affect the fundamental rights guaranteed under Article 30(1).
The remedy for a person aggrieved by the decision of a competent judicial tribunal is to approach for redress a superior tribunal, if there be one.
832 Lastly it is urged that the rights of the religious and linguistic minorities in respect of their educational institutions, however, liberally construed, cannot be allowed to dominate every other fundamental rights, directive principles of State policy and broad ideals of the Constitution.
Article 30(1) enables the minorities to establish and administer educational institutions of their choice but it is said they cannot be entitled to exact unjustifiable preferential or discriminatory treatment for minority institutions so as to obtain benefits but to reject obligations of statutory rights.
We fail to see the relevance of these submissions while adjudging the validity of Ordinance 33(1) and (4) in the light of Article 30(1).
The appellant, who appeared in person, supplemented the arguments of the learned counsel appearing as amicus curiae and urged that if the Court does not uphold the powers of the Vice Chancellor under Ordinance 33(4) it would be tantamount to negation of the State 's regulatory power to prevent or cure the abuse of power by the management and throw the teachers to their arbitrary actions without any security of tenure.
She urged that the religious, cultural and linguistic minorities though deserve a generous and sympathetic treatment, cannot at the same time be absolved of their obligations to conform to the norms of natural justice and fair employment.
In assailing the view of the High Court, learned counsel for the Management contends that the right of administration of minority educational institutions rests with the Management and the right of appointment, suspension and dismissal of the staff also is part and parcel of the administration.
In a private college, the appointing and disciplinary authority is the management.
Ordinance 33 relating to the service conditions of teachers in private colleges authorises the management to take any disciplinary proceedings.
The University has no power to interfere into the administration of the college or into the disciplinary action taken against a member of the staff.
The creation of an appellate authority like the Vice Chancellor, which is an outside agency, itself is an illegal abridgment of the right of management enshrined in Article 30(1).
That apart, directing a dismissed Principal, who is the academic head of the college, to hold office against the wishes of the founders of the college without specific power in that regard, is an anathema to the right of administration guaranteed by Article 30(1) of the Constitution.
If the Vice Chancellor were to have power of reinstatement of a dismissed teacher, the result would be, in effect, appointing a person against the will of the founders of the institution.
The conferment of such a power on the Vice Chancellor is destructive of the right of management.
In support of the contention 833 that Ordinance 33(1) and (4) were violative of Article 30(1), reliance was placed on the decision in Ahmedabad St. Xaviers College Society & Anr.vs State of Gujarat & Anr.Learned counsel for the interveners contends that the interposition of an outside authority like the Vice Chancellor, demits the entire disciplinary power of a minority educational institution to the Vice Chancellor.
Under Ordinance 33(4) the Vice Chancellor has the power to veto its disciplinary control.
There is complete interference with the disciplinary power of the minority institution.
The State may 'regulate ' the exercise of the right of administration, but it has no power to impose any 'restriction ' which is destructive of the right itself.
In matters relating to discipline, the process of decision must be left to the institution.
There is direct interference with this right.
The post of principal is of pivotal importance in the life of a college, around whom wheels the tone and temper of the institution, on whom depends the continuity of its traditions, maintenance of discipline and the efficiency of its teaching.
The character of the institution depends on the right choice of the principal by the management.
The right to choose the principal is perhaps the most important facet of the right to administer a college.
In the same way, the right to dispense with the services of the principal is an equally important facet of the same right.
The imposition of any trammel, thereon, except to the extent of prescribing the requisite qualifications and the experience or otherwise fostering the interests of the institution itself, cannot but be considered as a violation of the right warranted under Article 30(1).
Learned counsel appearing for the State of Kerala, however, while conceding that conferral of arbitrary and unguided powers on an outside agency like the Vice Chancellor, would be destructive of the right of management under Article 30(1), contends that the power of the Vice Chancellor under Ordinance 33(4) to hear an appeal against an order of dismissal does not suffer from this vice.
He tries to limit the appellate power of the Vice Chancellor under Ordinance 33(4) to a case where the action of the management is mala fide or where the order of dismissal is a nullity or where the management has acted in breach of the rules of natural justice.
When so read, it is urged, that the conferment of the right of appeal to the Vice Chancellor in case of disciplinary powers of a minority educational institution, amounts only to a regulation of such power, and, therefore, Ordinance 33(4) is not violative of Article 30(1).
Article 30(1) of the Constitution provides: 834 "30.(1) All minorities, whether based on religion or language, shall have the right to establish and administer educational institutions of their choice.
" It is clear beyond doubt that Article 30(1), though couched in absolute and spacious terms in marked contrast with other fundamental rights in Part III, has to be read subject to the regulatory power of the State.
Though this Court has consistently recognized this power of the State as constituting an implied limitation upon the right guaranteed under Article 30(1), the entire controversy has centred around the extent of its regulatory power over minority educational institutions.
In re the Kerala Education Bill, 1957(1), section R. Das, C.J. explained the content of the right under Article 30(1) of the Constitution, in these words: "We have already observed that Article 30(1) gives two rights to the minorities, (1) to establish and (2) to administer educational institutions of their choice.
The right to administer cannot obviously include the right to maladminister.
The minority cannot surely ask for aid or recognition for an educational institution run by them in unhealthy surroundings, without any competent teachers possessing any semblance of qualification, and which does not maintain even a fair standard of teaching or which teaches matters subversive of the welfare of the scholars.
It stands to reason, then, that the constitutional right to administer an educational institution of their choice does not necessarily militate against the claim of the State to insist that in order to grant aid the State may prescribe reasonable regulations to ensure the excellence of the institutions to be aided."
Thus, a contention based on the absolute freedom from State control of the minorities ' right to administer their educational institutions was expressly negatived in this case.
The Court clearly laid down a principle, namely, a regulation, which is not destructive or annihilative of the core or the substance of the right under Article 30(1), could legitimately be imposed.
The right of a minority community to establish and administer educational institutions of their choice was subject matter of decision by this Court in more than one case.
In Rev. Sidhajbhai Sabhai vs State of Bombay, Shah J. (as he then was) speaking for the Court, negatived an argument advanced on 835 behalf of the State that a law could not be deemed to be unreasonable unless it was totally destructive or annihilative of the right under Article 30(1), stating: "The right established by article 30(1) is a fundamental right declared in terms absolute.
Unlike the fundamental freedoms guaranteed by article 19, it is not subject to reasonable restrictions.
It is intended to be a real right for the protection of the minorities in the matter of setting up of educational institutions of their own choice.
The right is intended to be effective and is not to be whittled down by so called regulative measures conceived in the interest not of the minority educational institution, but of the public or the nation as a whole.
If every order which while maintaining the formal character of a minority institution destroys the power of administration is held justifiable because it is in the public or national interest, though not in its interest as an educational institution, the right guaranteed by article 30(1) will be but a 'teasing illusion ', a promise of unreality.
" The learned Judge then went on to say: "Regulation which may lawfully be imposed either by legislative or executive action as a condition of receiving grant or of recognition must be directed to making the institution while retaining its character as a minority institution effective as an educational institution.
Such regulation must satisfy a dual test the test of reasonableness, and the test that it is regulative of the educational character of the institution and is conducive to making the institution an effective vehicle of education for the minority community or other persons who resort to it.
" Unlike Article 19(1) the fundamental freedom under Article 30(1) is absolute in terms; it is not made subject to any reasonable restrictions of the nature the fundamental freedoms enunciated in Article 19 may be subjected to.
All minorities, linguistic or religious, have by Article 30(1) an absolute right to establish and administer educational institutions of their choice; and any law or executive direction which seeks to infringe the substance of that right under Article 30(1) would to that extent be void.
The extent of the regulatory power of the State was explained by Shah J., thus : "This, however, is not to say that it is not open to the State to impose regulations upon the exercise of this right.
836 The fundamental freedom is to establish and to administer educational institutions : it is a right to establish and administer what are in truth educational institutions, institutions which cater to the educational needs of the citizens, or sections thereof.
Regulation made in the true interests of efficiency of instruction, discipline, health, sanitation, morality, public order and the like may undoubtedly be Imposed.
Such regulations are not restrictions on the substance of the right which is guaranteed; they secure the proper functioning of the institution, in matters educational."
In Rev. Father W. Proost & Ors.vs The State of Bihar & Ors.(1) Hidayatullah C.J. while dealing with Articles 29(1) and 30(1), said : "In our opinion, the width of Article 30(1) cannot be cut down by introducing in it considerations on which article 29(1) is based.
The latter article is a general protection which is given to minorities to conserve their language, script or culture.
The former is a special right to minorities to establish educational institutions of their choice.
This choice is not limited to institution, seeking to conserve language, script or culture and the choice is not taken away if the minority community having established an educational institution of its choice also admits members of other communities.
That is a circumstance irrelevant for the application of Article 30(1) since no such limitation is expressed and none can be implied, although it is possible that they may meet in a given case.
" Incidentally, in dealing with the right under Article 30(1) and the extent of the State 's power of regulatory control of such right, this Court in State of Kerala vs V. Rev. Mother Provincial observed: "Administration means 'management of the affairs ' of the institution.
This management must be free of control so that the founders or their nominees can mould the institution as they think fit, and in accordance with their ideas of how the interests of the community in general and the institution in particular will be best served.
No part of this management can be taken away and vested in another body without an encroachment upon the guaranteed right.
There is, however, an exception to this and it is that the standards of education are not a part of management as such.
These standards concern the body politic and are dictated 837 by considerations of the advancement of the country and its people.
Therefore, if universities establish syllabi for examinations they must be followed, subject however to special subjects which the institutions may seek to teach, and to a certain extent the State may also regulate the conditions of employment of teachers and the health and hygiene of students.
Such regulations do not bear directly upon management as such although they may indirectly affect it.
Yet the right of the State to regulate education, educational standards and allied matters cannot be denied.
The minority institutions cannot be allowed to fall below the standards of excellence expected of educational institutions, or under the guise of exclusive right of management, to decline to follow the general pattern.
While the management must be left to them, they may be compelled to keep in step with others.
" Projection of the minorities is an article of faith in the Constitution of India.
The right to the administration of institutions of minority 's choice enshrined in Article 30(1) means 'management of the affairs ' of the institution.
This right is, however, subject to the regulatory power of the State.
Article 30(1) is not a charter for maladministration; regulation, so that the right to administer may be better exercised for the benefit of the institution is permissible; but the moment one goes beyond that and imposes, what is in truth, not a mere regulation but an impairment of the right to administer, the Article comes into play and the interference cannot be justified by pleading the interests of the general public; the interests justifying interference can only be the interests of the minority concerned.
The conferment of a right of appeal to an outside authority like the Vice Chancellor under Ordinance 33(4) takes away the disciplinary power of a minority educational authority.
The Vice Chancellor has the power to veto its disciplinary control.
There is a clear interference with the disciplinary power of the minority institution.
The State may 'regulate ' the exercise of the right of administration but it has no power to impose any 'restriction ' which is destructive of the right itself.
The conferment of such wide powers on the Vice Chancellor amounts in reality, to a fetter on the right of administration under Article 30(1).
This, it seems to us, would so affect the disciplinary control of a minority educational institution as to be subversive of its constitutional rights and can hardly be regarded as a 'regulation ' or a 'restriction ' in the interest of the institution.
In St. Xaviers College vs Gujarat (supra) a Bench of nine Judges, by a majority of seven to two, held that clauses (b) of sub sections (1) and (2) of section 51A of the Gujarat University Act, 1949 were violative 838 of Article 30(1).
Section 51A(1)(b) enacts that no member of the teaching, other academic and non teaching staff of an affiliated college shall be dismissed or removed or reduced in rank except after an enquiry in accordance with the procedure prescribed in clause (a) and the penalty to be inflicted on him is approved by the Vice Chancellor or any other officer of the University authorised by the Vice Chancellor in this behalf.
Similarly, clause (b) of sub section (2) requires that such termination should be approved by the Vice Chancellor or any officer of the University authorised by the Vice Chancellor in this behalf.
It was argued that the requirement that such termination must be with the approval of the Vice Chancellor, creates a fetter in matters relating to disciplinary control over the members of the teaching and non teaching staff.
The approval by the Vice Chancellor, it was said, may be intended to be a check on the administration but there were no guidelines provided and, therefore, clauses (b) of sub section (1) and (2) of section 51A cannot be said to be a permissive regulatory measure.
These contentions were upheld by the majority.
While seven Judges who constituted the majority upheld the provisions of clauses (a) of sub section (1) and (2) of section 51A, as they provided for a reasonable opportunity of showing cause against a penalty to be imposed as being 'regulatory ', they held that clauses (b) of sub sections (1) and (2) of section 51A of the Act, which confer a blanket power on the Vice Chancellor to interfere with the disciplinary control of the management of a minority educational institution over its teachers, make a serious inroad on the right of the minority to administer an educational institution guaranteed under Article 30(1).
To appreciate the point involved, we may refer to certain passages of the judgment.
In dealing with the question, Ray C.J., with whom Palekar, J. agreed, observed: "In short, unlimited and undefined power is conferred on the Vice Chancellor.
The approval of the Vice Chancellor may be intended to be a check on the administration.
The provision contained in section 51A, clause (b) of the Act cannot be said to be a permissive regulatory measure inasmuch as it confers arbitrary power on the Vice Chancellor to take away the right of administration of the minority institutions.
Section 51A of the Act cannot, therefore, apply to minority institutions.
" The provision for approval of the Vice Chancellor was held to be bad because it acted as a check on administration.
Further, it was 839 held to confer arbitrary powers on the Vice Chancellor because there was no guidelines on the basis of which the Vice Chancellor could withhold his approval.
Jaganmohan Reddy J., speaking for himself and for Alagiriswami J. agreed with the opinion of Ray C.J.
In explaining the extent of regulatory control, Khanna J. stated : "Although disciplinary control over the teachers of a minority educational institution would be with the governing council, regulations, in any opinion, can be made for ensuring proper conditions of service of the teachers and for securing a fair procedure in the matter of disciplinary action against the teachers.
Such provisions which are calculated to safeguard the interest of teachers would result in security of tenure and thus inevitably attract competent persons for the posts of teachers.
Such a provision would also eliminate a potential cause of frustration amongst the teachers.
Regulations made for this purpose should be considered to be in the interest of minority educational institutions and as such they would not violate article 30(1).
" He accordingly upheld the validity of clause (a) stating : "Clause (a) of sub sections (1) and (2) of section 51A of the impugned Act which make provision for giving a reasonable opportunity of showing cause against a penalty to be proposed on a member of the staff of an educational institution would consequently be held to 'be valid.
" But he held clause (b) to be invalid saying : "Clause (b) of those sub sections which gives a power to the Vice Chancellor and officer of the University authorised by him to veto the action of the managing body of an educational institution in awarding punishment to a member of the staff, in my opinion, interfere with the disciplinary control of the managing body over its teachers.
It is significant that the power of approval conferred by clause (b) in each of the two sub sections of section 51A on the Vice Chancellor or other officer authorised by him is a blanket power.
No guide lines are laid down for the exercise of that power and it is not provided that the approval is to be withheld only in case the dismissal, removal, reduction in rank or termination of service is mala fide or by way of victimisation or other similar cause.
The conferment of such blanket power on the Vice 840 Chancellor or other officer authorised by him for vetoing the disciplinary action of the managing body of an educational institution makes a serious inroad on the right of the managing body to administer an educational institution.
Clause (b) of each of the two sub sections of section 51A should, therefore, be held to be violative of article 30(1) so far as minority educational institutions are concerned.
" It was held that clause (b) interferes with the disciplinary control of the managing body over its teachers.
The provision does not restrict its operation in cases of mala fides or victimisation, etc.
In other words, the power of the Vice Chancellor was complete.
He could refuse his approval on facts, that is to say, on reaching a conclusion that the action of the management was improper or invalid.
Mathew J., speaking for himself and one of us, Chandrachud J. (as he then was) observed : "It was argued for the petitioners that clause (1)(b) of s.51A has the effect of vesting in the Vice Chancellor a general power of veto on the right of the management to dismiss a teacher.
The exact scope of the power of the Vice Chancellor or of the office of the University authorised by him in this sub section is not clear.
If the purpose of the approval is to see that the provisions of sub section 51A(1) (a) are complied with, there can possibly be no objection in lodging the power of approval even in a nominee of the Vice Chancellor.
But an uncanalised power without any guideline to withhold approval would be a direct abridgement of the right of the management to dismiss or remove a teacher or inflict any other penalty after conducting an enquiry."
The Learned Judge then proceeded to observe: "The relationship between the management and a teacher is that of an employer and employee and it passes one 's understanding why the management cannot terminate the services of a teacher on the basis of the contract of employment.
Of course, it is open to the State in the exercise of its regulatory power to require that before the services of a teacher are terminated, he should be given an opportunity of being heard in his defence.
But to require that for terminating the services of teacher after an inquiry has been conducted, the management should have the approval of an outside agency like the Vice Chancellor or of his nominee would be an abridgement of its right to administer the educational institution.
No guidelines are provided by the legis 841 lature to the Vice Chancellor for the exercise of his power.
The fact that the power can be delegated by the Vice Chancellor to any officer of the University means that any petty officer to whom the power is delegated can exercise a general power of veto.
There is no obligation under the sub sections (1)(b) and 2(b) that the Vice Chancellor or his nominee should give any reason for disapproval.
As we said a blanket power without any guideline to disapprove the action of the management would certainly encroach upon the right of the management to dismiss or terminate the services of a teacher after an enquiry."
He was of the opinion that such a provision constitutes a direct abridgement of the right of the management to dismiss or remove a teacher or inflict any other penalty, after conducting an enquiry.
Dissenting two of the other Judges, namely Beg, and Dwivedi, J. struck a discordant note.
Beg J. (as he then was) observed: "Section 51A of the Act appears to me to lay down general conditions for the dismissal, removal, reduction in rank and termination of services of members of the staff of all colleges to which it applies.
Again, we have not to consider here either the wisdom or unwisdom of such a provision or the validity of any part of section 51A of the Act on the ground that it violates any fundamental right other than the ones conferred by article 30(1) of the Constitution.
" Dwivedi J. stated: "The purpose of section 51A is to check this kind of misuse of the right to fire an employee.
So the Vice Chancellor 's power of approval is not unguided and unreasonable.
After the Chancellor, the Vice Chancellor is the next highest officer of the University.
It should be presumed that in granting or withholding approval 'he would act according to reason and justice '.
When the matter goes before the Vice Chancellor for approval, both the management and the teacher or the member of the non teaching staff should be heard by him.
Hearing both parties is necessarily implied, because without hearing either of them it will be difficult for him to make up his mind whether he should grant or withhold approval to the action proposed by the managing body of the educational institution.
It would also follow that while granting approval 842 or disapproval, the Vice Chancellor should record reasons, for the exercise of his power is subject to control by courts.
The statute does not make his order final, and courts would surely nullify his order if it is arbitrary, mala fide or illegal.
" An analysis of the judgments in St. Xaviers College 's case (supra) clearly shows that seven out of nine Judges held that the provisions contained in clauses (b) of sub sections (1) and (2) of section 51A of the Act were not applicable to an educational institution established and managed by religious or linguistic minority as they interfere with the disciplinary control of the management over the staff of its educational institutions.
The reasons given by the majority were that the power of the management to terminate the services of any member of the teaching or other academic and non academic staff was based on the relationship between an employer and his employees and no encroachment could be made on this right to dispense with their services under the contract of employment, which was an integral part of the right to administer, and that these provisions conferred on the Vice Chancellor or any other officer of the University authorised by him, uncanalised, unguided and unlimited power to veto the actions of the management.
According to the majority view, the conferment an such blanket power on the Vice Chancellor and his nominee was an infringement of the right of administration guaranteed under article 30(1) to the minority institutions, religious and linguistic.
The majority was accordingly of the view that the provisions contained in clauses (b) of sub sections (1) and (2) of section 51A of the Act had the effect of destroying the minority institutions disciplinary control over the teaching and non teaching staff of the college as no punishment could be inflicted by the management on a member of the staff unless it gets approval from an outside authority like the Vice Chancellor or an officer of the University authorised by him.
On the contrary, the two dissenting Judges were of the view that these provisions were permissive regulatory measures.
The power of appeal conferred on the Vice Chancellor under Ordinance 33(4) is not only a grave encroachment on the institution 's right to enforce and ensure discipline in its administrative affairs but it is uncanalised and unguided in the sense that no restrictions are placed on the exercise of the power.
The extent of the appellate power of the Vice Chancellor is not defined; and, indeed, his powers are unlimited.
The grounds on which the Vice Chancellor can interfere in such appeals are also not defined.
He may not only set aside an order of dismissal of a teacher and order his reinstatement, but may also interfere with any of the punishments enumerated in items 843 (ii) to (v) of Ordinance 33(2); that is to say, he can even interfere against the infliction of minor punishments.
In the absence of any guidelines, it cannot be held that the power of the Vice Chancellor under ordinance 33(4) was merely a check on maladministration.
As laid down by the majority in St. Xaviers College 's case (supra), such a blanket power directly interferes with the disciplinary control of the managing body of a minority education institution over its teachers.
The majority decision in St. Xaviers College 's case squarely applies to the facts of the present case and accordingly it must be held that the impugned Ordinance 33(4) of the University of Kerala is violative of Article 30(1) of the Constitution.
If the conferment of such power on an outside authority like the Vice Chancellor, which while maintaining the formal character of a minority institution destroys the power of administration, that is, its disciplinary control, is held justifiable because it is in the public and national interest, though not in its interest as an educational institution, the right guaranteed by Article 30(1) will be, to use the well known expression, a 'testing illusion ', a 'promise of unreality '.
A distinction is, however, sought to be drawn between the provisions contained in clauses (b) of sub section (1) and (2) of section 51A of the Gujarat University Act, 1949 which provided that no penalty could be inflicted on a member of the teaching staff without the prior approval of the Vice Chancellor or his nominee, and that contained in Ordinance 33(4) which confer on the Vice Chancellor the power to hear an appeal against an order of dismissal.
It is said that while a provision making the prior approval of the Vice Chancellor a condition precedent against dismissal, removal or reduction in rank of an employee creates a fetter on the exercise of a disciplinary control, which the employer undoubtedly has, the provision conferring on the Vice Chancellor a power to hear an appeal leaves the power of the employer untouched.
We are afraid, the distinction tried to be drawn is without any basis.
We must, accordingly, hold that Ordinance 33(4), Chapter LVII of the ordinances framed by the Syndicate of the University under section 19(J) of the Kerala University Act, 1969 would not be applicable to an educational institution established and managed by a religious or linguistic minority like St. Joseph 's Training College for Women, Ernakulam.
Incidentally, the Kerala University Act, 1969 has been repealed by the Kerala University Act, 1974, which has come into force with effect from August 18, 1974.
Section 65 of that Act confers power on the Government to constitute an Appellate Tribunal.
Any 844 teacher aggrieved by an order in any disciplinary proceedings taken against him may under section 60(7) appeal to the Appellate Tribunal and the Appellate Tribunal may, after giving parties an opportunity of being heard, and after such further inquiry as may be necessary, pass such orders thereon as it may deem fit, including an order of reinstatement of the teacher concerned.
Section 61 of the Act provides that (i) pending disputes between the management of a private college and any teacher relating to the conditions of service are to be decided under and in accordance with the provision the Act, and (ii) past disputes of such nature which have arisen after August 1, 1967, and had been disposed of before the commencement of the Act, shall, if the management or the teacher applies to the Appellate Tribunal in that behalf within thirty days of the commencement of the Act, be reopened and decided in accordance with the provisions of the Act.
We have been informed that the appellant has filed an appeal before the Appellate Tribunal, Kerala under section 61 (a) of the Kerala University Act, 1974.
We refrain from making any observation with regard to that appeal.
We wish to say that the validity of sections 60(7), 61 and 65 was not in question before us, and so we express no opinion in regard thereto.
The result, therefore, is that the appeals fail and are dismissed.
The judgment of the High Court setting aside the two orders of the Vice Chancellor of the University of Kerala dated October 19, 1970, is upheld though on a different ground, namely, the Vice Chancellor under Ordinance 33(1) and (4) had no power to entertain the appeals from the impugned orders of dismissal or suspension of the appellant.
The costs shall be borne by the parties throughout as incurred.
We are thankful to Sri M. K. Ramamurthi, who appeared as an amicus curiae for the appellant, for the able assistance he has rendered.
P.H.P. Appeals dismissed.
| IN-Abs | The Appellant was appointed as Principal of the St. Joseph Training College for Women, Ernakulam in the year 1957.
In October 1969, there was an unfortunate incident between the Appellant and on Rajaratnam a lecturer of the College placed on deputation by the Government.
On the basis of a complaint by Rajaratnam, the Managing Board initiated disciplinary proceedings against the Appellant and appointed a retired Principal of a College to be an Inquiry officer.
The Appellant did not participate in the proceedings.
The Inquiry officer held the Appellant guilty of misconduct.
A show cause notice was given to the Appellant.
The Appellant however, filed a suit challenging the validity of the proceedings.
An interim injunction was issued by the Civil Court restraining the Management from implementing the decision, if any.
taken in the meeting.
The Managing Board after due notice to the Appellant found that the charges of misconduct were proved.
Subsequently, the Court held that the dismissal of the Appellant was legal and proper.
During this period the Appellant was functioning as a Principal and had sent two communications to the Secretary to the Government calling for termination of deputation of Rajaratnam.
The Managing Board viewed the sending, of these communications by the Appellant without reference to it as an act of insubordination, and therefore, decided to conduct inquiry against the Appellant and she was suspended pending inquiry.
A substitute Principal was appointed.
The Appellant filed an appeal against the order of suspension and the Vice Chancellor directed that the status quo be maintained.
The substitute Principal filed a suit for an injunction restraining the appellant from functioning or interfering with the discharge of duties of the substitute Principal which was granted by the Munsif.
The Vice Chancellor by his orders held that the orders of dismissal and suspension passed against the Appellant were in breach of natural justice and fair play and were consequently illegal, null and void.
He therefore, directed the Management to allow the Appellant to function as Principal.
The Kerala.
University Act, 1957 was enacted to reconstitute the University of Travancore into a teaching University for the whole of the State of Kerala.
The definition of "teacher" in section 2(j) of the Act is wide enough to take in a Principal.
Section 19 empowers the Syndicate to make ordinances fixing the conditions of service of teachers.
The Kerala University Act 1957 was repealed by the Kerala University Act, 1969.
The earlier ordinances have been saved and continued under the new Act.
Ordinance 33 provides for an appeal to the Vice Chancellor against any order passed by the Management in respect of the penalties including penalty of dismissal.
821 The Management filed a suit in the Munsif 's Court.
The substitute Principal also filed a further suit against the Appellant and the postal authorities for prohibiting the postal authorities from delivering and the Appellant from receiving the articles addressed to the Principal of the College.
The Trial Court dismissed the suits holding that the Appellate power conferred on the Vice Chancellor by ordinance framed by the Syndicate was a valid conferment of power and even after the commencement of the Kerala University Act, 1969, both the Vice Chancellor and Syndicate had concurrent powers of Appeal.
It, therefore, upheld the orders of the Vice Chancellor directing reinstatement of the Appellant in service.
On appeal the District Judge held that the orders of the Vice Chancellor were perfectly valid and with jurisdiction and that his direction to the Management to continue the Appellant as Principal was legal.
The Kerala High Court reversed the judgment of the Courts below holding that the conferment by the Syndicate of the right to appeal to a teacher against the order of dismissal from service to the Vice Chancellor cannot be said to be in excess of the permissible limits of the power to prescribe the duties and conditions of service of teachers in private colleges in terms of section 19(j) of the Kerala University Act, 1957, and the provisions for a right to appeal were not violative of the rights guaranteed to the religious minorities under Article 30(1) and were, therefore, valid.
According to the High Court although the Vice Chancellor had the power to hear an appeal against an order of dismissal he did not have expressly or impliedly, the power to order reinstatement or even to grant a declaration that the services of the appellant had been wrongly terminated.
It was held that a statutory tribunal like Vice Chancellor could not grant such a relief as the same would amount to specifically enforcing the contract of service.
Dismissing the appeals the Court, ^ HELD: 1.
The expression conditions of service includes everything from the stage of appointment to the stage of termination of service and even beyond and relates to matters pertaining to disciplinary action.
The High Court thus, rightly held that the right of the appeal conferred by ordinance 33 (4) forms part of the conditions of service and is, therefore, valid.
[828F G, 829A] N.W.F. Province vs Suraj Narain, 75 I.A. 343, State of U.P. vs Babu Ram, ; and State of M.P. and Ors.
v Shardul Singh ; relied on.
Protection of the minorities is an article of faith in the Constitution of India.
The right is subject to the regulatory power of the State.
Article 30(1) is not a charter for maladministration; however regulation, so that the right to administer.
may be better excised for.
the benefits of the institution, is permissible; but the moment one goes beyond that and imposes what is in truth not a mere regulation but an impairment of the right to administer the Article comes into play and the interference cannot be justified by pleading the interests of the general public.
the interests justifying interference can only be the interests of the minority concerned.
[837C E] 3.
It is clear from the judgment in St. Xaviers College case that 7 out of 9 judges held that the provisions contained in clauses (b) of sub sections 1 and 2 of Section 51(A) of the Act therein providing for the disciplinary control of the 822 Management, over the staff of its educational institution were not applicable to an education institution established and managed by religious and linguistic minorities.
The reasons given by the majority were that the power of the Management to terminate the services of any member of the teaching or other academic and non academic staff was based on the relationship between the employer and his employees and no encroachment can be made on this right to dispense with their services under the contract of employment, which was an integral part of the right to administer.
[842B D] 4.
The High Court went wrong in holding that the Vice Chancellor while exercising the appellate powers under Ordinance 33(4) cannot direct rein statement of a teacher or grant a declaration that his dismissal was wrongful.
It also fell into error in holding that the right of appeal before the Vice Chancellor against the teachers of Private Colleges in the matter of suspension and dismissal was not violative of the rights to religious minorities under Article 30(I) of the Constitution.
[829B C] Ahmedabad st.
Xaviers College Society and Anr.
vs State of Gujarat and Anr.
; ; relied on.
Unlike Article 19, the fundamental freedom under Article 30(1) is absolute in terms; it is not made subject to any reasonable restrictions of the nature the fundamental freedoms enunciated in Article 19 may be subjected to.
All minorities, linguistic or religious have by article 30(1) an absolute right to establish and administer educational institution of their choice, and any law or executive direction which seeks to infringe the substance of that right under Article 30(1) would be to that extent void.
[835F G] Rev. Sidhajbhai Sabhai vs State of Bombay, ; 6.
The conferment of a right of appeal to an outside authority like the Vice Chancellor under Ordinance 33(4) takes away the disciplinary power of a minority educational authority.
The right of the vice Chancellor to veto the disciplinary power of the minority institution is a clear interference with its right.
It amounts to a letter on the right of administration under Article 30(1).
[837E G] 7.
The power of appeal conferred on the Vice Chancellor in ordinance 33(4) is not only a grave encroachment on the right of the institution to enforce and cover discipline in its administration but it is uncanalised and unguided in the sense that no `restrictions ' are placed on the exercise of the power.
The extent of the appellate power of the Vice Chancellor is unlimited and undefined.
The grounds on which the Vice Chancellor can interfere are not defined and indeed, the powers are unlimited.
He can even interfere against the infliction of punishment.
There is complete interference with the disciplinary power of a minority institution.
In the absence of any guidelines, it cannot be held that power of the Vice Chancellor under order 33(4) was merely a check on mal administration.
The ratio of St. xavier Colleges case is fully applicable.
[842G H, 843A B] 8.
Accordingly, the judgment of the High Court setting aside the two orders of the Vice Chancellor upheld by this Court although for different reasons.
[844E. F]
|
: Criminal Appeal No. 69 of 1972.
Appeal by Special Leave from the Judgment and Order dated 22 12 70 of the Calcutta High Court in Crl.
Revision No. 697 of 1969.
P.K. Chatterjee and Rathin Das for the Appellant.
K.R. Chowdhary for the Respondent.
The Judgment of the Court was delivered by CHANDRACHUD, C.J.
On December 5, 1967, the Baranagore Municipality served a notice on the respondent alleging that he had erected an obstruction over the main municipal drain without the permission of the Administrator of the Municipality and calling upon him to remove the same within fifteen days of the date of receipt of the notice.
A similar notice was sent to the respondent by registered post which he received on December 7.
On the respondent 's failure to comply with the requisition the Municipality, through the appellant who is its Law Assistant, filed a complaint against him under section 240(1)(b) read with section 500(1)(b) of the Bengal Municipal Act, XV of 1932, ("The Act").
The respondent took a preliminary objection to, the maintainability of the complaint on the ground that since the prosecution was not instituted within six months next after the commission of the offence, it was barred by limitation under section 533 of the Act.
That objection having been rejected by the trial court, the respondent filed a revisional application in the Calcutta High Court.
It will not be quite accurate to say that the respondent 's objection, in the form in which it was taken by him, was upheld by the High Court, but the High Court did dismiss the complaint on the ground that it was barred by limitation.
The judgment of the High Court rests on when 741 the period of six months began to run than on how the six months ' period is to be reckoned.
Being aggrieved by the judgment of the High Court dated December 22, 1970 the Municipality has filed this appeal by special leave.
Section 240(1)(b) of the Act provides to the extent material that the Commissioners may issue a notice requiring any person to remove any obstruction or encroachment which he may have erected upon any public street, drain or watercourse and which remains so erected after the period covered by any permission given in that behalf has expired.
The notice dated December 5, 1967, was given by the Municipality to the respondent under this provision.
The relevant part of section 500(1)(b) of the Act provides that whoever commits any ' offence by "failing to comply with any direction lawfully given to him or any requisition lawfully made upon him" under any of the provisions of the Act, shall be punished with fine which may extend to the amount mentioned in the third column of the table following that section.
Section 533 of the Act prescribes a period of limitation for filing prosecutions under the Act by providing that no prosecution for an offence under the Act shall be instituted "except within six months next after the commission of such offence".
The narrow question for determination in this appeal is whether the prosecution was instituted in the instant case within six months next after the commission of the offence as required by section 533 of the Act.
For a proper appreciation of this question it is necessary to advert briefly to the scheme of the Act because, without a proper appreciation and understanding of what in fact constitutes an offence for the present purposes, it will be impossible to resolve the question as to whether the prosecution is barred by limitation.
Section 240(1) of the Act confers by its three clauses various powers on the Commissioners.
Under clause (a) the Commissioners may, without giving a notice, remove any obstruction or encroachment which has been erected without obtaining the requisite permission.
Clause (b), on its true reading, empowers the Commissioners to issue a notice requiring any person to remove an encroachment which has been erected without permission or which remains erected after the expiry of the period covered by a permission granted in that behalf.
Clause (c) of section 240(1) confers upon the Commissioners the power to remove without notice any materials or goods which have been deposited in a public street without the requisite permission or which continue to be deposited after the permission has expired.
The person to whom a lawful direction has been given or upon whom a lawful requisition has been made through notice under section 240(1)(b) has to carry out the 742 direction or comply with the requisition, as the case may be.
Failure in that regard attracts penal consequences.
Though clause (b) of section 240(1) does not expressly provide that the Commissioners may permit such time as they think fit for the removal of the encroachment, it is implicit in the power conferred by that clause that by a proper direction or requisition, the Commissioners can allow for the removal of the encroachment such time as they consider reasonable in the circumstances of the case.
Section 500(1)(b) of the Act creates a somewhat artificial offence which, it must be remembered, does not consist in the original act of erecting the obstruction or encroachment but in "failing to comply with any direction lawfully given" to a person or "any requisition lawfully made upon him".
Respondent having been allowed by the notice dated December 5,1967 a period of fifteen days for the removal of the encroachment alleged to have been erected by him, it is plain that within and during that period he could not have been prosecuted under section 500(1)(b) for failure to comply with the direction or requisition.
The reason simply is that by the terms of the very notice which contained the direction or requisition, he was at liberty to remove the encroachment at any time within fifteen days after the receipt of the notice.
In other words, failure to comply with the direction or requisition occurred for the first time, within the meaning of section 500(1)(b), on the expiry of fifteen days after December 5, that is to say, after the expiry of December 20.
A proper appreciation of this scheme will facilitate the understanding of the true position, namely, that since the offence under section 500(1)(b) for which the respondent is being prosecuted consists of his alleged failure to comply with the particular direction or requisition, and since such failure occurred for the first time after December 20, the period of limitation prescribed by section 533 of the Act for instituting the prosecution will commence to run on the expiry of 20th December.
It is impossible to accept the submission made by the respondent 's counsel that the offence must be deemed to have been committed when the obstruction or encroachment was erected, which of course would be prior to December 5, 1967, when the Municipality served the notice on the respondent.
It may perhaps be that constructing an encroachment or obstruction on a public street may itself amount to an offence under some provision or the other of the Act, but we need not go into that question because the offence for which the respondent is being prosecuted does not consist in his erecting the encroachment or obstruction on a public street but in his failure to remove it within the 743 period allowed to him by the notice.
The error into which the High Court fell was to hold that the offence was committed on December 5, being the date on which the Municipality gave the notice to the respondent to remove the encroachment.
On that date no offence indeed was committed because, as stated above, the offence charged against the respondent consists in his failure to remove the encroachment within the time allowed by the Municipality by its notice.
We must, therefore, proceed on the basis that the failure to remove the encroachment having occurred on the expiry of December 20, limitation began to run for the purpose of section 533 on that and not on any earlier date.
The only question which then requires examination is whether the prosecution which was filed on June 19, 1968, was instituted as required by section 533, "within six months next after the commission" of the offence.
An argument was raised in the High Court that "six months" must be construed to mean 180 days and not six calendar months.
The High Court does not appear to have accepted that submission.
There the High Court is right, because section 3(27) of the Bengal General Clauses Act, I of 1899, defines "a month" to mean a month reckoned according to the British calendar.
The expression "six months" which occurs in section 533 of the Act must accordingly be construed to mean six calendar months and not 180 days.
The offence, being alleged to have been committed on the expiry of December 20, 1967, and the prosecution having been instituted on June 19, 1968, the provisions of section 533 must be held to have been duly complied with.
To sum up, we are of the view that the offence charged against the respondent consists, not in the erection of an obstruction by him, but in his failure to comply with the direction lawfully given to him to remove that obstruction; that the offence must be deemed to have been committed by the respondent, if at all, not on the date of the notice viz. December 5, 1967 nor on any anterior date but on the expiry of the period permitted to him for removing the obstruction viz. on the expiry of fifteen days after the receipt of notice; and that, the expression "six months" which occurs in section 533 of the Act means six calendar months and not 180 days.
For these reasons we set aside the judgment of the High Court and send back the case to the learned Magistrate for disposal in accordance with law.
S.R. Appeal allowed.
| IN-Abs | A notice dt.
5 12 67 calling upon the respondent to remove, within 15 days of the date of receipt of it, culvert erected without the permission from the Municipality by him thereby causing obstruction or encroachment over the main municipal drain, not having been complied with, the Baranagore Municipality through the appellant its Law Assistant filed a complaint against the respondent under s.240(1)(b) read with s.500(1)(b) of the Bengal Municipal Act, 1932.
The respondent 's objection to its maintainability on the plea of bar of limitation under section 533 of the Act was rejected by the trial court, but upheld by the High Court in revision.
Allowing the appeal by special leave the Court, ^ HELD: (1) The offence charged against the respondent concerned, consists not in the erection of an obstruction by him but in his failure to comply with the direction lawfully given to him to remove that obstruction that the offence must be deemed to have been committed by the respondent, if at all, not on the date of the notice viz. December 5, 1967 nor on any anterior date but on the expiry of the period permitted to him for removing the obstruction viz. on the expiry of the 15 days after the receipt of the notice; and that the expression "6 months" which occurs in section 533 of the Bengal Municipal Act means 6 calendar months and not 180 days.
[743E G] (a) section 240(1) of the Act confers by its three clauses various powers on the Commissioners.
Clause (b) on its true reading empowers the Commissioners to issue a notice requiring any person to remove an encroachment which has been erected without permission or which remains erected after the expiry of the period covered by a permission granted in that behalf.
Though clause (b) of section 240(1) does not expressly provide that the Commissioners may permit such time as they think fit for the removal of the encroachment, it is implicit in the power conferred by that clause that by a proper direction of requisition the Commissioners can allow for the removal of the encroachment such time as they consider reasonable in the circumstances of the case.
[741F G, 742A B] (b) section 500(1)(b) of the Act creates a some what artificial offence which does not consist in the original Act of erecting the obstruction or encroachment but in "failing to comply with any direction lawfully given" to a person or "any requisition lawfully made upon him".
By the terms of the very notice, in the instant case, which contained the direction or requisition the respondent was at liberty to remove the encroachment at any time within 15 days after the receipt of the notice.
In other words, failure to comply with direction or requisition occur for the first time within the meaning of section 500(1)(b) on the expiry of 15 740 days after December 5 i.e. to say after the expiry of December 20.
Since the offence under section 500(1)(b) for which the respondent is being prosecuted consists of his alleged failure to comply with the particular direction or requisition and since such failure occurred for the first time after December 20, the period of limitation prescribed by section 533 of the Act for instituting the prosecution will commence to run on the expiry of 20th December.
[742B C D E. F] (2) Section 3(27) of the Bengal General Clauses Act (Act 1), 1899 defines "a month" to mean a month reckoned according to the British calender.
The expression 6 months which occurs in section 533 of the Act must accordingly be construed to mean 6 calendar months and not 180 days.
The offence being alleged to have been committed on the expiry of December 20, 1967 and the prosecution having been instituted on June 19, 1968, the provisions of section 533 have been fully complied with.
[743D E]
|
N: Criminal Appeals Nos. 178 and 248 of 1977.
Appeals by Special Leave from the Judgment and order dated 25 1 77, 4 3 77 of the Kerala High Court in Criminal Misc.
Petition No. 862/76 and Criminal Appeal No. 416/75.
T. C. Raghavan (In Crl.
A. 178/77) and P. K. Pillai for the Appellant.
K. T. Narindranath (In Crl.
A. 178/77) and K. R. Nambiar for the Respondent.
The Judgment of the Court was delivered by KOSHAL, J.
By this judgment we shall dispose of Criminal Appeals Nos.178 and 248 of 1977, both of which were admitted to a hearing by special leave and in each one of which the sole point for determination is whether a member of an executive committee or a servant of a registered co operative society is a public servant for the purpose of clause (c) of sub section (1) of section 5 of the Prevention of Corruption Act (Central Act No. 2 of 1947, hereinafter referred under the Criminal Law Amendment Act (Central Act No. 46 of to as the 1947 Act) and whether, therefore, a Special Judge appointed 1952, hereinafter called the 1952 Act) has jurisdiction to try him for an offence under that clause.
799 2.
The appellant in Criminal Appeal No. 178 of 1977 is M.A. Kochu Devassy who was sent up, alongwith 11 others, for trial in respect of offences under sections 120 B, 408, 465, 467, 477 and 477 A of the Indian Penal Code (hereinafter described as the Code) and clause (c) of sub section (1) read with sub section (2) of section 5 of the 1947 Act to the Special Judge, Trichur by the Deputy Superintendent of Police, Vigilance Department, Trichur.
The allegations against the accused were that while being members of the Board of Directors or the servants of Cooperative Society No. R 192, Chalakudy (hereinafter called the Society), they, on the 18th of May 1972, entered into a conspiracy to misappropriate the funds of the Society, that in pursuance of that conspiracy they misappropriated a sum of Rs. 1900/ on the same date and that they prepared false records in order to conceal the misappropriation.
Before the trial commenced, however, a petition was made on behalf of the accused to the High Court of Kerala praying that the charge be quashed.
That petition came up for hearing before Khalid, J., who doubted the correctness of the dictum of a Division Bench of that Court in Sahadevan vs State of Kerala to the effect that a Special Judge has jurisdiction to try all cases against employees of co operative societies under all or any of the provisions of section 5 of the 1947 Act.
He adverted to various provisions of that Act and the Kerala Criminal Law Amendment Act (Kerala Act 27 of 1962 and hereinafter referred to as the Kerala Act) and thought that an important aspect of the amendment promulgated by the Kerala Act was not brought to the notice of the Division Bench and therefore referred the matter to a larger Bench by an order dated the 7th of December 1976.
The petition then came up for final hearing before a Full Bench of the Kerala High Court, which has, by the impugned judgment, held that the dictum of the Division Bench mentioned above was correct, that a member of the executive committee or a servant of a registered co operative society was a public servant for the purposes of the 1947 Act as a whole in so far as the State of Kerala was concerned and that, therefore, such a member or servant could be tried by a Special Judge.
It is by that judgment that the appellant feels aggrieved.
The appellant in Criminal Appeal No. 248 of 1977 is one C.A. Thomas, who was convicted by the Special Judge, Trichur, for offences under clause (c) of sub section (1) read with sub section (2) of section 5 of the 1947 Act and section 408 of the Code and was sentenced to rigorous imprisonment for a year and a fine of Rs. 5000/ on the first count, the sentence in default of payment of fine being rigorous imprisonment for six months.
No sentence was awarded for 800 the offence under section 408 of the Code.
The allegations on the basis of which he was prosecuted and which were found proved against him were that while being employed as a store keeper at the firewood depot at Punkunnam owned by the Wholesale Co operative Stores Ltd. Trichur, he misappropriated profits accruing to his employers by abusing his official position.
He filed an appeal to the High Court of Kerala which was dismissed by a learned Single Judge on the 4th of March 1977 through the judgment impugned before us.
The pleas raised before the High Court on his behalf included one that the Special Judge had no jurisdiction to try him inasmuch as he was not a public servant for the purposes of the 1947 Act.
The plea was rejected by the High Court in view of the dictum of the Full Bench which is challenged before us in Criminal Appeal No. 178 of 1977.
At this stage we may usefully refer to various provisions of the Code, the 1947 Act, the 1952 Act, the Kerala Act and the Criminal Law Amendment Act (Central Act No. 50 of 1955 and hereinafter called the 1955 Act).
Section 21 of the Code defines what is a "public servant".
In 12 clauses it lists various categories of persons who fall within the definition.
Members of the executive committee or servants of a co operative society are not embraced by any of those categories.
Chapter IX of the Code headed "Of Offences by or relating to Public Servants" consists of sections 161 to 171.
Section 161 states the conditions on the fulfilment of which a public servant would be guilty of bribery and lays down the punishment therefor.
Section 2 of the 1947 Act as originally enacted was to the following effect: '2.
For the purposes of this Act, "public servant" means a public servant as defined in section 21 of the Indian Penal Code. ' Sub section (1) of section 5 of the 1947 Act states when a public servant can be said to commit the offence of criminal misconduct.
It has five clauses of which the first three run as follows: "(a) if he habitually accepts or obtains or agrees to accept or attempts to obtain from any person for himself or for any other person, any gratification (other than legal remuneration) as a motive or reward such as is mentioned in section 161 of the Indian Penal Code, or "(b) if he habitually accepts or obtains or agrees to accept or attempts to obtain for himself or for any other person, any valuable thing without consideration or 801 for a consideration which he knows to be inadequate, from any person whom he knows to have been, or to be, or to be likely to be concerned in any proceeding or business transacted or about to be transacted by him, or having any connection with the official functions of himself or of any public servant to whom he is subordinate, or from any person whom he knows to be interested in or related to the person so concerned, or "(c) if he dishonestly or fraudulently misappropriates or otherwise converts for his own use any property entrusted to him or under his control as a public servant or allows any other person so to do, or" Sub section (2) of section 5 of the 1947 Act provides for punishment in respect of an offence under sub section (1) thereof, while section 6 creates a bar against any court taking cognizance of an offence under sections 161, 164 and 165 of the Code or sub section (2) of section 5 of the 1947 Act unless previous sanction of certain authorities has been obtained in that behalf.
Now we come to the provisions of the 1952 Act.
Section 3 thereof added to the Code section 165 A which created and laid down the punishment for the offence of abetment of the offences covered by sections 161 and 165 of the Code.
Section 6 of the 1952 Act dealt with the appointment of Special Judges to try offences under sections 161, 165 or 165 A of the Code or sub section (2) of section 5 of the 1947 Act, or conspiracy to commit any of those offences.
Sub section (1) of section 7 of the 1952 Act barred the jurisdiction of Courts other than those of Special Judges to try the offences mentioned in section 6, while sub section (3) of section 7 provided that a Special Judge trying any of the offences mentioned in section 6 could also try offences with which the accused might be charged at the same trial in accordance with the provisions of the Code of Criminal Procedure.
The 1955 Act added offences under sections 162, 163 and 164 of the Code to the range of offences to try which the Special Judge had exclusive jurisdiction, so that such jurisdiction thenceforth extended to the trial of offences under sections 161 to 165 A of the Code and subsection (2) of section 5 of the 1947 Act.
Seven years later was promulgated the Kerala Act, section 2 where of amended section 161 of the Code by adding thereto an Explanation, the relevant part of which is extracted below: 802 '"Public Servant" For purposes of this section and sections 162, 163, 164, 165 and 165 A, the words "public servant" shall denote, besides those who are "public servants" within the meaning of that section under any law for the time being in force, persons falling under any of the descriptions hereinafter following, namely: (i). . . . . (ii). . . . . (iii). . . . (iv) Every member of the Board of Directors or the executive or managing committee and every officer or servant of a co operative society registered or deemed to be registered under the law relating to co operative societies for the time being in force; (v) . . . . . (vi) . . . . . (vii) . . . . . (viii) . . . . .
Section 3 of the Kerala Act may be reproduced in extenso: 'In the Prevention of Corruption Act, 1947 (Central Act 2 of 1947) (i) for section 2, the following section shall be substituted, namely: "2.
Interpretation For the purposes of this Act, "public servant" shall have the meaning assigned to it under the Explanation to section 161 of the Indian Penal Code as amended by the Kerala Criminal Law Amendment Act, 1962"; (ii) in section 5A, for the words, figures and letter, "under section 161, section 165 or section 165A," the words, figures and letter "under sections 161, 162, 163, 164, 165 or 165A" shall be substituted; (iii) in subsection (1) of section 6, after clause (b), the following clause shall be inserted, namely : "(bb) in the case of a person falling under any of the descriptions mentioned in items (i) to (viii) in the Explanation relating to "Public Servant" in section 161 of the Indian Penal Code as amended by the Kerala Criminal Law Amendment Act, 1962, save by or with the sanction of the State Government;" 803 4.
The contentions raised on behalf of the appellants may be summarised thus.
Section 2 of the Kerala Act brought members of the executive committee or the servants of a registered co operative society within the ambit of the expression "public servant" only for the purposes of sections 161 to 165A of the Code and for no other purpose and therefore the use of the enlarged definition could not be made for the purposes of the 1947 Act.
It is true that section 2 of the 1947 Act as substituted by the Kerala Act states that the expression "public servant" shall have the same meaning for the purposes of the 1947 Act as have been assigned to it under the enlarged definition of that expression in the Explanation added to section 161 of the Code, but then the phrase "for the purposes of this Act" occurring in the said section 2 must be deemed to have a limited meaning and should be read down as if they are restricted to only those purposes of the Act which concern sections 161 to 165A of the Code.
Had the intention of the framers of the substituted section been not to give such a limited meaning to the said phrase but to use it in its literal sense, there was no point in enlarging the definition of the expression "public servant" by adding an Explanation to section 161 of the Code; for, in that case, the proper and direct method of carrying out the intention would have been to amend section 21 of the Code itself, so as to make the definition therein embrace all the eight categories of persons mentioned in the added Explanation.
We find ourselves wholly unable to accept any of the contentions.
The terms of section 2 of the 1947 Act as substituted by section 3 of the Kerala Act are absolutely clear and unambiguous and when they lay down that the expression "public servant" shall have a particular meaning for the purposes of the Act, that meaning must be given to the expression wherever it occurs in the Act.
"For the purposes of the Act" surely means for the purposes of all and not only some of the provisions of the Act.
If the intention was to limit the applicability of the definition of the expression "public servant" as contended, the language used would not have been "for the purposes of the Act" but something like "for the purposes of the Act insofar as they relate to the offences under sections 161 to 165A of the Indian Penal Code.
" It may be noted here that section 2 of the 1947 Act as substituted by the Kerala Act does not reproduce the definition of the expression "public servant" as contained in section 161 of the Code, but states in so many words that the expression shall have the meaning assigned to it in the Explanation to the said section 161.
It follows that what is brought into section 2 of the 1947 Act is the meaning of the expression as contained in the Explanation and not the entire Ex 804 planation itself, so that the words "for the purposes of this section and sections 162, 163, 164, 165 and 165A" occurring in the Explanation are not transplanted into section 2 of the 1947 Act as substituted.
If the contrary were true and the Explanation had to be read word for word into the said section 2, the result would entail an absurdity; for then the section last mentioned would read thus : `For purposes of this Act, for purposes of the section and sections 162, 163, 164, 165 and 165A, the words "public servant" shall denote . . ' So read, the section makes no sense and the method of incorporation of the Explanation into the substituted section 2 cannot be accepted as a correct method of interpretation of the section.
Nor do we see any cogent reason why the legislature should have intended to limit the applicability of the enlarged definition as contended.
The Kerala Act carried out amendments to the 1947 Act insofar as the State of Kerala was concerned and the 1947 Act deals not only with offences under sections 161 to 165A of the Code but also, and mainly, with those falling under various clauses of sub section (1) of section 5 of the 1947 Act.
No reasonable line of distinction between the offences under sections 161 to 165A of the Code on the one hand and those punishable under sub section (2) of section 5 of the 1947 Act on the other appears feasible for the purpose of conferment or exclusive jurisdiction on Special Judges to try them.
From this point of view also, the interpretation canvassed on behalf of the appellants is untenable.
And the argument that the enlarged definition of the expression "public servant" would not have been adopted in the form of the Explanation to section 161 of the Code but would have been incorporated in section 21 thereof if it was to apply to the 1947 Act as a whole, though attractive at first sight, is really without substance.
In our view, the method adopted is not without purpose.
Had the definition been enlarged by an amendment of section 21 of the Code, it would have made the eight new categories of persons brought by it within the ambit of the expression "public servant" liable to punishment not only for offences under sections 161 to 165A of the Code but also for numerous other offences specified in the Code relating to public servants, as also to offences so related and created by other Acts wherein the definition of "public servant" occurring in section 21 of the Code has been adopted as such.
It was presumably to avoid such a result and to limit the scope of the applicability of the 805 definition to bribery, criminal misconduct and allied offences committed by public servants, that the legislature in its wisdom adopted the device of amending section 161 of the Code by adding the Explanation to it and by providing also that the enlarged definition shall govern all the provisions of the 1947 Act.
Not finding any merit in the contentions raised on behalf of the appellants, we hold that the enlarged definition of the expression "public servant" as contained in the Explanation added to section 161 of the Code by section 2 of the Kerala Act governs all the provisions of the 1947 Act, that the appellants are public servants within the meaning of that enlarged definition by reason of the language employed in clause (iv) of the Explanation and that, therefore, the offences under clause (c) of sub section (1) of section 5 of the 1947 Act said to have been committed by them are triable exclusively by Special Judges appointed under the 1952 Act.
Both the appeals are accordingly dismissed.
P.H.P. Appeals dismissed.
| IN-Abs | The appellants in the above appeal were tried and convicted in respect of the offences inter alia under section 408, 465, 477 and 477A of the Indian Penal Code, 1860 read with section 5 of the Prevention of Corruption Act, 1947 by a special judge.
Both the appellants were members of a registered cooperative society.
The conviction of the appellants, was confirmed by the High Court.
21 of the Indian Penal Code defines a public servant "Members of the Executive Committee or servants of a cooperative society are not embraced by the categories mentioned in sec.
21" Chapter 9 of the Penal Code deals with offences by or relating to public servant.
Sec. 2 of the Prevention of Corruption Act, 1947 adopts definition of public servant from Sec.
21 of the Penal Code.
By the 1952 amendment of the Criminal Procedure Code the provisions of appointment of a Special Judge to try the offences have been provided.
The said 1955 amendment adds certain more offences which are to be tried by a special judge.
The Kerala Criminal Law Amendment Act, 1962 amended Sec.
161 of the Penal Code by adding an explanation thereto.
It provides that for the purpose of the said section and certain other sections a public servant shall denote, besides those who are public servants within the meaning of that section, members of the Board of Directors or the Executive or Managing Committee and other officer or servant of a Co operative Society registered or deemed to be registered under the law relating to co operative societies for the time being in force.
Sec. 3 of the Kerala.
Act provides that for the purpose of the Preventive of Corruption Act, 1947, public servant shall have the meaning assigned to it under the explanation to sec.
161 of the Indian Penal Code as amended by the Kerala Criminal Law Amendment Act, 1962.
(1) The appellants contended that sec.
2 of the Kerala Act brought members of the executive committee or the servants of a registered co operative society within the ambit of the expression "public servant" only for the purpose of Sections 161 to 165A of the Penal Code and for no other purpose.
Therefore, the use of the enlarged definition cannot be made for the purpose of 1947 Act.
(2) If the intention of the legislature was to enlarge the definition for all purposes, whatever, it would have amended section 21 of the Indian Penal Code itself.
Dismissing the appeals the Court, ^ HELD: (1) The terms of sec.
2 of the 1947 Act as substituted by sec.
3 of the Kerala Act are absolutely clear and unambiguous and when they lay down that expression public servant shall have a particular meaning for the 798 purpose of the Act, that meaning must be given to the expression wherever it occurs in the Act.
"For the purpose of the Act" surely means for the purpose of all and not only some of the provisions of the Act.
[803E] (2) The Kerala Act carried out amendment of the 1947 Act insofar as the State of Kerala was concerned.
The 1947 Act deals not only with offences under sec.
161 to 165A of the Penal Code but also and mainly with those falling under various clauses of sub section 1 to 5 of the 1947 Act.
No reasonable line of distinction between the offences under sec.
161 to 165A of the Code on the one hand and those punishable under sec.
5 of the 1947 Act on the other appears feasible for the purpose of conferment of exclusive jurisdiction on special judges to try them.
From this point of view also interpretation canvassed on behalf of the appellants is untenable.
[804C E] (3) The arguments that the legislature would have incorporated the additional definition under sec.
21 if it desired to extend the scope for all purposes is without substance.
If the definition had been enlarged by amendment of sec.
21 it would have made the new categories of persons brought by it within the ambit of the expression "public servant" liable to punishment not only for Offences under sec.
161 to 165A of the Code but also for numerous other offences specified in the code relating to public servants as also to offences so related and created by other Acts wherein the definition of public servant occurring in sec.
21 of the Code has been adopted.
[804F H]
|
ition No. 343 of 1972.
(Article 32 of the Constitution.) A. K. Sen, Anil Bhatnagar, K. Khaitan, section R. Agarwal and Praveen Kumar for the Petitioners.
A. P. Chatterjee, Govind Mukhoty and G. section Chatterjee for the Respondent.
620 The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
The old question "what is compensation" is back again, Fortunately, Constitutional Amendments and Judicial precedents have narrowed the scope for controversy.
The question has arisen this way: The appellant, the oriental Gas Company Ltd. was originally constituted in England by a deed of settlement in April 1853, as the oriental Gas Company for the purpose of manufacture, supply distribution and sale of fuel gas in Calcutta.
It was later incorporated in accordance with the provisions of the English Joint Stock Companies Act, 1862.
By a subsequent arrangement the control and management of the Company passed from British into Indian hands.
Over the course of the years the Company acquired extensive properties and became the owner of large plants.
machinery, buildings, lands pipelines, stores etc. 'the total market value of the appellants industrial undertaking was estimated by the appellant as on 22nd March, 1962, at Rs. 7,00,00,000/ .
In 1958, the Government of West Bengal, being of the view that the Company which enjoyed a monopoly in the supply of Gas in Calcutta was negligent in looking after the interest of the consumers, appointed a Committee to inquire into the unsatisfactory condition of supply of gas in Calcutta and to suggest remedial measures including valuation of the undertaking for the purpose of taking over the gas supply undertaking.
The Member of the Committee were: the Chief Secretary, the Sheriff of Calcutta, the Secretary, Commerce and Industries Department, the Administrator, Durgapur Project and the Director, Central Fuel Research Institute.
The Committee was assisted by several experts.
The Committee re F ported that the present Gas Works in Calcutta including the distributing system was in a bad state of disrepair and a very poor state of maintenance.
The Committee recommended that the Gas Works and the distribution system should be taken over immediately under the management of the State Govt.
in order to ensure and maintain the supply of gas to the consumers in Calcutta.
After the report of the Committee was received by the Government of West Bengal, the West Bengal Legislature enacted the oriental Gas Company Act (West Bengal Act XV of 1960) providing for the taking over for a limited period, of the management and control and the subsequent acquisition of the undertaking of the oriental Gas Co. Ltd. The "undertaking of the Company" was defined to mean "the properties of the company, movable or immovable other than cash balances and reserve funds but including works, workshops, plants, machineries, furniture, equipments and stores, and lands appertaining thereto, actually in use immediately 621 before the commencement of this Act, or intended to be used, in connection with the production of gas or supply thereof in Calcutta and its environs;".
Section 3 of the Act provided for the taking over of the management and control of the undertaking of the Company for a period of five years from the date specified in a notification to be issued.
Section 7 provided for the acquisition of the undertaking of the Company at any time within the period of the said five years.
Section 8(])(a) provided for the payment of annual compensation during the period of the take over of the management and control of the undertaking of the Company.
Section 8(1)(b) provided for the compensation payable for the acquisition of the undertaking of the Company.
In the present appeal we are concerned with the compensation payable for the acquisition of the undertaking of the Company, that is, we are concerned with Section 8(1) (b) only.
Section 8 (1) (1) as originally enacted was as follows: "8 (1) (b) in the case of acquisition of the undertaking of the company, the total compensation payable shall be a sum representing the purchase price of the undertaking of the company reduced by such depreciation as may he allowed by the Tribunal referred to in sub section (2) after considering the period and the nature of the use and the present condition of the properties concerned on the date of vesting in the State Government under Section 7, or a sum representing eight times the average net income of the undertaking of the company over a period of five complete years preceding the year in which the undertaking of the company has been transferred to the State Government under clause (a) of Section 4 for the purpose of management and control, whichever is less.
Explanation In this sub section (i) "Purchase price of the undertaking of the company" means the aggregate of the prices of the different parts of the undertaking of the company at the respective dates on which parts were purchased, acquired or constructed by the Company; (ii) "net income of the undertaking of the Company" means the difference between the amount of gross revenue, receipts and other general receipts, accountable in the assessment of Indian Income tax arising from, and ancillary or incidental to, the business of the company and the amount of expenditure incurred on the following 622 (a) rents, rates and taxes, (b) interest on loans and security deposits, (c) maintenance and repair, (d) collection charges, (e) cost of management, including the remuneration of managing agents, if any, (f) other expenses admissible under the law for the time being in force in the assessment of Indian income tax and arising from, and ancillary or incidental to, the business of the Company, and (g) such other expenses as may be prescribed by rules made under this Act".
Section 8(2) provided that the compensation was to be deter mined by a Tribunal to be appointed by the State Government.
The decision of the Tribunal was subject to an appeal to the High Court.
Section 9(2) provided that the amount of compensation was to be paid by the State Government in bonds carrying interest at the rate of 3% per annum from the date of issue and payable in 20 equal annual instalments.
Pursuant to the provisions of the oriental Gas Company Act, 1960, a notification dated 3rd October, 1960, was issued to take over the management and control of the undertaking for a period of five years.
Later by a notification dated 22nd March, 1962, the undertaking of the oriental Gas Company Ltd., was acquired by the Government pursuant to the power vested in it by Section 7 of the Oriental Gas Company Act.
In the meanwhile the Company filed a petition under Article 226 of the Constitution before the Calcutta High Court challenging the vires of the Act on various grounds.
The Calcutta High Court dismissed the writ Petition upholding the validity of the Act.
Ray, J. (as he then was) held: (i) The appellant has no legal right to maintain the petition (2) The appellant could not question the validity of the Act on the ground that its provisions infringed its fundamental rights under Articles 14, 19, and 31 in view of Article 31A(1)(b) of the Constitution; (3) The West Bengal Legislature had the legislative competence to pass the impugned Act by virtue of Entry 42 of List III of the Seventh Schedule to the Constitution; (4) Entry 25 of List IT also conferred sufficient authority and power on the State Legislature to make laws affecting gas and gas works; and (5) even if the Act inci 623 dentally trenched upon any production aspect, the pith and substance of the legislation was gas and gas work within the meaning of entry 25 of List II.
The Company preferred an appeal to the Supreme Court.
The question relating to fundamental rights was not raised before the Supreme Court.
The Supreme Court, while upholding the locus standi of the Company to file the Writ Petition, rejected the contention of the Company relating to the competence of the West Bengal State Legislature to pass the impugned Act.
The decision of the Supreme Court was rendered on 5th February, 1962, and is reported in The Calcutta Gas Company (Proprietary) Ltd. vs The State of West Bengal and others(1).
As mentioned by us earlier, the undertaking of the Company was acquired on 22nd March, 1962, by a notification of that date.
By further notification issued under Section 8 of the Act a Tribunal was constituted for the purpose of determining the compensation payable in respect of the acquisition of the undertaking.
In August 1965, the oriental Gas Company Ltd. filed a petition under Article 226 of the Constitution challenging the provisions of the Act relating to compensation.
The Writ Petition was, however, dismissed as withdrawn in May 1969 as the oriental Gas Company Act, 1960 was amended in the meanwhile by the President 's Act is of 1968, the oriental Gas Company (Amendment) Act 1968.
The Amending Act substituted a different provision for what was the original Section 8 (1) (b) .
Section 8(1)(b) as amended by the President 's Act is of 1968 was as follows: "8(1) (b) In the case of acquisition of the undertaking of the Company, the compensation payable by the State Government shall be determined in accordance with the principles specified in the Schedule".
The schedule referred to in the amended Section 8(1)(b) was as follows: "THE SCHEDULE [See Section 8 (1) (b)] Principles for determining compensation for acquisition of the undertaking of the company.
Paragraph 1: The compensation to! be paid by the State Government to the Company in respect of acquisition of the undertaking thereof shall be an amount equal to the sum total of the value of the (1) [1962] Suppl.
3 SC.R. 1. 6 549 SCI/78 624 properties and assets of the Company as on the date of acquisition of the undertaking of the Company calculated in accordance with the provisions of paragraph II less the sum total of the liabilities and obligations of the Company as on that date calculated in accordance with the provisions of paragraph III, together with the interest on such amount calculated in accordance with the provisions of paragraph IV.
Paragraph II: (a) The market value on the date of acquisition of the undertaking of the company; (i) of any land or buildings; (ii) of any plant, machinery or other equipment; (iii) of any shares, securities, or other investments held by the Company; (b) the total amount of the premiums paid by the Company up to the date of acquisition of the undertaking of the Company in respect of all leasehold properties reduced in the case of each such premium by an amount which bears to such premium the same proportion as the expired term of the lease in respect of which such premium shall have been paid bears to the total term of the lease; (c) the amount of debts due to the Company on the date of acquisition of the undertaking of the Company, whether secured or unsecured, to the extent to which they are reasonably considered to be recoverable; (d) the amount of cash held by the Company on the date of acquisition of the undertaking of the company, whether in deposit with a Bank or otherwise; (e) the market value on the date of acquisition of the undertaking of the company of all tangible assets and properties other than those falling within any of the preceding clauses.
Paragraph III: The total amount of liabilities and obligations incurred by the Company in connection with the formation.
management and administration of the under taking of the Company and subsisting immediately before the date of acquisition of the undertaking of the company; Provided that any of the properties, assets, liabilities or obligations of the Company as on the date of acquisition of the undertaking of the Company shall not include such properties or assets as were added, invested or acquired and such liabilities or obligations as were incurred in connection with 625 such addition, investment or acquisition by the State Government during the period of management and control of the undertaking of the company.
Paragraph IV: The interest referred to in Paragraph I shall be on the amount mentioned in the said paragraph for the period commencing from the date of vesting of the under taking of the Company under sub section (2) of Section 7 and ending with the date immediately before the date of enactment of the oriental Gas Company (Amendment) Act, 1968, calculated at the average bank rate during the said period".
It should also be mentioned here that Section 9(2) was also amended and it was provided that the Bonds should carry interest from the date of enactment of the amending Act and not from the date of issue.
The main provisions of the amending Act relating to the determination and payment or compensation were, however, short lived.
In 1970 the West Bengal Legislature passed the Oriental Gas Company (Amendment) Act, 1970 (West Bengal Act 6 of 1970) once again substituting a new Section 8(1) (b) and Section 9(2).
The new Section 8(1) (b) was as follows: "8(1)(b) In the case of acquisition of the undertaking of the Company, the compensation payable by the State Government shall be a sum representing eight times the average net income of the undertaking of the Company over a period of five complete years preceding the year in which the under taking of the Company has been transferred to the State Government under clause (a) of.
Section 4 for the purpose of management and control.
Explanation: In this sub section, "net annual income of the undertaking of the Company" means the difference between the amount of gross revenue receipts and other general receipts accountable in the assessment of Indian income tax arising from, and ancillary or incidental to, the business of the Company and the amount of expenditure incurred on the following (a) rents, rates and taxes, (b) interest on loans and security deposits, (c) maintenance and repair, (d) collection charges, (e) cost of management, including the remuneration of.
Managing Agents, if any, (f) other expenses admissible under the law for the time 626 Being force in the assessment of Indian income tax and arising from, and ancillary or incidental to, the business of the Company".
The amended Section 9(2) provided for interest on the bonds from the date of vesting of the Undertaking of the Company under Section 7.
It is thus seen that the provisions of the oriental Gas Company Act as originally enacted in 1960 provided for the determination of compensation by the method of cost less depreciation, or the method of capitalisation and directed the payment of whichever was less, in the shape of bonds carrying interest at 3% from the date of issue of the bonds.
The Act as amended in 1968 provided for the determination of compensation on the basis of the full market value of the undertaking and the payment of the compensation in the shape of bonds carrying interest from the date of the enactment of the Amendment Act of 1968 i.e. 7th May, 1968.
The Act as finally amended in 1970 and as it now stands provides for the determination of the compensation by the method of capitalisation and the payment of the compensation in bonds carrying interest from the date of the acquisition.
The appellant Company is aggrieved by the method of determination of compensation under the Act as amended in 1970 and has filed the present Writ Petition in this Court questioning the vires of Sections 8(1)(b) and 9(2) of the Act.
The submissions of Shri A. K. Sen, learned Counsel for the appellant were as follows: Article 31(2) of the Constitution as it stood on the date of the acquisition of the undertaking required the legislature to specify the principles on which compensation, i.e. a 'just equivalent ' af what the owner had been deprived of, had to be determined.
The principles so specified had necessarily to be relevant to the determination of such compensation.
The principle of capitalising net profit as a sole factor was not a relevant principle in determining the compensation payable for the acquisition of a public utility undertaking.
It might be a relevant principle to determine the value of the intangible assets of a public utility undertaking but was wholly irrelevant to determine the value of the tangible assets of a public utility undertaking.
Section 8(1)(b) of the oriental Gas Company Act, as amended in 1970, therefore, offended article 31 (2) of the Constitution.
The choice of the period of five years immediately preceding the take over for the purpose of calculating the average annual net profit was inappropriate as it did not reflect the true earning capacity of the undertaking.
There were special reasons why the profits were 627 low during the two or three years immediately preceding the takeover.
The choice of the multiplier of eight was also not based on any relevant principle.
The provision for payment in bonds payable in twenty years and carrying interest at 3% per annum at once had the effect of reducing the compensation in such a manner as not to approximate to what was determined.
This too was violative of Article 31(2).
Shri Sen relied upon the decision of this Court in Rustom Cavasjee Cooper vs Union of India(1) and passages from Alfred Jahr 's Eminent Domain, Valuation and Procedure, American Jurisprudence Vol.
27 and American Law Reports 2nd series, Vol.
A resume of Constitutional history and the story of the ding dong legal battles that were fought may not be out of place here.
It may help us to understand and, perhaps even to solve the problem before us.
It will enable us to appreciate the relevance or irrelevance of the principle specified for determining compensation.
Clauses (1) and (2) of Article 31 of the Constitution, as they stood originally, were as follows: "31.
Compulsory acquisition of property. (1) No person shall be deprived of his property save by authority of law.
(2) No property, movable or immovable, including any interest in, or in any company owning, any commercial or industrial undertaking, shall be taken possession of or acquired for public purposes under any law authorising the taking of such possession or such acquisition, unless the law provides for compensation for the property taken possession of or acquired and either fixes the amount of the compensation, or specifies the principles on which, and the manner in which, the compensation is to be determined and given".
The word 'compensation ' occurring in Article 31(2) was not qualified by any adjective such as 'just ' or 'fair ' unlike Section Sl of the Commonwealth of Australia Constitution Act and the 5th Amendment to the Constitution of America, in both of which provisions, the qualifying adjective just is used.
Even, so, in Bela Banerjee 's case(2) the Supreme Court introduced the concept of a 'just equivalent ' and held that compensation meant 'a just equivalent of what the owner had H (1) ; (2) ; 628 been deprived of.
It was said that the principles to be laid down by the legislature to determine the compensation were to be subject to the 'basic requirement of full indemnification of the expropriated owner '.
If the principles did not take into account 'all the elements which make up the true value of the property appropriated ' the legislation was liable to be struck down.
In other words what was to be given was full compensation on the basis of the market value of the property acquired.
The decision was capable of creating great difficulty in the sense of discomfiting legislation for the taking over of big estates and the nationalisation of large industrial undertakings.
In the words of Shah, J., in State of Gujarat vs Shri Shantilal Mangaldas & ors.(l), the decisions in Bela Banerjee 's case and Subodh Gopal Bose 's(2) case " . were therefore likely to give rise to formidable problems, when the principles specified by the Legislature as well as the amounts determined by the application of those principles, were declared justiciable.
By qualifying 'equivalent ' by the adjective 'just ', the enquiry was made more `controversial; and apart from the practical difficulties, the law declared by this Court also placed serious obstacles in giving effect to the directive principles of State policy incorporated in article 39".
So it was that Article 31 was amended by the Constitution 4th Amendment Act in 1955.
`The second clause of Article 31 as amended by the Constitution 4th Amendment Act was as follows: "No property shall be compulsorily acquired or requisitioned save for a public purpose and save by authority of a law which provides for compensation for the property so acquired or requisitioned and either fixes the amount of the compensation or specifies the principles on which, and the manner in which, the compensation is to be determined and given; and no such law shall be called in question in any court on the ground that the compensation provided by that law is not adequate.
" The true effect of the amendment was that the adequacy of the compensation provided by 'the law was made non justiciable.
Again in the words of Shah, J., in Shantilals case, "A challenge to a statute that the principles specified by it do not award a just equivalent will be in clear violation of the Constitutional declaration that the inadequacy of the compensation provided is not justiciable".
The intended effect (1) ; (2) ; 629 of the amendment had, however been previously nullified to a large extent by the decisions in P. Vajravelu Mudaliar vs Special Deputy Collector, Madras & Anr.(1) (p. 614) and the Union of India vs The Metal Corporation of India Ltd. & Anr.(2) where it was reiterated that the word 'compensation ' signified a, 'just equivalent ' of what the owner has been deprived of.
In Vajravelu 's case it was observed (at p. 626): "The fact that Parliament used the same expressions namely, "compensation" and "principles" as were found in article 31 before the Amendment is a clear indication that it accepted the meaning given by this Court to those expressions in Mrs. Bela Banerjee 's case.
It follows that a Legislature in making a law of acquisition or requisition shall provide for a just equivalent of what the owner has been deprived of or specify the principles for the purpose of ascertaining the 'just equivalent ' of what the owner has been deprived of.
If Parliament intended to enable a Legislature to make such a law. without providing for compensation so defined, it would have used other expressions like 'price ' 'consideration ' etc." Having said that, Subba Rao, J., however, went on to say that the argument that because the word compensation meant 'just equivalent ' for the property acquired, therefore, this Court could ascertain whether it was a 'just equivalent ' would render the amendment of the Constitution nugatory.
He observed that neither the principles prescribing the 'just equivalent ' nor the 'just equivalent ' could be questioned by the Court on the ground of the inadequacy of the compensation fixed or arrived at by the working of the principles.
The matter was illustrated by the statement that the value of a ' house which was acquired could be fixed in many ways: estimate by an Engineer, value rejected by comparable sales, capitalisation of rent etc.
The application of (different principles might lead to different results.
No one could insist that only that principle which yielded the highest result should be adopted.
On the other hand the value of land acquired in 1950 could not be fixed on the basis of its value in 1930 or though 100 acres were acquired compensation would be given only for 50 acres.
Principles so fixing the compensation would be irrelevant.
Subba Rao, J., summarised the position thus (at p. 629): "If the Legislature makes a law for acquiring a property by providing for an illusory compensation or by indicating the principles for ascertaining the compensation which do not (1) ; (2) ; 630 relate to the property acquired or to the value of such property at or within a reasonable proximity of the date of acquisition or the principles are so designed and so arbitrary that they do not provide for compensation at all, one can easily hold that the Legislature made the law in fraud of its powers.
Briefly stated the legal position is as follows: If the question pertains to the adequacy of compensation, it is not justiciable; if the compensation fixed or the principles evolved for fixing it disclose that the legislature made the law in fraud of powers in the sense we have explained, the question is within the jurisdiction of the Court".
In Vajravelu 's case the compensation to be paid was the value of the land at the date of the publication of the notification under the Land Acquisition Act or an amount equal to the average market value cf the land during the five years immediately preceding such date, whichever was less.
It was also provided that compensation.
was to be determine on the basis on the use to which the land was actually put on the date of publication of the notification and not on the basis of any potential value of the acquired land.
This Court held that in the context of continuous rise of land prices owing to abnormal circumstances it could not be said that the fixation of average price during the preceding five years was not a relevant principle for ascertaining the value of the land on or about the date of acquisition.
It was also held that though the potential value of the acquired land was generally an element to be considered in valuing land? the exclusion of such an element from consideration merely related to the inadequacy of the compensation and did not constitute a fraud on power so as to invalidate the provision.
The decision amounted to this that while the principles specified should aim at the ascertainment of a just equivalent, the principles so aimed could not be said to be irrelevant merely because the application of some other principles might have yielded results more favorable to the owner of the acquired property.
In the case of Metal Corporation of India & Anr., Subba Rao, C. J., observed: "The law to justify itself has to provide for the payment of a 'just equivalent ' to the land acquired or lay down principles which will lead to that result.
If the principles laid down are relevant to the fixation of compensation and are not arbitrary, the adequacy of the resultant product cannot be called in question in a Court of law.
The validity of the principles, judged by the above tests, falls within judicial scrutiny, and if they stand the tests, the adequacy of the pro duct falls outside its jurisdiction".
Judging by those tests, the two 631 principles specified for the ward of compensation in the Act impugned in that case namely "(i) compensation equated to the cost price in the case of unused machinery in good condition, and (ii) written down value as understood in the Incometax law as the value of used machinery" were held to be irrelevant to the fixation of the value of the machinery on the date of acquisition.
The case of Vajravelu and Metal Corporation of India & Anr. were both considered in great detail in Shantilal 's case.
The decision in the case of Metal Corporation of India was expressly overruled and the two principles which were found to be irrelevant in Metal Corporation of India 's case were held to be relevant principles for determination of compensation.
The observations in Vajravelu 's case suggesting that compensation meant a 'just equivalent ' and that the principles to be specified must relate to ascertainment of a 'just equivalent ' were held to be obiter.
The effect of the amendments of Article 31(2) made by the Constitution 4th Amendment Act 1955 was stated to be as follows: D "it clearly follows from the terms of article 31(2) as amended that the amount of compensation payable, if fixed by the Legislature, is not justiciable,, because the challenge in such a case, apart from a plea of abuse of legislative power, would be only a challenge to the adequacy of compensation.
If compensation fixed by the Legislature and by the use of the expression 'compensation ' we mean what the Legislature justly regards as proper and fair recompense for compulsory expropriation of property and not something which by abuse of legislative power though called compensation is not a recompense at all or is something illusory is not justiciable, an the plea that it is not a just equivalent of the property compulsorily acquired, is it open to the Courts to enter upon an enquiry whether the principles which are specified by the Legislature for determining compensation do not award to the expropriated owner a just equivalent ? In our view, such an enquiry is not open to the Courts under the statutes enacted after the amendments made in the Constitution by the Constitution (Fourth Amendment) Act.
If the quantum of compensation fixed by the I legislature is not liable to be canvassed before the Court on the ground that it is not a just equivalent, the principles specified for determination of compensation will also not be open to challenge on the plea that the compensation determined by 632 the application of those principles is not a just equivalent.
The right declared by the Constitution guarantees that com compensation shall be given before a person is compulsorily compulsorily of his property for a public purpose.
What is fixed as compensation by statute, or by the application of principles specified for determination of compensation is guaranteed: it does not mean however that some thing fixed or determined by the application of specified principles which is illusory or can in no sense be regarded as compensation must be upheld by the Courts, for, to do so, would be to grant a charter of arbitrariness, and permit a device to defeat the constitutional guarantee.
But compensation fixed or determined on principles specified by the Legislature cannot be permitted to he challenged on the somewhat indefinite plea that it is not a just or fair equivalent.
Principles may be challenged on the ground that they are irrelevant to the determination of compensation but not on the plea that what is awarded as a result of the application of those principles is not just or fair compensation.
A challenge to a statute that the principles specified by it do not award a just equivalent will be in clear violation of the constitutional declaration that inadequacy of compensation provided is not justiciable".
After Shantilal 's case, the effect of the amendment of Article 31(2) by the Constitution 4th Amendment Act again fell to be considered by this Court in R. C. Cooper vs Union of India(l) a decision of the Full Court.
There is a controversy whether this case was a retreat from the position taken in Shantilal 's case.
Later in Keshavananda Bharti 's(2) case Shelat, Hegde, Grover, Jaganmohan Reddy and Mukherjee JJ., expressed the view that Cooper 's case did not over rule Shantilal 's case while Dwivedi and Chandrachud, JJ.
expressed the view that Shantilal 's case was in substance overruled by Cooper 's case.
This uncertainty which is said to have resulted from the decision e in Cooper 's case led to the 25th Amendment of the Constitution.
As a result of the 25th Amendment Article 31(2) came to read as follows : "31(2) No property shall be compulsorily acquired or requisitioned save for a public purpose and save by authority of a law which provides for requisitioning or requisitioning of (1) ; (2) 633 the property for an amount which may be fixed by such law or which may be determined in accordance with such principles and given in such manner as may be specified in such law; and no such law shall be called in question in any court on the ground that the amount so fixed or deter mined is not adequate or that the whole or any part of such amount is to be given otherwise than in cash: Provided that in making any law providing for the compulsory acquisition of any property of an educational institution established and administered by a minority referred to in clause (1) of article 30, the State shall ensure that the amount fixed or determined under such law for the acquisition of such property is such as would not restrict or abrogate the right guaranteed under that clause".
So much for Constitutional history.
We are not concerned in this case.
with the 25th Amendment.
We are concerned with Article 31(2) as it stood after the 4th Amendment and before the 25th Amendment.
On a question of interpretation or Article 31(2) the decision in Cooper 's case, therefore, has the final word.
In Cooper 's case Shah, J., who spoke for the Court recognised the apparently conflicting views expressed in Vajravelu 's case and E case but held, that both the lines of thought converged in the ultimate result that the principles specified by the law for determination of compensation were beyond the pale of challenge, if they were relevant to the determination of compensation and were recognised principles applicable in the determination of compensation for properly compulsorily acquired and if the principles were appropriate in determining the value of the class of property sought to be acquired.
The provisions of the Banking Companies (Acquisition and Transfer of Undertaking) Act 22 of 1969 were struck down on the ground that relevant principles were not specified for the determination of compensation.
Instead of providing for valuing the entire undertaking as a unit, the Act provided for determining the value, reduced by the liabilities, of only some of the components which constituted the undertaking.
It also provided for different methods of determining compensation in respect of different components.
Since the undertaking was sought to be acquired as a going concern the goodwill and the value of the un. expired long term leases had also to be included in the assets of the banks.
These important components of the Undertakings were excluded.
It was, therefore, held that the principles specified were irrelevant for the determination of compensation of Banking Companies.
The Court, however, observed that the science of valuation of property recognised 634 several principles or methods for determining the value to be paid as compensation to the owner for loss of his property and that if an appropriate method or principle for determination of compensation was applied, the fact that by the application of another principle which was also appropriate, a different value was leached, would not justify the Court in entertaining the contention that out of the two appropriate methods, one more generous to the owner should have been applied by the Legislature.
It was observed that if several principles were appropriate and one was selected for determination of the value of the property to be acquired, selection of that principle to the exclusion of other principles was not open to challenge since the selection had to be left to the wisdom of the Parliament.
The Court then went on to refer to some of tile important methods of determination of compensation, and observed (at p. 600 and 601): "The important methods of determination of compensation are (i) market value determined from sales of comparable properties, proximate in time to the date of acquisition, similarly situate, and possessing the same or similar advantages and subject to the same or similar disadvantages.
Market value is the price the property may fetch in the open market if sold by a willing seller unaffected by the special needs of a particular purchase; (ii) capitalization of the net annual profit out of the property at a rate equal in normal cases to the return from gilt edged securities.
Ordinarily value of the property may be determined by capitalizing the net annual value obtainable in the market at the date of the notice of acquisition; (iii) where the property is a house, expenditure likely to be incurred for constructing a similar house? and reduced by the depreciation for the number of years since it was constructed; (iv) principle of reinstatement where it is satisfactorily established that reinstatement in some other place is bona fide intended, there being no general market for the property for the purpose for which it is devoted (the purpose being a public purpose) and would have continued to be devoted, but for compulsory acquisition.
Here compensation will be assessed on the basis of reasonable cost of reinstatement; (v) when the property has outgrown its utility and it is reasonably incapable of economic use, it may be valued as land plus the break up value of the structure.
But the fact that the acquirer does not intend to use the property for which it is used at the time of acquisition and desires to demolish it or use it for other purposes is irrelevant; and (vi) the property to be acquired has ordinarily to be 635 valued as a unit.
Normally an aggregate of the value of A different components will not be the value of the unit.
These are, however, not the only methods.
The method or determining the value of property by the application of an appropriate multiplier to the net annual income or profit is a satisfactory method of valuation of lands with buildings, only if the land is fully developed, i.e., it has been put to full use legally permissible and economically justifiable, and the income out of the property is the normal commercial and not a controlled return, or a return dcpreciated on account of special circumstances.
It the property is not fully developed, or the return is not commercial the method may yield a misleading result.
xxx xxx But when an undertaking is acquired as a unit the principles for determination of compensation must be relevant and also appropriate to the acquisition of the entire under taking.
In determining the appropriate rate of the net pro fits the return from gilt edged securities may, unless it is otherwise found unsuitable, be adopted".
It is worthy of notice that Shall, J., very carefully refrained, throughout the discussion, from using the expression 'just compensation ' or 'just equivalent ' nor did he draw inspiration from any American or Australian cases.
Realising the implication of the use of adjectives like 'just ' or 'fair ', he was content to use the expression 'compensation ' and to say that the principle specified must be relevant for determination of compensation.
F Dealing with the question whether compensation might be provided in the form of bonds, the Court said (at p. 608 609): "Compensation may be provided under a statute, other .
than in the form of money .
it may be given as equivalent of money, i.e., a bond.
But in judging whether the law provides for compensation, the money value at the date of expropriation of what is given as compensation, must be considered.
If the rate of interest compared with the ruling commercial rate is low, it will reduce the present value of the bond.
The Constitution guarantees a right to compensation an equivalent of the property expropriated and the right to compensation cannot be converted into a loan on terms which do not fairly compare with the prevailing com 636 mercial terms.
If the statute in providing for compensation devises a scheme for payment of compensation by giving it in the form of bonds, and the present value of what is deter mined to be given is thereby substantially reduced, the statute impairs the guarantee of compensation.
A scheme for payment of compensation may take many forms.
If the present value of what is given reasonably approximates to what is determined as compensation according to the principles provided by the statute, no fault may be found.
But if the law seeks to convert the compensation determined into a forced loan, or to give compensation in the form of a bond of which the market value at the date of expropriation does not approximate the amount determined as compensation, the Court must consider whether what is given is in truth compensation which is inadequate, or that it is not compensation at all.
Since we are of the view that the scheme in Sch.
II of the Act suffers from the vice that it does not award compensation according to any recognized principles, we need not dilate upon this matter further".
We may now examine the submissions of Shri A. K. Sen in the light of the principles enunciated in Cooper 's case without confusing ourselves with imported expression like 'just compensation ' or 'just equivalent '.
Shri A. K. Sen 's primary submission was that the principle of capitalising net profit as the sole factor for determining the compensation payable for the acquisition of a public utility Under taking was not a relevant principle.
According to him a Public.
Utility Undertaking was under an obligation to provide services to the community irrespective of whether its activities resulted in profit or loss It was subject to a rigid price control.
It did not have the freedom to extend or curtail its activities based on consideration of profit.
An Undertaking like the appellant 's, he said, was bound to render services even in unprofitable lines of supply and areas.
Therefore, the method of capitalising income was No. relevant to determine the compensation payable to a Public Utility undertaking.
It might be relevant to assess the value of the intangible assets of the Public Utility Under taking but it was not relevant for valuing its tangible assets.
Shri Sen invited our attention to certain passages from Alfred Jahr 's Eminent Domain Valuation and Procedure, Valuation by Bright, American Jurisprudence 2nd Edn. Vol.
27 and American Law Reports 2nd series, Vol.
It is hardly necessary tc point out that American authorities are not of any avail on the question before us since the 637 basic assumption of the American authorities is that what is payable is a 'just compensation ' and every and all principles necessary to arrive at a 'just compensation ' have to be applied.
That, as we have seen, is not the position in India.
What we have to see is whether the particular principle specified by the statute is a relevant principle.
Even so we will refer to the authorities cited by Shri Sen.
These authorities themselves show that the method of capitalisation of net profit is an unquestionably relevant principle in assessing compensation.
In fact the very argument of Shri Sen that the principle of capitalisation of net profit as a sole factor to determine compensation is not relevant, appears to us to imply that it is a relevant, principle alongwith others.
C Alfred Johr in his Eminent Domain Valuation and Procedure, states in Section 66: "At the outset, we must bear in mind that when private property is acquired for public use under the power of eminent domain, just compensation must be paid to the owner.
How is the just compensation determined ? That is the problem which we will discuss at some length".
Dealing particularly with the question of valuation of Public Utilities, the author mentions the reasons why the principles of valuation in the case of acquisition of Public Utilities are sometimes different from those pertaining to the usual acquisitions.
Then he proceeds to say that in estimating a 'just compensation ' of Utility property consideration must be given to two types of properties, the tangible properties and the intangible properties.
Tangible property such as land may be valued at the market value while property like plant etc.
may have to be valued on the basis of original cost, cost of permutation, allowance for depreciation etc.
In the case of intangible property the author states that the Courts do not indicate the method used in reaching the intangible item of 'going concern value ' .
and confesses that "there probably is none".
After remarking that valuation of a going concern based on capitalisation of net earnings assumes too many contingencies, the author refers to the case of Appleton Water Co. vs Railroad Commission , 148, , , where the Court said that the fundamental difficulty with an attempt to set a definite sum as representing going concern value is "that it is an attempt to divide a thing which is in its nature practically indivisible.
The value of the plant and business is an indivisible gross amount.
It is not obtained by adding up a number of separate items, but by taking a comprehensive view of each and all of the elements of property, tangible and intangible, including property rights, and considering them all, not as separate things, hut as inseparable parts of one harmonious entity".
638 Bright in his 'Valuation ', deals with the question under the heading 'Capitalized Earning Power Versus So Called Physical value as a measure of just compensation '.
After referring to various difficulties ` in arriving at the just compensation on the basis of the method of capitalisation, the author ends the statement: "No doubt the practical objections urged by the courts .
against capitalized earnings as a basis of valuation are well founded.
But valuations based on replacement cost are indefensible if judged by the assumed objective of an award t in condemnation, which is to indemnify the owners of the property for the loss.
Difficult as it is to determine fairly the value of a business enterprise by estimating its future earnings, no alternative method of valuation is acceptable, unless one is content to use the market prices of outstanding stocks and bonds".
In American Jurisprudence, 2nd Edn.
27, the discussion of the question of 'Measure and elements of compensation ' starts in paragraph 266 with the sentence "the right of Eminent Domain cannot be exercised except upon condition that just compensation be made to the owner".
In paragraph 339 the valuation of Public Utility properties is considered and the unique problems presented are mentioned.
It is then said : no rigid measures can be prescribed for the determination of 'just compensation ' under all circumstances and in all cases. .
The amount of net income actually received by a public utility company may and should be considered as a factor in determining the valuation, although such earnings are not conclusive, especially if a large sum would be necessary to put the plant in good condition.
Capitalization of earnings, or the "economic" value, is a method of appraisal in condemnation cases which has met with approval in some jurisdictions, although usually rejected as a sole test.
This test has its limitations (primarily because of the speculative factors involved).
but is unquestionably relevant, particularly when attempting to measure the intangibles of a public utility".
In American Law Reports 2nd series Vol 68, at pages 398 399 it is stated that in valuing utility property various tests have been applied, alone and in combination, the usual method being the ascertainment of market value.
It is then pointed out that there is a difference in ascertaining the market value for the purpose`sc of condemnation proceedings and for the purpose of rate making.
It is said: "In condemnation proceedings just compensation is the market value of the property taken.
In rate making cases, the standard or market value of the investment cannot be applied in determining just compensation, for the simple reason that marker value is dependent upon 639 earning capacity and fluctuates with that capacity; consequently in determining what earning capacity is just, the market value of the investment which is a result of earning capacity cannot be utilised as a basis for the determination of what constitutes the reasonable or just earning capacity of the plant".
We may also refer to Principles and Practice of Rating Valuation by Roger Emeny and Hector M, Wilks.
At page 197 of the 3rd edn., public utility undertakings are considered and it is said: 'Public Utility Undertakings were prior to 1950 valued by the profits method.
This method was used because public utility undertakings were not generally speaking let, added to which they enjoyed some element of monopoly. insofar that there are public utility undertakings or quasi public utility undertakings which are not covered by a formula, and in the absence of rental evidence, it is probable that the profits method of valuation would be applicable.
There is no shortage of case law to help the valuer when using the profits method for public utility undertaking".
It is thus clear from the very authorities cited by Shri Sen. that tangible and intangible property of a public utility undertaking, may not necessarily be valued separately and it is a sound principle to treat them as indivisible and value the undertaking as an integrated whole.
The authorities also treat the capitalisation of net profit as one of the recognised principles of valuation of Public Utility Undertaking, though it may not be the best in the sense that it may not yield that result which is most advantageous to the owner of the undertaking.
But we are not concerned with the question which principle will yield the result most advantageous to the owner of the undertaking but with the question whether the particular principle is a relevant principle at all.
In the language used in 'American Jurisprudence ' the principle of capitalisation of net income is "unquestionably relevant" even in the case of Public Utility Undertakings.
Tn our view, it requires no authority to say that capitalisation of net income is a sound principle of valuation.
Any purchaser will immediately put himself the question what profit does the undertaking make and how much should I invest to get the return ' ? He may pay more if the prospects of better income in the future are bright and if the plant, machinery and buildings are in excellent condition.
He may pay less if the future is not so bright and if the plant, machinery and buildings are in a poor state and require immediate replacement and repair.
He may pay more ll if the undertaking is possessed of substantial, unencumbered properties.
He may pay less if the lease of the land on which the factory 640 is located is about to expire.
Thus the price may vary depending on various factors but the basic consideration is bound to be the profit yielding capacity of the undertaking.
Shri Sen asserted that the lands belonging to the company which were purchased by way of investment, can fetch a price of Rupees six to seven crores.
There is nothing in the petition to indicate that any lands were purchased by way of investments and not for the purpose of gas works or that the lands are capable of being sold independently of the undertaking.
Perhaps, no one will come forward to purchase land next to a gas works.
Perhaps there are other factors which make the land unsale able or which depreciate the value of the land.
We do not know.
Suffice it to say that the assertion of Shri Sen is not borne out by any statement to that effect in the Writ Petition.
Shri Sell suggested that the petitioner might be given an opportunity to amend the Writ Petition.
We do not think we can do that.
The acquisition was made in 1962.
The impugned Act was passed in 1970.
The Writ Petition was filed in 1971 and has been pending in this Court for sever years.
If there was any substance in the present assertion, the petitioner would surely have mentioned it prominently in the Writ Petition.
It would not have taken the petitioner so many years to discover a circumstance claimed by his Counsel to be so very vital.
We do not think we will be justified in permitting any amendment at this stage.
The case of the petitioner right through has been that the principle of capitalisation of income was irrelevant.
With that submission we emphatically do not agree.
Shri Sen 's next submission was that the choice of the period of five years immediately preceding the take over of the management and control of the Company for the purpose of calculating the average annual income was arbitrary as those five years were particularly lean years for the Company because of some special circumstances.
The charge of arbitrariness is baseless.
The five years immediately preceding the take over of the control and management of the Company were the years 1955 56, 1956 57, 1957 58, 1958 59 and 1959 60 during which years the profits according to the balance sheets of the Company, were Rs. 15,86,789, Rs. 13,81,177, Rs. 7,50,582, Rs. 1,64,158 and Rs. 1,82,123/ respectively.
Now, if the Legislature wanted to be unfair to the Company, the last year 's profit could have been taken as the criterion on the ground that the value to be ascertained was the value on the date of take over and not some hypothetical anterior date.
Or, instead of taking the advantage of the period of the preceding five years, the Legislature could well have taken the average of the preceding three years.
If 643 that.
We should not however be understood as having decided that A Section 9 (2) offends Article 31 (2) of the Constitution.
Shri Chatterjee, learned Counsel for the State of West Bengal, argued that the earlier decision of the Calcutta High Court in the petition under Article 226 of the Constitution operated as res judicata.
In the view that we have taken on the main question it is unnecessary to consider this argument except to say that there does not appear to be any substance in it.
In the result the Writ Petition is dismissed with costs.
P.B.R. Petition dismissed.
| IN-Abs | In 1958, the Government of West Bengal, being of the view that the appellant company which enjoyed a monopoly in the supply of gas in Calcutta was negligent in looking after the interest of the consumers appointed a Committee to enquire into the unsatisfactory condition of supply of gas in Calcutta and to suggest remedial measures, including valuation of the Undertaking for the purpose of taking it over.
The Committee reported that the distribution system was in a bad state of disrepair and that the maintenance system was in a very poor state.
It recommended that the distribution system should be taken over immediately under the management of the Government to ensure and maintain supply of gas to consumers in Calcutta.
On the basis of this recommendation, the oriental Gas Company (West Bengal Act XV of 1960) was passed by the State Legislature.
Section 3 of the Act provided for the taking over for a limited period of the management and control and subsequent acquisition of the Undertaking of the Company Section 7 provided for the acquisition of the Undertaking of the Company at any time within a period of five years.
Section 8(1)(b) provided for payment of compensation for the acquisition of the Undertaking of the Company, by the method of cost less depreciation or the method of capitalisation whichever was less.
Section 9(2) provided that the compensation should be paid in bonds carrying interest at 3% p.a. from the date of issue and payable in 20 equal annual instalments.
The Act was amended in 1968.
The amended Act provided for the determination of compensation on the basis of full market value of the Undertaking and payment of compensation in the shape of bonds carrying interest from the date of enactment of the 1968 Act.
In 1970 the Act was again amended.
It provided for the determination of compensation by the method of capitalisation and payment of compensation in bonds carrying interest from the date of acquisition.
Aggrieved by the method of determination of compensation the appellant filed a writ petition under article 32 of the Constitution questioning the vires of section 8(1)(b) and section 9(2) of the Act.
The petitioner contended that (1) the principle of capitalising net profit as the sole factor for determining compensation payable for the acquisition of a public utility undertaking was not a relevant principle because a public utility concern was under an obligation to provide services to the community irrespective of whether its activities resulted in profit or loss; (2) the choice of the period of five years immediately preceding the take over of the management and control of the company for the purpose of calculating the average annual income was arbitrary; (3) at the time when the Undertaking was 618 acquired in 1962 the gilt edged securities were fetching 6% p.a. and therefore a higher multiplier than eight should have been provided and (4) the method of payment of compensation in the shape of bonds payable in twenty years at 3% interest had the effect of reducing the compensation to less than half of what was determined.
Dismissing the petition, ^ HELD: (1) (a) The principles specified by the law for determination of compensation are beyond the pale of challenge, if they are relevant to the determination of compensation and are recognised principles applicable in the determination of compensation for property compulsorily acquired and if the principles are appropriate in determining the value of the class of property sought to be acquired.
The science of valuation of property recognised several principals or methods for determining the value to be paid as compensation to the owner for loss of his property.
If an appropriate method or principle for determination of compensation was applied, the fact that by the application of another principle which was also appropriate a different value was reached, would not justify the court in entertaining the contention that out of the two appropriate methods, one more generous to the owner should have been applied by the Legislature.
If several principles were appropriate and one was selected for determination of the value of the property to be acquired, selection of that principle to the exclusion of other principles was not open to challenge since the selection to be left to the wisdom of the Parliament.
[633 F H] R. C. Cooper vs Union of India, ; followed.
Case law discussed.
(b) It is well established that tangible and intangible property of a public utility undertaking may not necessarily be valued separately and it is a sound principle to treat them as indivisible aqud value the undertaking as an integrated whole.
The authorities also treat capitalisation of net profit as one of the recognised principles of valuatior; of Public Utility Undertakings, though it may not be the best in the sense that it may not yield that result which is most advantageous to the owner of the undertaking.
Any purchaser will put himself the question what profit does the undertaking make ? and how much should he invest to get the return.
He may pay more if the prospects of better income in the future are bright and if the plant, machinery and buildings are in an excellent condition.
He may pay less if the future is not so bright and if the plant, machinery and buildings are in a poor state and require replacement and repair.
He may pay more if the undertaking is possessed of substantial, unencumbered properties.
He may pay less if the lease of land on which the factory is located is about to expire.
Thus the price may vary depending on various factors but the basic consideration is bound to be the profit yielding capacity of the undertaking.
[639 E, G H] In the instant case there is nothing in the writ petition to indicate that lands were purchased by way of investment and not for the purpose of gas works or that the lands were capable of being sold independently of the Undertaking.
The petitioner 's assertions are not borne out by any statement to that ecect in the petition.
Therefore, there would be no justification now to allow the petitioner to amend the petition filed in 1971.
Had there been 619 any substance in this assertion the petitioner would have mentioned it prominently in the petition itself.
It would not have taken it so many years to discover a circumstance claimed to be so very vital.
The case of the petitioner right through had been that the principle of capitalisation of income was irrelevant.
[640 C E] (2)(a).
There is no force in the charge of arbitrariness.
There is nothing wrong with the choice of the period of five years preceding the take over for the purpose of calculating the average annual income.
[640 F G] (b) If the legislature wanted to be unfair to the company, the previous year 's profit could have been taken as criterion on the ground that the value to be ascertained was the value on the date of take over and not somo hypotheticol anterior date, or instead of taking the average of the period of the proceeding five years the legislature could well have taken the average of the preceding three years.
If either of these courses had been adopted compensation would be much less.
Instead, the legislature fairly adopted a five year period for calculating the average annual income.
It may be that in the historical part the undertaking was making much profit It may be that in the past there were lean years.
Neither a specially fat nor a specially lean period from the past could properly be taken into account as that would be.
irrelevant.
The legislature was concerned with the value of the undertaking on or about the date of acquisition.
It, therefore, very properly chose the period of five years immediately preceding The take over.
[640 H; 641 A B] Appleton Water Co. vs Railroad Commission, 154 Wis. 121, 148, , referred to.
Eminent Domain by Alfred Jahr, Valuation by Bright, Principles and Practice of Rating Valuation by Roger Emeny and Hector M. Wilks referred to.
(3) There is equally no force in the argument that the legislature should have specified a higher multiplier than 'eight ' in fixing the compensation.
If the legislature thought that a. return of 12% in the case of large industrial undertaking such as the petitioner 's was reasonable and on that basis adopted the multiplier 'eight ', it is not for this Court to sit in judgment over that decision and attempt to determine a more appropriate multiplier.
The use of the term 'normal cases ' used in Cooper 's case where this Court pointed out that capitalisation of the net annual value of the property at a rate equal in normal cases to the return from gilt edged securities was an important method of determination of compensation, showed that it was not intended to lay down any invariable rule that whenever a method of capitalisation of net profits was adopted, return from gilt edged securities was to be the basis.
That should depend on a variety of circumstances such as the nature of the property, the normal return which could be expected on like investment, the state of the capital market and several such factors.
[641 G H; 642 A]
|
Civil Appeal No. 2329 of 1969.
Appeal by Special Leave from the Judgment and Order dated 16 12 1966 of the Allahabad High Court in S.C.A. No. 346/66.
G. N. Dikshit, M. V. Goswami and O. P. Rana for the Appellant.
section K. Mehta and P. N. Puri, for Respondent Nos.
The Judgment of the Court was delivered by SHINGHAL, J.
This appeal by special leave arises from a Judgment of the Allahabad High Court dated February 26, 1964.
It will be enough to state the admitted facts for they are quite sufficient for its disposal.
893 Mohammed Salamat Ullah Khan, Mohammed Sharafat Ullah Khan and Mohammed Latafat Ullah Khan were three brothers owning one third share each in their joint property.
Mohammed Salamat Ullah Khan died, and his sons Karamat Ullah Khan, Dilawar Ullah Khan, Muzaffar Ullah Khan and Tahir Khan migrated to Pakistan in 1948.
The remaining two brothers of Mohammed Salamat Ullah Khan, namely, Mohammed Sharafat Ullah Khan and Mohammed Latafat Ullah Khan, stayed in India and had a two third share in that property.
Major Chandra Bhan Singh was a refugee from Pakistan, and a temporary allotment of the one third evacuee share in the property was made in his favour on April 4, 1955.
As the property was listed as composite property, notices were issued in April, 1955, under section 6 of the , hereinafter referred to as the Act.
They were "individual" notices and the Competent Officer has stated that they were served on Latafat Ullah Khan and Sharafat Ullah Khan and their acknowledgements were placed on the record.
No claim was however filed by anyone, and an order was made by the competent Officer on August 31, 1955, under section 11 of the Act, vesting the property in the Custodian.
It may be mentioned that Mohammed Sharafat Ullah Khan had died earlier, leaving behind his four sons Shaukat Ullah Khan, Habib Ullah Khan, Nasar Ullah Khan and Aman Ullah Khan.
It so happened that the property was again reported to be composite property.
The earlier order dated August 31, 1955, was lost sight of, and fresh notices were issued to the co sharers under section 6 of the Act.
They were served personally on Mohammed Latafat Ullah Khan, and on Mohammed Sharafat Ullah Khan through his son Shaukat Ullah Khan, on February 25, 1956.
But again no claim was filed under section 7 of the Act by anyone, claiming any interest in the composite property.
An order was therefore again made on March 23, 1957, under section 11 of the Act, vesting the property in the Custodian.
The Assistant Custodian (L) sent a senior Inspector to take possession of the vested property.
Shaukat Ullah Khan, the eldest son of Mohammed Sharafat Ullah Khan, took notice of that development and undertook to file his claim within 15 days.
No claim was however filed even then.
Possession of Mohammed Salamat Ullah Khan 's one third share in the property was delivered to Major Chandra Bhan Singh on March 7, 1958, under orders of the Assistant Custodian.
Thereafter an order was made on June 6, 1958 giving him quasi permanent allotment along with his brother Raghubir Singh.
894 In the meantime, an application was made by Mohammed Latafat Ullah Khan and the four sons of Mohammed Sharafat Ullah Khan on March 12, 1958, for "restoration".
It was stated in the accompanying affidavit of Arshad Ullah Khan, son of Mohammed Latafat Ullah Khan, that Mohammed Sharafat Ullah Khan had died in 1950, and no notice for separation of the evacuee interest in the property was ever served on them.
It was further stated that they learnt of the vesting order only on March 6, 1958, when the Manager of the evacuee property went to the village to take possession.
An order was quickly made on March 15, 1958, setting aside the vesting order which, it will be recalled, had been made as far back as August 31, 1955.
The case was then taken up on May 12, 1958, when it was stated by Arshad Ullah Khan on oath that the only grove in the property was in plot No. 1791.
The Competent Officer relied on that statement, and gathered the impression that the Assistant Custodian (L) had no objection to the transfer of the evacuee interest in the property to Mohammed Latafat Ullah Khan and the four sons of Mohammed Sharafat Ullah Khan for Rs. 5000/ .
An order was made to that effect the same day.
One of the items of the property was however left out of evaluation even at that time for subsequent decision.
The Assistant Custodian of Evacuee Property however made an application to the Competent Officer soon after, on June 11, 1958, for a review of his order dated May 12, 1958, on the ground, inter alia, that certain grove plots were treated as agricultural plots.
That was followed by another application for review dated July 10, 1958, on the ground that the Competent officer made his order dated May 12, 1958 under the incorrect impression that the Assistant Custodian (L) had no objection to the transfer of the evacuee share in the land to Mohammed Latafat Ullah Khan and the four sons of Mohammed Sharafat Ullah Khan for Rs. 5000/ .
It was also pointed out that the evacuee interest in the property had already been allotted to Major Chandra Bhan Singh, who was a displaced person from Pakistan.
It was therefore prayed that the order dated May 12, 1958, may be reviewed and the property partitioned so as to separate the evacuee 's one third interest.
The Competent Officer partly disposed of the review application dated July 10, 1958, the same day.
He corrected the mistaken impression that the Assistant Custodian had no objection to the transfer of the evacuee share in the property for Rs. 5000/ and modified the earlier order dated May 12, 1958, by deleting that statement from it.
Mohammed Shaukat Ullah Khan however raised an objection against the maintainability of the review applications.
The Competent Officer took the view that as the Appellate Officer had held in 895 appeal No. 953 of 1957, that he (Competent Officer) could review his own order, there was no force in the objection to the contrary.
He examined the petition in terms of the requirements of Order 47 rule 1 of the Code of Civil Procedure and held that a new and important matter regarding the allotment of the land to the refugees (Major Chandra Bhan Singh and his brother Raghubir Singh) had been discovered which justified reconsideration of the earlier decision dated May 12, 1958.
He therefore reviewed that order and set it aside by his order dated September 8, 1958.
He gave his reasons for taking the view that the proper course was to partition the property, and allotted the plots mentioned in that order to the Custodian in lieu of the evacuee share of Karamat Ullah Khan, Dilawar Ullah Khan, Muzaffar Ullah Khan and Tahir Khan sons of Mohammed Salamat Ullah Khan.
The other plots were left to the Share of the non evacuee co sharers, namely, Mohammed Latafat Ullah Khan, Shaukat Ullah Khan, Aman Ullah Khan, Habib Ullah Khan and Nasar Ullah Khan their two third share by way of non evacuee interest.
Plot No. 1791/1 was left out for separate decision after receipt of the report regarding its valuation.
Mohammed Latafat Ullah Khan and the four sons of Mohammed Sharafat Ullah Khan felt aggrieved against that order of the Competent Officer and moved the High Court by a petition under article 226 of the Constitution.
The High Court took the view in its impugned judgment dated February 26, 1964, that in the absence of any provision in the Act for review, it was not permissible for the Competent Officer to review his order dated May 12, 1958.
It therefore allowed the writ petition, quashed the order of review dated September 8, 1958, and directed the "opposite parties" not to give effect to it and not to disturb the possession of the writ petitioners on the plots in dispute.
This, as has been stated, has given rise to the present appeal.
In order to appreciate the controversy, it will be desirable to examine the facts and circumstances of the case with due regard to the provisions of the Act.
It has not been disputed before us, and is in fact beyond challenge, that the property in question was "composite property" within the meaning of section 2(d) of the Act because the one third undivided share of Mohammed Salamat Ullah Khan 's sons Karamat Ullah Khan, Dilawar Ullah Khan, Muzaffar Ullah Khan and Tahir Khan, who had migrated to Pakistan in 1940, had been declared to be evacuee property and had vested in the Custodian under the , while the remaining share belonged to the other two brothers of Mohammed Salamat Ullah Khan who were 896 non evacuees.
The evacuee interest in the property was therefore confined to that one third share in the entire property being the right, title and interest of the evacuees therein within the meaning of clause (e) of section 2.
It is equally clear that it was permissible for the non evacuee shareholders having the remaining two third share in the property to make a claim in respect of it within the meaning of clause (b) of section 2 of the Act in their capacity as co sharers of the evacuees in the property.
Section 5 of the Act gives jurisdiction to the Competent Officer to decide any claim relating to a composite property, and section 6 requires that for the purpose of determining or separating the evacuee interest in a composite property, the Competent Officer may issue a general, and also an individual notice on every person who in his opinion may have a claim in that property to submit claims in the prescribed form and manner.
It will be remembered that as the property was listed as "composite property", notices were issued under section 6 of the Act and the individual notices were served on Latafat Ullah Khan and Sharafat Ullah Khan and their acknowledgments were placed on the record.
No claim was however filed under section 7 of the Act claiming any interest in the composite property.
Section 8 of the Act provides that on receipt of a claim under section 7, the Competent Officer shall hold an inquiry into the claim and give his decision thereon, while sections 9 and 10 deal with reliefs in respect of mortgaged property of evacuees and separation of the interest of evacuees from those of the claimants in a composite property.
Section 11 provides for the vesting of evacuee interest in the custodian where a notice under section 6 is issued in respect of any property but no claim is filed.
As no statement of claim was received by the Competent Officer, the evacuee interest in the "composite property" vested in the Custodian and the Competent Officer accordingly took a decision to that effect on August 31, 1955.
It was a lawful order under section 8 read with section 11 of the Act.
Section 14 provides that any person aggrieved by an order of the Competent Officer made under Section 8 may prefer an appeal to the Appellate Officer within 60 days of that order, and it would then be for the Appellate Officer to confirm, vary or reverse the order appealed from and to pass such orders as he deems fit.
Section 15 of the Act further provides that the Appellate Officer may at any time call for the record of any proceeding in which the Competent Officer has passed an order for the purpose of satisfying himself as to the legality or propriety thereof and to pass such order in relation thereto as he thinks fit.
This appellate and revisional jurisdiction was therefore available to the writ petitioners if they felt dissatisfied with the order 897 of the Competent Officer dated August 31, 1955, but it is admitted before us that they did not avail of it.
Section 18 of the Act therefore came into operation which provides as follows : "18.
Save as otherwise expressly provided in this Act, every order made by any appellate officer or competent officer shall be final and shall not be called in question in any Court by way of an appeal or revision or in any original suit, application or execution proceedings.
" So when the aggrieved persons did not invoke the appellate or revisional jurisdiction of the Appellate Officer, the order of the Competent Officer dated August 31, 1955, became final by virtue of section 18 and could not be called in question thereafter.
It will be recalled that, as has been mentioned, the property was again reported to be of a composite nature, and fresh notices were inadvertently issued to the non evacuee shareholders.
They were personally served on Mohammed Latafat Ullah Khan, and on Mohammed Shamfat Ullah Khan through his son Shaukat Ullah Khan, on February 25, 1956, but no claim was filed by anyone in spite of that second opportunity, and a vesting order was once again made under section 11 of the Act on March 23, 1957.
No appeal or revision application was filed against that order also, under sections 14 and 15 of the Act.
In fact it was after a lapse of some 2 1/2 years from the order dated August 31, 1955, and 1 year from March 23, 1957 that Mohammed Latafat Ullah Khan and the four sons of Mohammed Sharafat Ullah Khan made an application for "restoration" of their claims on March 12, 1958.
By then the order dated August 31, 1955 had become final and binding under section 18 and it was not permissible for any one to reopen it merely on the basis of a "restoration" application and to review the earlier order dated August 31, 1955 in disregard of the statutory bar of that section.
It is well settled that review is a creature of statute and cannot be entertained in the absence of a provision therefor.
It will be enough to make a reference in this connection to the decision of this Court in Harbhajan Singh vs Karam Singh and others(1) which approved the earlier Privy Council decision in Baijnath Ram Goenka vs Nand Kumar Singh(2) the decision in Anantharaju Shetty vs Appu Hegde(3) and reiterated the decision in Patel Chunibhai Dajibhai etc.
vs Naravanrao Khanderao Jambekar and another(4).
The orders of the Competent Officer dated March 15, 1958 and May 12, 1958 in favour of the writ petitioners setting aside 898 the vesting order dated August 31, 1955, and transferring the evacuee interest in the property to Mohammed Latafat Ullah Khan and the four sons of Mohammed Sharafat Ullah Khan for Rs. 5000/ were therefore without jurisdiction.
As has been stated, the Assistant Custodian felt aggrieved against the orders of the Competent Officer dated March 15, 1958, and May 12, 1958, and made application soon after, on June 11, 1958, and July 10, 1958, for review, and the Competent Officer allowed them by his orders dated July 10, 1958 and September 8, 1958.
The order dated July 10, 1958 was not of much consequence.
The fact therefore remains that the two sets of orders of the Competent Officer, namely, the first set of the two orders dated March 15, 1958 and May 12, 1958, and the second set consisting of the orders dated July 10, 1958 and September 8, 1958 suffered from the same vice of lack of jurisdiction and were equally void.
This fact was specifically brought to the notice of the High Court, but it ruled it out by merely saying that the "fact that the petitioners had wrongly filed a review application which was allowed by the Competent Officer would not confer jurisdiction on the Competent Officer to review his orders if the statute had not made any provision for it.
" That was begging the question, and could not possibly meet the objection of the present appellants.
If we may say so with respect, what the High Court failed to appreciate was that while it was true that want of jurisdiction to review the order of August 31, 1955, could not be cured by waiver, it would not necessarily follow that the Court was obliged to grant certiorari at the instance of a party whose conduct was such as to disentitle it for it.
The High Court was exercising its extraordinary jurisdiction and the conduct of the petitioners was a matter of considerable importance.
The High Court did not take due notice of the fact that the writ petitioners (or their predecessors in interest) had allowed the passing of the order dated August 31, 1955 in spite of the individual notices which were issued under section 7, and did not deserve any relief.
It did not notice the further fact that when the order dated August 31, 1955 had become final because of the failure to file an appeal or an application for revision, it was not permissible under the law, in view of the specific bar of section 18, for the writ petitioners to move a "restoration" application on March 12, 1958 for its review and to obtain its reversal by the Competent Officer 's orders dated March 15, 1958 and May 12, 1958, and to obtain a wholly beneficial order for the transfer of the one third evacuee interest to them on payment of Rs. 5000/ .
They, nevertheless, did so.
So when the writ petitioners had themselves unlawfully invoked the review jurisdiction of the Competent Officer, which did not exist, to their advantage, and to the disadvantage of the present appellant, by 899 their application dated March 12, 1958, they could not be heard to say, when the Department invoked the self same jurisdiction on two important grounds (to which reference has been made earlier) that the review orders of the Competent Officer dated July 10, 1958 and September 8, 1958 were void for want of jurisdiction and must be set aside for that reason.
The conduct of the writ petitioners was therefore such as to disentitle them to certiorari, and the High Court erred in ignoring that important aspect of the matter even though it was sufficient for the dismissal of the writ petition.
The appeal is allowed, the impugned judgment of the High Court dated February 26, 1964, is set aside and the writ petition is dismissed.
There will however be no order as to costs in the facts and circumstances of the case.
N.V.K. Appeal allowed.
| IN-Abs | Practice and Procedure Conduct of parties to be taken into account while granting relief in writ petition.
The property in dispute was undivided property (composite property) of three brothers, one of whom died and his sons migrated to Pakistan.
One third share of the property was declared evacuee property and vested in the Custodian under the .
It was allotted to the appellant who was a refugee.
The Competent Officer issued individual notices under Section 6 of the to the two remaining brothers of the evacuee and their acknowledgments were placed on record.
Since no claim was filed by anyone, an order was made by the Competent Officer on 31 8 1955 vesting the property in the Custodian under Sec. 11.
As the property was again reported to be composite property, fresh notices were inadvertently issued to the co sharers, but no claim was filed by anyone and an order was again made on 23 3 1957 vesting the property in the Custodian.
Possession of the evacuees one third share in the property was delivered to the appellant under order of Assistant Custodian.
After a lapse of time, the respondents filed an application for 'restoration ' alleging that no notice for separation of the evacuee interest in the property was ever served on them and that they learnt of the vesting order only when the Manager of the evacuee property went to the village to take possession.
The Competent Officer passed an order setting aside the vesting order dated 31 8 1955 and transferred the property to the sons of the deceased brother for Rs. 5,000/ .
The Assistant Custodian of Evacuee Property made an application to the Competent Officer for a review of his order, pointing out a wrong impression.
It was stated that the evacuee interest in the property had already been allotted to the appellant.
The Competent Officer partly allowed the review.
The respondents questioned the power of the Competent officer to review his order, but the objection was rejected.
The respondents filed a writ petition under article 226 of the Constitution.
The High Court quashed the order of review on the ground that in the absence of any provision in the Act for review, it was not permissible for the Competent Officer to review his order.
Allowing the appeal to this Court, 892 ^ HELD: (1) The conduct of the respondents was such as to disentitle them to a writ and the High Court erred in ignoring that important aspect of the matter even though it was sufficient for the dismissal of the writ petition.
[899B] (2) Review is a creature of a statute and cannot be entertained in the absence of a provision therefor.
[897G] Harbhajan Singh vs Karan Singh & Ors., ; ; Patel Chunibhai Dajibhai etc.
vs Narayanrao Khanderao Jambekar & Anr., ; referred to.
Baijnath Ram Goenka vs Nand Kumar Singh, 40 I.A. 54; Ananatharaju Shetty vs Appu Hegde, AIR 1919 Mad. 244, approved.
(3) The earlier two orders of the Competent Officer setting aside the vesting order and transferring the evacuee interest in the property to the respondents were therefor without jurisdiction.
[897H 898A] (4) But when the respondents had themselves unlawfully invoked the review jurisdiction of the Competent officer, which did not exist, to their advantage, and to the disadvantage of the appellant, they could not be heard to say, when the Department invoked the self same jurisdiction on two important grounds, that the review orders of the Competent Officer were void for want of jurisdiction and must be set aside for that reason.
[898H 899B] (5) The High Court failed to appreciate that while it was true that want of jurisdiction to review the order by the Competent Officer could not be cured by waiver, it would not necessarily follow that the Court was obliged to grant a writ at the instance of a party whose conduct was such as to disentitle it for it.
The High Court was exercising its extraordinary jurisdiction and the conduct of the petitioners was a matter of considerable importance.
[898E] (6) The High Court did not take due notice of the fact that the respondents had allowed the passing of the impugned orders, in spite of the individual notices to them.
It did not notice the further fact that when that order had become final because of the failure to file an appeal or an application for revision it was not permissible in view of the specific bar of Sec. 18 for the respondents to move a "restoration" application and to obtain its reversal by the Competent Officer.
[898F G]
|
relations between the testatrix and the appellant were very cordial those between her and the respondent were far from being cordial.
There could be no occasion for her to suddenly change her mind to revoke the will so as to benefit the respondent whom she despised.
Secondly, being an extremely religious and charitable lady, it is difficult to believe that she would shed her inclinations by revoking the will deleting the religious purposes and giving benefit to the respondent to make him the absolute owner of the properties.
Thirdly in all the earlier dispositions a clause was inserted prohibiting the trustees from alienating the properties.
Had she revoked the will the result would have been that the property would go to the respondent without any conditions, a conduct that would be against her temperament.
Fourthly the respondent and his wife had access to the house of the testatrix and therefore the possibility that he or his wife might have pilfered the will could not be excluded.
Lastly there was no evidence that the testatrix had at any time expressed a desire to revoke the will nor was there evidence to show that the respondent was gaining her favour at any time before her death.
[888D H, 889D, G, H] & CIVIL APPELLATE JURISDICTION: Civil Appeal No. 55 of 1969.
From the Judgment and Order dated 15 2 67 of the Delhi High Court in L.A.P. No. 146 D of 1963.
K. T. Hrindra Nath, Gautam Goswami and B. B. Sinha for the Appellant.
Sardar Bahadur Saharya and Vishnu Bahadur Saharya for Respondent No. 1.
The Judgment of the Court was delivered by FAZAL ALI, J.
This appeal by certificate is directed against the judgment of the Delhi High Court dated 15 2 1967 reversing the decision of the single Judge and dismissing the application filed for grant of probate by the appellant of a will said to have been executed by Smt.
Jog Maya on the 1st July, 1947 and registered on 9th July, 1947.
Jog Maya died on 22 10 1955.
Soon thereafter the appellant who was the sole legatee and executor under the will filed a petition before the District Judge, Delhi for grant of letters of administration or probate.
Put briefly the appellant 's case was that Smt.
Jog Maya was a resident of Mohalla Rang Mahal, Nahar Sadat Khan, Delhi and although she had an adopted son, namely, the respondent Pt.
Devi Charan there was no love lost between Smt.
Jog Maya and Devi Charan so much so that in her will the testatrix expressly mentioned that the adopted son should not be permitted to perform her 876 funeral rites on her death nor should he be allowed to touch her body.
The appellant Durga Prasad on the other hand was looking after the affairs of the lady and doing her work from time to time.
It was perhaps in lieu of the services rendered by the appellant that Smt.
Jog Maya executed a will in his favour on 1st July, 1947.
The proceedings for probate were contested by Devi Charan who denied the execution of the will on the ground that Smt.
Jogmaya was not of sound disposing mind when she is said to have executed the will but had been persuaded to do so by undue influence exercised by the appellant in executing the will.
It was also alleged by the respondent Devi Charan that the will was subsequently revoked and that is why it was not found in the house despite every possible search.
The District Judge accepted the plea of the respondent and dismissed the application for probate by his order dated 3 5 1957.
The appellant, therefore, filed an appeal to the High Court which was heard by Mr. Justice P. D. Sharma who reversed the decision of the District Judge and found that the will was a genuine document and had not been revoked.
He accordingly allowed the petition of Durga Prasad and issued letters of probate or administration.
The respondent went up in appeal to the Division Bench which reversed the finding of the Single Judge and restored the order of the District Judge dismissing the application for probate.
It would appear from a perusal of the Judgment of the Division Bench of the High Court that so far as the factual aspect regarding the execution of he will was concerned it agreed with the findings of fact given by the Single Judge that the will was a genuine document and was duly executed by the testatrix who had a sound disposing mind and no fraud or undue influence at all had been practised in the execution of the will which was witnessed by as many as 7 attesting witnesses some of whom had been examined before the District Judge to prove the execution of the will.
In this connection, the High Court observed as follows: "As regards the issue Nos. 1 and 2, as already stated above, the learned Single Judge held that the evidence on record was sufficient to prove that Smt.
Jog Maya executed the will (copy) exhibit
P. 10, and that she was of sound and disposing mind at the time of the execution, as held by the learned District Judge.
But the Courts have thus given concurrent findings on issues Nos. 1 and 2, viz., on the questions as to whether Jog Maya executed the alleged will dated 1st July, 1947, (certified copy of which has been put on 877 the record and marked as exhibit P.10) and whether Jog Maya was of sound and disposing state of mind when she executed the said will".
In view of this categorical finding of the High Court it is manifest that the point in dispute lies within a very narrow compass.
The High Court while accepting the genuineness of the will has non suited the appellant only on the ground that as the will was not found on the death of the testatrix despite every attempt to search for it, a presumption would have to be drawn that the testatrix had revoked the will by destroying it before her death.
In view of this presumption the High Court held that the will appears to have been revoked and consequently refused to grant probate to the appellant.
Mr. Hrindranath, counsel for the appellant submitted in the first place that the High Court was in error in applying the presumption of the revocation of the will in view of the express provisions of section 70 of the hereinafter called the Act.
It was contended in the alternative that even if the presumption was available to the respondent, the same being a rebuttable one was sufficiently rebutted by facts and circumstances proved in the case.
The High Court has relied on a number of decisions in support of its view that from the fact that the will was not found on the death of the deceased Smt.
Jog Maya, a presumption would have to be drawn that the will was revoked by her before her death.
Mr. Saharya, counsel for the respondent on the other hand supported the reasons given by the High Court and submitted that in the circumstances there was no alternative but to draw the presumption that the will was revoked.
Before however deciding the question of law arising in the present appeal, it may be necessary to set out a few facts against the background of which the point of law could be easily decided.
It appears that Smt.
Jog Maya was a very clever woman and personally looked after her own affairs as found by the High Court.
The High Court also found that Smt.
Jog Maya was a woman of a very religious and charitable bent of mind and had executed as many as three wills including the will in question and in all of them she had made adequate provision for Puja in the house and other charitable purposes.
Jog Maya had purchased the house situated in Rang Mahal, Nahar Sadat Khan, No. 667, in or about 1933.
She resided in the front portion of the ground floor and leased out the back portion of the ground floor to tenants.
She got a temple constructed in the upper storey and installed the idols of Lakshmi Narain and Hanuman, on 11 3 1935.
On 7th May, 1935 she executed a will and got regis 878 tered on 9th May, 1935.
In this will she clearly stated that she was performing Puja and service of the temple from out of the income of the rents of the building.
She further declared in the will that the house was made Wakf and dedicated to the temple and would remain so for all times to come.
Under the will five respectable persons were made the trustees, but Smt.
Jog Maya reserved the right of managing the property to herself and it was only after her death that the trustees were to manage the property and perform Puja etc.
Three years later on 12th July, 1938 Smt.
Jog Maya executed another will and got it registered on 18th July, 1938.
By this will she revoked the previous will of 1935 and dedicated a part of the house, some deposits in some banks, ornaments and other household goods for the benefit of the temple.
She retained the provision that she would manage the property and realise the rents till her life time after which the property was to be managed by seven persons nominated by her under the will.
In this will Smt.
Jog Maya expressly prohibited the respondent Devi Charan who was her adopted son from performing her funeral rites, but she gave Devi Charan and his wife the right to appropriate the rent of the two houses after the payment of taxes and repairs and after the death of the trustees.
There was also a clause which prohibited the trustees from alienating the endowed properties.
This will also shows the religious and charitable disposition of Smt.
Jog Maya.
The third will which is the will in question was executed on 1st July, 1947 and registered on 9th July, 1947.
By this will Smt.
Jog Maya cancelled the will of 1938 and declared the same as void and bequeathed all her properties, movable and immovable, to the appellant Pt.
Durga Prashad who was also appointed the executor of the will.
The will however contains a clear clause that Durga Prashad will be the owner of all the properties he would have no right of alienating the house but would only be entitled to realise the rent and income from the properties which he should spend in the performance of Puja in the temple and appropriate the balance himself.
In this will also there was a prohibition clause under which it was said that Devi Charan would have no concern with her estate, movable and immovable, and he should not even touch her dead body.
So far as the upper portion of the house is concerned, which was converted into a private temple where a deity was installed that is not the subject matter of the will and there is no dispute about the same.
The dispute between the parties centres round the ground portion of the house and other movable properties.
After the death of Smt.
Jog Maya the house was locked up by the neighbours and later a search was conducted as a result of which though 879 the original will was not found a draft will almost of the same time as the will in question was found which is Ext.
No date is given in this draft but Jog Maya has described herself as being 63 years of age which would show that this draft was written almost at the same time as the will.
According to this draft, apart from Durga Prashad one Pandit Ram Nath was also appointed as executor and trustee of the properties of Jog Maya.
The usual directions for carrying on the Puja and other charitable purposes was also found in this draft.
In the draft also it was clarified that Devi Charan had no connection with the house or with the properties which were the subject matter of the will and had executed a release deed in favour of Jog Maya.
As regards Devi Charan the following recitals appear in the draft: "I and Devi Charan have not been given rights of alienation and it is also mentioned in the will about Devi Charan that if he remains of good conduct he will be entitled to receive Rs. 10/ p.m.
As his character became bad on attaining majority, my father in law secured a release deed from him registered at No. 2200, Book I Volume 558 dated 26 8 1929 in my favour.
From that time my son Devi has no connection with those houses and with my movable and immovable property. . Eightly.
I specially direct that Devi Charan should not perform my funeral ceremonies and the trustees should get them performed by another".
It would thus appear that the relations between the respondent and the testatrix were extremely strained at the time when the will in question was executed and it appears that the testatrix did not wish that the respondent should have anything to do with her properties and any concession she had made in his favour in her two previous wills appears to have been completely withdrawn by the impugned will.
Even Prem Shankar one of the witnesses examined by the respondent clearly admitted that Devi Charan was not made a trustee by that trust deed because Smt.
Jog Maya was offended with him.
The appellant has also stated in his evidence that relations between the respondent and the testatrix were not good.
A careful analysis therefore of the previous wills or draft executed by Jog Maya show the presence of the following important features in all these documents: 1.
That relations between the respondent and Smt.
Jog Maya were extremely strained so much so that he was not permitted to perform her funeral rites or touch her body.
880 2.
Substantial provision was made for religious and charitable purposes in all the wills.
Express prohibition was made in all the wills regarding alienating the properties by the legatees or the trustees.
That in the draft will as also the impugned will Durga Prashad was constituted as the executor of the will.
We will develop these features a little later after discussing the points of law involved in the case.
The High Court appears to have drawn the presumption regarding the revocation of the will from two facts.
In the first place, it was found that there was no positive evidence to show that the will was in existence at the time of the death of the testatrix.
In this connection, it relied on the evidence of Durga Prashad that a few days prior to her death Jog Maya had told him that the original will was in safe custody in the bank, but this fact was falsified by the circumstance that when the sealed box kept in the bank was opened no will was found.
In our opinion, in the initial application which the appellant gave for grant of probate, he did not mention at all that Jog Maya told him that the original will was kept in safe custody in the bank.
This averment was made in an amended application which was given by him before the District Judge.
In the circumstances, therefore, we feel that no such statement was ever made by Jog Maya to the appellant who tried to overstate his case which was clearly an after thought otherwise there was no reason why he should not have mentioned this fact in the initial petition for the grant of probate which he filed before the District Judge.
In these circumstances, not much turns upon what Durga Prashad says about the will being in the box.
The High Court then relied on the circumstance that in spite of every possible search while the draft exhibit C 1 was in fact found the will was not found at all.
The High Court, therefore, drew presumption that the testatrix must have revoked the will by destruction or otherwise.
The question as to whether or not a presumption should be drawn in such cases as a rule of law is extremely doubtful.
Moreover, even if any such presumption is drawn the said presumption is rebuttable and may be rebutted either by direct or circumstantial evidence.
In the first place, the High Court relied on the case of Anna Maria Welch and Lucy Allen Welch vs Nathaniel Phillips where the Privy Council observed as follows: "Now the rule of the law of evidence on this subject, as established by a course of decisions in the Ecclesiastical Court, is this: "that if a will, traced to the possession of the 881 deceased, and last seen there, is not forthcoming on his death, it is presumed to have been destroyed by himself; and that presumption must have effect, unless there is sufficient evidence to repel it.
It is a presumption founded on good sense".
The serious question for us to determine is whether the ratio of this case can be applied to Indian conditions with full force.
This matter was clearly considered by the Privy Council in the case from India in Padman & Ors.
vs Hanwanta & Ors.
where the Privy Council sounded a note of caution in applying the aforesaid presumption to this country having regarding to the nature and habits of the people of our country.
While approving the observations of the Chief Court their Lordships in the aforesaid case observed as follows: "We think that the more reasonable presumption in this case is that the will was mislaid and lost, or else was stolen by one of the defendants after the death of Daula.
Their Lordships think that it was perfectly within the competency of the learned Judges to come to that finding.
Much stress has been laid on the view expressed by Baron Parke, in Welch vs Phillips ; that when a will is traced to the possession of the deceased and is not forthcoming at his death, the presumption is that he has destroyed it.
In view of the habits and conditions of the people of India this rule of law, if it can be so called, must be applied with considerable caution.
In the present case the deceased was a very old man and, towards the end of his life, almost imbecile.
There is nothing definite to show that he had any motive to destroy the will or was mentally competent to do so.
On the other hand, the circumstances favour the view the Chief Court has taken that the will was either mislaid or stolen".
The Privy Council made it very clear that the more reasonable presumption in a case like this should be that the will was mislaid, lost or stolen rather than that it was revoked.
The Privy Council further endorsed the fact that the presumption of English law should be applied to Indian conditions with considerable caution.
The High Court in the instant case does not appear to have kept in view the note of warning sounded by the Privy Council in the aforesaid case.
882 There are a large number of authorities of the Indian High Courts which take the view that even if the presumption is applied it should be applied with very great cautions.
Before however dealing with these authorities we would like to san the English law on the point.
Jarman on Wills while dwelling on this aspect of the matter observed as follows: "If a will is traced into the testator 's possession, and is not found at his death, the presumption is that he destroyed it for the purpose of revoking it; but the presumption may be rebutted. .
Where the will makes a careful and detailed disposition of the testator 's property, and nothing happens to make it probable that he wishes to revoke it, the presumption raised by the disappearance of the will may be rebutted by slight evidence, especially if it is shown that access to the box, or other place of deposit where the will was kept, could be obtained by persons whose interest it is to defeat the will".
It is, therefore, clear that even if a presumption of the revocation of the will is drawn from the fact that it was not found on the death of the testatrix it cannot be laid down as a general rule and can be rebutted even by slight evidence particularly where it is shown that some party had access to the place of deposit.
The Privy Council has doubted whether this presumption is a rule of law at all.
In Halsbury 's Laws of England, Third Edition, Vol. 39 at p. 896 it was thus observed: "Where a will is found destroyed or mutilated, in a place in which the testator would naturally put it if he thought he had destroyed it, the presumption is that testator destroyed it, and that the destruction was done animo revocandi. . . .
Similarly, if a will was last traced to the possession of the testator and is not forthcoming at his decease, there is a prima facie presumption, in the absence of circumstances tending to a contrary conclusion that the testator destroyed it animo revocandi.
The presumption may be rebutted by evidence, which, however, must be clear and satisfactory.
Recent declarations by a testator of satisfaction at having settled his affairs, or of goodwill towards the persons benefited by the will, or of adherence to the will and to the contents of the will itself may be used for this purpose.
The presumption may, it seems, also be rebutted by a consideration of the contents of the will itself".
883 It appears that so far as the United States is concerned no presumption as a rule of law can be drawn where the will is lost but the matter depends on the statute of a particular State.
In Corpus Juris Secundum Vol.
95 it has been observed as follows: "Since, in accordance with the general rule that a will speaks from the death of the testator, an instrument which has been duly executed as a will, and never been revoked, becomes effective on the death of the testator although it cannot be found or is not in existence, it is a well settled general rule, which in some jurisdictions is in effect prescribed by statute, that a will which has been lost or destroyed, either after the testator 's death or accidentally or fraudulently during his lifetime, may be established or admitted the probate, as by admitting a properly proved copy or duplicate of the will to probate or by a proceeding in accordance with the statute, in the court having jurisdiction thereof, and on competent and sufficient proof of its execution, loss, or destruction, and contents".
Thus, it is manifest that in the first place when the will is traced to the possession of the testator but not found at the time of death, no presumption can be drawn as a rule of law but in the facts and circumstances of a particular case such a presumption may be drawn and can be rebutted even by slight evidence.
In the case of Finch vs Finch(1) the Court observed as follows: "There is no doubt that if a man dies, after duly executing a will, and at the time of his death his will, having remained in his custody, is not in existence, the law presumes that it was revoked.
But in all such cases the question to be determined is, whether the will was or was not in existence at the time of the death" "The evidence certainly points strongly in that direction, and there is nothing to shew any change of intention which was likely to lead to the revocation of the will.
He had evidently not changed his mind when he last spoke to his daughter on the subject, and, as to the three weeks that elapsed between that conversation and his death, the evidence is a perfect blank.
There is nothing to shew any change of intention, but there is evidence that, during that interval, he was not on good terms with his son, and that, although they were living in the same house, they did not speak to each other".
884 Although the Court stated the law clearly that a presumption in such circumstances could be drawn it held that the presumption was rebutted by the important fact that there was nothing to show that there was any other in the intention of the testator to revoke the will.
On the other hand, strained relations between the father who was the testator and the son continued.
In these circumstances, it was held that the presumption was rebutted.
Against this background we shall now deal with the authorities of the Indian High Courts.
But before we do that it may be necessary to extract section 70 of the Act: "No unprivileged will or codicil, nor any part thereof shall be revoked otherwise than by marriage, or by another will or codicil, or by some writing declaring an intention to revoke the same and executed in the manner in which an unprivileged will is hereinbefore required to be executed, or by the burning, tearing or otherwise destroying the same by the testator or by some person in his presence and by his direction with the intention of revoking the same".
A perusal of this section would clearly reveal two important features.
In the first place, the section has been couched in negative terms having a mandatory content.
Secondly, the section provides the mode and the circumstances under which an intention to revoke can be established.
In these circumstances, therefore, the onus is on the objector who relies on the revocation to prove that the will had been revoked after it has been proved to have been duly executed.
Under section 70 of the Act the will can be revoked inter alia, by burning, tearing or otherwise destroying and unless any of the circumstances has been proved by the objector by cogent evidence, the question of the revocation of the will naturally not arise.
While construing this section, this Court in the case of Anil Behari Ghosh vs Smt.
Latika Bala Dassi & Ors.
observed as follows: "For proving that the will had been revoked, it had to be shown that the testator had made another will or codicil or by some writing declared his intention to revoke the will.
Such a document is required by section 70 of the Act to be executed in the same manner as a will.
Such a revocation could also have been proved, as the section lays down, by turning, tearing or otherwise destroying the will by the testator himself or by some other person in his presence and by his direction, thus clearly indicating his intention of revoking the will".
885 Applying these observations to the facts of the present case there is absolutely no evidence to show that even though Smt.
Jog Maya had made a registered will in favour of the appellant she revoked it at any time in the manner enjoined by section 70 of the Act.
In the case of Kaikhushru Jehangir vs Bai Bachubai Jehangir & Ors.
while construing section 70 of the Act it was pointed out that a will cannot be revoked by implication.
In this connection, the Court made the following observations: "Under the statute it is necessary to establish an intention to destroy.
There cannot be any revocation by necessary implication.
The revocation can only be by one or the other of the modes which are specified in the statute, and so far as we are here concerned, these modes are specified in section 70, Succession Act".
In the case of Babu Lal Singh & Anr.
vs Baijnath Singh & Anr.
a Division Bench of the Patna High Court while referring to the Privy Council case of Welch vs Phillips (supra) observed as follows: "In my opinion the essential condition of the rule of English law 'if a will traced to the possession of the deceased and last seen there is not forthcoming on his death ' has not been established.
Therefore the presumption of law on which Mr. Das laid much stress has no application to the facts of the present case . .The onus primarily lies on the party propounding the copy to account for the absence of the original . .
Thus there is nothing to show any change of intention, which was likely to lead to the revocation of the will.
In the circumstances the only reasonable inference is that the document is either mislaid or lost.
The loss of a will does not operate as a revocation.
It has been established that the will was duly executed by Man body and there is no uncertainty about the contents of it as a certified copy of it has been produced".
We are inclined to agree with the view taken by the Patna High Court.
In the case of Arya Printinidhi Sabha, Punjab Jullundur vs Dev Raj Vir Bhan and Anr.
it was clearly pointed out that the presump 886 tion of English law has to be applied with great caution and the Court observed as follows: "The rule is now firmly settled that the presumption of English law that when a will is traced to the possession of the deceased and is not forthcoming at his death, is that he has destroyed it, must be applied in India with considerable caution".
In the case of Brundaban Chandra vs Ananta Narayan Singh Deo a Division Bench of the Orissa High Court has rightly observed as follows: But there is formidable English authority for the proposition that if a testament was in the custody of the testator at the time of his death and is not forthcoming on his death it is presumed to have been destroyed by himself.
This presumption can however be rebutted; and the weight to be attached to such presumption will depend upon the character of the custody which the testator had over the will.
In England wills are usually deposited either in a Bank or with a Solicitor.
But the same presumption is hardly applicable in all circumstances in India where the habits and conditions of the people vary.
Here in India, deeds are not preserved with that amount of care as is done in England.
On the other hand, where a document is registered no care is taken at all of its custody as a certified copy is easily available, and the law allows its production in proof of the original.
Consequently, having regard to the habits and conditions of the people here, when a document like a registered will is not forthcoming after the testator 's death, presumption may well arise that it has been mislaid as seems to have happened here .
It follows that in this country a presumption of revocation of a will cannot be drawn merely from the fact of its disappearance.
. . . Where a will makes a careful and detailed disposition of the testator 's properties and nothing happens to make it probable that he wishes to revoke it, the presumption raised by the disappearance of the will may be rebutted by slight evidence, especially if it is shown that access to the box or other place of deposit where the will was kept can be obtained by persons whose interest it is to defeat the will".
We find ourselves in agreement with the view taken by the High Court.
887 To the same effect are the decisions in Satya Charan Pal vs Ashutosh Pal & Ors., Efari Dasya vs Podei Dasya, Shib Sabitri Prasad & Ors.
vs The Collector of Meerut, Anwar Hossein vs Secretary of State for India, Chouthmal Jivarjee Poddar vs Ramachandra Jivarjee Poddar and Pt.
Devi Charan vs Durga Porshad Chhanu Lal & Ors.
The correct legal position may therefore be stated as follows: 1.
That where a will has been properly executed and registered by the testator but not found at the time of death the question whether the presumption that the testator had revoked the will can be drawn or not will depend on the facts and circumstances of each case.
Even if such a presumption is drawn it is rather a weak one in view of the habits and conditions of our people.
That the presumption is a rebuttable one and can be rebutted by the slightest possible evidence, direct or circumstantial.
For instance, where it is proved that a will was a strong and clear disposition evincing the categorical intention of the testator and there was nothing to indicate the presence of any circumstance which is likely to bring about a change in the intention of the testator so as to revoke the will suddenly, the presumption is rebutted.
That in view of the fact that in our country most of the people are not highly educated and do not in every case take the care of depositing the will in the bank or with the Solicitors or otherwise take very great care of the will as a result of which the possibility of the will being stolen, lost or surreptitiously removed by interested persons cannot be excluded, the presumption should be applied carefully.
That where the legatee is able to prove the circumstances from which it can be inferred that there could be absolutely no reason whatsoever for revoking the will or that the act of revoking the will was against the temperament and inclination of the testator, no presumption of revocation of the will can be drawn.
888 5.
That in view of the express provision of section 70 of the Act the onus lies on the objector to prove the various circumstances, viz., marriage, burning, tearing or destruction of the will.
When there is no obvious reason or clear motive for the testator to revoke the will and yet the will is not found on the death of the testator it may well be that the will was misplaced or lost or was stolen by interested persons.
We shall now apply the aforesaid principles to the facts of the present case.
It is true that the impugned will despite search was not found at the time of death of the testatrix.
At the same time it cannot be gain said that the clear finding of the courts below is that the will was definitely executed by the testatrix with a sound disposing mind and had been attested by as many as 7 witnesses and had been proved.
We have already indicated the essential features common to all the will executed by the testatrix in the past and three things appear to be very conspicuous: 1.
That relations between the testatrix and Durga Prashad were very cordial, and therefore, there could be no occasion for the testatrix to suddenly change her mind to revoke the will so as to benefit the respondent a person whom she so detested that she made a provision in the will to the effect that he should not be permitted to touch her dead body or perform her funeral rites.
The lady was of an extremely charitable and religious bent of mind and she made substantial provision for religious and charitable purposes in all the wills including the draft will exhibit C 1.
She would not without any reason revoke the will which contained clear and strong provision regarding religious and charitable purposes.
It is difficult to believe that she would shed her religious and charitable inclination by revoking the will and deleting the religious and charitable purpose contained in the will so as to benefit the respondent and make him the absolute owner of the properties without any restriction.
This seems to be wholly improbable.
That in all the dispositions Smt.
Jog Maya had seen to it that a clause was inserted in the will under which the legatee or trustee was prohibited from alienating the properties.
Indeed, if she revoked the impugned will the result will be that the property would go to the respon 889 dent without any conditions or restrictions, a conduct that would be against the temperament of the testatrix.
Apart from these features, there are other circumstances which go to show that the will was not revoked by the testatrix.
R.W. 3 admitted that Devi Charan respondent never lived in the house (house of Jog Maya) but he used to visit it once or twice a month.
Similarly, R.W. 7, another witness for the respondent, admits that Devi Charan used to visit Smt.
Jog Maya previous to her death.
Even the respondent Devi Charan admits clearly in his evidence that as he was not well, his wife had gone to see Smt.
Jog Maya on the previous evening of her illness.
In this connection, the statement of Devi Charan runs thus: "I came to know about her illness on the previous evening.
As I was not well, my wife went to see how Smt.
Jog Maya was.
" From the evidence adduced by the respondent himself, therefore, it appears that Devi Charan had clear access to the house of Jog Maya which he visited off and on and his wife visited the house even during the illness of Jog Maya which resulted in her death.
Devi Charan was fully aware that the will executed by Jog Maya completely deprived him of any interest in the properties.
In these circumstances, the possibility that either Devi Charan or his wife may have pilfered or stolen the will in order to deprive the appellant of its benefits cannot be excluded.
In this connection, it may be noted that the respondent has stated in his evidence that he complained to Jog Maya that he had been deprived of his right by making a trust in the name of Durga Prashad and Ram Nath and she assured him that she would destroy the trust deed and would make him the owner of the property.
This statement is undoubtedly false and would not have been made by a woman of the nature and character of Jog Maya.
Indeed, if the statement was made to him in August, 1955 as mentioned by the witness in his evidence, then there was no reason why, when the respondent filed his first objection on 27 1 1956 before the Sub Judge Delhi, he did not mention it there nor even in the second objection and the additional pleas filed by him before the District Judge, Delhi.
This shows that his statement in court is absolutely false and is made merely for the purpose of defeating the claim of respondent.
Again it appears that although the will was executed in 1947, about 8 years before her death, Smt.
Jog Maya never expressed her intention to revoke the will at any time during this period to any of the attesting witnesses of the will or to Pt.
Ram Nath who was a trustee under the draft will of her intention to revoke the will.
It is difficult to 890 believe that she would leave the entire property to the respondent whom she hated so much.
Further, there is absolutely no evidence to show that Devi Charan succeeded in gaining the favour of or winning the confidence of Smt.
Jog Maya at any time before her death so as to put her in a mood to leave the entire property absolutely to him after her death by revoking the impugned will.
Nor is there anything to show that the respondent estranged the testatrix from the appellant to such an extent that the appellant fell in her estimation.
It is also neither pleaded nor proved that since the execution of the impugned will any circumstance existed or incident happened which brought about a serious estrangement between the appellant and the testatrix so as to induce her to revoke the will.
Having regard to these circumstances mentioned above which do not appear to have been considered by the High Court at all we are clearly of the opinion that the presumption if any, that the will was revoked by Smt.
Jog Maya has been sufficiently rebutted and the objector has miserably failed to discharge the onus which lay on him to prove that the will was revoked.
Moreover, the will being a registered one and being the product of the free will of the testatrix there must be strong and cogent reasons for holding that it was revoked.
The fact that the will was not found despite search at the time of death of Smt.
Jog Maya in the circumstances is not sufficient to justify a presumption that the will was revoked.
In the circumstances of this case particularly having regard to the fact that the respondent who would be interested in destroying the will had an access to the house of the testatrix, the presumption would be that the will was either stolen or misplaced by him or at his instance.
For these reasons, we allow this appeal with costs, set aside the judgment of the Division Bench of the High Court and restore the judgment of the Single Judge of the High Court and allow the application of the appellant for probate.
N.V.K. Appeal allowed.
| IN-Abs | The respondent was the adopted son of the testatrix who made a will in 1935 declaring that her properties were dedicated to a private temple of hers in her house and would remain so for all times to come.
In 1938, however, she revoked the earlier will and dedicated a part of the house and certain other items for the benefit of the temple.
But she expressly prohibited the respondent from performing her funeral rites and gave certain rights over the property to the appellant and his wife.
In 1947 she again revoked the will made in 1938 and bequeathed her properties to the appellant without right of alienation and had also clearly stated that the respondent should have no concern with her estate and should not be allowed to touch her dead body.
On her death, though the original will was not found, a draft will which was almost of the same time was discovered.
The recitals in the draft were almost the same as in the will of 1947.
In the appellant 's petition before the District Judge for grant of letters of administration or probate the respondent contended that the testatrix was not of sound disposing mind at the time of the alleged execution of the will and that the appellant had exercised undue influence over her in the execution of the will.
It was further alleged that the will was subsequently revoked and that was the reason why it was not found in the house despite search.
The District Judge accepted the respondent 's version and rejected the petition for probate.
On appeal a single Judge of the High Court found that the will was genuine and had not been revoked.
On further appeal the Division Bench restored the order of the District Judge dismissing the appellant 's application for probate by drawing a presumption that the testatrix had revoked the will by destroying it before her death.
In appeal to this Court it was contended on behalf of the appellant that the High Court was in error in drawing a presumption of revocation of the will in view of the express provisions of section 70 of the and in the alternative even if the presumption was available to the respondent the same being a rebuttable one.
was sufficiently rebutted by facts and circumstances proved in the case.
Allowing the appeal, ^ HELD: The presumption that the will was revoked by the testatrix had been sufficiently rebutted and the respondent had failed to discharge the onus which lay on him to prove that the will was revoked.
The will being a product of free will of the testatrix there must be strong and cogent reasons for holding that it was revoked.
The fact that the will was not found, despite search, was not 874 sufficient to justify a presumption that the will was revoked.
Having regard to the fact that the respondent was interested in destroying the will and had access to the house, the presumption would be that the will was either stolen or misplaced by him or at his instance.
[890C E] The correct legal position may be stated thus: (i) Where a will has been properly executed and registered by the testator but not found at the time of death the question whether the presumption that the testator had revoked the will can be drawn or not will depend on the facts and circumstances of each case.
Even if such a presumption is drawn it is rather a weak one in view of the habits and conditions of our people.
(ii) Such a presumption is a rebuttable one and can be rebutted by the slightest possible evidence, direct or circumstantial.
For instance, where it is proved that a will was a strong and clear disposition evincing the categorical intention of the testator and there was nothing to indicate the presence of any circumstance which is likely to bring about a change in the intention of the testator so as to revoke the will suddenly, the presumption is rebutted.
(iii) In view of the fact that in our country most of the people are not highly educated and do not in every case take the care of depositing the will in the bank or with the Solicitors or otherwise take very great care of the will as a result of which the possibility of the will being stolen, lost or surreptitiously removed by interested persons cannot be excluded, the presumption should be applied carefully.
(iv) Where the legatee is able to prove the circumstances from which it can be inferred that there could be absolutely no reason whatsoever for revoking the will or that the Act of revoking the will was against the temperament and inclination of the testator, no presumption of revocation of the will can be drawn.
(v) In view of the express provision of section 70 of the the onus lies on the objector to prove the various circumstances, viz., marriage, burning, tearing or destruction of the will.
(vi) When there is no obvious reason or clear motive for the testator to revoke the will and yet the will is not found on the death of the testator it may well be that the will was misplaced or lost or was stolen by the interested persons.
[887B 888A] Anna Maria Welch & Lucy Allen Welch vs Nathaniel Phillips, ; , Padman & Ors.
vs Hanwanta & Ors., AIR 1915 P.C. 111; Finch vs Finch, 1 P & D 371; Anil Behari Ghosh vs Smt.
Latika Bala Dassi & Ors., ; ; Kaikhushru Jehangir vs Bai Bachubai Jehangir Jullundur vs Dev Raj Vir Bhan & Anr., AIR 1963 Pun. 208; Halsbury 's Laws of England, Third Edition, Vol. 39 at 896; Jarman on Wills; Corpus Juris Secundum Vol. 95; referred to.
Babu Lal Singh & Anr.
vs Baijnath Singh & Anr., ; Brundaban Chandra vs Ananta Narayan Singh Deo, AIR 1956 Orissa 151; Satya Charan Pal vs Asutosh Pal & Ors., AIR 1953 Cal.
657 at 659 660; Efari Dasya vs Podei Dasya, ILR at 486; Shib Sabitri Prasad & Ors.
vs The Collector of Meerut, ILR 1907 All 82 at 87; Anwar Hossein vs Secretary of 875 State for India, at 892, Chouthmal Jivarjee Poddar vs Ramachandra Jivarjjee Poddar, AIR 1955 Nag.
126 at 136 and Pt.
Devi Charan vs Durga Porshad Chanu Lal & Ors., AIR 1967 Delhi 128 at 132; approved.
|
titions Nos.
4038, 4147, 4148, 4149, 4150, 4202, 4204, 4207, 4213, 4215, 4222, 4224, 4227, 4232, 4236, 4246, 4249, 4251, 4259, 4311, 4343 & 4347 of 1978.
(Under Article 32 of the Constitution).
V. M. Tarkunde, P. H. Parekh, C. B. Singh and Mukul Mudgar for the Petitioners in W.P. Nos. 4038 and 4244/78.
Yogeshwar Prasad, Mrs. Rani Chhabra and Miss M. Bali for the Petitioners in W.P. Nos. 4147 4150, 4207, 4232 and 4343/78.
B. R. Kapur and section K. Sabharwal for the Petitioners in W.P. Nos.
4213, 4215, 4246, 4249, 4311, 4224 and 4227/78.
O. P. Sharma for the Petitioners in W.P. Nos.
4222, 4259/78.
Pramod Swarup for the Petitioner in W.P. 4347/78.
Shreepal Singh for the Petitioner in W.P. 4236/78.
M. P. Jha for the Petitioner in W.P. 4251/78.
M. C. Bhandare (In W.P. 4204 and 4227/78 only) Mrs. section Bhandare, A. N. Karkhanis and Miss Malini Poduval for R. 3 (In W.P. 4204, 4227/78) and for R. 3 in 4215 and for R. 3 4 in 4249/78.
G. L. Sanghi (In W.P. 4038/78 only) section K. Mehta, K. R. Nagaraja, P. N. Puri and G. Lal for Municipality (rr) in W.P. 4038, 4207, 4215, 4249, 4227.
Hardev Singh and R. section Sodhi for the State of Punjab in (W.P. 4038/78).
Bishamber Lal for the State of Punjab in (W. P. 4147/78).
848 Naunit Lal for Municipal Committee (R.6) in W.P. 4249 and for r. 4 in 4227/78.
The Judgment of the Court was delivered by KRISHNA IYER, J.
This heavy bunch of writ petitions impeaching the validity of a tax on foreign liquor raises a few familiar legal riddles.
A rupee per bottle sold within every municipal town or city is the impugned levy, meant, according to the Punjab Government, to serve the twin purposes of replenishing the resources of municipal bodies reduced by house tax exemptions and of weaning drinkers from overly consuming foreign liquor as a prohibitionist gesture.
To pick the pocket of every spirituous bibber of the higher brackets by a tiny tax may be but a feeble homage to article 47 of the Constitution, and to finance welfare projects with this tainted tax may be queer Gandhiana.
The will to enforce 'dry ' sobriety in society and to abolish massive human squaller by fleecing the fat few, is made of sterner stuff, maybe.
But matters of means and ends, of police and morality, are largely for the legislature and validity is the province of the court.
We let slip the observation only because, from a certain angle, these dual grounds make odd companions and add to the credibility gap, although our focus is solely on the legality of the levy.
It is better to begin with the story of the tax under challenge.
The petitioners are all licensees to trade in foreign liquor including Indian made foreign liquor.
They are either wholesalers or retailers and pay excise duty and other fees and taxes including sales tax under the general sales tax law which imposes a levy of 10 per cent, on sales of foreign liquor.
There are also octroi levies of 10 per cent, and educational tax of 2 per cent, and these add up to a considerable burden; but the commodity taxed is foreign liquor, Indian made or other, whose consumer usually belongs to the well to do sectors.
The municipalities of Punjab are governed by two enactments.
The numerous little ones are statutory bodies created and controlled by the Punjab Municipal Act, 1911 and the few large ones by the Punjab Municipal Corporation Act, 1976 (the Act, for brevity, hereafter).
For our purposes, the provisions run on identical terms and so we will take up the latter statute which compresses into one section a plurality of sections in the former, and set out the common scheme to study the critical issues raised.
Arguments have been addressed only on this basis.
The immediate facts which have launched the litigative rocket need to be narrated now to get a hang of the core questions in their correct perspective.
The State of Punjab, in April 1977, under its statutory 849 power [section 90(4)] required the various municipal bodies in the State to impose a tax on the sale et al, of foreign liquor at the rate of Re. 1/ per bottle with effect from May 20, 1977.
The municipal authorities having tarried too long or totally failed to take action pursuant to this directive, the State directly entered the fiscal arena and issued a Notification under section 90(5) dated May 31, 1977, which reads thus: "Whereas the Government of Punjab, in exercise of the powers conferred by sub section (4) of section 90 of the Punjab Municipal Corporation Act, 1063 A PSLG 77/12170, dated 11th April, 1977, required of the Municipal Corporation of Ludhiana in Punjab to impose tax on the sale of "Indian made Foreign Liquor" at the rate of rupee one per bottle, by the 20th May, 1977.
And Whereas, the Municipal Corporation of Ludhiana has failed to carry out the aforesaid order of the Punjab Government within the stipulated period.
Now, therefore, in exercise of the powers conferred by sub section (5) of section 90 of the Punjab Municipal Corporation Act, 1976, the President of India is pleased to impose/modify the tax on the sale of "Indian made Foreign Liquor" within the Municipal Corporation of Ludhiana at the rate of rupee one per bottle.
The tax shall come into force with effect from 1st June, 1977.
L.S. BINDRA Joint Secretary to Govt.
Punjab Local Government Department" This notification, issued under section 90(5) read with section 90(2)(b) of the Act, was later modified marginally but survives substantially.
The petitioners (licensees) challenge its vires both as contrary to the statutory provision (section 90) and as violative of the Constitution.
The triple shapes of the fatal constitutional pathology are that (a) section 90 (2)(b) of the Act suffers from the vice of excessive delegation or legislative abdication; (b) there are no guidelines for the exercise of the vagariously wide fiscal power of the corporation or Government which make it too unreasonable to be salvaged by article 19(5) and too arbitrary to be 'equal ' under article 14; and (c) the order itself is vitiated by multiple infirmities.
The principal invalidatory charge, based on the Act, is that section 90(4) interdicts any tax 'already imposed '.
The present tax is on sales and there is, under the general sales tax law, already a like levy on sales of foreign liquor in the State, and so the second fiscal venture is beyond Government 's power.
We have to consider these grounds of attack on the notification which are the emphatic submissions of 850 Shri Tarkunde who led the arguments.
There are more subsidiary submissions urged by other counsel on a lower key, though, but we have to deal with them too in due course.
Briefly, they are (a) that in picking out for taxation, from the broad spectrum of luxury goods or intoxicants, foreign liquor alone, discrimination has been practised, (b) that even assuming that Government can exercise the power of the municipal body, it may not do so without adhering to the procedural fairness implied in the Explanation to section 90(2) applicable to municipal bodies and (c) that unequals are being treated equally because the tax of Re. 1/ bottle at a flat rate disregards germane considerations like the price of the liquor or the degree of alcoholic content.
A feeble plea that the tax is bad because of the vice of double taxation and is unreasonable because there are heavy prior levies was also voiced.
Some of these contentions hardly merit consideration, but have been mentioned out of courtesy to counsel.
The last one, for instance, deserves the least attention.
There is nothing in article 265 of the Constitution from which one can spin out the constitutional vice called double taxation.
(Bad economics may be good law and vice versa).
Dealing with a somewhat similar argument, the Bombay High Court gave short shrift to it in Western India Theatres(1).
Some undeserving contentions die hard, rather survive after death.
The only epitaph we may inscribe is: Rest in peace and don 't be re born ! If on the same subject matter the legislature chooses to levy tax twice over there is no inherent invalidity in the fiscal adventure save where other prohibitions exist.
Likewise, the plea that a flat rate of Re. 1/ per bottle, be it brandy or other stronger beverage or be it Rs. 50/ or Rs. 500/ per bottle, cannot be seriously pressed.
In the field of taxation many complex factors enter the fixation and flexibility is necessary for the taxing authority to make a reasonably good job of it.
Moopil Nair 's case(2) does not discredit as unconstitutional anathema all flat rates of taxation.
Maybe, in marginal cases where the virtual impact of irrationally uniform impost on the same subject is glaringly discriminatory, expropriatory and beyond legislative competence, different considerations may arise; but to condemn into invalidity a tax because it is levied at a conveniently flat rate having regard to the commodity or service which has a high range of prices and the minimal effect on the overall price, its easy means of collection and a variety of other pragmatic variables, is an absurdity, especially because in fiscal matters large liberality must be extended to the Government having regard to the plurality of criteria 851 which have to go into the fiscal success of the measure.
Of course, despite this forensic generosity, if there is patent discrimination in the sense of treating dissimilar things similarly or vice versa, the court may treat the tax as suspect and scrutinise its vires more closely.
In the present case, intoxicating liquids falling in the well known category of foreign liquors form one class and a flat minimal rate of Re. 1/ per bottle has no constitutional stigma of inequality.
It is so easy to conceive of innumerable taxes imposed in this manner in the daily governance of the country that illustrations are unnecessary.
As excisable articles go, foreign liquor is a distinct category and absence of micro classification within the broad genus does not attract the argument of inequality.
Likewise, picking and choosing within limits is inevitable in taxation.
The correct law is found in East India Tobacco Co.(1) "It is not in dispute that taxation laws must also pass the test of Art 14.
That has been laid down recently by this Court in Moopil Nair vs The State of Kerala.
But in deciding whether a taxation law is discriminatory or not it is necessary to bear in mind that the State has a wide discretion in selecting the persons or objects it will tax, and that a statute is not open to attack on the ground that it taxes some persons or objects and not others.
It is only when within the range of its selection, the law operates unequally, and that cannot be justified on the basis of any valid classification, that it would be violative of article 14.
The following statement of the law in Willis on "Constitutional Law" page 587, would correctly represent the position with reference to taxing statutes under our Constitution: "A State does not have to tax everything in order to tax something.
It is allowed to pick and choose districts, objects, persons, methods and even rates for taxation if it does so reasonably. .
The Supreme Court has been practical and has permitted a very wide latitude in classification for taxation." (See also Abdul Shakoor & Co. case)(2).
The foreign liquor levy does not fail on this score.
Shri Yogeshwar Prasad urged that section 90(2) obligated the municipal body to offer an opportunity to the residents of the city to file objections to the tax proposed and consider them before finalising 852 the impost.
This fair procedure must attach to the exercise of the power even under section 90(5); and since that has not been done the impugned notification must fail.
It is clear from section 90 that the scheme is that if the municipal corporation wishes to impose a tax under section 90(2) it must go through the due process indicated in the Proviso and secure Government 's approval.
But if Government is to exercise its power under section 90(5) no such procedural fetter is found in the Section.
Maybe, that power is different from procedure for its exercise; but unless the statute insists, it is impossible for the court to imply invitation of objections and consideration thereof from the residents.
For this simple reason, there is no merit in the submission.
Whether the failure to hear before fixing a tax has a lethal effect upon the fiscal power of the Government under section 90(5) also is of little moment although urged by the same counsel.
May be, it is desirable that the State acquaints itself with the actual sentiments of the denizens of the local area before imposing tax on them.
But it is not inherent in the constitutional requirements for the exercise of the State 's power of taxation that objections should be called for and considered. 'No taxation without representation ' is a slogan with a different dimension and has nothing to do with a levy by a government controlled by an elected legislature exercising its power of taxation.
We are unable to accede to the contention that representations from the residents not having been invited the taxation notification is bad in law.
What is wholesome is different from what is imperative.
Indeed, we are left with the two major arguments addressed by Shri Tarkunde and echoed or endorsed by other counsel.
Even here, we may dispose of the submission based on the wording in section 90(4), namely, that taxing power under section can be exercised in respect of a particular impost only if that species of tax is "not already imposed".
The power under section 90(4) is permissible only if the tax is new and not already imposed.
The petitioner 's argument is that the tax is on sales and is clearly a sales tax.
There is already a sales tax on foreign liquor at the rate of 10 per cent, under the Punjab General Sales Tax Act, 1948.
So the present rupee tax is a second round in breach of the forbiddance in section 90(4).
Simple enough, if the expression 'not already imposed ' in section 90(4) is a ban on further tax whatever the statute; but if the taboo is not on the topology of the tax but limited to the specific statute the contention is specious.
And it takes little reflection to hold the latter to correct view.
We must remember the statutory setting and the placement of the provision.
section 90 occurs in Chapter VIII headed 'Taxation '.
That Section prim 853 arily empowers municipal corporations to levy taxes.
section 90(1) specifies a number of items many of which are taxed also at State level, e.g. lands, vehicles.
section 90(2) is so widely worded that many taxes covered by it would already have been occupied field at the State or even Central level.
The municipal body may not have any index of taxes already imposed by other bodies and they are many.
section 90 would then be a precarious power, often an exercise in futility and frequently a litigative trap.
No. That is not the meaning of the prohibition `not already imposed '.
The Government exercises the power of the corporation under section 90(5) and cannot enter what is forbidden ground for the latter.
And what is forbidden is that the municipal body shall not repeat the same tax, if it has imposed that tax earlier under that Act.
The injunction is plain and is confined to repetition of those taxes which the municipality has already imposed.
If the Corporation has not already imposed the tax proposed, the embargo is absent.
It is of no moment that some other body, including the State Legislature has already entered the field.
The question is : has the municipal committee or corporation, under this Act, already exacted a similar tax? If it has, the second exercise is anathema.
Nobody has a case that the corporation has earlier taxed foreign liquor under this Act.
Therefore, the submission has no substance and we reject it.
The sole surviving ground of invalidation pressed by the petitioners which deserves serious examination is what we have outlined right at the outset, viz., that on the face of section 90(2), (3), (4) and (5) read together, unconstitutionality is writ large, in the sense of naked and uncanalised power with every essential legislative function surrendered to the humour and hubris of the State Executive.
If this charge be true the consequence is in no doubt.
The vice of unreasonableness and arbitrariness are manifestations of the same vice as has been pointed out in P. N. Kaushal etc.(1).
An examination of excessive delegation of legislative power takes us to the scheme of the Act and insight into the dynamics of municipal administration.
Certain fundamentals must be remembered in this context and then the text of the provision understood in the constitutional perspective.
The Founding Document of the nation has created the three great instrumentalities and entrusted them with certain basic powers legislative, judicative and executive.
Abdication of these powers by the concerned instrumentalities, it is axiomatic, amounts to betrayal of the Constitution itself and it is intolerable in law.
This means that the legislature cannot self efface its 854 personality and make over, in terms plenary, the essential legislative functions.
The legislature is responsible and responsive to the people and its representatives, the delegate may not be and that is why excessive delegation and legislative hara kiri have been frowned upon by constitutional law.
This is a trite proposition but the complexities of modern administration are so bafflingly intricate and bristle with details, urgencies, difficulties and need for flexibility that our massive legislatures may not get off to a start if they must directly and comprehensively handle legislative business in all their plenitude, proliferation and particularisation.
Delegation of some part of legislative power becomes a compulsive necessity for viability.
If the 500 odd parliamentarians are to focus on every minuscule of legislative detail leaving nothing to subordinate agencies the annual output may be both unsatisfactory and negligible.
The Lawmaking is not a turnkey project, ready made in all detail and once this situation is grasped the dynamics of delegation easily follow.
Thus, we reach the second constitutional rule that the essentials of legislative functions shall not be delegated but the inessentials, however numerous and significant they be, may well be made over to appropriate agencies.
Of course, every delegate is subject to the authority and control of the principal and exercise of delegated power can always be directed, corrected or cancelled by the principal.
Therefore, the third principle that emerges is that even if there be delegation, parliamentary control over delegated legislation should be a living continuity as a constitutional necessity.
Within these triple principles, Operation Delegation is at once expedient, exigent and even essential if the legislative process is not to get stuck up or bogged down or come to a grinding halt with a few complicated bills.
It is apt to excerpt here an oft quoted observation from Vasantlal Maganbhai Sanjanwala affirmed in Devi Das Gopal Krishnan & Ors(1) : "The Constitution confers a power and imposes a duty on the legislature to make laws.
The essential legislative function is the determination of the legislative policy and its formulation as a rule of conduct.
Obviously it cannot abdicate its functions in favour of another.
But in view of the multifarious activities of a welfare State, it cannot presumably work out all the details to suit the varying aspects of a complex situation.
It must necessarily delegate the working out of details to the executive or any other agency.
But there is a danger inherent in such a process of delegation.
An over 855 burdened 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 another agency either in whole or in part is beyond the permissible limits of delegation.
It is for a Court to hold on a fair, generous and liberal construction of an impugned statute whether the legislature exceeded such limits.
But the said liberal construction should not be carried by the Courts to the extent of always trying to discover a dormant or latent legislative policy to sustain an arbitrary power conferred on executive authorities.
It is the duty of the Court to strike down without any hesitation any arbitrary power conferred on the executive by the legislature.
" Such being the basics, accepted by presidential profusion of this Court, we have to examine whether any essential legislative function has been transplanted into the hands of Government or corporation by the Act, whether the delegation itself is an entrustment of overboard power, so unguided that the delegate may run amok and do what is arbitrary, unreasonable and violative of Articles 14 and 19 of the Constitution.
Taxation is exaction and even expropriation and, therefore, the right to property is in peril when a fiscal measure is afoot.
Article 10 comes into play when law is made for purposes of taxation and that law must comply with Part III.
Arbitrariness must be excluded in the law, for, if power is arbitrary it is potential inequality and article 14 is fatally allergic to inequality before the law.
These generalities take us to the particularities of the present case.
Shri Tarkunde turned the forensic fusillade on the total absence of guidance and regulation anywhere in the statute, expressly or implicitly, and on a true construction, according to him, a blanket power has been vested by section 90 on the corporation and, indubitably, on the Government.
The jurisprudence of delegation of legislative power, as earlier mentioned, has been the subject matter of this Court 's pronouncements.
In the absence of the rate of taxation being indicated by the Legislature, Shri Tarkunde and other counsel appearing on either side drew our attention to Liberty Cinema,(1) the land mark case on the point.
The later decisions have affirmed the principle in Liberty Cinema.
But 856 before we enter into a fuller discussion we may concretize the specific contention urged by counsel for the petitioners.
Section 90(1) sets out certain items for taxation by the corporation.
The taxes so levied are to be utilised for the purposes of the Act.
Therefore, there is a clear directive contained in the provision about the purpose and limit of the tax.
What is needed for the purposes of the Act by way of financial resources may be levied by the corporation.
Beyond that, No. If the corporation has a fancy for spending money on purposes unconnected with the Act and seeks to levy a tax for the fulfillment of such extra statutory objects the mis adventure must fail.
Moreover, the items on which taxes may be imposed are also specified.
Thus, the legislature has fixed the purpose of the taxation, the objects of the taxation and the limits of the taxation.
In short, section 90(1) is a textbook illustration of valid delegation by the legislature.
The offending area is approached as we move down to sub section (2) (b) which enables the corporation "to levy any other tax which the State Legislature has power to impose under the Constitution".
The fiscal area is obviously specious and so the question directly arises whether this over broad provision accords with or exceeds the principles of delegation.
Sub section (3) leaves the rates of levy to be specified by the Government and the legislature, argue petitioners ' counsel, has given no indication of the minima or the maxima of such rates.
Can such non fixation of at least the maximum rate of taxation be upheld or does it enable the delegate to usurp the essential functions of the legislature ? When we proceed further to sub section (5), the Government is clothed with the power to notify the tax which the corporation shall levy and, in exercising this power, not even the wholesome obligation of receiving representations could considering objections, contained in the Proviso to section 90(2), is present.
Can such untrammeled power, liberated from local pressures and intimate appreciation of municipal needs, be sanctioned as within the deligible ambit ? These are the substantial grounds of attack which we have to consider presently.
Back to the Liberty Cinema case (supra), Sarkar, J. who spoke for the majority overruled the contention that the levy in question was a fee and held that it was a tax and addressed himself to the question of excessive delegation of legislative functions to the municipal corporation "because it left it entirely to the latter to fix the amount of the tax and provided no guidance for that purpose".
While what constitutes an essential feature cannot be delineated in detail it certainly cannot include a change of policy.
The legislature is the master of legislative policy and if the delegate is free to switch policy it may be usurpation of legislative power itself.
So we have 857 to investigate whether the policy of legislation has been indicated sufficiently or even change of policy has been left to the sweet will and pleasure of the delegate in this case.
We are clearly of the view that there is fixation of the policy of the legislation in the matter of taxation, as a close study of section 90 reveals; and exceeding that policy will invalidate the action of the delegate.
What is that policy ? The levy of the taxes shall be only for the purposes of the Act.
Diversion for other purposes is illegal.
Exactions beyond the requirements for the fulfillment of the purposes of the Act are also invalid.
Like in section 90(1), section 90(2) also contains the words of limitation `for the purposes of this Act ' and that limiting factor governs sub sections (3), (4) and (5).
Sub section (3) vests nothing new beyond sub sections (1) and (2).
Sub section (4) does not authorise the government to direct the corporation to impose any tax falling outside sub section (1) or sub section (2).
Sub section (5) also is subject to a similar circumscription because the Government cannot issue an order to impose a tax outside the limitation of sub section (1) or sub section (2).
Thus, the impugned provision contains a severe restriction that the taxation leviable by the corporation, or by the Government acting for the corporation, shall be geared wholly to the goals of the Act.
The fiscal policy of section 90 is manifest.
No tax under guise of section 90(2) (b) can be charged if the purposes of the Act do not require or sanction it.
The expression "purposes of this Act" is pregnant with meaning.
It sets a ceiling on the total quantum that may be collected.
It canalises the objects for which the fiscal levies may be spent.
It brings into focus the functions, obligatory or optional, of the municipal bodies and the raising of resources necessary for discharging those functions nothing more, nothing else.
In Liberty Cinema (supra) it was contended that the rate of tax was an essential feature of legislation and if the power to fix it were abandoned it amounted to abdication of legislative power.
After an exhaustive examination of the judgments of this Court, Sarkar, J. reached the conclusion that there was clear authority "that the fixing of rates may be left to the non legislative body".
The matter does not end here, since the delegate may under guise of this freedom tyrannies and exact exorbitant sums which the legislature would hardly have intended.
If this possibility exists and there is no guideline given to the non legislative body in the matter of fixation of rates, the result may be a frustration of the legislative object itself.
For this reason, the Court in the Liberty Cinema (supra) case observed as axiomatic : "No doubt when the power to fix rates of taxes is left to another body, the legislature must provide guidance for such 858 fixation.
The question then is, was such guidance provided in the Act ? We first wish to observe that the validity of the guidance cannot be tested by a rigid uniform rule; that must depend on the object of the Act giving power to fix the rate.
It is said that the delegation of power to fix the rates of taxes authorised for meeting the needs of the delegate to be valid, must provide the maximum rate that can be fixed, or lay down rules indicating that maximum.
We are unable to see how the specification of the maximum rate supplies any guidance as to how the amount of the tax which no doubt has to be below the maximum, is to be fixed.
Provision for such maximum only sets out a limit of the rate to be imposed and a limit is only a limit and not a guidance.
It seems to us that there are various decisions of this Court which support the proposition that for a statutory provision for raising revenue for the purposes of the delegate, as the section now under consideration is, the needs of the taxing body for carrying out its functions under the statute for which alone the taxing power was conferred on it, may afford sufficient guidance to make the power to fix the rate of tax valid." (Pp. 493 494) In the Western India Theatres case (supra) the power given to the corporation (of the city of Poona), in terms very wide, to levy "any other tax" came to be considered from the point of view of abdication of legislative function.
The negation of this argument was based on the key words of limitation contained therein, namely, "for the purposes of the Act" and it was held "that this permits sufficient guidance for the imposition of the tax." In Devi Das Gopal Krishnan & Ors.
(supra) this Court again considered a similar contention.
The crucial passage in the judgment of Sarkar, J. was there extracted with approval by Subba Rao, C.J. : "It (the Municipal Corporation) has to perform various statutory functions.
It is often given power to decide when and in what manner the functions are to performed.
For all this it needs money and its needs will vary from time to time, with the prevailing exigencies.
Its power to collect tax, however, is necessarily limited by the expenses required to discharge those functions.
It has, therefore, where rates have not been specified in the statute, to fix such rates as may be necessary to meet its needs.
That, we think, would be sufficient guidance to make the exercise of its power to fix the rates valid.
"#R#(Pp.
562 563) 859 In the Municipal Corporation of Delhi(1) case, the proposition that where the power conferred on the corporation was not unguided, although widely worded, it could not be said to amount to excessive delegation, was upheld.
Delegation coupled with a policy direction is good.
Counsel emphasised that the court had made a significant distinction between the local body with limited functions like a municipality and Government : "The needs of the State are unlimited and the purposes for which the State exists are also unlimited.
The result of making delegation of a tax like sales tax to the State Government means a power to fix the tax without any limit even if the needs and purposes of the State are to be taken into account.
On the other hand, in the case of a municipality, however large may be the amount required by it for its purposes it cannot be unlimited, for the amount that a municipality can spend is limited by the purposes for which it is created.
A municipality cannot spend anything for any purposes other than those specified in the Act which creates it.
Therefore in the case of a municipal body, however large may be its needs, there is a limit to those needs in view of the provisions of the Act creating it.
In such circumstances there is a clear distinction between delegating a power to fix rates of tax, like the sales tax, to the State Government and delegating a power to fix certain local taxes for local needs to a municipal body.
A review of these authorities therefore leads to the conclusion that so far as this Court is concerned the principle is well established that essential legislative function consists of the determination of the legislative policy and its formulation as a binding rule of conduct and cannot be delegated by the legislature.
Nor is there any unlimited right of delegation inherent in the legislative power itself.
The legislature must retain in its own hands the essential legislative functions and what can be delegated is the task of subordinate legislation necessary for implementing the purposes and objects of the Act.
Where the legislative policy is enunciated with sufficient clearness or a standard is laid down, the courts should not interfere.
What guidance should be given and to what extent and whether guidance has been given in a particular case at all depends on a consideration of the provisions of the parti 860 cular Act with which the Court has to deal including its preamable.
Further it appears to us 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." ". . . . .
It is too late in the day to contend that the jurisprudence of delegation of legislative power does not sanction parting with the power to fix the rate of taxation, given indication of the legislative policy with sufficient clarity.
In the case of a body like a municipality with functions which are limited and the requisite resources also limited, the guideline contained in the expression "for the purposes of the Act" is sufficient, although in the case of the State or Central Government a mere indication that taxation may be raised for the purposes of the State may be giving a carte blanche containing no indicium of policy or purposeful limitation.
In a welfare State allowing in privations, the total financial needs may take us to astronomical figures.
Obviously that will be no guideline and so must be bad in law.
Something more precise is necessary; some policy orientation must be particularised Shri Tarkunde relied on this differentiation in attacking section 90(6) of the Act.
He argued that had the municipal corporation done the job there would have been some guidance from the section.
But when the Government did it, it did not have any such restraint and could, therefore, run berserk.
We do not appreciate this contention as we will explain at a later stage.
Suffice it to say that flexibility in the form the legislative guidance may take, is to be expected.
Wanchoo, C.J. explained : "It will depend upon the circumstances of each statute under consideration; in some cases guidance in broad general terms may be enough; in other cases more detailed guidance may be necessary.
As we are concerned in the present case with the field of taxation, let us look at the nature of guidance necessary in this field.
The guidance may take the form of providing maximum rate of tax upto 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 watch dog on the actions of the local body in this matter on behalf of the legislature.
There may be other ways in which guidance may 861 be provided.
But the purpose of guidance, whatsoever may be the manner thereof, is to see that the local body fixes a reasonable rate of taxation for the local area concerned.
So long as the legislature has made provision to achieve that reasonable rates of taxation are fixed by local bodies, whatever may be the method employed for this purpose provided it is effective, it may be said that there is guidance for the purpose of fixation of rates of taxation.
The reasonableness of rates may be ensured by fixing a maximum beyond which the local bodies may not go.
It may be ensured by providing safeguards laying down the procedure for consulting the wishes of the local inhabitants.
It may consist in the supervision by Government of the rate of taxation by local bodies.
So long as the law has provided a method by which the local body can be controlled and there is provision to sec that reasonable rates are fixed, it can be said that there is guidance in the matter of fixing rates for local taxation.
As we have already said there is pre eminently a case for delegating, the fixation of rates of tax to the local body and so long as the legislature has provided a method for seeing that rates fixed are reasonable, be it in one form or another, it may be said that there is guidance for fixing rates of taxation and the power assigned to the local body for fixing the rates is not uncontrolled and uncanalised.
It is on the basis of these principles that we have to consider the Act with which we are concerned.
(pp. 269 270) In the Municipal Corporation of Delhi (supra) case it was significantly observed : "According to our history also there is a wide area of delegation in the matter of imposition of taxes to local bodies subject to controls and safeguards of various kinds which partake of the nature of guidance in the matter of fixing rates for local taxation.
It is in this historical background that we have to examine the provisions of the Act impugned before us." (p. 271) Both the sides relied on certain important criteria contained in the judgment of Wanchoo, C.J., especially because it is a Bench of seven Judges and the ratio therein laid down has considerable authority and binds us.
Dealing with municipal bodies and the nature and 862 content in that Municipal Act, the court observed what is instructive for us in the present case : "This is in our opinion a great check on the elected councillors acting unreasonably and fixing unreasonable rates of taxation.
This is a democratic method of bringing to book the elected representatives who act unreasonably in such matters.
It is however urged that section 490 of the Act provides for the supersession of the Corporation in case it is not competent to perform or persistently makes default in the performance of duties imposed upon it by or under the Act or any other law or exceeds or abuses its power.
In such a case the elected body may be superseded and all powers and duties conferred and imposed upon the Corporation shall be exercised and performed by such officer or authority as the Central Government may provide in this behalf.
It is urged that when this happens the power of taxation goes in the hands of some officer or authority appointed by Government who is not accountable to the local electorate and who may exercise all the powers of taxation conferred on the elected Corporation by the Act. " "Another guide or control on the limit or taxation is to be found in the purposes of the Act.
The Corporation has been assigned certain obligatory functions which it must perform and for which it must find money by taxation.
It has also been assigned certain discretionary functions.
If it undertakes any of them it must find money.
Even though the money that has to be found may be large, it is not, as we have already indicated, unlimited for it must be only for the discharge of functions whether obligatory or optional assigned to the Corporation.
The limit to which the Corporation can tax is therefore circumscribed by the need to finance the functions, obligatory or optional which it has to or may undertake to perform.
It will not be open to the Corporation by the use of taxing power to collect more than it needs for the functions it performs. " "Another limit and guideline is provided by the necessity of adopting budget estimates each year as laid down in section 109 of the Act.
That section provides for division of the budget of the Corporation into four parts i.e. general, electricity supply, transport, water and sewage disposal.
The budget will show the revenue and expenditure and those 863 must balance so that the limit of taxation cannot exceed the needs of the Corporation as shown in the budget to be prepared under the provisions of the Act.
These four budgets are prepared by four Standing Committees of the Corporation and are presented to the Corporation where they are adopted after debate by the elected representatives of the local area.
Preparation of budget estimates and their approval by the Corporation is therefore another limit and guideline within which the power of taxation has to be exercised.
Even though the needs may be large, we have already indicated that they cannot be unlimited in the case of the Corporation, for its functions both obligatory and optional are well defined under the Act.
Here again there is a limit to which the taxing power of the Corporation can be exercised in the matter of optional taxes as well, even though there is no maximum fixed as such in the Act." (Pp. 271 273) In the present case it was the State Government, not the municipal corporation, which fixed the rate; but the Government did only what the Corporation ought to have done.
It acted for the purposes of the corporation 's finances and functions and not to replenish its own coffers.
In the Municipal Corporation of Ahmedabad City,(1) a further point fell for consideration which has some relevance to the present set of arguments.
Shri Tarkunde submitted that even if the provision requiring the sanction of the Government for the rate fixed by the corporation were a guideline and a control indicative of a legislative policy, that was absent in the impugned levy since the Government directly acted.
Shelat, J. negatived a kindred submission: ". .It is impossible to say that when a provision requiring sanction of the Government to the maximum rate fixed by the Corporation is absent, the rest of the factors which exist in the Act lose their efficacy and cease to be guidelines.
Furthermore, if the Corporation were to misuse the flexibility of the power given to it in fixing the rates, the State legislature can at any moment withdraw that flexibility by fixing the maximum limit up to which the Corporation can tax.
Indeed, the State Legislature has now done so by section 4 of Gujarat Act, 8 of 1968.
In view of the decisions cited above it is not possible for us to agree with counsel 's contention 864 that the Act confers on the Corporation such arbitrary and uncontrolled power as to render such conferment an excessive delegation.
"(1) We have no hesitation in holding that the law is well settled and none of the canons governing delegation of legislative power have been breached in the present case.
We will explain a little more in detail, with specific reference to the scheme of the Act, why we hold that the tax is valid and does not suffer from the infirmity of excessive delegation.
The thrust of Shri Tarkunde 's argument is that even if, in the light of Liberty Cinema (supra) and later rulings, guidelines are found in section 90 (2) of the Act, the notified impost being by the State Government did not have the benefit of such guidelines.
The local body knew precisely the local needs and the cost of such local services.
Like wise, the local councillors would be responsive and to local lobbies and be restrained from reckless taxes.
None of these controls were operational when Government acted or directed.
Moreover, the absence of the wholesome obligation to receive and pay regard to objections [Proviso to section 90(2)] removed the procedural check envisaged by the Legislature.
These criticisms highlight the role of Government in the setting of section 90(5) and its competence to be acquainted with the needs of municipal denizens, the finances of the local body and the like.
It must be remembered that as between two interpretations that which sustains the validity of the law must be preferred.
A close look at the schematic provisions and administrative realities is very revealing.
Is Government innocent of the total needs of municipal bodies and indifferent to the legitimate pressures of its denizens ? An overview of local self government may set the perspective.
The statutory pattern of municipal government is substantially the same all over the country.
The relevant legislation fabricates these local bodies, invests them with corporate personality, breathes life into them, charges them with welfare functions, some obligatory, some optional, regulates their composition through elected representatives, provides for their finances by fees and taxes and heavily controls their self government status through a Department of the State Government in various ways, including direction and correction, sanction and supersession.
Consequentially the law clothes the State Government with considerable powers over almost every aspect of municipal work 865 ing Local self government, realistically speaking, is a simulacrum of article 40 and democratically speaking, a half hearted euphemism, for in substance, these elected species are talking phantoms with a hierarchy of State officials hobbling their locomotion.
Their exercises are strictly overseen by the State Government, their resources are precariously dependent on the grace of the latter and their, functions are fulfilled through a chief executive appointed by the State Government.
Floor level democracy in India is a devalued rupee, article 40 and the evocative opening words of the Constitution, notwithstanding.
Grass roots never sprout until decentralisation becomes a fighting creed, not a pious chant.
What happens to Panchayats applies to municipalities.
This description has critical relevance to the cases on hand because one of the propositions underlying the major arguments advanced before us is that while municipal bodies know their needs and respond to local pressures and tailor their taxes accordingly, the distant State Government is neither aware nor responsive and the impugned tax measure is bad because the pragmatic and policy guidelines of (a) the local people 's welfare requirements vis a vis available municipal finances, and (b) people 's pressurising proximacy and municipality ' correctional reaction to undue tax burdens are absent when the power is exercised by a remote control board niched in the State Secretariat.
But if the picture is of a powerless talking shop of elected councillors passing resolutions but all the do 's and don 'ts, sanctions and approvals, countermands and even supersession of the Council itself reside in the State Government, the effective voice, the meaningful responses, the appreciation of budgetary needs and gaps and need for grants and a host of other responsibilities can be traced to the Government.
Such is the backdrop to the discussion of the issues raised.
Now let us scan the Act from this angle.
Corporations are created for the purposes of carrying out the provisions of the Act and they are charged with municipal administration (see section 4).
So, corporations cannot do anything beyond the purposes set out in the statutory provisions.
This itself is a statutory restriction on action.
The composition of the body corporate is by periodically elected councillors (see section 5) and this feature ensures responsive action.
The powers necessary for municipal government are spelt out as also the obligatory and discretionary functions (see Chapter III).
Now come certain other aspects of local self government.
The entire executive power of the corporation vests in the Commissioner who is appointed by Government.
This means that the Corporation Council takes a back seat in the municipal administration see sections 47, 866 52 et al.
Section 54 brings the Government into the expenditure picture.
The municipal staff also is, in a way, under Government control (section 71).
Money shall be spent by the municipality only according to budget provisions and budget estimates shall be submitted to Government for approval which has the power to modify them.
Thus, the financial control over the corporation by Government is a statutory fact.
Now we may consider the mode of raising tax revenue.
Any non traditional tax (i.e. which falls under section 90(2) of the Act) has to be with the prior approval of Government.
Indeed, affirmative direction to impose taxes may be issued by the Government to the local body and if the addressee is indifferent the Government itself may impose the tax and the corporation shall levy such tax.
Sub section (6) enables Government to make other tax payments to municipal bodies.
Municipal borrowings require government sanction, municipal accounts shall be audited by government auditors.
Chapter XXII provides for further government control upto even supersession of the corporation itself.
Even the resolutions of corporations may be suspended by Government and its proceedings annulled or modified.
There is a whole army of governmental minions in the department of local self government to sit upon, check, oversee and control municipal doings that the elective element becomes a decorative parlour.
This conspectus of provisions brings into bold relief the anaemic nature of municipal autonomy.
Full blooded units of self government, reflecting full faith in decentralised democracy uninhibited by a hierarchy of bureaucrats is the vision of article 40.
While the Gandhian goal is of a shining crescent on a starry sky the sorry reality is that our municipalities vis a vis government are wan like a full moon at midday.
This study of the statutory scheme shows that, in large measure, municipal councils reign, municipal commissioners rule; local self government is an experiment in directed democracy by the bureaucracy, article 40, notwithstanding.
State Governments master mind municipal administration in broad policies and even in smaller details and legally can suspend resolutions and supersede the organ itself.
Municipal legislation sanctions this Operation Mask.
If pluralism and decentralisation are to strengthen our democracy more authority and autonomy, at least experimentally, must be vested in local bodies.
To day, prompt elections when periods expire are rare; councillors exist, debate, resolve, but power eludes them.
Even so, municipal maya also counts ceremonially and otherwise.
867 To set the record straight, we must state that many municipal bodies do exercise their limited powers properly and serve the public without nagging interference by Government officials.
Municipalities are realities, often precarious, though.
This statutorily sanctified comprehensive oversight by Government weaken the assumption of Shri Tarkunde that State Governments know little of the needs and respond remotely to the pressures of the locality and that the guidelines stressed in the rulings cited above vanish when Government directly operates under section 90(5).
The finances, budgetary estimates and many aspects of the affairs of each municipal body, reach the Government, channelled through its minions, and, by force of statute, are approved, sanctioned, modified or reversed by the State Secretariat.
So, there is not much force in the submission that under section 90(5) governmental action may be a blind man 's buff, not intelligent appreciation.
Secondly, under section 90(5) Government acts to augment municipal revenues and so will, understandably, inform itself of the needs of the corporation and, on fiscal economics, 'of what the traffic will bear '.
The statutory strategy also ensures this.
First, a directive is given, obviously after considering relevant matters.
Only if indifference or intractability is displayed, the fiscal sword of section 90(5) is unsheathed.
Moreover, there is overall control by the legislature, sometimes, ineffective, sometimes meaningful.
It is familiar knowledge that there are a number of institutionalised means by which the legislature exercises supervision and control over municipal matters.
Broadly speaking, they are: (a) through inter relations, (b) by discussions and debates, (c) by approval or otherwise of rules and orders, and (d) by financial control when the budget is presented.
A study of the legislative proceedings in the various States of the country brings out many of these means of control (see Indian Administrative System, edited by Ramesh K. Arora & Co. Chapter 17).
In a sense, the general municipal administration comes under fire in the House on many occasions, including during the debate on the Governor 's Address.
Financial control and supervision by the legislators come up when budget proposals which contain allocation for municipal administration are presented to the House and at the time of the Appropriations Bill.
Moreover, the Public Accounts Committee, the Estimates Committee and like other bodies also make functional probes into municipal administration fiscal and other.
There may be a big gap between the power of control and its actual exercise but it is also a fact that in a general way the political echelons in Government and the bureaucracy in turn are influenced in their policies by the criticisms 868 of the municipal administration on the floor of the House and through other representations.
We cannot, therefore, dismiss the legal position that there is control by the Legislature over Government in its supervision of municipal administration therefore, delegated legislation cannot be said to be uncontrolled or unchecked by the delegator.
This discussion is of critical importance in view of the argument put forward by Shri Tarkunde that when Government exercises power under section 90(6) it is a law unto itself, unbridled and uncontrolled by the Legislature.
We may now refer to a few decisions which have been brought to our notice by counsel appearing for the municipal bodies and the State of Punjab to make out that the needs of municipalities and the pressures of local people are within the ken of the State Government and they also respond like municipal bodies and guide themselves in the manner corporations do.
More importantly, excessive delegation stands negatived because of legislative control over Government.
Even in the Liberty Cinema case, (supra) the control by Government over the municipal administration was relied upon as a policy guideline and it is an a fortiori case if the Government itself takes action, responsible and responsive as it is to the elected representatives of the House.
Great stress was laid on Papiah 's case(1) which dealt with subordinate legislation elaborately and upheld the validity of a provision where, superficially viewed, too wide a power had been delegated.
Mathew, J. speaking for the court, gave considerable latitude to the Legislature in delegating its power and referred to many prior rulings.
He quotes Subba Rao, C.J. to say: "An over burdened 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 another agency either in whole or in part is beyond the permissible limits of delegation.
"(2) 869 Nevertheless, this observation was neutralised by another made by Hegde, J. in Bishar Dayal (1): "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 be come out of date.
" Mathew, J. proceeded to cover English cases and reached the conclusion: "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(2) upheld the validity of delegation of the power to fix rates to the Commissioner Transport in that case." (P.613) The learned Judge quoted the Privy Council(3) which held that the Legislature was entitled to use any agent or machinery that it considered 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 Legislatare '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 946)." 870 The point to be emphasised 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 Transport 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.
The proposition so stated is very wide and sweeping.
By that standard, there is nothing unconstitutional about section 90(5) of the Act.
In the course of the argument certain observations of this Court were read to the effect that there was always a check by the courts on unconstitutional misuse of delegated power and that, in itself with out more, was good enough to make the delegation good.
So stated, the proposition may be perhaps too wide to be valid; for any naked delegation may then be sustained by stating that the court is there as the watch dog.
We do not have to go that far in the present case and so we make no final pronouncement on this extension of delegations jurisprudence.
We must state, while concluding that Punjab & Haryana High Court has overruled similar contentions on grounds which have our approval [see AIR 1977 P&H 297 and 74 PLR We are conscious that constitutional legitimation of unlimited power of delegation to the Executive by the Legislature may, on critical occasions, be subversive of responsible government and erosive of democratic order.
That peril prompts us to hint at certain portents to our parliamentary system, not because they are likely new but because society may have to pay the price some day.
As a back drop to this train of thoughts a few statements from a working paper presented by Prof. Upendra Baxi of the Delhi University at a recent seminar may be excerpted: ". law making remains the, more or less, exclusive prerogative of a small cross section of elites.
This necessarily affects both the quality of the law made as well its special communication, acceptance and effectivity.
It also reinforces the highly centralised system of power.
It is time that we considered the desirability and feasibility of building into the law making processes a substantial amount of public participation." 871 "People 's participation in the enforcement and implementation of the law is also not actively sought, sponsored or structured by the State.
Equally now is the idea that there should be a "social audit" of major legislations by the beneficiaries or, more generally, the consumers of legal justice." ".
The situation in regard to delegated legislation the volume of which is immensely greater than that of usual legislation, is even more alarming.
The Indian Parliament enacted from the period 1973 to 1977 a total of 302 laws; as against this the total number of statutory orders and rules passed in the same period was approximately 25,414.
Corresponding figures for States and union territories are not just available but the number of rules issued under the delegated legislation powers may well be astronomical. " Plenary powers of law making are entrusted to elected representatives.
But the political government instructed by the bureaucracy, by and large, gets bills through with the aid of the three line whip.
Even otherwise, legislators are some times innocent of legal skills; and complex legislations call for considerable information and instruction.
The law making sequence leaves much to subordinate legislation which, in practical terms, means surrender to the surrogate, viz., the bureaucracy which occupies commanding heights within the Secretariat.
The technocracy and the bureaucracy which mostly draft subordinate legislation are perhaps well meaning and well informed but insulated from parliamentary audit, isolated from popular pressure and paper logged most of the time.
And units of local self government are reduced to a para babel mechanisms, what with a pyramid of officialdom above them.
The core of Shri Tarkunde 's argument, even though rejected in legal terms by force of precedents, has a realistic touch to the effect that municipal administration in the matter of taxation, if taken over by Government as under section 90(5) of the Act, becomes administration by the barrel of the Secretariat pen.
The doctrine of delegation, in its extreme positions, is fraught with democracy by proxy of a coterie, of which the nation, in its naivete, may not be fully cognizant.
Therefore, the system of law making and performance auditing needs careful, yet radical, re structuring, if participative, pluralist Government by the People is not to be jettisoned.
We have laid down the law and obeyed the precedents but felt it necessary to lay bare briefly the political portents implicit in the extent law, for action by the national leadership betimes.
Who owns and operates India, that is Bharat ? That disturbing interrogation becomes deeply relevant 872 as we debate and decide the jurisprudence of delegation of power and vicarious exercise and so we have pardonably ventured to make heuristic hints and to project new perspectives.
The journey 's end is in sight.
The discussion has come to a close.
The notification suffers from no infirmity.
The writ petitions stand dismissed.
Costs one set.
(to the state) P.H.P. Petitions dismissed.
| IN-Abs | The Municipalities of Punjab are governed by two enactments.
The numerous little ones are statutory bodies created and controlled by the Punjab Municipal Act, 1911 and few large ones by the Punjab Municipal Corporation Act, 1976.
For the purpose of the present petitions the provisions run on identical terms.
The State of Punjab in April, 1977 required the various municipal bodies in the State to impose tax on the sale of Indian made foreign liquor @ Re. 1/ per bottle w.e.f. 20 5 1977.
The Municipal authorities having failed to take action pursuant to the directive the State of Punjab directly issued a notification under sec.
90(5) of the Punjab Municipal Corporation Act, 1976 and similar provision of the Municipal Act, 1911.
The petitioner challenged the constitutional validity of the said statutes and levy on the following grounds: 1.
Section 90(2)(b) of the Act suffers from the vice of excessive delegation or legislative abdication.
There are no guidelines for the exercise of the wide fiscal power of the Corporation or Government which make it too unreasonable to be salvaged by article 19(5) and too arbitrary to be equal under article 14.
The order imposing the tax itself is vitiated because: (a) It seeks to impose the tax which is already imposed and, therefore, violates section 90 (4); (b) There is double taxation; (c) It levies too heavy taxation; (d) Picking out from the broad spectrum of luxury goods or intoxicants the Indian made foreign liquor amounts to discrimination; (e) No opportunity of being heard was given; (f) Unequals are being treated equally by imposing Re. 1/ per bottle irrespective of the type of liquor taxed, price of the liquor and alcoholic content.
Dismissing the appeal.
^ HELD: (1) There is nothing in article 265 of the Constitution prohibiting double taxation.
[850 D] 846 Cantonment Board Poona vs Western India Theatres Ltd., AIR 1954 Bom.
261 approved.
(b) The plea that flat rate of Re. 1/ per bottle be it on brandy or other stronger beverage or be it Rs. 50/ or Rs. 500/ per bottle cannot be seriously pressed.
In the field of taxation many complex factors enter the fixation and flexibility is necessary for the taxing authority.
[850E F] Moopil Nair (K.T.) vs State of Kerala, ; ; East India Tobacco Co. vs State of A.P., ; at 406; A. Hajee Abdul Shakoor & Co. vs State of Madras. ; at 230 referred to.
(2) If the Municipal body proposed to impose a tax it is required to offer an opportunity to the residents of area.
No such procedural fetter is to be found under sec.
90(5) if the levy is imposed by the State Government.
It is impossible for the Court to imply invitation of objections. 'No taxation without representation ' is not applicable to a Government controlled by an elected legislature exercising its power of taxation.
[852B, C, D] (3) Sec.
90(4) talks of tax not already imposed.
The Sales Tax imposed by the state legislature under the Punjab General Sales Tax Act 1948 is no bar to the present levy.
Section 90 deals with the levy of taxes for Municipal Corporation.
The injunction is confined to repetition of the taxes which the Municipality has already imposed.
If the Corporation has not already imposed the tax.
the embargo is absent.
It is of no moment that some other body, including the State Legislature has already entered the field.
The question is has the Municipal Committee or Corporation under this Act already exacted a similar tax ? [852F, H, 853BC] (4) The Founding Document of the nation has created the three great instrumentalities and entrusted them with certain basic powers legislative, judicative and executive.
Abdication of these powers by the concerned instrumentalities, amounts to betrayal of the constitution and it is intolerable in law.
The legislature cannot delegate the essential legislative functions.
The legislature is responsible to the people and its representative, the delegate may not be and this is why excessive delegation have been frowned upon by constitutional law.
However, the complexities of modern administration are so bafflingly intricate and bristle with details, urgencies difficulties and the need for flexibility is such that our legislature may not get off to a start if they must directly and comprehensively handle legislative business in all their plenitude and particularisation.
Delegation of some part of legislative power becomes a compulsive necessity for viability.
Of course, every delegate is subject to the authority and control of the principal and exercise of delegated power can always be directed or cancelled by the Principal.
Therefore, even if there be delegation, parliamentary control over delegated legislation should be a living continuity as a constitutional necessity.
[853GH, 854A, B, C, D, E] Devi Das Gopal Krishnan & Ors.
vs State of Punjab & Ors.
, ; at 565; P. N. Kaushal etc.
vs vs Union of India & Ors.
; ; Corp. of Calcutta & Anr.
vs Liberty Cinema, referred to.
The taxes levied under the Act can be utilised only for the purpose of the Act.
There is a clear purpose contained in the provisions about the purpose and limit of the tax.
What is needed for the purpose of the Act by way of financial resources may be levied by the Corporation.
Beyond that not.
Moreover the 847 items on which taxes may be imposed are also specified.
Thus the legislature has fixed the purpose of the taxation, objects of the taxation and limits of the taxation.
[856A B] It is too late in the day to contend that the jurisprudence of delegation of legislative power does not sanction parting with the power to fix the rate of taxation, given indication of the legislative policy with sufficient clarity.
[860 B] When the Government is imposing taxes for the Municipality the Government is bound to know what ought to have been done by the Municipality.
The whole scheme of the statute shows that Government has an important role to play in the running of the municipalities.
The financial control over the corporation is with the State Government.
[865E] As between the two interpretations that which sustains the validity of law must be preferred.
[864E] M. K. Papiah & Sons vs The Excise Commr. & Anr., ; ; Sita Ram Bishambhar Dayal vs State of U.P., ; referred to.
|
Civil Appeal Nos.
1847 1848/72.
979 From the Judgment and Order dated 30 4 1970 of the Calcutta High Court in Income Tax Reference No. 128 of 1966.
V. section Desai, P. V. Kapur, section R. Agarwal, R. N. Bajoria, A. T. Patra and Praveen Kumar for the Appellant.
J. Ramamurthy and Miss A. Suhbashini for the Respondent.
The Judgment of the Court was delivered by BHAGWATI, J.
These appeals by special leave are directed against a judgment of the Calcutta High Court answering the first question referred to it by the Tribunal in favour of the Revenue and against the assessee.
There were in all five questions referred by the Tribunal but questions Nos. 2 to 5 no longer survive and these appeals are limited only to question No. 1.
That question is in the following terms: "Whether on the facts and in the circumstances of the case, the assessee 's claim for the exchange loss of Rs. 11 lakhs for the assessment year 1957 58 and Rs. 5,50,000/ for the assessment year 1959 60 in respect of remittances of profit from Pakistan was not allowable as a deduction? Since there are two assessment years in regard to which the question arises, there are two appeals one in respect of each assessment year, but the question is the same.
W will briefly state the facts as that is necessary for the purpose of answering the question.
The assessee is a limited company having its head office in Calcutta.
It has inter alia a cotton mill situate in West Pakistan where it carries on business of manufacturing and selling cotton fabrics.
This textile mill was quite a prosperous unit and in the financial year ending 31st March, 1954, being the accounting year relevant to the assessment year 1954 55, the assessee made a large profit in this unit.
This profit obviously accrued to the assessee in West Pakistan and according to the official rate of exchange which was then prevalent, namely, 100 Pakistani rupees being equal to 144 Indian rupees, this profit, which may for the sake of convenience be referred to as Pakistan profit, amounted to Rs. 1,68,97,232/ in terms of Indian rupees.
Since the assessee was taxed on actual basis, the sum of Rs. 1,68,97,232/ representing the Pakistani profit was included in the total income of the assessee for the assessment year 1954 55 and the assessee was taxed accordingly after giving double taxation relief in accordance with the bilateral agreement between India and Pakistan.
It may be pointed out that for some time, after the partition of India.
there continued to be parity in the rate of exchange between India and 980 Pakistan but on 18th September 1949, on the devaluation of the Indian rupee, the rate of exchange was changed to 100 Pakistani rupees being equal to 144 Indian rupees and that was the rate of exchange at which the Pakistani profit was converted into Indian rupees for the purpose of inclusion in the total income of the assessee for the assessment year 1954 55.
The rate of exchange was, however, once again altered when Pakistani rupee was devalued on 8th August, 1955 and parity between Indian and Pakistani rupee was restored.
The assessee thereafter succeeded in obtaining the permission of the Reserve Bank of Pakistan to remit a sum of Rs. 25 lakhs in Pakistani rupees out of the Pakistani profit for the assessment year 1954 55 and pursuant to this permission, a sum of Rs. 25 lakhs in Pakistani rupees was remitted by the assessee to India during the accounting year relevant to the assessment year 1957 58.
The assessee also remitted to India during the accounting year relevant to the assessment year 1959 60 a further sum of Rs. 12,50,000/ in Pakistani rupee out of the Pakistani Profit for the assessment year 1954 55 after obtaining the necessary permission of the Reserve Bank of Pakistan.
But by the time these remittances came to be made, the rate of exchange had, as pointed out above, once again changed to 100 Pakistani rupees being equal to 100 Indian rupees and the amounts received by the assessee in terms of Indian rupees were, therefore, the same, namely, Rs. 25 lakhs and Rs. 12,50,000.
Now, the profit of Rs. 25 lakhs in terms of Pakistani rupees had been included in the total income of the assessee for the assessment year 1954 55 as Rs. 36 lakhs in terms of Indian rupees according to the prevailing rate of exchange of 100 Pakistani rupees being equal to 144 Indian rupees and, therefore, when the assessee received the sum of Rs. 25 lakhs in Indian rupees on remittance of the profit of Rs. 25 lakhs in Pakistani rupees on the basis of 100 Pakistani rupees being equal to 100 Indian rupees, the assessee suffered a loss of Rs. 11 lakhs in the process of conversion on account of appreciation of the Indian rupee qua Pakistani rupee.
Similarly, on remittance of the profit of Rs. 12,50,000 in Pakistani currency the assessee suffered a loss of Rs. 5,50,000/ .
The assessee claimed in its assessments for the assessment years 1957 58 and 1959 60 that these losses of Rs. 11 lakhs and Rs. 5,50,000/ should be allowed in computing the profits from business.
This claim was however rejected by the Income Tax Officer.
The assessee carried the matter in further appeal to the Tribunal but the Tribunal also sustained the disallowance of these losses and rejected the appeals.
The decision of the Tribunal was assailed in a reference made at the instance of the assessee and Question No. 1 which we have set out above was referred by the Tribunal for the opinion of the High Court.
On the reference the High Court took substantially the same view as 981 the Tribunal and held that no loss was sustained by the assessees on remittance of the amounts from West Pakistan and that in any event the loss could not be said to be a business loss, because it was not a loss arising in the course of business of the assessee but it was caused by devaluation which was an act of State.
The High Court accordingly answered the question in favour of the Revenue and against the assessee.
The assessee thereupon preferred the present appeal after obtaining certificate of fitness from the High Court.
The first question that arises for consideration is whether the assessee suffered any loss on the remittance of Rs. 25 lakhs and Rs. 12,50,000/ in Pakistani currency from West Pakistan.
These two amounts admittedly came out of Pakistan profit for the assessment year 1954 55 and the equivalent of these two amounts in Indian currency, namely, Rs. 36 lakhs and Rs. 18 lakhs respectively.
was included in the assessment of the assessee as part of Pakistan profit.
But by the time these two amounts came to be repatriated to India, the rate of exchange had undergone change on account of devaluation of Pakistani rupee and, therefore, on repartition, the assessee received only Rs. 25 lakhs and Rs. 12,50,000/ in Indian currency instead of Rs. 36 lakhs and Rs. 18 lakhs.
The assessee thus suffered a loss Rs. 11 lakhs in one case and Rs. 5,50,000/ in other in the process of conversion of Pakistani currency into Indian currency.
It is no doubt true and this was strongly relied upon by the High Court for taking the view that no loss was suffered by the assessee that the books of account of the assessee did not disclose any loss nor was any loss reflected in the balance sheet or profit and loss account of the assessee.
The reason was that though, according to the then prevailing rate of exchange, the equivalent of Pakistani profit in terms of Indian rupee was Rs. 1,68,97,232/ and that was the amount included in the assessment of the assessee for the assessment year 1954 55, the assessee in its books of account maintained at the Head Office did not credit the Pakistani profit at the figure of Rs. 1,68,97,232/ , but credited it at the same figure as in Pakistani currency.
The result was that the loss arising on account of the depreciation of Pakistani rupee vis a vis Indian rupee was not reflected in the books of account of the assessee and hence it could not figure in the balance sheet and Profit and Loss Account.
But it is now well settled that the way in which entries are made by an assessee in his books of account is not determinative of the question whether the assessees has earned any profit or suffered any loss.
The assessee may, by making entries which are not in conformity with the proper accountancy principles, conceal profit or show loss and the entries 10 699SCI/7 982 made by him cannot, therefore, be regarded as conclusive one way or the other.
What is necessary to be considered is the true nature of the transaction and whether in fact it has resulted in profit or loss to the assessee.
Here, it is clear that the assessee earned Rs. 36 lakhs and Rs. 18 lakhs in terms of Indian rupees in the assessment year 1954 55 and retained them in West Pakistan in Pakistani currency and when they were subsequently remitted to India, the assessee received only Rs. 25 lakhs and Rs. 12,50,000/ and thus suffered loss of Rs. 11 lakhs and Rs. 5,50,000/ in the process of conversion on account of alteration in the rate of exchange.
It is, therefore, not possible to accept the view of the High Court that no loss was suffered by the assessee on the remittance of the two sums of Rs.25 lakhs and Rs. 12,50,000/ from West Pakistan.
This view which we are taking is clearly supported by the decision of this Court in Commissioner of Income Tax vs Tata Locomotive Engineering Company (1) which we shall discuss a little later.
That takes us to the next and more important question whether the loss sustained by the assessee was a trading loss.
Now this loss was obviously not an allowable deduction under any express provision of section 10(2), but if it was a trading loss, it would be liable to be deducted in computing the taxable profit of the assessee under section 10(1).
This indeed was not disputed on behalf of the Revenue but the serious controversy raised by the Revenue was whether the loss could at all be regarded as a trading loss.
The argument which found favour with the High Court was that the loss was caused on account of devaluation of the Pakistani rupee which was an act of the sovereign power and it could not, therefore, be regarded as a loss arising in the course of the business of the assessee or incidental to such business This argument is plainly erroneous and cannot stand scrutiny even for a moment.
It is true that a loss in order to be a trading loss must spring directly from the carrying on of business or be incidental to it as pointed out by Venkatarama Iyer, j., speaking on behalf of this Court in Badri Das Dage vs C.I.T. (2) but it would not be correct to say that where a loss arises in the process of conversion of foreign currency which is part of trading asset of the assessee, such loss cannot be regarded as a trading loss because the change in the rate of exchange which occasions such loss is due to an act of the sovereign power.
The loss is as much a trading loss as any other and it makes no difference that it is occasioned by devaluation brought about by an act of State.
It is not the factor or circumstance which causes the loss that is material in determining the true 983 nature and character of the loss, but whether the loss has occurred in the course of carrying on the business or is incidental to it.
If there is loss in a trading asset, it would be a trading loss, whatever be its cause, because it would be a loss in the course of carrying on the business.
Take for example the stock in trade of a business which is sold at a loss.
There can be little doubt that the loss in such a case would clearly be a trading loss.
But the loss may also arise by reason of the stock in trade being stolen or burnt and such a loss, though occasioned by external agency or act of God, would equally be a trading loss.
The cause which occasions the loss would be immaterial : the loss, being in respect of a trading asset, would be a trading loss.
Consequently, we find it impossible to agree with the High Court that since the loss in the present case arose on account of devaluation of the Pakistani rupee and the act of devaluation was an act of sovereign power extrinsic to the business, the loss could not be said to spring from the business of the assessee.
Whether the loss suffered by the assessee was a trading loss or not would depend on the answer to the query whether the loss was in respect of a trading asset or a capital asset.
In the former case, it would be a trading loss, but not so in the latter.
The test may also be formulated in another way by asking the question whether the loss was in respect of circulating capital or in respect of fixed capital.
This is the formulation of the test which is to be found in some of the English decisions.
It is of course not easy to define precisely what is the line of demarcation between fixed capital and circulating capital, but there is a well recognised distinction between the two concepts.
Adam Smith in his `Wealth of Nations ' describes `fixed capital ' as what the owner turns to profit by keeping it in his own possession and `circulating capital ' as what he makes profit of by parting with it and letting it change masters.
`Circulating capital ' means capital employed in the trading operations of the business and the dealings with it comprise trading receipts and trading disbursements, while `fixed capital means capital not so employed in the business, though it may be used for the purposes of a manufacturing business, but does not constitute capital employed in the trading operations of the business.
Vide Golden Horse Shoe (new) Ltd. vs Thurgood.,(1) If there is any loss resulting from depreciation of the foreign currency which is embarked or adventured in the business and is part of the circulating capital, it would be a trading loss, but depreciation of fixed capital on account of alteration in exchange rate would be a capital loss.
Putting it differently, if the amount in foreign currency is utilised or intended to be utilised in the course of business or for a trading purpose or for effecting a 984 transaction on revenue account, loss arising from depreciation in its value on account of alteration in the rate of exchange would be a trading loss, but if the amount is held as a capital asset, loss arising from depreciation would be a capital loss.
This is clearly borne out by the decided cases which we shall presently discuss.
We will first refer to the English decisions on the subject for they are quite illuminating.
The first decision to which we should call attention is that in Landes Brothers vs Simpson(1).
There the appellants who carried on business as fur and skin merchants and as agents were appointed sole commission agents of a company for the sale, in Britain and elsewhere, of furs exported from Russia, on the terms, inter alia, that they should advance to the company a part of the value of each consignment.
All the transactions between the appellants and the company were conducted on a dollar basis, and owing to fluctuations in the rate of exchange between the dates when advances in dollars were made by the appellants to the company against goods consigned and the dates when the appellants recouped themselves for the advances on the sale of the goods, a profit accrued to the appellants on the conversion of prepaid advances into sterling.
The question arose whether this profit formed part of the trading receipts of the appellants so as to be assessable to tax.
Singleton, J., held that the exchange profit arose directly in the course of the appellants ' business with the company and formed part of the appellants ' trading receipts for the purpose of computing their profits assessable to income tax under Case I of Schedule D.
The learned Judge pointed out that "the profit which arises in the present case is a profit arising directly from the business which had to be done, because the business was conducted on a dollar basis and the appellants had, therefore, to buy dollars in order to make the advances against the goods as prescribed by the agreements.
The profit accrued in this case because they had to do that, thereafter as a trading concern in this country re transferring or re exchanging into sterling.
" Since the dollars were purchased for the purpose of carrying on the business as sole commission agents and as an integral part of the activity of such business, it was held that the profit arising on retransfer or re exchange of dollars into sterling was a trading profit falling within Case I of Schedule D.
This decision was accepted as a correct decision by the Court of Appeal in Davis vs Shell & Co. of Chine Ltd.(2) 985 We may then refer to the decision of the Court of Appeal in Imperial Tobacco Co. vs Kelly(1).
That was a case of a company which, in accordance with the usual practice, bought American dollars for the purpose of purchasing in the United States, tobacco leaf.
But before tobacco leaf could be purchased, the transaction was interrupted by the outbreak of war and the company had, at the request of the Treasury, to stop all further purchases of tobacco leaf in the United States.
The result was that the company was required to sell to the Treasury and owing to the rise which had in the mean time occurred in the dollar exchange, the sale resulted in a profit for the company.
The question was whether the exchange profit thus made on the dollars purchased by the company was a trading profit or not ? The Court of Appeal held that it was a trading profit includible in the assessment of the company under Case I of Schedule D and Lord Green, Master of the Rolls delivering the main judgment, said : "The purchase of the dollar was the first step in carrying out an intended commercial transaction, namely, the purchase of tobacco leaf.
The dollars were bought in contemplation of that and nothing else.
The purchase on the facts found was, as I say, a first step in the carrying out of a commercial transaction, " "The Appellant Company having provided themselves with this particular commodity "namely, dollars" which they proposed to exchange for leaf tobacco, their contemplated transactions became impossible of performance, or were not in fact performed.
They then realised the commodity which had become surplus to their requirements".
When I say "surplus to their requirements" I mean surplus to their requirements for the purpose and the only purpose for which the dollars were acquired." "In these circumstances, they sell this surplus stock of dollars : and it seems to me quite impossible to say that the dollars have lost the revenue characteristic which attached to them when they were originally bought, and in some mysterious way have acquired a capital character.
In my opinion, it does not make any difference that the contemplated purchasers were stopped by the operation of Treasury or Governmental orders, if that were the case; nor is the case affected by the fact that the purchase was under a Treasury requisition and was not a voluntary one.
It would 986 be a fantastic result, supposing the Company had been able voluntarily, at its own free will, to sell these surplus dollars, if in that case the resulting profit should be regarded as income, whereas if the sale were a compulsory one the resulting profit would be capital.
That is a distinction which, in my opinion, cannot possibly be made." "To reduce the matter to its simplest elements, the Appellant Company has sold a surplus stock of dollars which it had acquired for the purpose of affecting a transaction on revenue account.
If the transaction is regarded in that light, any trader who, having acquired commodities for the purpose of carrying out a contract, which falls under the head of revenue for the purpose of assessment under Schedule D, Case I, then finds that he has bought more than he ultimately needs and proceeds to sell the surplus.
In that case it could not be suggested that the profit so made was anything but income.
It had an income character impressed upon it from the very first.
" This decision clearly laid down that where an assessee in the course of its trade engages in a trading transaction, such as purchase of goods abroad, which involves as a necessary incident of the transaction itself, the purchase of currency of the foreign country concerned, then profit resulting from appreciation or loss resulting from depreciation of the foreign currency embarked in the transaction would prima facie be a trading profit or a trading loss.
The last English decision to which we may refer in this connection is Davis vs The Shell Company of Chine, (supra).
The Company made a practice of requiring its agents to deposit with the company a sum of money usually in Chinese dollars which was repayable when the agency came to an end.
Previously the Company had left on deposit in Shanghai amounts approximately equal to the agency deposits, but because of the hostilities between China and Japan, the Company transferred these sums to the United Kingdom and deposited the sterling equivalents with its parent company which acted as its banker.
Owing to the subsequent depreciation of the Chinese dollar with respect to sterling, the amounts eventually required to repay agency deposits in Chinese currency were much less than the sums held by the Company to meet the claims and a substantial profit accrued to the Company.
The question arose whether this exchange profit was a trading profit or a capital profit.
The Court of 987 Appeal held that it was a capital profit not subject to income tax and the argument which found favour with it may be stated in the words of Jenkins, L. J., who delivered the main judgment : "I find nothing in the facts of this case to divest those deposits of the character which it seems to me they originally bore, that is to say the character of loans by the agents to the company, given no doubt to provide the company with a security, but nevertheless loans.
As loans it seems to me they must prima facie be loans on capital, not revenue account; which perhaps is only another way of saying that they must prima facie be considered as part of the company 's fixed and not of its circulating capital.
As appears from what I have said above, the evidence does not show that there was anything in the company 's mode of dealing with the deposits when received to displace this prima facie conclusion.
In my view, therefore, the conversion of company 's balance of Chinese dollars into sterling and the subsequent re purchase of Chinese dollars at a lower rate, which enabled the company to pay off its agents ' deposits at a smaller cost in sterling then the amount it had realised by converting the deposits into sterling, was not a trading profit, but it was simply the equivalent of an appreciation in a capital asset not forming part of the assets employed as circulating capital in the trade." Since the Court took the view that the deposits were in the nature of fixed capital, any appreciation in their value on account of alteration in the rate of exchange would be on capital account and that is why the Court held that such appreciation represented capital profit and not trading profit.
That takes us to the two decisions of this Court which have discussed the law on the subject and reiterated the same principles for determining when exchange profit or loss can be said to be trading profit or loss.
The first decision in chronological order is that reported in Commissioner of Income Tax, Bombay City vs Tata Locomotive and Engineering Co. Ltd. (supra).
There the assessee, which was a limited company carrying on business of locomotive boilers and locomotives, had, for the purpose of its manufacturing activity, to make purchases of plant and machinery in the United States.
Tata Ink, New York, a company incorporated in the United States, was appointed by the assessee as its purchasing agent in the United States 988 and with the sanction of the Exchange Control Authorities the assessee remitted a sum of $ 33,850/ to Tata Ink, New York for the purpose of purchasing capital goods and meeting other expenses.
The assessee was also the selling agent of Baldwin Locomotive Works of the United States for the sale of their products in India and in connection with this work, the assessee incurred expenses on their behalf in India and these expenses were reimbursed to the assessee in the United States by paying the amount to Tata Ink, New York.
The assessee also earned a commission of $ 36,123/ as selling agent of Baldwin Locomotive Works and this amount received as commission was taxed in the hands of the assessee in the relevant assessment year on accrual basis after being converted into rupees according to the then prevailing rate of exchange and tax was paid on it by the assessee.
Now these amounts paid by Baldwin Locomotive Works in reimbursement of the expenses and by way of commission were not remitted by the assessee to India but were retained with Tata Ink, New York for the purchase of capital goods with the sanction of the Exchange Control Authorities.
The result was that there was a balance of $. 48,572.30 in the assessee 's account with Tata Ink, New York on 16th September, 1949 when, on devaluation of the rupee, the rate of exchange which was Rs. 3.330 per dollar shot upto Rs. 4.775 per dollar.
The consequence of this alteration in the rate of exchange was that the assessee found it more expensive to buy American goods and the Government of India also imposed some restrictions on imports from the United States and the assessee, therefore, with the permission of the Reserve Bank of India, repatriated $ 49,500/ to India.
The repatriation of this amount at the altered rate of exchange gave rise to a surplus of Rs. 70,147/ in the process of converting dollar currency into rupee currency.
The question arose in the assessment of the assessee to income tax whether that part of the surplus of Rs. 70,147/ , which was attributable to $ 36,123/ received as commission from Baldwin Locomotive Works was a trading profit or a capital profit.
The matter was carried to this Court by the Revenue and in the course of the judgment delivered by Sikri, J., this Court pointed out that the answer to the question : ". . depends on whether the act of keeping the money, i.e., $ 36,123/02, for capital purposes after obtaining the sanction of the Reserve Bank was part of or a trading transaction.
If it was part of or a trading transaction then any profit that would accrue would be revenue receipt; if it was not part of or a trading transaction, then the profit made would be a capital profit and not taxable.
There is no doubt that the amount of $ 36,123.02 was a revenue 989 receipt in the assessee 's business of commission agency.
Instead of repatriating it immediately, the assessee obtained the sanction of the Reserve Bank to utilise the commission in its business manufacture of locomotive boilers and locomotives for buying capital goods.
That was quite an independent transaction, and it is the nature of this transaction which has to be determined.
In our view it was not a trading transaction in the business of manufacture of locomotive boilers and locomotives; it was clearly a transaction of accumulating dollars to pay for capital goods, the first step to the acquisition of capital goods.
If the assessee had repatriated $ 36,123.02 and then after obtaining the sanction of the Reserve Bank remitted $ 36,123.02 to the U.S.A., Mr. Sastri does not contest that any profit made on devaluation would have been a capital profit.
But, in our opinion, the fact that the assessee kept the money there does not make any difference specially, as we have pointed out, that it was a new transaction which the assessee entered into, the transaction being the first step to acquisition of capital goods.
" This Court held that the act of retaining $ 36,123/ in the United States for capital purposes after obtaining the sanction of the Reserve Bank of India was not a trading transaction in the business of manufacture of locomotive boilers and locomotives, but it was clearly a transaction of accumulating dollars to pay for capital goods, the first step in the acquisition of capital goods and the surplus attributable to $ 36,123/ was, therefore, capital accretion and not profit taxable in the hands of the assessee.
It would, thus, be seen that the test applied by this Court was whether the appreciation in value had taken place in a capital asset or in a trading asset or in other words, in fixed capital or in circulating capital and since the amount of $ 36,123/ , though initially a trading receipt, was set apart for purchase of capital goods and was thus converted into a capital asset or fixed capital, it was held that appreciation in its value on conversion from dollar currency to rupee currency was a capital profit and not a trading profit.
The position was the same as if the assessee had repatriated $ 36,123/ in the relevant assessment year in which it was earned and then immediately remitted an identical amount to the United States for the purchase of capital goods and profit had accrued on subsequent repatriating of this amount on account of alteration in the rate of exchange.
990 The other decision to which we must refer is the one in Commissioner of Income Tax, Mysore vs Canara Bank Ltd.(1).
The assessee in this case was a public limited company carrying on the business of banking in India and it had opened a branch in Karachi on 15th November, 1946.
After the partition in 1947, the currencies of India and Pakistan continued to be at par until the devaluation of the Indian rupee on September 18, 1949.
On that day the Karachi branch of the assessee had with it a sum of Rs. 3,97,221/ belonging to its Head Office.
As Pakistan did not devalue its currency, the old parity between Indian and Pakistani rupee ceased to exist.
The exchange ratio between the two countries was, however, not determined until 27th February, 1951 when it was agreed that 100 Pakistani rupees would be equivalent to 144 Indian rupees.
The assessee did not carry on any business in foreign currency in Pakistan and even after it was permitted to carry on business in Pakistani currency on 3rd April, 1951, it carried on no foreign exchange business.
The amount of Rs. 3,97,221/, which was lying with the Karachi branch remained idle there and was not utilised in any banking operation even within Pakistan.
On July 1, 1953, the State Bank of Pakistan granted permission for remittance and two days later, the assessee remitted the amount of Rs. 3,97,221/ to India.
This amount, in view of the difference in the rate of exchange became equivalent to Rs. 5,71,038/ in terms of Indian currency and in the process, the assessee made a profit of Rs, 1,73,817/ .
The question arose in the assessment of the assessee whether this profit of Rs. 1,73,817/ was a revenue receipt or a capital accretion.
Ramaswami, J., speaking on behalf of this Court, pointed out that the amount of Rs. 3,97,221/ was lying idle in the Karachi branch and it was not utilised in any banking operation and the Karachi branch was merely keeping that money with it for the purpose of remittance to India and as soon as the permission of the State Bank of Pakistan was obtained, it remitted that money to India.
This money was "at no material time employed, expended or used for any banking operation or for any foreign exchange business".
It was, to use the words of Ramaswami, J., "blocked and sterilised from the period of the devaluation of the Indian rupee upto the time of its remittance to India".
Therefore, even if the money was originally stock in trade, it "changed its character of stock in trade when it was blocked and sterilised and the increment in its value owing to the exchange fluctuation must be treated as a capital receipt".
Since the sum of Rs. 3,97,221/ was, on the finding of fact reached by the Revenue authorities, held on capital account and not as part of the circulating capital em 991 barked in the business of banking, it was held by this Court that the profit arising to the assessee on remittance of this amount on account of alteration in the rate of exchange was not a trading profit but a capital accretion.
The law may, therefore, now be taken to be well settled that where profit or loss arises to an assessee on account of appreciation or depreciation in the value of foreign currency held by it, on conversion into another currency, such profit or loss would ordinarily be trading profit or loss if the foreign currency is held by the assessee on revenue account or as a trading asset or as part of circulating capital embarked in the business.
But if on the other hand, the foreign currency is held as a capital asset or as fixed capital, such profit or loss would be of capital nature.
Now, in the present case, no finding appears to have been given by the Tribunal as to whether the sums of Rs. 25 lakhs and Rs. 12,50,000/ were held by the assessee in West Pakistan on capital account or Revenue account and whether they were part of fixed capital or of circulating capital embarked and adventured in the business in West Pakistan.
If these two amounts were employed in the business in West Pakistan and formed part of the circulating capital of that business, the loss of Rs. 11 lakhs and Rs. 5,50,000/ resulting to the assessee on remission of these two amounts to India.
On account of alteration in the rate of exchange, would be a trading loss, but if, instead, these two amounts were held on capital account and were part of fixed capital, the loss would plainly be a capital loss.
The question whether the loss suffered by the assessee was a trading loss or a capital loss cannot, therefore, be answered unless it is first determined whether these two amounts were held by the assessee on capital account or on revenue account or on revenue account or to put it differently, as part of fixed capital or of circulating capital.
We would have ordinarily, in these circumstances, called for a supplementary statement of case from the Tribunal giving its finding on this question, but both the parties agreed before us that their attention was not directed to this aspect of the matter when the case was heard before the Revenue Authorities and the Tribunal and hence it would be desirable that the matter should go back to the Tribunal with a direction to the Tribunal either to take additional evidence itself or to direct the Income Tax Officer to take additional evidence and make a report to it, on the question whether the sums of Rs. 25 lakhs and Rs. 12,50,000/ were held in West Pakistan as capital asset or as trading asset or, in other words, as part of fixed capital or part of circulating capital in the business.
The Tribunal will, on the basis of this additional evidence and in the light of the law laid down by us in this judgment, determine whether the loss 992 suffered by the assessee on remittance of the two sums of Rs. 25 lakhs and Rs. 12,50,000/ was a trading loss or a capital loss.
We accordingly set aside the order of the High Court and send the case back to the Tribunal with a direction to dispose it of in accordance with the directions given by us and in the light of the law laid down in this judgment.
There will be no order as to costs of the appeal.
P.H.P. Appeals allowed and case remanded.
| IN-Abs | It has inter alia a Cotton Mill situated in West Pakistan where it carries on business of manufacturing and selling cotton fabrics.
For the accounting year relevant to the assessment year 1954 55, the assessee made a large profit in the unit in West Pakistan.
The Pakistan profit, according to the official rate of exchange, which was then prevalent, namely, 100 Pakistani rupees being equal to 144 Indian rupees amounted to Rs. 1,68,97,232 in terms of Indian rupees.
Since the assessee was taxed on accrual basis, the sum of Rs. 1,68,97,232 representing the Pakistani profit was included in the total income of the assessee for the assessment year 1954 55 and the assessee was taxed accordingly after giving double taxation relief in accordance with the bilateral agreement between India and Pakistan.
On 8th August, 1955, the Pakistani rupee was devalued and parity between Indian and Pakistani rupee was restored.
The assessee thereafter succeeded in obtaining the permission of the Reserve Bank of Pakistani to remit a sum of Rs. 25 lakhs in Pakistani rupees out of the Pakistani profit for the assessment year 1954 55.
The profit of Rs. 25 lakhs in terms of Pakistani rupees had been included in the total income of the assessee for the assessment year 1954 55 as Rs. 36 lakhs in terms of Indian rupees according to the then prevailing rate of exchange and, therefore, when the assessee received the sum of Rs. 25 lakhs on remittance of the profit of Rs. 25 lakhs in Pakistani rupees during the assessment years 1957 58, the assessee suffered a loss of Rs. 11 lakhs, in the process of conversion on account of appreciation of the Indian rupee qua Pakistani rupee.
Likewise, in the assessment year 1959 60, a further sum of Rs. 12,50,000 was remitted by the assesses to India out of the Pakistani profit for the assessment year 1954 55 and suffered a loss of Rs. 5,50,000.
The assessee claimed in its assessment for the year 1957 58 and 1959 60 that these losses of Rs. 11 lakhs and Rs. 5,50,000 should be allowed in computing the profit from business.
The Income Tax Officer and the Tribunal disallowed the claim.
On a reference to the High Court, the High Court took the view that no loss was sustained by the assessee on remittance of the amounts from West Pakistan and that in any event, the loss could not be said to be a business loss because it was not a loss arising in the course of business of the assessee but it was caused by devaluation which was an act of State.
The High Court accordingly answered the question in favour of the Revenue and against the assessee.
Disposing of the appeals by special leave the Court, 977 ^ HELD: The first question that arises is whether the assessee suffered any loss on the remittance of Rs. 25 lakhs and Rs. 12,50,000.
These two amounts admittedly came out of the Pakistani profit for the assessment year 1954 55 and the equivalent of these two amounts in Indian currency, namely, Rs. 36 lakhs and Rs. 18 lakhs respectively was included in the assessment of the assessee as part of Pakistani profit but by the time these amounts came to be repatriated to India, the rate of exchange had undergone change on account of devaluation of Pakistani rupee and, therefore, on repatriation, the assessee received only Rs. 25 lakhs and Rs. 12.50 lakhs in Indian currency instead of Rs. 36 lakhs and Rs. 18 lakhs.
The assessee thus suffered a loss of Rs. 11 lakhs in one case and Rs. 5.50 lakhs in the other case.
The fact that no loss was reflected in the books of the two accounts of the assessee was not a conclusive factor and the High Court ought not to have relied on it.
It is now well settled that the way in which entries are made by an assessee in his books of account is not determinative of the question whether the assessee has earned any profit or suffered any loss.
[981 A D, 982 A B C] Commissioner of Income Tax vs Tata Locomotive Engineering Co., relied on.
The question arising in the case is whether the loss sustained by the assessee was a trading loss and if it was a trading loss whether it would be liable to be deducted in computing the taxable profit of the assessee under Sec.
10(1) of the Income Tax Act, 1922.
The argument which found favour with the High Court was that because the devaluation was an act of the sovereign power, it could not be regarded as a loss arising in the course of the business of the assessee or incidental, to such business, is plainly erroneous.
It is true that a loss in order to be a trading loss must spring directly from the carrying on of business or be incidental to it, but it would not be correct to say that where a loss arises in the process of conversion of foreign currency which is part of trading asset of the assessee, such loss cannot be regarded as a trading loss because the change in the rate of exchange which occasions such loss is due to an act of the sovereign power.
[982 D G] Badri Das Dada vs C.I.T., relied on.
It is not the factor or circumstance which caused the loss that is material in determining the true nature and character of the loss, but whether the loss has occurred in the course of carrying on the business or is incidental to it.
If there is a loss in trading asset, it would be a trading loss, whatever be its cause, because it would be a loss in the course of carrying on the business.
If the stock in trade of a business is stolen or burnt the loss, though occasioned by external agency or act of God would clearly be a trading loss.
Whether the loss suffered by the assessee is a trading loss or not, would depend on the answer to the query whether the loss is in respect of a trading asset or a capital asset.
In the former case, it would be a trading loss but not so in the latter.
The test may be formulated in another way by asking the question whether the loss is in respect of circulating capital or in respect of fixed capital.
It is, of course, not easy to define precisely what is the line of demarcation between fixed capital and circulating capital but there is a well recognised distinction between the two concepts.
Adam Smith in his 'Wealth of Nations ' describes fixed capital as what the owner turns to profit by keeping it in his 978 own possession and circulating capital as what he makes profit of by parting with it and letting in change masters.
Circulating capital means capital employed in the trading operations of the business and the dealings with it comprise trading receipts and trading disbursements, while 'fixed capital ' means capital not so employed in the business, though it may be used for the purposes of a manufacturing business but does not constitute capital employed in the trading operations of the business.
[982 H, 983 A F] Golden Horse Shoe (new) Ltd. vs Thurgood, ; approved.
Landes Bros. vs Simpson ; Davis vs Shell & Co. of Chine Ltd. ; Imperial Tobacco Co. vs Kelly; ; referred to with approval.
Commr.
of Income tax.
Bombay City vs Tata Locomotive & Engineering Co. Ltd. approved.
Commr.
of Income tax, Mysore vs Canara Bank Ltd. approved.
It is clear from the authorities that where profit or loss arises to an assessee on account of appreciation or depreciation in the value of foreign currency held by it, on conversion into another currency, such profit or loss would ordinarily be trading profit or loss if the foreign currency is held by the assesses on Revenue account or as trading asset or as part of circulating capital embarked in the business.
But if, on the other hand, the foreign currency is held as a capital asset or as fixed capital, such profit or loss would be of capital nature.
[991 B C] In the present case, no finding has been given by the Tribunal as to whether the sum of Rs. 25 lakhs and Rs. 12.50 lakhs were held by the assessee in West Pakistan on capital account or Revenue account and whether they were a part of fixed capital or of circulating capital embarked and adventured in the business in West Pakistan.
If these two amounts were employed in the business in West Pakistan and formed part of the circulating capital of that business, the loss of Rs. 11 lakhs and Rs. 5.50 lakhs resulting to the assessee on remission of these two amounts on account of alterations in the rate of exchange, would be a trading loss, but if instead these two amounts were held on capital account and mere part of fixed capital the loss would plainly be a capital loss.
[991 C E] The Court was, therefore, unable to answer the question whether the loss suffered by the assessee was a trading loss or a capital loss.
Ordinarily, the Court would have called for a supplementary statement of the case, from the Tribunal but since both the parties agreed that it would be proper that the matter should go back to the Tribunal with a direction to the Tribunal either to take additional evidence itself or to direct the Income Tax Officer to take additional evidence and make a report, the Court made an order accordingly and directed the tribunal to dispose of the case on the basis of the additional evidence and in the light of the law laid down in the Judgment.
[991 E H]
|
Civil Appeal Nos.
2084 2085/74.
Appeals by Special Leave from the Judgment and Order dated 10/11/10/1974 of the Bombay High Court in First Appeal No. 160 and 173 of 1966.
U. R. Lalit, V. N. Ganpule and Mrs. V. D. Khanna for the appellant.
B. D. Bal, P. H. Parekh and M. Mudgal for the Respondent.
The Judgment of the Court was delivered by DESAI, J.
These two appeals by special leave arise from a suit filed by the respondents plaintiffs for recovering possession of land bearing Survey Nos.
487/1 to 487/6 situated at Shirwal Peta Khandala from the appellant defendant.
During the pendency of this suit a portion of the land in dispute was acquired under the Land Acquisition Act and as both the plaintiffs and the defendant laid a claim to compensation, a reference was made under section 30 of the Land Acquisition Act for determining the eligibility for the amount of compensation.
The trial Court decreed the plaintiffs ' suit and First Appeal No. 160 of 1966 was preferred by the defendant to the High Court of 958 Bombay.
Following the decision of the trial Court, the reference under section 30 of the Land Acquisition Act was answered in favour of the plaintiffs respondents and the defendant preferred First Appeal No. 173 of 1966 to the High Court.
Both the appeals were heard together and by its judgment dated 10/11 October, 1974 a Division Bench of the High Court dismissed both the appeals with costs.
Thereupon the appellant preferred the present two appeals.
As both the appeals arise from a common judgment, they were heard together and are being disposed of by this common judgment.
Facts necessary for appreciating the point of law canvassed in these appeals lie within a narrow compass.
One Dattatraya Govind Kulkarni, husband of plaintiff No. 1 and father of plaintiffs 2 to 6 had borrowed a Tagai loan of Rs. 12,000/ by making an application Exhibit 129 accompanied by prescribed form, Ext. 128 on 7th February, 1949.
The loan was borrowed for constructing wells in Survey Nos. 167 and 170 and he offered as security the lands bearing Survey Nos. 165, 166, 167, 170 and 172.
In the application Ext.
129 that accompanied the prescribed form it was stated that wells have to be sunk to bring barren land under cultivation.
In other words, the loan was for improvement of the land.
The loan was advanced and the borrower failed to repay the loan as per the stipulations.
A revenue recovery proceeding was commenced and as by the sale of the land offered as security the Government could not reimburse itself the total amount outstanding, a proclamation of sale was issued and ultimately the suit land was auctioned and it was purchased by the defendant and the sale in his favour was confirmed and he was put in possession on 20th May, 1960.
The plaintiff stated that prior to the date of auction there was a partition between the father and his sons on 6th July, 1956 evidenced by Ext.
53 and at this partition the suit land with its sub divisions came to the share of the plaintiffs and therefore, the father had no saleable interest in the suit land and it could not have been sold at a revenue auction for recovering the personal debt of the father.
So contending, the plaintiffs brought an action for a declaration that the sale is not binding upon them and possession may be restored to them.
The trial Court held that the suit land was joint family property consisting of Dattatraya and his sons but as there was an effective partition prior to the revenue sale and the partition being a genuine one, the subsequent sale is not binding upon the plaintiffs to whose share the suit land was allotted at the partition and, therefore, the sale was void and the plaintiffs are entitled to be put back in possession.
959 The High Court in appeal by the present appellant examined the question of the validity of the revenue sale in the context of the provisions of the ( 'Loans Act, for short) and held that the auction sale of the lands at the relevant time standing in the names of the plaintiffs, the land being not one in respect of which the Tagai loan was advanced, or which was offered as security for that loan, would not be binding upon the plaintiffs as the plaintiffs were not borrowers within the meaning of section 7(1) of the Loans Act and the plaintiffs ' suit on this ground was rightly decreed.
The submission on behalf of the defendant that Tagai loan was a debt and that it was incumbent on the sons of Dattatraya under the doctrine of pious obligation of the sons of a Hindu father to pay their father 's debts which were not tainted with immorality or illegality, was not accepted and the High Court held that this doctrine of pious obligation cannot be extended to the debts contracted under the Loans Act as the Act applies to all citizens of India irrespective of their religion.
With these findings the appeals were dismissed.
Mr. U. R. Lalit, learned counsel for the appellant urged that Tagai loan was borrowed by Dattatraya, the father for improvement of lands bearing Survey Nos. 167 and 170 which were joint family property and the debt represented by Tagai loan would be joint family debt incurred by the manager for the benefit of the joint family or for the benefit of the estate of the joint family and, therefore, the joint family property, irrespective of the fact whether it was offered as security for the loan or whether it benefited by the loan, would be liable for the repayment of the loan notwithstanding the fact that a partition has taken place before the suit land, which again is a joint family property, was brought to revenue auction.
It was also urged that the partition is not genuine and that it is a sham and bogus one and in fact there was no partition in the eye of law.
It was further urged that the pious obligations of the sons of a Hindu father to pay the debt incurred by the father not tainted with illegality or immorality to the extent of the joint family property in their hands would certainly apply to loan borrowed under the Loans Act and the expression "borrower" under the Loans Act can as well include a joint Hindu family and thereby making the entire joint family property liable for repayment of the loan.
Mr. Bal, learned counsel for the plaintiffs respondents contended that Tagai loan was not a joint family debt nor in borrowing the loan the father was acting as Karta but was acting in his personal capacity, nor the loan was for the benefit of the joint family estate.
It was said that the Loans Act being a complete Code in itself and only 960 recognised borrower in his individual capacity, one cannot import the concept of Karta of a joint family borrowing under the Loans Act in his representative capacity so as to make the joint family property liable for such loans.
The principal contention which goes to the root of the matter is whether the Tagai loan borrowed by Dattatraya, the father, was borrowed in his personal capacity for his personal use or as Karta of the joint family for the benefit of the joint family or joint family estate.
If the loan was borrowed by Dattatraya, the father, as Karta of the joint Hindu family for the benefit of the family, certainly it would be a joint family debt and all the joint family property would be liable for this debt.
Even if there is a subsequent partition before the debt is repaid, the creditor can proceed against the joint family property in the hands of any of the coparceners because the joint family property is liable for the joint family debts.
The Karta or the Manager of a joint Hindu family has implied authority to borrow money for family purposes and such debts are binding on other coparceners and the liability of the coparceners in such a case does not cease by subsequent partition (See Para 240, Mulla 's Hindu Law, 14th Edn., p. 298).
Where father is the Karta of a joint Hindu family and the debts are contracted by the father in his capacity as manager and head of the family for family purposes, the sons as members of the joint family are bound to pay the debts to the extent of their interest in the coparcenary property.
Further, where the sons are joint with their father and the debts have been contracted by the father for his own personal benefit, the sons are liable to pay the debts provided they were not incurred for illegal or immoral purposes.
This liability arises from an obligation of religion and piety which is placed upon the sons under the Mitakshara Law to discharge the father 's debts, where the debts are not tainted with immorality.
This liability of the sons to pay the father 's debts exists whether the father be alive or dead, (para 290, Mulla 's Hindu Law, 14th Edn., p. 354).
A further requirement is that for an effective partition of a Mitakshara joint Hindu family a provision for the joint family debts should be made.
In order to determine what property is available for partition, provision must first be made for joint family debts which are payable out of the joint family property, personal debts of the father not tainted with immorality, maintenance of dependent female members and of disqualified heirs, and for the marriage expenses of unmarried daughter.
This must be so because partition is of joint family property and if joint family debts are repaid before the partition only the residue would be available for partition.
Therefore, if partition is effected before paying 961 the debts, provision to pay the debts should be made so as to determine the residue available for partition.
Having cleared the ground in law, let us look at facts which have been found by the Courts on appreciation of evidence and which unless found to be utterly unconscionable this Court would not interfere with.
The trial Court found that the suit property was joint family property and the High Court has not departed therefrom.
In fact, in an earlier suit filed by these very plaintiffs being Special Suit No. 14 of 1958 it has been in terms stated that the lands described in para 1 of the plaint Ext.
37 which include the suit land, were originally owned by joint family of plaintiffs and Dattatraya.
Therefore, on plaintiffs ' own admission the suit land was joint family property of plaintiffs and Dattatraya.
The next important question is whether the Tagai loan was the personal debt of Dattatraya or was debt incurred by him as Karta of the joint family for the benefit of the joint family.
We would only look at uncontroverted salient features of the evidence.
Prescribed form of application, Ext.
128 with application Ext.
129 would show that the loan was borrowed for constructing wells for improvement in the potentiality of the lands bearing Survey Nos. 167 and 170.
It was submitted that these lands, for the improvement of which the loan was borrowed, were not joint family property.
There again, a reference may be made to the admission of the plaintiffs in plaint Ext.
37 which also includes lands bearing Survey Nos. 167 and 170 being described by the plaintiffs themselves as joint family property.
The High Court held that Dattatraya borrowed the loan for improvement of the land.
Therefore, Dattatraya, the father, borrowed loan in his capacity as the father for improvement of joint family lands and for this purpose offered as security three other pieces of land which were joint family property.
In the face of this unimpeachable evidence the statement in Ext.
128, the application for loan, that Dattatraya was the full owner of the lands therein mentioned would not convey the idea that it was his separate property.
It is not necessary that Karta acting in his capacity as Karta to describe himself as Karta to affirm his representative capacity.
Whether he has acted in his personal capacity or representative capacity can be gathered from all the surrounding circumstances and in this case they are eloquent, in that he mortgaged or gave as collateral security joint family property, to wit land, and it extends to whole of the interest of the family and is not confined to Karta 's share, and therefore, he must be deemed to have acted in the transaction on behalf of the family (see Mulla 's Hindu Law, 14th Edn., page 313, article 251).
It was, however, stated that agriculture 962 was not the avocation of the joint family and, therefore, the father as the Karta did not have the implied authority to borrow loan so to be binding on the joint family property.
One has merely to look at the content of the application for loan, Ext. 129 made by Dattatraya to the Mamlatdar, Taluka Vichitragad, for advancing loan to him, to dispel the contention.
The application recites that applicant Dattatraya, the father had undertaken extensive work to bring barren land under cultivation to raise sufficient crops as well as to improve the quality of Land and for improving the quality of agriculture he had undertaken, loans should be advanced to him.
Mr. Bal, however, pointed out that Dattatraya was carrying on some business which would be evident from Ext.
23, a copy of execution application No. 87/60 filed by Bhor State Bank Ltd., against one Pandurang Krishnaji Kamble and Dattatraya Govind Kulkarni in which the occupation of Dattatraya is shown as business; and Ext.
22 being a copy of Execution Application No. 92/57 in which his occupation is shown as general agent, and Ext.
120 a copy of the decree in Special Civil Suit No. 2/49 wherein the occupation of Dattatraya is shown as business and which further shows that Dattatraya had running account with one Raghunath Shridhar Phadke in which Dattatraya had withdrawn Rs. 56,800/ and had credited Rs. 41,000/ and after adding interest leaving a debit balance of Rs. 19,238 14 00.
It was urged that if all these aspects are taken into consideration, it would appear that agriculture was not the occupation of the joint family.
Now, as against this, one may also refer to Ext.
24 a copy of the BADR Execution Application No. 294/56 for executing an Award made under the Bombay Agricultural Debtors ' Relief Act against Dattatraya which would show that Dattatraya was an agriculturist by occupation and his debts were adjusted by the Courts set up under the Bombay Agriculture Debtors ' Relief Act and this could have only been done if his principal occupation was agriculture.
Therefore, mere description of Dattatraya 's avocation in Exts. 22, 23 and 120 is hardly determinative of the occupation of Dattatraya or his family.
It may be that over and above agriculture Dattatraya may have been carrying on some side business but if his application Ext.
129 shows that he had on his own showing 160 bighas of land most of which are admittedly shown to be joint family property, it cannot be denied that agriculture was one of the occupations of Dattatraya and he was carrying on that avocation as Karta of the joint family consisting of himself and his minor sons.
Now, if agriculture was one of the occupations of the joint family and if loan was borrowed for the purpose of improving the joint family lands, the loan would ipso facto be for legal necessity and it would be joint family debt for which all the joint family property would be liable.
963 If thus the loan for the recovery of which the suit property was brought to auction was joint family debt and if the suit property was joint family property, certainly it would be liable to be sold for recovery of joint family debt.
The question, however, is: does the subsequent partition make any difference in respect of the liability of the joint family property for the joint family debts ? That would necessitate examination of the circumstances in which the partition was brought about though we are not inclined to examine the question whether the partition was a sham or bogus transaction or was a motivated one with a view to defeating the creditors of the joint family.
The partition is evidenced by a registered deed, Ext.
79 dated 6th July 1956.
Partition is between father and his minor sons.
There is no dispute that on that date the debt of Tagai loan was outstanding as well as there were certain other debts.
In the partition deed Ext.
79 there is no express or implied provision for the repayment of joint family debts or even outstanding debts of Dattatraya, the father.
There was some suggestion that the property which was allotted to Dattatraya was sufficient for discharging the debts outstanding on the date of partition.
That at least is not borne out by the partition deed nor has Dattatraya gone into the witness box to say that such was the position.
Therefore, taking into consideration the recitals in the partition deed as well as the relevant evidence on record the position is clear that no provision was made at the time of partition for the joint family debts or alternatively outstanding debts incurred by the father.
It is not for a moment suggested that on this account the partition is bogus and sham, an argument which was put forward before the High Court and negatived.
The substance of the matter is that if at a partition amongst the members of the joint family no provision is made for joint family debts, then despite the partition and allotment of shares to different coparceners the joint family property in their hands which they acquired by partition would still be liable for the joint family debts.
The Judicial Committee in Sat Narain vs Das(1), pointed out that when the family estate is divided, it is necessary to take account of both the assets and the debts for which the undivided estate is liable.
After affirming this ratio, this Court in Pannalal & Anr.
vs Mst Naraini & Ors.(2) observed as under: ". the right thing to do was to make provision for discharge of such liability when there was partition of the 964 joint estate.
If there is no such provision, "the debts are to be paid severally by all the sons according to their shares of inheritance", as enjoined by Vishnu (Vishnu, Chap.
6, verse 36).
In our opinion, this is the proper view to take regarding the liability of the sons under Hindu law for the pre partition debts of the father.
The sons are liable to pay these debts even after partition unless there was an arrangement for payment of these debts at the time when the partition took place.
This is substantially the view taken by the Allahabad High Court in the Full Bench case referred to above and it seems to us to be perfectly in accord with the principles of equity and justice".
If thus the partition makes no provision for repayment of just debts payable out of the joint family property, the joint family property in the hands of coparceners acquired on partition as well as the pious obligation of the sons to pay the debts of the father will still remain.
This position of law was reaffirmed in Vriddhachalam Pillai vs Shaldean Syriam Bank Ltd. & Anr.(1).
The only effect of partition is that after the disruption of joint family status by partition the father has no right to deal with the property by sale or mortgage even to discharge an antecedent debt nor is the son under a legal obligation to discharge the post partition debts of the father.
Assuming we are not right in holding that the debt, was for the benefit of the estate of the joint family and, therefore, a joint family debt, and assuming that Mr. Bal is right in contending that it was the personal debt of the father, yet the doctrine of pious obligation of the son to pay the father 's debt would still permit the creditor to bring the whole joint family property to auction for recovery of such debts.
Where the sons are joint with their father and debts have been contracted by the father for his personal benefit, the sons are liable to pay the debts provided they were not incurred for an illegal or immoral purpose.
This liability to pay the debt has been described as pious obligation of the son to pay the father 's debt not tainted with illegality or immorality.
It was once believed that the liability of the son to pay the debts contracted by the father, though for his own benefit, arises from an obligation of religion and piety which is placed upon the sons under the Mitakshara law to discharge the father 's debts, where the debts are not tainted with immorality, yet in course of time this liability has passed into the realm of law.
965 In Anthonyswamy vs M. R. Chinnaswamy Koundan (dead) by l.r.s. & Ors.(1), following the decision in Muttayan vs Zamindar of Sivagiri(2), this Court held that this obligation of the son to pay the father 's debt not tained with illegality or immorality was not religious but a legal obligation and the rule would operate not only after the father 's death but even in the father 's life time and the pertinent observation is as under: "It is evident therefore that the doctrine of pious obligation is not merely a religious doctrine but has passed into the realm of law.
The doctrine is a necessary and logical corollary to the doctrine of the right of the son by birth to a share of the ancestral property and both these conceptions are correlated.
The liability imposed on the son to pay the debt of his father is not a gratuitous obligation thrust on him by Hindu law but is a salutary counter balance to the principle that the son from the moment of his birth acquires along with his father an interest in joint family property".
It is not the case of the plaintiffs that the debt contracted by the father for which the property was sold was tainted with illegality or immorality or that it was ayyravaharik in the sense opposed to good morals.
Therefore, even assuming that there was a partition, the debt being antecedent debt for which no provision was made in the partition and the debt having not been shown to be tainted with illegality or immorality, the sons were liable to pay this debt to the extent the joint family property came in their hands.
Viewed from either angle, the property sold was liable for the discharge of the debt of Dattatraya, the father, and even if it came in the hands of the sons on partition, the debt admittedly being a pre partition debt not shown to be tainted with illegality or immorality, could be recovered from the joint family property in the hands of the sons.
Mr. Bal, however, raised an interesting contention that if the joint family property which came in the hands of the sons on partition was to be sold for recovery of the debt of the father after partition a suit would have to be filed by the creditor and if the property in the hands of the son was to be made liable for discharge of the debt, the sons ought to be joined as parties to the suit because only in such an event the sons could set up the defence of the debt being tainted 966 with illegality or immorality.
Where a revenue sale takes place, it was said, the sons would have no opportunity to contest the character of the debt, and, therefore, any sale in such circumstances, of the property that has fallen to the shares of the sons at a partition, subsequent to the partition would be void as against the sons.
In support of the submission reliance was placed on an observation in Pannallal 's case (supra) that a decree against the father alone obtained after partition in respect of such debt cannot be executed against the property that is allotted to the sons and that a separate and independent suit must be filed against the sons before their shares can be reached.
After observing that a son is liable even after partition for the pre partition debts of his father which are not immoral or illegal, this Court proceeded to examine the question as to how this liability is to be enforced by the creditor, either during the life time of the father or after his death.
After taking note of a large number of decisions in which it was held that a decree against the father alone obtained after partition in respect of such debt cannot be executed against the property that is allocated to the sons on partition and a separate and independent suit must be instituted against the sons before their shares can be reached, it was held that the principle underlying these decisions is sound.
This Court approved the decision in Jagnarayan vs Somaji (1).
It may be noted that decree for the pre partition debt was made after partition when in the suit father after partition could not represent the sons.
This very question again came up before this Court in section M. Jakati & Anr.
vs section M. Borkar & Ors.(2) In that case the Deputy Registrar of Co operative Societies had made an order against Mr. Jakati for realisation of the amount and an item of property belonging to the joint family of Jakati was attached by the Collector and duly brought to sale under section 155 of the Bombay Land Revenue Code.
The sale was held on 2nd February, 1943 and confirmed on 23rd June, 1943.
In the meantime.
On January 15, 1943, one of the sons of Jakati instituted a suit for partition and separate possession of his share in the joint family property and contended inter alia that the sale in favour of the first respondent was not binding on the joint family.
If the order of the Deputy Registrar was to be treated as a decree, the sale under section 155 of the Bombay Land Revenue Act being execution of that decree, was after the institution of the suit for partition and therefore it was contended that a partition after the decree but before the auction sale limited the efficacy of the sale to the share of the father even though the sale was of a whole estate including the interest of the sons, because after the partition the 967 father no longer possessed the power to sell the shares of sons to discharge his debts.
Negativing this contention it was held as under: "But this contention ignores the doctrine of pious obligation of the sons.
The right of the pre partition creditor to seize the property of the erstwhile joint family in execution of his decree is not dependant upon the father 's power to alienate the share of his sons but on the principle of pious obligation on the part of the sons to discharge the debt of the father.
The pious obligation continues to exist even though the power of the father to alienate may come to an end as a result of partition.
The consequence is that as between the sons ' right to take a vested interest jointly with their father in their ancestral estate and the remedy of the father 's creditor to seize the whole of the estate for payment of his debt not contracted for immoral or illegal purpose, the latter will prevail and the sons are precluded from setting up their right and this will apply even to the divided property which, under the doctrine of pious obligation continues to be liable for the debts of the father.
Therefore where the joint ancestral property including the share of the sons has passed out of the family in execution of the decree on the father 's debt the remedy of the sons would be to prove in appropriate proceedings taken by them the illegal or immoral purpose of the debt and in the absence of any such proof the sale will be screened from the sons ' attack, because even after the partition their share remains liable".
The High Court while examining the ratio in Jakati 's (supra) case observed that even though Ganpatrao Vishwanathappa Barjibhe vs Bhimrao Sahibrao Patil(1), was referred to therein it was not specifically overruled and, therefore, the trial Court was right in relying upon it and incidentally itself relied on it.
In that case it was held that in order to make the share of sons liable after partition they should be brought on record.
This Court referring to Ganpatrao (1) observed that the decision should be confined to the facts of that case and further observed as under : "Therefore where after attachment and a proper notice of sale the whole estate including the sons ' share, which was attached, is sold and the purchaser buys it intending it to be the whole coparcenary estate, the presence of the sons eo nomine is not necessary because they still have the right 968 to challenge the sale on showing the immoral or illegal purpose of the debt.
In our opinion where the pious obligation exists and partition takes place after the decree and pending execution proceedings as in the present case, the sale of the whole estate in execution of the decree cannot be challenged except on proof by the sons of the immoral or illegal purpose of the debt and partition cannot relieve the sons of their pious obligation or their shares of their liability to be sold or be a means of reducing the efficacy of the attachment or impair the rights of the creditor.
" The binding ratio would be one laid down in Jakati 's (supra) case and it cannot be ignored by merely observing that a different approach in Ganpatrao (supra) case holds the field for the High Court as it was not overruled in Jakati 's case.
It is thus crystal clear that the pious obligation of the sons continues to be effective even after partition and if the creditor in execution of a decree obtained prior to partition seizes the property in execution without making sons parties to the suit and the property is sold at an auction and the purchaser is put in possession and the property thus passes out of the family in execution of the decree on the father 's debt, the remedy of the sons would be to challenge the character of the debt in an appropriate proceeding brought by them.
The sale cannot be voided on the only ground that the sale of the property took place after partition and the property sold was one which was allotted to the sons on partition once the property is liable to be sold for recovery of debt of the father incurred prior to partition and which is not tainted with illegality or immorality.
Partition in such a situation merely provides a different mode of enjoyment of property without affecting its liability for discharge of pre partition debts.
In the present case the sons have filed the suit and in this suit issue No. 6 framed by the learned trial judge was whether the Tagai loan of Rs. 12,000/ was incurred by Dattatraya as manager of the family, for legal necessity and the family has benefited by it, and this issue was answered in the affirmative, meaning the debt is not shown to be tainted with illegality or immorality.
No submission was made to us by Mr. Bal on behalf of the respondents that the debt was tainted with illegality or immorality.
In such a situation unless in this suit the sons challenged the character of the debt and established to the satisfaction of the Court that the debt was tainted with illegality or immorality, they cannot obtain any relief against the purchaser who purchased the property at an auction held by the Civil Court or by the revenue authorities for recovering the debt of the father which the sons 969 were under a pious obligation to pay.
Therefore, even if the plaintiffs were not parties to the proceedings held by revenue authorities for sale of the land involved in this dispute, once the sale took place and it was confirmed and purchaser was put in possession, the sons can successfully challenge the sale by establishing the character of the debt thereby showing that they were not bound to pay it and, therefore, their share in the property cannot be sold to discharge the debt.
They cannot succeed merely by showing, as is sought to be done in this case, that as the sale took place subsequent to partition and as they were not parties to the proceedings the sale is not binding on them.
This clearly merges by reading Pannalal and Jakati cases (supra) together.
The loan sought to be recovered was a Tagai loan advanced under the Loans Act.
The amount can be recovered as arrears of land revenue.
Chapter XI of the Bombay Land Revenue Code provides procedure for realisation of land revenue, recovery to be made as if they are arrears of land revenue and other revenue demands.
Section 150 provides that an arrear of land revenue may be recovered inter alia by sale of the defaulter 's immovable property under section 155.
Section 155 provides that the Collector may cause the right, title or interest of the defaulter in any immovable property other than the land on which the arrear is due to be sold.
The sale is subject to sanction and confirmation.
The first contention is that the Collector is authorised to cause the right, title or interest of the defaulter in any immovable property which is sought to be sold in a revenue auction and in this case as the sale was after the partition the defaulter Dattatraya had no interest in the property brought to auction and, therefore, no title passed to the auction purchaser.
This submission overlooks again the pious duty of the sons to pay the father 's debt as also the right of the creditor to recover debts from the joint family property in the hands of the coparceners.
In Jakati 's case (supra) this was the exact contention and after comparing the parallel provision in the Code of Civil Procedure, viz., "the right, title or interest of the judgment debtor", this Court held that it is a question of fact in each case as to what was sold in execution of the decree.
This Court affirmed the ratio in Rai Babu Mahabir Prasad vs Rai Markunda Nath Sahai(1), that it is a question of fact in each case as to what was sold, viz., whether the right, title or interest of the debtor or defaulter was sold or the whole of the property was put up for sale and was sold and purchased.
It 970 was concluded that where the right, title and interest of the judgment debtor are set up for sale as to what passed to the auction purchaser is a question of fact in each case dependent upon what was the estate put up for sale, what the Court intended to sell and what the purchaser intended to buy and did buy and what he paid for.
There is not the slightest doubt that the whole of the property was sold in the instant case and that was intended to be sold and the purchaser purchased the whole of the property and the certificate was issued in respect of sale of the property and, therefore, it is futile to say that only the right, title and interest of Dattatraya was sold and that as he had no interest in the property sold on the date of auction sale, nothing passed to the purchaser.
Assuming, for a moment that if the sale takes place after the partition, to such a proceeding the sons should be a party before the liability arising out of the doctrine of pious obligation to pay the father 's debt is enforced against the joint family property in the hands of the sons, evidence reveals that the sons were fully aware of the intended sale and not only they knew of the intended sale but possession was taken from them by the purchaser after notice to them.
Proceedings for the recovery of the amount of Tagai loan of Rs. 12,000/ were commenced much prior to 25th April, 1955 because the first proclamation of sale in respect of four pieces of land was issued on 25th April, 1955.
79 would show that no bid was received whereupon the Kamgar Patil offered a nominal bid of Re. 1/ for four pieces of land.
It may here be mentioned that this sale was challenged by none other than Dattatraya and it was quashed and he had taken back the land included in the proclamation Ext.
Thus the recovery of the loan started prior to partition which took place on 6th July, 1956.
Where a loan is taken under the Loans Act and it is being recovered as arrears of land revenue, the order of the revenue authority to recover the amount would tantamount to a decree and when a proclamation of sale is issued it amounts to execution of the decree, to borrow the phraseology of the Code of Civil Procedure.
It is thus clear that execution started prior to the partition.
Undoubtedly the proclamation for sale of suit land was issued on 22nd January, 1957 as per Ext.
80 and that was subsequent to the partition but when different properties are brought to auction by different sale proclamations it is nonetheless an execution proceeding.
The sale proclamation was issued under the provisions of the land revenue code.
Amongst others the proclamation of sale is to be fixed on the property which is to be auctioned.
After the sale was confirmed, the purchaser was required to be put in possession.
The plaintiff claimed to be in possession and yet the revenue officer on 20th May, 1960 as per Ext.
82 handed over possession of 971 the land involved in the dispute to the purchaser.
It would be advantageous to point out here that the plaintiffs served notice dated 2nd February, 1957 which would mean that the notice was served prior to the date of the auction.
The plaintiffs therein referred to the proclamation of sale for the land involved in dispute and they also referred to the proclamation of sale for the land involved in dispute and they also referred to the attachment of the land.
They also referred to the date of intended auction sale and they called upon the Collector not to proceed with the sale.
The plaintiffs thereafter filed their first suit being Special Suit No. 14/58, certified copy of the plaint of which is Ext.
37, which would show that it was filed on 6th April, 1957.
In this plaint they sought a declaration that the sale held on 26th May, 1955 and 6th April, 1957 be declared illegal.
It was alleged in the plaint that Dattatraya was a drunkard and was in bad company and had borrowed the Tagai loan for his own vices and in collaboration with the concerned officers of the revenue department and the loan could never be said to be a Tagai loan.
Amongst others, the State of Bombay was impleaded as party defendant.
Subsequently this suit was withdrawn and the present suit was filed deleting State of Bombay as party.
From this narration of facts it clearly emerges that the plaintiffs had the knowledge of the proclamation of sale and yet no attempt was made by them either to appear before the Collector who had issued the proclamation or as was now sought to be urged, offered to repay the loan.
If after this specific knowledge that proceeding for recovery of Tagai loan had commenced and during its pendency the partition was brought about and yet on the subsequent sale the revenue authority sold the whole of the property and the purchaser intended to buy the whole of the property, the only way the sons can challenge this sale is by establishing the character of the debt as being tainted with illegality or immorality and the purchaser would be entitled to defend his purchase and possession on all the contentions which would negative the plaintiffs ' case including the one about the pious obligation of the sons to pay the father 's debt.
Therefore, there is no force in the contention that as the plaintiffs were not parties to the recovery proceedings the sale is not binding on them.
That brings us to the last contention which has found favour with the High Court.
The contention is that a loan borrowed under the provisions of the Loans Act could always be in the individual and personal capacity of the borrower and the Loans Act being applicable to all the communities in this country, it does not admit of a person borrowing loan in his representative capacity as Karta of the joint family and, thereby making joint family property liable for the discharge 972 of the debt.
Section 5 prescribes the mode of dealing with the applications for loans and section 6 provides for the period for repayment of loans.
Then comes section 7 which is material.
It provides for the mode of recovery of the loans borrowed under the Act.
Section 7 reads as under: "7.
(1) Subject to such rules as may be made under section 10, all loans granted under this Act, all interest (if any) chargeable thereon, and costs (if any) incurred in making the same, shall, when they become due, be recoverable by the Collector in all or any of the following modes, namely: (a) from the borrower as if they were arrears of land revenue due by him; (b) from his surety (if any) as if they were arrears of land revenue due by him; (c) out of the land for the benefit of which the loan has been granted as if they were arrears of land revenue due in respect of that land; (d) out of the property comprised in the collateral security (if any) according to the procedure for the realisation of land revenue by the sale of immovable property other than the land on which that revenue is due: Provided that no proceeding in respect of any land under clause (c) shall affect any interest in that land which existed before the date of the order granting the loan, other than the interest of the borrower, and of mortgages of, or persons having charges on, that interest, and where the loan is granted under section 4 with the consent of another person, the interest of that person, and of mortgagees of, or persons having charges on, that interest.
(2) When any sum due on account of any such loan, interest or costs is paid to the Collector by a surety or an owner of property comprised in any collateral security, or is recovered under sub section (1) by the Collector from a surety or out of any such property, the Collector shall, on the application of the surety or the owner of that property (as the case may be), recover that sum on his behalf from the borrower, or out of the land for the benefit of which the loan has been granted, in manner provided by sub section (1).
(3) It shall be in the discretion of a Collector acting under this section to determine the order in which he will resort to the various modes of recovery permitted by it.
" 973 The loan can be recovered from the borrower as if it were an arrear of land revenue due by him or from his surety by the same procedure or out of the land for the benefit of which the loan has been granted by following the same procedure or out of the property comprising as collateral security, if any, according to the procedure for realisation of land revenue by sale of immovable property or by the sale of immovable property other than the land on which the land revenue is due.
Now the word 'borrower ' is not defined.
Could it be said that a borrower for the purpose of section 7 can be an individual and no other person ? The High Court observed that the Act is applicable to all communities in India and not merely to Hindus and there are many communities which do not have the system of joint family and if the legislature intended to include in the word 'borrower ' manager of a family, it should have said so in express terms.
There is nothing in the language of section 7 which would show that the borrower must always and of necessity be an individual.
Even if the Act applies to other communities which do not have the system of joint family, that by itself would not exclude the manager of a joint Hindu family from becoming a borrower under section 7.
If the construction as suggested by the High Court is accepted it would put joint Hindu family at a disadvantage in borrowing loans under the Loans Act because the Karta of a joint Hindu family, if he has no separate property of his own, and if he cannot borrow the loan in his representative capacity, has no security to offer, nor could he take advantage of the beneficial provision of the Act for improving the land belonging to the joint Hindu family.
We see no justification for restricting the word 'borrower ' to be an individual alone.
In fact the Act itself contemplates joint borrowers.
Section 9 provides for joint and several liability of joint borrowers.
A Karta of a joint Hindu family therefore can be a borrower in his representative capacity.
If the Karta of a joint Hindu family is considered eligible for becoming a borrower would it run counter to the position of other communities in which there is no concept of a joint family and joint family properties ? In the absence of any such concept a borrower other than a Hindu can offer all the property at his disposal even if he has not sons, as security for the loan to be borrowed because in other communities governed by their personal laws the son does not acquire interest in the ancestral properties in the hand of the father from the time of his birth.
But in Hindu law there are two seemingly contrary but really complimentary principles, one the principle of independent coparcenary rights in the sons which is an incident of birth, giving to the sons vested right in the coparcenary property, and the other the pious duty of the sons to discharge their father 's debts not tainted with immorality or illegality, 974 which lays open the whole estate to be seized for the payment of such debts (see Jakati 's case) (Supra).
Now, if the sons of a Hindu father take interest in the ancestral property in the hands of the father by the incident of birth, they also incur the corresponding obligation of discharging the debts incurred by the father either for his own benefit or for the benefit of the joint family from the property in which the sons take interest by birth.
Such a concept being absent in communities not governed by Hindu law in this behalf, the father would be free to encumber the property and the sons in such communities would neither get interest by birth nor the liability to pay the father 's debt and would not be able to challenge the sale or property for discharge of the debt incurred by the father.
Therefore, the expression 'borrower ' in section 7 need not be given a restricted meaning merely because the Act applies to all communities.
Hence a father who is the Karta of the joint family consisting of himself and his sons can become a borrower in his capacity as Karta and if the loan is for legal necessity or for the benefit of the joint family estate he would render the joint family property liable for such debt and if it is for his personal benefit the joint family property even in the hands of the sons would be liable if the debt is not tainted with illegality or immorality.
The High Court said that such liability which arises from the obligation of religion and piety cannot be extended to the loans borrowed under the Loans Act because there is no such obligation in other communities to which the Act applies.
In reaching this conclusion the High Court overlooked the principle that this doctrine of pious obligation is not merely a religious duty but has passed into the realm of law (see Anthonyswamy), (supra).
On the facts of that case this principle was applied to parties belonging to Tamil Vannian Christians.
Viewed from this angle, the High Court was in error in holding that Dharmashastras of Hindus never contemplated improvement loans being given by the Governments of the day which were usually monarchies and, therefore, a debt of the kind which is contemplated under the Loans Act could never have been under the contemplation of the writers like Brihaspati and Narada in whose texts the pious liability is imposed on the sons and others.
It is not possible to subscribe to this view for the reasons hereinbefore mentioned.
The decisions in Sankaran Nambudripad vs Ramaswami Ayyar,(1) and Chinnasami Mudaliar vs Tirumalai Pillai,(2) do not touch the question herein raised and are of no assistance in the matter.
It, therefore, clearly transpires that Dattatraya had borrowed a loan from the Government under the Loans Act for the benefit of 975 joint family property.
It was being recovered as arrears of land revenue.
The property which is the subject matter of dispute in this proceeding was joint family property.
It was sold at a revenue auction and the whole of the property was sold and the whole of it was purchased by the purchaser.
The debt of Tagai loan for which the property was sold is not shown to be tainted with illegality or immorality or avyavaharik.
Therefore, the suit property was liable to be sold at court auction for two reasons, one that the debt was joint family debt for the benefit of the joint family estate and, therefore, all segments of the joint family property were liable for the discharge of the debt, and secondly, under the doctrine of pious obligation of the sons to pay the father 's debt.
In the present proceedings no attempt was made to establish that the debt was tainted with illegality or immorality.
Therefore, the sale is valid and the purchaser acquired a full and complete title to the property.
The sale is not void.
Part of the property is acquired and the compensation is taken by the plaintiffs subject to the orders of the Court.
Accordingly, both these appeals are allowed and the plaintiffs ' suit is dismissed but in the facts and circumstances of this case, with no order as to costs throughout.
N.V.K. Appeals allowed.
| IN-Abs | The respondents ' father took a Tagai loan from the Government for the purpose of digging wells in his land by offering his land as security for the loan.
When he failed to repay the loan, the suit land was auctioned under the revenue recovery proceeding and it was purchased by the appellants.
In a suit for recovery of possession, the respondents alleged that their father had no saleable interest in the land because, prior to the date of auction.
in the partition between themselves and their father, the suit land came to their share and therefore the land which belonged to them could not have been sold in an auction for recovering a personal debt of their father.
The trial court declared the sale as void.
The High Court affirmed the trial Court 's order.
In appeal to this Court the respondents contended that the debt was not a joint family debt; neither was the father acting as Karta of the joint family nor was the loan for the benefit of the joint family and therefore the joint family property could not be made liable for such loan.
Allowing the appeals the Court, ^ HELD: 1 (a) The suit land was joint family property of the respondents and their father.
[961C] (b) If the loan, for the recovery of which the suit property was brought to auction, was joint family debt and if the suit property was joint family property it would be liable to be sold for recovery of joint family debt.
[963A] (c) Whether the Karta acted in his personal capacity or representative capacity has to be gathered from all the surrounding circumstances.
The father borrowed the loan in his capacity as Karta of the joint family for improvement of the joint family lands and for this purpose he offered as security the land which was joint family property.
It is not necessary that the Karta acting in his capacity as Karta should describe himself as Karta to affirm his representative capacity.
Therefore he must be deemed to have acted in the transaction on behalf of the family.
[961G H] 956 (d) Agriculture was one of the occupations which the father was carrying on as Karta of the joint family.
If agriculture was one of the occupations of the joint family and if the loan was borrowed for the purpose of improving the joint family lands, the loan would ipso facto be for legal necessity and it would be joint family debt.
[962H] (e) Where the sons are joint with their father and debts have been contracted by the father for his personal benefit the sons are liable to pay the debts provided they were not incurred for illegal or immoral purpose.
This liability to pay the debt had been described as pious obligation of the son to pay the father 's debt if it is not tainted with illegality or immorality.
[960F] Muttayan vs Jamindar of Sivagiri, [1883] 9 I.A. 128 Anthonyswmy vs M. R. Chinnaswamy Koundan (dead) by L. Rs. Ors.
; ; referred to.
(f) If at a partition amongst the members of the joint family no provision was made for joint family debts, then despite the partition and allotment of shares to different coparceners, the joint family property acquired by partition would still be liable for the joint family debts.
[964D] Sat Narain vs Das, [1936] 63 I.A. 384; Pannalal & Anr.
vs Mst.
Naraini & Ors.
; at 558; Vriddhachalam Pillai vs Shaldean Syrian Bank Ltd. & Anr. ; ; referred to (g) In the instant case the property sold was liable for the discharge of the father 's debt.
The debt being a pre partition debt which was not shown to be tainted with illegality or immorality, could be recovered from the joint family property in the hands of the sons.
[965F] (h) The pious obligation of the sons continues to be effective even after partition.
If the creditor, in execution of a decree, obtained prior to partition, seizes the property in execution without making the sons parties to the suit and the property was sold at an auction and the purchaser was put in possession, the remedy of the sons would be to challenge the character of the debt in an appropriate proceeding.
The sale cannot be voided on the only ground that it took place after partition and the property sold was one which was allotted to the sons on partition.
Partition in such a situation merely provides a different mode of enjoyment of property without affecting the joint family 's liability for discharge of pre partition debts.
[968D F] section M. Jakati & Sons & Anr.
vs section M. Barkar & Ors., referred to.
(i) In the instant case the debt was not shown to be tainted with illegality or immorality.
Therefore, even if the respondents were not parties to the proceeding held by the Revenue Authorities, once the sale was confirmed and the purchaser was put in possession, the sons can challenge the sale only by establishing the character of the debt.
[968G, 969A] (2) The loan sought to be recovered being Tagai loan advanced under the Loans Act, it can be recovered as arrears of land revenue.
The Bombay land Revenue Code, provides procedure for realisation of land revenue, recovery of which could be made as if it was arrears of land revenue and other revenue demands.
[969C] 957 (3) When a loan was taken under the Loans Act and was being recovered as arrears of land revenue, the order of the Revenue Authority would tantamount to a decree and when a proclamation of sale was issued it amounted to execution of the decree.
[970F] 4 (a) The High Court was wrong in holding that since the Act was applicable to all communities in India and not merely to the Hindus, if it legislature intended to include manager of a family in the word 'borrower ', it should have said so in express terms.
There is nothing in the language of section 7 of the Loans Act to show that the borrower must always and of necessity be an individual.
If the construction suggested by the High Court is accepted it would put the joint Hindu family at disadvantage in borrowing loans under the Loans Act because the Karta of a joint Hindu family, if he has no separate property of his own, and if he cannot borrow the loan in his representative capacity, has no security to offer.
Nor would he be able to take advantage of the beneficial provision of the Act for improving the land belonging to the joint Hindu family.
[973C E] (b) Moreover there is no justification for restricting the word 'borrower ' to be an individual alone.
The Act itself contemplates joint borrowers.
A Karta of a joint Hindu family can be a borrower in his representative capacity.
[973F] Sankaran Nambudripad vs Ramaswami Ayyar, Madras 691; Chinnaswami Mudaliar vs Trimalai Pillai, Madras 572, inapplicable.
|
iminal Appeals Nos. 53 and 54 of 1956.
Appeals by special leave from the judgment and order dated May 31, 1955, of the Patna High Court in Criminal Revision No. 102 of 1955, arising out of the judgment and order dated January 10, 1955, of the Court of the Sessions Judge of Manbhum Singhbhum of Purulia in Criminal Re vision No. 43 of 1954.
Mahabir Prasad, Advocate General of Bihar, Tarakesh.
war Nath and section P. Verma, for the appellant in Appeal No, 53 and for respondent No, 3 in Appeal No. 54, 281 H. J. Umrigar and A. G. Ratnaparkhi, for the appellant in Appeal No. 54.
Jai Gopal Sethi and Govind Saran Singh, for the respondents in Appeal No. 53 and for respondents ' Nos. 1 and 2 in Appeal No. 54.
January 31.
The Judgment of the Court was delivered by JAGANNADHADAS J.
These appeals arise out of an order of discharge passed by the Subordinate Judge Magistrate of Dhanbad under section 494 of the Code of Criminal Procedure on his consenting to the withdrawal of the Public Prosecutor from a prosecution pending before him in so far as it was against the appellant.
Mahesh Desai, one of the accused therein.
The prosecution was launched on the first information of one Ram Naresh Pandey as against 28 persons about the commission of the murder of one Nand Kumar Chaubey, a peon of a colliery in Bagdigi, committed in the course of a serious riot on February 20, 1954.
This was said to have resulted from differences between two rival labour unions in connection with a strike.
The prosecution as against most of the other persons is under various sections of the Indian Penal Code including section 302, on the ground of their actual participation in the commission of the murder.
But as against the appellant, Mahesh Desai, it is only under section 302 /109 of the Indian Penal Code, the part ascribed to him in the first information report being that he abetted the murder by reason of certain speeches and exhortations at meetings or group talks the day previous to the murder.
The application for withdrawal as against the appellant was made on December 6, 1954, when the matter was pending before the Magistrate in the committal stage and before any evidence was actually taken.
It was made by the Public Prosecutor on the ground that" on the evidence available it would not be just and expedient to proceed with the prosecution of Sri Mahesh Desai and that therefore it was necessary to withdraw the case against Sri Mahesh Desai only ".
It was elicited in the course of the arguments before the learned Magistrate.
that the position of the Public 36 282 Prosecutor was, that the evidence regarding the complicity of this accused was meagre and that there WAS only, a single item of evidence of a dubious nature against him.
which was not likely to establish a prima facie case.
The learned Magistrate dealt with the ,matter in a fairly reasoned order and was of the opinion that there was no reason to withhold the consent that was applied for.
He accordingly discharged the accused.
That order was upheld by 'the learned Sessions Judge on, revision petition against it filed jointly by the first informant in the case and by the, widow of the murdered person.
These private parties pursued the matter further and applied to the High Court ' in revision.
The learned Chief Justice who dealt with it was of the opinion that the consent should not have been granted.
Accordingly, he set it aside.
The learned Chief Justice recognised that normally in a matter of this kind the High Court should not interfere.
But he felt called upon to set aside the order on the ground that ,there ' wag ' no judicial exercise of discretion in the present case.
" He, therefore, directed that the Magistrate should record the evidence and then consider whether it establishes a prima facie case against the appellant, Mahesh Desai.
The Advocate General of the State has come up before this Court against the order of the learned Chief Justice.
Leave was granted because it was urged that the view taken by the learned Chief Justice was based on an erroneous appreciation of the legally permissible approach in a matter of this kind and that the decision of the learned Chief Justice was likely to have repercussions in the State beyond what was involved in the particular case.
The aggrieved party, Mahesh Desai, also has come up by special leave and both these appeals are disposed of by this judgment.
The,question of law involved may be gathered from the following extracts from the learned Chief Justice 's judgment. " 'This is not a case where there is no evidence; on the contrary, this is a case where there is evidence which require 's judicial consideration. .
The procedure which the learned Special Magistrate followed was 283 tantamount to considering the sufficiency or otherwise of evidence before the evidence has been heard. .
The function of the Court would be surrendered to the Public Prosecutor.
not think that section 494 of the Code of Criminal Procedure justifies, such a procedure.
The legal question that arises from the above is whether where an application for withdrawal under section 494 of the Code of Criminal Procedure is made 'on the ground of insufficiency or meagreness of reliable evidence that is available, it is an improper exercise of discretion for the Court to grant consent 'before evidence is taken, if it was reasonably satisfied, otherwise, that the evidence, if actually taken, is, not likely to result in conviction.
Section 494 of the Code of Criminal Procedure runs as follows: " Any Public Prosecutor may, with the consent of the Court, in cases tried by jury.
before the returns of the verdict, and in other cases; before the judgment is pronounced, withdraw from the prosecutions of any person either generally or in respect of any one or more of the offences for which he is tried; and upon such withdrawal, (a)if it is made before a charge has been framed, the accused shall be discharged in respect of such offence or offences; (b)if it is made after a charge has been framed, or when under this Code no charge is required, he shall be acquitted in respect of such offence or offences".
The section is an enabling one and vests in the Public Prosecutor the discretion to apply to the Court for its consent to withdraw from the prosecution of any person.
The consent, ' if granted; has to be, followed up by his discharge or acquittal, as the case may be.
The section gives no indication as to the, grounds on which the Public Prosecutor may make the ' application, or the considerations on, which the Court is to grant its consent.
There can be no doubt, how ever, that the resultant order, on the granting of the consent, being an order of I discharge ' or 'acuittal ', would attract the applicability of correction by; the 284 High Court under es. 435, 436 and 439 or 417 of the Code of Criminal Procedure.
The function of the Court, therefore, in granting its consent may well be ,taken to be a judicial function.
It follows that in granting the consent the Court must exercise a judicial discretion.
But it does not follow that the discretion is to be exercised only with reference to material gathered by the judicial method.
Otherwise the apparently wide language of section 494 would become considerably narrowed down in its application.
In understanding and applying the section, two main features thereof have to be kept in mind, The initiative is that of the Public Prosecutor and what the Court has to do is only to give its consent and not to determine any matter judicially.
As ;the Privy Council has pointed out in Bawa Faqir Singh vs The King Emperor(1) " It (section 494 of the Code of Criminal Procedure) gives a general executive discretion (to the Public Prosecutor) to withdraw from the prosecution subject to the consent of the Court,, which may be determined on many possible grounds.
" The judicial function, therefore, implicit in the exercise of the judicial discretion for granting the consent would normally mean that the Court has to satisfy itself that the executive function of the Public Prosecutor has not been improperly exercised, or that it is not an attempt to interfere with the normal course of justice for illegitimate reasons or purposes.
In this context it is right to remember that the Public Prosecutor (though an executive officer as stated by the Privy Council in Bawa Faqir Singh vs The King Emperor(1)) is, in a larger sense, also an officer of the Court and that he is bound to assist the Court with his fairly considered view and the Court is entitled to have the benefit of the fair exercise of his function.
It has also to be appreciated that in this country, the scheme of the administration of criminal justice is that the primary responsibility of prosecuting serious offences (which are classified as cognizable offences) is on the executive authorities.
Once information of the commission of any such offence reaches the constituted (1) (1938) L. R. 65 I. A. 388, 395.
285 authorities, the investigation, including collection of the requisite evidence, and the prosecution for the offence with reference to such evidence, are the functions of the executive.
But the Magistrate also has his allotted functions in the course of these stages.
For instance, in the course of investigation, a person arrested must be brought before him within 24 hours (section 61 of the Code of Criminal Procedure).
Continuance of the arrested person in detention for purposes of investigation from time to time has to be authorised by him (section 167).
A search can be conducted on the issue of warrant by him (section 96).
Statements of witnesses and confessions may be recorded by him (section 164).
In an appropriate case he can order investigation or; further investigation (sections 155(2) and 202).
In all these matters he exercises discretionary functions in respect of which the initiative is that of the executive but the responsibility is his.
His discretion in such matters has necessarily to be exercised with reference to such material as is by then available and is not a prima facie judicial determination of any specific issue,.
The Magistrate 's functions in these matters are not only supplementary,.
at a higher level, to those of the executive but are intended to prevent abuse.
Section 494 requiring the consent of the Court for withdrawal by the Public Prosecutor is more in line with this scheme, than with the provisions of the Code relating to inquiries and trials by Court.
It cannot be taken to place on the Court the responsibility for a prima facie determination of a triable issue.
For instance the discharge that results therefrom need not always conform to the standard of " no prima facie case " under sections 209(1) and 253(1) or of " groundlessness " under sections 209(2) and 253(2).
This is not to say that a consent is to be lightly given on the application of the Public, Prosecutor, without a careful and proper scrutiny of the grounds on which the application for consent is made.
A large number of cases from the various High Courts have been cited before us.
We have carefully gone through them.
All of them recognise that the 286 function of the Magistrate in giving consent is a judcial one open to correction.
But in some of them there is no sufficient appreciation of the respective positions of the Public prosecutor and the Court, in the discharge, of their functions under section 494 as we conceive.
them to be.
There is, however, a general concurrence at least in the, later cases that the.
application for consent may legitimately be made by the Public Prosecutor for reasons not confined to the judicial prospects of the prosecution.
[See The King vs Moule Bux(1) and.
The King vs Parmanand(2).] If so, it is clear that, what the Court has to determine, for the exercise of its discretion in granting or withholding consent, is not a triable issue on judicial evidence.
Learned counsel for the respondents has strenuously urged before us that while this may be so where the consent is applied for on other grounds, or for other reasons, the position would not be the same, where the application for consent is made on the ground of No. evidence or no adequate or reliable evidence.
It is urged that in such a case, the Court can exercise its, judicial function, only with, reference to judicially recorded evidence as in one or other of the appropriate situations contemplated by the Code for ' judicial inquiry or trial.
If this argument means anything it must mean that in such a situation the Court before granting consent must hold a kind of preliminary inquiry into the relevant evidence in much the same way as, for instance '.
when a Magistrate acting under section 202 of the Code of Criminal Procedure may direct or it must mean that no consent can at all be given on such a ground and that the Court must proceed with the prosecution, and either discharge or acquit under one or other of the other sections in the Code enabling hereunto.
It appears to us that this would be engrafting, on the, wide terms of section 494 an exception or & proviso limited to such a case.
In our opinion, this would not be a permissible construction of the section.
We are, therefore, unable, with great respect, to subscribe to the view taken by the learned Chief (1) A.I.R. 1949 Pat '233 (F.B.).
(2) A.I.R. 1949 Pat.
222, 226 (F.B.).
287 Justice whose judgment is under appeal, that where the application is on the ground of inadequacy of evidence requiring judicial consideration, it would be manifestly improper for the Court to consent to withdrawal before ' recording the evidence and taking 'it into consideration.
We are not to be understood, however, as implying that such evidence as may already have been recorded by the, time the application is made is not to be looked into and considered in such cases, in order to determine the impropriety of the withdrawal as amounting to abuse or an improper interference with the normal course of justice.
Learned counsel for the respondents has raised a fresh point before us for maintaining the order of the High Court setting aside the discharge of the appellant by the Magistrate.
The point being purely one of law, we have allowed it to be argued.
His contention is that in a case triable by a Court of Session, an application by the Public Prosecutor for withdrawal with the consent of the Court does not lie in the committal stage. ' He lays emphasis on the wording of section 494 which says that " in cases tried by jury, any Public, Prosecutor may, with the consent of the Court, withdraw from the prosecution of any person before the return of the verdict.
" This, according to him, clearly implies that such withdrawal cannot be made until the case reaches the trial stage in the Sessions Court.
He also relies on the further phrase in the section " either generally or in respect of any one or more of the offenses for which he is tried.
" The use ' of the word 'tried ' in this phrase.
confirms, according to him, the contention that it is only when the case reaches the stage of trial that section 494 can be availed of.
He draws our attention to a passage in Archbold 's Criminal Pleading, Evidence and Practice (32nd Ed.),pp.
108, 109, section 12, that "a nolle prosequi to stay proceedings upon an indictment or information pending in any Court may be entered, by leave of the Attorney General, at the instance of either the prosecutor or the defendant at any time after the bill of indictment is signed, and before judgment.
" He urges that it is this principle that has been recognised in the first portion 288 of section 494 of the Code of Criminal Procedure.
It appears to us that the analogy of the English practice would be misleading as an aid to the construction of section 494.
The scheme of our Criminal Procedure Code is substantially different.
The provision corresponding to the power of the Attorney General to enter nolle prosequi is section 333 of the Code of Criminal Procedure which refers to jury trials in High Court.
The procedure under section 494 does not correspond to it.
The phrase " in other cases before the judgment is pronounced " in section 494 would, in the context, clearly apply to all cases other than those tried by jury.
Now, there can be no doubt that at least as regards these other cases, when the consent for withdrawal is given by the Court, the result is either a discharge or an acquittal, according to the stage to which that case has reached, having regard to the two alternatives (a) and (b) of section 494 of the Code of Criminal Procedure.
It follows that at least in every class of cases other than those tried by jury, the withdrawal can be at any stage of the entire proceedings.
This would include also the stage of preliminary inquiry in a Sessions case triable without a jury.
But if the argument of the learned counsel for the respondents is accepted, that power cannot be exerciser at the preliminary inquiry stage, only as regards cases which must lead to a jury trial.
We can find no conceivable reason for any such discrimination having been intended and prescribed by the Code.
We are unable to construe section 494 as involving any such limitation.
The wording is perfectly wide and general and would apply to all classes of cases which are capable of terminating either in a discharge or in an acquittal, according to the stage at which the section is invoked.
The whole argument of the learned counsel is based upon the use of the word ,tried ' and he ehaphasises the 'well known distinction between 'inquiry ' and 'trial ' in the scheme of the Code.
Our attention has also been drawn to the definition of the word 'inquiry ' in section 4 (k) of the Code which runs as follows: " 'Inquiry includes every inquiry other than a trial conducted under this Code by a Magistrate or Court.
" 289 There is hardly anything in this definition which throws light on the question whether the word 'trial ', is used in the relevant section in a limited sense as excluding an inquiry.
The word 'trial ' is not defined in the Code. 'Trial ' according to Stroud 's Judicial Dictionary means "the conclusion, by a competent tribunal, of questions in issue in legal proceedings, whether civil or criminal"(1) and according to Wharton 's Law Lexicon means "the hearing of a cause, civil or criminal, before a judge who has jurisdiction over it, according to the laws of the land"(2).
The words 'tried ' and 'trial ' appear to have no fixed or universal meaning.
No doubt, in quite a number of sections in ' the Code to which our attention has been drawn the words 'tried ' and trial ' have been used in the sense of reference to a stage after the inquiry.
That meaning attaches to the words in those sections having regard to the context in which they are used. ' There is no reason why where these words are used in another context in the Code, they should necessarily be limited in their connotation and significance.
They are words which must be considered with regard to the particular context in which they are used and with regard to the, scheme and purpose of the provision under consideration.
An argument has also been advanced by the learned Counsel for the respondents before us by referring to the word "judgment" in the phrase "in other cases before the judgment is pronounced" in section 494 as indicating that the phrase "in other oases" can refer only to proceedings which end in a regular judgment and not in any interim order like commitment.
Here again the difficulty in the way of the contention of the learned Counsel being accepted, is that the word "judgment" is not defined.
It is a word of general import and means only "judicial determination or decision of a Court".
(See Wharton 's Law Lexicon, 14th Ed., p. 545).
There is no reason to think in the context of this section that it is not applicable to an order of committal which terminates the proceeding so far as the inquiring Court (1) Stroud 's judicial Dictionary, 3rd Ed., VOl.
(2) Wharton 's Law Lexicon, 14th Ed., p. 101.
37 290 is concerned.
It may be, that in the context of Chapter XXVI of the Code judgment may have a limited meaning.
In any view, even if 'judgment, in this context is to be understood in a limited sense, it does not follow that an application during preliminary inquiry which is necessarily prior to judgment in the trial is excluded.
The history of section 494 of the present Code of Criminal Procedure (Act V of 1898) confirms the above view.
The provision for withdrawal by the Public Prosecutor with the consent of the Court appears, for the first time, in the Code of Criminal Procedure,; 1872 (Act X of 1872) as section 61 thereof and runs as follows: The public prosecutor may, with the consent of the Court withdraw any charge against any person in any case of which he is 'Charge; and upon such withdrawal, if it, is made whilst the case is under inquiry, the accused person shall be discharged.
If it is made when he is under trial, the accused person shall be acquitted.
" In the next Code of 1882 (Act X of 1882) this appears as section 494 thereof and runs as follows: "Any Public Prosecutor appointed by the Covernor General in Council or the Local Government may, with the consent of the Courts, in cases tried by jury before the return of the verdict, and in other cases before the judgment is pronounced, withdraw from the prosecution.
of any person; and, upon such withdrawal, (a) if it is made before a charge has been framed, the accused shall 'be discharged; (b) if it is made after a charge has been framed, or when under this Code, no charge is required, he shall be acquitted.
" It may be noticed that there has been a complete redrafting of the section which brings about two alterations.
this section seems to have remained as such in the 1898 Code (Act V of 1898).
The next modification in the section appears to have been made by Act XVIII of 1923 which inserted the phrase "either generally or in respect of any one or more of the offences for which he is tried" in the appropriate place 291 in section 494 as it stood in the 1882 Code (in addition to omitting ' the phrase "appointed by the Governor General in Council or Local Government").
The present section 494 is the corresponding section in the 1882 Code as so altered.
It will be thus seen there are altogether three substantial changes in between 1872 and 1923 in the corresponding section 61 of the 1872 Code.
The first two changes made in 1882 were obviously intended to indicate that the result by way of discharge or acquittal should depend not on the distinction between inquiry and trial but, on the fact of a charge having been framed or not having been framed.
The second was to clarif that the application can be made generally up to tie point when judgment is pronounced but to provide for an exception thereto in respect of cases which in fact have gone up for a jury trial, in which case the applicati on can be made only up to the point of time before the verdict is pronounced.
The third change in 1923 was to make it clear that the withdrawal need not be in respect of the entire case against a particular individual but in respect of one or more only of the charges for which he is being prosecuted.
These three changes, therefore, were introduced for spcific purposes which are obvious.
The section as it originally stood in 1872 was quite wide enough to cover all classes of cases not excluding even jury cases when it is in the stage of preliminary inquiry.
There is absolutely no reason to think that these successive, changes were intended to exclude such a preliminary inquiry from the scope of section 494 as it has finally emerged.
It may also be mentioned that the words " inquiry ' and 'trial ' were both defined in the Code of 1872 but that the definition of the word 'trial ' was omitted, in the 1882 Code and that latter on in the 1898 Code the definition of the word inquiry ' was slightly altered by adding the ,phrase "Other than a trial" leaving the, word 'trial ' undefined.
These various legislative changes from time to time with reference to s, 494 and the ' definition of the 'word inquiry ' confirm the view above taken that section 494 is wide enough to cover every kind of inquiry and trial and that the word trial ' in the, section 292 has not been used in any limited sense.
Substantially the same view has been taken in Giribala Dasee vs Madar Gazi (1) and Viswanadham vs Madan Singh(2) and we are in agreement with the reasoning therein as regards this question.
As regards the merits of the appeals, the matter lies in a short compass.
AB already stated the application by the Public Prosecutor was made before any evidence was taken in the committal stage.
The only materials then available to the Public Prosecutor or to the Court were the contents of the first information report and any statements of witnesses that may have been taken by the police during investigation.
What is alleged against the appellant, Mahesh Desai, in the first information report can be gathered from the following: "These persons, viz., Mahesh Desai and others,regularly held meetings and advocated for closing Bagdigi cable plant and coke plant and assaulting the "dalals '.
Yesterday, Friday morning when some labourers were going to resume their work in 8 No. pit, at Lodna the striking labourers created disturbance there and the labourers of that place who were going to resume work could not do so.
At about 11 a. m. Mahesh Desai the leader of the Koyala Mazdoor Panchayat came to Bagdigi and told the labourers of this place to stop all work, to hold on to their posts and to see that no one worked.
At the instance of Mahesh Desai the labourers stopped the work.
Last night at about 11 30 p.m. when I was in my quarter at Lodna, Jadubans Tiwary, the overman of Bagdigi Colliery, said that Sheoji Singh and Ramdhar Singh 'had told him that in the evening at about 6 30 p.m. Mahesh Desai came to Bagdigi Mahabir Asthan Chala, collected 120 to 125 labourers and held a meeting and Mahesh Desai said that he had come to know that the company and its dalals would take some labourers to pit No. 10 this morning to resume the work and they would get the work resumed by them.
In this ' morning Phagu Dusadh, Jalo Dusadh, Chamari Dusadh and others were (sic) took part.
Mahesh Desai said to (1) Cal. 233.
(2) I.L.R. 293 them " You go to your respective works and see that no one works there happen what may.
You remain, prepared in every respect.
The labourers of Lodna will also come to your help.
The police will not be able to do any harm to you ".
The meeting dispersed at about 7 30 o 'clock.
Mahesh Desai went by his Jeep from Mahabir Asthan to pit No. 10 and told the labourers there to stick to their strike.
Then Phagu, Jalo and Haricharan Dusadh of Bagdigi began to talk with him near the Jeep.
Jadubans Tewary heard Mahesh Desai saying " It is necessary for us to finish the dalals for achieving victory.
You remain prepared for this".
Saying this he boarded his Jeep and at the end Mahesh Desai said to Phagu, Haricharan and Jalo Dusadh " Finish all.
What will happen will be seen ".
Thereafter Mahesh Desai went away by his Jeep and Phagu.
Jalo and Haricharaa came back.
" The first information report continues to state what all happened the next day by way of rioting, etc.
in the course of which Phagu, Jalo and Haricharan Dusadh, along with others were said to have chased Nand Kumar Chaubey and wherein Phaou gave a pharsa blow and Haricharan a lathi blow to him and Nand Kumar Chaubey fell down dead.
In the closing portion of the first information report the informant states as follows: I make this statement before you that (having, instigated) yesterday evening in the meeting and having instigated Phagu Dusadh, Jalo Dusadh and Haricharan Dusadh near pit No. 10, and having got a mob of about one thousand persons collected to day in the morning by Harbans Singh and other workers of his union Mahesh Desai got the murder of Nand Kumar Chaubey committed by Phagu Dusadh, Jalo Dusadh and Haricharan Dusadh to day at 8 15 a.m. with lathi and pharsa.
" It is clear from this that what is ascribed to Mahesh Desai is that he is alleged to have exhorted the laborers once in the morning at 11 a.m. and again in the night at 6 30 p.m. as also at 7 30 p.m.
As regards the exhortation at 11 a. m. it is not quite clear from the first information report whether the 294 informant speak,% to his personal knowledge or what he heard from the labourers.
As regards what is said to have transpired at 6 30 p.m. and 7 30 p.m., it appears to be reasonably clear that the person who gave the information to the informant was Jadubans Tiwary and that his information itself was probably based on what Sheoji Singh and Ramdhar Singh had told him.
It would be seen, therefore, that the prosecution must depend upon the evidence of Jadubans Tiwary, and possibly of Sheoji Singh and Ramdhar Singh and that what these three persons could speak to was at best only as to the exhortation made by Mahesh Desai at the various stages.
Presumably, these witnesses were examined by the police in the course of the investigation.
Now, on this material, we find it difficult to appreciate why the opinion arrived at by both the trial court and the Sessions Court that the ' view taken of that material by the Public Prosecutor, viz., that it was meagre evidence on which no conviction could be asked for, should be said to be so improper that the consent of the Court under section 494 of the Code of Criminal Procedure has to be withheld.
Even the private complainant who was allowed to participate in these proceedings in all its stages, does not, in his objection petition, or revision petitions, indicate the availability of any other material or better material.
Nor, could the complainant 's counsel, in the course of arguments before us inform us that there was any additional material available.
In the situation, therefore, excepting for the view that no order to withdraw should be passed in such cases either as a matter of law or as a matter of propriety but that the matter should be disposed of only after the evidence, is judicially taken, we apprehend that the learned Chief Justice himself would not have felt called upon to interfere with the order of the Magistrate in the exercise of his revisional jurisdiction.
, We are, therefore, clearly of the opinion, for all the above reasons, that the order of the High Court should be set aside and the appeals allowed.
Accordingly, the order of the trial court is hereby restored.
295 There was some question raised before us as to whether the private complainants could be allowed, ' to participate in these proceedings at the various stages.
Nothing that we have said is intended to indicate that the private complainant has a locus standi.
It is unfortunate that this prosecution which is still pending at its very early stages has got to be proceeded with against all the rest of the accused, after the lapse of nearly three years from the date of the murder.
It is to be hoped that the proceedings which must follow will be speeded up.
Appeals allowed.
| IN-Abs | By section 494 Of the Code of Criminal Procedure, 1898: " Any Public Prosecutor may, with the consent of the Court, in cases tried by jury before the return of the verdict, and in other cases before the judgment is pronounced, withdraw from the prosecution of any person either generally or in respect of any one or more of the offences for which he is tried, ' and upon such withdrawal, (a) if it is made before a charge has been framed, the accused shall be discharged in respect of such offence or offences ; (b) if it is made after a charge has been framed, or when under this Code no charge is required, he shall be acquitted in respect of such offence or offences.
" The prosecution of M. and others was launched on the first information of the first respondent, and when the matter was pending before the Magistrate in the, committal stage and before any evidence was actually taken, and 'application for the withdrawal of M. from the prosecution was made by the Public Prosecutor under section 494 Of the Code of Criminal Procedure on the ground that " on the evidence available it would not :be just and expedient to proceed with the prosecution of M." The Magistrate was of the opinion that there was no reason to withhold the consent that was applied for and accordingly he discharged the accused.
This order was upheld by the Sessions judge, but on 280 revision, filed by the respondents, the High Court set aside the order and directed the Magistrate to record the evidence and then consider whether it established a Prima facie case against the accused.
The State appealed against the order of the High Court by special leave, while the respondents sought to support the order on the grounds (1) that where the application for withdrawal of the prosecution is made on the ground of no evidence or no adequate or reliable evidence the Magistrate must hold a preliminary enquiry into the relevant evidence, and (2) that in a case tried by jury by a Court of Session, an application by the Public Prosecutor under section 594 Of the Code does not lie in the committal stage.
Held : (1) Though the function of the Court in giving the consent under section 594 of the Code is a judicial one, it is not necessary that the discretion is to be exercised only with reference to material gathered by the judicial method, and what the Court has to do is to satisfy itself that the executive function of the Public Prosecutor in applying for, withdrawal of the prosecution has not been improperly exercised, or that it is not an attempt to interfere with the normal course of justice for illegitimate reasons or purposes.
(2) The word " tried " in section 494 Of the Code is not used in any limited sense and the section is wide enough to cover every kind of inquiry and trial, and applicable to all cases which are capable of terminating either in a discharge or in an acquittal according to the stage at which the application for withdrawal is made.
An order of committal which terminates the proceeding so far as the inquiring Court is concerned is a " judgment " within the meaning of section 494 of the Code of Criminal Procedure.
Giribala Dasee vs Mader Gazi, Cal 233, and Viswanadham vs Madan Singh,, I.L.R. , approved.
|
ition No. 644 of 1977.
(Under Article 32 of the Constitution) AND Writ Petition No. 917 of 1977 (Under Article 32 of the Constitution) AND Writ Petition Nos. 959 and 960 of 1977 F. section Nariman, M. F. D. Damania, G. D. Dave and Rameshwar Nath for the Petitioners in W.P. 644 of ]977.
F. D. Damania, K. L. Talsania, 1.
N. Shroff, H. section Parekh and M. R.P. Kapur, for the Petitioners in W.P. 917/77.
K.K. Singhvi, F.D. Damania, I.R. Joshi, P. H. Parekh and M. Mudgal for the Petitioners in W.P. Nos. 959 960/77.
U. R. Lalit (for Union of India), M. C. Bhandare (for the State of Maharashtra), E. C. Agrawala and M. N. Shroff for RR.
1 2 in W.P. Nos. 644, 959, 960 and 917 of 1977.
1015 S.J. Deshmukh, Mrs. section Bhandare, Miss Leela Mehta, A.N. Karkhanis and Miss Malini Podvel for R. 3 in W.P. No. 644 of 1977.
J. Ramamurthi and Miss Vaigai for R. 3 in W.P. 959 960/77.
M. K. Ramamurthi, A. K. Ganguli and G. section Chatterjee for the Intervener in W.P. Nos.
959 960 (State of West Bengal).
C. G. Nadkarni and K. L. Hathi for the intervener in W.P. 917/77 (Mazdoor Congress).
F. section Nariman and O.C. Mathur for the Intervener in W.P. No. 644/77 (Tube Investment).
M. K. Ramamurthi and K.M.K. Nair for the Intervener in W.P. 644/77 (State of Kerala).
The Judgment of the Court was delivered by UNTWALIA, J.
By these four Writ Petitions the employers challenge the constitutional validity of Sections 25 o and 25 R of The (hereinafter to be referred to as the Act).
The facts of the different cases are of a similar nature.
It is not necessary to state them in any detail for the purposes of deciding the constitutional question.
We may, however, just refer to a few in order to indicate the nature of the dispute between the parties.
WRIT PETITION No 644 OF 1977 The petitioner in this case is Excel Wear, a Registered partnership firm, the partners of which are citizens of India.
The petitioner has a factory at Bombay where it manufactures garments for exports.
About 400 workmen were employed in the petitioner 's factory.
According to its case the relation between the petitioner management and its employees started deteriorating from the year 1974 and had become very much worse from 1976.
From August, 1976 the workmen became very militant, aggressive, violent, indulged in unjustifiable or illegal strikes and the labour trouble in the factory became of an unprecedented nature.
Various incidents have been mentioned in the Writ Petition in support of the above allegations.
But since the facts are seriously challenged and disputed on behalf of the Labour Union, which was subsequently added as a party respondent in the Writ petition, we do not propose to refer to them in any detail and express our views in regard to them one way or the other.
The various facts alleged in the petition may be correct may not be correct.
We do not think it necessary to adjudicate upon them for the purpose of deciding the constitutional question.
Suffice it to say that it is legitimate to 1016 take notice of the fact that various kinds of situation, such as, labour trouble of an unprecedented nature, a factory running in a recurring loss, paucity of adequate number of competent and suitable persons in the family of the partners, shareholders or the proprietors of a particular factory, or even outsiders, for the purpose of management, non availability of raw materials, insurmountable difficulty in the replacement of damaged or worn out machineries and so on and so forth, may arise and are said to have arisen in one form or the other in the cases before us.
Although the facts pleaded in all the Writ petitions are instances of one or more of such difficulties, we shall advert to the consideration of the constitutional question on the justifiable assumption that in a given case they may exist.
No body could deny the possibility or probability of the existence of such facts in a particular industry.
Excel Wear, according to its case, finding it difficult, almost impossible, to carry on the business of the factory any longer served a notice dated May 2, 1977 on the State Government of Maharashtra, respondent No. 2 for previous approval of the intended closure of the undertaking in accordance with Section 25 0(1) of the Act.
The State Government refused to accord the approval and communicated their decision in their letter dated the 1st August, 1977.
It would be appropriate to quote here the relevant portion of this letter: "And whereas the Government of Maharashtra, after considering the aforesaid notice is satisfied that the reasons for the intended closure are prejudicial to public interest.
Now, therefore, in exercise of the powers conferred by sub section (2) of Section 25 O of the the Government of Maharashtra hereby directs the Excel Wear, Bombay 400025 not to close down the said undertaking" The petitioner challenges the validity of the order aforesaid.
Mr. F. section Nariman appeared for the petitioner in this case.
The Union of India, respondent No. 1, was represented by Mr. U. R. Lalit and Mr. M. C. Bhandare appeared for respondent No. 2.
The case of the Labour Union, the third respondent, was presented by Mr. section J. Deshmukh.
In the petitions under consideration Mr. Nadkarni appeared for an intervener Labour Union and Mr. M. K. Ramamurthi for two intervener States of West Bengal and Kerala.
WRIT PETITION No. 917 OF 1977 In this case the first petitioner is Acme Manufacturing Co. Ltd. and the second petitioner, citizen of India, is one of its shareholders.
Mr. 1017 Damania, learned counsel for the petitioners briefly drew our attention to the facts of this cases which were of a nature adverted to above.
The Wadala unit of the petitioner company is engaged in the business of manufacturing and selling Diesel oil Engines, Mechanical Lubricators, Engine Valves and Push Rods etc.
The petitioners were obliged to decide to close down the undertaking due to huge losses incurred by them on account of low productivity, serious labour unrest and indiscipline resulting in various incidents of assaults or the like.
The Company, therefore, applied to the State Government of Maharashtra on May 2, 1977 under section 25 O(1) of the Act for approval of the intended closure.
The State Government communicated their refusal in their letter dated the 29th July, 1977 enclosing therewith a copy of their order couched in identical terms as those in the case of Excel Wear.
WRIT PETITIONS 959 AND 960 OF 1977 Mr. K.K. Singhvi, appearing for the petitioners in this case apart from supporting the argument of Mr. Nariman drew our attention to the facts of this case which were more or less of a similar nature as in the case of Acme Manufacturing Co. Ltd. Petitioner No. 2 is a citizen of India and is a shareholder of Apar Private Ltd., petitioner No. 1.
The Company owns a factory at Vithalwadi, Kalyan (Bombay) which manufactures aluminum rods, AAC and ACSR conductors, P.V.C. cables and welding electrodes.
Feeling compelled to take a decision to close down the factory, the Company served a notice on the State Government under section 25 O(1) of the Act on September 16, 1976.
The order of the State Government refusing permission to the petitioner company to close down the undertaking is dated the 23rd December, 1976.
The reasons for refusal given in this order are slightly different.
They are as follows: "And whereas the Government of Maharashtra after considering the aforesaid notice is satisfied that the reasons for the intended closure of the said undertaking are not adequate and sufficient and the intended closure is prejudicial to the public intervener; Broadly speaking the contention on behalf of the employers in all these cases is that a right to close down the business is an integral part of the right to carry on the business guaranteed under Article 19(1) (g) of the Constitution of India.
The impugned law imposes a restriction the said fundamental] right which is highly unreasonable, excessive and arbitrary.
It is not a restriction but almost amounts to the destruction or negation of that right.
The restriction imposed is manifestly beyond the permissible bounds of clause (6) of Article 19 of the 1018 Constitution.
The proposition canvassed for our consideration was sometimes too bald and wide.
It was submitted that a right to carry on the business includes a right not to carry on the business, just like any other right mentioned in clause (1) of Article 19, such as, the right to freedom of speech includes a right not to speak and the right not to form an association is inherent in the right to form associations.
Similarly a right to acquire and hold property embraces within it a right not to acquire or hold property.
The submission was that no body can be compelled to speak or to form an association, to acquire or hold property and similarly no body can be compelled to carry on any business.
M/s. Lalit and Bhandare did not dispute the proposition that the right to close down the business is an integral part of the right to carry on the business.
They, however, strenuously urged That the restrictions imposed by the impugned law are quite reasonable and justified to put a stop to the unfair labour practice and for the welfare of the workmen.
It is a progressive legislation for the protection of a weaker section of the society.
Mr. Deshmukh, however, did not accept that a right to close down a business is an integral part of the right to carry on any business.
He submitted that a right to closure is appurtenant to the ownership of the property, namely, the undertaking.
The total prohibition of closure only affects a part of the right to carry on the business and not a total annihilation of this.
The restriction imposed was in public interest and there is a presumption of reasonableness in its favour.
Mr. Nadkarni endeavored to submit with reference to the high philosophies of Jurisprudence in relation to the social and welfare legislations, as expounded by renowned jurists and judges abroad, that the action of closing down a business is no right at all in any sense of the term.
Mr. Ramamurthi while supporting the main arguments put forward on behalf of others led great stress in the point that the law is protected by Article 31 C of the Constitution, a point which was merely touched by them but was seriously taken over by Mr. Ramamurthi.
Before we enter into the focus of the discussion of the main points and their important aspects and facts it would be advantageous to refer to the relevant history of the development of this branch of the law.
The Act being Central Act 14 of 1947 was passed in the year 1947.
In 1953, an ordinance was promulgated followed by Amending Act 43 of 1953 inserting Chapter VA containing Sections 25A to 25J. New definitions of "Lay off" and "Retrenchment" were furnished in the Act in clauses (kkk) and (oo) of Section 2.
The heading of Chapter VA is "Lay off and Retrenchment".
The relevant provisions of this Chapter were not meant to cover the small industrial 1019 establishment in which less than SO workmen were employed or establishments of a seasonal character.
Section 25C made a provision for certain amounts of compensation for workmen in case they are laid off.
Section 25F imposes certain conditions on the employers which are conditions precedent to retrenchment of workmen, such as, the giving of one month 's notice or wages in lieu thereof.
Provision has also been made for payment of retrenchment compensation.
Section 25FF dealt with compensation to workmen in case of transfer of undertakings.
In Hariprasad Shivshankar Shukla vs A. D. Divikar this Court had occasion to consider the meaning of the term "retrenchment".
It was opined that the word "retrenchment" means the discharge of surplus labour or staff by the employer for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action and does not include termination of services of all workmen on a bona fide closure of an industry.
The question posed at page 134 by section K. Das J., who delivered the judgment on behalf of the Constitution Bench of this Court was whether the definition clause of the word 'retrenchment ' covers cases of closure of business when the closure is real and bona fide ? The answer given at page 137 was in the negative.
Discharge of workmen on bona fide closure of business was held to be not retrenchment.
On the view that Section 25F of the Act had no application to a closed or dead industry, no pronouncement was made in regard to the constitutional validity of the section if it were to take within its ambit a case of closure also.
After the decision of this Court in the case of Hariprasad Shivshanker (supra) was handed down the law was amended by an ordinance followed by Amending Act 18 of 1957 with retrospective effect from November 28, 1956.
Section 25FF was amended to make a provision for payment of compensation to workmen in case of transfer of undertakings and a provision was made in Section 25FFF for payment of compensation to workmen in case of closing down of an undertaking.
It will be of use to read here sub section (1) of Section 25FFF for the purpose of deciding some of the contentious questions in this case.
It reads as follows : "Where an undertaking is closed down for any reason whatsoever, every workman who has been in continuous service for not less than one year in that undertaking immediately before such closure shall, subject to the provisions of sub section (2), be entitled to notice and compensation in accordance with the provisions of section 25F, as if the workman had been retrenched.
1020 Provided that where the undertaking is closed down on account of unavoidable circumstances beyond the control of the employer, the compensation to be paid to the workman under clause (b) of section 25F, shall not exceed his average pay for three months.
Explanation An undertaking which is closed down by reason merely of (i) financial difficulties (including financial losses); or (ii) accumulation of undisposed of stocks; or, (iii)the expiry of the period of the lease or licence granted to it; or (iv) in a case where the undertaking is engaged in mining operations, exhaustion of the minerals in the area in which operations are carried on; shall not be deemed to be closed down on account of unavoidable circumstances beyond the control of the employer within the meaning of the proviso to this sub section.
" It would be noticed from the provision extracted above that normally it became necessary for an employer in a case of closure for any reason whatsoever to give notice and compensation to the workmen in accordance with the provisions of section 25F as if the workman had been retrenched.
But the proviso clearly postulated that an undertaking may have to be closed down on account of unavoidable circumstances beyond the control of the employer.
In that event a ceiling was put in the proviso on the amount of normal compensation payable.
The explanation added by Amending Act 45 of 1971 merely indicates that the reasons enumerated in clauses (i) to (iv) of the Explanation will not be deemed to be a closure brought about on account of unavoidable reasons beyond the control of the employer within the meaning of the proviso.
Factually and really the said reasons may be said to fall within the expression "unavoidable circumstances beyond the control of the employer.
" But the said reasons will not be deemed to be such that a workman should be made to get only a limited compensation and not the full normal compensation provided in section 25F.
The constitutional validity of section 25FFF(l) came to be considered by this Court in M/s Hatisingh Mfg. Co. Ltd. and another vs Union of India and Ors.
The provision was construed in a manner which saved it from the attack on its vires.
Since we are on this case.
1021 at this very stage we may refer to some very important views expressed therein which are decisive of some of the points raised in this case and cf great help in deciding some others.
Shah J., as he then was, speaking for the Court pointed out at page 535: "By Article 19(1) (g) of the Constitution freedom to carry on any trade or business is guaranteed to every citizen, but this freedom is not absolute." "In the interest of the general public", says the learned Judge, "the law may impose restrictions on the freedom of the citizens to start, carry on or close their undertakings.
" This clearly indicates, and the whole ratio of the case is based upon this footing, that the right to carry on any business includes a right to start, carry on or close down any undertaking.
It has further been pointed out on the same page that "by section 25FFF(l), termination of employment on closure of the undertaking without payment of compensation and without either serving notice or paying wages in lieu of notice, is, not prohibited.
Payment of compensation and payment of wages for the period of notice are not therefore conditions precedent to closure.
" This is one of the main reasons given in the judgment to repel the attack on the constitutional validity of the provision.
We, however, must hasten to add that it does not necessarily follow therefrom that if such payments are made conditions precedent to closure the provision will necessarily be bad.
While judging the question as to whether the restrictions imposed by Sections 25 O and 25 R are reasonable or not within the meaning of clause (6) of Article 19, we will have to keep in mind the principles enunciated in Hatising 's case at page 535 thus : "Whether an impugned provision imposing a fetter on the exercise of the fundamental right guaranteed by article 19(1) (g) amounts to a reasonable restriction imposed in the interest of the general public must be adjudged not in the background of any theoretical standards or predeterminate patterns, but in the light of the nature and incidents of the right the interest of the general public sought to be secured by imposing the restriction and the reasonableness of the quality and extent of the fetter upon the right.
" At pages 536 37 are to be found some important observations in the interest of the labour and we respectfully agree with them.
They are as follows: "Closure of an industrial undertaking involves termination of employment of many employees, and throws them into the ranks of the unemployed, and it is in the interest of the general public that misery resulting from unemployment 1022 should be redressed.
In Indian Hume Pipe Co. Ltd. vs The Workmen [1960] 2 SCR 32 this Court considered the reasons for awarding compensation under section 25F (though not its constitutionality).
It was observed that retrenchment compensation was intended to give the workmen some relief and to soften the rigour of hardship which retrenchment brings in its wake when the retrenched workman is suddenly and without his fault thrown on the streets, to face the grim problem of unemployment.
It was also observed that the workmen naturally expects and looks forward to security of service spread over a long period, but retrenchment destroys his expectations.
The object of retrenchment compensation is therefore to give partial protection to the retrenched employee to enable him to tide over the period of unemployment.
Loss of service due to closure stands on the same footing as loss of service due to retrenchment, for in both cases, the employee is thrown out of employment suddenly and for no fault of his and the hardships which he has to face are, whether unemployment is the result of retrenchment or closure of business, the same.
In case of retrenchment only a specified number of workmen loses their employment while in closure all the workmen become unemployed.
By Amending Act 32 of 1972 section 25FFA was inserted in Chapter VA of the Act providing for the giving by the employer of 60 days ' prior notice to the appropriate Government of his intention to close down any undertaking.
Failure to do so entailed a liability to be punished under section 30A inserted in the Act by the same Amending Act.
Chapter VB was inserted in the Act by Amending Act 32 of 1976 with effect from the 5th March, 1976.
Under section 25K the provisions of this Chapter were made applicable to comparatively bigger industrial establishments in which not less than 300 workmen were employed.
Only three kinds of industries were roped in for the purpose of the rigour of the law provided in Chapter VB by defining "industrial establishment" in clause (a) section 25L to mean: "(i) a factory as defined in clause (m) of section 2 of the ; (ii) a mine as defined in clause (j) of sub section (1) of section 2 of the ; or 1023 (iii)a plantation as defined in clause (f) of section 2 of the .
" Section 25M dealt with the imposition of further restrictions in the matter of lay off.
Section 25N provided for conditions precedent to retrenchment of workmen.
In these cases the vires of neither of the two sections was attacked.
Rather, a contrast was made between the said provisions with those of section 25 O to attack the latter.
The main difference pointed out was that in sub section (3) of Section 25M the authority while granting or refusing permission to the employer to lay off was required to record reasons in writing and in sub section (4) a provision was made that the permission applied for shall be deemed to have been granted on the expiration of the period of two months.
The period provided in sub section (4) enjoins the authority to pass the order one way or the other within the said period.
Similarly in sub section
(2) of section 25N reasons are required to be recorded in writing for grant or refusal of the permission for retrenchment and the provision for deemed permission was made in sub section
(3) on the failure of the governmental authority to communicate the permission or the refusal within a period of three months.
We must now read section 25 o impugned provision in full: "(1) An employer who intends to close down an undertaking of an industrial establishment to which this Chapter applies shall serve, for previous approval at least ninety days before the date on which the intended closure is to become effective, a notice, in the prescribed manner, on the appropriate Government stating clearly the reasons for the intended closure of the undertaking: Provided that nothing in this section shall apply to an undertaking set up for the construction of buildings, bridges, roads, canals, dams or for other construction work.
(2) On receipt of a notice under sub section (1) the appropriate Government may, if it is satisfied that the reasons for the intended closure of the undertaking are not adequate and sufficient or such closure is prejudicial to the public interest, by order, direct the employer not to close down such undertaking.
(3) Where a notice has been served on the appropriate Government by an employer under sub section (1) of 1024 section 25FFA and the period of notice has not expired at the commencement of the Industrial Disputes (Amendment) Act, 1976, such employer shall not close down the undertaking but shall, within a period of fifteen days from such commencement, apply to the n r appropriate Government for permission to close down the undertaking.
(4) Where an application for permission has been made under sub section (3) and the appropriate Government does not communicate the permission or the refusal to grant the permission to the employer within a period of two months from the date on which the application is made, the permission applied for shall be deemed to have been granted on the expiration of the said period of two months.
(5) Where no application for permission under sub section (1) is made, or where no application for permission under sub section ( 3 ) is made within the period specified therein or where the permission for closure has been refused, the closure of the undertaking shall be deemed to be illegal from the date of closure and the workman shall be entitled to all the benefits under any law for the time being in force as if no notice had been given to him.
(6) Notwithstanding anything contained in sub section (1) and sub section (3), the appropriate Government may, if it is satisfied that owing to such exceptional circumstances as accident in the undertaking or death of the employer or the like it is necessary so to do, by order, direct that the provisions of sub section (1) or sub section (3) shall not apply in relation to such undertaking for such period as may be specified in the order.
(7) Where an undertaking is approved ar permitted to be closed down under sub section (1) or sub section (4), every workman in the said undertaking who has been in continuous service for not less than one year in that undertaking immediately before the date of application for permission under this section shall be entitled to notice and compensation as specified in section 25N as if the said workman had been retrenched under that section.
" 1025 Special provision as to the restarting of an undertaking closed down before the commencement of the Amending Act 32 of 1976 was made in section 25P.
Whether the said provision is constitutionally valid or invalid does not fall for determination in these cases.
What is, however, of some importance to point out is that only on the existence of the four situations mentioned in clauses (a) to (d) of section 25P the undertaking could be directed to be restarted within such time (not being less than one month from the date of the order) as may be specified in the order.
Section 25Q provides for penalty for lay off and retrenchment without previous permission and section 25 R deals with the question of imposition of penalty for closure under certain circumstances.
Section 25 R reads as follows : "(1) Any employer who closes down an undertaking with out complying with the provisions of sub section (1) of Section 25 O shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to five thousand rupees, or with both.
(2) Any employer, who contravenes a direction given under sub section (2) of section 25 O or section 25P, shall be punishable with imprisonment for a term which may extend to one year, or with fine which may extend to five thousand rupees, or with both, and where the contravention is a continuing one, with a further fine which may extend to two thousand rupees for every day during which the contravention continues after the conviction.
(3) Any employes who contravenes the provisions of sub section (3) of section 25 O shall be punishable with imprisonment for a term which may extend to one month, or with fine which may extend to one thousand rupees, or with both.
" Let us now analyse the provisions of section 25 O. Sub section (1) requires 90 days notice to the appropriate Government for previous approval of the intended closure.
Our attention was drawn to the Bombay Industrial Rules and the form prescribed therein for the filing of an application for permission to close down an undertaking.
A very comprehensive history of the undertaking and many facts and figures in relation thereto, apart from the reasons to be stated for the intended closure of the undertaking, are required to be given in the application form.
Under sub section (2), if in the opinion of the 1026 appropriate Government, the reasons for the intended closure are not adequate and sufficient or if the closure is prejudicial to the public interest, permission to close down may be refused.
The reasons given may be correct, yet permission can be refused if they are thought to be not adequate and sufficient by the State Government.
No reason is to be given in the order granting the permission or refusing it.
The appropriate Government is not enjoined to pass the order in terms of sub section (2) within 90 days of the period of notice.
Sub section (3) is a special provision in respect of an undertaking where an employer had given a notice under section 25FFA(1) before the commencement of Act 32 of 1976.
In that event he is required to apply within a certain period for permission to close down an undertaking.
Under sub section (4) in a case covered by sub section (3) it is incumbent upon the Government to communicate the permission or the refusal within a period of two months, otherwise the permission applied for shall be deemed to have been granted.
Sub section (5) brings about the real object of the impugned provisions by stating that the closure of the undertaking shall be deemed to be illegal from the date of the closure if the undertaking has been closed down without applying for permission under sub section (1) or sub section (3) or where the permission for closure has been refused.
In that event the workman shall be entitled to all the benefits under ally law for the time being in force as if no notice had been given to him.
It is to be noticed that sub section (5) does not say as to whether the closure will be illegal or legal in case a notice under section (1) has been given by the employer but in absence of any communication from the Government within a period of 90 days granting or refusing permission, the employer closes down the undertaking on the expiry of the said period.
Sub section (6) postulates that there may be a sudden closure of an undertaking due to some exceptional circumstances as accident in the undertaking or death of the employer or the like.
In such a situation the appropriate Government is empowered to direct that the provisions of sub section (1) or sub section (3) shall not apply in relation to such undertaking, for such period as may be specified in the order.
Under sub section (7) where an undertaking is approved or permitted to be closed down, then the workman becomes entitled to notice and compensation as specified in section 25N as if the said workman had been retrenched under that section.
In other words requirement of section 25N is to be complied with on the grant of the permission to close.
Section 25 R while providing for awarding of punishment to an employer who closes down an undertaking without complying with the provisions of sub section (1) of section 25 O or who contravenes a direction given under section 25 O(2) is silent on the question of 1027 entailing any penal consequences in case where an employer had applied for permission under sub section (1) of section 25 O but the Government had failed to communicate its order to him within a period of 90 days and the undertaking is closed down on the expiry of the said period.
We propose first to briefly dispose of the two extreme contentions put forward on either side as to the nature of the alleged right to close down a business.
If one does not start a business at all, then, perhaps, under no circumstances he can be compelled to start one.
Such a negative aspect of a right to carry on a business may be equated with the negative aspects of the right embedded in the concept of the right to freedom of speech, to form an association or to acquire or hold property.
Perhaps under no circumstances a person can be compelled to speak; to form an association or to acquire or hold a property.
But by imposing reasonable restrictions he can be compelled not to speak; not to form an association or not to acquire or hold property.
Similarly, as held by this Court in Cooverjee Bharucha vs The Excise Commissioner and the Chief Commissioner, Ajmer, and Ors.
Narendra Kumar & Ors.
vs The Union of India and Ors total prohibition of business is possible by putting reasonable restrictions within the meaning of Article 19(6) on the right to carry on the business.
But as pointed out at page 387 in the case of Narendra Kumar (supra) "The greater the restriction, the more the need for strict scrutiny by the Court" and then it is said further: "In applying the test of reasonableness, the Court has to consider the question in the background of the facts and circumstances under which the order was made, taking into account the nature of the evil that was sought to be remedied by such law, the ratio of the harm causes to individual citizens by the proposed remedy, to the beneficial effect reasonably expected to result to the general public.
It will also be necessary to consider in that connection whether the restraint caused by the law is more than was necessary in the interests of the general public.
" But then, as pointed out by this Court in Hatisingh 's case (supra) the right to close down a business is an integral part of the right to carry it on.
It is not quite correct to say that a right to close down a business can be equated or placed at par as high as the right not to start and carry on a business at all.
The extreme proposition urged on behalf of the employers by equating the two right 1028 and then placing then at par is not quite apposite and sound.
Equally so, or rather, more emphatically we do reject the extreme contention put forward on behalf of the Labour Unions that right to close down a business is not an integral part of the right to carry on a business, but it is a right appurtenant to the ownership of the property or that it is not a fundamental right at all.
It is wrong to say that an employer has no right close down a business once he starts it.
If he has such a right as obviously he has, it cannot but be a fundamental right embedded in the right to carry on any business guaranteed under Article 19(1) (g) of the Constitution.
In one sense that right does appertain to property.
But such a faint overlapping of the right to property engrafted in Article 19(1) (f) or Article 31 must not be allowed to case any shade or eclipse on the simple nature of the right as noticed above.
We now proceed to examine whether the restriction imposed under the impugned law are reasonable within the meaning of Article 19(6).
this is undoubtedly on the footing as held by us above, that the right to close a business is an integral part of the fundamental right to carry on a business.
But as no right is absolute in its scope, so is the nature of this right.
It can certainly be restricted, regulated or controlled by law in the interest of the general public.
On behalf of the petitioners, the restrictions imposed by the impugned law are said to be unreasonable because (i) Section 25 O does not require giving of reasons in the order.
(ii) No time limit is to be fixed while refusing permissions to close down.
(iii)Even if the reasons are adequate and sufficient, approval can be denied in the purported public interest of security of labour.
Labour is bound to suffer because of unemployment brought about in almost every case of closure.
(iv) It has been left to the caprice and whims of the authority to decide one way or the other.
No guidelines have been given.
(v) Apart from the civil liability which is it be incurred under sub section (5), the closure, however, compulsive it may be, if brought about against the direc 1029 tion given under sub section (2) is visited with penal consequences as provided in section 25 R. (vi) There is no deemed provision as to the according of approval in sub section (2) as in sub section (4).
(vii)Refusal to accord approval would merely mean technically that the business continues but a factory owner cannot be compelled to carry on the business and go on with the production and thus one of the objectives sought to be achieved by this provision cannot be achieved.
(viii)There is no provision of appeal, revision or review of the order even after sometime.
(ix) The employer is compelled to resort to the provisions of Section 25N only after approval of the closure.
(x) Restriction being much more excessive than is necessary for the achievement of the object is highly unreasonable.
(xi) There may be several other methods to regulate and restrict the right of closure by providing for extra compensation over and above the retrenchment compensation if the closure is found to be mala fide and unreasonable.
(xii)To direct the employer not to close down is altogether a negation of the right to close.
It is not regulatory.
(xiii)If carrying on any business is prohibited in public interest, a person can do another business.
But to prohibit the closure of a running business is destruction of the right to close.
(xiv)That reasons should be adequate and sufficient from whose points of view is not indicated in the Statute.
(xv) The reasonableness of the impugned restrictions must be examined both from procedural and substantive aspects of the law.
Sub section (2) of section 25 O does not make it obligatory for any 1030 higher authority of the Government to take a decision.
It may be taken even by a lower officer in the hierarchy.
On behalf of the respondents and the interveners all the above arguments were combated and it was asserted that the restriction imposed is reasonable in the interest of the general public.
The dominant interest was of labour but the other interests are also protected by the restriction, such as, interest of ancillary industry and preventing fall in production of a particular commodity which may effect the economic growth.
The application form requires the employer applying for permission to close down to give such comprehensive and detailed information that it will enable the appropriate Government to take appropriate decisions in appropriate cases.
It was also urged that the word "Socialist" has been added in the Preamble of the Constitution by the Forty Second amendment and the tests of reasonableness, therefore, must change and be necessarily different from the dogmatic and stereo type tests laid down in the earlier decisions of this Court.
Apart from invoking the bar of Article 31C in terms, it was also urged that the spirit behind the said Article for the progress of the law meant for social justice has got to be kept in view while judging the reasonableness of the restriction in the light of its endeavour to advance the directive principles enshrined in Part IV of the Constitution.
In order to overcome the various obvious lacunae in the section, we were asked, by a rule of construction, to read down the section and save its constitutionality.
It was urged that successive applications can be made on the change of a situation.
No amount of compensation can be a substitute for the preventive remedy of the evil of unemployment.
We now proceed to deal with the rival contentions.
But before we do so, we may make some general observations.
Concept of socialism or a socialist state has undergone changes from time to time from country to country and from thinkers to thinkers.
But some basic concept still holds the field.
In the case of Akadasi Padhan vs State of Orissa the question for consideration was whether a law creating a State monopoly is valid under the latter part of Article 19(6) which was introduced by the (first Amendment) Act, 1951.
While considering that question, it was pointed out by Gajendragadkar J., as he then was, at page 704: 1031 "With the rise of the philosophy of Socialism, the doctrine of State ownership has been often discussed by political and economic thinkers.
Broadly speaking, this discussion discloses a difference in approach.
To the socialist, nationalisation or State ownership is a matter of principle and its justification is the general notion of social welfare.
To the rationalist, nationalisation 1 or State ownership is a matter of expediency dominated by considerations of economic efficiency and increased output only production.
This latter view supported nationalisation only when it appeared clear that State ownership would be more efficient, more economical and more productive.
The former approach was not very much influenced by these considerations, and treated it a matter of principle that all important and nation building industries should come under State control.
The first approach is doctrinaire, while the second is pragmatic.
The first proceeds on the general ground that all national wealth and means of producing it should come under national control, whilst the second supports nationalisation only on grounds of efficiency and increased output.
" The difference pointed out between the doctrinaire approach to the problem of socialism and the pragmatic one is very apt and may enable the courts to lean more and more in favour of nationalisation and State ownership of an industry after the addition of the word `Socialist in the Preamble of the Constitution.
But so long as the private ownership of an industry is recognised and governs an overwhelmingly large proportion of our economic structure, is it possible to say that principles of socialism and social justice can be pushed to such an extreme so as to ignore completely or to a very large extent the interests of another section of the public namely the private owners of the undertakings ? Most of the industries are owned by limited companies in which a number of shareholders, both big and small, holds the shares.
There are creditors and depositors and various other persons connected with or having dealings with the undertaking.
Does socialism go to the extent of not looking to the interests of all such persons? In a State owned undertaking the Government of the Government company is the owner.
If they are compelled to close down, they, probably, may protect the labour by several other methods at their command, even, sometimes at the cost of the public exchequer.
It may not be always advisable to do so but that is a different question.
But 1032 in a private sector obviously the two matters involved in running it are not on the same footing.
One part is the management of the business done by the owners or their representatives and the other is running the business for return to the owner not only for the purpose of meeting his livelihood or expenses but to for the purpose of the growth of the national economy by formation of more and more capital.
Does it stand to reason that by such rigorous provisions like those contained in the impugned sections all these interests should be completely or substantially ignored ? The questions posed are suggestive of the answers.
In contrast to the other provisions, section 25 o(2) does not require the giving of reasons in the order.
In two of the impugned orders communicated to the petitioners, Excel Wear and Acme Manufacturing Co. Ltd., it is merely stated that the reasons for the intended closure are prejudicial to public interest suggesting thereby that the reasons given by the employers are correct, adequate and sufficient, yet they are prejudicial to the public interest.
In cases & band fide closures it would be generally so.
Yet the interest of labour for the time being is bound to suffer because it makes worker unemployed.
Such a situation as far as reasonably possible, should be prevented.
Public interest and social justice do require the protection of the labour.
But is it reasonable to give them protection against all unemployment after affecting the interests of so many persons interested and connected with the management apart from the employers? Is it possible to compel the employer to manage the undertaking even when they do not find it safe and practicable to manage the affairs ? Can they be asked to go on facing tremendous difficulties of management even at the risk of their person and property ? Can they be compelled to go on incurring losses year after year ? As we have indicated earlier, in section 25FFF retrenchment compensation was allowed in cases of closure and if closure was occasioned on account of unavoidable circumstances beyond the control of the employer a ceiling was put on the amount of compensation under the proviso.
The Explanation postulates the financial difficulties including financial losses or accumulation of undisposed stocks etc.
as the closing of an undertaking on account of unavoidable circumstances beyond the control of the employer but by a deeming provision only the ceiling in the matter of compensation is not made applicable to the closure of an undertaking for such reasons.
In 1972 by insertion of section 25FFA in Chapter VA of the Act, an employer was enjoined to give notice to the Government of an intended closure.
But gradually the net was cast too wide and the freedom of the employer tightened to such an extent by introduction of the impugned provisions that 1033 it has come to a breaking point from the point of view of the employers.
As in the instant cases, so in many others, a situation may arise both from the point of view of law and order and the financial aspect that the employer finds it impossible to carry on the business any longer.
He must not be allowed to be whimsical.
Or capricious in the matter ignoring the interest of the labour altogether.
But that can probably be remedied by awarding different slabs of compensation in different situations.
It is not quite correct to say that because compensation is not a substitute for the remedy of prevention of unemployment, the later remedy must be the only one.
If it were so, then in no case closure call be or should be allowed.
In the third case namely that of Apar Private.
Ltd. the Government has given two reasons, both of them being too vague to give any exact idea in support of the refusal of permission to close down.
It says that the reasons are not adequate and sufficient (although they may be correct) and that the intended closure is prejudicial to the public interest.
The latter reason will be universal in all cases of closure.
The former demonstrates to what extent the order can be unreasonable.
If the reason given by the petitioner in great detail are correct, as the impugned order suggests they are, it is preposterous to say that they are not adequate and sufficient for a closure.
Such an unreasonable order was possible to be passed because of the unreasonableness of the law.
Whimsically and capriciously the authority can refuse permission to close down.
Cases may be there, and those in hand seem to be of that nature, where if the employer acts according to the direction given in the order he will have no other alternative but to face ruination in the matter of personal safety and on the economic front.
if he violates it, apart from the civil liability which will be of a recurring nature, he incurs the penal liability not only under section 25 R of the Act but under many other Statutes.
We were asked to read in section 25 o(2) that it will be incumbent for the authority to give reasons in his order and we were also asked to cull out a deeming provision therein.
If the Government order is not communicated to the employer within 90 days, strictly speaking, the criminal liability under section 25 R may not be attracted if on the expiry of that period the employer closes down the undertaking.
but it seems the civil liability under section 25 o(5) will come into play even after the passing of the order of refusal of permission to close down on the expiry of the period of 90 days.
Intrinsically no provision in Chapter VB of the Act suggests that the object of carrying on the production can be achieved by the refusal to grant permission although in the objects and 1034 Reasons of the Amending Act such an object seems to be there, although remotely, and secondly it is highly unreasonable to achieve the object by compelling the employer not to close down in public interest for maintaining the production.
The order passed by the authority is not subject to any scrutiny by any higher authority or tribunal either in appeal or revision.
The order cannot be reviewed either.
We were again asked to read into the provisions that successive applications can be made either for review of the order or because of the changed circumstances.
But what will the employer do even if the continuing same circumstances make it impossible for him to carry on the business any longer ? Can he ask for a review ? Again, by interpretation we were asked to say that steps under section 25N can be taken simultaneously when a notice under section 25 o(1) is given.
Firstly, the language of sub section (7) does not warrant this construction.
The action of giving notice and compensation in accordance with section 25N is to be taken when an undertaking is approved or permitted to be closed down and not before that.
Secondly, it is not practicable to give three months notice in writing or wages for the said period in lieu of notice or to pay the retrenchment compensation in advance as required by section 25N before the employer gets an approval from the Government.
It is not always easy to strike a balance between the parallel and conflicting interests.
Yet it is not fair to unreasonably tilt the balance in favour of one interest by ignoring the other.
Mr. Nadkarni relied upon the following passage of Frankfurter J., while expressing his view on "Balance of Interest": "I cannot agree in treating what is essentially a problem of striking balance between the competing interest as an exercise in absolutes.
" Learned counsel also referred to a note on `Government and liberty ' from `Paradoxes of Legal Science ' by Banjamin Cardozo which is to the following effect: "As the social conscience is awakened, the conception of injury is widened and insight into its cause is deepened the area of restraint is therefore increased." No body can have a quarrel with these basic principles however, high sounding or unreasonable they may appear to be on their face.
But 1035 yet no jurisprudence of any country recognizes that the concept of injury is widened and the area of restraint is broadened to an extent that it may result in the annihilation of the person affected by the restraint.
In case of fixation of minimum wages the plea of the employer that he has not got the capacity to pay even minimum wages and, therefore, such a restriction on his right to carry on the business is unreasonable has been repeatedly rejected by this Court to wit U. Unichoy and Ors.
vs The State of Kerala.
But the principle, rather in contrast, illustrates the unreasonableness of the present impugned law.
No body has got a right to carry on the business if he cannot pay even the minimum wages to the labour.
He must then retire from business.
But to tell him to pay and not to retire even if he cannot pay is pushing the matter to an extreme.
In some cases of this Court, to wit Pipraich Sugar Mills Ltd. vs Pipraich Sugar Mills Mazdoor Union it has been opined that where the industry had been closed and the closure was real and bona fide, there cannot be an industrial dispute after closure.
At page 881 Venkatarama Ayyar J., has said: "Therefore, where the business has been closed and it is either admitted or found that the closure is real and bona fide, any dispute arising with reference thereto would, as held in K. N. Padmanabha Ayyar vs The State of Madras (supra), fall outside the purview of the .
And that will a fortiori be so, if a dispute arises if one such can be conceived after the closure of the business between the quondam employer and employees.
" But the observations at page 882 indicate that if the dispute relates to a period prior to closure it can be referred for adjudication even after closure.
The very apt observations are to the following effect: "If the contention of the appellant is correct, what is there to prevent an employer who intends, for good and commercial reason, to close his business from indulging on a large scale in unfair labour practices, in victimisation and in wrongful dismissals, and escaping the consequences thereof by closing down the industry ? We think that on a true construction of section 3, the power of the State to make a 1036 reference under the section must be determined with reference not to the date on which it is made but to the date on which the right which is the subject matter of the dispute arises, and that the machinery provided under the Act would be available for working out the rights which had accrued prior to the dissolution of the business.
" It would thus be seen that in the matter of giving appropriate and reasonable relief to the labour even after the closure of the business the facts which were in existence prior to it can form the subject matter of an industrial dispute.
Even assuming that strictly speaking all such matters cannot be covered in view of the decisions of this Court we could understand a provision of law for remedying these drawbacks.
The law may provide to deter the reckless, unfair, unjust or mala fide closures.
But it is not for us to suggest in this judgment what should be a just and reasonable method to do so.
What we are concerned with at the present juncture is to see whether the law as enacted suffers from any vice of excessive and unreasonable restriction.
In our opinion it does suffer.
The reasonableness has got to be tested both from the procedural and substantive aspects of the law.
In the case of State of Bihar vs K. K. Misra & Ors.
it has been said at page 196: "As observed in Dr. Khare vs State of Delhi, ; and reiterated in V.G. Raw 's case(1952) SCR 597 that in considering reasonableness of laws imposing restrictions on fundamental rights both substantive and procedural aspects of the law should be examined from the point of view of reasonableness and the test of reasonableness wherever prescribed should be applied to each individual statute impugned and no abstract standard or general pattern of reasonableness can be laid down as applicable to all cases.
It is not possible to formulate an effective test which would enable the court to pronounce any particular restriction to be reasonable or unreasonable per se.
All the attendant circumstances must be taken into consideration and one cannot dissociate the actual contents of the restrictions from the manner of their imposition or the mode of putting them into practice.
" It is no doubt true that Chapter VB deals with certain comparatively bigger undertakings and of a few types only.
But with all this 1037 difference it has not made the law reasonable.
It may be a reasonable classification for saving the law from violation of Article 14 but certainly it does not make the restriction reasonable within the meaning of Article 19(6).
Similarly the interest of ancillary industry cannot be protected by compelling an employer to carry on the industry although he is incapacitated to do so.
All the comprehensive and detailed information given in the application forms are of no avail to the employer if the law permits the authority to pass, a cryptic, capricious, whimsical and one sided order.
Mr. Deshmukh relying upon the decision of this Court in the case of Akadasi Padhan (supra) urged that there will be presumption of reasonableness in a legislation of this kind.
But reliance upon this principle enunciated in the case of State Monopoly of Kendu leaves seems to be misconceived.
Gajendragedkar J., pointed out at page 704: "The amendment made by the Legislature in article 19(6) shows that according to the Legislature, a law relating to the creation of State monopoly should be presumed to be in the interests of the general public.
article 19(6) (ii) clearly shows that there is no limit placed on the power of the State in respect of the creation of State monopoly.
" This proposition cannot be pressed into service in a case of the kind which we are dealing with.
Mr. Deshmukh 's argument that a right to close down a business is a right appurtenant to the ownership of the property and not an integral Art of the right to carry on the business is not correct.
We have already said so.
The properties are the undertaking and the business assets invested therein.
The owner cannot be asked to part with them or destroy them by not permitting him to close down the undertaking.
In a given case for his mismanagement of the undertaking resulting in bad relationship with the labour or incurring recurring losses the undertaking may be taken over by the State.
That will be affecting the property right with which we are not concerned in this case.
It will also be consistent with the object of making India a Socialist State.
But not to permit the employer to close down is essentially an interference with his fundamental right to carry on the business.
On the basis of the decision of this Court in The State of Gujarat and Anr.
vs Shri Ambica Mills Ltd., Ahmedabad, etc.
it was 1038 urged that even if there is a violation by impugned law of the fundamental right guaranteed under Article 19(1)(g) and not saved by clause (6) thereof, the said right has been conferred only on the citizens of India and not upon the corporate bodies like a company.
Counsel submitted that the company cannot challenge the law by a writ petition merely by making a shareholder join it.
Nothing of the kind was said by Mathew J., who spoke for the Court in the above case.
The question which was posed at page 773 was whether a law which takes away or abridges the fundamental right of citizens under Article 19(1)(f) would be void and, therefore non est as respects non citizens.
On a consideration of a number of authorities of this Court the principle which was culled out and applied in the case of Ambica Mills (supra) at page 780 is in these words "For our purpose it is enough to say that if a law is otherwise.
good and does not contravene any of their fundamental rights, non citizens cannot take advantage of the voidness of the law for the reason that it contravenes the fundamental right of citizens and claim that there is no law at all.
" Contrary to the above submission there are numerous authorities of this Court directly on the point.
A reference to the case of Bennet Coloman & Co. & ors.
vs Union of India & Ors. will be sufficient.
Following the decision of this Court in Rustom Cavasjee Cooper vs Union of India it was held that if a shareholder 's right is impaired the State cannot impair the right of the shareholders as well as of the company and the Court can strike down the law for violation of a fundamental right guaranteed only to the citizens of the challenge is by the company as well as the shareholder.
Referring to the bank nationalistion case it is said at page 773 by Ray J., as he then was: "A shareholder is entitled to protection of Article 19.
That individual right is not lost by reason of the fact that he is a shareholder of the company.
The Bank Nationalisation case (supra) has established the view that the fundamental rights of shareholders as citizens are not lost when they associate to form a company.
When their fundamental rights as shareholders are impaired by State action their rights as shareholders are protected.
The reason is that the shareholders ' rights are equally and necessarily affected if the rights of the company are affected.
" Excel Wear is a partnership concern.
The partners in the name of the firm can challenge the validity of the law.
In each of the other 1039 two petitions, as already stated, a shareholder has joined with the company to challenge the law.
The contention of Mr. Ramamurthi, therefore, must be rejected.
Now we proceed to consider whether the law is saved by Article 31C of the Constitution.
This point, as indicated earlier, was just touched in passing by other counsel.
But Mr. Ramamurthi endeavoured to advance a full dressed argument on this aspect of the matter.
His submission was that Article 31C inserted in the Constitution by the (Twenty fifth Amendment) Act, 1971 as amended by the (Forty second Amendment) Act, 1976 makes the law beyond the pale of challenge on the ground of violation of Article 19.
Mr. Ramamurthi 's argument proceeds thus.
A declaration of Emergency on the ground of external danger was made by the President in 1971.
While the.
imposition of external Emergency was in force, internal Emergency was also imposed on June 25, 1975.
The Emergency both external and; internal, was lifted on March 21, 1977.
Article 31C, as originally inserted read as follows: "Notwithstanding anything contained in Article 13, no law giving effect to the policy of the State towards securing the principles specified in Clause (b) or clause (c) of article 39 shall be deemed to be void on the ground that it is inconsistent with, or takes away or abridges any of the rights conferred by Article 14, Article 19 or Article 31. . "[We have omitted from this quotation that part of Article 31C which was declared void by majority decision in the case of His Holiness Kesavananda Bharati Sripadagalavaru vs State of Kerala (1973) Suppl.
S.C.R. 1.]" The Forty second Amendment made the application of the Article more comprehensive by substituting the words "all or any of the principles laid down in place of the words "the principles specified in clause (b) or clause (c) of Article 39." A feeble attempt in the first instance was made to show that the impugned law was covered by clause (b) or clause (c) of Article 39.
But this attempt could not be pursued with any force or success.
What was, however, strenuously contended was that surely the law is for giving effect to the policy of the State towards securing the principles laid down in Articles 39(1), 41 and 43 of Part IV and thus within the ambit of the amended Article 31C.
No attack on the validity of the law, therefore, could be made.
In the first instance, we may point out that we are not impressed with the argument and do not accept it as correct that the impugned law is for giving effect to the policy of the State towards securing any of the principles in Articles 1040 39(a) or 41.
Clause (a) of Article 39 concerns itself with the policy towards securing "that the citizens, men and women equally, have the right to an adequate means of livelihood.
" The impugned law obviously does not fit in with this directive principle.
Article 41 deals with right to work, to education and to public assistance in certain cases.
The impugned law is not concerned with this policy.
The directive principle which might be brought nearest to the impugned law is to be found in the following words of Article 43 "The State shall endeavour to secure, by suitable legislation. to all workers . work . " without deciding the question whether the impugned law can be said to be a law giving effect to the directive principle enshrined in Article 43 or not, we shall assume in favour of the respondents and the interveners that it is so.
Yet we shall presently show that the amended Article 31C cannot put this law beyond the pale of challenge.
Chapter VB was introduced by Amending Act 32 of 1976 with effect from 5th of March, 1976.
The amendment aforesaid made in Article 31C was with effect from 3rd January, 1977.
Section 4 of the (Forty second Amendment) Act, 1976 which brought about the amendment merely uses the expression "the words and figures. . shall be substituted.
" It did not say, and probably it could not have said so, that "they will always be deemed to have been substituted.
" It is, therefore, clear that the amendment was prospective in operation and was not made retrospective.
To overcome this difficulty Mr. Ramamurthi advanced an ingenious argument.
He submitted that Chapter VB was inserted in the Act when the Emergency was in operation.
Under Article 358, the State during the period of Emergency was competent to enact the impugned law even though it violated Article 19.
By the time the Emergency was lifted amended Article 31C had come into operation.
Thus by the continuous process the latter became immune from challenge on the ground of violation of Article 19.
Counsel relied upon the following decisions of this Court, apart from some others which are not necessary to be referred to, viz. (1) Keshavan Madhava Menon vs The state of Bombay ; (2) Dhirubha Devisingh Gohil vs The State of Bombay; (3) M. P. V. Sundararamier & Co. vs The State of Andhra Pradesh & Anr; (4) Jaganath etc.
vs Authorised officer, Land Reforms & Ors.
We shall presently point out 1041 the fallacy in the argument and show that none of the decisions supports the contention.
Rather, in contrast, some of them demolish it.
Article 358 says: "While a Proclamation of Emergency is in operation, nothing in article 19 shall restrict the power of the State as defined in Part III to make any law or to take any executive action which the State would but for the provisions contained in that part be competent to make or to take, but any law so made shall, to the extent of the incompetency, cease to have effect as soon as the Proclamation ceases to operate, except as respects things done or omitted to be done before the law so ceases to have effect :" Sometimes a distinction has been drawn between the lack of legislative competency of a State to make and enact a law on a particular topic covered by any of the Lists in the Seventh Schedule and its incompetency to make a law abridging or abolishing the fundamental rights or in violation of any other provisions of the Constitution.
When there is a lack of legislative competence, the law made is void ab initio, non est and a still born law.
But Article 13(2) also says : "The State shall not make any law which takes away or abridges the rights conferred by this Part and any law made in contravention of this clause shall, to the extent of the contravention, be void.
" Such a law is void to the extent of the contravention and in case of Article 19 the contravention is of the fundamental rights guaranteed to a citizen.
It has been said in some different contexts that for non citizens the law is not void but it is merely unenforceable.
Article 358 says that a law made in contravention of Article 19 during the operation of Proclamation of Emergency is not to be treated incompetently made by the State.
But as soon as the Proclamation ceases to operate the law so made ceases to have effect to the extent of the incompetency.
In other words, the Article clearly postulates that the law which was incompetently made and bad for violation of Article 19 will not be taken to be so during the period of Emergency.
But as soon as the Emergency is lifted the law becomes bad because it was bad when it was enacted, although it could not be taken to be so during the period of Emergency.
The amended Article 31C says that if the law gave effect to the policy 1042 of the State towards securing any of the principles laid in Part IV it shall not be deemed to be void on the ground of violation of Article 19.
The law which was enacted in March, 1976 could, by no stretch of imagination, be said to be a law giving effect to the policy of the State towards securing any of the principles laid down in Part IV within the meaning of the amended Article 31C which came into force in January, 1977.
The Legislature could not have thought of enacting a law within the meaning of amended Article 31C at a point of time when the Article stood unamended.
It is, therefore, difficult to accept the argument of the learned counsel that the law was not bad during the operation of the Emergency because of Article 358 and the same position was continued by Article 31C by its amendment by the (Forty second Amendment) Act.
The purport, content and the principles underlying the two Articles is so very different that it is difficult to tag the effects of the two together and make it a continuous effect like a relay race in a game.
In our view the law was bad for violation of Article 19(1) (g) when it was enacted, but it was not to be taken to be so during the period of Emergency; its invalidity sprouted out with full vigour on the lifting of the Emergency.
The amended Article 31C did not save it.
In Keshavan 's case (supra) Das J., as he then was, in the majority judgment of this Court was interpreting clause (1) of Article 13 and while doing so, he said at page 234: "In other words, on and after the commencement of the Constitution no existing law will be permitted to stand in the way of the exercise of any of the fundamental rights.
Therefore, the voidness of the existing law is limited to the future exercise of the fundamental rights.
article 13(1) cannot be read as obliterating the entire operation of the inconsistent laws, or to wipe them out altogether from the statute book, for to do so will be to give them retrospective effect which, we have said, they do not possess.
Such laws exist for all past transactions and for enforcing all rights and liabilities accrued before the date of the Constitution.
" This case is of no help to the respondents.
In Dhirubha 's case (supra) the wordings of Article 31B were being construed.
Because of the presence of the words "or ever to have become void" in the said Article it was said at page 696 97 : 1043 "The intention of the Constitution to protect each and every one of the Acts specified in the Ninth Schedule from any challenge on the ground of violation of any of the fundamental rights secured under Part III of the Constitution, irrespective of whether they are pre existing or new rights, is placed beyond any doubt or question by the very emphatic language of article 31 B which declares that none of the provisions of the specified Acts shall be deemed to be void or ever to have become void on the ground of the alleged violation of the rights : . .
In contrast to the language of Article 31C which merely uses the phrase "shall be deemed to be void" and not the phrase "or ever to have become void" as used in Article 31B the decision of this Court n Dhirubha 's case, rather, goes against the contention of the learned counsel.
In the Sundararamier 's case (supra) Venkatarama Aiyar J., summed up the result of the various authorities at page 1474 thus : "Where an enactment is unconstitutional in part but valid as to the rest, assuming of course that the two portions are severable, it cannot be held to have been wiped out of the statute book as it admittedly must remain there for the purpose of enforcement of the valid portion thereof, and being on the statute book, even that portion which is unenforceable on the ground that it is unconstitutional will operate proprio vigore when the constitutional bar is removed, and there is no need for a fresh legislation to give effect thereto." These observations were made in connection with the removal of the constitutional bar of imposition of sales tax under Article 286.
The distinction so drawn in the above case is not of universal application.
In the legislative field there is nothing like "void or voidable".
The application of the principle has been restricted later to only a limited field, namely, in connection with the question whether the legislation requires fresh enactment or not when the bar of incompetency is removed.
This Court has considered the question whether an enactment subsequently saved by Article 31B by being included in the Ninth Schedule requires a fresh legislation to make it valid.
The answer given was in the negative.
In the case of Ambica Mills (supra), Mathew, J., referred to some of the cases aforesaid and the principles decided therein as also the decision of this Court in 1044 Bhikaji Narain Dhakras & Ors.
vs The State of Madhya Pradesh and Anr.
wherein Das, Acting C.J., has said at pages 599 600 : "All laws, existing or future, which are inconsistent with the provisions of Part III of our Constitution are, by the express provision of Article 13, rendered void "to the extent of such inconsistency".
Such laws were not dead for all purposes.
They existed for the purposes of pre Constitution rights and liabilities and they remained operative, even after the Constitution, as against non citizens.
It is only as against the citizens that they remained in a dormant or moribund condition.
" Referring to Sundaramaier 's case the learned Judge said at page 775 in Ambica Mills case: "The proposition laid down by the learned Judge was that if a law is enacted by a legislature on a topic not within its competence, the law was a nullity but if the law was on a topic within its competence but if it violated some constitutional prohibition, the law was only unenforceable and not a nullity.
In other words, a law if it lacks legislative competence was absolutely null and void and a subsequent cession of the legislative topic would not revive the law which was still born and the law would have to be reenacted; but a law within the legislative competence but violative of constitutional limitation was unenforceable but once the limitation was removed, the law became effective.
" But later on he hinted at the restricted application of this principle.
It may also be pointed out here that in the case of Basheshar Nath vs The Commissioner of Income Tax, Delhi & Rajasthan & Another, Subba Rao J., as he then was, held that there was no distinction between lack of legislative competence and violation of constitutional limitations.
Subba Rao J., reiterated the same view in the case of Deep Chand vs The State of Uttar Pradesh and Others.
In the case of Mahendra Lal Jaini vs The State of Uttar Pradesh and others: 1045 "the Supreme Court again reviewed the authorities, and held (i) that the doctrine of eclipse applied only to pre Constitution and not to post Constitution laws; (ii) that the words "to the extent of the inconsistency" or "to the extent of the contravention" were designed to save parts of a law which did not contravene, or were not inconsistent with, fundamental right; (iii) that the meaning of the word "void" in article 13(1) and (2) was the same; (iv) however, pre Constitution laws violating fundamental rights were valid when enacted and could therefore be revived under the doctrine of eclipse, whereas post Constitution laws violating fundamental rights were "still born" and non est and could not be revived.
In dealing with the argument, based on Supreme Court decisions, that a law violating article 19 would be void qua citizens but valid qua non citizens, Wanchoo J. said: Theoretically the laws falling under the latter category (i.e. contravening article 19) may be valid qua non citizens; but that is a wholly unrealistic consideration and it seems to us that such nationally partial valid existence of the said laws on the strength of hypothetical and pedanic considerations cannot justify the application of the doctrine of eclipse to them." (Vide Seervai 's Constitutional Law of India, 2nd edition, page 180).
Of course, in none of the three cases aforesaid the decision of this Court in Sundararamaier 's case was considered.
For our purpose we have merely pointed out the divergence of opinion on this aspect of the matter, although for the decision of the point at issue, even Sundararamaier 's case does not make good the submission of Mr. Ramamurthi.
Mr. Ramamurthi was not right in pressing this ratio in support of his contention.
The content of Article 358 and 31C is entirely different.
The former Article, rather, works in the reverse gear.
It does not lift the ban in the way of the State to enact a law in violation of Article 19.
It puts the ban under suspension during the period of Emergency and the suspension comes to an end on its lifting.
Article 31C has no words to indicate that the ban is removed by it.
It merely saves the law enacted after coming into force of the said Article.
We, therefore, must reject the argument of Mr. Ramamurthi with reference to Article 31C of the Constitution.
1046 In the result all the petitions are allowed and it is declared that Section 25 O of the Act as a whole and Section 25 R in so far as it relates to the awarding of punishment for infraction of the provisions of Section 25 O are constitutionally bad and invalid for violation of Article 19(1) (g) of the Constitution.
Consequently, the impugned orders passed under sub section (2) of Section 25 O in all the cases are held to be void and the respondents are restrained from enforcing them.
We must, however, make it clear that since the orders fall on the ground of the constitutional invalidity of the law under which they have been made, we have not thought it fit to express any view in regard to their merits otherwise.
We make no order as to costs in any of the petitions.
| IN-Abs | The facts of only one petition are set out because they are similar to facts in other petitions.
Excel Wear is a partnership firm manufacturing garments for export.
About 400 workmen were employed in the petitioners ' factory.
The case of the petitioners is that the relations between the management and the employees started deteriorating and became very strained from 1976.
The workmen became very militant, aggressive, violent and indulged in unjustifiable or illegal strikes.
Various incidents have been mentioned in the Writ Petition in support of the said allegations.
However, since those facts were seriously challenged and disputed by the workmen, the Court did not refer to them in any detail nor expressed any view one way or the other.
(2) According to the petitioners it became almost impossible to carry on the business.
The petitioners, therefore, served a notice dated 2nd May, 1977 on the Government of Maharashtra, respondent No 2 for previous approval of the intended closure of the undertaking in accordance with section 25(O)(1).
The State Government refused to accord the approval on the ground that the intended closure was prejudicial to public interest.
(3 ) The petitioners contended: (a) A right to close down a business is an integral part of the right to carry on a business guaranteed under article 19(1)(g) of the Constitution.
The impugned law imposes a restriction on the said fundamental right which is highly unreasonable.
excessive and arbitrary.
It is not a restriction but almost amounts to the destruction or negation of that right.
The restrictions imposed is manifestly beyond the permissible bounds of article 19(6) of the Constitution.
(b) A right to carry on a business includes a right not to carry on a business which is like any other right mentioned under Article 19(1) such as the right to freedom of speech includes a right not to speak and the right not to form an association is inherent under the right to form association.
(c) The restrictions are unreasonable because (i) Section 25(o) does not require giving of reasons in the order.
(ii) No time limit is to he fixed while refusing permission to close down.
(iii)Even if the reasons are adequate and sufficient, approval can be denied in the purported public interest of security of labour.
Labour is bound to suffer because of unemployment brought about in almost every case of closure.
1010 (iv) It has been left to the caprice and whims of the authority to decide one way or the other.
No guidelines have been given.
(v) Apart from the civil liability which is to be incurred under sub section (5), the closure, however, compulsive it may be, if brought about against the direction given under sub section (2) is visited with penal consequences as provided in section 25 R. (vi) There is no deemed provision as to the according of approval in sub section (2) as in sub section (4).
(vii)Refusal to accord approval would merely mean technically that the business continues but a factory owner cannot be compelled to carry on the business and go on with the production and thus one of the objectives sought to be achieved by this provision cannot be achieved.
(viii)There is no provision of appeal, revision or review of the order even after sometime.
(ix) Restriction being much more excessive than is necessary for the achievement of the object is highly unreasonable.
(x) There may be several other methods to regulate and restrict the right of closure by providing for extra compensation over and above the retrenchment compensation if the closure is found to be mala fide and unreasonable.
(xi) To direct the employer not to close down is a negation of the right to close.
It is not regulatory.
(xii)If carrying on any business is prohibited in public interest, a person can do another business.
But to prohibit the closure of a running business is destruction of the right to close.
(xiii) The reasonableness of the impugned restrictions must be examined both from procedural and substantive aspects of the law.
Sub section (2) of section 25 D does not make it obligatory for any higher authority of the Government to take a decision.
It may be taken even by a lower officer in the hierarchy.
(4) The respondents ' contentions: (a) Some counsel for the respondents did not dispute that the right to close down a business is an integral part of the right to carry on a business.
They however, contended that the restrictions imposed by the impugned law are quite reasonable and justified to put a stop to the unfair labour practice and for the welfare of the workmen.
It is a progressive legislation for the protection of a weaker section of society.
(b) Some other counsel for the respondents, however, did not accept that a right to close down a business is an integral part of the right to carry on any business.
According to them, the total prohibition of closure only affects a part of the right to carry on the business and not a total annihilation of this.
The restriction imposed was in public interest and there is a presumption of reasonableness in favour of a statute.
Reliance was also placed on social and welfare legislation as expounded by renowned jurists and judges abroad.
It was also contended that the legislation was protected by Article 31C of the Constitution.
1011 (5) Allowing the petitions, the Court ^ HELD: The right to close down a business cannot be equated with a right not to start or carry on n business at all.
The extreme proposition urged on behalf of the employer by equating the two rights and placing them at par is not quite apposite and sound.
If one does not start a business at all, then perhaps under no circumstances, he can be compelled to start one.
Such a negative aspect of a right to carry on a business may be equated with the negative aspect of the right embedded in the concept of the right to freedom of speech, to form an association or to acquire or hold property.
Perhaps under no circumstances, a person can be compelled to speak, to form an association or to acquire or hold a property.
But by imposing reasonable restrictions, he can be compelled not to speak, not to form an association or not to acquire or not to hold property.
A total prohibition of business is possible by putting reasonable restrictions under Article 19(6) on the right to carry on a business.
[1027 B D, 1028 A] Cooverjee B. Bharucha vs The Excise Commissioner and the Chief Commissioner, Ajmer & Ors.; ; ; Narendra Kumar & ors.
vs The Union of India & ors. ; relied on.
However, the greater the restriction, the more the need for strict scrutiny by the Court.
The contention put forward on behalf of the labour unions that the right to close down a business is not an integral part of the right to carry on a business or that it is not a fundamental right at all is also wrong.
In one sense the right does appertain to property.
But such a faint overlapping of the night to property engrafted in article 19(1)(f) or article 31 must not be allowed to cast any shade or eclipse on the simple nature of the right.
However, the right to close down is not an absolute right.
It can certainly be restricted, regulated or controlled by law in the interest of the general public.
[1027 1028 A C] Concept of socialism or socialistic state has undergone changes from time to time, from country to country and from thinkers to thinkers.
But some basic concept still holds the field.
In the case of Akadasi Padhan the question for consideration was whether a law creating a state monopoly is valid under the latter part of Article 19(6).
The Court pointed out the difference between the doctrinaire approach to the problem of socialism and the pragmatic one.
But so long as the private ownership of an industry is recognised governs an overwhelmingly large proportion of our economic structure, it is not possible to say that principles of socialism and social justice can be pushed to such an extreme so as to ignore completely or to a very large extent the interests of another section of the public namely the private owners of the undertakings.
[1030 G H. 1031 E G] Akadasi Padhan vs State of Orissa, [1963] Suppl.
2 SCR 691 referred to.
There are creditors and depository and various other persons connected with or having dealings with the undertaking, whose rights are also affected by the impugned legislation.
[1031 G] Section 25 O (2) does not require the giving of reasons in the order.
In two of the orders in the present cases, it is merely stated that the reasons for the intended closure are prejudicial to public interest suggesting thereby that the reasons given by the employers are correct, adequate and sufficient, yet they are prejudicial to the public interest.
In case of bona fide closures, it would be 1012 generally so.
Yet the interest of labour for the time being is bound to suffer because it makes a worker unemployed.
Such a situation as far as reasonably possible should be prevented.
Public interest and social justice do require the protection of the labour.
But it is not reasonable to give them protection against all unemployment after affecting the interests of so many persons interested including persons who have no connection with the management.
It is not possible to compel the employers to manage the undertaking even if they find that it is not safe or practicable to do so.
They cannot be asked to go on facing tremendous difficulties of management even at the risk of their person and property.
They cannot be compelled to go on incurring losses year after year.
[1032 C F] In the third Writ Petition, the Government has given two reasons, for refusing to grant permission.
Both of them are too vague to give an exact idea in support of the refusal of permission, to, close down.
It says that the reasons are not adequate and sufficient and that the intended closure is prejudicial to the public interest.
The latter reason will be universal in all cases of closure.
The former demonstrates to what extent the order can be unreasonable.
If the reasons given by the petitioner in great detail are correct, as the impugned order suggests they are, it is preposterous to say that they are not adequate and sufficient for a closure.
Such an unreasonable order was possible to be passed because of the unreasonableness of the law.
Whimsically and capriciously, the authority can refuse permission to close down.
[1033 B E] If the Government order is not communicated to the employer within 90 days, strictly speaking, criminal liability in section 25(R) may not be attracted, if on the expiry of that period an employer closes down the undertaking.
But it seems the civil liability under Section 25(O) (5) will come into play even after the passing of the order of refusal of permission to close down on the expiry of the period of 90 days.
Provision in Chapter V(B) of the Act suggests that the object of carrying on production can be achieved by the refusal to grant permission although in the objects and reasons of the amending act such an object seems to be there although remotely and secondly it is highly unreasonable to achieve the object by compelling the employee not to close down in public interest for maintaining production.
The order passed by the authority is not subject to any scrutiny by any higher authority or tribunal either in appeal or revision.
The order cannot be reviewed either.
[1033 F H, 1034 A B] It is not always easy to strike the balance between the parallel and conflicting interest, and it is not fair to unreasonably tilt the balance in favour of one interest by ignoring the other.
In the case of fixation of minimum wages this Court has repeatedly rejected the contention of the employers that he has no capacity to pay minimum wages and therefore his right to carry on the business is affected.
[1034E, 1035 A B] U. Unichoyi & Ors.
vs The State of Kerala. ; relied on.
But this principle, rather, in contrast, illustrates the unreasonableness of the present impugned law.
Nobody has got a right to carry on business if he cannot pay even the minimum wages.
He must then retire from business, But to tell him to pay and not to retire if he cannot pay is pushing the matter to an extreme.
It has been observed that where an industry had been closed and the closure was real and bona fide, there cannot be an industrial dispute after closure.
[1035 B D] 1013 Pipraich Sugar Mills Ltd. vs Pipraich Sugar Mills Mazdoor Union, referred to.
The law may provide to prevent and regulate unfair unjust or mala fide closure.
[1036 C] The reasonableness has got to be tested both from the procedural and substantive aspects of the law.
It is true that Chapter V (B) deals with certain comparatively bigger undertakings and for a few types only but with all this it has not made the law reasonable.
It may be a reasonable law for saving the law from violation of article 14 but certainly it does not make the restriction reasonable within the meaning of article 19(6).
Not to permit the employer to close down is essentially an interference with the fundamental right to carry on the business.
[1036 D, H, 1037 A, G] If a law is otherwise good and does not contravene any of the fundamental rights of the non citizens, non citizens cannot take advantage of the voidness of law for the reason that it contravenes the fundamental rights of the citizens and claim that there is no law at all.
In the case of Ambica Mills this Court has not said that even if there is violation of the fundamental rights guaranteed by article 19(1)(b) and not saved by clause (6) of the said right has been conferred only on the citizens of India and not upon the corporate bodies like a company.
[1()38 A D] State of Gujarat and Anr.
vs Shri Ambica Mills Ltd., Ahmedabad, etc.
; explained.
Bennet Coleman & Co. & ors.
vs Union of India & Ors.
, ; , Rustom Cavasjee Cooper vs Union of India, ; relied on.
It was laid down in the case of Bennet Coleman & Co. & Ors.
and Rustom Cavasjee Cooper that if a shareholder 's right is impaired the State cannot impair the right of the shareholder as well as of the company and the Court can strike down the law for violation of fundamental right guaranteed only to the citizens if the challenge is by the company as well as by the shareholders.
The partners can challenge the validity in the name of firm.
In the present case where company is petitioner a shareholder has also been joined with the company to challenge the law. [1038 E F, H, 1039 A] The impugned law is not for giving effect to the policy of the State towards securing any of the principles in Articles 39(1) or 41.
The law does not fit in with the said directive principles.
The argument that it is protected by article 31(C) is not sustainable.
The amendment was prospective and not retrospective.
[1039 H, 1040 A B, E] The argument that when the amendment was brought the proclamation of emergency was in operation and thereafter before emergency was lifted, the amend article 31C had come into force and thus by the continuous process the latter became immune on the ground of violation of article 19 is not maintainable.
[1042 C] As soon as the emergency is lifted the law becomes bad because it was bad when it was enacted, although it could not be taken to be so during the period 1014 of Emergency.
Therefore, article 31C cannot protect the law.
Apart from the fact that article 31C has no application the law was bad for violation of article 19(1)(b) when it was enacted but it was not taken to be bad during the period of emergency.
Its invalidity sprouted out with full vigour on the lifting of emergency.
[1041 H, 1042 C D] Keshavan Madhava Menon vs The State of Bombay, ; Dhirubha Devi Singh Gohil vs The State of Bombay ; ; M.P.V. Sunderaramier & Co. vs The State of A. P. & Anr., ; , Jagannath etc., etc.
vs Authorised Officer, Land Reforms and Ors.
; , ; distinguished.
Bhikaji Narain Dhakras and Ors vs The State of M.P. & Anr., ; ; Basheshar Nath vs The Commissioner of Income Tax, Delhi and Rajasthan and Anr., [1959] Suppl.
1 SCR 528; Deep Chand vs The State of U.P. & ors.
, [1559] Suppl.
2 SCR 8; Mahendra Lal Jaini vs The State of U.P. and ORS.
, [1963] Suppl.
1 SCR 912 referred t(b.
The Court declared section 25 (o) as a whole and Section 25R in so for as it relates to the awarding of punishment for infringement of the provisions of Section 25(o) constitutionally bad and invalid for violation of article 19(1) of the Constitution.
The Court declared the impugned order passed in all the cases to be void and restrained the respondents from enforcing them.
The Court however did not express any opinion on the merits of the case, since the orders fall on the ground of constitutional invalidity.
[1046 A C]
|
ICTION: Criminal Appeal 24 of 1976.
From the Judgment and Order dated 31 9 1974 of the Punjab and Haryana High Court in Criminal Writ No. 32 of 1970.
B. Sen. (for appellant No. 1), A. K. Sen (for Appellant No. 2), J. C. Bhatt (for appellant No. 3), F. section Nariman (for appellant No. 4), A. B. Diwan (for appellant No. 4), I.N. Shroff and H. section Parihar for the Appellants.
D. Mukherjee, E. C. Agrawala and R. N. Sachthey for the Respondent.
The Judgment of the Court was delivered by JASWANT SINGH, J.
During the course of on spot check carried out by him on December 29, 1964 of B.P. sheets lying in appellant No. 1 's factory at Sonepat, the Development Officer (LME 1) of the Directorate General of Technical Development, New Delhi, discovered from an examination of the said appellant 's account books that it had during the period intervening between January 1, 1964 and January 12, 1965, acquired black plain iron sheets of prime quality weighing 1073 60.03 metric tons from various parties at a rate higher than the maximum statutory price fixed for such sheets by the Iron and Steel Controller (hereinafter referred to as 'the Controller ') in exercise of the powers vested in him under clause 15(1) of the Iron and Steel (Control) Order, 1956 (hereinafter referred to as 'the Control Order.
After the Special Magistrate had framed the charges and secured in the Court of the Special Magistrate, Ambala Cantt for an offence under section 120 B of the Indian Penal Code read with section 7 of the (Act No. 10 of 1955) (hereinafter referred to as 'the Act ') as also for an offence under section 7 of the Act read with clause 15 (3) of the Control Order.
After the Special Magistrate had framed the charges and examined sixteen prosecution witnesses, the appellants made an application before him on February 12, 1970 under section 251A (11) and 288 (1) of the Code of Criminal Procedure, 1898 praying that in view of the submissions made therein, the case against them be not proceeded with and they be acquitted.
The trial Magistrate dismissed the application vide his order dated June 4, 1970, relevant portion whereof is extracted below for facility of reference : "In the light of the above observations, I am prevented from determining the case otherwise than by making an order of acquittal or conviction which I can pass only after recording further evidence both of prosecution and in defence.
Regarding various objections raised by the learned counsel for the accused on the points that the notifications were not placed before the Parliament and within a reasonable time and also on the points of formation of opinion and delegation of powers I may submit that the prosecution cannot be prevented from adducing evidence regarding the formation of opinion and laying of the notifications before the Parliament which can be proved by the contemporaneous record.
Regarding the non prosecution of the sellers of the black iron sheets it does not lie in the mouth of the accused to say that such and such person has not been prosecuted.
I need not to give my observations on merits on the points regarding subsequent exemption of control mens rea, formation of opinion and delegation of powers in laying notifications before the Parliament and also need not discuss the citations as I will have to consider 1074 all these points at the time of final arguments and any order given now will not be proper.
I dismiss the application of the accused on the short ground that it is not possible for this Court to hold that the cognizance was taken on an invalid report and the order of the Court ordering framing of charge is a nullity on the ground that on record no offence is committed and no cognizance could be taken.
" Aggrieved by the aforesaid order of the Special Magistrate, the appellants moved the High Court of Punjab and Harayana under Articles 226 and 227 of the Constitution and section 561 A of the Code of Criminal Procedure, 1898 challenging their prosecution inter alia on the grounds that the Control Order and the notification which formed the basis of their prosecution did not have the force of law as they had not been laid before the Houses of Parliament within a reasonable time as required under section 3(6) of the Act; that the Control Order and the Notification fixing the maximum selling price of the commodity in question for the contravention of which the appellants had been hauled up were invalid as the same did not appear to be preceded by the formation of the requisite opinion under section 3(1) of the Act which was a sine qua non for issue of any order by the Central Government or by the Controller; that none of the 18 concerns which, according to the prosecution sold the aforesaid B.P. sheets to the appellants and who were equally guilty of the offence under section 7 of the Act having been proceeded against, in the Court of the competent jurisdiction, the prosecution of the appellants was violative of Article 14 of the Constitution and that the purchases of the aforesaid B.P. sheets having been openly made and entered in the account books of appellant No. 1, the mens rea which was a necessary ingredient of the offence under section 7 of the Act was totally lacking in the case.
In the return filed by it in opposition to the writ petition, the respondent while denying that the Control Order had not been placed before both Houses of Parliament, as required by sub section (6) of section 3 of the Act or that the issue of the Control Order or the Notification fixing maximum selling prices of various categories of iron and steel including the commodity in question was not based on the formation of the opinion envisaged by sub section 1 of section 3 of the Act conceded that the notification fixing the maximum selling prices of the categories of iron and steel including the commodity in question had not been placed before both Houses of Parliament but contended that the provisions of sub section (6) of section 3 of the 1075 Act requiring the placing of the order contained in the aforesaid notification before both Houses of Parliament were directory and not mandatory and the omission to comply with that requirement did not have the effect of invalidating the notification.
The respondent further contended that the notification fixing the maximum selling prices of various categories of iron and steel including the black plain iron sheets being a part of the Control Order and a piece of delegated legislation, it was not necessary to lay it before the Houses of Parliament.
It was also pleaded by the respondent that the mensrea of the accused was manifest from various manipulations resorted to by them as also from the fact that they wanted to increase their production and earn more profits.
The respondent also averred that launching of prosecution against any person depended on the availability of sufficient evidence and that non prosecution of the sellers of the iron sheets in question did not involve any discrimination as envisaged by Article 14 of the Constitution but was due to non availability of adequate and reliable evidence against them.
After careful consideration of the rival contentions of the parties, the High Court by its elaborate judgment and order dated May 31, 1974 dismissed the petition overruling the contentions of the appellants.
One of the learned Judges of the High Court constituting the Bench which dealt with the writ petition also observed that the Notification in question had not in reality been issued under section 3 of the Act which required it to be laid before both Houses of Parliament but was issued in exercise of the power conferred by section 4 of the Act which plainly related to issue of incidental orders arising out of the nature of the powers conferred and duties imposed thereunder and the purpose whereof was to enable the various authorities mentioned therein to provide the details to fill up gaps in the Control Orders issued under section 3 of the Act so as to ensure the harmonious and rational working of the orders.
The High Court, however, being of the opinion that the case involved a substantial question of law relating to the vires of the notification fixing the maximum selling prices of various categories of iron and steel including the commodity in question certified the case as eminently fit for appeal to this Court.
This is how the case is before us.
At the hearing of the appeal though the learned counsel for the appellants have reiterated all the contentions raised by them in the aforesaid writ petition, the only substantial question of law with which we are concerned at the present stage is whether the aforesaid notification fixing the maximum selling price of the commodity in question is void for not having been laid before both Houses of Parliament.
1076 For a proper determination of the aforesaid question, it is necessary to notice a few provisions of the Act which are relevant for the purpose of the appeal.
Section 2 is a glossary of the Act.
According to clause (a)(vi) of the said section, iron and steel and manufactured products thereof fall within the ambit of the expression "essential commodity".
Sub section (1) of section 3 of the Act confers on the Central Government the general power of making and issuing orders providing for regulating or prohibiting the production, supply and distribution of an essential commodity and trade and commerce therein if it is of opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing its equitable distribution and availability at fair prices or for securing any essential commodity for the defence of India or the efficient conduct of military operations.
Sub section (2) of section 3 of the Act specifies the orders which without prejudice to the generality of the powers conferred by subsection (1) of section 3 can be issued thereunder.
Clause (c) of sub section (2) of section 3 of the Act authorities the issue of an order for controlling the price at which any essential commodity may be bought or sold.
Sub section (6) of section 3 of the Act ordains that every order made under this section by the Central or by any officer or authority of the Central Government shall be laid before both Houses of Parliament as soon as may be, after it is made.
Section 4 of the Act lays down that an order made under section 3 may confer powers and impose duties upon the Central Government or the State Government or officers and authorities of the Central Government or State Government and may contain directions to any State Government or to officers and authorities thereof as to the exercise of any such powers or the discharge of any such duties.
Section 5 of the Act deals with delegation of powers.
It provides that the Central Government may, by notified order, direct that the power to make orders or issue notifications under section 3 shall, in relation to such matters and subject to such conditions, if any, as may be specified in the direction, be exercisable also by (a) such officer or authority subordinate to the Central Government, or (b) such State Government or such officer or authority subordinate to a State Government, as may be specified in the direction.
Section 6 of the Act which embodies the non obstante clause lays down that any order made under section 3 shall have effect notwithstanding anything inconsistent therewith contained in any enactment 1077 other than this Act or any instrument having effect by virtue of any enactment other than this Act.
Section 7 of the Act lays down the penalties which any person contravening any order made under section 3 shall entail.
Section 10 of the Act which deals with offences by the companies provides as follows: "10.
(1) If the person contravening an order made under section 3 is a company, every person who, at the time the contravention was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company as well as the company, shall be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly : Provided that nothing contained in this sub section shall render any such person liable to any punishment if he proves that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention.
(2) Notwithstanding anything contained in sub section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
Explanation.
For the purposes of this section, (a) "company" means any body corporate, and includes a firm or other association of individuals; and (b) "director" in relation to a firm means a partner in the firm.
" We may also at this stage advert to the Control Order which was issued by the Central Government vide S.R.O. 1109/ESS.
COMM/ IRON AND STEEL dated May, 8, 1956 in exercise of the powers conferred on it by section 3 of the Act.
Sub clause (1) of clause 15 of this Order authorities the Controller to fix by notification in the Gazette of India the maximum prices at which any iron and steel may 1078 be sold (a) by a producer, (b) by a stockholder including a controlled stockholder and (c) by any person or class of persons.
Sub clause (3) of clause 15 of the Control Order which is material for the purpose of the case provides: "15.
(3) No producer or stockholder or other person shall sell or offer to sell, and no person shall acquire, any iron or steel at a price exceeding the maximum prices fixed under sub clause (1) or (2).
" It was under sub clause (1) of clause 15 of the Control Order that the notification in question was issued.
Though sub section (6) of section 3 of the Act provides that every order made by the Central Government or by any officer or authority of the Central Government shall be laid before both Houses of Parliament as soon as may be after it is made, the important point to be considered in the absence of analogous statutes like the Statutory Instruments Act, 1946 and the Laying of Documents before Parliament (Interpretation) Act, 1948 prescribing the conditions, the period and the legal effect of the laying of order before the Parliament is whether the provision is directory or mandatory.
It is well to remember at the outset that the use of the word `shall ' is not conclusive and decisive of the matter and the Court has to ascertain the true intention of the legislature, which is the determining factor, and that must be done by looking carefully to the whole scope, nature and design of the statute.
Reference in this connection may be made to the decision of this Court in State of U.P. vs Manbodhan Lal Srivastava.
`Reference in this behalf may also be made with advantage to another decision of this Court in The State of Uttar Pradesh & Ors.
vs Babu Ram Upadhya(2) where Subba Rao, J. (as he then was) after quoting with approval the passage occurring at page 516 in Crawford "On the Construction of Statutes" as well as the passage occurring at page 242 in `Craies on Statute Law ', 5th Edition, observed as follows : "The relevant rules of interpretation may be briefly stated thus: When a statute uses the word "shall", prima facie, it is mandatory, but the Court may ascertain the real intention of the legislature by carefully attending to the whole scope of the statute.
For ascertaining the real intention of the Legislature, the Court may consider, inter alia, the nature and the design of the statute, and the consequences which would follow from constituting it one way or the other, 1079 the impact of other provisions whereby the necessity of complying with the provisions in question is avoided, the circumstances, namely, that the statute provides for a contingency of the non compliance with the provisions, the fact that the non compliance with the provisions is or is not visited by some penalty, the serious or trivial consequences that flow therefrom, and, above all, whether the object of the legislation will be defeated or furthered." Thus two considerations for regarding a provision as directory are : (1) absence of any provision for the contingency of a particular provision not being complied with or followed and (2) serious general inconvenience and prejudice that would result to the general public if the act of the Government or an instrumentality is declared invalid for non compliance with the particular provision.
Now the policy and object underlying the provisions relating to laying the delegated legislation made by the subordinate law making authorities or orders passed by subordinate executive instrumentalities before both Houses of Parliament being to keep supervision and control over the aforesaid authorities and instrumentalities, the "laying clauses" assume different forms depending on the degree of control which the legislature may like to exercise.
As evident from the observations made at pages 305 to 307 of the 7th Edition of Craies on Statute Law and noticed with approval in Hukam Chand etc.
vs Union of India & Ors.(1) there are three kinds of laying which are generally used by the Legislature.
These three kinds of laying are described and dealt with in Craies on Statute Law (Supra) as under. (i) Laying without further procedure, (ii) Laying subject to negative resolution, (iii) Laying subject to affirmative resolution.
(i) Simple laying.
The most obvious example is in section 10(2) of the 1946 Act.
In earlier days, before the idea of laying in draft had been introduced, there was a provision for laying rules etc., for a period during which time they were not in operation and could be thrown out without ever having come into operation (compare Merchant Shipping Act, 1894, section 417; Inebriates Act 1898, section 21) but this is not used now.
1080 (ii) Negative resolution.
Instruments so laid have immediate operative effect but are subject to annulment within forty days without prejudice to a new instrument being made.
The phraseology generally used is "subject to annulment in pursuance of a resolution of either House of Parliament.
" This is by far the commonest form of laying.
It acts mostly as a deterrent and sometimes forces a Minister (in Sir Cecil Carr 's phrase) to "buy off opposition" by proposing some modification.
(iii) Affirmative resolution.
The phraseology here is normally "no order shall be made unless a draft has been laid before Parliament and has been approved by a resolution of each House of Parliament.
Normally, no time limit is fixed for obtaining approval none is necessary because the Government will naturally take the earliest opportunity of bringing it up for approval but section 16(3) of the Housing (Financial and Miscellaneous Provisions) Act, 1946 did impose a limit of forty days.
An old form (not much used nowadays) provided for an order to be made but not to become operative until a resolution of both Houses of Parliament had been obtained.
This form was used in section 10(4) of the Road Traffic Act, 1930 (cf.
Road Traffic Act, 1960, s.19 (3) .
The affirmative resolution procedure necessitates a debate in every case.
This means that one object of delegation of legislation (viz. saving the time of Parliament) is to some extent defeated.
The procedure therefore is sparingly used and is more or less reserved to cases where the order almost amounts to an Act, by effecting changes which approximate to true legislation (e.g. where the order is the meat of the matter, the enabling Act merely outlining the general purpose) or where the order replaces local Acts or provisional orders and, most important of all, where the spending, etc.
of public money is affected.
Sometimes where speedy or secret action is required (e.g. the imposition of import duties), the order is laid with immediate operation but has to be confirmed within a certain period of Import Duties Act, 1958, 1081 s.13(4).
This process of acting first and getting approval after has also been adopted in the Emergency Powers Act, 1920 under which a state of emergency can be proclaimed and regulations made.
The proclamation must be immediately communicated to Parliament and does not have effect for longer than a month: but it can be replaced by another proclamation.
Any regulations made under the proclamation are to be laid before Parliament immediately and do not continue in force after the expiration of seven days from the time when they are so laid unless a resolution is passed by both Houses providing for their continuance." Now at page 317 of the aforesaid Edition of Craies on Statute Law, the questions whether the direction to lay the rules before Parliament is mandatory or merely directory and whether laying is a condition precedent to their operation or may be neglected without prejudice to the effect of the rules are answered by saying that "each case must depend on its own circumstances or the wording of the statute under which the rules are made.
" In the instant case, it would be noticed that sub section(6) of section 3 of the Act merely provides that every order made under section 3 by the Central Government or by any officer or authority of the Central Government shall be laid before both Houses of Parliament, as soon as may be, after it is made.
It does not provide that it shall be subject to the negative or the affirmative resolution by either House of Parliament.
It also does not provide that it shall be open to the Parliament to approve or disapprove the order made under section 3 of the Act.
It does not even say that it shall be subject to any modification which either House of Parliament may in its wisdom think it necessary to provide.
It does not even specify the period for which the order is to be laid before both Houses of Parliament nor does it provide any penalty for non observance of or non compliance with the direction as to the laying of the order before both Houses of Parliament.
It would also be noticed that the requirement as to the laying of the order before both Houses of Parliament is not a condition precedent but subsequent to the making of the order.
In other words, there is no prohibition to the making of the orders without the approval of both Houses of Parliament.
In these circumstances, we are clearly of the view that the requirement as to laying contained in sub section (6) of section 3 of the Act falls within the first category i.e. "simple laying" and 1082 is directory not mandatory.
We are fortified in this view by a catena of decisions, both English and Indian.
In Bailey vs Williamson(1) whereby section 9 of the Parks Regulations Act, 1872 passed on June 27, 1872 "to protect the royal parks from injury, and to protect the public in the enjoyment of those royal parks and other royal possessions for the purpose of innocent recreation and exercise" it was provided that any rules made in pursuance of the first schedule to the Act shall be forthwith laid before both Houses of Parliament, if Parliament be sitting, or if not, then within three weeks after the beginning of the then next ensuing session of Parliament; and if any such rules shall be disapproved by either House of Parliament within one month of the laying, such rules, or such parts thereof as shall be disapproved shall not be enforced and Rules for Hyde Park were made and published on September 30, 1872 when Parliament was not sitting and in November 18, 1872, the appellant was convicted under section 4 of the Act for that he did unlawfully act in contravention of Regulation 8 contained in the first schedule annexed thereto by delivering a public address not in accordance with the rules of the said Park but contrary to the statute, and it was inter alia contended on his behalf that in the absence of distinct words in the statute stating that the rules would be operative in the interval from the time they were made to the time when Parliament should meet next or if Parliament was sitting then during the month during which Parliament had an opportunity of expressing its opinion upon them, no rule made as supplementing the schedule could be operative so as to render a person liable to be convicted for infraction thereof unless the same had been laid before the Parliament, it was held overruling the contention that the Rules became effective from the time they were made and it could not be the intention of the Legislature that the laying of the rules before Parliament should be made a condition precedent to their acquiring validity and that they should not take effect until they are laid before and approved by Parliament.
If the Legislature had intended the same thing as in section 4, that the rules should not take effect until they had the sanction of the Parliament, it would have expressly said so by employing negative language.
In Starey vs Graham(2) where it was contended that the Register of Patent Agents Rules, 1889 which had been repealed by Rules of 1890 could not be re enacted by mere reference without complying with the provisions of section 101, sub section 4 of 46 and 47 Vict.
c. 57 according to which, a copy of the Rules of 1889 should also have been 1083 laid before both Houses of Parliament in order to make them valid, Channell, J. said : "I somewhat doubt whether the provisions of section 101 are more than directory and whether it is necessary in any particular case where reliance is placed on such rules to prove that in fact its provisions had been complied with." In Jan Mohammad Noor Mohammad Bagban vs The State of Gujarat & Anr.(1) where it was urged by the petitioner that the rules framed by the Provincial Government in 1941 in exercise of the powers conferred on it under section 26(1) of the Bombay Agricultural Produce Markets Act (22 of 1939) had no legal validity as they were not laid before each of the Houses of the Provincial Legislature at the session thereof next following as provided by sub section (5) of section 26 of the Act, this Court rejected the contention and upheld the validity of the said rules.
The following observations made in that case by Shah, J. (as he then was) on behalf of the Constitution Bench are apposite: "The rules under Act 22 of 1939 were framed by the Provincial Government of Bombay in 1941.
At that time there was no Legislature in session, the Legislature having been suspended during the emergency arising out of World War II.
The session of the Bombay Legislative Assembly was convened for the first time after 1941 on May 20, 1946 and that session was prorogued on May 24, 1946.
The second session of the Bombay Legislative Assembly was convened on July 15, 1946 and that of the Bombay Legislative Council on September 3, 1946 and the rules were placed on the Assembly Table in the second session before the Legislative Assembly on September 1, 1946 and before the Legislative Council on September 13, 1946.
Section 26(5) of Bombay Act 22 of 1939 does not prescribe that the rules acquired validity only from the date on which they were placed before the Houses of Legislature.
The rules are valid from the date on which they are made under section 26(1).
It is true that the Legislature has prescribed that the rules shall be placed before the Houses of Legislature, but failure to place the rules before Houses of Legislature does affect the validity of the rules, merely because they have not been placed before the Houses of the Legislature.
Granting that the provisions of sub section
(5) of section 26 by reason of the failure to place the rules before the Houses of Legislature were 1084 violated, we are of the view that Sub section
(5) of section 26 having regard to the purposes for which it is made, and in the context in which it occurs, cannot be regarded as mandatory.
(Emphasis supplied).
The rules have been in operation since the year 1941 and by virtue of section 64 of the Gujarat Act 20 of 1964 they continue to remain in operation.
In D. K. Krishnan vs Secretary, Regional Transport Authority, Chittor(1) where the validity of Rule 13 A of the Madras Motor Vehicles Rules, 1940, made under the empowering the Regional Transport Authority to delegate its functions to the Secretary was challenged on the ground that it was not laid before the Legislature of the Madras State as required by section 133(3) of the Act which provided that the rules shall be laid for not less than fourteen days before the Legislature as soon as possible after they are made and shall be subject to such modification as Parliament or such Legislature may make during the session in which they are so laid, Sabba Rao, J. (as he then was) after an exhaustive review of the case law and the text books on constitutional law by eminent jurists repelled the contention observing as follows : "The aforesaid discussion in the text books and the case law indicate the various methods adopted by the Parliament or legislature to control delegated legislation.
That control is sought to be effected by directing the rules or regulations made by the delegated authority to be laid before the Parliament.
Where the statute makes the laying of the rules before Parliament a condition precedent or the resolution of the Parliament a condition subsequent, there is no difficulty as in the former case, the rule has no legal force at all till the condition precedent is complied with and in the latter case, it ceases to have force from the date of non compliance with the condition subsequent.
Nor can there be any difficulty in a case where the Parliament or the Legislature, as the case may be, specifically prescribes the legal effect of non compliance with that condition.
But more important question arises when the Parliament directs the laying of the rules before the Parliament without providing for the consequences of non compliance with the rule.
1085 In the case of a statute directing rules to be laid before the Parliament or the Legislature without any condition attached, the rule is only directory.
Though the statute says that the rules shall be laid before the Parliament as the provision in the statute is conceived in public interests, the dereliction of the duty by the Minister or other officer concerned in not following the procedure should not be made to affect the members of the public governed by the rules.
It may be asked and legitimately too that when the Parliament to keep its control over delegated legislation directs that the rules shall be laid before the Parliament and if that rule is construed as directory, the object itself would be defeated.
But the Parliament or the Legislature, as the case may be if they intended to make that rule mandatory, they would have clearly mentioned the legal consequences of its non compliance as they have done in other cases.
This rule (i.e. the one contained in Section 133(3) therefore, is not made either a condition precedent or a condition subsequent to the coming into force of the rules.
It does not provide for any affirmative resolution.
The role continues to be in force till it is modified by the Parliament.
If sub section (3) is only directory, in view of the opinion expressed by us, it is clear from a fair reading of the words used in the section that the rules made under the section came into effect immediately they were published and they continued to be in force because it is not suggested that they were modified by the Legislature.
We, therefore, hold that the rule in question is valid.
" In State vs Karna(1) where the very question with which we are concerned in the present case cropped up in connection with the Rajasthan Foodgrains (Restrictions on Border Movement) Order, 1959, a bench of Rajasthan High Court said as follows: "It is important to note that laying the Order before both the Houses of Parliament is not a condition precedent for bringing into force the Order.
All that sub section (6) provides is that every Order made under sec.
3 of the by the Central Government or by any officer or authority of the Central Government shall be laid before both the Houses of Parliament as soon as after it is made.
It is significant that 1086 the Order is valid and effective from the date it is duly promulgated.
Even the limit or period within which it must be placed before the Parliament has not been specified.
It is, therefore, not possible to hold that sub sec.
(6) of sec.
3 of the is mandatory.
If the legislature intended that in order to provide an adequate safeguard it was necessary to make the said provision mandatory it could have done so in express words.
We are, therefore, of the opinion that the order cannot be considered as invalid merely because the State was not able to put on record proof of the fact that the Order was laid before both the Houses of Parliament." In Mathura Prasad Yadava vs Inspector General, Rly.
Protection Force, Railway Board, New Delhi & Ors.(1) where it was contended that Regulation 14 of the Railway Protection Force Regulations, 1966 made under section 21 of the Railway Protection Force Act (23 of 1957) was invalid as it was not laid before both Houses of Parliament as required by sub section (3) of section 21 of the Act, it was held: "What then is the consequence of failure to lay the regulation ?.
A correct construction of any particular laying clause depends upon its own terms.
If a laying clause defers the coming into force of the rules until they are laid, the rules do not come into force before laying and the requirement of laying is obligatory to make the rule operative.
So the requirement of laying in a laying clause which requires an affirmative procedure will be held to be mandatory for making the rules operative, because, in such cases the rules do not come into force until they are approved, whether with or without modification, by Parliament.
But in case of a laying clause which requires a negative procedure the coming into force of the rules is not deferred and the rules come into force immediately they are made.
The effect of a laying clause of this variety is that the rules continue subject to any modification that Parliament may choose to make when they are laid; but the rules remain operative until they are so modified.
Laying clauses requiring a negative procedure are, therefore, construed as directory.
The matter is put beyond controversy by the decision of the Supreme Court in Jan Mohd. vs State of Gujarat (supra).
Our conclusion, therefore, is that the laying requirement enacted in section 21(3) of the Act is merely directory.
It logically follows that failure to lay Regulation 1087 14 has no effect on its validity and it continues to be effective and operative from the date it was made." Relying on the decision in D. K. Krishnan vs Secretary Regional Transport Authority, Chittoor (supra), Grover, J. speaking for the bench in Krishna Khanna & Anr.
vs State of Punjab(1) said that sub section (6) of section 3 of the was merely of a directory nature and its non compliance did not render the Punjab Coal Control Order, 1955 invalid or void.
Metcalfe & Ors.
vs Cox & Ors.
(2) where the Commissioners (charged with the duty of making provisions for improving the administration of the Scotish Universities) assuming to act under powers of section 16 of the Universities (Scotland) Act, 1889 executed an instrument in writing declaring that they had affiliated and did thereby affiliate the University College of Dundee to and make it form part of the University of St. Andrews which was treated as an ordinance and held to be invalid on the ground that it had not been laid before Parliament is not helpful to the appellants, as the decision in that case turned upon the construction of the language of section 20 of the said Act which provided that all ordinances made by the Commissioners are to be published in the Edinburgh Gazette, laid before Parliament and submitted to Her Majesty, the Queen for approval and no such ordinance shall be effectual until it shall have been so published, laid before Parliament and approved by Her Majesty in Council.
The decision of this Court in Narendra Kumar & Ors.
vs The Union of India & Ors.(3) on which counsel for the appellants have heavily leaned is clearly distinguishable.
In that case, the Non ferrous Metal Control Order, 1958 was held to be invalid essentially on the ground that the principles specified by the Central Government in accordance with clause 4 of the Order were not published either on April 2, 1958 on which the order was published in the Government Gazette or any other date.
It would be noticed that while considering the effect of non publication of the aforesaid principles which formed an integral part of the order by which alone the Central Government could regulate the distribution and supply of the essential commodities, it was only incidentally that a mention was made by the Court to the effect that the principles had not been laid before both Houses of Parliament.
Likewise the decisions of this Court in Express Newspapers (Private) Ltd. & Anr.
vs The Union of India & Ors(4) and in re: The 1088 Kerala Education Bill A.I.R. 1958 S.C. 956) are also not helpful to the appellants.
The point involved in the present case was not directly in issue in those cases and the observations made therein about laying were merely incidental.
From the foregoing discussion, it inevitably follows that the Legislature never intended that non compliance with the requirement of laying as envisaged by sub section (6) of section 3 of the Act should render the order void.
Consequently non laying of the aforesaid notification fixing the maximum selling prices of various categories of iron and steel including the commodity in question before both Houses of Parliament cannot result in nullification of the notification.
Accordingly, we answer the aforesaid question in the negative.
In view of this answer, it is not necessary to deal with the other contention raised by the respondent to the effect that the aforesaid notification being of a subsidiary character, it was not necessary to lay it before both Houses of Parliament to make it valid.
In the result, the appeal fails and is dismissed.
N.V.K. Appeal dismissed.
| IN-Abs | The appellants were prosecuted for the offence of acquiring a controlled commodity at a rate higher than the maximum statutory price fixed for such commodity by the Iron Control Order, 1956.
In the course of proceedings before the trial court the appellants made an application u/s 251A & 288 Cr.
P.C. raising various objections to their prosecution including, that the notification fixing maximum selling prices of various categories of Iron & Steel including the commodity in question was not placed before the Parliament and as such was not valid.
Observing that the laying of the notification before the Parliament could be proved by contemporaneous record and that it was not possible to hold that cognizance of the offence was taken on an invalid report and the order framing the charge was a nullity the trial Court dismissed the application.
In its writ petition filed under articles 226 and 227 of the Constitution, the appellants challenged their prosecution on the ground that the control order and the notification did not have the force of law as they had not been laid before the Houses of Parliament within a reasonable time as required by the .
The High Court dismissed the writ petition.
On the question, whether the notification fixing the maximum selling price of the commodity was void, for not having been laid before both Houses of Parliament.
Dismissing the appeal, the Court ^ HELD: 1.
Non laying of the notification fixing the maximum selling prices of various categories of iron and steel including the commodity in question before both Houses of Parliament cannot result in nullification of the notification.
The legislature never intended that non compliance with the requirement of laying as envisaged by section 3(6) of the Act should render the order void.
Though section 3(6) of the Act provides that every order made by the Central Government or by any officer or authority of the Central Government shall be laid before both Houses of Parliament as soon as may be after it is made, the important point to be considered in the absence of a provision prescribing the conditions, the period and the legal effect of the laying of the order before the Parliament is whether the provision is directory or mandatory.
The use of the word 'shall ' is not conclusive and decisive of the matter and the Court has to ascertain the true intention of the legislature, which is the determining factor, and that must be done by looking carefully to the whole scope, nature and design of the statute.
[1078 C E] State of U.P. vs Manbodhan Lal Srivastava, ; , The State of Uttar Pradesh and Ors.
vs Babu Ram Upadhya, ; referred to.
Craies Statute Law 5th Edn.
p. 242.
Two considerations for regarding a provision as directory are: (1) absence of any provision for the contingency of a particular provision not been complied with or followed and (2) serious general inconvenience and prejudice that would result to the general public if the act of the government or an instrumentality is declared invalid for non compliance with the particular provision.[1079 C] 4.
The policy and object underlying the provisions relating to laying the delegated legislation made by the subordinate law making authorities or orders passed by subordinate executive instrumentalities before both Houses of Parliament, being to keep supervision and control over the aforesaid authorities and instrumentalities, the "laying clauses" assume different forms depending on the degree of control which the Legislature may like to exercise.
The three kinds of laying which are generally used by the Legislature are (i) laying without further procedure (ii) laying subject to negative resolution, (iii) laying subject to affirmative resolution.
Each case must depend on its own circumstances or the wording of the statute under which the rules are made.
[1079 D, E; 1081 D] Hukam Chand etc.
vs Union of India and Ors.
referred to.
Craies Statute Law 7th Edn.
305 307.
In the instant case, section 3(6) of the Act merely provides that every order made under section 3 by the Central Government or by any officer or authority of the Central Government, shall be laid before both Houses of Parliament, as soon as may be, after it is made.
It does not provide that it shall be subject to the negative or the affirmative resolution by either House of Parliament.
It also does not provide that it shall be open to the Parliament, to approve or disapprove the order made under section 3 of the Act.
It does not even say that it shall be subject to any modification which either House of Parliament may in its wisdom think it necessary to provide.
It does not even specify the period for which the order is to be laid before both Houses of Parliament nor does it provide any penalty for non observance of or non compliance with the direction as to the laying of 1072 the order before both Houses of Parliament.
The requirement as to the laying of the order before both Houses of Parliament is not a condition precedent but subsequent to the making of the order.
In other words, there is no prohibition to the making of the orders without the approval of both Houses of Parliament.
Therefore the requirement as to laying contained in section 3(6) of the Act falls within the first category i.e. "simple laying" and is directory and not mandatory.
[1081 E 1082 A] Jan Mohammed Noor Mohammed Bagban vs The State of Gujarat and Anr., ; ; relied on.
D. K. Krishnan vs Secretary, Regional Transport Authority Chittor, A.I.R. 1956 AP.
129, State vs Karna Mathura Prasad Yadava vs Inspector General, Railway Protection Force, Railway Board, New Delhi and Ors. , Krishna Khanna and Anr.
vs State of Punjab, A.I.R. 1958, Punjab 32; approved.
Narendra Kumar and Ors.
vs The Union of India and Ors., ; ; distinguished.
Express Newspapers (P) Ltd. and Anr.
vs The Union of India and Ors., ; In re.
Kerala Education Bill ; not applicable.
Bailey vs Williamson 1873 LR VIII Q.B. 118, Storey vs Graham referred to.
|
Civil Appeal No. 839 of 1978.
From the Judgment and Order dated 11 3 1978 of the Disciplinary Committee of the Bar Council of India, New Delhi D.C. Appeal No. 14/75.
G. L. Sanghi and A. T. M. Sampath for the Appellant.
Nemo for the Respondent.
The following Judgments were delivered KRISHNA IYER, J.
We agree wholly with our learned brother Sen, J., that the appellant is guilty of gross professional misconduct and deserves condign punishment.
But conventional penalties have their punitive limitations and flaws, viewed from the reformatory angle.
A therapeutic touch, a correctional twist, and a locus penitentiae, may have rehabilitative, impact, if only we may experiment unorthodoxly but within the parameters of the law.
Oriented on this approach and adopting the finding of guilt, we proceed to consider the penalty, assuming the need for innovation and departing from wooden traditionalism.
A middle aged man, advocate by profession, has grossly misconducted himself and deceived a common client.
Going by precedent, the suspension from practice for one year was none too harsh.
Sharp practice by members of noble professions deserves even disbarment.
The wages of sin is death.
1058 Even so, justice has a correctional edge, a socially useful function, especially when the delinquent is too old to be pardoned and too young to be disbarred.
Therefore, a curative, not cruel punishment has to be designed in the social setting of the legal profession.
Law is a noble profession, true; but it is also an elitist profession.
Its ethics, in practice, (not in theory, though) leave much to be desired, if viewed as a profession for the people.
When the constitution under Article 19 enables professional expertise to enjoy a privilege and the confers a monopoly, the goal is not assured income but commitment to the people whose hunger, privation and hamstrung human rights need the advocacy of the profession to change the existing order into a Human Tomorrow.
This desideratum gives the clue to the direction of the penance of a devient geared to correction.
Serve the people free and expiate your sin, is the hint.
Law 's nobility as a profession lasts only so long as the member maintain their commitment to integrity and service to the community.
Indeed, the monopoly conferred on the legal profession by Parliament is coupled with a responsibility a responsibility towards the people, especially the poor.
Viewed from this angle, every delinquent who deceives his common client deserves to be frowned upon.
This approach makes it a reproach to reduce the punishment, as pleaded by learned counsel for the appellant.
But, as we have explained at the start, every punishment, however, has a functional duality deterrence and correction.
Punishment for professional misconduct is no exception to this 'social justice ' test.
In the present case, therefore, from the punitive angle, the deterrent component persuades us not to interfere with the suspension from practice reduced 'benignly ' at the appellate level to one year.
From the correctional angle, a gesture from the Court may encourage the appellant to turn a new page.
He is not too old to mend his ways.
He has suffered a litigative ordeal, but more importantly he has a career ahead.
To give him an opportunity to rehabilitate himself by changing his ways, resisting temptations and atoning for the serious delinquency, by a more zealous devotion to people 's causes like legal aid to the poor, may be a step in the correctional direction.
Can these goals be accommodated within the scheme of the statute? Benignancy beyond the bounds of law are not for judges to try.
1059 Speaking frankly, Sec.
35(3) has a mechanistic texture, a set of punitive pigeon holes, but we may note that words grow in content with time and circumstance, that phrases are flexible in semantics, that the printed text is a set of vessels into which the court may pour appropriate judicial meaning.
That statute is sick which is allergic to change in sense which the times demand and the text does not countermand.
That court is superficial which stops with the cognitive and declines the creative function of construction.
So, we take the view that 'quarrying ' more meaning is permissible out of Sec.
35(3) and the appeal provisions, in the brooding background of social justice, sanctified by article 38, and of free legal aid enshrined by article 39A of the Constitution.
"A statute rarely stands alone.
Back of Minerva was the brain of Jove, and behind Venus was the spume of the ocean." (The Interpretation and Application of Statutes Read Dickerson p. 103) Back to the Act.
35(3) reads: "The disciplinary committee of a State Bar Council after giving the advocate concerned and the Advocate General an opportunity of being heard, 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 from practice for such period as it may deem fit; (d) remove the name of the advocate from the State roll of advocates.
37 provides an appeal to the Bar Council of India.
It runs: 37(1) Any person aggrieved by an order of the disciplinary committee of a State Bar Council made (under section 35) (or the Advocate General of the State) may, within sixty days of the date of the communication of the order to him, prefer an appeal to the Bar Council of India.
1060 (2) Every such appeal shall be heard by the disciplinary committee of the Bar Council of India which may pass such order (including an order varying the punishment awarded by the disciplinary committee of the State Bar Council) thereon as it deems fit.
Section 38 provides a further, final appeal to the Supreme Court in these terms: "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 concerned, as the case may be) may, within sixty days of the date on which the order is communicated to him, prefer an appeal to the Supreme Court and the Supreme Court may pass such order (including an order varying the punishment awarded by the disciplinary committee of the Bar Council of India) thereon as it deems fit." Section 35(3) (c) enables suspensions of the advocate whether conditionally or absolutely, it is left unclear.
Section 37 (2) empowers the Bar Council of India widely to 'pass such order as it deems fit. ' And the Supreme Court, under Sec.
38 enjoys ample and flexible powers to 'pass such order. as it deems fit '.
Wide as the power may be, the order must be germane to the Act and its purposes, and latitude cannot transcend those limits.
Judicial 'Legisputation ' to borrow a telling phrase of J. Cohen, is not legislation but application of a given legislation to new or unforeseen needs and situations broadly falling within the statutory provision.
In that sense, 'interpretation is inescapably a kind of legislation '.
This is not legislation stricto sensu but application, and is within the court 's province.
We have therefore sought to adapt the punishment of suspension to serve two purposes injury and expiation.
We think the ends of justice will be served best in this case by directing suspension plus a provision for reduction on an undertaking to this court to serve the poor for a year.
Both are orders within this court 's power.
1061 Tamil Nadu has a well run free legal aid programme with which the Governor and Chief Justice of the State are associated.
The State Legal Aid Board, working actively with two retired Judges of the High Court at the head, may use the services of the appellant keeping a close watch on his work and relations with poor clients, if he applies to the Legal Aid Board for giving him such an opportunity, after getting this court 's order as provided below.
Independently of that, as a token of our inclination to allow the appellant to become people minded in his profession, we reduce the suspension from practice upto the 14th of August 1979.
With the next Independence Day we hope the appellant will inaugurate a better career and slough off old bad habits.
If the appellant gives an undertaking that he will work under any official legal aid body in Tamil Nadu and convinces the Chairman of the State Legal Aid Board, Tamil Nadu, to accept his services in any specific place where currently there is an on going project, produces a certificate in this behalf from the Board, and gives an undertaking to this Court that he will do only free legal aid for one year as reasonably directed by the Board (and shall not, during that period, accept any private engagement), his period of suspension shall stand terminated with effect from January 26, 1979.
As a condition precedent to his moving this court he must pay (and produce a receipt) Rs. 2,500/ to the victim of the misconduct.
Atonement cannot be by mere paper pledges but by actual service to the people and reparation for the victim.
That is why we make this departure in the punitive part of our order.
Innovation within the frame work of the law is of the essence of the evolutionary process of juridical development.
From that angle, we think it proper to make a correctional experiment as a super addition to punitive infliction.
Therefore, we make it clear that our action is less a precedent than a portent.
With the modification made above, we dismiss the appeal.
SEN, J.
This appeal under section 38 of the by V. C. Rangadurai is directed against an order of the Disciplinary Committee of the Bar Council of India dated March 11, 1978 upholding the order of the Disciplinary Committee II of the State Bar Council, Madras dated May 4, 1975 holding him guilty of professional misconduct but reducing the period of suspension from practice to one year from six years.
There can be no doubt that the appellant had duped the complainants, T. Deivasenapathy, an old deaf man aged 70 years and his aged wife Smt. D. Kamalammal by not filing the suits on two 1062 promissory notes for Rs. 15,000/ and Rs. 5,000/ both dated August 26, 1969 executed by their land lady Smt.
Parvathi Ammal, who had borrowed Rs. 20,000/ from them, by deposit of title deeds.
Admittedly, though the plaint for recovery of the amount due on the promissory note for Rs. 15,000/ with interest thereon bearing court fee of Rs. 1,519.25 was returned for presentation to the proper court, it was never re presented.
It is also not denied that though the appellant had drafted the plaint for recovery of Rs. 5,000/ with interest no such suit was ever filed.
In spite of this, the appellant made false representations to the complainants Deivasenapathy (P.W. 1), his wife Smt.
Kamalammal (P.W. 3) and the power of attorney agent of the complainants, D. Gopalan (P.W. 2) that the suits had been filed and were pending, gave them the various dates fixed in these two suits, and later on falsely told them that the court had passed decrees on the basis of the two promissory notes.
On the faith of such representation the complainants served a lawyer 's notice dated December 25, 1973 (Ext.
P 3) on the debtor Smt.
Maragathammal, to the effect: "That you are aware of my clients ' filing two suits against you for recovery of Rs. 15,000/ and Rs. 5,000/ with due interest and cost thereon and it is not to state that both the suits were decreed as prayed for by my clients in the court proceedings.
My clients further say that in spite of the fact that the suits had been decreed long ago you have not chosen to pay the amount due under the decrees in question and on the other hand trying to sell the property by falsely representing that the original documents have been lost to the prospective buyers.
My clients further state that you are aware of the fact that my clients are in possession of the original documents relating to the property bearing door No. 41 Shaik Daood Street, Royapeeth, Madras 14, but deliberately made false representation as aforesaid with the mala fide intention to defeat and defraud my clients ' amounts due under the decree.
My clients emphatically state that you cannot sell the property in question without disclosing the amounts due to them. .".
1063 It would thus appear that acting on the representations made by the appellant, the complainants called upon the debtor Smt.
Maragathammal to pay the amount due under the decrees failing which they had instructed their lawyer to bring the property to sale.
Actually no such suits had in fact been filed nor any decrees passed.
It is argued that the finding as to professional misconduct on the part of the appellant reached by the Disciplinary Committee of the Bar Council of India is not based on any legal evidence but proceeds on mere conjectures.
It is pointed out that the ultimate conclusion of the Disciplinary Committee cannot be reconciled with its earlier observation that it was not prepared to attach any credence to the conflicting assertion of Deivasenapathy that he had at first handed over Rs. 855/ on December 2, 1970 for filing the suit on the promissory note for Rs. 5,000/ and then paid Rs. 2,555/ some time in July 1972 for filing the suit on the promissory note for Rs. 15,000/ which is in conflict with the allegation in the lawyer 's notice dated February 21, 1974 (Ext.
R 1) that a sum of Rs. 3,410/ was paid on July 17, 1972 to wards court fees and expenses for the filing of the two suits, or that the various dates marked in the copies of the two plaints, Ext.
P 1 and Ext.
P 2, were indeed given by him.
It is urged that the Disciplinary Committee was largely influenced by the fact that the appellant gave the receipt, Ext.
R 7 to K.S. Lakshmi Kumaran, which was found to be forged.
In view of the discrepancies in the testimony of Deivasenapathy, P.W. 1, Smt.
Kamalammal, P.W. 3 and their agent, D. Gopalan, P.W. 2, it was evident that the Disciplinary Committee mainly based the charge of misconduct on mere suspicion.
Lastly, it is said that the complaint was a false one and was an attempt to pressurize the appellant to persuade his client Smt.
Maragathammal to sell the house to the complainants.
We are afraid, the contentions cannot be accepted.
In denial of the charge the appellant pleaded that though he had drafted the plaint in the suit to be filed on the basis of the promissory note for Rs. 5,000/ , he felt that as the debtor Smt.
Maragathammal had consulted him in another matter, it would be better that the complainants engaged some other counsel and he advised them accordingly.
He suggested the names of two or three lawyers out of whom, the complainants engaged K. section Lakshmi Kumaran.
He denied that the two promissory notes were handed over to him or that he had received any amount by way of court fees or towards his fees.
According to him, K.S.Lakshmi Kumaran was, therefore.
instructed to file the suits.
K. section Lakshmi Kumaran, on the other hand, pleaded that he knew nothing about the suits but had in fact signed the Vakalat as a Junior 1064 counsel, as a matter of courtesy at the behest of the appellant.
He pleaded that he had never met the complainants nor had he been instructed by them to file the suits.
He further pleaded that when the complainants served him with their lawyer 's notice dated February 11, 1974, Ext.
R 11, he went and saw the appellant who told him that he had returned the plaint, which was returned by the court, together with all the documents to the complainant Deivasenapathy as per receipt, Ext.
On February 21, 1974 the complainants served another lawyer 's notice on both the appellant and K. section Lakshmi Kumaran.
The appellant and K. section Lakshmi Kumaran sent their replies to this notice.
The appellant 's reply, Ext.
R 2, was practically his defence in the present proceedings.
K. section Lakshmi Kumaran in his reply, Ext.
R 5, refers to the lawyer 's notice, Ext.
R 11, sent by the complainants earlier and states that when he took the notice to the appellant, he told him that the papers were taken back from him by the complainant Dievasenapathy who had passed on to him a receipt.
The Disciplinary Committee, in its carefully written order, has marshalled the entire evidence in the light of the probabilities and accepted the version of K. section Lakshmi Kumaran to be true.
It observes: "Earlier we referred to the conflict between the two advocates.
We cannot help observing that we feel there is want of candour and frankness on the part of RD.
On a careful consideration of the evidence we see no reason to reject the evidence of L that he merely signed the Vakalat and plaint and when the plaint was returned he took the return and passed on the papers to RD.
" It then concludes stating: "On an overall view of the evidence we hold that L was not directly engaged by the parties and that when the plaint with its annexures was returned, L passed it on to RD.
We also accept L 's evidence that when on receipt of the notice Ext.
R 11 he met RD he was informed that the case papers were taken back by P.W. 1 and that some time afterwards RD gave him the receipt Ext.
R 7. . .
It must be, that when the complainants turned against RD suspecting his bona fide he denied having had anything to do in the matter and threw up his junior colleague in the profession stating that he passed the clients no to L and had nothing more to do with the case.
As the clients had no direct contact with L his statement that he handed over the 1065 plaint on its return to RD looks probable and likely.
We accept it.
When a notice was issued to him in the matter he went to RD and RD gave him the receipt Ext.
The receipt purports to be signed by Deivasenapathy and accepted it for what it was worth.
" In that view, both advocates were found guilty of professional misconduct, but differing in character and different in content.
In dealing with the question, it observes: "As regards RD, the litigants entrusted the briefs to him whatever their motive.
The record does not establish that before entrusting the case to L the complainants were introduced by RD to L and L was accepted by them as counsel in charge of the case.
" It condemned both the advocates for their dereliction of duty, but only reprimanded K. section Lakshmi Kumaran, the junior advocate, because he never knew the complainants and had signed the vakalat at the bidding of the appellant, but took a serious view of the misconduct of the appellant, and castigated his whole conduct in no uncertain terms, by observing: "Finding himself in difficulties RD miserably failed in his duty to his fellow advocate very much junior to him in the profession and who trusted him.
The conduct of a lawyer to his brothers in the profession must be characterised by candour and frankness.
He must keep faith with fellow members of the bar.
While quite properly RD did not accept the engagement himself we are of the view that he has been party to the institution of a suit tended merely to harass the defendants in the suit, with a view to secure some benefit for the other party manifestly unprofessional.
" It went on to observe: "The only casualty is RD 's professional ethics in what he might have thought was a gainful yet good samaritan move.
When the move failed and there was no likelihood of his success, the complainants turned against him securing for their help their power of attorney.
Then fear psychosis appears to have set in, leading RD to totally deny his involvement in the plaint that was filed and let down the junior whose assistance he sought.
We see no other probability 1066 out of the tangled web of exaggerations, downright denials, falsehood and fabrications mingled with some truth.
" May be, the complainants were not actuated from a purely altruistic motive in lodging the complaint but that does not exonerate the appellant of his conduct.
The suggestion that the complaint was false one and constituted an attempt at blackmail is not worthy of acceptance.
The property was actually sold to M. M. Hanifa for Rs. 36,000 by registered sale deed dated August 1, 1974, while the complaint was filed in April 1974.
We do not see how the initiation of the proceedings would have pressurised the appellant to compel his client Smt.
Maragathammal to part with the property for Rs. 20,000/ the price offered by the complainants.
It is no doubt true that at one stage they were negotiating for the purchase of the house of which they were the tenants but the price offered by them was too low.
The Disciplinary Committee of the Bar Council of India summoned the purchaser and he stated that from December 1973, he had been trying to purchase the property.
It is also true that in response to the notice dated August 1, 1974 served by the purchaser asking the complainants to attorn to him, they in their reply dated August 8, 1974 expressed surprise that he should have purchased the property for Rs. 36,000/ when in fact it was not worth more than Rs. 26,000/ It matters little whether the amount of Rs. 3,410/ was paid to the appellant in a lump sum or in two instalments.
Deivasenapathy, P.W. 1 faltered when confronted with the notice Ext.
R 1 and the Disciplinary Committee of the Bar Council of India has adversely commented on this by saying that he is not 'an illiterate rustic ' but is an M.I.S.E., a retired Civil Engineer.
This by itself does not disapprove the payment of the amount in question.
It may be the general power of attorney, D. Gopalan, P.W. 2, made a mistake in instructing the counsel in giving the notice.
As regards the various dates appearing on the copies of the two plaints, Exts.
P 1 and P 2, the complainants could not have got these dates by themselves unless they were given by the appellant.
In an appeal under section 38 of the Act, this Court would not, as a general rule, interfere with the concurrent finding of fact by the Disciplinary Committee of the Bar Council of India and of the State Bar Council unless the finding is based on no evidence or it proceeds on mere conjecture and unwarranted inferences.
This is not the case here.
Under the scheme of the Act, the disciplinary jurisdiction vests with the State Bar Council and the Bar Council of India.
Disciplinary 1067 proceedings before the State Bar Council are sui ceneris, are neither civil nor criminal in character, and are not subject to the ordinary criminal procedural safeguards.
The purpose of disciplinary proceedings is not punitive but to inquire, for the protection of the public, the courts and the legal profession, into fitness of the subject to continue in the capacity of an advocate.
Findings in disciplinary proceedings must be sustained by a higher degree of proof than that required in civil suits, yet falling short of the proof required to sustain a conviction in a criminal prosecution.
There should be convincing preponderance of evidence.
That test is clearly fulfilled in the instant case.
When 'a lawyer has been tried by his peers ', in the words of our brother Desai J., there is no reason for this Court to interfere in appeal with the finding in such a domestic enquiry merely because on a reappraisal of the evidence a different view is possible.
In the facts and circumstances of the case, we are satisfied that no other conclusion is possible than the one reached.
There is, therefore, no ground for interference with the finding of the Disciplinary Committee of the Bar Council of India.
It is not in accordance with professional etiquette for one advocate to hand over his brief to another to take his place at a hearing (either for the whole or part of the hearing), and conduct the case as if the latter had himself been briefed, unless the client consents to this course being taken.
Council 's paramount duty is to the client; accordingly where he forms an opinion that a conflict of interest exists, his duty is to advise the client that he should engage some other lawyer.
It is unprofessional to represent conflicting interests, except by express consent given by all concerned after a full disclosure of the facts.
Nothing should be done by any member of the legal fraternity which might tend to lessen in any degree the confidence of the public in the fidelity, honesty and integrity of the profession.
Lord Brougham, then aged eighty six, said in a speech, in 1864, that the first great quality of an advocate was 'to reckon everything subordinate to the interests of his client '.
What he said in 1864 about 'the paramountcy of the client 's interest '.
is equally true today.
The relation between a lawyer and his client is highly fiduciary in its nature and of a very delicate, exacting, and confidential character requiring a high degree of fidelity and good faith.
It is purely a personal relationship, involving the highest personal trust and confidence which cannot be delegated without consent.
A lawyer when entrusted with a brief, is expected to follow the norms of professional ethics and try to protect the interests of his clients, in relation to whom he occupies a position of trust.
The 1068 appellant completely betrayed the trust reposed in him by the complainants.
It is needless to stress that in a case like this the punishment has to be deterrent.
There was in this case complete lack of candour on the part of the appellant, in that he in a frantic effort to save himself, threw the entire blame on his junior, K. section Lakshmi Kumaran.
The evidence on record clearly shows that it was the appellant who had been engaged by the complainants to file suits on the two promissory notes for recovery of a large sum of Rs. 20,000/ with interest due thereon.
There was also complete lack of probity on the part of the appellant because it appears that he knew the debtor, Smt.
Maragathammal for 7/8 years and had, indeed, been appearing for her in succession certificate proceedings.
If there was any conflict of interest and duty, he should have declined to accept the brief.
What is reprehensible is that he not only accepted the brief, pocketed the money meant for court fees, and never filed the suits.
The appeal for mercy appears to be wholly misplaced.
It is a breach of integrity and a lack of probity for a lawyer to wrongfully withhold the money of his client.
In a case of such grave professional misconduct, the State Bar Council observes that the appellant deserved the punishment of disbarment, but looking to his young age, only suspended him from practice for a period of six years.
The Disciplinary Committee of the Bar Council of India has already taken a lenient view and reduced the period of suspension from six years to one year, as in its view the complainants did not suffer by the suits not being proceeded with because even if they had obtained decrees for money, they would still have been required to file a regular mortgage suit for the sale of the property charged.
In the facts and circumstances of the case, I am of the view that the punishment awarded by the Disciplinary Committee of the Bar Council of India does not warrant any further interference.
I have had the advantage of reading the judgment of my learned brother Krishna Iyer for the restitution to the appellant of his right to practice upon fulfilment of certain conditions.
I have my own reservations in the matter, that is, whether any such direction should at all be made in the present case.
Where it is shown that the advocate acted in bad faith towards his client in detaining or misappropriating funds of the client, or that the wrong was committed or aided by means of false representations, fraud or deceit, as here, the fact that the advocate makes restitution to 1069 or settlement with the client will not prevent disbarment, especially where restitution was not made until after the commencement of the disciplinary proceedings.
It is only an ameliorating circumstance but does not mitigate the offence involved in the misappropriation, particularly when the repayment is made under pressure.
When there is disbarment or suspension from practice, the lawyer must prove, if he can, after the expiration of a reasonable length of time, that he appreciates the significance of his dereliction, that he has lived a consistent life of probity and integrity, and that he possesses the good character necessary to guarantee uprightness and honour in his professional dealings, and therefore is worthy to be restored.
The burden is on the applicant to establish that he is entitled to resume the privilege of practising law without restrictions.
There is nothing of the kind in the present case.
Further, even if this Court has the power to make such a direction.
in terms of section 38, the Court has a duty to act with justice to the profession and the public as well as the appellant seeking reinstatement, and without regard to mere feelings of sympathy for the applicant.
Feelings of sympathy or a feeling that the lawyer has been sufficiently punished are not grounds for reinstatement.
I also doubt whether a direction can be made requiring the advocate to undertake free legal aid during the period of his suspension.
This would be a contradiction in terms.
Under section 35(4), when an advocate is suspended from practice under cl.(c) of sub section
(3) thereof, he shall, during the period of suspension, be debarred from practising in any court or before any authority or person in India.
If the making on such a direction implies the termination of the order of suspension, on the fulfilment of the conditions laid down, I am of the considered view that no restriction on the right of the advocate to appear before any court or authority, which privilege he enjoys under section 30 of the Act, can be imposed.
The taking, of too lenient a view in the facts and circumstances of the case, I feel, would not be conducive to the disciplinary control of the State Bar Councils.
I would, for these reasons, dismiss the appeal and maintain the punishment imposed on the appellant.
In conclusion, I do hope the appellant will fully reciprocate the noble gesture shown to him by the majority, come up to their expectations and turn a new leaf in life.
It should be his constant endeavour to keep the fair name of the great profession to which he belongs unsullied.
S.R. Appeal dismissed.
| IN-Abs | The appellant was found guilty of gross professional misconduct by the Disciplinary Committee II of the State Bar Council, Tamil Nadu and was therefore, debarred from practice as an Advocate for a period of six years.
In appeal, the Bar Council of India upheld the said findings but reduced the period of suspension to one year.
Dismissing the appeal, the Court Per Iyer, J. (on behalf of Desai, J. and himself) ^ HELD: 1.
Punishment has a functional duality deterrence and correction.
But conventional penalties have their punitive limitations and flaws, viewed from the reformatory angle.
A therapeutic touch, a correctional twist, and a locus penitentiae, may have rehabilitative impact if only Courts may experiment unorthodoxly but within the parameters of the law.
[1057 F G; 1058 E] When the Constitution under article 19 enables professional expertise to enjoy a privilege and the confers a monopoly, the goal is not assured income but commitment to the people whose hunger, privation and hamstrung human rights need the advocacy of the profession to change the existing order into a Human Tomorrow.
[1058 B C] Justice has correctional edge a socially useful function especially when the delinquent is too old to be pardoned and too young to be disbarred.
Therefore, a curative not cruel punishment has to be designed in the social setting of the legal profession.
Punishment for professional misconduct is no exception to this 'social justice ' test.
[1058 A, E] In the present case, therefore, the deterrent component of the punitive imposition persuades non interference with the suspension from practice reduced 'benignly at the appellate level to one year.
From the correctional angle a gesture from the Court may encourage the appellant to turn a new page.
He is 1055 not too old to mend his ways.
He has suffered a litigative ordeal, but more importantly he has a career ahead.
To give him an opportunity to rehabilitate himself by changing his ways, resisting temptations and atoning for the serious delinquency, by a more zealous devotion to people 's cause like legal aid to the poor may be a step in the correctional direction.[1058 E G] 2.
Judicial legislation is not legislation but application of a given legislation to new or unforeseen needs and situations broadly falling within the statutory provision.
In that sense, interpretation is inescapably a kind of legislation.
Legislation is not legislation stricto sensu but application and is within the Court 's province.
So viewed the punishment of suspension under Sec.
35(3) of the serves two purposes injury and expiation.
The ends of justice will be served best in this case by directing suspension plus a provision for reduction on an undertaking to this Court to serve the poor for a year.
Both are orders within this Court 's power [1060 F H] 3.
Section 35(3) has a mechanistic texture, a set of punitive pigeon holes, but words grow in content with time and circumstance, that phrases are flexible in semantics and the printed text is a set of vessels into which the Court may pour appropriate judicial meaning.
That statute is sick which is allergic to change in sense which the times demand and the text does not countermand.
That Court is superficial which stops with the cognitive and declines the creative function of construction. 'Quarrying ' more meaning is permissible out of Sec.
35(3) and the appeal provisions in a brooding background of social justice sanctified by article 38 and of free legal aid enshrined by article 39A of the Constitution.
[1059 A B] Per Sen (J) In an appeal under Sec.
38 of the the Supreme Court would not, as a general rule interfere with the concurrent findings of fact by the Disciplinary Committee, Bar Council of India and the State Bar Council unless the findings is based on no evidence or it proceeds on mere conjecture and unwarranted inferences.
[1066 G H] When 'a lawyer has been tried by his peers ' the Supreme Court cannot interfere in an appeal with the finding in such a domestic enquiry merely because on a re appraisal of the evidence a different view is possible.
In the facts and circumstances of the case, no other conclusion is possible than the conclusion reached.
There is, therefore no ground for interference with the finding of the Disciplinary Committee of the Bar Council of India.
[1067 C D] 2.
Disciplinary proceedings before the State Bar Council are sui generis, are neither civil nor criminal in character and are not subject to the ordinary criminal procedural safeguards.
The purpose of disciplinary proceedings is not punitive but to inquire, for the protection of the public, the Courts and the legal profession into fitness of the subject to continue in the capacity of an advocate.
Findings in disciplinary proceedings must be sustained by a higher degree of proof than that required in civil suits, yet falling short of the proof required to sustain a conviction in a criminal prosecution.
There should be convincing preponderance of evidence.
That test is clearly fulfilled in the instant case.
[1067 A B] 3.
It is not in accordance with professional etiquette for one advocate to hand over his brief to another to take his place at a hearing (either for the whole or 1056 part of the hearing), and conduct the case as if the latter had himself been briefed, unless the client consents to this course being taken.
Counsel 's paramount duty is to the client; accordingly where he forms an opinion that a conflict of interest exists, his duty is to advise the client that he should engage some other lawyer.
It is unprofessional to represent conflicting interests, except by express consent given by all concerned after a full disclosure of the facts.
[1067 D E] In the instant case, if there was any conflict of interest and duty the appellant should have declined to accept the brief.
What is reprehensible is that he not only accepted the brief, pocketed the money meant for court fees, and never filed the suits but in a frantic effort to save himself, he threw the entire blame on his junior.
[1068 B C] Nothing should be done by any member of the legal fraternity which might tend to lessen in any degree the confidence of the public in the fidelity, honesty and integrity of the profession.
The relation between a lawyer and his client is highly fiduciary in its nature and of a very delicate, exacting, and confidential character requiring a high degree of fidelity and good faith.
It is purely a personal relationship, involving the highest personal trust and confidence which cannot be delegated without consent.
A lawyer when entrusted with a brief, is expected to follow the norms of professional ethics and try to protect the interests of his clients, in relation to whom he occupies a position of trust.
The appellant completely betrayed the trust reposed in him by the complainants in this case.
[1067 F, G H; 1068 A] 4.
The punishment awarded by the Disciplinary Committee of the Bar Council of India does not warrant any further interference.
In a case like this, the punishment has to be deterrent.
Any appeal for mercy is wholly misplaced.
It is a breach of integrity and a lack of probity for a lawyer to wrongfully with hold the money of his client and there was in this case complete lack of candour on the part of the appellant.
[1068 D, F] (per contra) (a) Where it is shown that the advocate acted in bad faith towards his client in detaining or misappropriating funds of the client, or that the wrong was committed or aided by means of false representations, fraud or deceit, the fact that the advocate makes restitution to or settlement with the client will not prevent disbarment especially where restitution was not made until after the commencement of the disciplinary proceedings.
It is only an ameliorating circumstance but does not mitigate the offence involved in the misappropriation particularly when the repayment is made under pressure.
[1068 H, 1069 A] (b) When there is disbarment or suspension from practice, the lawyer must prove, if he can, after the expiration of a reasonable length of time, that he appreciates the significance of his dereliction, that he possesses the good character necessary to guarantee uprightness and honour in his professional dealings, and therefore is worthy to be restored.
The burden is on the applicant to establish that he is entitled to resume the privilege of practising law without restrictions.
There is nothing of the kind in the present case.
Even if the Supreme Court has the power to make such a direction, in terms of section 38, the Court has a duty to act with justice to the profession and the public as well as the appellant seeking reinstatement, and without regard to mere feelings of sympathy for the applicant.
Feelings of sympathy or a feeling that the lawyer has been sufficiently punished are not grounds for reinstatement.
[1068 B D] 1057 (c) A direction requiring the advocate to undertake free legal aid during the period of his suspension would be a contradiction in terms.
Under section 35(4), when an advocate is suspended from practice under cl.
(c) of sub section
(3) thereof, he shall, during the period of suspension be debarred from practising in any court or before any authority or person in India.
If the making of such a direction implies the termination of the order of suspension, on the fulfilment of the conditions laid down, no restriction on the right of the advocate to appear before any Court or authority, which privilege he enjoys under section 30 of the Act, can be imposed.[1069 D F] The Court directed: (i) the appellant to pay a sum of Rs. 2,500/ to the victim of the misconduct and produce a receipt (ii) give an undertaking as directed viz., accepting the suspension from practice upto 14th August 1979 and willingness to undertake work under any legal aid body in Tamil Nadu and convince the Chairman of that Board to accept his services in any specific place where currently there is an on going project, produce a certificate in this behalf from the Board and (iii) agree to do only free legal and for one year as reasonably directed by the Board (and shall not during that period accept any private engagement) so that the period of suspension shall stand terminated with effect from January 26, 1979.
[1061 A D]
|
Civil Appeal No 12 of 1965.
From the Judgment and Decree dated 29 4 1965 of the Rajasthan High Court in D. B. Civil Misc.
Case No. 67 of 1965.
B. D. Sharma for the Appellant.
section N. Kacker, Sol.
Genl., U. R. Lalit and Girish Chandra for Respondent No. l. section M. Jain for Respondent No. 2 The Judgment of the Court was delivered by KOSHAL, J.
The facts forming the background to this appeal by certificate granted by the High Court of Rajasthan against its judgment dated the 29th April 1968, in so far as they are undisputed, may be stated in some detail.
On the 28th February 1948, the Rulers of the erstwhile States of Alwar, Bharatpur, Dholpur and Karauli entered into a Covenant (hereinafter referred to as the Matsya Covenant) agreeing to merge their States into one State known as the United State of Matsya which was to come into being on the 1st of April 1948 with the Ruler of Dholpur as its Raj Pramukh.
Article VI of the Covenant provided that the Ruler of each Covenanting State shall, as soon as may be practicable and in any event not later than the 15th March, 1948, make over the administration of his State to the Raj Pramukh and that thereupon all rights, authority and jurisdiction belonging to such Ruler which appertained or were incidental to the Government of his State.
shall vest in the United State of Matsya.
65 Article Xl of the Covenant provided for the private properties of the Ruler and ran thus: "1.
The Ruler of each Convenanting State shall be entitled to the full ownership, use and enjoyment of all private, properties (as distinct from State properties) belonging to him on the date of his making over the administration of that State to the Raj Pramukh.
He shall furnish to the Raj Pramukh before the 1st May, 1948, an inventory of all the immovable properties, securities and cash balances held by him .16 such private property.
If any dispute arises as to whether any item of property is the private property of the Ruler or State property it shall be referred to such person as the Government of India may nominate and the decision of that person shall be final and binding on all parties concerned.
" The United State of Matsya came into being as stipulated in the Matsya Covenant on the 1st of April 1948 and during the same month the Ruler of Alwar, who is the appellant before us, furnished to the Raj Pramukh an inventory of all the immovable properties, securities and cash balances held and claimed by him as his private properties.
On the 11th of April 1948, the Rulers of ten States, namely, Banswara, Bundi, Dungarpur, Jhalawar, Kishengarh, Kotah, Mewar, Partabgarh, Shahpura and Tonk entered into a Covenant agreeing to merge them into one State named the United State of Rajasthan.
That Covenant was superseded by another dated the 10th of March 1949 (hereinafter called the Rajasthan Covenant) through which the United State of Rajasthan was to consist of the said ten States as also of four others, namely, Bikaner, Jaipur, Jaisalmer , and Jodhpur, with the Ruler of Jaipur as the Raj Pramukh.
Clause (c) of Article I of the Rajasthan Covenant defined the expression "new Covenanting State" to mean any of the said four States.
Article II of the Covenant last mentioned provided that the United State of Rajasthan would include any other State, the Ruler of which entered into an agreement with the Raj Pramukh, with the approval of the Government of India? to the integration of that State with the United State of Rajasthan Article XII of the Rajasthan Covenant provided: "(1) The Ruler of each Covenanting State shall be entitled to the full ownership, use and enjoyment of all private properties (as distinct from State properties), belonging to 66 him on the date of his making over the administration of that State to the Raj Pramukh of the former Rajasthan state or as the case may be, to the Raj Pramukh of the United State under this Covenant.
" (2) If any dispute arises as to whether any item of property is the private property of the Ruler of a Covenanting State other than a new Covenanting State, or is State pro perty, it shall be referred to such person as the Government of India may nominate in consultation with the Raj Pramukh, and the decision of that person shall be final and binding on all parties concerned: "Provided that no such dispute shall be so referable after the first day of May, 1949.
"(3) The private properties of the Ruler of each new Covenanting State shall be as agreed to between the Government of India in the States Ministry and the Ruler concerned, and the settlement of properties thus made shall be final.
" On the 1st of May 1949, the Rulers of the States of Alwar, Bharatpur, Dholpur and Karauli which were the constituent States of the United State of Matsya, entered into an agreement (hereinafter called the Amending Agreement) with the Raj Pramukh of the United State of Rajasthan merging with four States into it with effect from the 15th of May 1949 in abrogation of the Matsya Covenant.
While subscribing to the Amending Agreement the Ruler of Dholpur acted not only in his capacity as such but also as the Raj Pramukh of the United State of Matsya.
Article IV of that Agreement effected amendments in the Rajasthan Covenant so as to make it applicable to the said four States with effect from the date last mentioned.
No charge, however, was made in the provisions of clause (c) of Article I of Article XII of the Rajasthan Covenant.
On the 14th of September 1949, Mr. V. P. Menon of the Ministry of States, Government of India, wrote the following letter to the Ruler of Alwar: "My dear Maharaja Sahib, "Your Highness will recall that the inventory of immovable properties, securities and cash balances furnished by Your Highness in accordance with Article, XI of the Covenant for the formation of the United State of Matsya was discussed with Your Highness at New Delhi on the 9th and 10th April, 1949.
I now forward for Your Highness 's information a 67 copy of the final inventory of Your Highness 's private properties.
It has the approval of the Government of India in the Ministry of States.
The following claims of Your Highness and the counter claims of the former Matsya Government are still under consideration and the decision will be communicated to Your Highness as soon as possible.
(1) cash balance of the Alwar State treasury; (2) claim for Rs. 4,82,520 as arrears of Privy Purse of Your Highness for 6 years from 1936 37 to 1942 43.
Your Highness will appreciate that the settlement of the inventory is an integral part of an over all agreement in respect of all outstanding matters of dispute and does not stand by itself.
"With kind regards, "Yours sincerely, Sd/ "(V. P. Menon)" This letter was accompanied by a copy of the "final ' inventory which listed 32 items.
Reproduced below is the item at Serial No. 1 of that inventory: "section Description of property.
Decision of the State No Ministry.
City Palace including adjoining building.
Ancestral.
The portion of the building at present in use by the State for administrative purposes or for Museum and Imperial Bank will continue to be so used till such time as required.
The requirements of the State in future will not be of the same order as today and every effort will be made to release the accommodation at present occupied in the Zenana & Mardana Mahals at the earliest practicable date.
The State will bear the maintenance cost of the portions used by it.
Any addition or alteration in the portion used by the State will require the prior consent of His Highness and should be carried out at State expense.
" 68 Thereafter, correspondence went on between the Ministry of States and the Ruler of Alwar and on the 24th September 1952 the later received from the former a written communication dealing with 26 items of properties.
The opening clause of Para 2 of the letter stated: "2.
The Government of India have carefully considered all the outstanding questions in respect of your High Courts private properties, in consultation with the Rajasthan Government, and their decisions in respect thereof are as follows: " The description of each item covered by the letter was followed by the decision in respect thereof That part of the letter which deals with item 26 is set down below: "(26) City Palace including adjoining buildings: The City Palace with the adjoining buildings, comprising of the Jagir office, Central Record, lmperial Bank, Treasury, Gandhi National School etc.
will be your Highness 's ancestral property.
The secretariat building will however be State 1) property.
This decision was reiterated in an office Memorandum issued by the Government of Rajasthan in the Political Department on the 30th of December 1952.
Through a letter dated the 14th of October 1959 proceeding from his Private Secretary and addressed to the Chief Secretary, Ministry of Home Affairs, Government of India.
the Ruler of Alwar claimed rent for three properties known as the Secretariat building, Daulat Khana building and Indra Viman Station adjoining the City Palace and the bungalow at Sariska, which were in the occupation of the Rajasthan Government.
The claim was made on the ground that all the four properties had been declared to be the private properties of the Ruler in the inventory appended to the letter dated the 14th September 1949 mentiond above.
The claim was rejected by the Ministry of Home Affairs which asserted in its letter dated the 24th of December 1959 that the four properties in question had not been recognized as the private properties of the Ruler.
The claim was reiterated by the Ruler through a letter issued by Shri Gopesh Kumar Ojha, his Legal & Financial Adviser, but the name was again turned down by the Ministry of Home Affairs through their letter dated the 6th/8th of December 1960 in which the position taken was: "The Statement regarding the extent of your Private Property rights in the City Palace area made in our letter dated 24 12 59 are based upon the decision reached in March 1952 after discussion with your Highness and we regret that they cannot now be reopened." 69 2.
It was in the above background that the Ruler of Alwar filed two suits, being suits Nos. 4 and 5 of 1963, in the court of the District Judge, Alwar.
In Suit No. 5 the prayer made was that the three properties known as the Secretariat building, Daulat Khana building and Indra Viman Station be declared to be the private properties of the plaintiff and that the State of Rajasthan be ejected therefrom, or, in the alternative, be ordered to pay rent at a specified rate.
A decree for 36,000% was also claimed for mesne profits.
In suit No. 4 of 1963, the Claim was that the plaintiff was entitled to rent or mesne profits in respect of a building forming part of the Mardana Palace.
Both suits were resisted by the Union of India and the State of Rajasthan who were joined as the two defendants to each of them and it was claimed inter alia that the provisions of article 363 of the Constitution of India were a complete bar to their maintainability.
The two suits were transferred by me High Court of Rajasthan to itself and the question of their maintainability was mooted before it with reference to the provisions of article 363 of the Constitution 1 which states: (1) Notwithstanding anything in this Constitution but subject to the provisions of article 143, neither the Supreme Court nor any other court shall have jurisdiction in any dispute arising out of any provision of a treaty, agreement, covenant, engagement, sanad or other similar instrument which was entered into or executed before the commencement of this Constitution by any Ruler of Indian State and to which the Government or the Dominion of India or any of its predecessor Governments was a party and which has or has been continued in operation after such commencement, or in any dispute in respect of any right accruing under or any liability or obligation arising out of any of the provisions of this Constitution relating to any such treaty, agreement, covenant, engagement, sanad or other similar instrument.
(2) In this article (a) "Indian State" means any territory recognised before the commencement of this Constitution by His Majesty or the Government of the Dominion of India as being such a State; and (b) "Ruler" includes the Prince, Chief or other per son recognised before such commencement by 70 His Majesty or the Government of the Dominion of India as the Ruler of any Indian State.
The High Court proceeded to determine whether the dispute in suit No. 5 of 1963 was one arising out of an agreement such as fell within the ambit of article 363 (as was contended by the defendants) or was merely a one sided decision of the Government of India and, therefore, outside the purview of the article as was asserted by the plaintiff.
It held that the "decisions" contained in the latter dated the 14th of September 1949 had really resulted from an agreement between the Ministry of States and the plaintiff, that the extent of the building adjoining the City Palace was not to be found with precision in the inventory appended to the said letter, that consequently there was a real dispute between the parties whether the suit property was included in the expression "adjoining building" and that the adjudication of such a dispute was barred by the provision of article 363 of the Constitution.
Suit No. 5 of 1963 was, therefore, dismissed, but with no order as to costs.
In regard to suit No. 4 of 1963, however, the High Court held that the property in dispute was clearly a part of the City Palace itself as it was comprised in the Mardana Mahal that the dispute was altogether illusory in view of the fact that right up to the 8th of December 1960, the Government of India had been taking the stand that the disputed property was the private property of the plaintiff, that the dispute was consequently not barred by the provisions of article 363 of the Constitution, and that the suit, there fore, deserved to be decided by the District Judge on merits.
In the result, suit No. 4 of 1963 was remitted to the trial court for decision according to law.
It is the judgment of the High Court in suit No. S of 1963 alone that is challenged in this appeal.
Mr. B. D. Sharma, learned Counsel for the appellant Ruler, has vehemently contended that the letter dated the 14th December 1949 was not the result of an agreement between the plaintiff and the Government of India and that, on the other hand, it was a decision arrived at in pursuance of clause (3) of Article XI of the Matsya Covenant.
In support of this contention it was pointed out that the letter was issued as a sequel to the inventory furnished by the plaintiff under clause (2) of that Article and that the operative part of the inventory appended to the letter is headed "decision of the States Ministry" which, according to learned Counsel, clearly negatives an agreement.
It was further urged that even the Rajasthan Covenant did not envisaged any agreement in so far as the plaintiff was concern cd because he was not the Ruler of a "new Covenanting State" with 71 in the meaning of that expression as used in clauses (2) and (3) of Article XII thereof, that it was clause (2) of that Article which governed him and which again provided for a decision being given on disputes relating to properties and that the letter dated 14th September 1949 must still be construed as a decision if the Matsya Covenant was held to be inapplicable.
A careful examination of the material on the record, however, clearly makes out that the contention is without substance as we shall presently show.
It is no doubt true that the plaintiff had furnished the inventory of the properties held by him in accordance with Article XI of the Matsya Covenant as is stated in the opening paragraph of the letter dated the 14th of September 1949.
It further cannot be gain said that the third column of the inventory to that letter was headed "decision of the State Ministry".
These two factors, without more, might have gone a long way to support the case propounded on behalf of the plaintiff, but they are sought to be used out of context as is clear from a perusal of the entire letter from which it can be safely spelt out that the so called "decision" was nothing but an agreement arrived at between the Government of India and the plaintiff.
It is pertinent that the letter mentions that the inventory furnished by the plaintiff was discussed with him at New Delhi on the 9th and 10th of April 1949 and then states that a copy of the final inventory of the plaintiff 's private properties, which had the approval of the Government of India in the Ministry of States, was forwarded to him.
Now, under clause (3) of Article XI of the Matsya Covenant as also clause (2) of Article XII of the Rajasthan Covenant no approval of the Ministry of States was called for.
In fact, what each of those clauses provided was that if any dispute arose as to whether any item of property was the private property of the Ruler concerned or of his erstwhile State, it was to be referred to such person as the Government of India might nominate, and the decision of that person was to be final and binding on all parties concerned.
Now, it is not the case of the plaintiff that the Government of India nominated a person to whom the dispute was to be referred; nor is it claimed by him that such a person gave any decision.
The contents of the letter, therefore, are not at all relateable to those of either of the two clauses just above mentioned.
On the other hand, they clearly indicate that the so called "decisions" of the Sates Ministry contained in the inventory appended to the letter formed really the record of the agreement arrived at between the Ministry of States and the plaintiff as a result of negotiations held on the 9th and 10th of April 1949.
In this connection, reference may pointedly be made to paragraph 3 of the letter which bears repetition: 72 "3.
Your Highness will appreciate that the settlement of the inventory is an integral part of an overall agreement in respect of all outstanding matters of dispute and does not stand by itself." This paragraph talks of "the settlement of the inventory" which was to be an integral part of an "over all agreement in respect of all outstanding matters of dispute" and was not to stand by itself.
In our opinion, the paragraph is a clincher against the plaintiff and indicates without any shadow of doubt that what the letter said was that all the disputes regarding the property of the Ruler were to be settled by an over all agreement, that the contents of the inventory appended to the letter merely recorded the settlement between the plaintiff and the Ministry of States and that even those contents were not to be regarded as a final settlement of the matters dealt with therein unless they formed part of an agreement embracing all items of property.
It may be noted here that the Matsya Covenant had been abrogated with effect from the 15th May 1949 by the Rajasthan Covenant as modified by the Amending Agreement and there was thus no question of any decision being given after that date under clause 3 of Article XI of the Matsya Covenant and that the only surviving provision under which disputes regarding property owned by the plaintiff could be determined after the 15th of May 1949, was Article XII of the Rajasthan Covenant.
It is true that the expression "new Covenanting State" as defined in clause (c) of Article I of that Covenant meant only any of the four States of Bikaner, Jaipur, Jaisalmer and Jodhpur, that the definition was not amended by any provision of the Amending Agreement, so that the State of Alwar could not be regarded as a "new Covenanting Stat.
_" for the purpose of clause (3) of Article XII of the Rajasthan Covenant and that the clause of that Article in accordance with which disputes relating to property claimed by tho Ruler of Alwar as his private property were to be determined was clause (2) which provided for their decision by a person nominated by the Government of India in that behalf.
The fact remains, however, that no such person was ever nominated and that the letter dated the 14th September, 1949, cannot be construed (for reasons already stated by us) as laying down a decision of any such person.
What appears to have happened is that instead of following the course indicated in clause (2) last mentioned and having the disputes referred for decision to a person nominated by the Government of India, the parties (the Government of India and the appellant) decided to adopt the method of mutual agreement to settle those disputes a method which always remained open to them, notwithstanding the Matsya 73 Covenant and the Rajasthan Covenant.
Such mutual agreement could, by no stretch of imagination be regarded as a decision by a person nominated by the Government of India either under clause (3) of Article XI of the Matsya Covenant or clause (2) of Article XII of the Rajasthan Covenant and must be deemed to be nothing more or less than an agreement simpliciter even though it was labelled as a "decision of the States Ministry" in the inventory appended to the letter dated the 14th September, 1949.
Another contention raised by Mr. Sharma was that even if the letter dated the 14th September, 1949 was held to evidence an agreement, it was not hit by the provisions of article 363 of the Constitution inasmuch as it was an agreement resulting from the Rajasthan Covenant which alone according to him, was the agreement covered by the article.
This contention is also without substance.
Article 363 of the Constitution bars the jurisdiction of all courts in any dispute arising out of any agreement which was entered into or executed before the commencement of the Constitution by any Ruler of an Indian State to which the Government of India was a party.
The operation of the article is not limited to any "parent" Covenant and every agreement whether it is primary or one entered into in pursuance of the provisions of a preceding agreement would fall within the ambit of the article.
Thus the fact that the agreement contained in the letter dated the 14th September 1949 had resulted from action taken under the provisions of the Rajasthan Covenant, is no answer to the plea raised on behalf of the respondents that article 363 of the Constitution is a bar to the maintainability of the two suits, although we may add, that agreement did not flow directly from the Rajasthan Covenant but was entered into by ignoring and departing from the provisions of clause (2) of Article XII thereof.
The only other contention put forward by Mr. Sharma was based on the contents of column 3 of Item 1 of the inventory appended to the letter dated the 14th September 1949.
He drew our attention to the mention in that column of the portions of the adjoining building being occupied by the State for administrative purposes or for Museum and Imperial Bank and also comprising the Zenana and Mardana Mahals.
According to him, this meant that the entire building adjoining the City Palace was held to be the private property of the plaintiff, which finally vested in the plaintiff as from the date of the letter and of which the plaintiff could not be divested by any subsequent decision of the Ministry of States.
In this connection, Mr. Sharma urged that the Ministry of States had no power of reviewing a settlement once arrived at and argued that if it was claimed that such 6 817 SCI/78 74 a power existed, the determination by a court of the limited question of the power of review would be barred by the provisions of article 363 of the Constitution.
This contention also is of no avail to him.
As held above, the agreement dated the 14th September 1949 was not to stand by itself but was to be a part and parcel of an overall agreement embracing all outstanding matters of dispute.
It follows that the terms of the agreement contained in the letter were liable to change till a final agreement was reached, and in this view of the matter no finality could be said to attach to those terms until all the disputes became the subject matter of an agreed settlement.
The terms of the inventory attached to the letter were thus merely tentative, the process of settlement being a continuous one till all the disputes were finally resolved.
And the ultimate decision of the Ministry of Home Affairs conveyed in its letter of the 24th of December 1959, not to treat the Secretariat building, Daulat Khana building and Indra Viman Station adjoining the City Palace to be the private property of the plaintiff, was based upon a mutual agreement between the parties which was reached after discussion in March 1952, as part of an over all agreement as is evident from the letter of the Ministry of Home Affairs dated the 6th/8th of December 1960.
In view of the conclusions arrived at above, we hold that the ` 'decision" sought to be enforced by the plaintiff is an agreement hit by article 363 of the Constitution and that the High Court was right in dismissing suit No. 5 of 1963 as being not maintainable.
The appeal, therefore, fails and is dismissed, but with no order as to costs.
N.V.K. Appeal dismissed.
| IN-Abs | The appellant who was the Ruler of a princely state entered into a covenant agreeing to merge his state into a union called the United States of Matsya.
The Matsya Covenant, by article Xl Cl.
(2) provided that the ruler of each state shall furnish to the Raj Pramukh an inventory of all the inn movable properties, securities and cash balances held by him as private property and cl.
(3) provided that if any dispute arose as to whether any item of property was the private property of the ruler or the state property it shall be referred to such person as the Government of India may nominate in the decision of that person shall be final and binding on all parties.
The appellant furnished an inventory of all properties claimed to be his private "property.
Sometime later the rulers of the constituent States of Matsya entered into a Covenant with the Rajpramukh of the United State of Rajasthan for merger of their States into the State of Rajasthan in abrogation of the Matsya Covenant.
The Rajasthan Covenant by article XII, Cl.
(2) provided for the settlement of any dispute as to whether the property was private property or state property by reference to such person as the Government of India may nominate in consultation with the Rajpramukh and that the decision of such person shall be final and binding on the parties.
The Ministry of States, Government of India wrote on 14th September, 1949 to the appellant that the settlement of the inventory was an integral part of an overall agreement in respect of all outstanding matters of dispute and did not stand by itself.
After correspondence with the Government of India the appellant received a written communication intimating the decision of the Government of India in respect of 25 items of the property.
The appellant claimed that four buildings which were in occupation of the State Government had been declared as his private properties in the inventory appended to the letter of the Government of India and that the State Govern 63 ment should pay rent to him in respect of those buildings.
This claim of the appellant having been rejected, he filed a suit in the district court for a declaration that the properties were his private properties and that the respondents should be ordered to pay rent to him.
The suit was transferred by the High Court to itself, The High Court dismissed the suit on the ground that adjudication of the dispute was barred by article 363 of the Constitution.
In appeal to this Court it was contended that the letter of 14th September, 1949 was the result of a decision arrived at in pursuance of cl.
(3) of article XI of Matsya Covenant and cl.
(2) of article XII of the Rajasthan Covenant and must be construed as a decision of the Government of India.
Dismissing the appeal, ^ HELD: 1.
The decision sought to be enforced is an agreement hit by article 363 of the Constitution and the High Court was right in dismissing the suit.
[74H] 2.
The so called decision was nothing but an agreement between the Government of India and the appellant.
The letter clearly stated that the inventory furnished by the plaintiff was discussed with him at New Delhi and that a copy of the final inventory of the appellant 's private properties, which had the approval of the Government of India in the Ministry of States, Was forwarded to him.
Under clause (3) article XI of the Matsya Covenant as also clause (2) of article XII of the Rajasthan Covenant, no approval of the Ministry of States was called for.
What each of these clauses provided was that if any dispute arose as to whether any item of property was the private property of the ruler concerned or of his erstwhile state, it was to be referred to such a person as the Government of India might nominate, and the decision of that person was to be final and binding on all parties concerned.
Neither the Government of India nominated a person to whom the dispute was to be referred; nor did any such person give a decision on the point.
The contents of the letter, are not at all relatable to those of either of the two clauses.
On the other hand, they clearly indicate that the so called "decisions" of the States Ministry contained in the inventory appended to the letter formed really the record of the agreement arrived at between the Ministry of States and the plaintiff as a result of negotiations.
[71D H] 3.
Paragraph three of the letter talks of the "settlement of the inventory '.
which was tc.
be an integral part of an "overall agreement in respect of all outstanding matters of dispute" and was not to stand by itself.
What the said was that all the disputes regarding the property of the Ruler were to be settled by an overall agreement that the contents of the inventory appended to the letter merely recorded the settlement between the appellant and the Ministry and that even those contents were not to be regarded as final settlement of the matters dealt with therein unless they formed part of an agreement embracing all items of property.
[72B C] 4.
In the instant case instead of having the disputes referred for decision to a person nominated by the parties they decided to adopt the method of mutual agreement to settle those disputes.
Such mutual agreement could not 64 be regarded as a decision by a person nominated by the Government of India either under clause (3) of article of Matsya Covenant or clause (2) of article Xll of Rajasthan Covenant.
It must be deemed to be nothing more nor less than an agreement simpliciter even though it was labelled as a decision of the States Ministry.
[72H 73B] 5.
Article 363 of the Constitution bars the jurisdiction of all courts in any dispute arising out of any agreement which was entered into or executed before the commencement of the Constitution by any Ruler of an Indian Sate to which the Government of India was party.
The operation of the Article is not limited to any "parent" Covenant and every agreement whether it was primary or one entered into in pursuance of the provisions of a preceding agreement would fall within the ambit of the Article.
The fact that the agreement contained in the letter dated the 14th September, 1949 had resulted from action taken under the provisions of the Rajasthan Covenant, is no answer to the plea raised on behalf of the respondents that article 363 of the Constitution is a bar to the maintainability of the two suits, although that agreement did not flow directly from the Rajasthan Covenant but was entered into by ignoring and departing from the provisions of clause (2) of article XII thereof.
[73D E]
|
Civil Appeals Nos. 171, 171A 171D of 1969.
From the Judgment and decree dated 10 12 1963 of the Allahabad High Court in First Appeal No. 511/55.
Lal Narain Sinha, P. P. Singh, J. B. Dadachanji, K. John and J. Sinha for the Appellants.
G. N. Dikshit and M. V. Goswami for the Respondent.
The Judgment of the Court was delivered by JASWANT SINGH, J.
These five appeals by certificates under Article 133(1)(c) of the Constitution granted by the High Court of Judicature at Allahabad shall be disposed of by this judgment as they raise a common question relating to the interpretation of section 39(1) (e) of the U.P. Zamindari Abolition and Land Reforms Act, 1950 (Act No. 1 of 1951) (hereinafter referred to as 'the Act ').
As the facts giving rise to these appeals are identical, it shall suffice to narrate the facts of the case culminating in Appeal No. 171 of 1969.
The predecessor in interest of the appellants, the late Jodha Mal, owned several private forests in the State of U.P. including the one consisting of three compartments comprising a total area of 484.57 acres in village Rajiwala Attick Farm, Mahal Sansar in District Dehradun.
On the vesting of the said forest in the State of U.P. by virtue of section 4 of the Act, the question arose about the assessment and payment of compensation therefor to the heirs of the intermediary.
On service of draft compensation roll prepared under section 40 of the Act, each one of the appellants, filed separate objections in regard thereto before the Compensation officer, Dehradun, who disposed of the same by his order dated August 31, 1953 holding that the average annual income for the said forest which could be taken into consideration while computing its compensation was Rs. 4,551/ as disclosed by the appellants ' accounts for a period of 22 years preceding the date of vesting in terms of clause (i) of section 39(1)(e) of the Act and Rs. 450/ was its annual yield on the date of vesting as per terms of clause (ii) of section 39(1) (e) of the Act.
Dividing the sum total of these two figures by 2, the Compensation officer held that Rs. 5,001/ was the annual income from the aforesaid forest to the intermediaries.
Aggrieved by the computation of compensation, the respondent preferred an appeal to the High Court of Judicature at Allahabad under section SO of the Act.
The appellant 's also filed cross appeals claiming that the average annual income as assessed by the Compensation officer was too low.
Being of the view that while com 30 puting the average annual income from the forest, both the results arrived at by working both the clauses of section 39(1)(e) of the Act had to be looked into and considered and it had to be objectively decided as to what the average annual income from the forest would be, the High Court held that Rs. 2,000/ and not Rs. 450/ was the income under clause (ii) of section 39(1)(e) of the Act.
On the aforesaid basis, the High Court came to the conclusion that Rs. 3,000/ and not Rs. 5,001/ was the average annual income on the basis of which gross assets had to be calculated in computation of compensation in respect of the aforesaid forest.
The High Court by its judgment and decree dated December 10, 1963, disposed of the appeal and the cross appeal in the manner indicated above.
Aggrieved by the judgment and decree of the High Court, the appellants have come up in appeal to this Court.
The respondent has also filed objections with regard to the item of Rs. 2,000/ .
Mr. Lalnarayan Sinha appearing on behalf of the appellants has raised a very short point.
Assailing the method adopted by the High Court in computing the compensation, he has urged that the High Court has missed the real purport and meaning of the provisions relating to the computation of compensation and that the relevant portion of section 39 of the Act did not authorise the High Court to calculate the compensation by taking a mean of the aforesaid two figures.
He has further urged that having worked out the average annual income according to the method indicated in clause (i) of section 39(1)(e) of the Act, the High Court was not required to work out the annual yield of the forest on the date of vesting.
We regret, we cannot accede to this contention.
Section 39(1) (e) of the Act provides as follows: "39.Gross assets of a mahal. (1) Gross assets as respects a mahal shall be the aggregate gross income of the land or estate comprised in the mahal and such income shall comprise . . . (e)average annual income from forests, which shall be computed (i) on the basis of the income for a period of twenty to forty agricultural years immediately preceding the date of vesting as the Compensation officer may consider reasonable, and (ii) on the appraisement of the annual yield of the forest on the date of vesting.
" 31 It will be noticed that the opening words of the above quoted section which is couched in very emphatic terms govern not only clause (i) but also clause (ii ) of section 39 ( 1 ) (e) of the Act.
Consequently neither of the two factors mentioned in section 39(1)(e) of the Act can be ignored while computing the average annual income.
Now so far as the connotation of the word 'average ' is concerned, it does not admit of any doubt.
According to shorter oxford English Dictionary, the word 'average ' means arithmetical mean to estimate by dividing the aggregate of a series by the number of its units '.
The same is the connotation of the word 'average ' according to the Random House Dictionary of the English Language where the total receipt has been stated to mean the total receipt from sales divided by the number of the units sold.
On a true construction of section 39(1)(e) of the, Act, it appears to us that the legislature cast an obligation on the Compensation officer to work out the compensation by computing the average annual income giving due weight to both the factors mentioned in the aforesaid clauses (i) and (ii).
Accordingly, we are of the view that the High Court was correct in computing the average income by adding up to two figures i.e. Of Rs. 4,551/ and Rs. 2,000/ and arriving at a mean on that basis.
The position is also not res integra as in Smt.
Durgi Devi & Ors.
vs State of U.P.(l) this Court held that the average annual income has to be arrived at by taking into consideration not only the income referred to in clause (i) of section 39(1) (e) but also the estimated annual yield of the forest on the date of vesting.
The following observations made therein are apposite.
"A plain reading of clause (e) of section 39(1) shows that its sub clauses (i) and (ii) do not provide for two alter native methods of calculating the average annual income of the forest.
The conjunction 'and ' at the end of sub clause (i) cannot be read as "or".
It conjoins the two sub clauses, and in effect, read in the context of "shall" in the opening part of clause (e), mandates the compensation officer to take both the factors into consideration in assessing the average annual income from the forest.
The reason why the legislature has made compliance with the requirement of this sub clause (ii), also, obligatory, appears to be to ensure that the compensation assessed has a reasonable nexus and proportion to the actual and potential value of the forest as on the date of vesting.
If a forest has been repeatedly, wholly and indiscriminately exploited within forty years or less imme (1) ; 3 S.C.C. 101.
32 diately before the vesting, its actual and potential value as a forest on the date of the vesting might be far less than the one calculated on the basis of its average annual income of the preceding 20 to 40 years as the case may be.
In such a case, average annual income calculated merely on the basis of the income for a period of 20 to 40 years preceding the vesting, may cause fortuitous inflation in the assessment of compensation.
Conversely, if a forest has been very little exploited in the preceding forty years and is well preserved and well developed on the date of vesting than calculation of its average annual income on the basis of sub clause (i) alone, without taking into account its potential yield on the date of the vesting, will make the compensation assessed wholly illusory, having no relation whatever to the value of the forests as at the date of vesting.
Entry of the appraised annual yield of the forest on the date of vesting, into computation under clause (e), operates as a counterpoise against fortuitous inflation or deflation in the assessment.
" Again in Ganga Devi vs State of Uttar Pradesh(1) it was pointed out by this Court that in computing the average annual income under clause (e) of section 39(1), the compensation officer has to refer to both these sub clauses (i) and (ii).
He cannot adopt either of these sub clauses.
It was also pointed out that under sub clause (ii) the annual yield on the date of vesting is to be appraised by taking into consideration, inter alia the number and age of the trees, the area under forest and the produce.
For the foregoing reasons, we find no merit in these appeals which are dismissed with costs.
S.R. Appeals dismissed.
| IN-Abs | on the vesting of the forests belonging to the appellants in the State of U.P. by virtue of Section 4 of the U.P. Zamindari Abolition and Land Reforms Act, 1950 (Act 1 of 1951), the question arose about the assessment and payment of compensation therefor to the heirs of the intermediary.
The compensation officer held that the average annual income from the said forests which could be taken into consideration while computing its compensation was Rs. 4551/ as disclosed by the appellants ' accounts for a period of 22 years preceding the date of vesting in terms of clause (i) of Section 39(1)(e) of the Act and Rs. 450/ was its annual yield on the date of vesting as per terms of clause (ii) of Section 39(1)(e) of the Act.
The compensation officer held that Rs. 5001/ was the annual income from the aforesaid forest to the intermediaries.
The High Court in appeal held that Rs. 2000/ and not Rs. 450/ was the income under clause (ii) of Section 39(1)(e) of the Act and therefore came to the conclusion that Rs. 3000/ was the average annual income on the basis of which gross assets had to be calculated in computation of compensation in respect of the said forest.
Dismissing the appeals by certificate the Court, ^ HELD: 1.
The opening words of Section 39(1)(e) of the U.P. Zamindari Abolition Act, 1950 which is couched in very emphatic terms govern not only clause (1), but also clause (ii) of the Section.
Consequently neither of the two factors mentioned in Section 39(1)(e) of the Act can be ignored while computing the average annual income.
The connotation of the word 'average ' does not admit of any doubt.
[31A B] (ii) On a true construction of Section 39(1)(e) of the Act, it is clear that the Legislature cast an obligation on the compensation officer to work out the compensation by computing the average annual income giving due weight to both the factors mentioned in the aforesaid clauses (i).
and (ii).
He cannot adopt either of these sub clauses.
Under sub clause (ii) the annual yield on the date of vesting is to be appraised by taking into consideration, inter alia, the number and age of the trees, the area under forest and the produce.
[31C, 32E] Durgi Devi and Ors.
vs State of U.P. [1978] 3 SCR p. 595, Ganga Devi vs State of U.P., ; applied. 29
|
Civil Appeal Nos. 1701 1703 of 1974.
Appeal by Special Leave from the Judgment and order dated 26 9 73 of the Punjab & Haryana High Court in Income Tax Reference Nos. 38/72, 2/73, 3/73.
section T. Desai and Ramesh Chand for the Appellant.
P. G. Gokhale and Miss A. Subhashini for the Respondent.
The Judgment of the Court was delivered by TULZAPURKAR, J.
The short question raised in these appeals by special leave is whether the cost of materials supplied by the Government (M.E.S. Department) for being used in the execution of works is liable to be taken into consideration while estimating the profits of a contractor and the question has assumed general importance as it affects the entire class of contractors who undertake works on behalf of the Government and in view of a conflict of decisions on the point among different High Courts.
The facts in all the three appeals are substantially the same though the assessees are different.
In Civil Appeal No. 1701 of 1974 the material facts are these: The assessee (M/s. Brij Bhushan Lal Praduman Kumar of Ambala Cantonment), a registered firm, is a Military Engineering Services (M.E.S.) contractor and as such carries on the business of executing contracts and works on behalf of the Government.
For the execution of the works undertaken by the assessee certain material such as cement, coal, items of steel etc. is supplied at the fixed rates specified in Schedule to the contract by the Government for being used in the works.
Such material though in custody of the contractor always remains the property of the Government and if any surpluses is left at the completion of the contract, the contractor (assessee) has to account for it at the same rates at which the supply was made to him (wear and tear excepted) and return the same to the Government.
The assessment year involved was 1966 67 for which the accounting year commenced on 1 10 1964 and ended on September 19 30, 1965.
The assessee firm had taken two contracts, one at Delhi A and the other at Ambala.
For the said assessment year it filed its return of income declaring income of Rs. 44,462 being 10% of the total cash payments of Rs. 4,44,622 received from the military authorities.
The assessee, however, did not furnish any figures about the stores (material) received by it from the M.E.S. The Income tax officer called upon the assessee to produce the relevant certificates in respect of such stores but the assessee failed to do so on the ground that the Departments were not cooperating with it.
The Income tax officer, therefore, estimated the cost of such material at 50% of the cash payments, namely, at Rs. 2,22,311 and by adding this figure to the net cash receipts of Rs. 4,44,622 he arrived at total receipts (including the cost of material) of Rs. 6,66,933 and after rejecting the book results applied a flat rate of 10% and worked out net income or profits at Rs. 66,693 which was rounded upto Rs. 66,690 and on that basis the tax was levied after allocating the said profits among the three partners of the firm.
The assessee preferred an appeal to the Appellate Assistant Commissioner contending that the addition of the cost of material supplied by the Government to the figure of cash receipts received by it during the year for applying the Hat rate of 10% was erroneous and in any case the estimate of the value of such stores at 50% of the cash payments was excessive.
The Appellate Assistant Commissioner rejected the first contention but reduced the estimate of the value of the stores supplied by the Government to 25% and con fined the addition to Rs. 1,11,155.
Aggrieved by that order the assessee preferred further appeal to the Income Tax Appellate Tribunal and the Tribunal accepted the contention of the assessee that the cost of the stores or material supplied by the Government to the assessee could not be added to the figure of cash payments received by the assessee on the ground that the stores (material) supplied by the Government F were 'never sold ' to the contractor, that the same always remained the property of the Government and that no profit could be said to have arisen to the assessee when such stores (material) was merely handled and manipulated by the assessee in the execution of the works under the contract.
The Tribunal followed the decision of the Kerala High Court in M.P. Alexander & Co. vs Commissioner of Income tax(l) where that Court has taken the view that the cost of such material supplied by the Government was not to be included while estimating the profits of a contractor.
The Revenue sought a reference to the Punjab & Haryana High Court on the question whether on the facts and circumstances of the case, the Tribunal was justified in holding that the cost of the material supplied by the Government was not to be (1) 20 included while estimating the profits of a contractor and the High Court in Reference No. 38 of 1972 answered the question against the assessee and in favour of the Department and restored the view of the taxing authorities by its order dated September 26, 1973 and in doing so the yearly income tax paid by them is Rs. 70 to Rs. 80 only.
There is Bhushan Lal vs Commissioner of Income Tax, Delhi(l) where it had held that the cost of the materials supplied by the military authorities was liable tc be included before applying the flat fate to the assessees rceipts.
Civil Appeals Nos 1702 & 1703 of 1974 relate to the assessments of M/s. Brij Bhushan Lal Ramesh Kumar for the assessment years 1965 66 and 1966 67, the relevant accounting years being the ones which ended on March 31, 1965 and March 31, 1966 respectively.
The assessee firm, a M.E.S. Contractor, carried on the business of executing works on behalf of the Government under similar M.E.S. contracts wherein stores/materials are supplied by the military authorities to the firm on identical terms.
For the assessment year 1965 66 the assessee filed its return declaring an income of Rs. 18,684 and disclosing net cash receipts from the Government at Rs. 2,63,853.
Though this income was based on books of accounts maintained by the firm, the assessee during the course of assessment proceedings offered that a flat rate of 9% on the cash receipts of Rs. 2,66,853 may be applied.
The Income Tax officer did not accept the offer but applied a flat rate of 10% on Rs. 3,07,605 which included the value of the stores supplied by the Department to the assessee with the.
result that the profits were assessed at Rs. 3,07,60 and after allowing deprecation of Rs. 5107 the net taxable income was determined at Rs. 25,653 which was rounded up to Rs. 25,650.
For the assessment year 1966 67 the firm declared an income of Rs. 62414 calculated by adopting the flat rate of 10% on the cash receipts of Rs. 6,24,144.
The firm had received stores/material of the value of Rs. 1,36,520 from the military authorities and the Income Tax Officer after adding the value of the stores to the cash receipts arrived at a total receipt of Rs. 7,60,664 and by applying the flat rate of 10% determined the taxable income at Rs. 76,070.
The assessee 's appeals for both the years to the Appellate Assistant Commissioner were unsuccessful but in further appeals the Appellate Tribunal by its order dated October 31, 1970 accepted the assessee 's contention and held that the cost or the value of the stores/material supplied by Government to the contractor was not liable to he included while estimating the profits or income of the contractor.
In coming to this conclusion, as in the other case, the Tribunal followed the Kerala High Court 's decision in M. P. Alexander 's case (supra).
(1) 21 At the instance of the Revenue two references (being Income Tax References Nos. 2 and 3 of 1973) were made to the Punjab & Haryana High Court and the High Court following its earlier decision in Brij Bhushan Lal 's case (supra) answered the questions referred to it in the negative i.e. in favour of the Department and against the assessee.
Both the assessees have come up to this Court by special leave challenging the view taken by the High Court.
In support of these appeals counsel for the appellants has contended that it was well settled that even while making a best judgment assessment the Income Tax officer must make an honest and fair estimate of the income of the assessee and that having regard to the terms and conditions of the contract (a specimen whereof was produced during the hearing before us) and particularly the terms on which the stores/materials were supplied by the military authorities to the assessee for being used in the works undertaken by the firm, it was clear that no element of profit was embedded led in such stores/materials that were made available to the contractor for being used in the works entrusted lo the contractor and as such the cost or value of such stores/material could not be added to the total cash payments received by the contractor from the Department under the contract for the purpose of estimating the income or profits derived by the contractor from such contract.
He pointed out that under the terms and conditions of the contract such stores/material were never 'sold ' by the Department to the contractor but the same always remained the property of the Department and the 15 contractor had merely handled, manipulated or used the same in the works completed by him and the surplus of such stores/material, if any, that remained was required to be and was actually returned by the contractor to the Department and this being the true nature of the supply of such stores/material, the cost or the value thereof could not be included or added to the total cash payment received by the contractor under the contract for computing his income or profits From the said contract.
In support of his contention reliance was placed upon M.P.Alexander 's case (supra), Madras High Court 's decision in Commissioner of Income tax Madras vs K. section Guruswami Gounder & K. section Krishanaraju(l); Gujarat High Court 's decision in Trilokchand Chunilal vs Commissioner of Income Tax, Gujarat(2) and Full Bench decision of the Andhra Pradesh High Court in Additional Commissioner of Income tax vs Trikamji Punia & Sons(2).
on the other hand, counsel for the Revenue contended that not only the cash payments received by the assessee under the contract but (1) (2) (3) 22 also the cost of the store material supplied by the Department to the contractor both together represented the real value of the contract to the contractor and as such, since the book results were rejected, the Taxing Authorities and the High Court were right in coming to the conclusion that the income or profits derived by the contractor from such contracts was liable to be determined by applying the flat rate to the entire value of the contract.
In other words, it was contended by him that the cost of the stores/material supplied by the Government to the contractor was liable to be taken into account while estimating the income or profits of the contractor under such contract and in that behalf he pressed for our acceptance the view of the Punjab & Haryana High Court in Brij Bhushan Lal 's case (supra).
At the out set it may be stated that in the case of both the assessees their returns and book results were rejected on the ground that proper and reliable books of account had not been maintained and the Income tax officer was required to make the assessments on "best judgement" basis.
However, the principles to be followed by the lncome tax officer while making a best judgment assessment have been clearly laid down by the Privy Council as also by this Court in a number of decisions.
In commissioner of Income Tax vs Laxminarain Badri das(1), their Lordships of the Privy Council observed as follows: "The officer is to make an assessment to the best of his judgment against a person who is in default as regards supplying information.
He must not act dishonestly or vindictively or capriciously because he must exercise judgment in the matter.
He must make what he honestly believes to be a fair estimate of the proper figure of assessment, an(l for this purpose he must, their Lordships think, be able lo take into consideration local knowledge and repute in regard to the assessee 's circumstances, and his own knowledge of previous returns by and assessments of the assessee, and all other matters which he thinks will assist him in arriving at a fair and proper estimate; and though there must necessarily be guesswork in the matter, it must be honest guesswork.
In that sense, too, the assessment must be to some extent arbitrary".
Since the law relating to "best judgment assessment" is the same both in the case of income tax assessment and the sales tax assessment and the following observations of this Court in Raghubar Mandal Harinder Mandal vs State of Bihar,(2) a case under the Bihar Sales Tax Act, would be material: (1) (1937) S I.T.R. 170 (PC).
(2) (1957) 7 STC 770 at p. 778.
23 "No doubt it is true that when the returns and the books of account are rejected, the assessing officer must make an estimate, and to that extent he must make a guess: but the estimate must be related to some evidence or material and it must be something more than mere suspicion." Again in State of Kerala vs C. Velukutty,(l) which was a case 1 under the Travancore Cochin General Sales Tax Act, Subba Rao, J. (as he then was), speaking for this Court observed at page 244 of the report thus: "The limits of the power are implicit in the expression 'best of his judgment '.
Judgment is a faculty to decide matters with wisdom truly and legally.
Judgment does not depend upon the arbitrary caprice of a judge, but on settled and invariable principle, of justice.
Though there is an element of guesswork in a 'best judgment assessment. ' it shall not be a wild one, but shall have a reasonable nexus to the available material and the circumstances of each case.
" It will appear clear from what has been said above that the authority making a best judgment assessment must make an honest and fair estimate of the income of the assessee and though arbitrariness cannot be avoided in such estimate the same must not be capricious but should have a reasonable nexus to the available material and the circumstances of the case.
It is with reference to these principles that the question raised before us will have to be considered and looking at it from that point of view the real question is whether the turnover represented by the cost of the stores/material supplied by the M.E.S. Department involves any element of profit having regard to the terms and conditions on which such supply is made ? If it does then cost of such stores/material will have to be taken into account but if it does not such cost will have to be excluded.
In order to decide the aforesaid question it will be necessary to advert to the terms and condition of the works contracts undertaken by the two assessee firms, which as stated earlier, are common.
The assessee firms in both the cases are M.E.S. Works Contractor tendering and obtaining from the M.E.S. Department what are known as ' 'Lump sum contracts which arc governed by the General Conditions of contracts I.A.F.W. 2249 (1963 print).
In addition to the general conditions the particular work undertaken by the contractor is also governed by special terms contained in the Acceptance of Tender, and the specification and Schedules annexed thereto. ' 'In Lump (1) 24 Sum Contracts" of M.E.S. Department two salient features are always present, namely, (l) there is a Schedule 'B ' which specifies the items of stores/material to be supplied by the Department to 'he contractor solely for being used, fixed or incorporated in the works together with the fixed rates at which the same will be supplied and such supply is governed by General Conditions Nos. 10 and 33: apart from the stores/material specified in Schedule 'B ' the contractor also brings his own stores/material on site for the purposes of the works which is also governed by some Paragraphs of General Conditions Nos. 10 and 33: and (2) the final financial liability of the Government is fixed on completion of the contract on the basis of the actual measurements and on the basis of the rates which are already standardised; a detailed measurement is undertaken at the end of the work at which the Garrison Engineer and the assessee 's representative remain present and the measurements are entered in Measurement Books and after the measurements.
final bills are prepared as per the M.E.S. Schedule and payments are made after making adjustments for the advances already made.
With regard to stores/material Condition Nos. 10 and 33 of the General Conditions are material.
Condition No. 10 so far as is material runs thus: "Condition 10 Stores and Materials The Contractor shall at his own expense, supply all stores and materials required for the Contract, other than those listed in Schedule 'B ' which are to be provided by the Government by the rates detailed therein.
. . . . . . . . . . . . .
All stores and materials to be supplied by the Contractor shall be the best of the respective kinds described in the Specifications and the Contractor shall upon the request of the Engineer in Charge furnish him with proof to his satisfaction that the stores and materials so comply. . . . . . . . . .
In the case of stores provided under Schedule 'B ', the Contractor shall bear the cost of loading, transporting to site, unloading, storing under cover as required, assembling and jointing the several parts together as necessary and incorporating and fixing these stores and materials in the Works, including all preparatory work of whatever description as may 25 be required, and of closing, preparing, loading and returning empty cases or containers to the place of issue without any extra charge." condition No. 33 SO far as is material runs thus: "Condition 33 Stores and Materials on site Stores and materials required for the Works are to be deposited by the Contractor only in places to be indicated by the Engineer in Charge.
. . . . . . . . . . . . .
All stores and materials brought to the site shall become and remain the property of Government and shall not be removed off the site without the prior written approval of the G.E.
But whenever the Works are finally completed the Contractor shall at his own expense forthwith remove from the site all surplus stores and materials originally supplied by him and upon such removal, the same shall revest in and become the property of the Contractor.
All Government stores and materials Issued to the Contractor for incorporation or fixing in the Works and which, making due allowance tor reasonable wear and tear and or waste, have not on completion of the Works been so incorporated or fixed shall be returned by the Contractor at his own expenses to the place of issue.
Surplus stores and/or materials returned by the Contractor will be credited to him at a price not exceeding that at which the said stores and materials were originally issued to him but due consideration shall be given to and allowance claimed by Government in respect of ally depreciation or damage suffered by the Stores and/or materials whilst in the custody of the Contractor " From the tender documents that are made available to contractor and the aforesaid terms and conditions of the "Lump Sum Contracts" two or three aspects emerge very clearly.
In the first place the contractor becomes aware that certain specified stores/materials will be supplied to him by the Department at fixed rates for being used in the works to be undertaken by him for which he has not to pay from his pocket and it is on that footing that he submits his tender quoting a particular figure for the entire work; secondly, such stores/material so supplied by the M.E.S. Department has to be used, fixed or incorporat 3 817 SCI/78 26 ed by the contractor in the works undertaken by him and the surplus, if any, that would remain after the completion of the work is to be returned to the Department; thirdly, since for accounting purposes the initial supply is debited to the contractor at the specified fixed rates, credit for the balance of the stores/materials so returned is also given at the same rates, some adjustment being made in respect of the wear and tear of such stores/material but in regard to the stores/material out of such supply as is actually used, fixed or incorporated in the works, no accounting is done vis a vis the contract payment that is made to the contractor.
In other words, in substance and in reality such stores/material always remains the property of the Department and the contractor has merely the custody of it and he fixes or incorporates the same into the works.
It seems to us clear that in such circumstances and having regard to the terms and conditions on which much supply of store/materials is made there is not even a theoretical possibility of any element of profit being involved in the turnover represented by the cost of such stores/material.
It is conceiveable that when the contractor himself purchases materials in the open market and supplies the same to the Department by using, fixing or incorporating the same in the works, as in the case of materials other than specified in Schedule 'B ' some profit element would be embedded in the turnover represented by the cost of such material but when stores/material is supplied by the Government Department at fixed rates for being used, fixed or incorporated in the work on terms indicated above there would be no element of profit involved in the turnover represented by the cost of such material.
It is true that ordinarily when a works contract is put through or completed by a contractor the income or profits derived by the contractor from such contract is determined on the value of the contract as a whole and cannot be determined by considering several items that go to form such value of the contract but in our view where certain stores/material is supplied at fixed rates by the Department to the Contractor solely for being used or fixed or incorporated in the works undertaken on terms and conditions mentioned above, the real total value of the entire contract would be the value minus the cost of such stores/material so supplied.
Therefore, since no element of profit was involved in the turnover represented by the cost of stores/material supplied by the M.E.S. to the assessee firms, the income or profits derived by the assessee firms from such contracts will have to be determined on the basis of the value of the contracts represented by the cash payments received by the assessee firms from the M.E.S. Department exclusive of the cost of the material/stores received for being used, fixed or incorporated in the works undertaken by them.
27 Having regard to our aforesaid conclusion the view taken by the Punjab and Haryana High Court in Brij Bhushan Lal 's case (supra) must be regarded as erroneous and we approve the view taken by the Kerala High Court (M. P. Alexander & Co. case), Madras High Court (K.S. Guruswami Gounder 'case).
Gujrat high Court (Trilokchand Chunilal 's case) and Andhra Pradesh High Court (Trikamji Punia 's case).
In the result the appeals are allowed, the impugned orders of the High Court are set aside and those of the Appellate Tribunal are restored.
The Revenue will pay the costs of the appeals to the assessee firms.
S.R. Appeals allowed.
| IN-Abs | The appellant assessees are Military Engineering Services ' contractors and as such carry on business of executing contracts and work on behalf of the Government.
Their contracts are "Lumpsum contracts" where the department supplies the materials at fixed rates.
The revenue was of the opinion that the cost of the materials supplied by the military authorities was liable to be included before applying the flat rate to the assessee 's receipts and estimating the profits for the purposes of tax liability.
The High Court of Punjab and Haryana on a reference at the instance of the Revenue confirmed it following its own earlier Judgments in the case of Brij Bhushan Lal vs C.I.T. Delhi, ( 1971 ) Allowing the appeals by special leave, the Court, ^ HELD: l.
The law relating to 'best judgment assessment ' is same both in the case of income tax assessment and the sales tax assessment.
The authority making a best judgment assessment must make an honest and fair estimate of the income of the assessee and though arbitrariness cannot be avoided in such estimate the same must not be capricious, but should have a reasonable nexus to the available material and the circumstances of the case.
[22G H, 23D E] Commissioner of Income Tax vs Laxminarain Badridas, (1937) S I.T.R. 170 (PC), Raghubar Mandal Harihar Mandal vs State of Bihar, (1957) 7 S.T.C. 770 at p. 778 and State of Kerala vs C. Velukutty, ; referred to.
Ordinarily when a works contract is put through or completed by a contractor the income or profits derived by the contractor from such contract is determined on the value of the contract as a whole and cannot be determined by considering several items that go to form such value of the contract but where certain stores/material is supplied at fixed rates by the Department to the Contractor solely for being used for fixed or incorporated in the works undertaken on terms and conditions mentioned in the contract, the real total value of the entire contract would be the value minus the cost of such stores/matrial so supplied.
Therefore, since no element of profit was involved in the turnover represented by the cost of stores/material supplied by The M.E.S. to the assessee firms, the income or profits derived by the assessee firms from such contracts will have to be determined on the basis of the value of the contracts represented by the cash payments received by the assessee 17 firms from the M.E.S. Department exclusive of the cost of the material/stores received for being used, fixed or incorporated in the works undertaken by them.
[26E H] In Lumpsum contracts of` M.E.S. Department two salient features are always present namely, ( 1 ) there is a Schedule 'B ' which specifies the items of stores/material to be supplied by the Department to the contractor solely for being used, fixed or incorporated in the works together with the fixed rates R at which the same will be supplied and such supply is governed by General Conditions Nos. 10 and 33; apart from the stores/material specified in Schedule 'B ' the contractor also brings his own stores/material on site for the purposes of the works which is also governed by some Paragraphs of General Conditions Nos. 10 and 33; and (2) the final financial liability of the Government is fixed on completion of the contract on the basis of the actual measurements and on the basis of the rates which are already standardised; a detailed measurement is undertaken at the end of the work at which the Garrison Engineer and the Assessee 's representative remain present and the measurements, are entered in Measurement Books and after the measurements final bills are prepared as per the M.E.S. Schedule and payments are made after making adjustments for the advances already made.
[24A D] From the tender documents that are made available to contractor and the aforesaid terms and conditions of the "Lump Sum Contracts" two or three aspects emerge very clearly.
In the first place the contractor becomes aware that certain specified stores/materials will be supplied to him by the Department at fixed rates for being used in the works to be undertaken by him for which he has not to pay from his pocket and it is on that footing that he submits his tender quoting a particular figure for the entire work; Secondly, such stores/material so supplied by the M.E.S. Department has to be used, fixed or incorporated by the contractor in the works undertaken by him and the surplus, if any, that would remain after the completion of the work is to be returned to the Department; thirdly, since for accounting purposes the initial supply is debited to the contractor at the specified fixed rates, credit for the balance of tho stores/materials so returned is also given at the same rates, some adjustment being made in respect of the wear and tear of such stores/material but in regard to the stores material out of such supply as is actually used, fixed or incorporated into the works, no accounting is done viz a viz the contract payment that is made to the contractor.
In other words, in substance and in reality such stores/material always remains the property of the Department and the contractor has merely the custody of it and he files or incorporates the same into the works.
In such circumstances having regard to the terms and conditions on which such supply of stores/materials is made there is not even a theoretical possibility of any element of profit being involved in the turnover represented by the cost of such stores/materials.
It is conceivable that when the contractor himself purchases materials in the open market and supplies the same to the Department by using fixing or incorporating the same in the works.
as in the case of materials other than specified in Schedule 'B ' some profit element would be embedded in the turnover represented by the cost of such martial but when stores/material is supplied by the Government Department at fixed rates for being used, fixed or incorporated in the work on terms indicated above there would be no element of profit involved in the turnover represented by the cost of such material.
[25G H, 26A E] 18 Brij Bhushan Lal vs Commissioner of Income Tax, Delhi, and Haryana); overruled.
M. P. Alexander and Co. vs Commissioner of Income Tax ; Commissioner of Income Tax, Madras vs K. section Guruswami Gounder and K section Krishnaraju ; Trilokchand Chunilal vs Commissioner of Income Tax Gujarat , Additional Commissioner of Income Tax vs Trikamji Punia and Sons, [AP (F.B.)]; approved.
|
Civil Appeal No. 2481 of 1978.
Appeal by Special Leave from the Judgment and order dated 10 10 67 of the Jammu and Kashmir High Court in Civil First Appeal No 18 of 1966 Lal Narain Sinha, E. C. Agarwala, M. M. L. Srivastava, R. Satish and Altaf Ahmed for the Appellant.
section N. Andley, B. P. Maheshwari and Suresh Sethi for the Respondent The Judgment of the Court was delivered by FAZAL ALI, J.
This is a plaintiffs ' appeal by special leave against a judgment dated 10th October, 1966 of the Jammu & Kashmir High Court dismissing the plaintiff 's suit.
4 The facts of the case lie within a very narrow compass and after hearing counsel for the parties we propose to decide only one point, viz., the question as to whether or not the plaintiffs were entitled to a decree of ejectment against the defendants in respect of the house in question on the ground of personal necessity, and, therefore, we shall narrate only those facts which are germane for this purpose.
The property in suit was a four storeyed building situated at Maisuma Lal Chowk, Srinagar and belonged to one Peer Ali Mohammad, the ancestor of the plaintiffs.
This building was leased out to the defendants by a registered lease deed dated 1st December 1947 for a period of 10 years.
Under the lease the lessor had provided some furniture and crockery to the lessees.
Furthermore, it was clearly stipulated that the building was leased out for the purpose of running a hotel by the lessees, and for this purpose the lessees were given the right to make suitable alterations in the same, but were prohibited from making any alteration which may affect the durability or damage the building.
On the expiry of the period of the lease, the appellants demanded possession of the building from the respondents and despite certain notices given by the appellants the respondents failed to give possession of the building.
Hence the plaintiff 's suit.
The plaintiffs had taken three main grounds in support of their contention for ejectment of the defendants from the suit premises.
In the first place, the appellants alleged that they required the building in order to extend their business by running a hotel there themselves; secondly, as the lease had expired by efflux of time, the respondents were legally bound to surrender possession.
Thirdly, it was averred by the plaintiffs that the Jammu & Kashmir Houses and Shops Rent Control Act, 1966 (hereinafter referred to as the Act) was wholly inapplicable to the premises in dispute, because the yearly income of the defendants far exceeded Rs. 20,000 and that running a hotel did not fall within the purview of section 2(3) of the Act.
The suit was resisted by the respondents who took, inter alia, a number of objections to the grant of the relief to the appellants.
In the first place, it was pleaded that tho income of the respondents being less than Rs. 20,000/ per year the suit was clearly covered by the Act.
Secondly, it was averred that the definition of the word 'house ' in section 2(3) of the Act was wide enough to include a hotel.
It was next averred that the plaintiffs had no personal necessity and had filed the suit merely for the purpose of getting a higher rent.
Lastly, it was contended that as the plaintiffs required the house for running a hotel, such a purpose did not fall within the ambit of section ll(h) of the Act which applied only to such a case where the landlord required the house for his occupation and, at any 5 rate, having regard to the comparative advantages or disadvantages of the landlord and the tenant, there was no equity on the side of the plaintiffs.
The case was tried by the City Judge, Srinagar who accepted the case of the defendants (respondents) and dismissed the plaintiffs ' suit.
The plaintiffs thereupon filed an appeal before the High Court of Jammu & Kashmir which held that the plaintiffs had not proved their personal plaintiffs filed an application for leave to appeal to this Court and the same having been refused, they obtained special leave of this Court and hence the appeal before us.
In support of the appeal Mr. Lal Narayan Sinha, counsel for the appellants submitted three points.
In the first place, he contended that there was sufficient evidence to indicate that the income of the defendants respondents was more than Rs. 20,000/ a year, and, therefore, the provisions of the Act were not applicable and as the leave has expired due to efflux of time, the plaintiffs were entitled to a decree for ejectment straightway.
Secondly, it was argued that the word 'house ' used in section 2(3) of the Act cannot include a hotel, and, therefore, the Act was not applicable.
Lastly, it was submitted that the High Court committed a grave error of law in holding that the plaintiffs hold not been able to prove personal necessity" although the High Court gave a clear finding that the plaintiffs had undoubtedly proved that they had a strong desire to occupy the building for running a hotel.
It was argued that the finding of the High Court was not based on a discussion of the evidence and circumstances of the case and the High Court has taken an erroneous view of law on the nature of the need of the appellants as also on the question of the comparative advantages or disadvantages of the landlord and the tenant if a decree for eviction followed.
After having heard counsel for the parties we are clearly of the opinion that the appeal must succeed on the third point raised by learned counsel for the appellants, i.e., the question of personal necessity and in this view of the matter we refrain from expressing any opinion on the applicability of the Act to the suit premises as averred by the respondents.
Learned counsel for the appellants contended that there was sufficient material before the Court to show that the plaintiffs did not merely have a desire to occupy the building, but they actually needed the same and their need is both genuine and reasonable.
In this connection, reliance was placed on the evidence of the witnesses for the plaintiffs which does not appear to have been considered by the High Court.
We find that the plaintiffs had clearly mentioned in their plaint 6 that they required the house for the purpose of running the hotel business.
On behalf of the plaintiffs P.W. Mohd. Yusuf had made it absolutely clear that they required the lease property for their personal need as they wanted to run the hotel themselves.
The witness had further explained that this was necessary, because the plaintiffs could not maintain themselves from the income of the leased property.
It is true that the plaintiffs were doing a small business, but the witness had made it clear that their income was very low so much so that they paid income tax of only Rs. 70 to Rs. 80/ per annum.
These facts have not been demolished either in the cross examination of the witness or in the evidence of rebuttal given by the defendants.
The above evidence of the plaintiffs is corroborated by the other witnesses examined by them.
P.W. Girdhari Lal has clearly stated that the plaintiffs want to extend their business and want to have the hotel in their own possession to run the same.
He has further stated that the plaintiffs are running their business on a small scale, and he categorically stated that he had personally observed that there is very little work at the plaintiff 's shop now a days.
That is why they want to run a hotel.
The witness is a neighbour of the plaintiffs.
shop and was, therefore, competent to depose to the facts mentioned above which have not been shaken in cross examination.
P.W. Peer Ahmad Ullah has also stated that now a days people give up other occupations and take up hotel business because hotel business is itself a profitable business.
The witness added that the plaintiff also want to extend their business and start a hotel in this building.
P.W. Ghulam Nabi Dar also says that although the plaintiffs had a l? Boot shop they also want to run the hotel themselves, because their business has become dull.
P W. Ghulam Mohd. whose shop is in front of the shop of the plain tiffs states as follows: "The plaintiffs require the suit property for their own use, as they have been telling me for the last two or four years Previously, the business at Boot shops was running well but now it has become dull.
The plaintiffs intend to run the hotel themselves. . .
As for plaintiffs I say that they are in need of the hotel.
The plaintiffs require the; hotel in order to extend their business".
Another neighbour of the plaintiffs P.W. Yash Paul states that the plaintiffs say that they will start a hotel in the suit property.
He fur 7 ther deposes that there is little work in the shop of the plaintiffs, and, therefore, they want to start a hotel, P.W. Ghulam Mohd. who is the brother in law of P.W. Pir Ali.
Mohd., father of the plaintiffs and was looking after his children on the death of P.W. Pir Ali Mohd. has also stated that the plaintiffs want to start business in the shape of a hotel in the house and they also want to run the shop.
It is, therefore, proved by the evidence discussed above ( 1 ) that the plaintiffs required the house for their personal necessity in order to augment their income, (2) that as their income from the Boot shop is very small and they are not able to maintain themselves.
so they want to run the hotel business in the suit premises.
The High Court has not at all discussed this part of the evidence of the plaintiffs, but at the some time being impressed by the fact that the need of the plaintiffs was genuine the High Court gave a finding to at the plaintiffs had a strong desire to occupy the house and use it for commercial purposes.
Thereafter the High Court appears to have lost itself in wilderness by entering into a hair splitting distinction between desire and need.
Here the High Court has misdirected itself.
If the plaintiffs had proved that their necessity was both genuine and reasonable, that the present premises which belonged to them were required for augmenting their income as the income so far received by them was not sufficient for them to make the two ends meet, there could be no question of a mere desire, but it is a case of real requirement or genuine need.
In fact the irresistible inference which could be drawn from the facts is that the plaintiffs had a pressing necessity of occupying the premises for the purposes of conducting hotel business so as to supplement their income and maintain themselves property.
The Act is a piece of social legislation and aimed at easing the problem of accommodation, protecting the tenants from evictions inspired by profit hunting motives and providing certain safeguards for the tenants and saving them from great expense, inconvenience and trouble.
But the Act does not completely overlook the interest of the landlord and has under certain conditions granted a clear right to the landlord to seek eviction on proof of the grounds mentioned in section 11 of the Act.
Thus, the Act appears to have struck a just balance between the genuine need of the landlord on the one hand and great inconvenience and trouble of the tenant on the other.
It was also not disputed that the defendants had taken the property on lease only for a period of 10 years and now they have been in possession of the same for over 30 years.
If the plaintiffs found that their present business had become dull and was not yielding sufficient income to maintain themselves and, therefore, it was necessary to occupy the house so as to run a hotel business, it cannot by any stretch of imagination be said that the plaintiffs had merely a desire rather than 8 a bonafide need for evicting the tenants.
We therefore, disagree with the finding of he High Court that the plaintiffs had not proved that they had a bonafide need for occupation of the building in dispute.
Moreover section 11(h) of the Act uses the words 'reasonable requirement ' which undoubtedly postulate that there must be an element of need as opposed to a mere desire or wish.
The distinction between desire and need should doubtless be kept in mind but not so as to make even the genuine need as nothing but a desire as the High Court has done in this case.
It seems to us that the connotation of the term 'need ' or 'requirement should not be artificially extended nor its language so unduly stretched or strained as to make it impossible or extremely difficult for one landlord to get a decree for eviction.
Such a course would defeat the very purpose of the Act which affords the facility of eviction of the tenant to the landlord on certain specified grounds.
This appears to us to be the general scheme of all the Rent Control Acts, prevalent in other State in the country.
This Court has considered the import of the word requirement and pointed out that it merely connotes that there should be an element of need.
In the case of Phiroze Ramanji Desai vs Chandrakant N. Patel & Ors.
(1) Justice Bhagwati speaking for the Court observed as follows: The District Judge did not misdirect himself in regard to the true meaning of the word 'requires ' in section 13(1) (g) and interpreted it correctly to mean that there must be an element of need before a landlord can be said to 'require ' premises for his own use and occupation.
It is not enough that the landlord should merely desire to use and occupy the premises.
What is necessary is that he should need them for his own use and occupation.
" Thus, this Court has held that in such cases the main test should be whether it was necessary for the landlords to need the premises for their use or occupation.
In the case of B. Balaiah vs Chandoor Lachaiah(2) a Division Bench of the High Court observed as follows: "As long as such requirement is bona fide, the petitioner can certainly claim for a direction for eviction of the tenant".
It had become necessary for us to enter into the evidence led by the plaintiffs, because the High Court has in a general way made a sweeping obvervation that although the plaintiffs had a strong desire, they (1) [1974] I S.C.C. 661 (2) A.I.R 1965 A.P 435. 9 were not able to prove reasonable requirement and the High Court came to this finding without at all considering the evidence of competent and important witnesses examined by the plaintiffs on this point which has been discussed above.
For these reasons, therefore, we are clearly of the opinion that in the instant case the plaintiffs had proved that the requirement for the house for starting a hotel business was both genuine and reasonable and even imperative, because the scanty income of the plaintiffs was not sufficient to maintain them or to afford them a decent or comfortable living.
This brings us to the next limb of the argument of the learned counsel for the respondents regarding the interpretation of section 11 ( 1 ) (h) of the Act.
Section ll(l)(h) of the Act runs thus: 11(1)(h) . . . . where the house or shop is reasonably required by the landlord either for purposes of building or re building, or for his own occupation or for the occupation of any person for whose benefit the house or shop is held; Explanation: The Court in determining the reasonableness of requirement for purposes of building or rebuilding shall have regard to the comparative public benefit or disadvantage by extending or diminishing accommodation, and in determining reasonableness of requirement for occupation shall have regard to the comparative advantage or disadvantage of the landlord or the person for whose benefit the house or shop is held and of the tenant".
It was submitted by Mr. Andley learned counsel for the respondents that the words used in section ll(l)(h) are "that the house should be required by the landlord for his own occupation or for the occupation of and person for whose benefit the house or shop is held.
" It was argued that the words `own occupation ' clearly postulate that the landlord must require it for his personal residence and not for starting any business in the house.
We are, however, unable to agree with this argument.
The provision is meant for the benefit of the landlord and, therefore, it must be so construed as to advance the object of the Act.
The word 'occupation ' does not exclude the possibility of the landlord starting a business or running a hotel in the shop which also would amount to personal occupation by the landlord.
In our opinion, the section contemplates the actual possession of the landlord, whether for his own residence or for his business.
It is manifest that even if the landlord is running a hotel in the house, he is undoubtedly in possession or occupation of the house in the legal sense of the term.
2 817SCI/78 10 Furthermore, the section is wide enough to include the necessity of not only the landlord but also of the persons who are living with him as members or the same family.
In the instant case there can be no manner of doubt that the house was required for the personal residence or occupation of all the three plaintiffs who admittedly were the owners of the house.
The fact that the plaintiffs wanted to occupy the property for running hotel would not take their case out of the ambit of personal necessity as already indicated above, occupation of a house may be required by the owner for personal purposes.
He may choose to reside himself in the house or run a business in the house or use it as a paying guest house and derive income therefrom.
In all these cases even though the owner may not physically reside in the house, the house in law would nevertheless be deemed to be in actual occupation of the owner.
Having regard, therefore, to the circumstances mentioned above, we are unable to subscribe to the view that the words 'own occupation 'must be so narrowly interpreted so as to indicate actual physical possession of the landlord personally and nothing short of that.
We, therefore, overrule the argument of the respondents on this point.
The last argument that was advanced before us by Mr. Andley for the respondents was that taking an overall picture of the various aspects of the present case, it cannot be said that the balance of comparative advantages and disadvantages was in favour of the landlord.
In this connection, our attention was drawn to the evidence led by the defendants that the main source of their income is the hotel business carried on by them in the premises and if they are thrown out they are not likely to get any alternative accommodation.
The High Court has accepted the case of the defendants on this point, but does not appear to have considered the natural consequences which flow from a comparative assessment of the advantages and disadvantages of a landlord and the tenant if a decree for eviction follows.
It is no doubt true that the tenant will have to be ousted from the house if a decree for eviction ii passed, but such an event would happen whenever a decree for eviction is passed and was fully in contemplation of the legislature when section ll(l)(h) of the Act was introduced in the Act.
This by itself would not be a valid ground for refusing the plaintiffs a decree for eviction.
Let us now probe into the extent of the hardship that may be caused to one party or the other, in case a decree for eviction is passed or is refused.
It seems to us that in deciding this aspect of the matter each party has to prove its relative advantages or disadvantages and the entire 11 Onus cannot be thrown on the plaintiffs to prove that lesser disadvantages will be suffered by the defendants and that they were remediable.
This matter was considered by this Court in an unreported decision in the case of M/s Central Tobacco Co. vs Chandra Prakash(l) where this Court observed as follows: "We do not find ourselves able to accept the broad pro position that as soon as the landlord establishes his need for additional accommodation he is relieved of all further obligation under section 21 sub section
(4) and that once the landlord 's need is accepted by the court all further evidence must be adduced by the tenant if he claims protection under the Act.
Each party must adduce evidence to show what hardship would be caused to him by the granting or refusal of the decree and it will be for the court to determine wether the suffering of the tenant, in case a decree was made, would be more than that of the landlord by its refusal.
The whole object of the Act is to provide for the control of rents and evictions, for the leasing of buildings etc.
and section 21 specifically enumerates the grounds which alone will entitle a landlord to evict his tenant.
The onus of proof of this is certainly on the landlord.
We see no Sufficient reason for holding that once that onus is discharged by the landlord it shifts to the tenants making it obligatory on him to show that greater hardship would be caused to him by passing the decree than be refusing to pass it.
In our opinion both sides must adduce all relevant evidence before the court; the landlord must show that other reasonable accommodation was not available to him and the tenant must also adduce evidence to that effect.
It is only after shifting such evidence that the court must form its conclusion on consideration of all the circumstances of the case as to whether greater hardship would be caused by passing the decree than by refusing to pass it".
This case was followed in Phiroze Ramanji Desai vs Chandrakant N. Patel & Ors (supra).
In the case of Kelley vs Goodwin(2) Lynskey, J. Observed as follows: "The next matter one has to consider is whether there was evidence on which the county court judge could come to the conclusion that there would be greater hardship in mak (1) C.A. 1175 of 1969 decided on 23 4 1969.
(2) 12 ing the order than not making the order.
He has taken into account, in relation to that question, first, the position of the landlord, and, secondly, the position of the tenant.
He has taken into account the financial means of the tenant.
It is argued before us that he was wrong in doing that.
In my view, he was quite entitled, in considering hardship, to have regard to the financial means of the tenant in considering whether he could obtain other accommodation because, by reason of his means, he was in a position, not merely to rent, but to buy a house.
It seems to me also that, on this question cf hardship, the judge was entitled to take into account the fact that the tenant had taken no real steps to try and find other accommodation or no real steps to buy a house".
To the same effect is the decision in the case of K. Parasuramaiah vs Pokuri Lakshmamma(1) where a Division Bench of the High Court narrated the mode and circumstances in which the comparative advantages and disadvantages of the landlord and the tenant could be weighed.
In this connection, the Court observed as follows: "Thus the hardship of the tenant was first to be found out in case eviction is to be directed.
That hardship then has to be placed against the relative advantages which the land lord would stand to gain if an order of eviction is passed .
What is however required is a careful consideration of all the relevant factors in weighing the relative hardship which is likely to be caused to the tenant with the likely ad vantage of the landlord on the basis of the available material on record. '.
The proviso however should not be read as if it confers a practical immunity on the tenant from being evicted.
That would destroy the very purpose of Sec. 10(3)(c).
Likewise the requirement of the land lord in accordance with that provision alone cannot be given absolute value, because that would mean to underestimate the value of the proviso to that section.
Keeping in view therefore the purpose of the provision and the necessity of balancing the various factors each individual case has to be decided in the light of the facts and circumstances of that case ' '.
In view of our findings it has been established that the landlords have not only a genuine requirement to possess the house, but it is necessary for them to do so in order to augment their income and maintain themselves properly.
Being the owners of the house they (1) A.I.R. 1965 A.P.220 13 cannot be denied eviction and be compelled to live below the poverty line merely to enable the respondents to carry on their flourishing hotel business, at the cost of the appellants.
This shows the great prejudice that will be caused to the plaintiffs if their suit is dismissed.
The plaintiffs have already produced material before the court to show that their income does not exceed more than Rs. 8000 to Rs. 9000/ per year as the yearly income tax paid by them is Rs. 70 to Rs. 80 only.
There is no other means for them to augment their income except to get their own house vacated by the defendants so as to run a hotel business.
It was vehemently contended by Mr. Andley that there is nothing to show that the plaintiff Mohd. Yusuf or his mother had any experience of running the hotel, and, therefore, it is fruitless to allow them to run the hotel by evicting the respondents.
Mohd. Yusuf is admittedly doing shoe business, and has got sufficient experience of business.
Nothing has been brought on the record to show that he is incapable of running a hotel in the premises.
The building belongs to him and there is Do reason for us to think that he cannot establish a hotel business.
On the other hand the defendants have been running the hotel for the last 30 years and must have made sufficient profits.
To begin with, the defendants had taken the lease only for 10 years which now by virtue of the statute has been extended to 30 years which is a sufficiently long period for which the plaintiffs have been deprived the possession of the house.
There is thus no equity in favour of the respondents for continuing in possession any further.
It was then submitted by Mr. Andley, counsel for the respondents that if the respondents are evicted they will be thrown out on the road; that hotel is the only source of their sustenance and they are not likely to get any alternative accommodation on being evicted.
If the defendants had proved that they will not be able to get any accommodation any where in the city where they could set up a hotel, this might have been a weighty consideration, but the evidence of all the witnesses examined by the defendants only shows that the defendants may not get alternative accommodation in that very locality where the house in dispute is situated.
There is no satisfactory evidence to prove that even in other business localities there is no possibility of the defendants getting a house.
To insist on getting an alternative accommodation of a similar nature in the same locality will be asking for the impossible.
The defendants are tenants and had taken the lease only for 10 years but had overstayed for 20 years and they cannot be allowed to dictate to the landlord that they cannot be evicted unless they get a similar accommodation in the very same locality.
14 G. M. Khan the defendant himself has stated that if he is evicted from the house, he cannot get such a place any where.
Great stress is laid that he must get a house of the size of the house in dispute.
It was suggested to him that if one of the houses of the plaintiffs is given to him that will be sufficient for him, to which he said that the said house situated in Hari Singh High Street is not suitable because he can not run his hotel business there.
The witness has further stated towards the end that the defendants cannot get any place for the purpose of running a hotel in this Ilaqa (locality).
D.W. Ghani Hajam also says that the defendants cannot get any other building for the purpose of the hotel at this place like the one under dispute.
Similarly, D. W. Ghulam Mohd. Khan, another witness for the defendants says that the defendants will not get such a building in this Ilaqa for running a hotel.
D.W. Haji Noor Mohd. also endorses the fact that if the defendants are ejected, it is difficult for them to get such a building in this place.
D.W. Mohd, Ramzan deposes that if the defendants are ejected from the building, they will not get such a building in this locality for running a hotel.
To the same effect is the evidence of D. W. Rasool Dar who says that it is impossible for the defendants to get a house like the suit house for the purposes of running a hotel at the site or nearabout where the suit house is situated.
D. W. Ghulam Mohd. has made a similar statement in his deposition when he says that the defendants will not get such a building nor is there any such building vacant in the locality.
It is true that there are some witnesses like D. W. Aslam Khan, Ghulam Hassan, Mohd. Abdullah Pandey who has said that the defendants might not get any other place for running a hotel but the evidence is extremely vague and nebulous.
D. W. Abdul Kabir however merely says that he had no knowledge that the defendants could get any other house.
Thus, what is established from the evidence of the defendants is that if they are ejected, they might not get a house as big as the house in dispute in the very locality where the disputed house is situated.
There is no clear evidence in the first place to show that there is no other business locality in the city at all or that if there is any other business locality attempts were made by the defendants but they Were unable to get any house.
Furthermore, as indicated above, the plaintiff necessity is imperative and their requirement is undoubtedly reasonable, because the income which they are receiving including the rent of the house which is in the region of Rs. 5000/ per year, is not sufficient to maintain them.
Thus, on a careful comparison and assessment of the relative advantages and disadvantages of the landlord and the tenant it seems to us that the scale is tilted in favour of the plaintiffs.
15 The inconvenience, loss and trouble resulting from denial of a decree for eviction in favour of the plaintiffs far outweigh the prejudice or the inconvenience which will be caused to the defendants.
The High Court has unfortunately not weighed the evidence from this point of view.
Before closing the judgment we would like to observe that normally this Court does not interfere with concurrent findings of facts but as the High Court as also the Trial Court have made a legally wrong approach to this case and have committed a substantial and patent error of law in interpreting the scope and ambit of the words "reasonable requirement" and "own possession" appearing in section 11 (1) (h) of the Act and have thus misapplied the law and overlooked some of the essential features of the evidence as discussed by us, we had to enter into the merits of the case in order to prevent grave and substantial injustice being done to the appellants.
For the reasons given above, the appeal is allowed.
The judgment and decree of the High Court are set aside, and a decree for ejectment of the defendants from the house in dispute is hereby passed against the defendants.
In the peculiar circumstances of this case, there will be no order as to costs.
S.R. Appeal allowed.
| IN-Abs | The appellants plaintiffs sought the eviction of the respondents defendants from the suit premises which was leased to the latter for a period of ten years only and for running a hotel, on the grounds (a) of personal requirement to run a hotel business themselves and (b) of the failure of the respondents to deliver possession after the expiry of the period of lease despite notices issued.
The Trial Court and the High Court in appeal having dismissed the suit, the appellants obtained special leave of this Court.
Allowing the appeal, the Court ^ HELD : 1.
The Jammu and Kashmir Houses and Shops Rent Control Act, 1966 is a piece of social legislation aimed at easing the problem of accommodation, protecting the tenants from evictions inspired by profit hunting motives and providing certain safeguards for the tenants and saving them from great expense, inconvenience and trouble.
But the Act does not completely overlook the interest of the landlord and has under certain conditions granted a clear right to the landlord to seek eviction on proof of the grounds mentioned in section 1.
Of the Act.
Thus, the Act appears to have struck a just balance between the genuine need of the landlord on the one 'land and great inconvenience and trouble which may be caused to the tenants on the other.
In the instant case.
the defendants had taken the property on lease only for a period of I O years and now they have been in prossession of the same for over 30 years.
If the plaintiffs found that their present business had become dull and was not yielding sufficient income to maintain themselves and therefore, it was necessary to occupy the house so as to run a hotel business, it cannot by any stretch of imagination be said that the plaintiffs had merely a desire rather than a bonafide need for evicting the tenants.
The findings of the High court that the plaintiffs had not proved that they had a bonafide need for occupation of the building in dispute is incorrect.
[7E H, 8A] 2.
Section 11(h) of the Act uses the words 'reasonable requirement ' which undoubtedly postulate that there must be an element of need as opposed to a mere desire or wish.
The distinction between desire and need should doubtless be kept in mind but not so as to make even the genuine need as nothing but a desire as the High Court has done in this case.
The connotation of the term 'need ' or 'requirement ' should not be artificially extended nor its language so unduly stretched or strained as to make it impossible or extremely difficult for the landlord lo get a decree for eviction.
Such a course would defeat the very pur 2 pose of the Act which affords The facility of eviction of the tenant to the landlord on certain specified grounds. 'This is the general scheme of all the Rent Control Acts, prevalent in other States in the country.
The word "requirement" merely connotes that there should be an element of need.
In such cases the main test should be whether it was necessary for the landlords t() need the premises for their own use or occupation.
[8A D, F] In the instant case, the plaintiffs had proved that The requirement for the house for starting a hotel business was both genuine and reasonable and even imperative, because the scanty income of the plaintiffs was not sufficient to maintain them or to afford them a decent or comfortable living.
[9A B] Phiroze Ramanji Desai vs Chandrakant N. Patel and Ors ; ; applied.
B. Baliah v Chandoor Lachaiah, A.I.R. 1965 A.P. 435 (D.B.) approved.
The words "own occupation" in section ll(h) cannot be so narrowly interpreted as to indicate actual physical possession of the landlord personally and nothing short of that.
The provision in section ll(h) of the Act is meant for the benefit of the landlord and, therefore, it must be so construed as to advance the object of the Act.
The word 'occupation ' does not exclude the possibility of the landlord starting a business or running a hotel in the shop which also would amount to personal occupation by the landlord.
The section contemplates the actual possession of the landlord, whether for his own residence or for his business.
It is manifest that even, if the landlord is running a hotel in the house, he is undoubtedly in possession or occupation of the house in the legal sense of the term.
Furthermore, the section is wide enough/to include the necessity of not only the landlord but also of the persons who are living with him as members of the same family.
[9G H, 10A and D] In the instant case there can be no manner of doubt that the house was required for the personal residence or occupation of all the three plaintiffs who admittedly were the owners of the house.
The fact that the plaintiffs wanted to occupy the property for running hotel would not take their case out of the ambit of personal necessity and the occupation of a house may be required by the owner for personal purposes.
He may choose to reside himself in the house or run a business in the house or use it as a paying guest house and derive income therefrom.
In all these cases even though the owner may not physically reside in the house, the house in law would nevertheless be deemed to be in actual occupation of the owners.
[10A C] 4.
(a) In deciding the aspect of balance of convenience of the parties in an eviction suit each party has to prove its relative advantages or disadvantages and the entire onus cannot be thrown on the plaintiffs to prove that lesser disadvantages will be suffered by the defendants and that they were remediable.
[10H, 11A] (b) It is no doubt true that the tenant will have to be ousted from the house if a decree for eviction is passed, but such an event would happen when ever a decree for eviction is passed and was fully in contemplation of the legislature when section ll(l)(h) of the Act was introduced in the Act.
This by itself would not be a valid ground for refusing the plaintiffs a decree for eviction.
[10F G] 3 M/s. Central Tobacco Co. vs Chandra Prakash, Civil Appeal No. 1175/69 [SC] dated 23 4 1969 and Phiroze Ramanji Desai vs Chandrakant N. Patel and Ors.
[1974] I S.C.C. 661; referred to.
Kelley vs Goodwin, [1947] All E.R. P. 810; quoted with approval; K Parasuramaiah v Pokuri Lakshmamma AIR 1965 A.P. 220 approved.
(c) Being the owners of the house they cannot be denied eviction and be compelled to live below the poverty line merely to enable the respondents to carry on their flourishing hotel business, at the cost of the appellants.
This shows the great prejudice that will be caused to the plaintiffs if their suit is dismissed.
The plaintiffs have already produced material before the court to show that their income does not exceed more than Rs. 8000 to Rs. 9000/ per year as the yearly income tax paid by them is Rs. 70 to Rs. 80 only.
There is no other means for them to augment their income except to get their own house vacated by the defendants so as to run a hotel business.
[12H, 13A B] (d ) on a careful comparison and assessment of the relative advantages and disadvantages of the landlord and the tenant, it is clear that the scale is tilted in favour of the plaintiffs in the instant case.
The inconvenience, loss and trouble resulting from denial of a decree for eviction in favour of the plaintiffs far outweigh the prejudice or the inconvenience which will be caused to the defendants.
The High Court has unfortunately not weighed the evidence from the point of view.
[14H, 15A] Observation: Normally Supreme Court does not interfere with concurrent findings of facts but as the High Court as also the Trial Court have made a legally wrong approach to this ease and have committed a substantial and patent error of law in interpreting the scope and ambit of the words "reasonable requirement" and "own possession" appearing in section ll(I)(h) of the Act and have thus misapplied the law and overlooked some of the essential features of the evidence, the merits of the case had to be looked into in order to prevent grave and substantial injustice being done to the appellant.
[15B C]
|
Civil Appeal No. 634 or 1975.
Appeal by Special Leave from the Judgment and order dated 1 10 1974 of the Punjab and Haryana High Court in Civil Writ No. 5126 of 1974.
O. P. Malhotra, N. section Das Behl and Sat Pal Arora for the Appellant.
Madan Mohan for Respondents 3 4.
The Judgment of the Court was delivered by DESAI, J.
Socio economic justice, the corner stone of industrial jurisprudence to be achieved by the process of give and take, concessions and adjustments of conflicting claims would hardly advance if the industrial dispute involved in this appeal by special leave brought by the appellant M/s. Avon Services (Production Agencies) Pvt. Ltd. convassing some technical legal nicety rendering the two employees jobless for more than seven years is encouraged.
A brief recital of few facts touching upon the controversy would reveal the arena of dispute.
The appellant is a Private Limited Company incorporated under the , and is engaged in the business of manufacturing Fire Fighters Foam Compound.
It has set up two factories, one at Bombay and the other at Ballabhgarh.
The industrial dispute which is the subject matter of appeal relates to Ballabhgarh factory.
According to the appellant this factory, when commissioned in 1962, was divided into two sections, now styled as two separate undertakings: (i) manufacturing section; and (ii) packing material making section.
The manufacturing section comprised two sub sections, viz., the chemical section, i.e. Foam Compound manufacturing section, and the boiler section.
The packing material section was again composed of two sub sections, one manufacturing containers, and the other painting of the containers.
Respondents 3 and 4 according to the appellant were employed in the painting section.
Around 1964 the appellant decided to buy containers from the market and consequently closed down its packing material 49 making section but continued the painting sub section.
On 13th July 1971 the appellant purported to serve a notice on respondents 3 and 4 and one Mr. Ramni intimating to them that the management has decided to close the painting section effective 13th July 1971 due to unavoidable circumstances and hence the services of the three workmen would no longer be required and, therefore, they are retrenched.
Even though it is alleged that the notice was served upon the three workmen, the Tribunal found that the notice never reached respondents 3 and 4.
By the notice the workmen concerned were also informed that they should collect their dues under section 25FFF of the , from the office of the Company.
Since 13th July 1971 respondents 3 and 4 have been denied employment by the appellant.
A Trade Union of the employees of the appellant affiliated to Bharatiya Mazdoor Sangh served a notice of demand, Annexure P l dated 16th July 1971 inter alia calling upon the appellant to reinstate respondents 3 and 4 and the third workman and also to pay the full back wages.
On 19th February 1972 as per Annexure P 2, the Secretary to the Government of Haryana, Labour and Employment Department, intimated to the President of the Union that from amongst the demands contained in Annexure P l, Demands 2 to 9 have been referred to Industrial Tribunal for adjudication.
In respect of demand No. l relating to the reinstatement of the three workmen in the painting section, the reference was refused on the ground that there was no work for painting in the factory where these two workmen were working.
This refusal to refer the demand concerning respondents 3 and 4 has been the subject matter of a very serious submission on behalf of the Company that the reference subsequently made by the Government was invalid.
To proceed further with the narrative.
subsequently the Government of Haryana by its order dated 23rd November, 1972 referred the following dispute to the Industrial Tribunal for adjudication: "Whether the retrenchment of Sarvashri Mohammed Yamin and Mohammad Yasin was justified and in order ? If not, to what relief they are entitled ?" The Tribunal registered the reference at No. 81/72 and proceeded to adjudicate upon the dispute.
Three issues were raised before the Tribunal and it is necessary to set down the three issues here in order to point out that one of the contentions raised at the hearing of this appeal was never put forth before the Tribunal.
The issues framed by the Tribunal are: "1.
Whether the present reference is bad in law for the reasons given in para No. 1 of the preliminary objection in the written statement ? (On management).
Whether the statement of claim filed on behalf of the workmen is not in order ? (On management).
Whether the retrenchment of Sarvashri Mohammed Yamin and Mohammad Yasin was justified and in order ? If not, to what relief they are entitled?" The management, in support of its contention covered by issue No. 1, urged before the Tribunal that once the Government declined to make a reference in respect of termination of service of respondents 3 and 4, the Government was not competent to refer the dispute for adjudication at a later date.
The Tribunal negatived the contention observing that there is abundant authority in support of the proposition that the Government having once declined to make a reference, is not rendered incompetent from making a reference of the same dispute at a later date.
Issue No. 2 was also answered against the appellant but as that contention was not raised before us, we need not go into the details of it.
On issue No. 3, the Tribunal held that respondents 3 and 4 were retrenched and the case would squarely fall under section 25F of the (for short 'the Act ') and as the appellant employer has not complied with the pre condition laid down in section 25F (a) and (b) of the Act to wit, serving of one month 's notice or wages in lieu of such notice and payment of retrenchment compensation, the retrenchment was invalid.
The Tribunal was further of the opinion that as both the workmen have been in service for 15 years or so, they could have been conveniently absorbed in some other department and, therefore, the retrenchment was unjustified.
the Tribunal accordingly directed reinstatement of respondents 3 and 4 with full back wages.
The appellant moved the High Court of Punjab & Haryana for a writ of certiorari but the writ petition was dismissed in limine.
Mr. O. P. Malhotra, learned counsel for the appellant canvassed two contentions before US.
He submitted that the Government having declined to make a reference under section 10(l) of the Act in respect of termination of service of respondents 3 and 4 as per its order dated 19th February 1972 Annexure P 2, the Government was not competent or had no power or authority to make a reference in respect of the same dispute unless the Government must have come up with some fresh or additional material which, when the validity of the reference was challenged, must be disclosed or it must appear on the face of the reference itself.
Alternatively it was contended that after having declined to make a reference in respect of termination of service of respondents 3 and 4, the Government was not competent to make a reference of an entirely different dispute touching the question of reinstatement 51 of respondents 3 and 4 which was a materially different dispute, from A the one raised by the Union as per its charter of demands Annexure P 1, dated 16th July 1971 because the demand as is now referred to the Tribunal was never raised before the management and, therefore, no such demand existed which the Government could have referred to the Tribunal under section 10(1) of the Act.
The second contention was that the termination of service of respondents 3 and 4 was consequent upon the closure of painting undertaking which was a separate and independent undertaking of the appellant and the case would, therefore, be governed by section 25FFF and not by section 25F as held by the Tribunal and even if wages in lieu of notice and retrenchment compensation were not paid at the time or retrenchment the termination would not be invalid because the conditions for payment of wages in lieu of notice and retrenchment compensation are not conditions precedent when termination of service is brought about on account of closure of the undertaking.
Section 10(1) of the Act confers power on the appropriate Government to refer at any time any industrial dispute which exists or is apprehended to the authorities mentioned in the section for adjudication.
The opinion which the appropriate Government is required to form before referring the dispute to the appropriate authority is about the existence of a dispute or even if the dispute has not arisen, it is apprehended as imminent and requires resolution in the interest of industrial peace and harmony.
Section 10(1 ) confers a discretionary power and this discretionary power can be exercised on being satisfied that an industrial dispute exists or is apprehended.
There must be some material before the Government on the basis of which it forms an opinion that an industrial dispute exists or is apprehended.
The power conferred on the appropriate Government is an administrative power and the action of the Government in making the reference is an administrative act.
The formation of an opinion as to the factual existence of an industrial dispute as a preliminary step to the discharge of its function does not make it any the less administrative in character.
Thus the jurisdictional facts on which the appropriate Government may act are the formation of an opinion that an industrial dispute exists or is apprehended which undoubtedly is a subjective one, the next step of making reference is an administrative act.
The adequacy or sufficiency of the material on which the opinion was formed is beyond the pale of judicial scrutiny.
If the action of the Government in making the reference is impugned by a party it would be open to such a party to show that what was referred was not an industrial dispute and that the Tribunal had no jurisdiction to make the Award but if the dispute 52 was an industrial dispute, its factual existence and the expediency of making a reference in the circumstances of a particular case are matters entirely for Government to decide upon, and it will not be competent for the Court to hold the reference bad and quash the proceedings for want of jurisdiction merely because there was, in its opinion, no material before Government on which it could have come to an affirmative conclusion on those matters (see State of Madras vs C. P. Sarathy) (1).
The contention, however, is that once the appropriate Government applies its mind to the question of referring an industrial dispute to the appropriate authority and declines to make a reference, it cannot subsequently change its mind and make the reference of the dispute unless there is some fresh or additional material before it.
It was said that once an industrial dispute is raised and the Government declines to make a reference, the opposite party is entitled to act on the supposition that the dispute in question was not worth referring and such a dispute would no more be in existence between the employee 1) and the concerned employer and that the Government cannot spring a surprise by subsequently unilaterally making the reference without any fresh or additional material being brought to its notice.
Section 10(l) enables the appropriate Government to make reference of all industrial dispute which exists or is apprehended at any time to one of the authorities mentioned in the section.
How and in what manner or through what machinery the Government is apprised of the dispute is hardly relevant.
Section 12 casts a duty upon the Conciliation officer to hold conciliation proceedings in respect of the industrial dispute that exists or is apprehended.
It is mandatory for the Conciliation officer to so hold the conciliation proceedings where dispute relates to a public utility service and a strike notice has been served under 6. 22.
The conciliation officer must try to promote a settlement between the parties and either he succeeds in bringing the parties to a settlement or fails in his attempt, he must submit a report to the appropriate Government, but this procedure for promoting settlement cannot come in the way of the appropriate Government making a reference even before such a report is received.
The only requirement for taking action under section 10(1) is that there must be some material before the Government which will enable the appropriate Government to form an opinion that an industrial dispute exists or is apprehended.
This is an administrative function of the Government as the expression is understood in contradistinction to judicial or quasi judicial function.
Merely because the Government rejects a request for a reference or declines to make a reference.
it cannot be said that the industrial dis (1) , 53 pute has ceased to exist, nor could it be said to be a renew of any A judicial or quasi judicial order or determination.
The industrial dispute may nonetheless continue to remain in existence and if at a subsequent stage the appropriate Government is satisfied that in the interest of industrial peace and for promoting industrial harmony it is desirable to make a reference, the appropriate Government does not lack power to do so under section 10(1), nor is it precluded from making the reference o l the only ground that on an earlier occasion it had declined to make the reference.
The expression "at any time" is section 10(l) will clearly negative the contention that once the Government declines to make a reference the power to make a reference under section 10(1) in respect of the same dispute gets exhausted.
Such a construction would denude a very vital power conferred on the Government in the interest of industrial peace and harmony and it need not be whittled down by interpretative process.
In Western India Match Co. Ltd., vs Western India Match Co. Workers Union & Ors.,(1) an identical contention was raised in respect of a reference made under section 4(k) of the U.P. which is in pari materia with section 10(1) of the Act.
Negativing this contention this Court observed as under: "In the light of the nature of the function of the Government and the object for which the power is conferred on it, it would be difficult to hold that once the Government has refused to refer, it cannot change its mind on a reconsideration of the matter either because new facts have come to light or because it had misunderstood the existing facts or for any other relevant consideration and decide to make the reference.
But where it reconsiders its earlier decision it can make the reference only if the dispute is an industrial one and either exists at that stage or is apprehended and the reference it makes must be with regard to that and no other industrial dispute".
It follows that the Government does not lack the power to make the reference in respect of the same industrial dispute which it once declined to refer.
But it was urged that the ratio of the decision would show that the Government must have some fresh material made available to it, subsequent to its refusal to make a reference, for the formation of a fresh opinion, for making the reference.
It is not absolutely necessary that there ought to be some fresh material before the Government for reconsideration of its earlier decision.
The Government may reconsider its decision on account of some new facts brought to its notice or for any other relevant considera (1) ; 54 tion and such other relevant consideration may include the threat to industrial peace by the continued existence of the industrial dispute without any attempt at resolving it and that a reference would at least bring the parties to the talking table.
A refusal of the appropriate Government to make a reference is not indicative of an exercise of power under section 10(1), the exercise of the power would be a positive act of making a reference.
Therefore, when the Government declines to make a reference the source of power is neither dried up nor exhausted.
It only indicates that the Government for the time being refused to exercise the power but that does not denude the power.
The power to make the reference remains intact and can be exercised if the material and relevant considerations for exercise of power are available; they being the continued existence of the dispute and the wisdom of referring it, in the larger interest of industrial peace`and harmony.
Refusal to make the reference does not tantamount to saying that the dispute, if it at all existed, stands resolved.
On the contrary the refusal to make a reference not compelling the parties to come to a talking table or before a quasi judicial Tribunal would further accentuate the feelings and a threat to direct action may become imminent and the Government may as well reconsider the decision and make the reference.
It is, therefore, not possible to accept the submission that if the Government had on an earlier occasion declined to make a reference unless it be shown that there was some fresh or additional material before the Government the second reference would be incompetent.
It has not been shown that the dispute had ceased to exist and the very existence of the dispute enables the Government to exercise the power under section 10(l) and it has been rightly exercised.
The view which we are taking is in accord with the decision of this Court in Binny Ltd. vs Their Workmen & Anr.(1) wherein it was found that the Government had declined to make a reference of the dispute on two previous occasions on the basis of which it was contended that the reference was invalid.
The contention was negatived observing that the mere fact that on two previous occasions the Government had taken the view that no reference was called for does not entitle the Court to conclude that there could be no cause for a reference at a later date.
Alternatively it was contended that even if the appropriate Government has power to make a reference after having once declined to make the reference, it can only refer that industrial dispute which it had once declined to refer and no other dispute and that in this case the Government has referred an entirely different dispute than (1) 55 the one raised by the Union and that in respect of the referred dispute A the demand having not been made from the employer there was no such dispute in existence and, therefore, the reference was invalid.
The contention in the form in which it is now canvassed was not raised before the Industrial Tribunal and even before the High Court.
However, as we find substance in the contention we would not reject it on the technical ground that it was not raised before the Industrial Tribunal or the High Court.
The Avon Employees Union by its notice of demand Annexure P l dated 16th July 1971 requested the appellant company to consider the demands set out in the notice.
The relevant demand for the purpose of present discussion is demand No. 1 which reads as under: "That our three (?) companions Mohamed Yamin and Mohamed Yasin who had been working in the above mentioned factory for the last 15/15 years and 8 years, their termination of service and denying their gate passes are illegal and against the principle of justice, therefore, they be reinstated to their jobs and by giving back the full wages from the date of their termination, injustice be ended," The demand as hereinabove set out appears to be a translation of a demand originally served in Hindi.
The substance of the matter is that the Union complained about the termination of service of the two named workmen who are respondents 3 and 4 and one other whose services were terminated by the appellant and which termination was styled as illegal and the crucial industrial dispute was to reinstate them with full back wages and continuity of service.
There were seven other demands with which we are not concerned.
The appropriate Government while making the reference Annexure P 2, informed the Union that the demands 2 to 9 have been referred to Industrial Tribunal and in respect of demand No. 1, the Government, while declining to make the reference, stated its reasons as under: "There is no work for painting in the factory where these two workmen were working." Subsequently the appropriate Government by its order No. ID/FD 72/40688, dated 23rd November 1972, referred the following dispute to the Industrial Tribunal for adjudication: "Whether the retrenchment of Sarvashri Mohamad Yamin and Mohmad Yasin was justified and in order ? If not, to what relief they are entitled ?" 56 The submission is that the Union espoused the cause of the aforementioned two workmen respondents 3 and 4 complaining that the termination of their services is illegal and for reinstatement, and that demand made by the Union was not referred to the Industrial Tribunal by the Government and subsequent to the decision of the Government respondents 3 and 4 did not make any demand from the employer nor did they raise an industrial dispute with regard to termination of their services and, therefore, the Government could not have referred an entirely different demand in respect of respondents 3 and 4 and the reference is invalid.
A mere comparison of the demand raised by the Union and the demand subsequently referred to the Industrial Tribunal would clearly negative the contention.
The dispute arose from the termination of services of respondents 3 and 4 and one other workman.
Retrenchment comprehends termination of service.
Termination of service may be brought about by dismissal, discharge, removal from service or even retrenchment apart from resignation or voluntary retirement.
Retrenchment is defined in section 2(oo) of the Act to mean termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include termination in the manner stated therein.
The definition clearly indicates that retrenchment is a mode of termination of service.
The Union complained about the termination of service of respondents 3 and 4 and demanded reinstatement with full back wages and the Government referred the dispute, about termination of service brought about by way of retrenchment and for con sequential relief for adjudication to the Industrial Tribunal.
There fore, there is no substance in the contention that the original demand was someone other than the one which is now referred to the Industrial Tribunal.
The Union had espoused the cause of two specified workmen and one other and the reference is with regard to the termination of service by retrenchment in respect of the same two workmen.
The language or the format in which the demand is couched is hardly decisive of the matter The substance of the matter is as to what was the grievance of the workmen complained of by them or espoused by the Union and what the Industrial Tribunal is called upon to adjudicate.
Viewed from this angle the demand referred to the Industrial Tribunal for adjudication is the same which was espoused and raised by the Union.
Reference was made in this connection to the Sindhu Resettlement Corporation Ltd. vs The Industrial Tribunal of Gujarat & ors.
(I) The appellant employer in that case contended that the demand raised before the employer was about retrenchment compensation and not about reinstatement of the retrenched workmen and, therefore, the (1) ; 57 Government was not competent to make a reference as if the demand was one of reinstatement.
The demand which was referred to the Tribunal was whether Shri R. section Ambwaney should be reinstated in the service of Sindhu Resettlement Corporation Ltd. and he should be paid his wages from 21st February 1958 ? After examining the evidence this Court held that the retrenched workmen in their claim put forward before the management of the employer requested for payment of retrenchment compensation and did not raise any dispute for reinstatement.
In this background this Court held that the only reference which the Government could have made had to be related to the payment of retrenchment compensation which was the only subject matter of dispute between the appellant and the respondents and therefore, the reference to the extent of adjudication for reinstatement was held to be incompetent.
The decision turns purely on the facts of the case.
In the case before us the Union complained about illegal termination of service and demanded reinstatement with back wages.
The Government subsequently made a reference about the validity of the retrenchment and the relief to which the workmen would be entitled.
It is thus crystal clear that there was a demand about reinstatement, complaining about the illegality of termination of service and the same has been referred to the Tribunal.
Therefor, it is not possible to accept the contention that on this account the reference is incompetent.
In this view of the matter it is not necessary to examine the contention raised on behalf of the respondents that the decision in Sindhu Resettlement Corporation Ltd. (Supra) ignores or omits to take note of the expression "difference" used in the definition of industrial dispute in section 2(k) as also the power of the Government not only to refer a dispute which exists but one which is apprehended in the sense which is imminent or is likely to arise in near future and which in order to arrest in advance threatened or likely disturbance to industrial peace and harmony and a threat to production has to be referred to the Industrial Tribunal for adjudication.
The last contention is that the Tribunal was in error in holding that respondents 3 and 4 were retrenched from service and, their case would be governed by section 25F while in fact the services of respondents 3 and 4 were terminated on account of closure of the painting undertaking of the appellant company and, therefore, the case would be governed by section 25FFF and failure to pay compensation and notice charges simultaneously with termination of service being not a pre requisite, the termination would neither be illegal nor invalid.
Section 25F prescribes conditions precedent to retrenchment of workmen.
The conditions precedent are: (a) giving of one month 's 5 817 SCI/78 58 notice in writing to the workman sought to be retrenched indicating the reasons for retrenchment and the retrenchment can be brought about on the expiry of the notice period or on payment of wages in lieu of such notice for the period of notice; (b) payment of retrenchment compensation as per the formula prescribed therein.
No notice to the workman would be necessary if the retrenchment is under an agreement which specifies a date for the termination of service.
Section 25FFF prescribes liability of an employer to pay compensation to workmen in case of closing down of undertaking.
The relevant portion of section 25FFF reads as under: "25FFF.
(1) Where an undertaking is closed down for any reason whatsoever, every workman who has been in continuous service for not less than one year in that under taking immediately before such closure shall, subject to the provisions of sub section (2), be entitled to notice and compensation in accordance with the provisions of section 25F, as if the workman had been retrenched: Provided that where the undertaking is closed down on account of unavoidable circumstances beyond the control of the employer, the compensation to be paid to the work man under clause (b) of section 25F, shall not exceed his average pay for three months".
A comparison of the language employed in section 25F and section 25F (1) would bring about in bold relief the difference between the phraseology employed by the Legislature and its impact on the resultant rights of the workmen.
Under section 25F a workman employed in an industrial undertaking cannot be retrenched by the employer until the payment is made as provided in clauses (a) and (b).
Section 25FFF (1) provides that the workman shall be entitled to notice and compensation in accordance with the provisions of section 25F if the undertaking is closed for any reason, as if the workman has been retrenched.
Taking note of this difference in language, this Court in State of Bombay & Ors.
vs The Hospital Mazdoor Sabha & Ors.,(1) held that the failure to comply with the provision prescribing conditions precedent for valid retrenchment in c. 25F renders the order of retrenchment invalid and inoperative.
Expounding this position, a Constitution Bench of this Court in M/s. Hatisingh Mfg. Co. Ltd. & Anr.
vs Union of India & Ors.
,(2) held that the Legislature has not sought to place closure of an undertaking on the same footing as retrenchment under section 25F.
By section 25F a prohibition against retrench (1) ; at 871.
(2) ; 59 ment until the conditions prescribed by that section are fulfilled, is imposed; by section 25FFF ( 1 ) termination of employment on closure of the undertaking without payment of compensation and without either serving notice or paying wages in lieu of notice is not prohibited.
Payment of compensation and payment of wages for the period of notice are not, therefore, conditions precedent to closure.
Is this then a case of retrenchment or closure ? What constitutes retrenchment is no more res integra.
In State Bank of India vs N. Sundara Mortey,(1), one of us, Krishna Iyer, J. examined the definition of the expressioin "retrenchment" under section 2(oo) to ascertain the elements which constitute retrenchment.
It was observed as under: "A break down of section 2(oo) unmistakably expands the semantics of retrenchment. 'Termination. for any reason whatsoever ' are the key words.
Whatever the reason, every termination spells retrenchment.
So the sole question is has the employee 's service been terminated ? Verbal apparel apart, the substance is decisive.
A termination takes place where a term expires either by the active step of the master or the running out of the stipulated term.
To protect the weak against the strong this policy of comprehensive definition has been effectuated.
Termination em braces not merely the act of termination by the employer, but the fact of termination howsoever produced.
May be, the present may be a hard case, but we can visualise abuses by employers, by suitable verbal devices, circumventing the armour of section 25F and section 2(oo).
Without speculating on possibilities, we may agree that 'retrenchment ' is no longer terra incognita hut area covered by an expansive definition.
It means 'to end, conclude, cease '." As against this, reference was made to Management of Hindustan Steel Ltd. vs The Workmen & Ors.,(2) wherein the management contended that it is a case of closure and the workmen contended that the termination was on account of retrenchment.
The entire decision turns on the facts of the case.
Hindustan Steel Ltd. had set up what was described as Ranchi Housing Project and this Project was completed in 1966.
After completion of the residuary work, the services of certain employees were terminated.
This termination was questioned alleging that it was a case of retrenchment and (1) ; at 165.
(2) ; 60 as the condition precedent was not complied with, the retrenchment was invalid.
The employer contended that it is a case of closure and payment of compensation was not a condition precedent and did not invalidate the termination of service.
This Court held that the word 'undertaking ' as used in section 25FFF appears to have been used in its ordinary sense connoting thereby any work, enterprise, project or business undertaking.
It is not intended to cover the entire industry or business of the employer.
Even closure or stoppage of a part of the business or activities of the employer would seem in law to be covered by this sub section.
This question has to be decided on the facts of each case.
Examining the facts of the case, this Court came to the conclusion that it was a case of closure.
In the present case the appellant attempted to serve notice dated 13th July 1971 on respondents 3 and 4 and one Mr. Ramni.
Tn this notice it was stated that the management has decided to close the painting section with effect from Tuesday, 13th July 1971 due to unavoidable circumstances and the services of the workmen mentioned in the notice would no longer be required and hence they are retrenched.
The workmen were informed that they should collect their dues under section 25FFF from the office of the Company.
The tenor of the notice clearly indicates that workmen were rendered surplus and they were retrenched.
It is thus on the admission of appellant a case of retrenchment.
It was, however, urged that notice refers to section 25FFF and there fore employer intended it to be a notice of termination of service consequent upon closure of painting undertaking.
Now, even if a closure of an undertaking as contemplated by section 25FFF need not necessarily comprehend a closure of the entire undertaking and a closure of a distinct and separate unit of the Undertaking would also be covered by section 25FFF, the question is whether painting subsection was itself an undertaking ? The expression 'undertaking ' is not defined in the Act.
It also finds its place in the definition of the expression 'industry ' in section 2(j).
While ascertaining the amplitude of the expression 'undertaking ' in the definition of the expression 'industry ', noscitur a sociis cannon of construction was invoked and a restricted meaning was assigned to it in Bangalore Sewerage Board vs Rajappa.(1) While, thus reading down the expression, in the context of section 25FFF it must mean a separate and distinct business or commercial or trading or industrial activity.
It cannot comprehend an infinitismally small part of a manufacturing process.
(1) ; at 227.
61 The Tribunal found that the alleged retrenchment notice was not served upon workmen and that finding was not controverted by pointing out some evidence which may point to the contrary.
The notice expressly states that ' the workmen are retrenched though it simultaneously states that the action is taken under section 25FFF.
But if the Company had a container making section which was closed way back in 1964 and yet these three workmen who used to paint the containers were retained, it cannot be said that painting section was a recognised sub section eligible for being styled as a part of the undertaking.
If such mini classification is permitted it would enable the employed to flout section 25 with impunity.
These workmen appear not to have been employed initially as painters.
They were doing some other work from which they were brought to painting section.
They could have as well been absorbed in some other work from which they were capable of doing as observed by the Tribunal.
If painting was no more undertaken as one of the separate jobs, the workmen would become surplus and they could be retrenched after paying compensation as required by section 25.
To style a job of a particular worker doing a specific work in the process of manufacture as in itself an undertaking is to give meaning to the expression 'undertaking ' which it hardly connotes.
An employer may stop a certain work which was part of an undertaking but which could not be classified as an independent undertaking, the stoppage of work in this context would not amount to closure of the undertaking.
The three workmen were doing work of painting the containers.
No records were shown that there was a separate establishment, that it was a separate sub section of that it had some separate supervisory arrangement.
In fact, once the container making section was closed down, the three painters became part and parcel of the manufacturing process and if the painting work was not available for them they could have been assigned some other work and even if they had to be retrenched as surplus, the case would squarely fall in section 25F and not be covered by section 25FFF, on a specious plea of closure of an undertaking.
The Tribunal in our opinion was right in holding that this was a case of retrenchment and as conditions precedent were not complied with, the retrenchment was invalid and the relief of reinstatement with full back wages was amply deserved.
Accordingly this appeal fails and is dismissed with costs quantified at Rs. 2,000/ .
N.V.K. Appeal dismissed.
| IN-Abs | The appellant 's factory was divided into two sections; manufacturing section and packing material making section.
The packing material making section comprised two sub sections: manufacturing containers and painting containers.
The appellant decided to buy containers from the market and consequently closed down its packing material making section but continued the painting section.
After a lapse of years, the employer served a notice of retrenchment on the two workmen (respondents nos.
3 and 4) and another employee all of whom at that time were working in the painting section alleging that the undertaking is closed.
They were asked to collect their dues under section 25FFF of the .
The Trade Union of the employees submitted a number of demands one of which related to the reinstatement of the two retrenchment workmen with full back wages.
The Government referred all their demands to the Industrial Tribunal but declined to refer the demand relating to reinstatement of the two retrenched workmen.
A few months later, however, the Government referred this demand as well for adjudication.
The Tribunal held ( 1 ) that though in the first instance the Government l? refused to refer the dispute it was competent to make a reference at a later date and (2) that the retrenchment of the workmen was invalid because the appellant did not comply with the provision of section 25F. The appellant 's writ petition was dismissed in limine.
In appeal to this Court it was contended that (1) the Government having once declined to make a reference, had no power to make a reference in respect of the same dispute at a later date unless it had some fresh or additional material before it; and (2) since the painting undertaking was a separate and independent undertaking, the case was governed by section 25FFF and not by section 25F. Dismissing the appeal.
^ HELD: 1.
(i) The Government does not lack the power to make reference in respect of the same industrial dispute which it once declined to refer.
[53G] 46 (ii) The opinion which the appropriate Government is required to form before referring a dispute to the appropriate authority under section 10(1) is about the existence of a dispute or even if the dispute has not arisen it is apprehended as imminent and requires resolution in the interest of industrial peace and harmony.
The power under this section, which is discretionary, can be exercised when the Government is satisfied that an industrial dispute exists or is apprehended.
There must be some material before the Government forms an opinion in respect of the two relevant considerations.
Moreover, the power conferred being administrative in nature the action of the Government in making the reference is an administrative act.
The jurisdictional facts on which the appropriate Government may act are the formation of opinion that an industrial dispute exists or is apprehended, which is a subjective one.
That being so the adequacy or sufficiency of the material on which the opinion was formed is beyond the pale of judicial scrutiny.
If the Governments action is impugned by a party it would be open to such a party to show that what was referred was not an industrial dispute and that the tribunal had no jurisdiction to make the award.
If the dispute was an industrial dispute its factual existence and the expediency of making a reference being matters entirely for the Government to decide, it will not be competent for the court to hold the reference bad merely because there was, in its opinion, no material before the Government on which it could have come to an affirmative conclusion on those matters.
[51E 52B] State of Madras vs C. P. Sarathy, referred to.
(iii) The Government does not lack the power to make the reference in respect of the same industrial dispute which it once declined to refer.
The only requirement for taking action under section 10(l) is that there must be some material before the Government enabling it to form, an opinion that an industrial dispute exists or is apprehended.
How and in what manner or through what machinery the Government is apprised of the dispute is hardly relevant.
Merely because ' the Government rejects a request for a reference or declines to make a reference, it cannot be said that the dispute has ceased to exist.
An industrial dispute may nonetheless continue to remain in existence and if at a subsequent stage.
the appropriate Government is satisfied that it is desirable to make a reference the Government does not lack the power to do so nor is it precluded from making the reference on the only ground that on an earlier occasion it had declined to make the reference.
The expression "at any time" clearly negatives that contention.
[53G, 52G, E, H, 53A B] Western India Match Co. Ltd. vs Western India Match Co. Workers Union & Ors., ; followed.
(iv) Nor again is it necessary that there should be some fresh material before the Government for reconsideration of its earlier decision.
It may re consider its decision on some new facts brought to its notice or for any relevant consideration.
Such relevant consideration may include threat to industrial peace by the continued existence of the industrial dispute and that a reference would at least bring the parties to the talking table.
When the Government declined to make the reference the source of power is neither dried up nor exhausted.
It only indicates that the Government for the time being refused to exercise the power but that does not denude the power.
The power to make a reference remains intact.
Similarly refusal 47 to make the reference does not tantamount to saying that the dispute stands resolved.
On the contrary, refusal to make a reference would further accentuate the feelings and a threat to direct action may become imminent and the Government may as well consider the decision to make the reference.
[53H 54A, 54R D] In the instant case it has not been shown that the dispute had ceased to exists and the very existence of the dispute enables the Government to exercise the power under section 10(i).
[54F] Binny Ltd. vs Their Workmen & Anr.
[19721 3 SCR 518 referred to.
(2) There is no substance in the appellant 's contention that The original demand was some one other than the one which was referred to the Industrial Tribunal later.
The Union had espoused the cause.
Of two workmen and the reference was with regard to the termination of services by retrenchment in respect of the same two workmen.
The language or the format in which the demand is couched is hardly decisive of the matter.
The substance of the matter, is as to what is the grievance of the workmen, complained of by them, or espoused by the Union and what the Industrial Tribunal is called upon to adjudicate.
In this case the demand referred to the Tribunal was the same which was espoused by the Union earlier.
[56F G] Sindhu Resettlement Corporation Ltd. vs The Industrial Tribunal of Gujarat & Ors., [1968] 1 scr 515 held inapplicable.
(3) The tenor of the notice served on the workmen clearly indicated that workmen were rendered surplus and they were retrenched.
On the admission of the appellant it was a case of retrenchment.
[60E] State Bank of India vs N. Sundara Money, ; at 165; Management of Hindustan Steel Ltd. vs The Workmen & Ors., ; referred to.
(4) (i) The notice expressly stated that the workmen were retrenched though it simultaneously stated that the action was taken under section 25FFF However on the facts found by Industrial Tribunal, case of closure of undertaking is not made out.
[60D, F] (ii) The expression "undertaking" cannot comprehend an infinitismally small part of a manufacturing process.
While ascertaining the amplitude of the expression 'undertaking.
in the definition of the expression 'industry this Court gave a restricted meaning to it.
While thus reading down the expression, in the context of section 25FFF, it must mean a separate and distinct business or commercial or trading or industrial activity.
[60G H] Bangalore Sewerage Board .
Rajappa; , 227 referred to.
(iii) The case would squarely fall in section 25F and not be covered by section 25FFF, on a specious plea of closure of an undertaking.
As the company had a container making section which was closed a long time back and yet 48 these three workmen were retained, it cannot be said that the painting section was a recognised sub section eligible for being styled as a part of the undertaking.
If such mini classification is permitted it would enable the employer to flout section 25F with impunity.
These workmen appear not to have been employed initially as painters.
They were doing some other work from which they were brought to the painting section.
They could have as well been absorbed in some.
Other work which they were capable of doing.
If painting was no more undertaken as one of the separate jobs, the workmen would become surplus and they could be retrenched after paying compensation as required by section 25F.
To style a job of a particular worker doing a specific work in the process of manufacture as in itself an undertaking is to give meaning to the expression `undertaking which it hardly connotes.
[61F, B D]
|
: Criminal Appeal No. 58 of 1972.
Appeal by Special Leave from the Judgment and Order dated 23 7 1971 of the Mysore High Court in Criminal Appeal No. 17 of 1969.
1106 Soli J. Sorabji, Sol.
Genl., R. B. Datar and Girish Chandra for the Appellant.
section section Javali, A. K. Srivastava and Vineet Kumar for the Respondents.
The Judgment of the Court was delivered by JASWANT SINGH, J.
On the basis of recovery of 30 gold ingots bearing foreign markings effected by the Central Excise and Customs Headquarters Staff, Preventive Branch, Bangalore on April 16, 1964 from the suit case which the respondent was alleged to be carrying on alighting from Guntakal Bangalore Train No. 85 at Yeshwanthpur Rail way Station without a permit granted by the Administrator as required by Rule 126 H(2) (d) (ii) of the Defence of India (Amendment) Rules, 1963 relating to gold control (hereinafter referred to as 'the D.I. Rules ') and without including the same in the prescribed declaration as required by sub rules (1) and (10) of Rule 126 I of the D.I. Rules, the respondent was proceeded against in the Court of the Magistrate, Ist Class, Bangalore under section 135(ii) of the and Rules 126 P(2) (ii) and 126 P(1) (i) of the D.I. Rules.
On a consideration of the evidence adduced in the case, the Magistrate ac quitted the respondent of the charge under section 135 of the but convicted him for the commission of an offence under Rule 126 I(1) and (10) read with Rule 126 P(2)(ii) of the D.I. Rules and sentenced him to rigorous imprisonment for six months and a fine of Rs. 2,000/ .
On appeal, the II Additional Sessions Judge, Bangalore being of the opinion that the offence committed by the respondent fell within the purview of Rule, 126 P(2) (i) of the D.I. Rules convicted him under that Rule and sentenced him to simple imprisonment till the rising of the Court maintaining the fine of Rs. 2,000/ .
Both the parties felt dissatisfied with the aforesaid judgment and order of the II Additional Sessions Judge.
While the Central Excise Department preferred an appeal to the High Court under section 417(3) of the Code of Criminal Procedure against the acquittal of the respondent of the offence under Rules 126 H(2) (d) of the D.I. Rules read with Rule 126 P(2) (ii) of the Rules, the respondent filed a revision challenging his conviction and sentence as stated above.
By judgment and order dated July 23, 1971, the High Court allowed the appeal against acquittal holding that the facts and circumstances proved in the present case clearly brought the case within the mischief of Rule 126 P(2) (ii) of the D.I. Rules which prescribed a minimum sentence of six months but directed that the respondent be released on probation of good con duct for a period of three years under the Probation of offenders Act, 1958 on his furnishing a bond in the sum of Rs. 2,000/ with one 1107 surety of the similar amount to the satisfaction of the trial court undertaking to maintain peace and be of good behaviour during the aforesaid period overruling the objection raised on behalf of the Department that the provisions of the cannot be invoked in case of offences under the D.I. Rules which prescribe a minimum sentence of imprisonment in view of section 43 of the Defence of India Act, 1962.
Aggrieved by the aforesaid Judgment and order of the High Court, the Superintendent of Central Excise, Bangalore applied under Article 134(1)(c) of the Constitution for a certificate of fitness to appeal to this Court which was reused.
The Superintendent of Central Excise thereupon made an application under Article 136(1) of the Constitution for special leave to appeal to this Court which was allowed.
Hence this appeal.
The learned Additional Solicitor General, who has appeared at our request to assist us, and counsel for the appellant have contended that the impugned order directing the release of the respondent on probation of good conduct in purported exercise of the power under the is invalid and cannot be sustained.
They have vehemently urged that since the provisions of sections 3, 4 and 6 of the Probation of offenders Act, 1958 are inconsistent with the provisions of Rule 126 P(2) and other rules contained in Part XIIA of the D.I. Rules which prescribe minimum sentence of imprisonment for offences specified therein, the provisions of those rules must prevail in view of the non obstante clause contained in section 43 of the Defence of India Act, 1962 which is later than the Probation of offender Act, 1958.
Mr. Javali has, on the other hand, tried to justify the aforesaid order of the High Court by submitting that there is no inconsistency between the provisions of the Probation of offenders Act, 1958 and the provisions of Rule 126 P(2) of the D.I. Rules and that the provisions of Probation of offenders Act, 1958 which are based on a combination of the deterrent and reformative theories of the measure of punishment in due proportion far from being destructive of the provisions of the Defence of India Act, 1962 are supplemental thereto and provide an equivalent to the sentences prescribed therein.
He has further contended that in any event since the Defence of India Act, 1962 which was a temporary measure has long since expired, section 43 thereof can no longer operate as a bar to the respondent continuing to remain on probation of good conduct.
On the submissions of the learned counsel for the parties, two questions fall for determination (1) whether in view of the provisions of section 43 of the Defence of India Act, 1962, the respondent was entitled to be released on probation of good conduct under the Probation 1108 of offenders Act, 1958 and (2) whether the bar to the respondent 's invoking the benefit of the provisions of the Probation of offenders Act has been removed by the expiry of the Defence of India Act.
For a proper determination of the aforesaid two question," it is necessary to advert to Rule 126 P(2) (ii) of the D.I. Rules, sections 3, 4 and 6 of the Probation of offenders Act, 1958 and section 43 of the Defence of India Act, 1962 insofar as they are relevant for the purpose of this case: "126 P. Penalities. ( 1 ) . . . . . . (2) Whoever, (i). . . . . . . . (ii) has in his possession or under his control any quantity of gold in contravention of any provision of this Part, . . . . shall be punishable with imprisonment for a term of not less then six month and not more than two years and also with fine.
When any person is found guilty of having committed an offence punishable under section 379 or section 380 or section 381 or section 404 or section 420 of the Indian Penal Code or any offence punishable with imprisonment for not more than two years, or with fine, or with both under the Indian Penal Code or any other law, and no previous conviction is proved against him and the court by which the per son is found guilty is of opinion that, having regard to the circumstances of the case including the nature of the offence and the character of the offender, it is expedient so to do, then, notwithstanding anything contained in any other law for the time being in force, the court may, instead of sentencing him to any punishment or releasing him on probation of good conduct under section 4 release him after due admonition.
Explanation.
For the purposes of this section, previous conviction against a person shall include any previous order made against him under this section or section 4. 4.
(1) When any person is found guilty of having committed an offence not punishable with death or imprisonment for life and the court by which the person is found guilty is of opinion that, having regard to the circumstances of the case including the nature of the offence and the character of the offender, it is expedient to release him on probation of good conduct, then, notwithstanding anything contained in 1109 any other law for the time being in force, the court may, in stead of sentencing him at once to any punishment, direct that he be released on his entering into a bond, with or without sureties, to appear and receive sentence when called upon during such period, not exceeding three years, as the court may direct, and in the meantime to keep the peace and be of good behaviour; Provided that the court shall not direct such release of an offender unless it is satisfied that the offender or his surety, if any, has a fixed place of abode or regular occupation in the place over which the court exercises jurisdiction or in which the offender is likely to live during the period for which he enters into the bond. . . 6.
(1) When any person under twenty one years of age is found guilty of having committed an offence punishable with imprisonment (but not with imprisonment for life), the court by which the person is found guilty shall not sentence him to imprisonment unless it is satisfied that, having regard to the circumstances of the case including the nature of the offence and the character of the offender, it would not be desirable to deal with him under section 3 or section 4, and if the court passes any sentence of imprisonment on the offender, it shall record its reasons for doing so.
(2) For the purpose of satisfying itself whether it would not be desirable to deal with section 3 or section 4 with an offender referred to in sub section (1), the court shall call for a report from the probation officer and consider the report, if any, and any other information available to it relating to the character and physical and mental condition of the offender.
Effect of Act and rules, etc., inconsistent with other enactments.
The provisions of this Act or any rule made thereunder or any order made under any such rule shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or in any instrument having effect by virtue of any enactment other than this Act.
" It would be noticed that whereas Rule 126 P(2) (ii) of the D.I. Rules which is mandatory in character makes it obligatory for the Court to impose a minimum penalty of six months rigorous imprisonment and fine on a person found guilty of any of the offences specified therein, 1110 sections 3 and 4 of the Probation of offenders Act, 1958 vest in the Court a discretion to release a person found guilty of any of the offences specified therein on probation of good conduct after due admonition if no previous conviction is proved against him and if it is of opinion that having regard to the circumstances of the case including the nature of the offence and the character of the offender, it is expedient so to do.
[It would also be seen that section 6 of the Probation of offenders Act, 1958 puts a restriction on the power of the Court to award imprisonment by enjoining on it not to sentence an offender to imprisonment if he is under 21 years of age and has committed an offence punishable with imprisonment but not with imprisonment for life except where it is satisfied that having regard to the circumstances of the case including the nature of the offence and character of the offender it would not be desirable to deal with him under sections 3 and 4 of the Probation of offenders Act, 1958.
The incompatibility between sections 3, 4 and 6 of the Probation of offenders Act, 1958 and Rule 126 P(2) (ii) of the D.I. Rules is, therefore, patent and does not require an elaborate discussion.
The view that the aforesaid provisions of the Probation of offenders Act, 1958 are inconsistent with the provisions of the D.I. Rules which cast an obligation on the Court to impose a minimum sentence of imprisonment and fine is reinforced by section 18 of the Probation of offenders Act, 1958 which saves the provisions of (1) section 31 of the Reformatory School Act, 1897 (Act No. 8 of 1897), (2) Sub section (2) of section 5 of the Prevention of Corruption Act, 1947 (Act No. 2 of 1947), (3) the Suppression of Immoral Traffic in Women and Girls Act, 1956 (Act No. 104 of 1956) and (4) of any law in force in any State relating to juvenile offenders or borstal schools, which prescribe a minimum sentence.
The provisions of the Probation of offenders Act, 1958, being therefore, obviously inconsistent with Rule 126 P(2) (ii) of the D.I. Rules under which the minimum penalty of six months imprisonment and fine has to be imposed, the former have to yield place to the latter in view of section 43 of the Defence of India Act, 1962 which is later than the Probation of offenders Act, 1958 and embodies a non obstante clause clearly overriding the provisions of the enactments which contain inconsistent provisions including those of the Probation of offenders Act to the extent of inconsistency.
The result is that the provisions of rules made and issued under the Defence of India Act prescribing minimum punishment which are manifestly inconsistent with the aforesaid provisions of the Probation of offenders Act are put on par with the provisions of the enactments specified therein so as to exclude them from applicability of the Probation of offenders Act.
We are fortified in this view by a decision of this Court in 1111 Kumaon Motor owners ' Union Ltd. & Anr.
vs The State of Uttar Pradesh(1) where it was held that looking to the object behind the Defence of India Act, 1962 which was passed to meet an emergency arising out of the Chinese Invasion of India in 1962, section 43 of the Defence of India Act which is couched in emphatic language must prevail in case of apparent conflict between section 43 of the Defence of India Act on the one hand and section 68 B of the on the other.
The decision of this Court in Arvind Mohan Sinha vs Amulya Kumar Biswa & ors.(2) on which strong reliance is placed by Mr. Javali cannot be usefully called in aid on behalf of the respondent in view of the fact that the attention of the Court does not seem to have been invited in that case to section 43 of the Defence of India Act, 1962 which contains a non obstante clause.
This is apparent from the following observations made in that case "The broad principle that punishment must be proportioned to the offence is or ought to be of universal application save where the statute bars the exercise of judicial discretion either in awarding punishment or in releasing an offender on probation in lieu of sentencing him forthwith.
" The above observations also clearly show that where there is a statute which bars the exercise of judicial discretion in the matter of award of sentence, the Probation of offenders Act will have no application or relevance.
As Rule 126 P(2) (ii) of the D.I. Rules manifestly bars the exercise of judicial discretion in awarding punishment or in releasing an offender on probation in lieu of sentencing him by laying down a minimum sentence of imprisonment, it has to prevail over the aforesaid provisions of the Probation of offenders Act, 1958 in view of section 43 of the Defence of India Act, 1962 which is later than the Probation of offenders Act and has an overriding effect.
For the foregoing, we are of the view that though generally speaking, the benefit of sections 3, 4 and 6 of the Probation of offenders Act, 1958 which, as observed by Subba Rao, J. (as he then was) in Rattan Lal vs State of Punjab(3) is a milestone in the progress of the moderns liberal trend of reform in the field of peonage, can be claimed subject to the conditions specified therein by all offenders other than those found guilty of offences punishable with death or 1112 life imprisonment unless the provisions of the said Act are excluded by section 18 thereof, in case of offences under a special Act enacted after the Probation of offenders Act which prescribes a minimum sentence of imprisonment, the provisions of the Probation of offenders Act cannot be invoked if the special Act contains a provision similar to section 43 of the Defence of India Act, 1962.
Accordingly, we uphold the contention advanced on behalf of the appellant that recourse to the provisions of the Probation of offenders Act, 1958 cannot be had by the Court where a person is found guilty of any of the offences specified in Rule 126 P(2) (ii) of the D.I. Rules relating to gold control which prescribes a minimum sentence in view of the emphatic provisions of section 43 of the Defence of India Act.
The question No. 1 is accordingly answered in the negative.
This takes us to the consideration of the second question, viz., whether the bar to the respondent 's invoking the benefit of the provisions of the Probation of offenders Act has been removed by the expiry of the Defence of India Act.
The argument advanced by Mr. Javali in support of his contention in relation to this question cannot be countenanced in view of the fact that it overlooks the clear and unequivocal language of causes (a), (b), (c) and (d) of sub section (3) of section 1 of the Defence of India Act, 1962 which correspond to clauses (b), (c), (d) and (e) of section 6 of the General Clauses Act, the effect whereof is to keep alive all liabilities and penalties incurred during the operation of the Defence of India Act.
As in the instant case, not only was the criminal liability in respect of the aforesaid offences under Rule 126 P(2)(ii) of the D.I. Rules duly made under the Defence of India Act, 1962 incurred by the respondent before the Defence of India Act came to an end but the penalty or punishment prescribed therefor was also incurred and imposed on him while the Defence of India Act was very much in force, the benefit of the aforesaid provisions of the Probation of offenders Act, 1958 cannot be invoked by the respondent and he has to suffer the imprisonment awarded to him by the trial court in view of the unambiguous language of section 1(3) of the Defence of India Act.
The second contention urged by Mr. Javali is, therefore, rejected and question No. 2 (supra) is also answered in the negative.
For the foregoing reasons, we allow the appeal and set aside the impugned judgment and order.
As however, the matter was disposed of by the High Court on a preliminary point namely, whether the Court which finds a person guilty of any of the offences specified in Rule 126 1113 P(2)(ii) of the D.I. Rules is competent to release him on probation of good conduct on his executing a bond under the Probation of offenders Act, 1958 and the revision filed by the respondent was not disposed of on merits, we remit the case to the High Court with the direction to admit the revision to its original number and dispose of the same on merits according to law.
P.H.P Appeal allowed and case remitted.
| IN-Abs | The respondent was charged for violating rule 126 (H), 2(d)(ii) of the Defence of India (Amendment) Rules.
1963 relating to Gold Control and Rule 126 I before the Magistrate First Class, Bangalore and under Sec.
135 of the and Rule 126 of the Defence of India Rules.
The Magistrate acquitted the Respondent of the charge under Sec.
135 of the but convicted him for the offence under Defence of India Rules and sentenced him to rigorous imprisonment and fine of Rs. 2,000/ .
The Central Excise Department preferred an appeal to the High Court against the acquittal of the Respondent and the Respondent filed a revision challenging his conviction and sentence.
The High Court came to the conclusion that the offence under Rule 126 P(2)(ii) of the Defence of India Rules was proved against the Respondent and that the minimum sentence prescribed was six months.
The High Court however released the Respondent on probation of good conduct for a period of three years under the on his furnishing Bond in the sum of Rs. 2,000/ with one surety, over ruling the objection raised on behalf of the department that the provisions of the cannot be invoked in case of offences under the Defence of India Rules which prescribe a minimum sentence of imprisonment.
In an appeal by special leave the Department contended that the provisions of sections 3, 4 and 6 of the are inconsistent with the provisions of Defence of India Rules which prescribe minimum sentence of imprisonment for offences specified therein.
43 of Defence of India Act 1962 which is a later Act than the and which contains a non obstante clause must prevail over the provisions of the .
The Respondent contended: (1) There is no inconsistency between the provisions of and provisions of Rule 126 (2) of the Defence of India Rules.
The provisions of are based on the combination of the deterrent and reformative theories of the measure of punishment 1105 in due proportion far from being destructive of the provisions of the Defence of India Act.
1962 are supplemental thereto and provide and equivalent to the sentence prescribed therein (ii) The Defence of India Act, 1962 which was a temporary measure has long since expired.
Therefore, Sec. 43 of the Act no longer operates as a bar to the respondent continuing to remain on probation of good conduct.
Allowing the appeal the Court, ^ HELD: 1.
Rule 126 prescribes a minimum sentence of imprisonment of six months and a maximum of 2 years.
Sec. 3 of the provides that if a person if found guilty of offences mentioned therein under the India Penal Code and any offence punishable with imprisonment for not more than 2 years, and if such a person has no previous conviction and if the Court is of the opinion that having regard to the circumstances of the case including the nature of the offence and the character of the offender, it is expedient to release him on probation instead of sentencing him to any punishment, the Court may notwithstanding any other law for the time being in force, release him after due admonition.
Sec. 4 and 5 deal with other aspects of release in probation.
43 of the Defence of India Act provides that the provisions of the said Act and Rules made thereunder shall have effect.
notwithstanding anything inconsistent therewith contained in any enactment.
The incompatibility between sections 3, 4 and 6 of the Probation offenders Act and Rule 126 P(2)(ii) of the Defence of India Rules is patent.
The fact that the provisions of the two statutes are inconsistent is reinforced by Sec. 18 of Probation of offenders Act which save provisions of certain statues which prescribe minimum sentence.
In view of the inconsistency between two statutes the must yield to the Defence of India Act.1962 in view of the language of Sec. 43 which embodies a non obstante clause and which is a later Act.
[1109H,1110 A F].
Kumaon Motor Owners ' Union Ltd. & Anr.
vs The State of U.P., ; referred to.
Arvind Mohan Sinha vs Amulya Kumar Biswas & Ors, ; dissented from.
Clauses (a), (b), (c) and (d) of Sec.
1(3) of Defence of India Act, 1962 correspond to clauses (b), (c), (d) and (e) of Sec.
6 of the General Clauses Act.
In view of the said provisions liabilities and penalties incurred during the operation of the Defence of India Act are kept alive.
In the present case, Criminal liability was incurred by the respondent before the Defence of India Act came to an end and penalty and punishment was also inured and imposed on him while the Defence of India Act was very much in force Therefore, the benefit of the provision of Probationers of Offenders Act cannot be invoked by the Respondents.
[1112 E G]
|
Appeal (Criminal Appeal No. 1 of 1950) by special leave from an order of the High Court of Allahabad.
N.P. Asthana, and N.C. Chatterjee (K.B. Asthana, with them) for the appellant.
P.L. Banerjee (Sri Ram, with him) for the respondent.
March 19.
The judgment of the Court was deliv ered by KANIA C.J.
This is an appeal by special leave against an order of the Allahabad High Court dismissing the revision petition of the appellant against the order of the Special Magistrate refusing to quash the proceedings on the ground that the prosecution of the appellant inter alia under sections 161 and 165 of 314 the Indian Penal Code was illegal and without jurisdiction in the absence of the sanction of the Government under section 107 of the Criminal Procedure Code and section 6 of the Prevention of Corruption.
Act (II of 1947), hereafter referred to as the Act.
The material facts are these.
In 1947 the appellant held the office of Regional Deputy Iron and Steel Controller, Kanpur Circle, U.P., and was a public servant.
The police having suspected the appellant to be guilty of the offences mentioned above applied to the Deputy Magistrate, Kanpur, for a warrant of his arrest on the 22nd of October, 1947, and the warrant was issued on the next day.
The appellant was arrested on the 27th of October, 1947, but was granted bail.
On the 26th of November, 1947, the District Magistrate cancelled his bail as the Magistrate considered that the sureties were not proper.
On the 1st of December, 1947, the Government appointed a Special Magis trate to try offences under the Act and on the 1st December, 1947, the appellant was produced before the Special Magis trate and was granted bail.
The police continued their investigation.
On the 6th of December, 1948, sanction was granted by the Provincial Government to prosecute the appel lant inter alia under sections 161 and 165 of of the Indian Penal Code.
On the 31st January, 1949, sanction in the same terms was granted by the Central Government.
In the meantime as a result of an appeal made by the appellant to the High Court of Allahabad the amount of his bail was reduced and on the 25th of March, 1949, the appellant was ordered to be put up before the Magistrate to answer the charge sheet submit ted by the prosecution.
On behalf of the appellant it is argued that when the warrant for his arrest was issued by the Magistrate on the 22nd of October, 1947, the Magistrate took cognizance of the offence and, as no sanction of the Government had been obtained before that day, the initiation of the proceedings against him, which began on that day without the sanction of the Government, was illegal.
It is argued that the same proceedings are continuing against him and therefore the notice to 315 appear before the Magistrate issued on 25th March, 1949, is also illegal.
In support of his contention that the Magis trate took cognizance of the offences on 22nd March, 1947, he relies principally on certain observations in Emperor vs Sourindra Mohan Chuckerbutty(1).
It is therefore necessary to determine when the Magis trate took cognizance of the offence.
The relevant part of section 190 of the Criminal Procedure Code runs as follows: 190.
(1)"Except as hereinafter provided, any Presidency Magistrate, District Magistrate or Sub divisional Magistrate and any other Magistrate specially empowered in this behalf, may take cognizance of any offence (a) upon receiving a complaint of facts which constitute such offence; (b) upon a report in writing of such facts made by any police officer; (c) upon information received from any person other than a police officer, or upon his own knowledge or suspicion, that such offence has been committed. " It is clear from the wording of the section that the initiation of the proceedings against a person commences on the cognizance of the offence by the Magistrate under one of the three contingencies mentioned in the section.
The first contingency evidently is in respect of non cognizable of fences as defined in the Criminal Procedure Code on the complaint of an aggrieved person.
The second is on a police report, which evidently is the case of a cognizable offence when the police have completed their investigation and come to the Magistrate for the issue of a process.
The third is when the Magistrate himself takes notice of an offence and issues the process.
It is important to remember that in respect of any cognizable offence, the police, at the initial stage when they are investigating the matter, can arrest a person without obtaining an (1) I.L.R. 41 316 order from the Magistrate.
Under section 167(b) of the Criminal Procedure Code the police have of course to put up the person so arrested before a Magistrate within 24 hours and obtain an order of remand to police custody for the purpose of further investigation, if they so desire.
But they have the power to arrest a person for the purpose of investigation without approaching the Magistrate first.
Therefore in cases of cognizable offence before proceedings are initiated and while the matter is under investigation by the police the suspected person is liable to be arrested by the police without an order by the Magistrate.
It may also be noticed that the Magistrate who makes the order of remand may be one who has no jurisdiction to try the case.
The offences for which the appellant is charged are under the Criminal Procedure Code non cognizable and there fore if the matter fell to be determined only on the provi sions of the Criminal Procedure Code the appellant could not be arrested without an order of the Magistrate.
The posi tion however is materially altered because of section 3 of the Act which runs as follows: 3.
"An offence punishable under section 161 or section 165 of the Indian Penal Code shall be deemed to be a cogniz able offence for the purposes of the Code of Criminal Proce dure, 1898, notwithstanding anything to the contrary con tained therein.
Provided that a police officer below the rank of Deputy Superintendent of Police shall not investigate any such offence without the order of a Magistrate of the first class or make any arrest therefor without a warrant.
" It therefore follows that for the Prevention of Corrup tion Act, offences under sections 161 and 165 of the Indian Penal Code become cognizable, notwithstanding what is pro vided in the Criminal Procedure Code.
The proviso to sec tion 3 of the Act puts only two limitations on the powers of the police in connection with the investigation relating to those offences under the Act.
They are: (1) that the inves tigation 317 should be conducted by an officer not below the rank of a Deputy Superintendent of Police unless a Magistrate of the first class otherwise orders; and (2) if an arrest has to be made an order of the Magistrate has to be obtained.
The important point to be borne in mind is that the order of the Magistrate, which has to be obtained, is during the time the police is investigating the case and not when they have completed their investigation and are initiating the pro ceedings against the suspected person under section 190 of the Criminal Procedure Code.
The order which may be applied for and made during the police investigation by virtue of section 3 of the Act is therefore before the Magistrate has taken cognizance of the offence under section 6 of the Act or section 190 of the Criminal Procedure Code.
That appears to us to be the result of reading sections 3 and 6 of Act II of 1947 and section 190 of the Criminal Procedure Code read with the definition of cognizable offence in the Code.
The argument of the appellant is that when the Magis trate issued the warrant in October, 1947, he did so on taking cognizance of the offence under section 161 or 165 of the Indian Penal Code under section 190 of the Criminal Procedure Code.
It was contended that without such cogni zance the Magistrate had no jurisdiction to issue any proc ess as that was the only section which permitted the Magis trate to issue a process against a person suspected of having committed an offence.
In our opinion having regard to the wording of section 3 of the Act the assumption that the Magistrate can issue a warrant only after taking cogni zance of an offence under section 190 of the Criminal Procedure Code is unsound.
The proviso to section 3 of the Act expressly covers the case of a Magistrate issuing a warrant for the arrest of a person in the course of investi gation only and on the footing that it is a cognizable offence.
Section 3 of the Act which makes an offence under section 161 or 165 of the Indian Penal Code cognizable has provided the two safeguards as the proceedings are contem plated against a public servant.
But because of these safe guards it 318 does not follow that the warrant issued by the Magistrate under section 3 of the Act is after cognizance of the of fence, and not during the course of investigation by the police in respect of a cognizable offence.
The only effect of that proviso is that instead of the police officer ar resting on his own motion he has got to obtain an order of the Magistrate for the arrest.
In our opinion, it is wrong from this feature of section 3 of the Act alone to contend that because the warrant is issued it must be after the Magistrate has taken cognizance of it and the Magistrate 's action can be only under section 190 of the Criminal Proce dure Code.
The material part of section 197 of the Criminal Procedure Code provides that where any public servant who is not removable from his office save with the sanction of Government is accused of an offence alleged to have been committed by him while acting or purporting to act in the discharge of his official duty, no court shall take cogni zance of such offence except with the previous sanction of the appropriate Government.
This section read as following section 190 shows that the word 'cognizance ' in this section indicates the stage of initiation of proceedings against a public servant.
Sections 190 to 199 B of the Criminal Proce dure Code are grouped together under the caption "Initiation of proceedings".
The sections dealing with the stage of in vestigation by the police in the case of cognizable offences are quite different.
Under section 6 of the Act it is pro vided that no court shall take cognizance of an offence punishable under section 161 or 165 of the Indian Penal Code . alleged to have been committed by a public servant except with the previous sanction of the appropriate Government.
Reading sections 197 and 190 of the Criminal Procedure Code and section 6 of the Act in the light of the wording of the proviso to section a, it is therefore clear that the stage at which a warrant is asked for under the proviso to section 3 of the Act is not on cognizance of the offence by the Magistrate as contemplated by the other three sections.
319 Learned counsel for the appellant relied on some observa tions in Emperor vs Sourindra Mohan Chuckerbutty (1), in respect of the interpretation of the word 'cognizance '.
In that case, on the 24th April, 1909, a dacoity took place at N and on the same day the police sent up a report of the occurrence to the Sub divisional officer of Diamond Harbour.
On the 2nd September one of the accused was arrested and he made a confession on the 18th October.
The case was subse quently transferred by the District Magistrate of Alipore to his own file and on the 20th January, 1910, an order under section 2 of the Criminal Law Amendment Act (XIV of 1908) was issued in the following terms: "Whereas the District Magistrate of the 24 Parganas has taken cognizance of offences under sections 395 and 397, I.P.C., alleged to have been committed by the persons accused in the case of Emperor vs Lalit Mohan Chuckerbutty and others . and whereas it appears to the Lieutenant Governor of Bengal. the provi sions of Part 1 of the Indian Criminal Law Amendment Act should be made to apply to the proceedings in respect of the said offences, now, therefore, the Lieutenant Governor. directs. that the provisions of the said Part shall apply to the said case.
" S surrendered on the 24th of January and was arrested by the police and put before the Joint Magis trate of Alipore who remanded him to Jail.
Applications for bail on his behalf were made but they were dismissed.
The Sessions Judge was next moved unsuccessfully for bail under section 498 of the Criminal Procedure Code.
S then moved the High Court for a Rule calling upon the District Magistrate to show cause why bail should not be granted on the grounds (1) that no order had been made applying Act XIV of 1908 and (2) that there did not appear any sufficient cause for further inquiry into the guilt of section The first contention rested on the assertion that the Magistrate had not taken cognizance of the offence of dacoity on the 20th of January.
The learned Judges pointed out that the argument was ad vanced because the legal adviser of S had (1) 1. 320 SUPREME COURT REPORTS no opportunity to see the record of the case.
On the facts it was clear that the Magistrate had taken cognizance of the offence on the 20th of January.
The observations "taking cognizance does not involve any formal action or indeed action of any kind but occurs as soon as a. magistrate as such applies his mind to the suspected commission of an offence" have to be read in the light of these facts.
As noticed above, the magistrate had expressly recorded that he had taken cognizance of the case and thereupon the provi sions of the Criminal Law Amendment Act were made applicable to the case.
The question argued before the High Court was in respect of the power of the High Court to grant bail after the provisions of the Criminal Law Amendment Act were applied to the case.
In our opinion therefore that decision and the observations therein do not help the appellant.
In Gopal Marwari vs Emperor (1), it was observed that the word 'cognizance 'is used in the Code to indicate the point when the Magistrate or a Judge first takes judicial notice of an offence.
it is a different thing from the initiation of proceedings.
It is the condition precedent to the initiation of proceedings by the Magistrate.
The court noticed that the word 'cognizance 'is a word of somewhat indefinite import and it is perhaps not always used in exactly the same sense.
After referring to the observations in Emperor vs Sou rindra Mohan Chuckerbutty (2), it was stated by Das Gupta J. in Superintendent and Remembrancer of Legal Affairs, West Bengal vs Abani Kumar Banerjee (3) as follows : " What is taking cognizance has not been defined in the Criminal Procedure Code and I have no desire to attempt to define it.
It seems to me clear however that before it can be said that any magistrate has taken cognizance of any offence under section 190 (1) (a), Criminal Procedure Code, he must not only have applied his mind to the contents of the petition but he must have done so for the purpose (1) A.I.R. 1943 Pat.
(3) A.I.R. 1950 Cal.
(2) I. L. R. 321 of proceeding in a particular way as indicated in the subse quent provisions of this Chapter proceeding under section 200 and thereafter sending it for inquiry and report under section 202.
When the magistrate applies his mind not for the purpose of proceeding under the subsequent sections of this Chapter, but for taking action of some other kind, e.g., ordering investigation under section 156 (3), or issuing a search warrant for the purpose of the investiga tion, he cannot be said to have taken cognizance of the offence.
" In our opinion that is the correct approach to the question before the court.
Moreover, in the present case on the 25th March, 1949, the Magistrate issued a notice under section 190 of the Criminal Procedure Code against the appellant and made it returnable on the 2nd of May, 1949.
That clearly shows that the Magistrate took cognizance of the offence only on that day and acted under section 190 of the Criminal Procedure Code.
On the returnable date the appellant contended that the sanction of the Central Government was void because it was not given by the Government of the State.
On the deci sion going against him he appealed to the High Court and to the Privy Council.
The appellant 's contention having thus failed, the Magistrate proceeded with the trial on the 26th of November, 1949.
The only question which is now presented for our decision therefore is whether there was any sanction granted by the Government before the Magistrate took cogni zance of the offence and issued the notice under section 190 of the Criminal Procedure Code On the 25th March, 1949.
To that the clear answer is that the Government had given its sanction for the prosecution of the appellant before that date.
It seems to us therefore that the appellant 's conten tion that the Magistrate had to take cognizance of the offences without the previous sanction of the Government is untenable and the appeal fails.
Appeal dismissed.
| IN-Abs | Under section 3 of the Prevention of Corruption Act.
1947, an offence punishable under section 161 or section 165 of the Indian Penal Code 313 is a cognisable offence for the purposes of the Criminal Procedure Code subject to the condition that the police shall not investigate without an order of a magistrate of the first class or make an arrest without a warrant; and when the police apply for a warrant of arrest during inves tigation under section 3 of the said Act and the magistrate issues a warrant, he is not deemed to have taken cognisance of the case under section 190 of the Criminal Procedure Code and the fact that sanction of the Government under section 197 of the Criminal Procedure Code had not been obtained before the warrant was issued would not vitiate the trial.
Having regard to the wording of section 3 of the said Act the view that the magistrate can issue a warrant only after taking congni sance of the offence under section 190 of the Criminal Procedure Code, is unsound.
Before it can be said that a magistrate has taken cogni sance of an offence under section 190 (1) (a) of the Criminal Procedure Code, he must not only have applied his mind to the contents of the petition but have done so for the pur pose of proceeding under section 200 and the subsequent provi sions of the Code.
Where he applied his mind only for ordering investigation or issuing a warrant for purposes of investigation he cannot be said to have taken cognisance of the offence.
Emperor vs Sourindra Mohan Chuckerbutty (I.L.R. 37 Cal.
412) distinguished.
Observations of Das Gupta J. in Super intendent and Remembrancer of Legal Affairs, West Bengal vs Abani Kumar Banerjee approved.
Gopal Mandari vs Emperor (A.I.R 1943 Pat.
245) referred to.
|
iminal Appeal No. 64 of 1955.
26 of 1952.
V. N. Sethi, for the appellant.
R. Ganapathy Iyer and R. H. Dhebar, for the respondent.
December 22.
BOSE J.
The only question in this appeal is whether the High Court bad in mind the principles 1287 we have enunciated about interference under section 417 of the Criminal Procedure Code when it allowed the appeal filed by the State against the acquittal of the appellant.
It is, in our opinion, well settled that it is not enough for the High Court to take a different view of the evidence; there must also be substantial and compelling reasons for holding that the trial Court was wrong: Amar Singh vs State of Punjab(1) and if the trial Court takes a reasonable view of the facts of the case, interference under section 417 is not justifiable unless there are really strong reasons for reversing that view: Surajpal Singh vs State(2).
The appellant was prosecuted under sections 302 and 447 of the Indian Penal Code for the murder of Aher Jetha Sida.
It is not necessary at the moment to set out the facts.
It is enough to say that the High Court based its conviction on a retracted confession plus certain circumstances which the learned Judges regarded as corroborative.
The learned Sessions Judge excluded the confession on the ground that it was neither voluntary nor true.
The learned Judge 's reasoning about its falsity is weak.
We do not think there is material on which a positive finding about its falsity can be reached but *hen he says that he is not satisfied that it was made voluntarily we find it impossible to hold that is a view which a judicial mind acting fairly could not reasonably reach.
The facts about that are as follows.
The offence was committed during the night of the 18th/19th May 1952.
The police were informed on the 19th morning at 9 30.
The police station was only 4 miles distant and they started investigation immediately.
The appellant was arrested on the 20th.
They are Bhura, Dewayat and Kana.
The investigating officer was not examined, so he could not be asked about this and the point could not be developed further.
But the appellant did cross examine some of the prosecution witnesses (1) ; , 423.
(2) ; , 201, 1288 about this and elicited contradictory replies.
Kana, P.W. 4, said "I was not arrested.
Dewayat, Barat Lakhmansingh was arrested first. .
All the three of us were released the same evening.
Dewayat, P.W. 5, denied that either he or any of the others were arrested and Maya, P.W. 15, said the same thing but Meraman, P.W. 11, insisted that Dewayat was arrested.
In the absence of the SubInspector it is difficult to say definitely that the appellant is wrong.
It is evident that the others were at least suspected, especially as one of the points made against the appellant is that he was seen sharpening an axe on the evening of the murder and Meraman, P.W. II, says that not only was the appellant sharpening an axe but so was Dewayat.
If this was a matter of suspicion against the appellant it must equally have been so against Dewayat and accordingly there is nothing improbable in the appellant 's statement about these other arrests; and as the SubInspector was not there to clear up the matter it is only fair to accept what the appellant says.
The appellant was sent to a Magistrate at 8 p.m. on the 21st for the recording of a confession but the Magistrate did not record it till the 3rd of June.
He was examined as P.W. 21 and explained that be gave the appellant ten days for reflection.
The length of time is unusual but no objection about its fairness to the accused could reasonably have been raised bad it not been for the fact that the judicial lock up is in charge of a police guard which is under the direct control, orders and supervision of the very SubInspector who had conducted the investigation and had earlier suspected and, according to the accused, actually arrested three other persons; and two of them are now called as prosecution witnesses to depose against the appellant about a matter on which the prosecution lay great importance, namely the sharpening of an axe.
The danger that they might exaggerate their stories or give false evidence in their anxiety to avert further suspicion from themselves is 1289 one that cannot be overlooked.
But apart from that.
This is the description of the judicial look up which the Magistrate who recorded the confession (P.W. 21) gives us: "A police guard is on 24 hours duty at the Bhanwad Judicial lock UP.
The prisoner is so placed within the compound wall that he can see the police all the 24 hours through the bars and can talk.
These police officers are under the police Sub Inspector.
A peon is working as warder.
He stays there on duty by day.
At night he is not there.
Clerk Jailor does not remain present there.
The police lock up is within the ail itself.
Inside the jail gate is the police lock up.
The police can go into the police lock up when they choose".
Now the appellant repudiated his confession at the earliest opportunity.
He told the Committing Court on 12 12 1952 in a written statement that "After my arrest by the police I was sent to jail.
At night time the police, having arrived at the jail, threatened me to make confession before Court as they directed.
The police frightened me with beating if I did not confess.
As a result of which, through fright, I have made a false confession as directed by the police and which I now deny".
And in his examination under section 342, Criminal Procedure Code, he said "I have made the confession because the police were threatening to beat me in the jail.
He repeated these statements in the Sessions Court.
He said he was beaten at the time of his arrest and then after he had been sent to the jail he said "I was daily threatened.
They said 'confess the offence of murder.
We shall get you on remand.
You will live as an impotent man '.
On the morning of the 3rd date, they took me to a big police officer after administering extraordinary threats.
Only now I come to know that he is the Magistrate". , Now it may be possible to take two views of this statement but there are two important factors in every criminal trial that weigh heavily in favour of an accused person,: I one is that the accused is entitled 1290 to the benefit of every reasonable doubt and the other.
, an off shoot of the same principle, that when an accused person offers a reasonable explanation of his conduct, then, even though be cannot prove his assertions, they should ordinarily be accepted unless the circumstances indicate that they are false.
What the appellant said in this case is not impossible; such things do happen and it is understandable that the police, frustrated in their endeavour to find the culprit among three other persons, should make an all out endeavour to make sure of the fourth.
We do not say that happened here.
But that it might have happened is obvious, and when the police absent themselves from the witness box and forestall attempts at cross examination, we find it impossible to hold that a judge acting judicially, and hearing in mind the important principles that we have outlined above, can be said to have reached an unreasonable or an unfair conclusion when he deduces from these circumstances that there is a reasonable probability that the appellant 's story is true and that therefore the confession was not voluntary.
The only reason that the learned High Court Judges give for displacing this conclusion is that "in Saurashtra. . though judicial and police lock ups are placed under a common guard the judicial lock ups are in charge of Magistrates and are looked after by their clerks and peons, who are assigned the duties of jailors and warders respectively" and they conclude "It is therefore difficult to say that the police could have effectively threatened him".
But what the learned Judges overlook is the fact that this control is only effective during the day and that at night neither the peon nor the clerk is there; and even during the day the "clerk cum jailor does not remain present there".
The appellant said in his written statement that "at night time the police, having arrived at the jail, threatened me, etc".
There is nothing on the record to displace this statement.
Had the Sub Inspector or some policeman been examined as a witness and had the appellant omitted to 1291 cross examine him about this, that might have raised an inference that what the accused said was only an afterthought.
But here we find that this defence about the involuntary nature of the confession due to threats by the police was raised at the outset, even in the Committing Magistrate 's Court, and was persisted in throughout and the appellant did what he could to build up this part of his case by cross examining the only official witness who did appear, namely the Magistrate who recorded the confession; and he succeeded in establishing that there was ample opportunity for coercion and threat.
The fact that this defence was raised in the Committal Court should have put the prosecution on its guard and the absence of refutation in the Sessions Court is a matter that can legitimately be used in the appellant 's favour.
In the circumstances, we do not think the High Court has squarely met the learned Sessions Judge 's reasoning and shown that there are compel ling reasons for holding that he was wrong; on the contrary, the learned Sessions Judge 's hesitation is grounded on well established judicial principles.
Now the law is clear that a confession cannot be used against an accused person unless the Court is satisfied that it was voluntary and at that stage the question whether it is true or false does not arise.
It is abhorrent to our notions of justice and fair play, and is also dangerous, to allow a man to be convicted on the strength of a confession unless it is made voluntarily and unless he realises that anything he says may be used against him; and any attempt by a person in authority to bully a person into making a confession or any threat or coercion would it once invalidate it if the fear was still operating on his mind at the time he makes the confession and if it "would appear to him reasonable for supposing that by making it he would gain any advantage or avoid any evil of a temporal nature in reference to the proceedings against him": section 24 of the Indian Evidence Act.
That is why the recording of a confession is hedged around with so many safeguards and is the 163 1292 reason why magistrates ordinarily allow a period for reflection and why an accused person is remanded to jail custody and is put out of the reach of the investigating police before he is asked to make his confession.
But the force of these precautions is destroyed when, instead of isolating the accused from the investigating police, he is for all practical purposes sent back to them for a period of ten days.
It can be accepted that this was done in good faith and we also think that the police acted properly in sending the appellant up for the recording of his confession on the 21st; they could not have anticipated this long remand to so called "jail custody".
But that is hardly the point.
The fact remains that the remand was made and that opened up the very kind of opportunities which the rules and prudence say should be guarded against; and, as the police are as human as others, a reasonable apprehension can be entertained that they would be less than human if they did not avail themselves of such a chance.
It will now be necessary to set out the facts.
The murdered man is one Jetha.
He married Sunder, P.W. 3, about three years before he was killed, but we gather that she had not gone to live with her husband; anyway, she was living in the appellant 's village Shiva with her people at the time of the occurrence and this afforded the pair opportunities for a long continued course of illicit amours, chances which it seems they were not slow to seize.
The husband lived in a village Kalawad which is three miles distant.
At the time of the murder arrangements were being made for Sunder to go to her husband and preparations for the ceremonial appropriate to such occasions were in the course of progress.
Both Courts hold that the motive is proved; and that can be accepted.
Next comes the evidence about the sharpening of the axe on the evening of the 18th at Kana 's house in the village Shiva.
The axe was produced in Court and Dewayat (P.W. 5) tells us that it was blunt.
Now there is nothing suspicious or unusual in a villager sharpening a blunt axe and, as we have pointed out, Meraman (P.W. 11) says that Dewayat was also sharpening an axe at the same time and place; and Dewayat is one of the other three against whom suspicion was directed; also, the fact that the axe was sharpened in this open way in the presence of a number of persons, including two strangers to the village, (the two Satwara witnesses, P.Ws. 9 and 10), points to innocence rather than guilt.
But the prosecution do not rely on this alone.
Their witnesses say that when the appellant was asked why he was sharpening his axe (Dewayat does not seem to have been put a similar question though he was doing the same thing) he replied that he wanted to offer a green coconut to Lord Shanker.
All the witnesses are agreed that this has no special significance and that they attributed no sinister meaning to it at the time.
It has acquired significance only in the light of after events.
Even here, there seems to us to be some danger that what the appellant really said has got mixed up, with what these witnesses say and, no doubt, honestly believe he said.
We say this because Sunder, P.W. 3, and her mother Vali, P.W. 2 tell us that the appellant came to the mother that evening and offered her eight annas in lieu of a coconut.
It seems that this is a customary offering given by relatives when a daughter leaves her parents ' home for her father in law 's place.
A reasonable doubt arises and the appellant is entitled to its benefit.
Next comes the evidence of Samant, P.W. 16, who says that be saw the appellant that night on the outskirts of Kalawad where the murder was committed.
He was wearing a false beard and a mask.
But that is the very question that the Court has to decide.
The only fact that this witness can be said to prove is that be saw a man that night wearing a false beard and mask who looked like the appellant.
Then we come to the recoveries.
The false beard and mask were found buried in the grounds of Dewayat 's house and the appellant is said to have recovered them in the presence of panchas.
But those discoveries are inadmissible in evidence because the police already knew where they were hidden.
Their information was not derived from the appellant but from Dewayat (one of the other suspects).
The way the police came to find this out was this.
Dewayat says that the appellant confessed the murder to him and told him that he had gone there wearing a false beard and a mask and that he had buried these articles 1295 under the Shami tree in the grounds of Dewayat 's bada.
Dewayat says "Next the police called me to go to Kalawad.
At that time Raja had been arrested. .
I was interrogated.
I spoke about the beard at that time.
Then the police came to my field with Raja".
If Meraman (P. W. 11), read with the Confused statement of Kana (P.W. 4), is to be believed, Dewayat was also under arrest either at the time or on the day before.
As the Sub Inspector was not examined, we are unable to clear this up and so are bound to give weight to the criticism of the Sessions Judge where he says "However, Dewayat confesses that his statement was not recorded on the 19th of May 1952 but was recorded on 20 5 1952 only after he was questioned by the police".
In our opinion, not only is this evidence about recovery not admissible but the danger that Samant (P.W. 16) mistook Dewayat, who was also under strong suspicion, or someone else who looked like the appellant, for the appellant, has not been excluded.
Lastly, there is the recovery of the axe.
But this was not hidden.
It was kept behind an earthen jar in the appellant 's house just as an axe might be normally kept in any average household.
The only point of suspicion is that the axe had stains of human blood on it.
But the difficulty we are faced with there is that the extent of the stains and their position is not disclosed.
We have had occasion to comment before on the very slovenly and ineffective way in which some Chemical Analysers do their duty.
This is another case in which what might otherwise have been a valuable piece of evidence has to be disregarded.
The axe was not recovered till the 21st and was standing where it could have been handled by other members of the household.
In any case, villagers frequently have slight cuts or scratches or a prick from a thorn on their persons and a few drops of blood could easily be transferred to an article like an axe without anybody noticing or knowing.
The important thing in a case like this, where everything 1296 is now seen to hang on this one fact, would be the extent of the blood and its position.
The postmortem reveals that the injuries were incised and that the bleeding was profuse.
When everything hangs on this one point, we cannot assume without proof that stains which might be compatible with either guilt or innocence must have been of what we might term the guilty kind.
On a careful examination of the evidence in this case, we are not satisfied that the circumstances disclose "strong and compelling reasons" to set aside the acquittal.
The appeal is allowed.
The conviction and sentence are set aside and the appellant is acquitted.
VENKATARAMA AYYAR J.
I regret I am unable to agree with the judgment just delivered.
The appellant belonged to the village of Katkora, and developed intimacy with an unmarried woman called Sunder in the neighboring village of Shiva.
Subsequently, Sunder was married to one Jetha of Kalawad, a village about 3 miles distant from Shiva.
It had been arranged to take Sunder to her husband 's house on the 19th May 1952, and for that purpose, Sida, the father of Jetha, had come to Shiva on the 18th.
The case of the prosecution was that the appellant was determined to prevent Sunder from joining her husband, and with that object he went to Kalawad on the night of the 18th, and killed Jetha with his axe, when be was asleep.
The murder came to light next morning, and the matter was reported to the police.
The appellant was arrested on 20 5 1952.
On his information the police recovered from his house at Katkora an axe, and the panchnama discloses that it then bad stains of blood which was subsequently found by the Chemical Analyst to be human.
The appellant next showed to the police 1297 a false beard, which was buried under a tree in the village of Shiva.
It is alleged that this was worn by the appellant at the time of the murder.
The Magistrate, however, decided to give him time "to cool down", and put him in judicial lock up.
He then went on duty to another place, and on his return, recorded the confession of the appellant, which is as follows: " I, having gone to his Wadi, have killed him.
I have killed him with axe.
I have killed him for the sake of Sunderbai.
Sunderbai is the wife of Jetha.
I had illicit connection with her.
I have murdered Jetha Sida with the idea of marrying Sunderbai.
I gave him an axe blow on the neck.
At that time I had put on a tunic and a pair of trousers.
I bad a turban on my head.
I had worn artificial beard.
After the murder, the artificial beard buried in the field of Dewanand Mope.
I took the axe to my house".
The appellant retracted this confession before the Committing Magistrate, as made under police beatings and threats.
He was then sent up to the Sessions Court, Halar, to take his trial, which took place with the aid of four assessors.
There was no direct evidence that the appellant had committed the murder.
The circumstantial evidence on which the prosecution sought to establish his guilt consisted of a confession made by him to the Magistrate, the recovery of the axe and the false beard, and the existence of strong motive.
There was, besides, a considerable body of evidence that on the 18th May the appellant was haunting the village of Shiva where Sunder was residing, with an axe in his hand and threats in his tongue.
The assessors were unanimously of the opinion that the appellant was guilty, but the Sessions Judge disagreed with them, and held that the confession was neither true nor voluntary, and that though there were strong grounds for suspecting him, the evidence was not sufficient to convict him, and so acquitted him.
There was an appeal against this judgment by the 1298 State to the High Court of Saurashtra.
The learned Judges, differing from the Sessions Judge, held that the confession was true and voluntary, that there was ample corroboration thereof in the evidence, and that even apart from it, the other facts proved by 'the prosecution were sufficient to establish the guilt of the appellant.
They accordingly set aside the order of acquittal passed by the Sessions Judge, convicted the appellant under section 302 and sentenced him to transportation for life.
It is against this judgment that the present appeal by special leave has been brought.
The question is whether having regard to the principles on which this Court exercises its jurisdiction under article 136, there are grounds for interference in this appeal.
Those principles are well settled and may briefly be recapitulated.
Prior to the abolition of the jurisdiction of the Privy Council, the law of this country did not in general provide for appeals against judgments of the High Courts in criminal matters.
Indeed, the policy of the legislature as expressed in sections 404 and 430 of the Code of Criminal Procedure and departing in this respect from that adopted in the Civil Procedure Code, has been that decisions of courts passed in criminal appeals should be final and subject to specified exceptions, not open to a further appeal on facts.
So far as judgments of the High Courts are concerned, the limitation on further appeal imposed by the Indian statutes could not affect the jurisdiction of the Privy Council to entertain appeals against them in the exercise of the prerogative of the Crown.
That was a power which the Privy Council possessed in respect of orders passed by the courts all over the Dominions, and the limits within which the Judicial Committee exercised that power were thus stated by Lord Watson in In re Abraham Mallory Dillett(1): "The rule has been repeatedly laid down, and has been invariably followed, that Her Majesty will not review or interfere with the course of criminal proceedings, unless it is shown that, by a disregard of (1) [1887] 12 A.G. 459, 467. 1299 the forms of legal process, or by some violation of the principles of natural justice, or otherwise,substantial and grave injustice has been done".
These principles were followed in quite a number of appeals against judgments of Indian courts in criminal matters.
In Dal Singh vs King Emperor(1), the Privy Council, stating the practice of the Judicial Committee in dealing with an appeal in a criminal case., observed: "The general principle is established that the Sovereign in Council does not act, in the exercise of the prerogative right to review the course of justice in criminal cases, in the free fashion of a fully constituted Court of criminal appeal.
A mere mistake on the part of the Court below.
Such questions are, as a general rule, treated as being for the final decision of the Courts below".
In Taba Singh vs Emperor(2) , Lord Buckmaster observed that the responsibility for the administration of criminal justice rested with the courts in India, and that the Board would not interfere "unless there has been some violation of the principles of justice or some disregard of legal principles".
In George Gfeller vs The King(3), which was an appeal from the Supreme Court of Nigeria, Sir George Rankin observed: "Their Lordships have repeated ad nauseam the statement that they do not sit as a Court of Criminal Appeal.
For them to interfere with a criminal sentence there must be something so irregular or so outrageous as to shock the very basis of justice: per Lord Dunedin in Mohindar Singh vs Emperor(4).
Muhammad Nawaz vs Emperor(5) (1) [1917] L.R. 44 I.A. 187, 140.
(2) [1924] I.L.R. (3) A.I.R. 1943 P.C. 211.
(4) [1932] L.R. 59 I.A. 233, 235.
(5) [1941] L.R. 68 I.A. 126, 129.
164 1300 On these principles, the Privy council refused in Macrea, Ex parts(1) leave to appeal on the ground of misdirection to the jury and in Mohindar Singh vs Emperor '(2)on the ground that a wrong view had been taken of the law.
Thus, the law was well settled that the Privy Council would not entertain appeals against judgments in criminal cases, unless there was an error of .
procedure or disregard of legal principles amounting to a denial of fair trial and resulting in grave injustice.
Under the Constitution, the position of the Supreme Court which has taken t he place of the Privy Council is this.
Its jurisdiction as that of the Privy Council in respect of criminal appeals may be classed under two categories, cases where a right of appeal is expressly granted by the Constitution or by the statutes, as for example, articles 132(1) and 134 (1) of the Constitution or section 411 A(4) of the Code of Criminal Procedure, in which the scope of the appeal would depend upon the terms of the enactments which confer the right; and cases ' where it is called upon to exercise its powers under article 136, which corresponds substantially to the prerogative jurisdiction exercised by the Privy Council with reference to which the practice of the Judicial Committee might usefully be referred to for indicating the area of interference.
The question was considered by this Court in Pritam Singh vs The State(3), where the law was thus laid down: "On a careful examination of article 136 along with the preceding article, it seems clear that the wide discretionary power with which this Court is invested under it is to be exercised sparingly and in exceptional cases only .
The Privy Council have tried to lay down from time to time certain principles for granting special leave in criminal cases, which were reviewed by the Federal Court in Kapildeo vs The King(4).
It is sufficient for our purpose to say that though we are not bound to follow them too (1) [1893] L.R. 20 I.A. 90.
(2) [1932] L.R. 59 I.A. 233, 235.
(3) , 458.
(4) A.I R. 1301 rigidly since the reasons constitutional and administrative, which sometimes weighed with the Privy Council, need not Weigh with us, yet some of those principles are useful as furnishing in many cases a sound basis for invoking the discretion of this Court in granting special.
Generally speaking, this Court will not grant special leave, unless it is shown that exceptional and special circumstances exist, that substantial and grave injustice has been done and that the case in question presents features of sufficient gravity to warrant a review of the decision appealed against".
The preceding article referred to in the opening passage is clearly article 134.
Article 134(1) confers a right of appeal to this Court in certain cases, in terms unqualified, on questions both of fact and of law, and if the scope of an appeal under article 136 is to be extended likewise to questions of fact, then article 134(1) would become superfluous.
It is obvious, that the intention of the Constitution in providing for an appeal on facts under articles 134(1) (a) and (b) was to exclude it under article 136, and it strongly supports the conclusion reached in Pritam Singh vs The State(1) that like the Privy Council this, Court would not function as a further court of appeal on facts in criminal cases.
Having regard to the principles enunciated in this decision.
, the question is whether there are sufficient grounds for interfering with the judgment of the High Court in the present appeal.
The point which the learned Judges had to decide in the appeal was whether it was the appellant who had murdered Jetha.
That is a pure question of fact turning on appreciation of evidence.
The High Court has gone into the matter fully, examined the entire evidence ex haustively, and in a judgment which is as closely reasoned as it is elaborate, has come to the conclusion that the guilt of the appellant has been established beyond all reasonable doubt.
Does that decision call for our interference in special appeal?.No, unless this Court is to 'function as a court of appeal on facts.
1302 But then, it is argued that the appeal before the High Court was one against acquittal, that such an appeal was subject to the limitation that there should be compelling reasons for reversing an order of acquittal, and that it would be open to this Court in special appeal to consider whether that limitation bad been duly observed.
Nevertheless, the view was taken at one time in some of the decisions that appeals against acquittals were in a less favoured position than appeals against convictions, and that an order of acquittal should not be interfered with in appeal except "where through the incompetence, stupidity or perversity of certain tribunal such unreasonable or distorted conclusions have been drawn from the evidence so as to produce a positive miscarriage of justice", or were "the lower court has so obstinately blundered or gone wrong as to produce a result mischievous at once to the admi nistration of justice and the interests of the public".
In Sheo Swarup vs King Emperor(5), the question was raised for determination by the Privy Council whether there was any legal basis for the limitation which the above decisions had placed on the right of the State to appeal under section 417.
Answering it in t e negative, Lord Russell observed that there was "no indication in the Code of any limitation or restriction on the High Court in the exercise of its powers as an appellate tribunal", that no distinction was drawn (1) All. 148.(2) All. 212.(3) (4) Rang.312, (5)[1934] L.R. 61 I.A. 398, 403, 404. 1303 "between an appeal from an order of 'acquittal and an appeal from a conviction", and that "no limitation should be placed upon that power unless it be found expressly stated in the Code".
He went on to remark at page 404 that, "the High Court should and will always give proper weight and consideration to such matters as (1) the views of the trial Judge as to the credibility of the witness, (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 doubt, and (4) the slowness of an appellate Court in disturbing a finding of fact arrived at by a Judge who bad the advantage of seeing the witnesses".
These observations, however, do not mean that the scope of appeals against acquittals is different from that of other appeals.
They merely embody the principles applicable to all appeals, civil and criminal, to appeals alike against conviction and acquittal.
If the trial Judge does not accept the evidence adduced by him and dismisses his suit and he appeals, he has the burden still on him to prove on the evidence adduced that the promissory note is genuine, and in discharging that burden he has to show that the judgment appealed against is clearly wrong.
If all he can show is nicely balanced calculations which lead to the equal possibility of the judgment on either the one side or the other being right, he has not succeeded".
1304 has to establish on the evidence that the accused is guilty, and to establish it, it has to satisfy the court that the judgment of the trial court is erroneous.
The oft repeated observation that on acquittal the presumption of innocence becomes reinforced is merely this principle stated in terms of criminal law.
Likewise, the weight to be attached by an appellate court to a finding of the trial court based upon appreciation of oral evidence is the same whether it is given in a civil litigation or a criminal trial.
But generally speaking, it is undesirable to interfere with the findings of fact of the Trial Judge who sees and hears the witnesses and has an opportunity of noting their demeanour, especially in cases where the issue is simple and depends on the credit which attached to one or other of conflicting witnesses. .
In making these observations their Lordships have no desire to restrict the discretion of the Appellate Courts in India in the consideration of evidence".
It is clearly these principles that Lord Russell had in mind when he made the observations at page 404 in Sheo Swarup vs King Emperor2 ') quoted above, and that will be clear from the observation next following: "To state this, however, is only to say that the High Court in its conduct of the appeal should and will act in accordance with rules and principles well known and recognized in the administration of justice".
The scope of the decision in Sheo Swarup vs King Emperor(2) with special reference to the observations discussed above was thus explained by the Privy .Council in Nur Mohammad vs Emperor(3): "Their Lordships were referred, rightly enough to the decision of this Board in the case in Sheo
(1) [1915] L.R. 42 I.A. 110; 118.
(2) [1934] L.R. 61 I.A. 398.
Their Lordships do not think it necessary to read it all again, but would like to observe that there really is only one principle, in the strict use of the word, laid down there; that is that the High Court has full power to review at large all the evidence upon which the order of acquittal was founded, and to reach the conclusion that upon that evidence the order of acquittal should be reversed".
These authorities establish beyond all controversy that an appeal against acquittal under section 417 stands, as regards the powers of an appellate court, on the same footing as appeals against conviction.
If that is the true scope of an appeal under section 417, where then does the doctrine of "compelling reasons" come in? And how do we fit it among the powers of a court under that section? The words compelling reasons" are not a legislative expression.
They are not found in section 417.
As far as I have been able to discover, it was first used in Surajpal Singh and others vs The State(2), wherein it was observed: "It is well established that in an appeal under section 417 of the Criminal Procedure Code, the High Court has full power to review the evidence upon which the order of acquittal was founded, but it is equally well settled that the presumption of innocence of the accused is further reinforced by his acquittal by the trial court, and the findings of the trial court which had the advantage of seeing the witnesses and hearing their evidence can be reversed only for very substantial and compelling reasons".
Do the words "compelling reasons" in the above passage import a limitation on the powers of a court hearing an appeal under section 417 not applicable to a court hearing appeals against conviction?
If they do, then it is merely the old doctrine that appeals against acquittal are in a less favoured position, dressed in a new garb, and the reasons for rejecting it as unsound are as powerful as those which found favour with the Privy Council in Sheo Swarup vs King Em (1) [1934] L.R. 61 I.A. 398.(2) ; , 201.1306 peror(1) and Nur Mohammad vs Emperor(2).
But it is probable that these words were intended to express, as were the similar words of Lord Russell in Sheo Swarup vs King Emperor(1), that the court hearing an appeal under section 417 should observe the rules which all appellate courts should, before coming to a conclusion different from that of the trial court.
If so understood, the expression "compelling reason s" would be open to no comment.
But the expression has been quoted in later judgments, especially of the courts below, as if it laid down that in appeals against acquittal, the standard of proof required of the appellant was far higher than what the law casts on appellants in other appeals, and as the words "compelling reasons" are vague and indefinite to a degree, the result has not seldom been that even when Judges hearing appeals under section 417 were convinced of the guilt of the accused, they refrained from setting aside the order of acquittal owing to the dark and unknown prohibition contained in the expression.
That is the impression which I have formed in the appeals which have come before me.
in this Court.
There is always a danger in taking a phrase, attractive and telling in its context, out of it, and erecting it into a judicial formula as if it laid down a principle universal in its application.
And this danger is all the greater when the phrase is of undefined import, and relates to appreciation of evidence.
It is in the interests of the public that crimes should be punished, and it is with this object that section 417 confers on the State a right to appeal against acquittal.
To fetter this right through such expressions as "compelling reasons" would not merely be to legislate but to defeat the plain intention of the legislature that an accused in an appeal against acquittal should.
have only those rights which the State in an appeal against conviction or a respondent in a civil appeal has, and that he is to enjoy no special protection.
(1) [1934] L.R. 61 I.A. 398.
(2) A.I.R. 1945 P.C. 151.
1307 The fundamental objection to regarding the expression "compelling reasons" as a rigid formula governing the decision of an appeal under section 417 is that it puts a judgment of acquittal, however rendered, in a position of vantage which the law did not accord to it, and throws around the accused who gets an order of acquittal in the trial court a protection which the law did not intend to give him.
In my judgment, this is a situation in which great mischief must result, and the interests of the public must suffer ' If the expression "compelling reasons" does not impose a restriction on the powers of a court hearing an appeal under section 417, and if its true scope is to guide it in arriving at a decision, the question whether this Court can interfere with that decision on the ground that it is erroneous presents no difficulty.
The decision would then be one on a question of fact depending upon the appreciation of evidence, and this court cannot, on the principles enunciated in Pritam Singh vs The State(1) interfere with it.
This position is, in fact, concluded by the decisions in Sheo Swarup vs King Emperor(2) and Nur Mohammad vs Emperor(3).
In Sheo Swarup vs King Emperor(2), the Sessions Judge bad characterised the prosecution witnesses as liars, and disbelieving their evidence had acquitted the accused.
On appeal, the High Court reviewed the evidence, and differing from the trial court as to the weight to be attached to it, convicted the accused.
Declining to interfere with this judgment, the Privy Council observed that even though there was no express mention in the judgment of the High Court that it had considered all the particulars which an appellate court should consider in deciding an appeal, there was "no reason to think that the High Court had failed to take all proper matters into consideration in arriving at their conclusions of fact".
In Nur Mohammad vs Emperor(3), the judgment of the High Court did not disclose that it had considered the matters mentioned by Lord Russell at page 404 (1) ; (2) [1934] L R. 61 I.A. 398, (3) A.I.R 1945 P.C. 151.165 1308 in Sheo Swarup vs King Emperor(1).
Nevertheless, the Privy Council dismissed the appeal observing: "In the present case the High Court judgment shows that they have been at pains to deal in detail with the reasons given by the Sessions Judge for disbelieving the group of witnesses, the Patwari and the other three alleged eye witnesses.
They have dealt in detail with them, showing on the face of their judgment that there is no necessity to presume in this case that they have not done their duty. "
These decisions are authorities for the position that when in an appeal under section 417 the court considers the evidence and comes to its own conclusion the findings recorded by it are not, even when they result in a reversal of the order of acquittal, open to interference in special appeal.
Different considerations would have arisen if the law bad provided a further appeal on facts against those orders of reversal, in which case the appreciation of the evidence by the appellate court would be a matter open to review in the superior court.
That, as already stated, would be the position in an appeal under articles 132 (1) and 134(1) (a) and (b), but where, as in the present, no appeal on facts is provided, the decision of the High Court is not open to review by this Court under article 136 on the ground that there were no compelling reasons for the learned Judges to reverse an order of acquittal.
This is sufficient to entail the dismissal of this appeal.
But, having gone through the evidence, I am of opinion that even on the merits the decision of the High Court is correct.
The evidence against the appellant is wholly circumstantial, and consists mainly of (1) the existence of a strong motive, (2) the conduct of the appellant on the day when the murder was committed, (3) the recovery of a blood stained axe and a false beard at the instance of the appellant, and (4) a confession made by him 'before the Magistrate, P.W. 21, on 3 6 1952.
1309 macy with Sunder, and as she was to be taken on the 19th May 1952 to Kalawad to join her husband, he wanted to do away with him.
The appellant admitted that he had illicit connection with Sunder for some years, and the Sessions Judge also found, basing himself on the prosecution evidence, that the appellant was very much agitated on the night of the 18th.
A number of witnesses deposed that they saw him on 18 5 1952 at Shiva sharpening his axe, and that when questioned, he stated that be was going to offer a green coconut to Mahadevji, "can expression " say the learned Judges "which in common parlance means sacrifice of a head".
The appellant denied that he went to Shiva on the 18th, but his statement was, disbelieved by the Sessions Judge who was impressed by the quality and number of the prosecution witnesses, and both the courts have concurred in accepting their evidence on this point.
As for the recovery of the axe, the appellant admitted it, but he stated in his examination under section 342 that there was no blood on it when he showed it to the police.
The Sessions Judge, was not prepared to accept this statement and observed: "Accused admits that this is his axe.
In light of chemical analysis, there is no doubt that there were stains of human blood on the axe.
It is also mentioned in the Pancbnama, exhibit 21 itself that the Panch had suspected that there were marks of human blood on this axe".
But all the same, he discounted the value of this evi dence, because according to him, in view of certain circumstances "the presence of human blood on the axe is by no means conclusive", and that "at best it raises a suspicion against the accused".
Those circumstances are three: Firstly, the panch who witnessed the recovery at Katkora belonged to Kalawad, and the criticism is that a local panch ought to have been got to witness the same.
The learned Judges of the High Court did not think much of this criticism, as the recovery at Katkora had to be made in pursuance of the statement given by the appellant at Kalawad, 1310 and the police might have reasonably thought that the same panch should be present at both the places.
As the Sessions Judge has accepted the evidence of the panch that there were blood stains at the time of the recovery of the axe, his criticism on this point lacks substance.
Secondly, though the recovery was made on 21 5 1952, it was sent to the medical officer for report only on 27 5 1952, and the delay is suspicious.
It is difficult to follow this criticism.
When once the conclusion is reached that there was blood on the axe when it was recovered, this criticism has no meaning unless it is intended to suggest that the police required some time to wash the blood which was on the axe at the, time of its recovery and to substitute human blood therefore.
There is nothing in the evidence to support a suggestion so grotesque, and as observed by the learned Judges, if the police wanted to substitute blood, they would not have taken so much time over it.
Thirdly, in despatching the blood to the Chemical Analyst, the medical officer sent the parcel containing the blood scrapings to the railway station, not through his own peon or the compounder in the hospital but through the local police, and that, according to the Sessions Judge, is a suspicious circumstance.
As the parcel was received intact by the Chemical Analyst at Bombay, it is difficult to see what the point of the criticism is.
The Sessions Judge himself observes: "I do not believe that the police have intercepted this parcel and they deliberately sent an axe with human blood.
However, there is no doubt that the procedure adopted by the doctor is wrong, and is capable of mischief".
It has not been explained and it is not possible to divine what that mischief could have been in this case.
And who could have been the mischief maker unless it be the police? The Sessions Judge stated that be did not believe the suggestion made against the police, but that nevertheless is the assumption underlying his comment.
"Anxious to wound, afraid to strike" would appropriately describe the situation.
The learned Judges disagreed with the reasoning of 1311 the Sessions Judge, and held that as the appellant had admitted the recovery of the axe and as there was human blood on it at that time, it was clear and cogent evidence pointing to his guilt.
I am unable to find any answer to this reasoning.
Pausing here, it will be seen that in discussing the question of the recovery of the blood stained axe, as indeed throughout the judgment, the learned Sessions Judge has taken up an, attitude of distrust towards the police for which it is difficult to find any justification in the evidence an attitude which, I regret to say, is becoming a growing feature of judgments of subordinate Magistrates.
When at the trial, it appears to the court that a police officer has, in the discharge of his duty, abused his position and acted oppressively, it is no doubt its clear duty to express its stern disapproval of his conduct.
But it is equally its duty not to assume such conduct on the part of the officer gratuitously and as a matter of course, when there is, as in this case, no reasonable basis for it in the evidence or in the circumstances.
The presumption that a person acts honestly applies as much in favour of a police officer as of other persons, and it is not a judicial approach to distrust and suspect him without good grounds therefore.
Such an attitude could do neither credit to the magistracy nor good to the public.
It can only run down the prestige of the police administration.
It is the case of the prosecution that the appellant unearthed a false beard, which he had buried underneath a shami tree in Shiva, and that he had worn it at the time of the murder.
The appellant did not deny the recovery, but stated that it was not he that had uncovered it but the jamadar.
Both the courts below have accepted the version of the prosecution as true, but while the Sessions Judge held that it was not sufficient to implicate the appellant, the learned Judges held otherwise.
P.W. 16 deposed that he saw the appellant at midnight on the 18th May on the outskirts of Kalawad wearing a false beard, and the comment of the Sessions Judge on this evidence is: " I do not see bow this evidence will prove the 1312 prosecution case beyond reasonable doubt.
At best, it will suffice to raise suspicion against the accused".
But if the beard was discovered by the appellant, then surely it is a valuable link in the chain of evidence against him.
Then we come to the confession made by the appellant to P.W. 21.
The Magistrate has deposed that he had satisfied himself that it was voluntary, before he recorded it.
Now, the facts relating to this matter are these, The appellant was, as already stated, arrested on the 20th May and discoveries of the axe and the false beard were made through him, and on the 21st he was sent to the Magistrate with a letter that he desired to make a confession.
The Magistrate has given evidence that he did not record the confession at once, as he wanted the appellant "to cool down", and accordingly gave him ten days to reflect, and committed him to judicial lock up.
There is nothing improper in this, and indeed ' it is a commendable precaution for ensuring that the confession was made voluntary.
From 21 5 1952 to 3 6 1952 the appellant continued in judicial lock up, and this is a circumstance which normally should negative the possibility of there having been a threat or inducement.
But the Sessions Judge declined to attach any weight to it, because both the police lock up and the judicial lock up were situated in the same compound, separated by a distance of 20 feet, and were guarded by the same police officers, and though the judicial lockup had its own warder and clerk jailor, they kept watch only during daytime, and therefore even though the police could have had no access inside the lock up, they had "every opportunity to threaten and bully the accused".
The Sessions Judge accordingly held that the confession was not voluntary.
On appeal, the learned Judges came to a different conclusion.
They considered that the possibility of threats having been uttered through the bars was too remote and unsubstantial to form the 'basis for any 1313 conclusion, and that all the circumstances indicated that the confession was voluntary.
These are the salient points that emerge out of the evidence.
The position may be thus summed up: (1) No special weight attaches to the findings of the Sessions Judge on the around that they are based on the evidence of witnesses whom he had the advantage of seeing in the box, and believed.
The oral evidence was all on the side of the prosecution, and that was substantially accepted by the Sessions Judge.
His judgment is based on the probabilities of the case, and of them, the learned Judges were at least as competent to judge, as he.
(2) The finding of the Sessions Judge in so far as it related to the recovery of bloodstained axe was clearly erroneous, as it did not follow on his reasoning.
(3) As regards the confession, the conclusion of the Sessions Judge rests on nothing tangible, and is largely coloured by a general distrust of the police, not based on evidence or justified by the circumstances.
(4) The learned Judges were of the opinion that even excluding the confession, the other evidence in the case was sufficient to establish the guilt of the appellant.
(5) All the four assessors were of the opinion that the appellant was guilty.
Now, returning to the two questions which have formed the basis of the preceding discussion, (1) what is it that the High Court has to do in exercise of its powers under section 417, having regard to the findings reached by it and set out above, and how does the doctrine of "compelling reasons" bear upon it? (2) What are the grounds on which we can interfere with its decision? A court hearing an appeal under section 417 might be confronted with three possibilities: (i) It might come to the same conclusion as the trial court on the questions in issue, in which case, of course, it should dismiss the appeal; (ii) It might consider that the evidence was not clear and conclusive one way or the other, in which case its duty 1314 as an appellate court would be not to interfere with the judgment appealed against; and (iii) it might come to a conclusion on an appreciation of the evidence opposite to that reached by the court of first instance, in which case it would clearly be its duty in exercise of its powers under section 417 to set aside the order of acquittal.
Wherein does the theory of "compelling reasons" come in the scheme? There is no need for it in the second category, because even apart from it, the same result must, as already stated, follow on the principles applicable to all courts of appeal.
Then, there remains the third category of cases.
If the High Court comes to the conclusion on an appreciation of the evidence that the appellant is guilty, has it, nevertheless, to confirm the order of acquittal on the basis of this theory? Surely not, as that would render the right conferred by section 417 illusory.
It has no independent value as bearing on its powers under section 417.
If that is the true position, it follows on the principles laid down in Sheo Swarup vs King Emperor(1) and Nur Mohammad vs Emperor(2) and in Pritam Singh vs The State(3) that this Court cannot interfere with the orders passed under section 417 merely on the ground that the findings of fact were not justified, having regard to the doctrine of "compelling reasons".
In my opinion, this appeal ought to be dismissed.
ORDER.
BY THE COURT.
In accordance with the Judgment of the majority this Appeal is allowed.
The conviction and sentence are set aside and the Appellant is acquitted.
(1) [1934] L.R. 61 I.A.398.
(2) A.I.R. 1945 P.C. 151.
| IN-Abs | Per BOSE, and CHANDRASEKHARA AIYAR JJ.
(VENKATKRAMA AYYAR J. dissenting).
It is well settled that the High Court should not set aside an order of acquittal under section 417 of the Code of Criminal Procedure simply because it differs from the trial Court as to the appreciation of the evidence; there must be substantial and compelling reasons for doing so.
Where the trial Court takes a reason.
able view of the facts of the case, interference is not justifiable unless there are really strong reasons for holding otherwise.
Amar Singh vs State of Punjab ([1953] S.C.R. 418) and Surajpal Singh vs State ([1952] S.C.R. 193), referred to.
The accused in a criminal case must be given the benefit of every reasonable doubt and, therefore, when he offers a reasonable explanation of his conduct, although he cannot prove it, that explanation should ordinarily be accepted unless the circumstances indicate that it is false.
Consequently, in a case where an accused person, charged under SS. 302 and 447 of the Indian Penal Code, repudiated his confession at the earliest opportunity as having been made under Police threats administered to him at night while in jail custody and there was evidence to show that the Police had access to him there, and there was nothing to displace his statement that he was threatened by them, the finding of the Sessions Judge that the confession was not voluntary in character was fair and reasonable and in the absence of any compelling reason the High Court should not have set aside the order of acquittal.
1286 As the evidence otherwise was insufficient to warrant a conviction the accused was acquitted.
Per VENKATARAMA AYYAR J.
This is not a case in which the Supreme Court should interfere under article 136 of the Constitution.
The Constitution by specifically providing for an appeal on facts under article 134(1) intended to exclude it under article 136 and like the Privy Council this Court will not function as a further Court of appeal on facts in criminal cases.
The fact that the appeal in the High Court was one against an order of acquittal makes no difference as the powers of an appellate Court are the same in all appeals, whether against acquittal or against conviction.
Pritam Singh vs The State ([1950] S.C.R. 453), Sheo Swarup vs King Emperor ([1934] L.R. 61 I.A. 398) and Nur Mohammad vs Emperor (A.I.R. , relied on.
The expression "compelling reasons" used in Surajpal Singh 's case should be read only in the context of that case and should not be treated as a rigid formula so as to restrict the powers of the Court, or the right of appeal conferred on the State by section 417 of the Code or to place a judgment of acquittal in a position of vantage and give the accused a protection which the law does not afford to them.
Such a formula can be of use only as guiding principle for the appellate Courts in deter mining questions of fact.
Surajpal Singh vs The State ([1952] S.C.R. 193), considered.
Consequently, the findings arrived at by the High Court were not open to review by this Court under article 136 of the Constitution and as there was evidence apart from the retracted confession to support the view, it had taken on merits, the appeal must be dismissed.
|
Civil Appeal No. 911 of 1978.
Appeal by Special Leave from the Judgment and order dated 12 12 1977 of the Allahabad High Court (Lucknow Bench) in Writ Petition No. 1283 of 1976 R.K.Garg, V. J. Francis, Madan Mohan and D.K Garg for the Appellant.
G. N. Dikshit and O.P. Rana for Respondents Nos. 1 and 2.
84 section N Andley, B. P. Maheshwari and Sures Sethi for Respondents 3 and 5.
Yogeshwar Prasad, Mrs. Rani Chhabra and Miss Meera Bali, for Respondent No. 4.
P. C. Bhartari and R. P. Kathuria for the Intervener (B. section Yadav and Ors.) The Judgment of the Court was delivered by SARKARIA,J.
This appeal by special leave is directed against a judgment dated December 12, 1977 of the High Court of Allahabad.
The appellant herein, Shri B. L. Goel, is a District and Sessions Judge and as such a Member of U.P. Higher Judicial Service.
The sanctioned permanent strength of the Higher Judicial Service was 82.
It comprised (i) 37 posts of District and Sessions Judges and (ii) 45 Civil and Sessions Judges, including five posts of leave reserve.
The service includes substantive posts as well as temporary posts.
The appointments to the posts of Civil and Sessions Judges are made from two sources: (a) By promotion from the members of the U.P. Civil Service (Judicial Branch); and (b) By direct recruitment after consultation with the Court (vide Rule 5).
Under Rules 13 and 17 of the U.P. Higher.
Judicial Service 1953 (hereinafter referred to as the 1953 Rules) waiting lists were to be prepared of the persons found fit for promotion or appointment to the higher service.
Rule 19 provided that the Governor shall, on receipt from the Court of the waiting lists prepared under Rules 13 and 17, make appointment to the service on the occurrence of substantive vacancies.
Para 2 of Rule 19 provide d that the Governor could make appointments in temporary or officiating vacancies of the persons who were eligible for appointment by promotion and whose names were borne on the waiting list on force prepared under Rule 13.
Rule 21 fixed the period of probation for direct recruits at two years.
Rule 22 provided that the probation could be extended for a specific period.
On satisfactory completion of his period of probation, a direct recruit was entitled to be confirmed.
No period of probation was fixed in the case of promotees.
Rule 20, which is being impugned, originally, ran as follows: "20. Seniority.
Subject to the provisions of rule 31, seniority in each of the two classes of posts in the Services shall be determined by the date of confirmation in that class of post; 85 Provided that if in any class of the post, two or more persons are confirmed on the same date, their seniority will be determined according to the order in which their confirmation has been notified; Provided further that in the case of direct recruits, their inter se seniority will be fixed in the same order in which their names appear in the list prepared by the Selection Committee under rule 17.
" Rule 23 dealt with confirmation.
It provided: "23.
Confirmation. (1) A probationer shall be confirm ed in his appointment at the end of his period of probation or at the end of the extended period of probation, if the Governor, after consultation with the Court, is satisfied that he is fit for confirmation.
(2) All confirmations under this rule shall be notified in the the official Gazette.
" D The appellant was appointed to the U.P. Civil Service (Judicial Branch) on September 13, 1948 on the basis of a competitive examination held by the U.P. Public Service Commission.
He was posted as Civil Judge in the same service in January 1955.
He was appointed by promotion as an officiating Civil and Sessions Judge in U.P. Higher Judicial Service in July 1 960.
Respondents 3, 4 and 5 are direct recruits.
They were appointed on probation on Civil and Sessions Judges and joined the service on May 31, 1966, May 27, 1966 and June 1, 1966, respectively.
The constitutional validity of the 1953 Rules providing for appointment to U.P. Higher Judicial Service first came up for consideration before this Court in 1966, in Chandra Mohan v state of U.P.(1) wherein it was held that the 1953 Rules providing for recruitment of District Judges particularly rules 5, 8, 13, 17 and 19 of the U.P. Higher Judicial Service Rules 1953, were invalid as they contravened the mandate of Article 233(1), and that consequently, the appointments of persons appointed under those Rules including the appellant and respondents 3, 4 and S to the U.P Higher Judicial Service were unconstitutional and invalid.
The appointments of persons appointed under the 1953 Rules, including the appellant and respondents 3, 4 and S were, however.
validated by the Constitution (Twentieth Amendment) Act, 1964, which inserted Article 233A in the Constitution.
(l) A.T.R. 86 By a notification dated March 31, 1969 the Governor confirmed respondents 3, 4 and 5 as Civil and Sessions Judges with effect from May 31, 1966.
May 27, 1966 and June 1, 1966, respectively.
Again by a Notification dated May 31, 1969 they were confirmed with effect form the same dates.
These Notifications were superseded by Notification dated July 19, 1974.
The dates of confirmation of the respondents, however, remained unchanged.
This notification was cancelled by Government notification dated August 26, 1974.
The Government by its order (G.O. No. 870/7 AI 503) dated June 19, 1971, created by conversion of the existing temporary posts,22 permanent posts of Civil & Sessions Judges with effect from June 1,1969, for absorbing the promoted officers, who had been continuously officiating as Civil & Sessions Judges for more than three years.
Subsequently, by its G.O. 2693/VII A Niaya/503/70.
the Government in partial modification of its G.O., dated June 19, 1971, directed that the creation of 22 permanent posts of Civil & Sessions Judges shall have effect from April 1, 1966.
This Notification shows that all these posts/courts continuously existed on temporary basis from different dates ranging between July 22, 1949 to August 8.1962.
Consequent upon the creation of 22 permanent posts with effect from April 1. 1966, the Governor on March 19, ]975 issued a Notification in supersession of the earlier ones.
Although all the 22 permanent posts created with effect from April 1,1966 according to the Government Notification were meant for absorption of promotees only three of those posts were given to the three direct recruits, respondents 3, 4 and S (S/Shri R. C. Bajpai, Rikheshwari Prasad and Behari Ji Das) who were shown as confirmed with effect from May 31, 1968, May 27, 1968 and June 1, 1968, respectively, the dates on which they completed their two years ' probation.
Against 12 of those posts, 12 promotees were confirmed as District and Sessions Judges with effect from April 1, 1966.
The appellant was not one of those 12 promotees who were so confirmed although he had been continuously officiating as Civil and Sessions Judge since July 1960 and the direct recruits/Respondents 3, 4 and 5 were appointed to that cadre about six years later.
The appellant was however shown, along with others as confirmed with effect from January 1, 1969.
The appellant was appointed as officiating District and Sessions Judge under Government Notification dated January 9, 1974 with the rider that the seniority would be determined later on.
This Notification was cancelled by Notification dated July 17, 1974 whereby the 87 appellant was confirmed on the post of District and Sessions Judge with effect from February 1, 1973.
Respondent 3, 4 and 5 were appointed as District and Sessions Judges, and confirmed as such by a Government Notification dated January 9, 1974.
These Notifications were cancelled and replaced by fresh Notifications from time to time.
The last Notification Issued by the State Government confirming the appellant and respondents 3, 4 and 5 as District and Sessions Judges is of March 19, 1975.
Under this Notification, the appellant was confirmed with effect from February 1,1973 while respondents 3, 4 and 5 were confirmed with effect from July 16, 1972, August 8, 1972 and August 25, 1975, respectively.
On July 22, 1977, the High Court in exercise of its powers under Article 235 of the Constitution, issued a Notification confirming certain officers as District and Sessions Judges in order of seniority from the dates and in the vacancies shown against their names.
the appellant was shown at Serial No. 38 and respondents 3, 4 and 5 at Serial] Nos. 30, 31 and 32, respectively.
While the appellant 's date of confirmation was mentioned as May 18, 1973, respondents 3, 4 and 5 were shown as confirmed with effect from August 25.
The appellant challenged the validity of all the Notifications issued by the State Government relating to his confirmation as also of respondents 3, 4 and 5 on the post of Civil and Sessions Judge as well as on the post of District and Sessions Judge by a writ petition under Article 226 on these grounds: (1) That these orders were discriminatory and therefore, violative of Articles 14 and 16 of the Constitution; and (2) that the Governor had no power to confirm Civil and Session Judges and District Judges, as the same power being a part of 'control ' vested exclusively in the High Court under Article 235, (3) The appellant, also, (by amending his writ petition) impugned the validity of Notification No. 670 dated July 22, 1977 issued by the High Court during the pendency of the writ petition, (4) It was also contended on the authority of this Court in section B. Patwardhan vs State of Maharashtra(1) that the rule requiring determination of the seniority to be governed by the date of confirmation is Unconstitutional as it made seniority dependent upon the fortuitous circumstances of confirmation, and where a cadre consists of both permanent and temporary employees, the date of confirmation cannot be an intelligible criterion for determining seniority as between direct recruits and promotees.
The High Court has however, taken the view that Patwardhan 's (supra) is not attracted to the facts of the instant case because in the case of U.P. Higher Judicial Service, the matter stands concluded (1) ; , 88 by the decision of this Court in Chandra Mohan 's case(l), wherein it was held that it is open to the competent authority to determine the seniority in accordance with rule 20 sans the second proviso, supplemented by any other valid principles or rules.
After an elaborate discussion, the High Court concluded: "The Notification dated 17th July 1974 and Notification dated 19th March, 1975 issued by the Governor confirming the petitioner and the opposite parties 3, 4 and 5, are invalid and ultra vires inasmuch as the power to confirm on the post of District Judge vests in the High Court and not in the Governor.
The Notification of the High Court, dated 22nd July 1977, however, meets the situation and fills up the lacuna to a certain extent.
This Notification has been issued by the High Court in exercise of its powers under Article 235 of the Constitution.
The said Notification of the High Court also mentions the respective dates from which they stood confirmed.
These dates are not founded on proper criteria and it appears that they were not properly fixed.
Hence, that part of the said Notification of the High Court cannot be sustained.
Their dates of confirmation shall have to be redetermined by the High Court.
" In the result, the High Court partly allowed the writ petition and quashed the aforesaid Notifications dated July 17, 1974 and July 22, 1977 so far as they relate to the dates of confirmation of the petitioner and the opposite parties 3, 4 and 5.
A direction was given to the High Court in its administrative side, to redetermine the dates of their confirmation as District & Sessions Judges and their inter se seniority "in accordance with rule 20 sans the second proviso of the U.P. Higher Judicial Service Rules, 1953, supplemented by any other valid principles or rules".
The main contentions raised by Shri R. K. Garg, appearing on be half of the appellant, are (1) Rules 20 and 23 of the 1953 Rules, which make determination of seniority wholly dependent upon the fortuitous circumstance of confirmation offend Articles 14 and 15 of the Constitution.
(It is submitted that earlier in Civil Appeal 1703 of 1969 decided on April 19, 1976, he was obliged to give up the plea because fundamental rights were then under suspension and the broader protection of Article 14 was not available to him).
Reliance has been placed on Patwardhan 's case (ibid).
(2) (a) In the impugned Notifications, dates of confirmations have been fixed arbitrarily in a manner which unduly favours the direct recruits (respondents 3, 4 and 5) and singles out the appellant pro (I) A.I.R. 1976 S.C. 1482.
89 motee for unfavourable treatment, notwithstanding the fact that he was Promoted as Civil and Sessions Judge about 6 years prior to the recruitment of Respondents 3, 4 and 5 to the same cadre, and had also been promoted to the senior grade of the Service as District and Sessions Judge, one year prior to the promotion of these respondents to that grade.
The High Court has not properly construed the observation in this Court 's decision dated April 19, 1976 in C.A. 1703 of 1969, to the effect, that the seniority was to be determined "in accordance with rule 20 sans the second proviso of the U.P. Higher Judicial Service Rules, 1953, supplemented by any other valid principles or rules,".
In that observation the indication was clear that the confirmations were not to be arbitrarily made but in accordance with valid and fair criteria which would ensure that its consequences did not offend Articles 14 and 16.
One of these criteria would be the length of continuous service in the cadre of the Higher Judicial Service.
Indeed, new Rules of 1975 adopt this as the governing criteria for fixation of inter se seniority in the service.
According to Mr. Garg, this criterion, based as it was on a principle of fairplay, could be validly imported into the truncated Rule 20 of 1953 Rules, in accordance with the broad observation of this Court in its decision in C.A. 1703 of 1969.
(b) In any case, the Government had while creating 22 permanent posts with effect from April, 1966, (by conversion of the existing temporary posts held by promotees into permanent ones) as per Notifications (G.O. No. 870/7 AI 503 and G.C).
No. 2093/VII A Niaya/ 503/70) declared it as a matter of policy that all these posts are being created for permanent absorption of promotes who have been continuously working against temporary posts in an officiating capacity for more than three years.
Respondents 3, 4 and S had not even been appointed (on probation) to the service on April 1, 1966.
They entered the service on May 31, 1966, May 21, 1966 and June 1, 1966; while on April 1. 1966, or even on the date of respondents ' entry into service, the appellant had put in about six years ' continuous service as officiating Civil and Sessions Judge.
Thus, both as a matter of declared policy and fair principle, the appellant could not be denied confirmation with effect from April 1, 1966, against one of those 22 posts, and none of the respondents could be confirmed against any of those 22 posts which had been made permanent for the purpose of absorbing promotes who had put in officiating service for a period of more than three years.
Stress has been laid on the fact that apart ll from greater length of service, the appellant has an excellent, unblemished record of service.
In the circumstances, therefore, the confir 7 817 SCI/78 90 mation of the appellant with effect from a date later than those assigned to Respondents 3, 4 and 5 is unfair, arbitrary, and discriminatory.
As against this, Shri Andley, Learned Counsel for Respondents 3, 4 and 5 submits that the Respondents should be deemed to have been appointed to the service in 1964, when they were selected for appointment to the service. by the Select Committee of the High Court and were recommended for appointment to the Government.
The Respondents, it is submitted, would have been appointed to the Service and joined it in 1964, but for the fact that Chander Mohan etc.
in the writ proceeding obtained an interim order from the Court, restraining the Government from giving effect to their appointments, and it was only on the vacation of that "stay" order in 1966, the respondents could join duty, which they did in May and June 1966.
The delay in joining the service being not due to any fault on the part of the Respondents, for the purpose of confirmation and determination of seniority, it would be but fair to take the date of their appointment as the date on which they were selected by the Selection Committee in 1964 for recruitment to the Service.
If no stay order issued by the Court had intervened, the Respondents would have been entitled to be confirmed on completion of their two years ' probation in 1966, Long before a substantive vacancy could become available to the appellant.
It is pointed out while these direct recruits were, as usual, appointed against substantive vacancies, on probation, the appellant and other promotes like him were appointed against temporary posts on officiating basis only, and they (promotees) could claim confirmation only when substantive vacancies/posts became available to them.
It is further argued that the intendment of Rule 8 of the 1953 Rules was that 25 per cent of the vacancies in U.P. Higher Judicial Service should be filled by direct recruitment, and this, according to the learned Counsel implies that confirmation of direct recruits and promotes at any given time should also be made in the ratio of 1: 3 by rotation.
It is urged that when the matter is considered from this angle, the en bloc confirmation of 12 promotes with effect from April l, 1966 followed by the confirmation of the three direct recruits (respondents 3, 4 and 5) with effect from May 30, 1968, May 27, 1968 and June 1968, was neither improper, nor arbitrary.
Learned Counsel further maintains that equities are wholly on the side of respondents 3, 4 and S who are not younger than the appellant, and this should also be taken into account as a factor in their favour.
The last but luke warm contention of Shri Andley is that it is not clearly borne out by the record that the 22 temporary posts, converted 91 into permanent ones with effect from April 1, 1966, were created for the purpose of absorbing the promotees only.
We do not think it necessary to decide the question with regard to the constitutional validity of Rules 20 and 23, because this appeal can be disposed of on the second ground urged by Shri Garg.
Before dealing with that contention, it is necessary to have a clear picture of its factual premises.
There is no dispute that the appellant was promoted as officiating Civil and Sessions Judge in July 1960, while Respondents 3, 4 and 5 joined the service as Civil and Sessions Judges on probation, about six years later in May/June, 1966.
We are unable to accept Shri Andley 's argument that the date of the Respondents ' C entry into service should be assumed as the date in 1964, when the Selection Committee selected them for appointment.
There is no warrant for importing such a fiction.
The stark fact remains that respondents 3, 4 and S joined the service in May/June 1966.
It is further an uncontroverted fact that the appellant was promoted to the senior grade as officiating District and Sessions Judge about one year prior to the respondents ' promotion to that grade.
It is further clear from the record (vide Paragraph 6 (g) of the affidavit of Shri Radhika Raman, Under Secretary to the Government of Uttar Pradesh: Annexure IV A to the Rejoinder Affidavit of Respondents 3 and 5 filed in the High Court as also the copies of the Notifications filed by the appellant in this Court) that the State Government created (by conversion of the existing temporary posts/courts) 22 permanent posts/ courts of Civil and Sessions Judges, under G.O. Nos.
870/7 1 503, dated 19 6 1971 with effect from 1 1 69.
Later on, by another Government order No. 2693/VII/A Nyay 503/70, dated 3 3 1973, in modification of the earlier notification, the creation of the aforesaid 22 permanent posts was given effect from 1 4 1966.
By the impugned Government Notification of March 19, 1975, against 12 of those 22 posts, twelve promoted officers shown at Serial Nos.
24 to 35 were confirmed with effect from 1 4 1966.
Against the next 3 of those 22 posts, respondents 3, 4 and 5 were confirmed with effect from 31 5 68, 27 5 68 and 1 6 68.
Against the remaining seven promoted officers including the appellant, were confirmed with effect from January 1, 1969.
The first proviso to Rule 8 of 1953 Rules which provided for a quota of 25% for direct recruitment and 75% for promotion, was specifically declared void by this Court in Chandra Mohan 's case decided in 1966.
That void Rule, being non existent, was not available for the purposes of confirmation etc.
92 After considering the entire material on record and hearing the Counsel for the parties, including Shri Dikshit appearing for the State, we are unable to appreciate, why the appellant like 12 other promoted officers, was not confirmed with effect from April 1, 1966, when he was continuously working as officiating Civil and Sessions Judge from July, 1960.
In the case of promoted officers, the main criteria to be considered for their confirmation are: (i) Availability of a substantive vacancy/post.
(ii) Suitability for the post.
Here, in the case of the appellant, a substantive post was available to him with effect from April 1, 1966, when respondents 3, 4 and S had not even been appointed, on probation or otherwise, to the service.
By that date, April 1, 1966, he had put in service as officiating Civil and Sessions Judge for a period of 5 years and 9 months approximately.
There is nothing on record to suggest that by or on April 1, 1966, he was not found suitable for confirmation.
Why was he, then, not accorded the same treatment in the matter of fixing the date of his confirmation as had been meted out to twelve promoted officers who were confirmed with effect from April 1, 1966 Shri Dikshit has not been able to satisfy us that in not allocating 1 4 66 to the appellant as the date of his confirmation, the Government were acting according to any intelligible differentia or reasonable principle.
Nor is any a principle justifying a differential treatment to the appellant in the matter of fixing the date of his confirmation, discernible from the impugned Notification dated March 19, 1975, itself.
We are therefore, of opinion that this Government Notification dated March 19, 1975 cannot, as it stands, be sustained and needs reconsideration .
The same comments apply mutatis mutandis to the impugned Notification, dated July 22, 1977, issued by the High Court.
Moreover, once it is found that the Notification dated March 19, 1975 cannot be sustained, the foundation for fixing dates of confirmation and determining relative seniority of District and Sessions Judges will also crumble.
Accordingly we allow this appeal, set aside the impugned Notifications dated March 19, 1975 and July 22, 1977 in so far as they fix the dates of confirmation of the appellant vis a vis Respondents 3, 4 93 and 5, both in the junior and senior grade of the U.P. Higher Judicial Service.
The High Court shall consider the matter afresh and refix and readjust, in the exercise of its powers under Article 235 of the Constitution, the dates of the confirmation of the appellant and the said respondents, at first, in the grade of Civil and Sessions Judges, and then in the grade of District and Sessions Judges, in accordance with law.
There will be no order as to costs in this Court.
P.B.R. Appeal allowed.
| IN-Abs | Under the U.P. Higher Judicial Service Rules, 1953 appointments to the posts of Civil and Sessions Judges were made by promotion from the members of the U.P. Civil Service (Judicial Branch) and by direct rccruitment.
Rule 20 of the Rules dealing with seniority provided that seniority in each of the two classes of posts shall be determined by the date of confirmation in that class of post.
Rule 23 provided that a probationer shall be confirmed in his appointment at the end of his period of probation if the Governor was satisfied that he was fit for confirmation.
The appellant who was appointed as a Civil Judge in 1955, was promoted as officiating Civil and Sessions Judge in July, 1960.
Respondents 3 to 5 who were direct recruits to the post of Civil and Sessions Judges joined service In May/June, 1966.
For the purpose of absorbing the promoted officers the Government converted 22 temporary posts into permanent posts of Civil and Sessions Judges with effect from April 1, 1966.
Three out of those posts were given to the three respondents, who were direct recruits, and they were confirmed in the posts with effect from May/June, 1968.
In twelve other posts, twelve promotees were confirmed with effect from April 1, 1966, but the appellant was not so confirmed though he had been continuously officiating as a Civil and Sessions Judge since July, 1960.
He was confirmed as Civil and Sessions Judge with effect from January 1, 1969.
He was eventually confirmed in the post of District and Sessions Judge with effect from February 1, 1973.
The three respondents were later appointed as District and Sessions Judges.
By a Notification dated March 19, 1975, they were confirmed in those posts with effect from July/August, 1972.
The Notification dated July 22, 1977 issued by the High Court, showed the three respondents at serial Nos. 31 and 32 of the list and the appellant at No.38 and the dates of confirmation were shown as August 25, 1972 in respect of three respondents and March 18, 1973 in respect of the appellant.
The High Court allowed the appellant 's writ petition and quashed the Notifications dated March 19, 1975 and July 22, 1971 insofar as they related to the dates of confirmation of the appellant and the respondents.
The High Court on the administrative side was directed to redetermine the dates of their confirmation as District and Sessions Judges and their inter se seniority in accordance with Rule 20. 83 In appeal it was, inter alia, contended on behalf of the appellant that the 22 permanent posts having been created with effect from 1 4 1966 for permanent absorption of promotees who had been officiating prior to that date four a period of more than three years, (Respondents 3 to S who were not even in service on that date, could not be absorbed against any of those vacancies, and the appellant who had put in nearly six years of service in the Cadre on the date when the three respondents were appointed, could not be denied confirmation with effect from April 1, 1966; that apart from greater length of service, the appellant has an excellant, unblemished record of service; and in the circumstances, the confirmation of the appellant with effect from date later than those assigned to Respondents 3, 4 and S is unfair, arbitrary and discriminatory.
Allowing the appeal, ^ HELD: The main criteria to be considered for confirmation of officers officiating in the Higher Judicial Service of the State are: (i) Availability of a substantive vacancy/post.
(ii) Suitability for the post.
[92C] Here, a substantive post of Civil and Sessions Judge was available to the appellant from April 1, 1966, when Respondents 3, 4 and 5 had not even been appointed to the service in any capacity.
By April 1, 1966, the appellant had put in service as officiating Civil and Sessions Judge for a period exceeding 5 years and 9 months.
There is nothing on record to suggest that by or on April 1, 1966, he was not suitable for confirmation as Civil and Sessions Judge, or later, as District and Sessions Judge when a post in that grade became available to him.
In the circumstances, the impugned Notification dated March 19, 1975 issued by the Government, inasmuch as it did not accord to the appellant the same treatment which had been meted out to twelve other promoted officers who were confirmed with effect from April 1, 1966, is not based on any intelligible.
differentia or reasonable principle, and as such, cannot be sustained.
The same comments apply mutatis mutandis to the impugned Notification, dated July 22, 1977, issued by the High Court.
Once it is found that the Notification dated March 19, 1975 cannot be sustained, The foundation for fixing the dates of confirmation and determining relative seniority of District and Sessions Judges will also crumble.
[92D G] The entire matter therefore, requires reconsideration by the High Court in the exercise of its powers under Article 235 of the Constitution.
|
ivil Appeal Nos.
293 295 of 1971.
From the Judgment and Order dated 30 4 1970 of the Madhya Pradesh High Court in M.P. No. 333/68 and 48 and 27 of 1969.
Gulab Gupta and Vineet Kumar for the Appellant.
V. M. Tarkunde, D. N. Misra and O.C.Mathur for the Respondent.
The Judgmnent of the Court was delivered by CHANDRACHUD, C. J.
The respondent, M/s. Perfect Pottery Co. Ltd., was engaged in the manufacture of stoneware pipes and other refractory material at its factory known as Perfect Pottery Works, where it employed about 900 workmen.
For the purposes of its factory, respondent had taken a lease of Poly Pather Clay Mines, wherein about 81 workmen were employed.
On April 24, 1967 respondent issued a notice of closure of the factory and the Mines stating, that the management.
had decided to close down the business on account of financial difficulties and other reasons.
Consequent upon the notice of closure, the appellant herein, the Pottery Mazdoor Panchayat, applied for initiation of conciliation pro 128 ceedings to the Deputy Labour Commissioner, Madhya Pradesh and to the Regional Labour Commissioner (C), Jabalpur.
The reason for initiation of two different conciliation proceedings was that Perfect Pottery Works was an industry to which the Madhya Pradesh Industrial Relations Act, 1960, applied, whereas Poly Pather Clay Mines was an industry governed by the .
We will refer to these two Acts as 'the State Act ' and 'me Central Act ' respectively Conciliation proceedings having failed, the Madhya Pradesh State Government, on June 26, 1967, referred an industrial dispute to the arbitration of the Industrial Court under section 51 of the State Act.
The main questions referred to the Industrial Court were: Whether the proposed closure by the management of the Perfect Pottery Co. Ltd., Jabalpur, of their pottery factory at Jabalpur, with effect from July 1, 1967, is proper and justified, and To what retrenchment compensation are the employees entitled, if it is decided that 'the proposed closure is proper and justified ? The reference was evidently made in order, in the first instance, to avert the closure of the factory.
The Industrial Court was there fore also asked to consider whether any interim relief should be granted by restraining the management from closing down the factory until the reference was finally adjudicated upon.
The Industrial Court by an interim Award dated June 30, 1967, having declined to issue a prohibitory injunction, the appellant filed Writ Petition No. 337 of 67 in the Madhya Pradesh High Court.
That Petition became infructuous after the closure of the factory and was not pressed.
On July 1, 1967 the respondent purported to close down the business.
We say "purported", because whether the business was, truly and in fact, closed or not is a matter on which the parties have joined issue.
The case of the appellant is that respondent had closed the place of business and not the business itself.
After the closure, or shall we say the 'alleged closure ', the Central Government on September 16, 1967, made a reference under section 10(1)(d) of the Central Act to the Central Government Industrial Tribunal cum Labour Court, Jabalpur, on the following question: Whether the employers in relation to the Poly Pather Clay Mines of Perfect Pottery Co. Ltd., Jabalpur, were justified in closing down the said mine and retrenching the 129 (Chandrachud, C. J.) following 81 workers with effect from July 1, 1967.
If not, to what relief are the workmen entitled ? In the two references, one before the Industrial Court and the other before the Central Government Industrial Tribunal cum Labour Court, 'the respondent contended that the respective Tribunals had no jurisdiction to consider the question as regards the propriety or justification of the management 's decision to close down the business on the other question, the respondent did not dispute its liability to pay retrenchment compensation to the workmen but it contended that neither of the two Tribunals had jurisdiction to go into that question.
The appellant 's case before the Tribunals was that the so called closure of the business was merely a camouflage and was in substance and essence, a lock out.
In support of this contention the appellant pleaded that the respondent was making large profits in its business, that no economic or financial reasons could have impelled it to close down its business and the true reason of the supposed closure was to victimize the workers for their Trade Union activities and to defeat the rights which flowed out of the Award given by the Industrial Court, Madhya Pradesh, on March 16, 1966, under which the workers were entitled to receive enhanced dearness allowance The two Tribunals came to contrary conclusion on the principal question as to whether they had jurisdiction to inquire into the propriety of or justification for the closure.
The Central Government Industrial Tribunal cum Labour Court held by its award dated July 3, 1968 that it had no jurisdiction to inquire whether the decision of the management to close down the business was proper and justified but that it was entitled to consider whether, in fact, the business was closed.
On the other hand, the Industrial Court, by its award dated p November 15, 1968 held that it had no jurisdiction either to inquire into the propriety of the closure or, because of the terms of reference, to consider whether there was or was not a real closure.
As against these decisions, three Writ Petitions were filed in the High Court of Madhya Pradesh, one by the appellant and two by the respondent which were disposed of by the High Court by a common judgment dated April 30, 1970.
Dismissing the Writ Petition filed by the appellant and allowing the Writ Petitions filed by the respondent, it has granted to the appellant a certificate to file an appeal to this Court under Article 133(1) (a) of the Constitution.
Two questions were argued before the High Court: Firstly, whether the tribunals had jurisdiction to question the propriety or justification of the closure and secondly, whether they had jurisdiction 130 to go into the question of retrenchment compensation.
The High Court has held on the first question that the jurisdiction of the Tribunal in industrial disputes is limited to the points specifically referred for its adjudication and to matters incidental thereto and that the Tribunal cannot go beyond the terms of the reference made to it.
on the second question the High Court has accepted the respondent 's contention that the question of retrenchment compensation has to be decided under section 33C(2) of the Central Act.
Having heard a closely thought out argument made by Mr. Gupta on behalf of the appellant, we are of the opinion that the High Court is right in its view on the first question.
The very terms of the references show that the point of dispute between the parties was not the fact of the closure of its business by the respondent but the propriety and justification of the respondent 's decision to close down the business.
That is why the references were expressed to say whether the proposed closure of the business was proper and justified.
In other words, by the references, the Tribunals were not called upon by the Government to adjudicate upon the question as to whether there was in fact a closure of business or whether under the pretence of closing the business the workers were locked out by the management.
The references being limited to the narrow question as to whether the closure was proper and justified, the Tribunals by the very terms of the references, had no jurisdiction to go behind the fact of closure and inquire into the question whether the business was in fact closed down by the management.
It is not necessary to rely exclusively on the terms of references for coming to this conclusion.
The history of the dispute and the various documents on record of the references themselves indicate that the dispute between the parties related not to the question as to whether the business, in fact, was closed by the management but whether there was any justification or propriety on the part of the management in deciding to close down the business.
On June 22,1967, the General Secretary of the appellant Union addressed a letter to the Regional Labour Commissioner, Jabalpur, by which the present dispute was raised.
The first paragraph of that letter says: "that the Company had notified is decision to close down the mine with effect from July 1, 1967, that some of the workers were served with notices of retrenchment individually but that retrenchment compensation was not paid by the management which was illegal and violative of the provisions of the ".
This grievance assumes the validity of the decision to close down the business and proceeds to make a claim arising out of a valid closure namely, a claim for retrenchment compensation.
The second paragraph of the 131 (Chandrachud, C. J.) the aforesaid letter begins by saying that "the closure of the mine and the factory is malafide".
The reasons for the closure are then set out in that paragraph which winds up by saying that the Union was of the opinion that the closure was not for business reasons but was a malafide decision taken in order to drive the Union out of existence and to cheat the workers of their lawful dues.
On June 28, 1967, the Managing Director of the respondent sent a reply to the Regional Labour Commissioner dealing with the contentions made by the Union in its letter of June 22,, 1967.
The Managing Director contended that no industrial dispute existed or was apprehended and that the Conciliation officer had, therefore, no jurisdiction under the Act to hold any proceedings.
In the order dated April 30, 1970, of the Industrial Tribunal cum Labour Court, Jabalpur, reference has been made to an affidavit which was filed on behalf of the workers for the purpose of securing an interim award.
We have, looked at the affidavit for ourselves and are in agreement with the view expressed by the Tribunal that there is a clear and unequivocal admission on the part of the workers in that affidavit to the effect that the business was in fact closed by the respondent.
The High Court has also referred to a statement dated June 16, 1967, in which it was stated on behalf of the workmen that since the establishment had already closed down, there was no necessity for making submissions on the point relating to the reduction in the number of employees and revision of the workload.
Learned counsel for the appellant relies upon a judgment of this Court in The Management of Express Newspapers Ltd. vs Workers and Staff Employed under it and others,(1) in which it was observed that if, in fact and in substance, the closure of the business is a lock out and the business has been apparently closed for the purpose of disguising a lock out and a dispute is raised in respect of such a closure it would be an industrial dispute which an Industrial Tribunal is competent to deal with.
There, can, with respect, be no quarrel with this proposition but the true question which arises for consideration is whether in the instant case there was any dispute at all, whether there was in fact a closure or whether the management purported to close the business as a cloak or disguise for what in fact and substance was a lock out.
As we have shown earlier no such dispute was ever raised, the limited dispute which was raised by the appellant being whether the closure of the business was effected for a proper and a justifiable reason.
The appellant 's counsel also drew our attention to the definition of 'closure ' in section 2(8) of the State Act according to which 'closure ' (1) ; , 548 132 to the extent material, means the closing of any place or part of a place of employment or the total or partial suspension of work by an employer or the total or partial refusal by an employer to continue to employ persons employed by him whether such closing, suspension or refusal is or is not in consequence of an industrial dispute.
It may perhaps be that the concept of 'closure ' in the State Act is wider than what is commonly understood by that expression but we do not appreciate how the circumstance that even a partial closure of a business is closure within the meaning of the State Act can assist the appellant in its contention that under the terms of the present references, the Tribunals were entitled to enter into the question as to the fact of the closure.
In this connection the provisions of section 82 of the state Act, to which Mr. Tarkunde appearing on behalf of the respondent drew our attention, are very significant.
That section provides that the State Government may make a reference to a Labour Court or the Industrial Court for a declaration whether any proposed strike, lock out, closure or stoppage will be illegal.
If ever it was the case of the appellant that there was in fact no closure and there was really an illegal lock out, the reference would have been asked for and made not under section 51 under which it was made, but under section 82.
We are, therefore, of the view that the High Court was right in coming to the conclusion that the two Tribunals had no jurisdiction to go behind the references and inquire into the question whether the closure of business, which was in fact effected" was decided upon for reasons which were proper and justifiable.
The propriety of or justification for the closure of a business, in fact and truly effected, cannot raise an industrial dispute as contemplated by the State and Central Acts.
It is unnecessary to consider the second question as regards the payment of retrenchment compensation and we will, therefore, express no opinion as to whether the Tribunals had jurisdiction to go into that question.
Happily, the parties have arrived at a settlement on that question under which, the respondent agrees to fix within a period of six months from today the retrenchment compensation payable to the retrenched workers in accordance with the provisions of section 25FFF of the Central Act, namely, the , without the aid of the proviso to that section.
After the retrenchment compensation is so fixed, a copy of the decision fixing the compensation payable to each of the workers will be sent by the respondent to the appellant Union.
The workers or their legal representatives, as the case may be, will then be entitled to receive the retrenchment compensation from the respondent, which agrees to pay the same to them.
The respondent will be entitled to set off of the amounts of retrenchment compen 133 (Chandrachud, C.J.) sation already paid to the workers against the amounts found due to them under this settlement.
On receiving the retrenchment compensation the workers concerned shall withdraw the applications, if any, filed by them for relief in that behalf.
We would only like to add that the compensation which will be paid to the workers will be without prejudice to their right, if any, to get employment from the respondent in the new business as and when occasion arises.
The appeals are accordingly dismissed but there will be no order as to costs.
N.V.K. Appeals dismissed.
| IN-Abs | The respondent was engaged in the manufacture of stoneware pipes and other refractory material at its factory.
It had taken lease of reference.
The respondent issued a notice of closure of the factory and mines, on account of financial difficulties.
The factory was governed by the Madhya Pradesh Industrial Relations Act, 1960 and the Mines were governed by the .
A dispute having been raised by the workmen, the case relating to the factory was referred under section 51 of the State Act to an Industrial Court, while the dispute relating to the Mines was referred under section 10(1) (d) of the Central Act to the Central Government Industrial Tribunal cum Labour Court.
The main question referred under the State Act was whether the proposed closure was proper and justified, while the reference under the Central Act was whether the employers were justified in closing down the mines.
The Industrial Court held that it had no jurisdiction either to inquire into the propriety of the closure or to consider whether there was or was not a real closure, while the Central Government Industrial Tribunal held that though it had no jurisdiction to inquire whether the management 's decision to close down the business was proper and justified, it was entitled to consider whether, in fact, the business was closed.
In writ petitions filed by both sides, the High Court came to the conclusion that the jurisdiction of the Tribunal in industrial disputes is limited to the points specifically referred for its adjudication and to matters incidental thereto and that the Tribunal cannot go beyond the terms of reference made of.
Dismissing the appeals, ^ HELD: 1.
The references being limited to the narrow question whether the closure was proper and justified, the Tribiunals by the very terms of the references, had no jurisdiction to go behind the fact of closure and inquire into the question whether the business was in fact closed down by the management.
[130 E] 2.
The terms of the references show that the point of dispute between there parties was not the fact of the closure of business but the propriety and justification of the respondents decision to close down the business.
The Tribunals. 127 (Chandrachud, C. J.) were not called upon to adjudicate upon the question as to whether under the pretence of closing the business the workers were locked out by the management.
[130 C D] 3.
The history of the dispute indicated that the dispute between the parties related not to the question as to whether the business, in fact, was closed by the management but whether there was any justification or propriety on the part of the management in deciding to close down the business.
There is a clear and unequivocal admission on the part of the workers before the Tribunals that the business was in fact closed by the respondent.
[130F, 131D] 4.
The concept of 'closure ' as envisaged in section 2(8) of the State Act is perhaps wider than what is commonly understood by that expression but that cannot assist the appellant to contend that under the terms of the references, the Tribunals were entitled to enter into the question as to the fact OF the closure.
If ever it was the case of the appellant that there was in fact no closure and there was really an illegal lock out, the reference would have been asked for and made not under section Sl under which it was made, but under section 82.
1132B. D] 5.
The propriety of or justification for the closure of a business in fact and truly effected, cannot raise an industrial dispute as contemplated by the State and Central Acts.
[132 F] The Management of Express Newspapers Ltd. vs Workers and Staff Employed under it and Others ; , 548 referred to.
|
Civil Appeal No. 364 of 1969.
From the Judgment and order dated 7 8 1968 of the Punjab and Haryana High Court in Civil Writ No. 2199/68.
section N. Anand and R. N. Sachthey for the Appellant.
Arvind Minocha for the Respondent.
The Judgment of the Court was delivered by UNTWALIA, J.
The Chief Commissioner, Union Territory, Chandigarh, has preferred this appeal by certificate from the decision of the High Court of Punjab & Haryana allowing the Writ Petition of the respondent and declaring the amendment of item 30 in Schedule to the Punjab General Sales Tax Act, 1948, hereinafter referred to as the Act, invalid.
The composite and the then existing State of Punjab was re organised by the , Central Act 31 of 1966.
The Union Territory of Chandigarh was carved out as one of the States on and from November 1, 1966.
Under section 6 of the Act no tax was payable on the sale of goods specified in Schedule B.
The State Government could amend this Schedule and at the relevant time the power so conferred on the State Government was in the following terms: "The State Government after giving by notification not less than three months ' notice of its intention so to do may, by like notification add or delete from Schedule and there upon Schedule shall be deemed to be amended accordingly.
" Item 30 of Schedule exempted from sales tax: "All varieties of cotton, woollen or silken textiles, including rayon, artificial silk or nylon, whether manufactured by handloom or powerloom or otherwise, but not including car pets, druggets, woollen durees and cotton floor durees." On August 24, 1966 the State Government of the composite State of Punjab issued a notification giving three months ' notice of its intention to amend Schedule to exclude pure silken fabrics from the list of tax; free goods.
But before the expiry of three months and before 136 any further notification could be issued by the State Government as required by section 6 of the Act, the Union Territory of Chandigarh came into existence on November 1, 1966.
The Government of the Union Territory issued a notification dated January 4, 1968 amending item 30 as intended to be amended by the notification dated August 24,1966 issued by the State Government of the composite State of Punjab.
The respondent filed a writ petition in the High Court challenging this notification as being invalid on the ground that the earlier notification could not be availed of by the new Government for amending Schedule B.
The stand taken on behalf of the appellant was that the earlier notification was a "law in force" within the meaning of section 88 of Central Act 31 of 1966.
The High Court repelled this argument, and in our opinion, rightly.
It is plain on the wordings of section 6 of the Act, extracted above, that a notification merely notifying the intention of the State Government to add or delete from Schedule any article, by itself, had no force of law until and unless on the expiry of the period of three months a like notification was issued amending the Schedule.
The erstwhile State Government of Punjab could not issue a second notification in respect of the Union Territory after it ceased to be a part of the State of Punjab.
Sales tax could not be charged on pure silken fabrics by the said State Government on October 31, 1966 merely by virtue of the notification dated August 24, 1966.
It was, therefore, not a law in force when the composite State was re organised.
Section 88 of the runs as follows: "The provisions of shall not be deemed to have f effected any change in the territories to which any law in force immediately before the appointed day extends or applies, and territorial references in any such law to the State of Punjab shall, until otherwise provided by a competent .
Legislature or other competent authority, be construed as meaning the territories within that State immediately before the appointed day.
" It is clear that there was no law in force on November 1, 1966, which could enable the Union Territory to levy any sales tax on pure silken fabrics.
Mr. section N. Anand endeavoured to attack the judgment of the High Court by taking a new stand in this Court that the notification dated August 24, 1966 could enure to the benefit of and be availed by the Union Territory Government.
But he failed to point out any provision L in Act 31 of 1966 or any other law to substantiate this argument.
No 137 "deeming" provision could be brought to our notice, as there is none, to show that the notification issued by the erstwhile State Government of Punjab could be deemed to be one issued by the new Government of the Union Territory.
For many other purposes there are "deeming" provisions in Central Act 31 of 1966 e.g. sections 59(1), 74(1) and 92.
But no provision is to be found to show that by a legal fiction the first notification of intention issued by the erstwhile State Government could be deemed to be a notification issued by the new Government. 'The argument thus presented by Mr. Anand must be rejected.
Learned counsel for the appellant placed reliance upon the principle of law enunciated in paragraph 12 at page 1749 in the decision of this Court in M/s. Ratan Lal and Co. and another etc., vs The Assessing Authority, Patiala and another, etc.(1).
The principle stated therein is that the new legislature of the new State after the re organisation of the composite State could amend the existing law retrospectively from a date anterior to the date of reorganisation.
Obviously the view expressed in the decision aforesaid is so very different that it cannot be of any help to the appellant in this case.
For the reasons stated above, we dismiss the appeal with costs.
P.B.R. Appeal dismissed.
| IN-Abs | Section 6 of the Punjab General Sales Tax Act, 1948 provides that the State Government, after giving by notification, not less than three months ' notice of its intention so to do, may, by like notification add or delete from Schedule and thereupon Schedule shall be deemed to be amended accordingly.
The State Government of the composite State of Punjab issued a notification under section 6 giving its intention to delete from Schedule pure silken fabrics from the list of tax free goods.
Before the issue of any further notification, however, the composite State was reorganised and the Union Territory of Chandigarh was formed.
The Government of the Union Territory of Chandigarh issued a notification amending item 30 of Schedule as intended to be amended by the notification issued by the former government.
In a writ petition filed before the High Court the respondent challenged the notification as invalid on the ground that the earlier notification could not be availed of by the new Government for amending Schedule B.
The appellant claimed that the earlier notification was "law in force".
But the High Court repelled this argumenet It allowed the respondent 's writ Dismissing the appeal, ^ HELD: 1.
There was no "law in force" enabling the newly formed Union 'Territory of Chandigarh to levy any sales tax on pure silken fabrics.
The notification merely notifying the intention of the State Government to add or delete from Schedule any article by itself had no force of law until and unless, on the expiry of the period of three months, a like notification was issued amending the Schedule.
The erstwhile State Government of Punjab could not issue the second notification in respect of the Union Territory after it ceased to be a part of the State of Punjab.
Sales Tax could not be charged on pure silken fabrics by the said State Government merely by virtue of the notification.
It was therefore not a law in force when the composite State was reorganised.
[136D E] 135 3.
No provision is to be found in the Act to show that by a legal fiction the A first notification of intention issued by the erstwhile State Government could be deemed to be a notification issued by the new Government.
[137 B] M/s. Rattan Lal and Co. and another etc.
vs The Assessing Authority, Patiala and another, etc.
AIR 1970 S.C 1742 held inapplicable.
|
N: Criminal Appeals Nos.
86 93 of 1974.
From the Judgment and Order dated 25 7 73 of the Orissa High Court in Criminal Misc.
Case Nos.
131 138 of 1972.
D. Mukerjee and B. Parthasarthy for the Appellant.
D. V. Patel and Vinoo Bhagat for the Respondent in (all the appeals).
The Judgment of the Court was delivered by KAILASAM, J.
These appeals are by State of Orissa by certificate granted by the Orissa High Court against the judgment in Criminal Miscellaneous Cases Nos. 131 to 138 of 1973.
The eight respondents before this Court filed a batch of eight criminal miscellaneous petitions under Section 561 A/ and 562 of the Code of Criminal Procedure for a review of the orders passed by the High Court in Criminal Reference Nos. 13 and 15 to 21 of 1972 on 7 5 73, enhancing their sentence of fine of Rs. 2,000/ to one of rigorous imprisonment for six months.
The facts of the case are briefly as follows: On 1 2 1967, the Vigilance police filed nine criminal cases against certain firms and their partners or proprietors under Section 20(e) of the Forward Contracts (Regulation) Act, 1952 (Act 74 of 1952).
The cases were tried by the Additional District Magistrate (Judicial), Cuttack.
The District Magistrate found the firms and persons, in management of the business, guilty of the offences with which they were charged and inflicted a consolidated fine of Rs. 2,000/ with the direction that, they would suffer simple imprisonment for three months in default of payment of fine.
Against their conviction and sentence, the accused preferred an appeal to the Sessions Judge.
The Sessions Judge, while dismissing the appeals, found that the law required imposition of a minimum sentence of fine of Rs. 1,000/ for each offence and as the sentence passed by the trial court was not in accordance with the law, he referred the matter to the High Court for passing of appropriate sentence.
The accused preferred Revision Petitions against the order of the Sessions Judge.
The Reference made by the Sessions Judge as well as the revision Petitions by the High Court.
The High Court, while dismissing the Revision Petitions preferred by the accused, accepted the Reference by the Sessions Judge and enhanced the sentence so far as the firms are concerned, to a sum of Rs. 3,900/ at the rate of rupees one thousand and three hundred for each offence.
As regards the Managers or the managing partners, the High Court 1117 sentenced them to six months rigorous imprisonment, i.e., two months for each deal The firms paid up their fines but the persons, who were awarded substantive sentence of imprisonment, filed criminal miscellaneous petitions before the High Court for a review of its order.
The High Court accepted the petitions for review and recalled its previous judgment imposing substantive sentence of six months rigorous imprisonment on the petitioners but imposed a fine of Rs. 3,900/ at the rate of Rs. 1,300/ for each of the offence on each of the petitioners who are the respondents in this Court.
Against the decision of the High Court, the State of Orissa applied for a certificate for preferring an appeal to this Court which was granted.
Before the High Court it was urged that the petitioners were not given notice of enhancement in the Reference cases in respect of fines imposed.
It was submitted that the notice was based on the recommendation of the learned Sessions Judge to pass appropriate sentence, but there was no indication in the notice, that the sentence would be enhanced to a substantive term of imprisonment.
The order of Reference by the Sessions Judge provided that, the sentence imposed by the trial court was illegal and therefore while maintaining the convictions, he set aside the consolidated sentence of fine and referred the matter to the High Court for passing appropriate sentences.
The learned Judge who dealt with the References made by the Sessions Judge passed an order in the following terms : "Admit.
Issue notice fixing 20.3.72 for appearance.
The acceptance of the reference may have the effect of enhancement of the sentence.
Let clear notice be given to show cause against enhancement of sentence.
" In pursuance of the order, the High Court sent a notice, directing the respondents to appear and show cause as to why the sentences, inflicted on them, should not be enhanced.
The submission, that was made on behalf of the respondents, was that, neither the parties nor the lawyers ever took it, that the notices were comprehensive notices, which would include enhancement of sentence by way of converting the fine into imprisonment.
The High Court accepted the plea on behalf of the respondent that the Criminal References read with the revisions would establish that the petitioners merely were given notice to show cause why the sentence of fine should not be regularised by way of enhancement of fine and that the notices ruled out enhancement by way of imprisonment since in this setting the notices were specifically in respect of fine and therefore imposition of sentence of imprisonment.
1118 was without jurisdiction.
We do not find any basis for the conclusion arrived at by the High Court.
The notice, under Section 439 (2) of the Criminal Procedure Code requires that no order, under Section 439, shall be made to the prejudice of the accused unless he has had an opportunity of being heard either personally or by pleader in his own defence, and sub section (6) states that "notwithstanding anything contained in this section, any convicted person, to whom an opportunity has been given under sub section (2) of showing cause why his sentence should not be enhanced, shall, in showing cause, be entitled also to show cause against his conviction.
The order of the learned Judge by whom the reference was received and the notice issued by the High Court clearly show that, the respondents were asked to show cause why their sentence should not be enhanced.
The view, taken by the High Court, that notice was only to show cause why the sentence should not be regularised by enhancement of the fine and not to a term of imprisonment is not borne out by the record.
Mr. Mukherjee, learned counsel appearing for the State of Orissa submitted that, apart from the merits, the High Court had no jurisdiction to review its own judgment, and as such, the order of the High Court passed in review will have to be set aside as being without jurisdiction.
On behalf of the respondent, Mr. D. J. Patel, submitted that, so far as the High Court is concerned, it has ample jurisdiction under Section 561 (A) and other provisions of the Code to review its own judgment.
Mr. Patel further submitted that Section 369 of the Criminal Procedure Code is not applicable to judgments on appeal passed by the High Court, much less to judgments of the High Court passed in exercise of its criminal jurisdiction under Section 439.
To support this contention, the learned counsel submitted that Chapter XXVI refers only to judgments of the trial court and cannot be made applicable to appellate judgments.
We referred to Section 424 which provides that, the rules, contained in Chapter XXVI as to the judgement of criminal court of original jurisdiction, shall apply, so far as may be applicable to the judgment to any appellate court other than the High Court.
The plea is that if Section 369 could be understood as being applicable to appellate judgments of the High Court also, there is no need for providing separately for the applicability of Chapter XXVI to the judgments of appellate courts other than the High Courts.
Reliance was placed on Section 430 for the submission that the finality provided for judgments, orders passed by the appellate court would also indicate that, Section 369 is not intended to apply to judgments of the appellate courts and to the High Court in appeals and in revisions.
In order to appreciate the contention of the parties the relevant sections may be set out.
1119 Section 369 as enacted in 1898, provided that "No Court other than a High Court, when it has signed its judgment, shall alter or review the same, except as provided in Section 395 and 484 or to correct a clerical error.
Despite the express exclusion of the High Courts from the operation of this provision, it was held that the High Court had no implied power to alter or review their own judgments whether under Section 369 or under Section 439 or otherwise.
It was accordingly proposed in 1921 that the words "other than a High Court" should be omitted to make it clear that Section 369 conferred no such power on the High Courts, as it was noticed that one or two other sections of the Code besides 395 and 484 and clause 26 of the Letters Patent of the High Courts empowered the High Courts to revise their judgments.
Hence the Section was redrafted.
Section 369 of the Code of Criminal Procedure 1898 reads as follows : "Save as otherwise provided by this Code or by any other law for the time being in force or, in the case of a High Court, by the Letters Patent or other instrument constitute such High Court, no court, when it has signed its judgment shall alter or review the same, except to correct a clerical error".
Under the Code of Criminal Procedure (Act 2 of 1974) the new Section 362 provides "Save as otherwise provided by this Code or by any other law for the time being in force, no Court, when it has signed its judgment or final order disposing of a case, shall alter or review the same except to correct a clerical or arithmetical error".
The words "or in the case of a High Court, by the Letters Patent or other instrument constituting such High Court" which were found in the corresponding Section 369 of the old Code have been omitted in the present section.
Hence an alteration or review by a High Court would be permissible as in the case of other Courts, where provision therefore is made in this Code or by any other law for the time being in force.
A reading of Section 369 discloses that the section prohibits all courts when it has signed its judgment to alter review the same except to correct a clerical error.
While, regarding other courts, the prohibitions subject to any provision in the Code of. . or any provision of any other law in force, in the case of the High Court it is provided that the prohibition will be subject to the Letters Patent or other instrument constituting such High Court.
Thus so far as the High Court is concerned, the prohibition against alteration and the 1120 review of the judgment will be subject to the Letters Patent or other instrument constituting such High Court.
The Letters Patent of the High Courts of Bombay, Calcutta and Madras provide that the High Courts will have original criminal jurisdiction as well as the appellate criminal jurisdiction as provided by clauses 22 to 24.
Clause 26 provides that such point or points of law reserved under clause 25 or on its being certified by the Advocate General that there is an error and that the points should be further considered, the High Court shall have full power to review the case.
No other provision is found in the Letters Patent enabling the High Court to review its own judgment.
No other instrument, relating to the power to review, in the constitution of the High Court, was brought to our notice.
Giving the plain meaning to Section 369, it is clear that no court, subject to exceptions made in the section, shall alter or review its judgment.
Two other sections were relied on by the defence as providing an exception to the rule laid down in Section 369.
They are Sections 424 and 430 of Code of Criminal Procedure.
Section 424 runs as follows: "424.
The rules contained in Chapter XXVI as to the judgment of a Criminal Court of original jurisdiction shall apply, so far as may be practicable, to the judgment of any appellate Court other than a High Court: Provided that unless the Appellate Court otherwise directs, the accused shall not be brought up, or required to attend, to hear judgment delivered".
The first part of Section 424 provides that the rules, contained in Chapter XXVI as to the judgment of a Criminal Court of original jurisdiction, shall apply, so far as may be practicable, to the judgment of any Appellate Court other than a High Court.
Chapter XXVI relates to the judgment.
Section 366 is the first section in the Chapter.
It prescribes the mode of delivering judgment, i.e. it shall be delivered in the open court and in the language of the court.
Sub Section (2) provides that the accused shall be required to attend, to hear judgment delivered.
Section 367 prescribes the language and contents of the judgment and provides that the judgment may be in the alternative.
When read with Section 424, it is seen that Sections 366, 367 and 368, which relate to the judgment of a criminal court of original jurisdiction, are made applicable, as far as may be to the judgment of the appellate court other than the High Court.
The effect of Section 424 Crl.
P.C. would be that the judgment of the appellate court should, as far as applicable, be in accordance with the requirements of Sections 366, 367 and 368 of the Code.
This rule is not made applicable 1121 to a High Court hearing an appeal.
The proviso to Section 424 is significant, in that, it states that unless the appellate court otherwise directs, the accused, shall not be brought up or required to attend to hear the judgment delivered.
This proviso makes an exception to the requirement, that is found in Section 366(2), which requires that the accused should attend when the judgment is delivered.
Section 367 prescribes the language of the judgment and requires the points for determination, the decision thereon, the reasons for the decision that it shall be dated and signed in open court.
While Section 369 prohibits altering or reviewing the judgment after a court has signed its judgment, section 424 requires that the judgment of the appellate court shall, as far as applicable, be in accordance with Sections 366, 367 and 368 of the Criminal Procedure Code, which deals with the trial court.
Sections 369 and 424 do not restrict the prohibition under Section 369 to the trial court alone.
The purpose of Section 424 is to prescribe mode of delivering of judgment, the language and the contents of the judgment while Section 369 is general in its application and prohibits all courts from altering or reviewing its judgment when once it has signed it.
The second section, that is relied on, is Section 430.
Section 430 provides, "When the judgment passed by an appellate court upon appeal shall be final except in the cases provided for in Section 417 and Chapter XXXII".
The section deals with the finality of orders on appeal.
An exception is made in the case of a judgment under Section 417 that is, in an appeal by a public prosecutor against an order of acquittal, whether made by the trial court or the appellate court.
So also, the provisions of Chapter XXXII is excepted in that the judgment of an appellate court will not be final when provision is made for reference and revision.
Neither Section 424 nor Section 430 deal with the prohibition imposed under Section 369 prohibiting the court from altering or reviewing its judgment when once it has signed it.
It was next submitted that in any event Section 561 A is wide enough to include a power of review by the High Court.
Section 561 A of Criminal Procedure Code runs as follows : "561A.
Nothing in this Code shall be deemed to limit or effect the inherent power of the High Court to make such orders, as may be necessary, to give effect to any order under this Code, or to prevent abuse of the process of any Court or otherwise to secure the ends of justice".
The inherent power of the High Court is restricted to making such orders, as may be necessary, to give effect to any order, under the Code or to prevent abuse of the process of any court or otherwise to 1122 secure the ends of justice.
The scope of the section has been explained.
In the two decisions of the Privy Council, which have been uniformly followed by this Court.
In Emperor vs Khwaja Nazir Ahmad the Privy Council, repelling the view that Section 561A of Criminal Procedure Code gave increased powers to the court which it did not possess before that section was enacted, observed, that "it was not so" and proceeded to state "The section gives no new powers, it only provides that those powers which the Court already inherently possess shall be preserved, and is inserted as.
Their Lordships think lest it should be considered, that the only powers possessed by the Court are those expressly conferred by the Criminal Procedure Code and that no inherent power had survived the passing of that Act.
Reiterating the same view the Privy Council in Lala Jairam Das and Others vs Emperor observed: that Section 561A of the Code confers no new powers.
It merely safeguards all existing inherent powers possessed by a High Court necessary (among other purposes) to secure the ends of justice.
This Court in State of Uttar Pradesh vs Mohammad Naim cited with approval the two decisions of the Privy Council referred to above.
Section 561A was added to the Code in 1923.
It purports to save the inherent powers of the High Court to make such orders as may be necessary to give effect to any order passed under the Code, to prevent abuse of the process of the Court and otherwise to secure the ends of justice.
The introduction of the section was because doubts were expressed about the existence of such inherent powers in the High Courts after the passing of the Criminal Procedure Code.
By the introduction of the section it was made clear that, the inherent powers of the High Court, for the purposes mentioned in the section, shall not be deemed to be limited or affected by the provisions of the Criminal Procedure Code.
Thus, inherent power cannot relate to any of the matters specifically dealt with by the Code.
It would follow that inherent powers cannot be invoked to exercise powers which would be inconsistent with any of the specific provisions of the Code.
The saving of inherent power is only for giving effect to orders passed under the Code, to prevent abuse of the process of any court or otherwise to secure the ends of justice.
Section 369 of the Criminal Procedure Code is understood as applying to judgments on appeal by the High Court, Section 561A cannot be invoked for enabling the Court to review its own order which 1123 is specifically prohibited by Section 369 by providing that, no court when it has signed its judgment, shall alter or review the same except to correct a clerical error.
Section 424 read along with Sections 366 and 367 would show that the requirements of the two sections in a judgment by a criminal court of original jurisdiction, shall also apply, as far as applicable to the judgment of the appellate court other than the High Court.
The proviso is significant.
It states that the appellate court, when delivering the judgment the accused shall not be brought up or required to attend unless otherwise directed to hear the judgment delivered.
The provisions of Section 366(2) require the court to secure the personal attendance of the accused at the time of delivery of the judgment, except where his personal attendance during the trial has been dispensed with.
The effect of Section 424 is generally that, the appellate court should comply with the requirements prescribed under Sections 366 and 367.
Section 430 deals with finality of orders on appeal, that is, the judgment passed by an appellate court shall be final unless otherwise provided for, but the finality of the appeal is subject to the provisions of section 417 of the Criminal Procedure Code which enable the State to prefer an appeal against an order of the trial court or by an appellate court.
Similarly a judgment by an appellate court is final subject to the Chapter which provides for reference and revision.
Section 424 deals with the general requirements of judgments and Section 430 with the finality of judgment on appeal unless otherwise provided for.
These two sections, it may be noted, do not deal with restriction against altering or reviewing the judgment except for correcting a clerical error.
A reading of Section 369 of Criminal Procedure Code would reveal that this Section is intended to apply to all courts, the provision being "no court when it has signed its judgment shall alter or review the same". 'no court ' would include 'all courts '.
The operation of the section is saved if it is provided by the Code or by any other law for the time being in force.
So far as the High Court is concerned, the Section provides that the prohibition will not apply if the Letters Patent or other instrument constituting such High Courts confers such a power.
We see no justification for restricting the application of the Section to judgments delivered by the High Court in criminal trials alone.
The reference to the High Court in the section would indicate that the High Court is also covered by the provisions of the section subject to the exception provided for.
The criminal jurisdiction as conferred by the Letters Patent on the High Court covers not only the original criminal jurisdiction but also appellate powers.
Though Section 369 appears in Chapter XXVI, we 1124 are not inclined to accept the contention put forward on behalf of the defence that it is applicable only to trial courts and in any event not to appellate judgments of the High Court.
Section 362 of the new Act has done away with the special provisions regarding the High Court and has made the section applicable to all courts.
On a careful reading of Sections 369 and 424 and 430, we are satisfied that Section 369 is general in its application.
The word 'no court ' would include all courts and apply in respect of all judgments.
Section 424 in confined, in its application, only to the mode of delivery of judgment, the language of the judgment, the contents of judgment etc.
and section 430 of Criminal Procedure Code to the finality of judgments on appeal, except as provided for.
Whether the judgment is by the trial court or the appellate court, Section 369 is universal in its application and when once a judgment is signed, it shall not be altered or reviewed except for correcting a clerical error.
Mr. Patel, the learned counsel for the respondents, submitted that this Court has laid down that Section 369 is applicable only to judgments of the trial court and therefore Section 369 cannot be construed as being applicable to appellate court, especially to High Court.
He relied on the decision in U.J.S. Chopra vs State of Bombay.
The question that arose for decision in the case was whether a revision preferred by the State of Bombay to the High Court praying for enhancement of sentence, passed on the accused, is maintainable after the appeal preferred by the accused to the High Court of Bombay, was summarily dismissed.
This court held that the summary dismissal of the appeal, preferred by the appellant, did not preclude him, from taking advantage of the provision of Section 439(6) of the Code of Criminal Procedure, and showing cause against his conviction when he was subsequently called upon to show cause why the sentence imposed on him should not be enhanced.
Two separate judgments were delivered by the three Judge Bench.
Justice Bhagwati along with Imam, J. spoke for the court while S.R. Das, J. delivered a separate judgment.
Justice Das, while repelling the contention that the power under Section 439(6) is conditioned or controlled by the provisions relating to finality of judgment embodied under Section 369 and 430 at page 108, observed: "There is indication in the Code itself that the purpose of Section 369 is not to prescribe a general rule of finality of all judgments of all criminal courts but is only to prescribe the finality of the judgment so far as the trial court is concerned.
That this Section does not, by itself, apply to the judgment of an appellate court is quite obvious, because if it did, there 1125 would have been no necessity for enacting Section 424 specifically making the rules contained in Chapter XXVI which includes Section 369 applicable to the judgment of any appellate Court other than High Court, nor for again prescribing by Section 430 a rule of finality for judgments and orders passed by an appellate Court".
The learned Judge concluded that the finality of section 369 attaches to the judgments pronounced by all trial courts including the High Court in the exercise of its original criminal jurisdiction, it certainly has no bearing on the question of finality of appellate judgments which is specifically provided by section 430 of the Code.
Bhagwati J. who spoke for the Court has not held that the provisions of section 369 are applicable only to judgments of the trial courts.
On the other hand, a reading of the judgment of Bhagwati J. would indicate that the learned Judge was inclined to hold that the finality provided for in section 369 of the Criminal Procedure Code is also applicable to the judgments rendered by the High Court in the exercise of its appellate or criminal jurisdiction.
At p. 144 of the Reports the learned Judge observed that once a judgment of the lower court is replaced by the judgment of the High Court, the High Court has no further powers to review or revise its own judgment and enhance the sentence which is thus passed by it upon the accused.
The principle as to the finality of judgments applied by the Court by virtue of the provisions of section 369 and section 430 of the Criminal Procedure Code should not have been confined merely to the question of con firming the conviction but also should have been extended to the con firming of the sentence insofar as the High Court did not see any reason to reduce the sentence already passed by the lower Court upon the accused.
Again dealing with the principle of finality the learned Judge observed that the principle of finality of judgments should therefore be extended not only to the question of the confirming of the conviction but also to the question as to the adequacy of the sentence, whether the sentence which is passed upon the accused by the lower Court should be reduced, confirmed or enhanced.
Once therefore the judgment of the High Court replaces that of the lower Court there is no question which can ever arise of the exercise by the High Court of its revisional powers under section 469 ( 1 ) of the Criminal Procedure Code.
Again at p. 162 the learned Judge reiterated the principle and observed "As we have observed that principle comes into operation when once a judgment of the High Court has replaced that of the lower Court and in those cases the High Court would not be competent to review or revise its own judgment." In referring to the import of section 369 on the powers of the High Court under section 439(6), Bhagwati J. held that section 369 in terms provides, 1126 "save as otherwise provided in this Code" and section 439(6) would be an otherwise provision which is saved by this non obstante clause appearing in section 369.
It is significant to note that both these amendments the one is section 369 and the other is section 439, were enacted by section 119 of Act XVIII of 1923 and the very purpose of these simultaneous amendment would appear to be to effectuate the right given to the accused to show cause against his conviction as enacted in section 439(6) of the Criminal Procedure Code".
As the majority judgment does not share the view expressed by Das J. quoted above reliance cannot be placed on the view of Das J.
The view expressed by Privy Council in Jai Ram Das 's(1) case that alteration by the High Court of its judgment is prohibited by section 369 of the Code was not brought to the notice of Das J. Later decision Of this Court particularly the decision in Superintendent and Remembrance of Legal Affairs, W.B. vs Mohan Singh and Others (2) held that when once the judgment has been pronounced by the High Court either in exercise of its appellate or its revisional jurisdiction, no review or revision can be entertained.
In the Full Bench decision of the Allahabad High Court in Raj Narain and other vs The State (2), Moothem J. observed: "It has commonly been assumed, even it would appear by the Privy Council in Jairam Das 's case, that this section applies also to the judgment of the appellate Court but it is clear that this is not so: U.J.S. Chopra vs State of Bombay ; In a latter decision in Nirbhay Singh vs State of Madhya Pradesh, (4) this Court, dealing with section 369, after referring to Chopra 's case observed that section 369 occurs in Chapter XXVI and prima facie applies to judgments of the court of first instance.
The Court did not proceed on the basis that it was settled law that section 369 is applicable only to judgments of trial courts.
Before concluding we will very briefly refer to cases of this Court cited by counsel on both sides.
1958 S.C.R.1226 relates to the power of the High Court to cancel bail.
The High Court took the view that under section 561A of the Code, it had inherent power to cancel the bail, and finding that on the material produced before the Court it would not be safe to permit the appellant to be at large cancelled the bail distinguishing the decision in 1945 Law Reports and 72 Indian Appeals (supra) and stated that the Privy Council was not called upon to consider the question about the inherent power of the High Court 1127 to cancel bail under section 561A.
In Sankata Singh vs State of U.P.,(1) this Court held that section 360 read with section 424 of the Code of Criminal Procedure specifically prohibits the altering or reviewing of its order by a court.
The accused applied before a succeeding Sessions Judge for re hearing of all appeal.
The learned Judge was of the view that the appellate court had no power to review or restore an appeal which has been disposed of.
The Supreme Court agreed with the view that the appellate court had no power to review or restore an appeal.
This court, expressing its opinion that the Sessions Court had no power to review or restore an appeal observed that a judgment.
which does not comply with the requirements of section 369 of the Code, may be liable to be set aside by a superior court but will not give the appellate court any power to.
set it aside himself and rehear the appeal observing that "section 369 read with section 424 of the Code makes it clear that the appellate court is not to alter or review the judgment once signed, except for the purpose of correcting a clerical error.
Reliance was placed on a decision of this Court in Superintendent and Remembrance of Legal Affairs W.B. vs Mohan Singh and others(2) by Mr. Patel, learned counsel for the respondent wherein it was held that rejection of a prior application for quashing is no bar for the High Court entertaining a subsequent application as quashing does not amount to review or revision.
This decision instead of supporting the respondent clearly lays down, following Chopra 's case (supra) that once a judgment has been pronounced by a High Court either in exercise of its appellate or its revisional jurisdiction, no review or revision can be entertained against that judgment as there are no provisions in the Criminal Procedure Code which would enable the High Court to review the same or to exercise revisional jurisdiction.
This Court entertained the application for quashing the proceedings on the ground that a subsequent application to quash would not amount to review or revise an order made by the Court.
The decision clearly lays down that a judgment of the High Court on appeal or revision cannot be reviewed or revised except in accordance with the provisions of the Criminal Procedure Code.
The provisions of section 561A of the Code cannot be revoked for exercise of a power which is specifically prohibited by the Code.
In the result we accept the contention put forward by Mr. Mukerjee for the State and hold that High Court has no power to revise its own order.
The appeal is allowed.
P.H.P. Appeal allowed.
| IN-Abs | The respondents were convicted under Section 20 of the Forward Contracts.
(Regulation) Act, 1952.
The District Magistrate found the firms and persons in management of business guilty of the offences with which they were charged and inflicted a consolidated fine of Rs. 2000/ with the direction that they would suffer simple imprisonment for three months in default of payment of fine.
Against their conviction and sentence the accused preferred an appeal to the Sessions Judge.
The Sessions Judge while dismissing the appeals found that the law required imposition of a minimum sentence of fine of Rs. 1000/ for each offence and as the sentence passed by the Trial Court was not in accordance with the law, he referred the matter to the High Court for passing an appropriate, sentence.
The accused also preferred revision petition against the order of the Sessions Judge.
Both the proceedings were heard together The High Court dismissed the revision petition preferred by the accused and accepted the reference by the Sessions Judge and enhanced the sentence so far as the firms are concerned, to a sum of Rs. 3,900/ .
As regards the Managers or the Managing partners the High Court sentenced them to six months rigorous imprisonment.
The Managers or Managing Partners filed miscellaneous petitions before the High Court for review of its order.
The High Court accepted the petition for review and recalled its previous judgment imposing sentence of six months rigorous imprisonment on the petitioners and instead imposed a fine of Rs. 3900/ .
The High Court came to the conclusion that no comprehensive notice was given to the accused to show cause why sentence of film should not have been enhanced to true sentence of substantive imprisonment and that the notice was only to show cause why the fine should not be increased.
The State of Orissa filed an appeal by certificate in this Court The appellants contended.
(1) The High Court had no jurisdiction to review its own judgment.
(2) The High Court erred in holding that proper notice was not issued.
(3) The notice issued to the accused was clear and wide enough to include the imposition of substantive sentence of imprisonment.
The respondent contended: 1.
The High Court has ample jurisdiction under section 561(A) and other provisions of the Criminal Procedure Code to review its own judgment.
Section 369 of the Criminal Procedure Code is not applicable to judgments on appeal passed by the High Court much less to the judgment of the High Court passed in exercise of its criminal jurisdiction, under section 439 1115 Allowing the appeal the Court, ^ HELD: (1) Section 369 as enacted in 1898 provided that no Court other than High Court, when it has signed its judgment shall alter or review the same except as provided in Section 395 and 484 or to correct a clerical error.
The section was redrafted in 1921 which gave power to the High Court to review its judgment only if it is provided by the code or by any other law for the time being in force.
Section 362 of the Criminal Procedure Code 1974 also provides: "that save as otherwise provided by the Code or by any other law no court, when it has signed its judgment or final order disposing of a case shall alter or review the same except to correct a clerical or arithmetical error." [1119 A E] (2) The Letters Patent of the High Court at Bombay, Calcutta and Madras provide that the High Court shall have full power to review a case if such points or points of law are reserved under clause 25 or on it being certified by the Advocate General that there is an error and the points should be further considered.
No other provisions relating to the power of review of the consideration of the High Court was brought to the notice of the Court.[1120 A C] (3) The provisions of Sec. 424 which make the procedure of the Court of original Jurisdiction applicable to the Appellate Court cannot confer the power of review.
[1127 C] (i) The inherent power of the High Court conferred by Sec.
561(A) are restricted to making orders to give effect to any order under the Code or to prevent abuse of the process of any court or otherwise to secure the ends of justice.
Section 561 (A) does not confer increased powers to the Court which it did not possess before that section was enacted.
It only provides that those powers which the Court inherently possessed shall be preserved.
[1121 ,H, 1122 A C] Emperor vs Khweja Nazir Ahmad, AIR 1945 Privy Council 18; Lala Jairam Das & Ors.
vs Emperor, 1945 Law Reports 72 I.A. 120 State of U.P. vs Mohammad Naim, ; at 370 relied on.
(2) Sec.
561(A) was added to the Code in 1923 because doubts were expressed about the existence of such inherent powers in the High Court after the passing of the criminal procedure code.
The inherent powers cannot relate to any of the matters specifically dealt with by the Code.
Inherent powers cannot be invoked to exercise powers which would be inconsistent with any of the specific provisions of the Code.
The inherent power is only for giving effect to orders passed under the code, to prevent abuse of process of any court or otherwise to secure the ends of justice.
[1122 D G] R. J. section Chopra vs State of Bombay, ; distinguished.
Raj Narain & Ors.
vs The State, AIR 1959 All. 315, U. J. section Chopra vs State of Bombay, ; ; Nirbhay Singh vs State of M.P., ; Sankatha Singh vs State of U.P.; , ; Superintendent and Remembrance of Legal Affairs W.B. vs Mohan Singh & Ors., referred to. 1116
|
ivil Appeal Nos.
372 382 of 1969.
Appeals by Special Leave from the Judgment and order dated 10 10 1968 of the Rajasthan High Court in C.S.A. Nos. 18 and 29, 27, 28.
30 35 of 1960 and 54 and 58 of 1961.
section N. Jain and section K. Jain for the Appellants.
B. P. Maheshwari and Suresh Sethi for the Respondent.
The Judgment af the Court was delivered by SHINGHAL, J., These appeals by special leave arise out of a common judgment of the Rajasthan High Court dated October 10, 1968, by which the suits which were filed by the present appellants were dismissed in pursuance of the earlier judgment of the same court dated November 9, 1964, on the ground that they were governed by section 179(2) of the Rajasthan Town Municipalities Act, 1951, hereinafter referred to as the Act, and were barred by limitation.
The facts giving rise to the appeals were different in details, but they were examined in the High Court with reference to the common questions of law which arose in all of them and formed the basis of that Court 's, decision against the plaintiffs.
We have heard these as companion appeals, and will decide them by a common judgment.
It is not necessary to give the detailed facts of all the cases as it will be enough to refer to the suit which was filed by M/s Surajmal Banshidhar and the developments connected with it, in order to appreciate the controversy.
The plaintiff firm referred to above carried on business in "pakka arat" and exported goods of various kinds from Ganganagar.
The Municipal Board of Ganganagar realist "export duty", by way of ter 171 minal tax, on the exported goods.
The plaintiff therefore raised a suit on October 19, 1957, challenging the Board 's right to "impose or to reales" any export duty during the period June 5, 1954 to March 10 1957, amounting to Rs. 10,729/ .
It however confined the suit to the recovery of Rs. 10,000/ alongwith interest and gave up the balance.
The Board denied the claim in the suit and pleaded, inter alia, that the levy of the terminal tax was in accordance with the law and the suit was barred by limitation.
The trial court rejected the defence and decreed the suit, and its decree was upheld by the District Judge on appeal.
Similar decrees were passed in the other suits, for various sums of money.
The Board took the matter to the High Court in second appeals.
The appeals were heard by a Single Judge who, while deciding that the suits were governed by section 179(2) of the Act, referred the question on the legality of the levy to a larger Bench.
A Full Bench of the High Court held that the levy of the terminal tax was illegal, and sent the cases back to the Single Judge who allowed the appeals only for those amounts which were found to be within limitation under section 179(2) of the Act and dismissed the other suits.
The plaintiffs obtained special leave and have come up to this Court in these circumstances.
The question which arises for consideration is whether the suits fall within the purview of section 179(2) of the Act.
The first two subsection of section 179 which bear on the controversy read as follows, "179.
Limitation of suits, etc.
(1) No suit shall be instituted against any municipal board, president, member, officer, servant or any person acting under the direction of such municipal board, chairman, member, officer or servant for anything done or purporting to be done under this Act, until the expiration of two months next after notice in writing, stating the cause of action, the name and place of abode of the intending plaintiff and the relief which he claims, has been, in the case of a municipal board, delivered or left at its office, and, in case of a chairman, member, officer, or servant, or person as aforesaid, delivered to him or left at his office or usual place of abode; and the plaint shall contain a statement that such notice has been so delivered or left.
(2) Every such suit shall, unless it is a suit for the recovery of immovable property or for a declaration of title thereto, be dismissed if it is not instituted within six months after the accrual of the alleged cause of action.
" The question therefore is whether the illegal levy of terminal tax (assuming that it was illegal as held by the High Court) could be said to 172 be a thing "done or purporting to be done" under the Act.
A similar question arose for the consideration of this Court ill Poona City Municipal Corporation vs Dattatraya Nagesh Deodhar(l) with reference to the provision in section 127 (4) of the Bombay Provincial Municipal Corporation Act, 1949, and it was held that if the levy of a tax was prohibited by the Act concerned and was not in pursuance of it, it 'could not be said to be 'purported to be done in pursuance of execution or in tended execution of the Act '.
" It was observed that what was plainly prohibited by the Act could not be "claimed to be purported to be done in pursuance or intended execution of the Act.
" It was therefore held that the suit was outside the purview of the section 127(4) and was not barred by limitation.
We are in respectful agreement with that view, and we have no hesitation in holding, in the circumstances of the pre sent cases, which are governed by a provision similar to section 127(4) or the Poona City Municipal Corporation Act, that the suits did not fall within the purview of section 179 of the Act and were not barred by limitation.
It may be mentioned that it has not been argued before us, and is nobody 's case, that the suits would be barred by limitation even if they did not fall within the purview of section 179(2) of the Act.
The decision of the High Court to the contrary is not correct and will have to be set aside.
It has however been argued on behalf of the respondents that the High Court erred in taking the view that the levy of the terminal tax was illegal, and our attention has been invited to the relevant provisions of the law including the Bikaner State Municipal Act, 1923, article 277 of the Constitution and section 2 of the Act.
It is not in controversy before us that the Bikaner State Municipal Act, 1923, authorised the levy of terminal tax and such a tax was levied by the Ganganagar Municipal Board under the authority of that law upto January 26, 1950, when the Constitution came into force.
On and from that date, the power to levy export duty vested in the Parliament but article 277 saved that and some other taxes as follows, "277.
Any taxes, duties, cesses or fees which, immediately before the commencement of this Constitution, were being law fully levied by the Government of any State or by any municipality or other local authority or body for the purposes of the State, municipality, district or other local area may, not withstanding that those taxes, duties, cesses or fees are mentioned in the Union list, continue to be levied and to be applied to the same purposes until provision to the contrary is made by Parliament by law. ' (1) ; 173 it was therefore permissible for the Municipal Board to continue to levy A the terminal tax until provision to the contrary was made by Parliament by law.
But it so happened that the Bikaner Municipal Act, 1923 was repealed and the Act was brought into force with effect from December 22, 1951.
Section 2(b) of the Act, which dealt with the repeal of the Bikaner Act and the saving of some of its provisions, expressly provided that on the coming into force of the Act, the laws and enactments specified in the First Schedule of the Act shall be repealed in so far as they relate to the Town Municipalities covered by the Act.
So as the Bikaner State Municipal Act, 1923, was included in the first Schedule, it was repealed by the aforesaid section 2.
That section however contained a proviso, clause (b) whereof was to the following effect, "(b) all town municipalities constituted under the said laws or enactments, and members appointed or elected, committees established, limits defined, appointments, rules, orders and bye laws made, notifications and notices issued, taxes imposed, contracts entered into, and suits and other proceedings instituted, under the said laws or enactments or under and laws or enactments thereby repealed shall, so far as may be and so far as they relate to town municipalities be deemed, unless the Government directs otherwise, to have been respectively constituted, appointed, elected, establish ed" defined, made, issued, imposed, entered into and instituted under this Act.
" The repeal did not therefore affect the validity of those taxes which had already been imposed and which could be "deemed" to have been imposed under the Act, unless there was a direction to the contrary by the State Government.
It is quite clear from the provisions af the Act, and is in fact not disputed before us, that the terminal tax in question could not be imposed under any of the provisions of the Act.
Its, levy could not therefore be saved by clause (b) of the proviso to section (2) of the Act.
On the other hand, it could be said with justification that the State Legislature had decided to discontinue the levy by excluding it from the purview of the saving clause.
The further levy of the tax therefore became illegal and it was not permissible to continue it any longer under article 277 which merely gave the authority concerned the option to continue the levy if it so desired.
So as the levy of the tax after December 22, 1951, was illegal, there is nothing wrong with the view taken by the High Court that the amounts 174 paid by the plaintiffs by way of terminal tax were recoverable by the suits which have given rise to these appeals, and there is no force in the argument to the contrary.
The appeals are allowed with costs, the decrees of the High Court are set aside and those of the lower appellate court restored.
P.B.R. Appeals allowed.
| IN-Abs | The respondent Board realised terminal tax on goods experted by the appellants.
In suits filed by the appellants for refund of the amounts which they claimed were collected without authority of law, the respondent Board pleaded that the levy was in accordance with law and that the suits where barred by limitation.
The trial court decreed the suits and on appeal the District Judge affirmed the trial Court 's decrees.
In second appeal the High Court held that the levy was illegal.
The High Court, however, allowed the appeals in respect of those amounts which were found to be within limitation under section 179(2) of the Act and dismissed the others.
On the question whether the levy could be said to be a thing done or purported to be done under the Act.
Allowing the appeal, ^ HELD: The suits did not fall within the purview of section 179 of the Act and were not barred by limitation.
[172 D] 1.
(a) It is well established that if levy of a tax is prohibited by an Act and is not in pursuance of it, it could not be said to be purported to be done in pursuance of the execution or intended execution of the Act.
[172 B] Poona City Municipal Corporation vs Dattatraya Nagesh Deodhar, ; followed.
(b) The terminal tax could not be imposed under any of The provisions of the Act.
The High Court was right in holding that the amounts ` paid by the appellants by way of terminal tax were recoverable by the suits.
[173 F G 174 Al 2.
The Bikaner State Municipal Act, 1923 (which was the predecessor of the present Act) authorised the levy of terminal tax and the Board accordingly levied the tax until January 26, 1950.
With the coming into force 12 SCI/78 170 of the Constitution, by virtue of article 277 it was permissible for the Board to continue to levy the terminal tax until provision to the contrary was made by Parliament by law.
But with effect from December 22, 1951 the Bikaner Act was repealed and the present Act was brought into force.
the repeal, however, did not affect the validity of those taxes which had already been imposed and which could be "deemed` ' to have been imposed under the Act.
But the provisions of the Act the clear that the terminal tax in question could not be imposed thereunder.
The levy could not, therefore, be saved by cl.
(b) of the proviso to section 2.
on the other hand it is clear that the State Legislature had decided to discontinue the levy by excluding it from the purview of the saving clauses.
The further levy of the tax, therefore, became illegal and it was not permissible to continue it any longer under article 277 which merely gave the authority concerned the option to continue to levy if it so desired.
[173A, F G]
|
: Criminal Appeal 227 of 1977.
Appeal by Special Leave from the Judgment and order dated 17 2 1977 of the Gujarat High Court in Special Criminal Application No. 1 of 1977.
M.F. Thakkar and section section Khanduja for the Appellant.
B.V. Patel, section P. Nayar and M. N. Shroff for the Respondent.
The Judgment of the Court was delivered by TULZAPURKAR, J.
This appeal by special leave is directed against the judgment and order of the; Gujarat High Court dated February 17, 1977 in Special Criminal Application No. 1 of 1977 filed under Articles 140 226 and 227 of the Constitution whereby the High Court reversed the order of the learned Sessions Judge, Broach in Criminal Appeal No. 39 of 1975 and sent the matter back to the learned Sessions Judge for passing an appropriate order in regard to the question as to whether the entire seized stock of exercise books of the appellant or part thereof should be confiscated under section 6A of the .
The question raised in the appeal is whether exercise books are covered by the item "paper" occurring in section 2(a) (vii) of that Act as also in Entry 13 of Schedule I to the Gujarat Essential Articles Dealers ' (Regulation) order, 1971 ? The question arises in these circumstances: The appellant Maharaja Book Depot is a partnership firm dealing in books and stationery articles at Rajpipla, District Broach.
Its shop was inspected and searched by the Mamlatdar of Rajpipla on July 4, 1975 when certain alleged irregularities came to light.
During the search 78 gross exercise books of controlled variety and 97 gross exercise books of non controled variety were seized on the ground that the appellant had committed breaches of Clauses 3, 9 and 11 of the Gujarat Essential Articles Dealers ' (Regulation) order 1971 (hereinafter referred to as "the Regulation order"), in that the appellant (a) did not display at any conspicuous part of the premises the opening stock of the exercise books, (b) did not write the names of the customers on the bills issued to them for the sale of the exercise books and (c) did not keep a register showing the stock of controlled and non controlled exercise books.
A notice under section 6B of the (hereinafter referred to as 'the Act ') was served by the Collector, Broach, calling upon the appellant to show cause why the seized stock of exercise books should not be confiscated and after taking into consideration the explanation offered by the appellant the Collector by his order dated September 17, 1975 held that the appellant firm was guilty of the breaches of Clauses 3, 9 and 11 of the, Regulation order and directed that the entire seized stock be confiscated to the State Government under section 6A of the Act.
The appellant preferred an appeal to the Sessions Court at Broach being Criminal Appeal No. 39 of 1975 and the learned Sessions Judge by his judgment and order dated October 16, 1976 allowed the appeal and set aside the order of confiscation on the ground that the Act and the Regulation order did not apply to the exercise books inasmuch as an exercise book which is a distinct commodity did not fall within the item "paper" enlisted as an essential commodity in section 2(a) (vii) of the Act and in Entry 13 of Schedule I to the Regulation order.
This order was challenged by the State of Gujarat in Special Criminal Application No. 1 of 1977 under article 227 of the Constitution.
The High Court by its judgment and order dated February 17, 1977 took the view that the 141 item "paper" as enlisted both in section 2(i) (vii) of the Act and Entry 13 A in Schedule I to the Regulation order was wide enough to cover an exercise book which was nothing but collection of papers stitched together by a piece of string or pinned with pins of stappler and quashed the order of the learned Sessions Judge but instead of straightaway confirming the Collector 's confiscation order it remanded the appeal back to the Sessions Judge for passing an appropriate order after deciding the question as to whether the entire seized stock or a part thereof should be confiscated under section 6A of the Act.
The appellant has challenged the legality and or validity of the view taken by the High Court in this appeal.
In order to appreciate properly the submissions of counsel for the appellant on the construction of the expression "paper" occurring in the concerned legislations it will be necessary to set out the purpose and the relevant provisions thereof.
The Act was put on the Statute Book, as its preamble will show, with a view to provide, in the interests of the general public, for the, control of production, supply and distribution of, and trade and commerce in certain commodities defined and enlisted as "essential commodities" in section 2, which enlistment has been enlarged from time to time by Central Government Notifications.
In other words, the obvious purpose of the enactment is to control the production, supply and distribution of certain commodities which are essential for the society at large with a view to ensure that the common man gets them at fair prices without let or hindrance on the part of the trade.
Section 3 confers powers on the Central Government to regulate or prohibit the production,, supply and distribution of essential commodities and trade and commerce therein by issuance of orders in that behalf for maintaining or increasing supplies of such commodities or for securing their equitable distribution and availability at fair prices etc.
while under section 5 the Central Government can delegate its powers in that behalf to an officer or authority subordinate to it or to any State Government.
It appears that on December 8, 1971 in exercise of the powers conferred by sub section
(1) read with cls.
(d), (e), (i) and (j) of sub section
(2) of section 3 of the Act read with the order of the Government of India, Ministry of Commerce No. so 1844 dated June 18, 1966, and the order of that Government in the Ministry of Food, Agriculture, Community Development and Co operation (Department of Food) No. G.S.R. 1111 dated July 24, 1971, the State of Gujarat passed its order called "The Gujarat Essential Articles Dealers (Regulation) order, 1971", for the purpose of maintaining supplies of essential articles and for securing their equitable distribution and availability at fair prices.
Now, the Act as also the Regulation Order contain an enlistment of items which are regarded as 'essential commodities ' or '.
essential articles '; section 2(a) of the 142 Act defines 'essential commodity ' as meaning any of the classes of commodities enlisted in its various sub clauses and sub cl.
(vii) refers to the item "paper" while cl.
(v) of the Regulation order defines 'essential article ' as meaning any of the articles specified in Schedule I and item 13 in that Schedule relates to "paper" but at both the places the item has been described in identical manner, viz: "Paper, including newsprint, paper board and strawboard".
It seems that the enlistment of the item "paper" in the above manner in section 2(a) (vii) of the Act has not been amended, altered or changed but its enlistment in the Regulation order has undergone a change, for by a Notification dated July 10, 1975, the Schedule I of the Regulation order was recast and more items were added.
Schedule I so amended by the said Notification now includes the item "paper" at sl.
No. 14 which runs thus: "14.
Paper" including news print, paper board, straw board and exercise note books.
" In other words, by the Notification dated July 10, 1975 exercise note books have come to be specifically added to the item "paper".
The main question is whether exercise books are covered by the item "paper" as described in section 2 (a) (vii) of the Act and in Item 13 in Schedule I to the Regulation order as it stood before its amendment by the Notification dated July 10, 1975.
Counsel for the appellant raised two or three contentions before us in support of this appeal.
He emphasized the fact that on July 4. 1975 when the stock of exercise books was seized from the appellant 's shop by the Mamlatdar both in section 2(a) (vii) of the Act as well as under Entry 13 in Schedule I to the Regulation order the item "paper" as an essential commodity was described in a particular manner without the addition of "exercise note books" which was made in the Regulation order after the seizure had been effected.
On construction of the item "paper" he first contended that the expression "paper" ordinarily means a sheet or sheets of paper and an exercise book being a distinct commodity was excluded from that item.
Secondly, he urged that this would be.
so because even while providing for an inclusive description of the item the legislation has included only news prints, paper boards and straw boards within it but not exercise books and, therefore, the expression "paper" should be construed as excluding exercise books.
Thirdly, he urged that so far as the Gujarat Regulation order is concerned the very fact that by Notification dated July 10, 1975 Item 14 in Schedule I was enlarged so as to include specifically exercise note books within the expression "paper" clearly shows that 143 the legislative intent was to exclude exercise books from the expression "paper" under Item 13 in Schedule I as it stood prior to that date.
Lastly, he urged that since the provisions of the Act as well as the Regulation order were penal in character, the item "paper" should be construed narrowly in favour of the person proceeded against and as such the view taken by the learned Sessions Judge should be upheld.
In support of these submissions counsel relied upon a decision of this Court in State of Bihar vs Bhagirath Sharma and Another,(1) where this Court, having regard to the legislative history and penal character of the concerned order took the view that the item like "component parts and accessories of automobile", though of wide import did not cover tyres and tubes of motor cars and motor cycles.
According to him, therefore, the learned Sessions Judge was right in his view that the expression "paper" did not cover exercise book and that the seized exercise books were not liable to be confiscated under section 6A of the Act.
The question thus centres round the proper construction of the item "paper" as described in section 2(a) (vii) of the Act and item No. 13 of Schedule I to the Regulation order.
On this question the object or purpose of the Act and the Regulation order as well as the manner in which 'essential commodity ' or 'essential article has been defined therein will have considerable bearing.
As stated earlier, the object or purpose of both the pieces of legislation is to control the production, supply and distribution of essential commodities or essential articles with view to ensure that the common man gets them at fair prices without any let or hindrance on the part of the trade and it is with this object that the item "paper" has been enlisted as an essential commodity or essential article in the Act and take Regulation order.
Further though section 2(a) of the Act and Cl.
2(v) of the Regulation order purport to define 'essential commodity ' or 'essential article ' that expression has no meaning of its own and in substance both under section 2 (a) (vii) of the Act and Cl.
2 (v) of the Regulation order an enumeration or enlistment has been made of several items as constituting essential commodities or essential articles for the purposes of the Act and the Regulation Order and it will appear clear that items have been enumerated or enlisted under broad general heads and some of the items are stated to include certain things which may not in ordinary parlance fall within the broad general head.
The item 'paper" will have to be considered in the light of this position which emerges clearly on a consideration of several items enlisted as essential commodities or essential articles.
The item "paper" is described thus: "Paper including news print, paper board and straw board".
(1) ; 144 According to the Concise Oxford Dictionary paper means "A substance used for writing, printing, drawing, etc.
made of interlaced fibres of rags, straw, wood, etc.
" In Webster 's New World Dictionary (1962 Edn.) the meaning of the word "paper" is given as follows: "Paper thin flexible material in sheets or leaves, made from rags, wood pulp., or other fibrous decorate etc." In Black 's Law Dictionary (Revised Fourth Edition 1968) the expression "paper" is explained thus: "Paper a manufactured substance composed of fibres (whether vegetable or animal) adhering together in forms consisting of sheets of various sizes and of different thicknesses, used for writing or printing or other purposes to which flexible sheets are applicable." In substance, therefore, paper, whether lined or blank, means a material on which writing, printing, drawing etc.
can be done.
In light of this meaning of the expression "paper" the question is whether an exercise book would be covered by that expression or not ? It cannot be disputed that an exercise book is nothing but a collection of sheets of paper (blank or lined) stitched together by a piece of string or pinned together with pins of a stappler and is a substance used for writing and, therefore, would clearly fall within the item "paper".
The test would be whether because of stitching or pinning them together such a collection of sheets looses its identity as paper ? The answer must be in the negative.
Looked at from this angle it is difficult to accept the contention that an exercise book is a distinct commodity other than paper.
It is true that an inclusive description has been given of the item "paper" in section 2(a) (vii) of the Act and Item 13 in Schedule I to the Regulation order, but if the inclusive part is carefully scrutinised it will appear clear that the things mentioned in the inclusive part may not ordinarily be regarded as paper and, therefore, by the inclusive part an extended meaning or description is given to the expression "paper".
Since an exercise book (which is nothing but a collection of sheets of paper intended to be used for writing) squarely falls within the dictionary meaning of the word "paper" there was no necessity to mention it in the inclusive part of the description.
On a true and proper construction, therefore, we are clearly of the view that within its normal dictionary meaning the item "paper" as described in section 2(a) (vii) of the Act and Item 13 in Schedule I to the Regulation order covers an exercise book.
145 Moreover, such a construction would be in consonance with and carry out effectively the object or purpose of the Act and the Regulation order.
Counsel for the appellant undoubtedly relied upon the fact that so far as the Gujarat Regulation order is concerned it was by notification dated July 10, 1975 that the description of item "paper" (being item No. 14 in the recast Schedule I) was enlarged so as to include specifically 'exercise notebooks ' and, according to counsel, this clearly shows that initially the legislative intent was to exclude exercise book from the expression "paper" under Item 13 in Schedule I to the said order as it originally stood.
It is not possible to infer such legislative intent from the mere fact that the item "paper" has been amended and enlarged so as to include within it exercise books by means of the subsequent Notification.
In fact, as discussed earlier, since an exercise book squarely falls within the dictionary meaning of the expression "paper" we have held that it was unnecessary to mention it in the inclusive part of the description as it originally stood and in that inclusive part such things had been mentioned as could not in ordinary parlance be regarded as "paper".
In our view the amendment and enlargement of the item "paper" so as to include specifically exercise books was made ex majore cautela to make things abundantly clear and, therefore, no inference as regards the initial legislative intent of the type suggested can be drawn.
Counsel also contended that since the Act as well as the Regulation order contain penal provisions, the item "paper" should he construed strictly and narrowly in favour of the appellant firm which was being proceeded against under the said pieces of legislation.
The true rule of construction in that behalf has been set out in Maxwell on Interpretation of Statutes (12th Edn.) at page 246 where the following passage occurs: "The effect of the rule of strict construction might be sum med up by saying that, where an equivocal word or ambiguous sentence leaves a reasonable doubt of its meaning which the canons of interpretation fail to solve, the benefit of the doubt should be given to the subject and against the legislature which has failed to explain itself.
If there is no ambiguity, and the act or omission in question falls clearly within the mischief of the statute, the construction of a penal statute differs little, if at all, from that of any other.
" It would thus appear clear that it is only when there is some equivocation or ambiguity about a word or provision that the rule of strict construction or narrow construction in favour of the subject is to be applied 146 but if there is no ambiguity and the act or omission falls clearly within the mischief of statute then the construction of a penal statute will not differ from that of any other.
Applying this principle to the facts of the present case it is clear that there is no ambiguity or equivocation of the item "paper ' occurring in section 2(a) (vii) of the Act and Item 13 of Schedule I of the Regulation order and since an exercise book squarely falls within the dictionary meaning of "paper" as used in the said provisions, there will be no question of construing that item narrowly so as to exclude exercise book therefrom and in favour of the appellant firm.
That takes us to the decision of this Court in State of Bihar vs Bhagirath Sharma and Anr.
(supra) on which the appellant firm strongly relied.
In that case the question was whether Motor Tyres and Motor Tubes were covered by the item "Component parts and accessories of automobiles" occuring in Item No. 1 in Schedule I to the Bihar Essential Commodities Act other than Foodgrains Prices and Stocks (Display and Control) order 1947 and this Court undoubtedly took the view that though the said item I was widely worded it did not include Motor Tyres or Motor Tubes and that no interference was called for in the order passed by the High Court acquitting the respondents of the charge that they had failed to display the price list and the stock position of the Motor Tyres anywhere in their shop in contravention of Cl.
(4) of the said order.
In our view, the decision is clearly distinguishable on the ground that the drafting precedents furnished by several Notifications that obtained there warranted such a conclusion.
From the inception along with Item 1 (component parts and accessories of automobiles) there was in the concerned Prices and Stocks (Display and Control) order, 1947 another item being Item 5 which ran thus: "Cycle tyres and tubes (including cycle rickshaw tyres and tubes)" which suggested that where "Tyres and Tubes" were intended to be included as the Item in the Schedule these had actually been expressly so stated as distinct from the "component parts and accessories or automobiles"; further, by a Gazette Notification (No. GSR 82) dated September 18, 1970 published in the Bihar Government Gazette (Extra ordinary) four items were added, one of them being Item No. 11, Which ran thus: "Tyres and tubes of cars, buses, jeeps, vans, trucks automobiles of any category whatsoever, tractors and tractor trollies.
", even the Central Government had issued three Notifications a Notification dated 11 January, 1968 (No. S.O. 218) issued by the Ministry of Commerce, in which "Tyres and Tubes of Scooters" were expressly mentioned as essential commodities distinct from the component parts and accessories of automobiles; a Notification dated 22 August, 1968 (No. s o. 2878) in which "Tyres and Tubes of Cars etc." were.
147 specifically mentioned as essential commodity and a Notification dated A 3rd January, 1969 (No. S.O. 25) in which "Tyres and Tubes of Cars " were mentioned in the manner almost similar to the one found in the Bihar Government Gazette Notification No. GSR 82 dated 18 September, 1970.
It was in the back ground of these drafting precedents furnished by such Notifications that this Court took the view that the draftsman did not intend the scheduled item No. 1 in the Order as in force in May, 1969 to cover "Tyres and Tubes of Motor cars".
In the instant case before us there are no such drafting precedents of the type which obtained in the aforementioned case.
As stated earlier, the Item "paper" in s.2 (a) (vii) in the Act has all along remained the same without any modification, alteration or enlargement and it is only the item No. 13 in the Schedule to the Regulation order (a subordinate piece of legislation) that has undergone a change and the item has been amended so as to include specifically "exercise notebooks".
We have no doubt in our minds that the said amendment to the item "paper" is declaratory or clarificatory in nature.
In the circumstances, in our view, the High Court was right in coming to the conclusion that the exercise books of the appellant firm that were seized were liable to confiscation and the remand order made by the High Court was proper.
The appeal is accordingly dismissed.
N.V.K. Appeal dismissed.
| IN-Abs | The term "paper" is described as "paper", including newsprint, paper board and strawboard" in section 2(a) (vii) of the as well as in Item 13 in Schedule I to the Gujarat Essential Articles Dealers (Regulation) order 1971.
By a notification dated July 10, 1975, the Schedule 1 of the Regulation order was recast and more items were added.
Item No. 13 of the Regulation order after it was recast by the amendment of 1975 and renumbered as section No. 14 read as follows: "14.
Paper including newsprint, paper, strawboard and exercise note books.
" The appellant is a firm dealing in books and stationery articles.
On a surprise inspection and search of the appellant 's shop it was found that in regard to exercise books the appellant committed breach of the Regulation order, in that he did not display the stock; thereof that he did not write the names of customers on the bills issued to them and that he did not maintain the stock registers properly and thereof a sizable quantity of exercise books were seized.
The Collector found that the appellant was guilty of breach of the Regulation order and directed that the seized stocks of exercise books be confiscated under section 6A of the Act.
In appeal the Sessions Judge set aside the Collector 's order on the ground that exercise books did not fall within the item "paper" as envisaged in the Act and the Regulation order.
In proceedings under article 227, the High Court book the view that the term "paper" was wide enough to cover exercise books, which was nothing but a collection of papers, stitched together by a piece of string or pinned with pins of stappler, and quashed the order of the Sessions Judge.
Dismissing the appeal to this Court: ^ HELD: (1) On a true and proper construction, within its normal dictionary meaning the item "paper" as described in section 2(a)(vii) of the Act and Item 13 in Schedule I to the Regulation order covers an exercise book Such a construction would be in consonance with and carry out effectively the object or purpose of the Act and the Regulation order.
[144H 145A] 139 Black 's Law Dictionary (Revised Fourth Edn. 1968).
Webster 's New World Dictionary (1962 Edn.); Concise oxford Dictionary, referred to.
(2) 'Though section 2(a) of the Act and cl.
2(v) of the Regulation order purport to define 'essential article ' that expression has no meaning of its own and what follows is an enumeration of articles regarded as essential for the purposes of the Act and the order.
[143 F] (3) An inclusive description has been given to the item "paper" in the Act and the Regulation order, but the inclusive part refers to things that may not ordinarily be regarded as paper and, therefore, an extended meaning or description is given to the expression "paper".
Since an exercise book (which is nothing but a collection of sheets of paper intended to be used for writing), squarely t`falls within the dictionary meaning of the word "paper" there was no necessity to mention it in the inclusive part of the description.
[144 F H] (4) The amendment and enlargement of the item ' 'paper ' ' so as to include specifically exercise books was made ex majore cautela to make things abundantly clear and, therefore, no inference as regards the initial legislative intent that it was to exclude exercise books from the expression "paper" under item 13 in Schedule I to the said order as it originally stood can be drawn.
[145 D] (5) It is only when there is some equivocation or ambiguity about a word or provision in a penal statue that the rule of strict or narrow construction in favour of the subject is to be applied but if there is no ambiguity and the act or omission falls clearly within the mischief of the statute then the construction of a penal statute will not differ from that of any other.
[145 H 146A] Maxwell on interpretation of Statutes (12th Edn.) p. 246 referred to.
(6) In the instant case there is no ambiguity or equivocation of the item 'paper" and an exercise book squarely falls within the dictionary meaning of "paper".
[146 B] State of Bihar vs Bhagirath Sharma & Anr., ; distinguished.
|
ivil Appeal Nos.
1249 of 1968 and 1946 of 1972.
From the Judgment and order dated 27 9 1965 of the Allahabad High Court in Special Appeal No. 95/62.
V. section Desai and Rameshwar Nath for the Appellant (In CA 1946/ 72) .
G. N. Dikshit and O. P. Rana for the Respondent in C.A. 1946/ 72.
D The Judgment of the Court was delivered by TULZAPURKAR, J.
These appeals by certificate under article 133(1) of the Constitution raise an important question whether an assessee having once exercised the option regarding the method of computation of his agricultural income by filing the requisite declaration along with his return is entitled to change the option under the U.P. Agricultural Income Tax Act, 1948 ? The appellant assessee (The Delhi Cloth and General Mills Company Limited, Delhi) is a company registered under the Indian Companies Act and has certain agricultural farms at Daurala in Meerut District from which it derives agricultural income chargeable to levy of agricultural income tax and super tax under section 3 of the U.P. Agricultural Income Tax Act, 1948 (hereinafter called 'the Act ').
Section 6(2) of the Act provides two alternative methods of computation of agricultural income, (a) Rental method (multiple of Annual Rental income) mentioned in clause (a) or (b); Produce method (subject to deductions) mentioned in clause (b) and under section 6(1) an option is given to the assessee to select one or the other method whichever may be advantageous to him.
Such option is required to be indicated ill a Declaration in the prescribed Form No. A.I.T. 2 to be submitted under Rule S of the U.P. Agricultural Income tax Rules, 1949 alongwith his return under section 15 of the Act.
For the assessment year 1954 55 a return of the agricultural income for the relevant previous year ending June 30, 1954 (1361 Fasli) was filed under 112 section 15(2) of the Act on November 27, 1954 by the appellant assessee, returning a net income of Rs. 1,06,664.
Alongwith the return a declaration in Form No. A.I.T. 2 was also filed indicating the option to be assessed in accordance with section 6(2) (b) of the Act.
On April 4, 1955 the appellant assessee discovering some mistake in the said re turn filed a revised return under section 15(4) of the Act showing the net income at Rs. 98,854 and explaining that the difference was due to certain further deductions that were claimed on account of expenses, and while filing such revised return the option unders.s 2 (b) was adhered to.
However, notwithstanding the filing of the aforesaid two returns, one on November 27, 1954 and the revised return on April 4, 1955, on April 7, 1955 the Assessing Authority served upon the appellant assessee a notice under s.15(3) requiring the latter to furnish within period specified in the notice a return in the prescribed form and verified in the prescribed manner setting forth its total agricultural income in the previous year relevant to the assessment year 1954 55 and alongwith such notice a provisional estimate of the assessee 'section agricultural income for the previous year (i.e. 1361 Fasli) computed under s.6(2)(a) was also furnished as required by section 15(3 B) of the Act; the provisional estimate made in accordance with s.6 (2) (a) of the Act showed the income of the assessee at Rs. 2,07,923/9/ .
It appears that neither the original return filed on November 27, 1954 nor the revised return filed on April 4, 1955 was found to be correct or complete by the Assessing Authority and, therefore, on April 14, 1955 the Assessing Authority served a notice under s.16(2) of the Act on the appellant assessee requiring it to produce evidence in support of its return; in reply the assessee produced some evidence in the form of accounts and vouchers and details of the various expenses were also supplied.
On September 29, 1955, however, another notice was given to the appellant assessee stating that its income had escaped assessment to the tune of Rs. 38,947/ and objections were invited.
Thereupon, the appellant assessee applied for inspection of the record before the Assessing Authority, but the application was rejected on October 18, 1955 against which a revision was filed by the appellant before the Revision Board and on April 29, 1958 the Board allowed the revision application and the Assessing Authority was directed to permit the inspection of the record.
Thereupon the appellant took inspection of the record, but on November 8, 1958, being the date fixed for the hearing of the objections, the appellant filed a fresh return (third return) in respect of its agricultural income for the self same previous year (1361 Fasli) and this was done in response to the notice dated April 7, 1955 that had been served upon it by the Assessing Authority under section 15(3 B) of the Act and along 113 with this return, which showed the net income of Rs. 1,79,543/5/9, a declaration in the prescribed Form No. A.I.T. 2 selecting the method of computation.
Of agricultural income under s.6(2) (a) was also filed and the appellant prayed that it should be allowed to change the option and have its income computed under s.6(2) (a) instead of under section 6(2) (b) as previously intimated.
The Assessing Authority without first deciding the question whether the appellant was entitled to change the option as sought, by its order dated March 27, 1959 made a best judgment assessment in accordance with the method under s.6(2) (b) of the Act and assessed the appellant 's income at Rs. 4,82,231.05 nP on which the tax liability was assessed at Rs. 2,88,488.46 nP.
The appellant challenged the assessment order ill an appeal to the Commissioner who by his order dated July, 1, 1959 allowed the appeal, set aside the assessment and remanded the case back to the Assessing Authority with a direction that he should first dispose of the question relating to change of option which the appellant had claimed he was entitled to have and then make the assessment in accordance with law after allowing the appellant an opportunity to lead evidence in support of its return.
The Assessing Authority thereupon went into the question of change of option and by its order dated November 17, 1959 held that the appellant had no right to change its option and that the assessment had to be made in accordance with s.6(2) (b) of the Act.
The appellant went in revision before the Agricultural Income Tax Revision Board challenging the said order of the Assessing Authority but the Revision Board by its order dated January 27, 1960 upheld the decision of the Assessing Authority.
The Board took the view that an assessee having exercised the option once in Form No. A.I.T. 2 filed alongwith the original return could not change that option subsequently while filing another return or revised return under the Act.
By a Writ Petition, being Civil Misc.
Writ No. 1382 of 1960 filed in the Allahabad High Court the appellant challenged the validity of the two orders, one of the Assessing Authority and the other of the Revision Board and sought a mandamus directing the Assessing Authority to assess the appellant 's tax liability after computing its agricultural income for the relevant previous year in accordance with s.6(2)(a) of the Act instead of under s.6(2)(b) of the Act.
The learned Single Judge who heard the writ petition by his judgment and order dated October 13, 1961 accepted the contention of the appellant that it was open to it to change its option with the filing of a subsequent or fresh return with the result that the impugned orders were quashed and he issued a direction to the Assessing Authority 114 that it shall proceed to assess the appellant assessee in accordance with the option expressed by it on November 8, 1958.
The respondents preferred an appeal to the Division Bench of the High Court being Special Appeal No. 95 of 1962 and the Division Bench allowed the appeal, set aside the decision of the learned Single Judge and restored the orders passed by the Assessing Authority and the Revision Board.
In its judgment dated September 27, 1965, the Division Bench took the view that the assessee had no right to change the option.
Initially the appellant preferred an appeal.
to this Court being Civil Appeal No.1249(NT) of 1968 on the strength of a certificate issued by the Allahabad High Court under article 133(1)(a) of the Constitution but at the time of the hearing of that appeal this Court accepted the preliminary objection raised by the respondents to the maintainability of the appeal on the ground that the High Court was not competent to grant the certificate under articles 133 (1) (a) in as much as the issue before the High Court was incapable of valuation and the order appealed against could not come within the scope of the said provision; this Court, therefore, revoked the said certificate and sent the case back to the High Court for fresh consideration inasmuch as the appellant 's prayer for grant of certificate in the High Court was made both under articles 133(1) (a) and 133(1) (c) of the Constitution and directed the High Court to consider the prayer for grant of the certificate under the latter provision.
Thereafter the High Court by its order dated April 18, 1972 granted the certificate under article 133(1) (c) on the ground that the question of law involved was of substantial importance and also of great public importance and it is on the strength of such certificate that was issued by the High Court that the Civil Appeal No.1946 (NT) of 1972 has been filed by the appellant in this Court.
However, in both the appeals the principal question raised is whether an assessee who has once exercised his option in regard to the method of computation of his agricultural income by filing the requisite declaration in the prescribed Form No. A.I.T. 2 alongwith his first or initial return can change the option under the Act? In may be stated at outset that after the judgment was delivered by the learned single Judge of the Allahabad High Court on October 13, 1961 answering the point in favour of the assessee, the Assessing Authority, since no stay was obtained during the pendency of Special Appeal No. 95 of 1962, proceeded with the assessment of the appellant on the basis of that judgment and completed the assessment on December 19, 1962, in accordance with section 6(2)(a) of the Act and 115 we are informed at the Bar that the appellant has paid the tax according to that assessment order.
But after the reversal of the judgment.
Of the learned Single Judge by the Division Bench that assessment order became ineffective and a fresh assessment order was made on July 30, 1969 in accordance with the judgment of the Division Bench by adopting the method of computation indicated in s.6(2) (b).
Against that assessment order dated July 30, 1969 the appellant preferred ar.
appeal but the same was dismissed on June 23, 1970 and a revision against the dismissal of that appeal is pending before the U.P. Agricultural Income tax Board.
The position, therefore, would be that if the appellant succeeds in these appeals the assessment order made against it on July 30, 1969 and which has been confirmed in appeal on June 23, 1970 and which is the subject matter of revision before the Board will be rendered ineffective and the assessment order made against it on December 19, 1962 will revive and hold the field and the appellant shall be taken to have complied with the demand under that order but in case the appellant fails in these appeals the Appellate order dated June 23, 1970 subject to the result of the revision will become operative.
Counsel for the appellant raised two or three contentions before us in support of the appeals.
In the first place he contended that under section 6(1) of the Act an option to choose one or the other method of computation of agricultural income has been given to the assessee so that he could choose whichever method was advantageous to him and the assessee would be entitled to exercise such option every time he files a return, be it the initial or first return or a subsequent return or a revised return, in regard to his agricultural income of any particular previous year, especially, as Rule 5 of the U.P. Agricultural Income tax Rules.
1949 makes it incumbent upon the assessee to file a declaration in Form A.I.T. 2 indicating his option alongwith "his return of income".
He urged that this position becomes all the more clear if the provisions of the present s.6 and Rule 5 are considered vis a vis the said provisions before they were amended.
Secondly, he urged that in the instant case in spite of the appellant having filed its first return of November 27, 1954 and its revised return of April 4, 1955, the Assessing Authority had, served upon it a notice under s.15(3) alongwith a statement showing provisional estimate of the agricultural income of the appellant at Rs. 2,07,923 9 annas in accordance with s.6(2) (a) for the relevant previous year ending June 30, 1954 (1361 Fasli), pursuant to which the appellant filed a fresh return on November 8, 1958 for the said previous year indicating in the accompanying 116 declaration in Form No. A.I.T. 2 the option for computation in accordance with s.6(2) (a) of the Act and, therefore, the Assessing Authority had to make the assessment in accordance with s.6(2)(a) of the Act.
Thirdly, he contended that in any event since the Assessing Authority after the issuance of the notice under section 16(2) had proceeded to make a best judgment assessment under s.16(4) it had no option but to make the assessment with due regard to the statement of provisional estimate served under s.15(3 B) notwithstanding any option exercised under s.6(1) of the Act.
on the other hand, counsel for the respondents supported the view taken by the Division Bench of the High Court by contending that the option conferred upon an assessee by section 6 is to be exercised in accordance with the provisions of the Act and the Rules and the only provision is that contained in Rule 5 which speaks of a declaration indicating the option being filed alongwith 'his return of income ' which could only be when the assessee filed his first or initial return and there is no provision for filing such a declaration alongwith any subsequent return or revised return.
He urged that only s.15(4) speaks of filing a revised return which could be done only if the assessee discovered any wrong statement in the return previously filed by him under sub s.1 or 2 or 3 of section 15 but a statement made in such previously filed return does not become wrong merely because the assessee had selected the wrong option; in other words, the assessee does not get the right to file a revised return under s.15(4) merely because he wishes to change the option.
He? therefore, urged that in the absence of any positive provision being contained in the Act or the Rules conferring upon the assessee the right to change the option, the right of the option once exercised must be held to have become final.
He, further urged that the aspect whether an assessee will have a right to change the option by filing a fresh declaration along with a return filed in response to the notice served under section 15(3) of the Act, notwithstanding his having filed a return under section 15(1) or section 15(2) and having exercised his option at that time, was not raised before the High Court by the appellant and as such the appellant should not be permitted to raise it now inasmuch as there is no material on record to show that the return filed by the appellant on November 8, 1958 was in response to that notice or was within time specified in that notice.
In any event, he urged that sub sections
(1), (2) and (3) d section 15 are independent provisions and the notice under section 15(3) does not give an assessee any right to change the option.
He further urged that in the instant case the assessee could be said to have acquiesced in the proceedings that were taken by the Assessing Authority on the 117 two earlier returns which were filed by him based on s.6(2)(b) and as such the appellant could not be allowed to change the option initially exercised by it.
In order to decide the main question that has been raised in these Appeals it will be necessary to refer to the provisions of s.6 and Rules S, and 7, as they stood originally and as they stand now after the amendments.
Originally s.6, which dealt with computation of agricultural income and conferred an option on the assessee to select one or the other of the two methods of computation mentioned therein ran thus: "6.
Computation of agricultural income. (1) The agricultural income mentioned in sub clauses (i), (ii) and (iii) of clause (b) of sub section (1) of section 2 shall, at the option of the assessee, be computed m accordance with clause (a) or clause (b) of sub section (2): Provided that an assessee who has once exercised his option shall not be entitled to vary the method of computation except with the permission of the Board of Revenue.
(2) (a) Subject to such deduction in respect of agricultural calamities as may be prescribed, the income shall be, deemed to be such multiple, not exceeding 71 per cent, of the rent of the land calculated at the latest sanctioned rent rates applicable to hereditary tenants of similar class of soil, as the Board of Revenue may fix for each district or portion thereof: Provided that the Board of Revenue may direct that the multiple for calculating income from and newly brought under cultivation shall for the specified number of years be such lower figure as may be specified, or (b) the income shall be the gross proceeds of sale of all the produce of the land subject to the Following deductions: (Here followed sub clauses (i) to (xiii) specifying the (deduction) .
(3) If the assessing authority is satisfied that the proceeds of sale have not been correctly shown by the assessee or that any portion of the produce has not actually been sold, he may assess the value of the produce for purposes or clause (b) of sub section (1) of section 2 by determining, to the best of his judgment.
the amount of produce and the market value thereof " 118 Original Rules S, 6 and 7 of the U.P. Agricultural Income Tax Rules, 1949, framed under s.44 of the Act ran thus: "5.
An assessee shall, along with his first return of in come, file a declaration in Form No.
A.I.T. 2 indicating his option under sub section (1) of section 6. 6.
The declaration filed by an assessee under rule S shall be preserved by the assessing authority in a separate guard file.
Where an assessee desires to vary the method of computation indicated under rule 5, he shall before the first day of August of the year in respect of which assessment is to be made.
present an application for permission in that behalf to the assessing authority addressed to the Board of Revenue and the former shall without unnecessary delay forward the same together with such remarks as it may consider proper of the Board of Revenue for necessary orders.
" lt may be stated that the aforesaid provisions came up for consideration before Division Bench of the Allahabad High Court in Kr.
Jyoti Sarup vs Board of Revenue, U.P. (Lucknow) and Anr.
(1) and justice Mukherji took the view that "this proviso (meaning the proviso to sub s (1) of section 6) means that once and only once during the course of an assessee 's "assessable life", can he, unfettered, exercise the option given to him under s.6(1) of the Act and that if once he has exercised his option, he cannot, without the permission of the Board, take the other alternative." Justice Bind Basni Prasad, the other Member of the Bench, observed that "My interpretation of s.6 (1) is that after the commencement of the U.p.
Agricultural Income Tax Act, an assessee has once selected one method of computation of agricultural income he cannot vary it subsequently in any year without the permission of the Board of Revenue.
The proviso is not limited in its application to variation of such method in the course of a year".
Thereafter, the Legislature thought of amending these provisions.
By the Amending Act XVIII of 1954 the aforesaid proviso to s.6(1) was deleted with effect from July 1, 1954 and an altogether different proviso unconnected with the option was substituted.
By a Notification No. 2590/I C289 C 53 dated August 29, 1953 the word "first" n occurring between the words "his" and "return" was deleted from (1) 119 Rule 5 with effect from the date of the Notification.
Rules 6 and 7 were totally deleted.
The amended section 6 as it stands today runs thus: "6.
Computation of agricultural income. (1) The agricultural income mentioned in sub clause (i), (ii) and (iii) of clause (b) of sub section (1) of Section 2 shall, at the option of the assessee, be computed in accordance with clause (a) or clause (b) of sub section (2), Provided that the agricultural income as aforesaid for tea gardens shall be computed in accordance with clause (b) of sub section (2).
(2) (a) Subject to such deductions in respect of agricultural calamities as may be prescribed, the income from the land shall be deemed t o be an amount equal to its rent multi plied by such multiple not exceeding 12 1/2 as the Land Reforms Commissioner may fix, and different multiples may be fixed for different districts or portions of district and for different classes of groves and orchards: Provided that the Land Reforms Commissioner may direct that the multiple for calculating income from land newly brought under cultivation shall for a specified number or years be such lower figure as may be prescribed.
Explanation.
In this section rent shall be deemed to be an amount calculated at the latest sanctioned rent rates applicable to hereditary tenants of the highest class of soil in the village in the case of orchards and groves and of similar class of soil in other cases.
(b) the income shall be the gross proceeds of sale of all the produce of the land subject to the following deductions.
(Here followed sub clauses (i) to (XIII) specifying the deductions) .
(3) If the assessing authority is satisfied that the proceeds of sale have not been correctly shown by the assessee or that any portion of the produce has not actually been sold, he may assess the value of the produce for purposes of clause (b) of sub section (1) of Section 2 by determining.
to the best of his judgment, the amount of produce and the market value thereof.
" 120 The amended Rule S as it now stands runs thus: "5.
An assessee shall, along with his return of income, file a declaration in Form A.I.T. 2 indicating" his option under sub section (1) of Section 6.
" The Form No. A.I.T. 2 of declaration of the option for computation of income under s.6 reads thus: "In pursuance of Section 6(1), I,. do here by declare that I have elected the method of computation of agricultural income provided by Section 6(2)(a)/6(2)(b) and Lave computed my income accordingly.
" It seems to us clear that section 6 as originally framed gave an assessee the right to exercise the option, unfettered, only once after the commencement of the Act if he once selected one method of computation of agricultural income he could not vary it subsequently in any year without the permission of the Board of Revenue which was given absolute discretion to grant or to refuse such permission.
At any rate, that was how the original unamended provisions were authoritatively interpreted by the Allahabad High Court.
Relying upon the deletion of the original proviso to s.6(1) of the Act by the Amending Act XVIII of 1954 and the deletion of the word "first" which occurred originally in Rule S as also the deletion of Rules 6 and 7, counsel for the appellant contended that whatever may have been the position under the original section 6 and original Rules 5, 6 and 7, under the amended s.6 read with the amended Rule 5 it would be clear that there is no restriction on the assessee`s right to change the option and it would be open to an assessee not merely to change his option every year but even to change his option during.
the year by filing a fresh return or a revised return for the same year indicating the change in the declaration accompanying such fresh return or revised return provided, of course, it is done before the assessment is completed by the Assessing Authority.
In our view, there is considerable force in this contention for the reason that whatever restrictions had been imposed on the change of option by the original proviso to s.6(1) have been removed and the concept of "first return deleted from Rule 5.
That being so, the expression "his return of income" occurring in Rule 5 would apply to any of returns contemplated under s.15 of the Act, namely, (1) a return filed in pursuance of the general notice issued and published by the Collector under s.15(1): (2) a return filed by the Principal officer of a Company under section 15(2) read with section 21; (3) a return filed in pursuance of individual notice served upon an assessee by the Assessing Authority under 121 s.15(3) and (4) a return or a revised return filed by an assessee A under section 15(4), provided that in the first three cases the return is filed within time specified in the notice or the rule or within the extended time granted by the Assessing Authority and in the last case the revised return is filed on account of discovery of a wrong statement in the previous return and is filed before the assessment is complete.
In fact, Rule 5 is obligatory and makes it incumbent upon an assessee to file along with his return of income a declaration in Form No. A.I.T.2 indicating his option under section 6(1) of the Act and as such the exercise of such option including a change of the option indicated in the declaration filed along with a subsequent return or a fresh return or a revised return will be valid provided the return itself is validly submitted.
In this view of the matter it is not possible to accept the view of the Division Bench of the High Court that if once option is exercised by an assessee by filing the requisite declaration along with his return for a particular year he will have no right to change his option by filing a fresh return or a revised return before the assessment is made for that year.
Turning to the factual aspects in the case the main question that arises is whether the return filed by the appellant on November 8, 1958 was in pursuance of the notice served by the Assessing Authority upon the appellant under s.15(3) of the Act or whether it was a revised return filed under s.15(4) of the Act and his question assumes significance because it was along with this return that the assessee had filed a declaration in Form No.
A.I.T. 2 indicating a change in the option and praying that the computation of its agricultural income should be made in accordance with section 6(2) of the Act instead of under s.6(2)(b) as mentioned in the declarations filed alongwith two earlier returns dated November 27, 1954 and April 4. 1955.
t is obvious that if the return dated November 5, 1958 was filed under section 15(4) then in order to avail of the change of the option the appellant will have to show that it was really a revised return in the sense that the same had been filed because of a wrong statement discovered in the earlier returns filed by him.
The Division Bench of the High Court G has rightly taken the view that a wrong statement in the earlier returns does not mean selection of a wrong option by the assessee; in other words, the assessee does get the right to file a revised return under section 15(4) merely because he wishes to change the option.
Counsel for the appellant, however, contended that the fresh return filed by the appellant on November 8, 1958 was not a revised return under s.15 (4) at all but was a return filed in response to the notice that was served upon it by the Assessing Authority on April 7, 1955 under 9 817SCI79 122 s.15(3) of the Act.
In this behalf counsel for the respondent did make a grievance before us that there was no material on record to show whether, in fact, the return filed on November 8, 1958 was in response to the notice served under s.15(3) and if so, whether the same Was filed within time or the extended time, if any, granted by the Assessing Authority.
The hearing of the appeal was, therefore, adjourned to enable both the parties particularly the Revenue which will be possessing the records to produce material in that behalf and at the resumed hearing though no material by way of assessment re cords of files in the custody of the Assessing Authority was produced by the Revenue, the appellant placed on record a copy of the return dated November 7, 1958 (which was filed on November 8, 1958) together with a copy of the declaration in the Form No.
A.I.T. 2 and the forwarding letter.
The forwarding letter dated November 7, 1958 clearly shows that the return was filed in response to the notice dated April 7, 1955 served upon the appellant under s.15(3) of the Act.
The said letter in terms referred to the notice dated April 7, 1955 under s.15(3) as also to the statement of provisional estimate of agricultural income for the relevant previous year 1953 54 (1361 Fasli) prepared under section 6(2) (a) read with section 15(3 B) accompanying the notice and further stated that the appellant had decided, in order to avoid further prolonged litigation, to accept the provisional estimate of agricultural income under section 6(2) (a) (subject only to necessary corrections as regards area and classification of soil etc.) and to suffer agricultural income tax: on that basis and requested the Assessing Authority to complete the assessment in accordance with section 6(2) (a) of the Act.
It is, therefore, clear that the return filed by the appellant on November 8, 1958 was in response to the notice served upon it by the Assessing Authority under s.15(3).
Moreover, the said return was rejected by the Assessing Authority not on the ground that it had been filed beyond time but on the ground that the appellant had no right to change its option which clearly suggests that the return was treated by the Assessing Authority as having been filed within time but the same was rejected on merits holding that the appellant was not entitled to change its option.
It is thus clear that the return filed by the assessee on November 8, 1958 was not a revised return under s.15 (4) but a fresh return filed within time in response to notice under s.15(3) served upon it by the Assessing Authority and as such the appellant was entitled to change its option and have computation of its agricultural income made in accordance with s.6(2) (a) of the Act.
The fact that the appellant had produced some evidence in pursuance of notice received under s.16(2) in relation to its earlier returns or that it took inspection of the records of the Assessing Authority can 123 not and does not amount to acquiescence or waiver of its right to file a, declaration indicating its option a fresh long with the return validity filed in response to the notice served under section 15(3) of the Act.
Apart from the aforesaid position there is yet one more aspect to which we would like to refer in relation to the question raised before us in these appeals and that arises in view of the provisions of s.16(4) of the Act under which the Assessing Authority makes its best judgment assessment.
In this connection ss.15(3), 15(3 B) and 16(4) the Act will have to be considered together.
Section 15(3) runs thus: "15(3) In the case of any person whose total agricultural income is, in the opinion of the assessing authority.
such amount as to render such person liable to payment of agricultural income tax in any year, he may serve in hat year .
a notice in the prescribed form requiring such person to furnish within such period, not being less than thirty days as may be specified in the notice, a return in the prescribed form and verified in the prescribed manner setting forth (alongwith such other particulars as may be provided for in the notice), his total agricultural income during the previous year: Provided that the assessing authority may in his discretion extend the date for delivery of the return.
" Section 15(3 B) runs thus: "15(3 B) Alongwith the notice under sub section (3) the assessing authority shall send a statement showing a pro visional estimate of the agricultural income which in his opinion accrued to the person during the previous year.
The estimate shall be prepared in accordance with the provisions of clause (a) of sub section (2) of Sec ion 6 and be in such form and contain such particulars as may be prescribed." In the instant case, as we have said above, notice under s.15(3) was served by the Assessing Authority upon the appellant and as required by s.15(3 B), alongwith the notice the Assessing Authority had sent a statement showing the provisional estimate of the agricultural income which in its opinion accrued to the appellant during the previous year 1953 54 which estimate was prepared in accordance with the provisions of section 6(2) (a).
Admittedly, the change of opinion sought to be exercised by the appellant was denied to it by the Assessing Authority and the Assessing Authority proceeded with the assess 124 ment of the agricultural income of the appellant assessee in accordance with s.6(2)(b).
Admittedly further, the Assessing Authority had issued a notice under s.16(2) requiring the appellant to produce evidence in support of its earlier returns.
On September 29, 1955 the Assessing Authority served a further notice upon the appellant in forming the latter that agricultural income to the tune of Rs. 38,947/ had escaped assessment and invited objections from the appellant whereafter it seems that the Assessing Authority not being satisfied with the evidence produced by the appellant proceeded to make its best judgment assessment under section 16(4).
Section 16(4) runs thus: "16(4) If the principal officer of any company or other person fails to make a return under subsections (2) or (3) of Section 15, as the case may be, or, having made the return, fails to comply with all the terms of the notice issued under sub section (2) of this section or to produce any evidence required under sub section (3) the assessing authority shall make the assessment lo the best of his judgment with due regard to the statement, if any, sent under sub section (3 B) of Section 15, notwithstanding any option exercised under sub section (1) of section 6.
" It will appear clear from the aforesaid provision contained in s.16(4) that whenever the Assessing Authority proceeds to make the assessment to the best of its judgment the same is required to be made "with due regard to the statement, if any, sent under sub section (3 B) of section 15 notwithstanding any option exercised under sub section
(1) of s.6.
lt is thus clear that irrespective of whatever option might have been exercised by the assessee the best judgment assessment has to be made by the Assessing Authority by having due regard to the statement of provisional estimate of agricultural income made in accordance with s.6(2)(a) of the Act.
The non obstante clause leaves it open tc the Assessing Authority to select whatever basis it consider appropriate for computing and determining the true agricultural income of the assessee; it may adopt any one of the bases in respect of the entire agricultural area or adopt one basis in respect of one part of agricultural area and the other basis in respect of another part, the only obligation being to have "due regard" to the statement under s.15(3 B).
The scheme of s.16(4) clearly shows that in regard to the best judgment assessment there is nothing sacrosanct about the option exercised by the assessee under section 6(1) of the Act, equally it can be said that in regard to assessments other than best judgment assessments under the scheme of s.15 there is nothing sacrosanct about the particular option previously exercised by the assessee and he need 125 not be held bound by it provided he changes the option by filing a subsequent or a fresh or a revised return in accordance with the applicable provisions contained in s.15, the object being to determine his true agricultural income for the relevant previous year, though so far as the Assessing Authority is concerned such option whether original or subsequent, would indisputably be binding on it.
In view of the aforesaid discussion we are clearly of the view that the learned Single Judge of the Allahabad High Court was right in his conclusion that the appellant assessee was entitled to have tho computation of its agricultural income for the previous year 1953 54 (1361 Fasli) relevant to the assessment year 1954 55 done in accordance with section 6(2) (a) of the Act.
The appeals are, therefore, allowed, the order of the Division Bench dated September 27, 1965 in Special Appeal No. 95 of 1962 is set aside and that of the learned Single Judge dated October 13, 1961 in Civil Misc.
Writ No. 1382 of 1960 is restored.
The appellant will get the costs of Civil Appeal No.1946(NT) of 1972 from the respondents while each party will bear and pay its own costs of Civil Appeal No. 1249 (NT) of 1968.
P.B.R. Appeal allowed.
| IN-Abs | Section 6(1) of the U.P. Agricultural Income tax Act, 1948 gives an option to an assessee to select one of the two alternative methods of computation of agricultural income as provided in section 6(2), whichever is more advantageous to him.
Such option is required to be indicated along with his return submitted under section 15 of the Act.
While submitting its return for the assessment year 1954 55 the assessee chose the option to be assessed under section 6(2) (b) of the Act.
It later submitted a revised return under section 15(4) but stuck to the option to be assessed under section 6(2) (b) .
The assessing authority, notwithstanding the filing of these two returns by the assesses, called upon it to file a return of the income computed under section 6(2)(a).
Thereafter the assessing authority served a notice on the assesses requiring it to produce evidence in support of it return.
After the assesses produced the required evidence, the assessing authority issued a notice to the effect that certain income escaped assessment and called for its objections, if any.
The assesses asked for inspection of records; but it was refused.
At the instance of the assesses the Revision Board directed true assessing authority to permit inspection of the record.
After inspection of the record he assesses filed a fresh (third) return.
At this stage the assesses preferred the method of computation of income provided under section 6(2)(a) instead of section 6(2)(b) which it chose earlier.
Without deciding the question as to whether the assesses was entitled to change the option, the assessing authority made a best judgment assessment under section 6(2)(b).
On appeal the Commissioner directed the assessing authority to first decide the question relating to change of option whereupon the assessing authority held that the assesses had no right to change its earlier option.
On further appeal the Revision Board upheld the order of the assessing authority.
In the assessee 's writ petition challenging the order of the assessing authority a single Judge of the High Court held that it was open to the assesses to change its option at the time of filing a subsequent or fresh return.
But the Division Bench was of the view that the assesses had no right to change its option.
In its appeal the assessee contended before this Court that (1) it is open to the assessee to change its option not merely every year but during the year by filing a fresh return or a revised return provided it is done before tho assessment is completed (2) although the assessee filed its first return and the 110 revised return, the assessing authority issued a notice under 8.
15(3) along with a statement of provisional estimate computed in accordance with section 6(2) (a) pursuant to which the assessee filed the third return exercising the option for computation in accordance with section 6(2) (a) and, therefore, the assessing authority had to make the assessment in accordance with section 6(2) (a) and (3) in any event since the assessing authority had proceeded to make a best judgment assessment under section 16(4) it had no option but to make the assessment with due regard to the provisional estimate served under section 15(3B) notwithstanding any option exercised under section 6(1) of the Act.
Allowing the appeals, ^ HELD: The Division Bench of the High Court was wrong in holding that when once the option is exercised by an assessee by filing the requisite declaration he will have no right to change the option by filing a fresh return or revised return before the assessment is made for that year.
[121 Cl 1.
Whatever restrictions had been imposed on the change of option by the original proviso to section 6(1) had been removed and the concept of "first return ' was deleted from r. 5 That being so, the expression "his return of income" occurring in r. S would apply to any of returns contemplated under section 15, In fact r. 5 is obligatory and makes it incumbent upon an assessee to file, along with his return, a, declaration indicating his option under section 6(1).
The exercise of such option.
including a change of option indicated in the declaration filed along with a subsequent return or a fresh return or a revised return, will be valid provided the return itself is validly submitted.
[120 G H] 2.
If the return was filed under section 15(4), then in order to avail of the change of the option the assessee will have to show that it was really a revised return in the sense that the same had been filed because of a wrong statement discovered in the earlier returns.
Clearly the third return was filed in response to) the notice issued by the assessing authority under section 15(3).
This return was rejected by the assessing authority not on the ground that it had been filed beyond time but on the ground that the assessee had no right to change its option which suggests that the return was treated by the assessing authority as having been filed within time but was rejected on merits holding that the assessee was not entitled to change its option.
Therefore the third return was not a revised return under section 15(4) but a fresh return filed within time in response to the notice under section 15(3) and as such the assessee was entitled to change its option and have the computation made in accordance with section 6(2) (a).
The fact that the assessee had produced come evidence in pursuance to the notice in relation to its earlier returns or that it took inspection of the records cannot and does not amount to acquiescence or waiver of its right to file a declaration indicating its option afresh along with the return validly filed in response to the notice under section 15(3) of the Act.
[121 F G;122D; G H] 3.
Moreover, irrespective of whatever option might have been exercised by the assessee the best judgment assessment has to be made by the assessing authority by having due regard to the statement of provisional estimate of agricultural income made in accordance with section 6(2) (a).
Under section 16(4) whenever the assessing authority proceeds to make the assessment the same is required to be made "with due regard to the statement, if any, sent under 111 section 15(3 B) notwithstanding any option exercised under section 5(1).
" The scheme of section 16(4) clearly shows that in regard to the best judgment assessment there is nothing sacrosanct about the option exercised by the assessee under section 6(1); equally it can be said that in regard to the assessments other that best judgment assessments under the scheme of section 15 there is nothing sacrosanct about tho particular option previously exercised by the assessee and he need not be held bound by it provided he changes the option by filing a subsequent or a fresh or a revised return in accordance with the applicable provisions in section 15.
So far as the assessing authority is concerned such option, whether original or subsequent, would be binding on it.
[124F; H]
|
Civil Appeal No. 453 of 1969.
(From the Judgment and order dated 12 9 68 of the Orissa High Court in Misc.
Appeal No. 208 of 1966).
Sardar Bahadur Saharya and Vishnu Bahadur Saharya for the appellant.
Nemo for the respondent.
CHANDRACHUD, C.J. Respondent 1 obtained a money decree on August 18, 1962 against respondent 3 and his mother respondent 4.
On June 28, 1963 respondent 1 filed an execution petition for recovering the decretal amount and prayed therein for attachment of the Immovable property belonging to respondent 3.
The property was attached by an order passed by the Executing Court on July 13, 1963.
On November 27, 1963 respondent 1 filed an application in the Executing 198 Court praying that permission be obtained of the Revenue Divisional officer for sale of the property since respondent 3 to whom the property belonged was a member of the Scheduled Tribe.
The permission was considered necessary by reason of the provisions contained in Clause 6 of the ""Orissa Scheduled Areas Transfer of Immovable Property by Scheduled Tribes Regulation No. 2 of 1966".
It provides: In execution of money decree against a member of a Scheduled Tribe no right title or interest held by him in any immovable property within any scheduled area shall be liable to be attached and sold except as and if prescribed.
Rule 4 made under the aforesaid Regulation provides: There shall be no attachment or sale of immovable property in execution of a money decree against a member of a Scheduled Tribe within any scheduled area without the writ ten permission of the competent authority.
The property at such a sale shall be sold only to a member of a Scheduled Tribe unless otherwise specifically directed in writing by the competent authority.
The Revenue Divisional officer, Nowrangpur, was the competent authority for the present purpose.
Respondent 3 who was in the meantime negotiating for the private sale of the property moved the R.D.O., Nowrangpur on June 18, 1963 for permission to sell the property to a non Scheduled Tribe person.
He obtained the requisite permission by an order dated October 23, 1963 for the sale of the property for Rs. 4,000/ .
On the strength of the aforesaid permission respondent 3 sold the property to the appellant on January 2, 1964 by a registered deed of sale.
A copy of the order passed by the R.D.O. was produced by respondent 1 in the Executing Court whereupon on May IS, 1964 the property was put to sale.
Respondent 2, who is the son of respondent 1 purchased the property in the auction sale.
On June 22, 1964 the appellant filed an application under order 21 Rules 89 and 90 and Sections 47 and 151 of the Code of Civil Procedure praying that the auction sale should be set aside on the ground that the attachment and the auction sale were void since they were effected without obtaining the permission of the competent authority under Orissa Regulation No. 2 of 1956.
The appellant also alleged that the decree holder had played a fraud on the Court by inducing it 23, 1963 which was passed by the competent authority at the instance 23, 1963 which was passed by the competent authority at the instance of the appellant.
199 Respondent 2 resisted the appellant 's application on the ground that he was a bona fide purchaser in a court sale, that the aforesaid sale was held after the competent authority had granted permission for the sale of the property and that therefore his title to the property was not liable to be displaced at the instance of the appellant.
The learned District Munsif who dealt with the matter accepted the contention of the appellant and set aside the auction sale.
In Civil Miscellaneous Appeal No. 9 of 1965 filed by respondent 1, the Appellate Judge confirmed the order of the District Munsif and dismissed the appeal.
Respondent l then filed a second appeal in the Orissa High Court, being Miscellaneous Appeal No. 208 of 1966.
Before the High Court respondent 1 raised two contentions only viz., (1) that the judgment debtor, respondent 3, was not a member of the Scheduled Tribe and therefore the attachment and the court sale were not void; and (2) that the judgment debtors, having failed to take objection to the attachment on the ground that they belonged to a Scheduled Tribe, were debarred from objecting to the sale of the property on the principle of constructive res judicata.
The High Court rejected the first contention relying mainly on the circumstance that respondent 1, the decree holder, had accepted the position that respondent 3 whose property was being put to sale was a member of the Scheduled Tribe.
The High Court however accepted the second contention on the ground that neither respondent 3 nor the appellant had taken any objection in the execution proceedings that since the former had no saleable interest in the property the auction sale could not be held or that the permission given by the, R.D.O. did not authorise the sale.
Being apprieved by the judgment of the High Court dated September 12, 1968, the, private purchaser from the decree holder has filed this appeal.
We are in agreement with the view of the High Court that it is not open to respondent 1, the decree holder, to contend that respondent 3 whose property was put to sale in the execution proceedings was not a member of the Scheduled Tribe.
Respondent 1 filed his execution petition for the purpose of recovering the decretal dues by attachment and sale of the property belonging to one of the judgment debtors, respondent 3.
Respondent 1 himself asked the Executing Court to secure the permission of the competent authority for sale of the property on the ground that respondent 3 whose property was to be put to sale belonged to the Scheduled Tribe.
The permission from the competent authority was later obtained by the appellant, with whom respondent 3 was negotiating for a private sale of his property.
The 200 permission which was granted by the R.D.O., Nowrangpur at the instance of the appellant was produced by respondent I in the execution proceedings as if the permission was granted in his favour for the sale by respondent 3 of his property.
Respondent 1 cannot then be permitted to dispute that respondent 3 did not belong lo a Scheduled Tribe and therefore the permission of the competent authority was not needed to validate the sale.
The contention that respondent 3 did not belong to a Scheduled Tribe was founded solely on the consideration that he belonged to the Bhotra tribe which is not expressly mentioned as on of the Scheduled Tribes in the schedule to the Constitution (Scheduled Tribes), order 1950.
It may be assumed that respondent 3 is a Bhotra.
But paragraph 2 of the Scheduled Tribes order, 1950 provides to the extent material that the Tribes, or parts of, or groups within the Tribes specified in the Schedule to the order shall also be deemed to be Scheduled Tribes.
Whether Bhotras fall within any of the sub groups or the Scheduled Tribes enumerated in Part IX of the Schedule to the 1950 order is a question which could not have been permitted to be raised for the first time in the second appeal.
Much less can it be allowed to be raised before us.
This appeal, like the second appeal before the High Court, must therefore be disposed of on the basis that respondent 3 is a member of the Scheduled Tribe.
Upon that footing, the appellant must succeed because after the R.D.O., Nowrangpur granted permission to sell the property on October 23, 1963, the property was purchased by the appellant from respondent 3 on January 2, 1964.
Prior to that sale the property was undoubtedly attached in execution proceedings on July 13, 1963 but the order of attachment was void, being contrary to the express inhibition contained in Clause 6 of Regulation No. 2 of 1956 read with Rule 4 made thereunder.
Both Clause 6 and Rule 4 provide that no immovable property belonging to a member of the Scheduled Tribe is liable to be attached or sold except in accordance with the Permission granted by the competent authority.
Under the registered sale, Ext. 4, executed by respondent 3 in favour of the appellant, the title to the property vested in the appellant.
The appellant having become an owner of the property on account of the aforesaid private sale, respondent 3 had no saleable interest left in the property which could be put to sale in the court auction.
It is elementary that what can be brought to sale in a court sale is the right, title and interest of the judgment debtor and therefore, the auction purchaser can get nothing more than that right, title and interest.
The judgment debtor not having any saleable interest in the property at all on the date of the auction sale, there was nothing that respondent 2 could get in the auction sale which was 201 held in execution of the money decree obtained by his father, respondent 1.
The auction sale therefore cannot displace the title of the appellant which is the same thing as saying that as between the title of the appellant and the so called title of the auction purchaser, the appellant 's title must prevail.
It must follow that the auction sale is bad and must be set aside.
There is an additional reason why the auction sale is not valid By the permission granted by the R.D.O., Nowrangpur on October 23, 1963 for sale of the property, one of the conditions imposed on the judgment debtor was that the property shall be sold for a sum of Rs 4,000/ .
In the private sale, the appellant purchased the property for Rs. 4,000/ and therefore the condition of the permission was complied with.
But the auction sale was held in satisfaction of the decretal dues which were far less than Rs. 4,000/ , the decree itself being in the sum of Rs. 1,000 odd and the highest bid at the auction being of Rs. 3,000/ only.
As the condition imposed by the R.D.O. regarding the price was violated by the auction sale, the auction purchaser cannot get a valid title to the property under that sale.
In this view, no question of res judicata can arise because the basic issue ill the appeal is as regards the validity of the auction sale in favour of respondent 2.
The appellant claims through the judgment debtor and neither the latter nor the decree holder ever disputed that he, the judgment debtor, was a member of the Scheduled Tribe.
On the other hand both of them were conscious of the situation that the property could not be sold without the sanction of the R.D.O., Nowrangpur.
The decree holder himself, apprised the Executing Court of that position.
The failure, there, of the judgment debtor to raise any particular contention cannot operate as res judicata, actually or constructively, either against him or against the appellant.
For these reasons we allow the appeal, set aside the judgment of the High Court and confirm that of the learned Subordinate Judge, Koraput, setting aside the court sale in favour of respondent 2.
There will be no order as to costs.
S.R. Appeal allowed.
| IN-Abs | On the strength of the permission granted by the Revenue Divisional Officer, as required under clause 6 of the Orissa Scheduled Areas Transfer of Immovable Property by Scheduled Tribes Regulation 3 of 1956 and Rule 4 made thereunder, to sell his private property to a non scheduled Tribe person for a sum of Rs. 4000/ , Respondent 3 sold his property on January 2, 1964 by a registered deed of sale to the appellant, despite an attachment order passed by the Executing Court on July 13, 1963 on an application dated June 28, 1963 made by Respondent 1 to recover the decretal amount as per the money decree obtained by him on August 18, 1962 against Respondent 3 and his mother Respondent 4.
Later, Respondent No. 1 however, produced the copy of the order passed by the R.D.O. dated October 23, 1963, at the instance of appellant in the Executing Court and got the property put to sale on May 15, 1964.
In the court auction respondent 2 son of respondent 1 purchased the property.
On June 22, 1964, the appellant filed an application under order 21 Rules 89 and 90 and Section 47 and 151 C.P.C. for setting aside the auction sale on the ground that the attachment and the auction sale were void for want of permission from the competent authority under Orissa Regulation 2 of 1956 and also due to fraud committed by the decree holder.
The application was allowed followed by confirmation by the appellate judge, in appeal.
But the High Court in Second Appeal reversed it accepting the contention of res judicata.
Allowing the appeal by special leave, the Court.
^ HELD: 1.
Both clauses 6 of the "Orissa Scheduled Areas Transfer of Immovable Property by Scheduled Tribes Regulation 2 of 1956, and Rule 4 made thereunder, provide that no immovable property belonging to a member of the scheduled Tribe is liable to be attached or sold except in accordance with the permission granted by the competent authority.
Prior to the sale to the private party, the property was undoubtedly attached in execution proceedings on July 13, 1963, but the order of attachment was void, being contrary to the express inhibition contained in clause 6 of Regulation 2 of 1956 read with Rule 4 made thereunder.
[200E G] 2.
The auction sale is bad and invalid: It is elementary that what can be brought to sale in a Court sale is the right, title and interest of the judgment debtor and therefore, the auction purchaser can get nothing more than that right, title and interest.
In the instant case, the appellant having become an owner of the property on account of the 197 Private sale dated January 2, 1964 respondent 3 had no saleable interest left in the property which could be put to auction.
The auction sale therefore cannot displace the title of the appellant which is the same thing as saying that as between the title of the appellant and the so called title of the auction purchaser the appellant 's title must prevail.
[200G H, 201A] Moreover, as the condition imposed by the R.D.O. regarding the price was violated by the auction sale, the auction purchaser cannot get a valid title to the property under that sale.
In the private sale, the appellant purchased the property for Rs. 4,000/ and therefore the condition of the permission was complied with.
But the auction sale was held in satisfaction of the decretal dues which were far less than Rs. 4,000/ the decree itself being in the sum of Rs. 1,000/ and odd and the highest bid at the auction being of Rs. 3,000/ only.[201 B C] 3.
(a) The basic issue being the validity of auction sale in favour of respondent 2, no question of res judicata can arise.
the appellant claims through the judgment debtor and neither the latter nor the decree holder ever disputed that he, the judgment debtor, was a member of the Scheduled Tribe.
On the other hand both of them were conscious of the situation that the property could not be sold without the sanction of the R.D.O., Nowrangpur.
The decree holder himself apprised The Executing Court of that position.
The permission which was granted by the R.D.O., Nowrangpur at the instance of the appellant was produced by respondent 1 in the execution proceedings as if the permission was granted in sis favour for the sale by respondent 3 of his property.
The failure, therefore, of the judgment debtor to raise any particular contention cannot operate as res judicata actually or constructively, either against him or against the appellant.
[201 D F] (b) Whether "Bhotras" fall within any of the sub groups of the Scheduled Tribes enumerated in Part IX of the Schedule to the Constitution (Scheduled Tribes) Order, 1950 is a question which could not have been permitted to be raised for the first time in the Second Appeal.
Much less can it be allowed to be raised in this Court in an appeal under article 136 of the Constitution.[200C D]
|
N: Criminal Appeal No. 350 of 1978.
(From the Judgment and order dt. 29 5 78 of the Gujarat High Court in Spl.
Criminal Appln.
No. 20 of 1978) Ram Jethmalani and Mrs. K. Hingorani for the appellant.
section K. Mehta and M. N. Shroff for the respondent.
The Judgment of the Court was delivered by TULZAPURKAR, J.
On September 29, 1978 the detenu herein was directed to be released forthwith on his detention order being set aside and we had stated that we would give our reasons for our order later which we do presently.
217 By a detention order passed on January 4, 1978 under section 3(1) of the (hereinafter referred to as "COFEPOSA") the detenu Gopal Ghermal Mehta was detained by the Additional Chief Secretary to the Government of Gujarat (Respondent No. 1) with a view to preventing him from engaging in transporting smuggled goods.
The grounds of detention were served upon him on the same day i.e. On January 4, 1978.
Briefly stated the grounds disclosed the following material against the detenu: on receipt of certain information on December 12, 1977 by the Customs officers of Ahmedabad, the said officers had kept a watch for a Fiat Car No. GTI 6020 and the said car with five occupants was intercepted in the early hours of December 13, 1977 near Naroda Railway Crossing and the occupants (the detenu and four others) were taken to the Customs Divisional Office, Paldi, Ahmedabad for examination.
The detenu and the other four occupants of the car denied that they were carrying any smuggled gold or prohibited articles, but on search of one of the occupants Sheveram Atmaram Chandwani two cloth bags were recovered D, from him, in one of which there were 27 gold bars of foreign marking weighing 19 tolas valued at Rs. 2,16,00 and in the other there were 18 pieces of gold bearing 'Trishul ' mark valued at Rs. 1,94,400/ .
Chandwani in his statement before the Customs officers stated that the two bags which he was carrying on his person belonged to the detenu who was dealing in Silver and Gold in Udaipur and that he was merely a carrier who used to receive remuneration of Rs. 100/ per trip from the detenu.
Two statements of the detenu were recorded by the Customs officers on December 13 and 14, 197$, in which he corroborated the version of Chandwani but added that the entire quantity of foreign marked gold and the 'Trishul ' marked gold belonged to one Prem of Chandni Chowk, Delhi, for and on whose behalf he was carrying the gold from Delhi to Udaipur and from Udaipur to Ahmedabad for disposing it of to two persons, Namely, Poonamchand Laxmanji and Bhagubhai in Ahmedabad.
The detenu also stated that this had been going on for about six to eight months and that he had made five to six trips in a month and on each such trip he used to carry 2 1/2 to 3 kgs.
of gold.
He further admitted that the Fiat Car in question had been purchased for this purpose for Rs. 15,000/ which money had been provided by Prem.
He further stated that after disposal of the gold belonging to Prem at Ahmedabad he used to carry the sale proceeds to Prem and account for the same at the time of the next transaction between him and Prem.
Counsel for the petitioner (being the wife of the detenu) did not dispute that the aforesaid material disclosed in the grounds was 15 817SCI/78 218 prima facie sufficient to show the detenu 's involvement in the racket of smuggling gold, namely, transporting smuggled gold from Delhi to Udaipur and from Udaipur to Ahmedabad but he challenged the detention order on the ground that procedural safeguards had not been followed vitiating the requisite satisfaction on the part of the detaining authority under section 4(1).
It appears that when the interrogation of the detenu was going on while he was in custody of the Customs officials, Smt.
Devyantiben Shah, an Advocate of the detenu addressed a letter as also a telegram, both dated December 14, 1977, making a grievance about the wrongful restraint and illegal custody of the detenu by the Customs officers beyond 24 hours and expressing apprehension that .
the detenu had been so detained with a view to obtain confessional statements against his will.
The receipt of the letter was disputed but the Assistant Collector of Customs admitted the receipt of the telegram from the Advocate on December 15, 1977.
By his reply dated December 15, 1977 sent to the Advocate, the Assistant Collector denied the allegations made in the telegram.
Admittedly on December 14, 1977, the Advocate had gone to the Customs office and had sought permission to remain present at the time of the interrogation of the detenu but her request was not acceded to as the Customs Officers were of the view that there was no provision in law permitting an Advocate to remain present at the time of interrogation.
Further on this occasion the Advocate was told that the detenu will be produced before the Magistrate at 5.30 p.m.
On that very day and, therefore, she waited in the Magistrate 's Court upto 5.30 p.m. to obtain bail for the detenu but as the detenu was not produced the Magistrate declined to pass any order on the bail application.
On December 15, 1977 the detenu was produced before the Magistrate who remanded him to Customs custody for five days in spite of opposition by the Advocate.
On December 20, 1977 the detenu was again produced before the Magistrate and even on this occasion bail was refused but the detenu was remanded to judicial custody permitting further interrogation by Customs Officers.
On December 22, 1977 while he was in judicial custody the detenu was interrogated by Customs officers and his statement was recorded on that day but the detenu refused to sign the same and instead made an endorsement that his earlier statements dated December 13 and 14, 1977 and the facts stated therein were not correct.
In other words, in his statement dated December 22, 1977 the detenu had resiled from his earlier confessional statements and had squarely repudiated the facts stated therein.
On January 3, 1978 the Advocate of the detenu made another application for getting him released on bail as the period of remand was to expire on January 1978 and that application was fixed for hearing on January 6, 1978 but on January 4, 1978 itself while the 219 detenu was in judicial custody the Additional Chief Secretary to the Gujarat Government (Respondent No. 1) passed the impugned order under s.3(1) of the "COFEPOSA" and the detenu was detained thereunder.
The aforesaid detention was challenged by the appellant (wife of the detenu) before the Gujarat High Court under Article 226 of the Constitution by filing Special Criminal Application No. 20 of 1978 seeking a writ of habeas corpus for the release of the detenu principally on the ground that there was complete non application of mind on the part of the detaining authority (respondent No. 1) to the attendant circumstances in which the confessional statement of the detenu on which the detention order was mainly based were recorded, particularly the vital facts that transpired during the interrogation as also those that followed the recording of those statements.
It was contended that apart from the apprehension expressed in the Advocate 's telegram that the detenu was being detained with a view to obtain his confessional statements under duress, the said confessional statements had actually been retracted by the detenu at the first available opportunity when he was in judicial custody on the ground that these had been involuntarily extorted from him and that such retraction of the confessional statements was not intimated to the detaining authority and was not considered by it before passing the impugned detention order and as such for want of considering such vital fact the subjective satisfaction of the detaining authority got vitiated and the impugned order was liable to be set aside.
The High Court, however, rejected the said contention as also the other contentions urged on behalf of the appellant (the wife of the detenu) and dismissed the said application on May 29, 1978.
Against this dismissal the present appeal has been preferred.
Counsel for the petitioner contended before us that the High Court had clearly erred in taking the view that since the contents of the telegram dated December 14, 1977 expressing the apprehension had been made known to the detaining authority it could not be said that this material aspect of the case had been kept back from the detaining authority.
It was pointed out that the mere expression of an apprehension that confessional statements might be extorted was different from the actual obtaining of the statements under pressure of which a complaint had been made by the detenu in his statement recorded on December 22, 1977 wherein the earlier statements had been completely retracted and it was urged that the fact that there was such retraction of the confessional statements by the detenu at the first 220 available opportunity was not communicated or placed before the detaining authority when it considered the question of passing the impugned order.
Counsel further contended that instead of considering whether these facts were vital enough to require the application of mind by the detaining authority, the High Court went on to record findings of fact, to the effect (i) that it could not be said that the detenu was in illegal custody: (ii) that the confessional statements could not have been extracted under compulsion and (iii) that the said statements were not obtained under duress and in doing so the High Court clearly acted in excess of jurisdiction and contrary to the well established principles applicable to the issue of habeas corpus in preventive detention case.
In any case it was for the detaining authority to apply its mind to these aspects before deciding to issue the impugned order.
Counsel further contended that it was undisputed that the Advocate was not allowed to be present nor allowed to be consulted during the interrogation in spite of request having been made in that behalf which clearly showed that the detenu was under duress and not a free person.
In any event, counsel contended, the satisfaction of the detaining authority must be regarded as vitiated inasmuch as these vital facts, namely, (i) that during interrogation in spite of request neither the presence nor the consultation of the Advocate was permitted; (ii) that in spite of intimation to the Advocate in that behalf the detenu was not produced before the Magistrate at 5.30 p.m.
On December 14, 1977 and (iii) that the confessional statements had been squarely retracted by the detenu on December 22, 1977 at the first available opportunity while he was in judicial custody all of which had a material bearing and would have influenced the mind of the detaining authority one way or the other were neither placed before nor considered by the detaining authority before passing the detention order on January 4, 1978 and, therefore, the impugned order was liable to be set aside.
We find considerable force in these contentions urged by counsel for the appellant before us.
It is well settled that the subjective satisfaction requisite on the part of the detaining authority, the formation of which is a condition precedent to the passing of the detention order will get vitiated if material or vital facts which would have a bearing on the issue and would influence the mind of the detaining authority one way or the other are ignored or not considered by the detaining authority before issuing the detention order.
In Sk.
Nizamuddin vs State of West Bengal(1) the order o`f detention was made on September 10, 197 under s.3(2) (a) of MISA based on the subjective satisfaction of the District Magistrate that it was necessary to detain the petitioner with (1) ; 221 a view to preventing him from acting in a manner prejudicial to the maintenance of supplies and services essential to the community and his subjective satisfaction, according to the ground of detention furnished to the petitioner, was founded on a solitary incident of theft of aluminium wire alleged to have been committed by the petitioner on April 14, 1973.
In respect of this incident of theft a criminal case was filed inter alia against the petitioner in the Court of the Sub Divisional Magistrate Asansol, but the criminal case was ultimately dropped as witnesses were not willing to come forward to give evidence for fear of danger W their life and the petitioner was discharged.
It appeared clear on record that the history sheet of the petitioner which was before the District Magistrate when he made the order of detention did not make any reference to the criminal case launched against tho petitioner, much less to the fact that the prosecution had been dropped or the date when the petitioner was discharged from that case.
ID connection with this aspect this Court observed as follows: "We 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.
" It is true that the detention order in that case was ultimately set aside on other grounds but the observations are quite significant.
These observations were approved by this Court in Suresh Mahato vs The District Magistrate, Burdwan and others(1).
The principle that could be clearly deduced from the above observations is that if material or vital facts which would influence the mind of the detaining authority one way or the other on the question whether or not to make the detention order, are not placed before or are not considered by the detaining authority it would vitiate its subjective satisfaction rendering the detention order illegal.
After all the detaining authority must exercise (1) A.I.R. 1975 S.C. 728.
222 Due care and caution and act fairly and justly in exercising the power of detention and if taking into account matters extraneous to the scope and purpose of the statute vitiates the subjective satisfaction and renders the detention order invalid then failure to take into consideration the most material or vital facts likely to influence the mind of the authority one way or the other would equally vitiate the subjective satisfaction and invalidate the detention order.
In the instant case admittedly three facts were not communicated to or placed before the detaining authority before it passed the impugned order against the detenu, namely, (i) that during interrogation of the detenu, in spite of request neither the presence nor the consultation of the Advocate was permitted; (ii) that in spite of intimation to the Advocate in that behalf the detenu was not produced before the Magistrate on December 14, 1977 and (iii) that the confessional statements were squarely retracted by the detenu on December 22, 1977 at the first available opportunity while he was in judicial custody; the first two had a bearing on the question whether the confessional statements had been extorted under duress from the detenu or not, while the third obviously was in relation to the confessional statements which formed the main foundation of the impugned order and such were vital facts having & bearing on the main issue before the detaining authority.
As regards the first this Court in Nandini Satpathy 's(1) case has observed in para 63 of the judgment thus: "Lawyer 's presence is a constitutional claim in some circumstances in our country also, and, in the context of Article 20(3), is an assurance of awareness and observance of the right to silence.
The Miranda decision has insisted that if an accused person asks for lawyer 's assistance, at the stage of interrogation, it shall be granted before commencing or continuing with the questioning.
We think that Article 20(3) and Article 22(1) may, in a way, be telescoped by making it prudent for the police to permit the advocate of the accused, if there be one, to be present at the time he is examined.
Overreaching Article 20(3) and Section 16(2) will be obviated by this requirement.
We do not lay down that the police must secure the services of a lawyer.
That will Lead to 'police station lawyer ' system, an abuse which breeds other vices.
But all that we mean is that if an accused person expresses the wish to have his lawyer by his side when his examination goes on, this facility shall not be denied, without being exposed to the serious reproof that involuntary self crimination secured in secrecy and by coercing the will, was the project." (1)[978] 2 S.C.C.424.
223 In this case the request to have the presence/consultation of a lawyer was turned down owing to some misconception of the legal position but that apart, the fact that such a request was made and refused ought to have been intimated to the detaining authority.
Further, in passing the detention order the detaining authority obviously based its decision on the detenu 's confessional statement of December 13 and 14, 1977 and, therefore, it was obligatory upon the Customs officers to report the retraction of those statements by the detenu on December 22, 1977 to the detaining authority, for, it cannot be disputed that the fact of retraction would have its own impact one way or the other on the detaining authority before making up its mind whether or not to issue the impugned order of detention.
Questions whether the confessional statements recorded on December 13 and 14, 1977 were voluntary statements or were statements which were obtained from the detenu under duress or whether the subsequent retraction of those statements by the detenu on December 22, 1977 was in the nature of an after thought, were primarily for the detaining authority to consider before deciding to issue the impugned detention order but since admittedly the aforesaid vital facts which would have influenced the mind of the detaining authority one way or the other were neither placed before nor considered by the detaining authority it must be held that there was non application of mind to the most material and vital facts vitiating the requisite satisfaction of the detaining authority thereby rendering the impugned detention order invalid and illegal.
For these reasons we set aside the impugned detention order.
P.B.R. Appeal allowed.
| IN-Abs | A detention order, under section 3(1) of the , was passed by the respondent against the detenu (appellant 's husband) with a view to prevent him from engaging in transporting smuggled gold.
When the detenu was in the custody of the Customs officers, his advocate addressed a letter and sent a telegram to them protesting against his detention and illegal custody beyond 24 hours and also expressing an apprehension that he was being detained with a view to obtain confessional statements under duress.
It was admitted that the advocate 's request for permission to remain present at the time of interrogation of the detenu was turned down by the Customs officers.
The advocate was also told that the detenu would be produced before a Magistrate at 5.30 p.m.
On the day of her request.
But that was not done.
He was produced on the following day and was remanded to judicial custody permitting further interrogation by the Customs officers.
During such interrogation while in judicial custody, the detenu refused to sign the further statements and squarely resiled from his earlier confessional statements disowning the facts therein stated.
While the detenu 's application for bail was pending before the Magistrate, the respondent passed the impugned order.
In her petition under article 226 of the Constitution for the issue of a writ of habeas corpus the appellant contended that the order of the detaining authority was liable to be set aside because full facts of the case were not intimated to it before detention order was passed and, therefore, there was complete non application of mind of the detaining authority to the attendant vital circumstances.
The High Court dismissed the petition.
Allowing the appeal, ^ HELD: (1) The impugned order was invalid and illegal because there was complete non application of the mind of the detaining authority to the most material and vital facts which would have influenced the mind of The detaining authority one way or the other as these were neither placed before it nor considered by the detaining authority.
[223E] (2) It is well settled that if material or vital facts, which would influence the mind of the detaining authority one way or the other on the question whether or not to make the detention order, are not placed before or are not con 216 sidered by the detaining authority it would vitiate its subjective satisfaction rendering the detention order illegal.
The detaining authority must exercise due care and caution and act fairly and justly in exercising the power of detention and if taking into account matters extraneous to the scope and purpose of the statute vitiates the subjective satisfaction and renders the detention order invalid then failure to take into consideration the most material or vital facts likely to influence the mind of the authority one way or the other would equally vitiate t the subjective satisfaction and invalidate the detention order.
[222A B] In the instant case three facts were not communicated to or placed before the detaining authority before it passed the impugned order against the detenu viz., (i) during the interrogation, in spite of the request, neither the presence nor consultation of the advocate was permitted, (ii) in spite of intimation to the advocate by the Customs officers the detenu was not produced before the Magistrate at the appointed time and (iii) the confessional statements were squarely retracted by the detenu at the first available opportunity while he was in judicial custody.
The first two had a bearing on the question whether the confessional statements had been extorted under duress from the detenu or not.
while the third was in relation to the confessional statements which formed the foundation of the impugned order and as such were vital facts having a bearing on the main issue before the detaining authority.
Nizamuddin vs State of West Bengal ; ; Suresh Mahato vs The District Magistrate, Burdwan & Ors.
AIR 1975 SC 728; Nandini Satpathy vs The State of Orissa ; ; applied.
(3) The fact that the request to have the presence or consultation of the h lawyer was made and refused ought to have been intimated to the detaining authority.
Further in passing the detention order the detaining authority based its decision on the detenu 's confessional statements and, therefore, it was obligatory upon the Customs officers to report to the detaining authority the retraction of those statements by the detenu.
In fact of retraction would have its own impact one way or the other on the detaining authority before making up its mind whether or not to issue the impugned order of detention.
[223A B]
|
Civil Appeal No. 1836 of 1978.
From the Judgment and Order dated 27 5 1963 of the Punjab and Haryana High Court in Letters Patent Appeal No. 273/61.
Appellant in Person R. section Sodhi and Hardev Singh for Respondent No. 1.
Govind Das, Badri Das Sharma and R. N. Sachthey for Respondent Nos. 2 and 3.
The Judgment of the Court was delivered by SHINGHAL J.
This case for rehearing the appeal has come up before us in these circumstances.
Appellant K. N. Bahl was B.Sc.
(Agriculture) when he was appointed Overseer, Government Archaeological Gardens in Lahore, in 1935.
After the partition of the Country, he was employed as Subdivisional Officer (Horticulture) P.W.D.B.&R. (Development) by the Government of East Punjab.
He was selected for appointment as Assistant Superintendent of Archaeological Gardens in Delhi by the Union Public Service Commission and took up that appointment in 1950 with the concurrence of the East Punjab Government.
While serving on that post, he went to U.S.A. for further studies in Harvard and Cornell Universities in 1951.
While he was still there, the Punjab Government issued an advertisement, in 1952, inviting applications for the post of Landscape Architect, Capital Project, Chandigarh, in the scale of Rs. 625 1275.
He applied for the post, and was appointed as Landscape Architect on a temporary basis by an order dated May 24, 1952.
He returned after graduating M.Sc.
(Cornell) and becoming an Associate of the Institute of Landscape Architects, England, in 1953.
The Punjab Government issued an order fixing his pay at Rs. 825/ .
The Government of India requested the Punjab Government by a telegram dated May 30, 1953, for a short extension in the time allowed to Bahl to join as Landscape Architect, Chandigarh.
He was relieved by the Government of India on June 27, 1953, and reported for duty at Chandigarh on June 30, 1953.
He was however not allowed to join as the Chief Engineer took the stand that he was not in possession of the order of his appointment.
The State Government in fact appears to have taken the view that as Bahl had 1092 failed to join the Capital Project by June 1, 1953, the post had been filled by another candidate and the offer of appointment to him stood cancelled on May 30, 1953.
The Punjab Government appointed Harinder Singh Dhinsa as Landscape Architect by its order dated July 16, 1953.
Even though the Government of India sent a letter on August 8, 1953, explaining the delay in relieving Bahl and pointing out that it was not due to his fault, he was not allowed to join.
The Punjab Government wrote back in reply that the offer stood cancelled on May 30, 1953, and could not be revived.
Bahl therefore rejoined the Government of India on September 30, 1953.
It so happened that the Punjab Government once again advertised the post of Landscape Architect in 1954 stating that it was a temporary post but was likely to continue after February 28, 1955, and the period of probation would be six months in case of persons already in Government service and one year for direct recruits.
The Public Service Commission selected Bahl for the post and recommended a starting pay of Rs. 825/ in its letter dated July 13, 1954.
The State Government was requested to send special assessment Reports on the amount and quality of Bahl 's work in accordance with the earlier instructions.
Accordingly, a letter of his temporary appointment as Landscape Architect on a starting pay of Rs. 825/ was issued by the State Government on October 21, 1954, requesting the Government of India to relieve him immediately.
Bahl joined that post, and a notification was issued in the State Gazette dated November 23, 1954, intimating that he had taken over charge as Landscape Architect and Sub divisional Officer (Horticulture Subdivision) on November 6, 1954.
The probationary period of six months expired on May 5, 1955, but no action was taken about Bahl 's confirmation.
On the other hand, his period of probation was extended upto June 14, 1957.
Bahl 's representations for confirmation went unheeded.
It has been specifically stated in paragraph 13 of the writ petition that there was "further extension of the post upto February 28, 1958 and the end of March, 1958 and after that the post was extended monthly but the petitioner was not paid after May, 1958, although the post had been extended upto November, 1958.
" Soon after taking over charge on November 6, 1954, Bahl examined the statement of the sanctioned work for which liabilities were being incurred without sanction or estimates, and made a report thereof to the Executive Engineer on December 3, 1954.
He followed that up by another letter dated December 17, 1954, pointing out how 1093 those liabilities were incurred under verbal orders and even without authority involving "large liability".
He endorsed a copy of that letter to the Superintending Engineer, Capital Project Circle, for requesting the Financial Adviser to ask an Assistant Accounts Officer to cheek the statement of unsanctioned work for the month of November, 1954.
He himself addressed a letter to the Superintendent, Checking Party, Office of the Chief Accounts Officer, Capital Project, pointing out the irregularities.
Check was therefore taken up, and an interim report was sent on March 23, 1955.
It was stated in the report that an expenditure of Rs. 3,49,000/ was unauthorised as none of the estimated amount had been technically sanctioned or administratively approved.
The Finance Secretary also took up the matter on April 19, 1955, and asked the Chief Engineer to investigate into the serious irregularities and to tighten up the procedure in order to stop the leakage or waste of public money.
Another letter was issued on April 19, 1955, by way of reminder, which contained a suggestion for vesting the Landscape Architect with powers of Sub divisional Officer in his field of work.
The Finance Secretary also addressed a letter dated September 7, 1955, suggesting the delegation of some executive powers to the Landscape Architect and providing him with the necessary staff so that he could take charge of the Horticulture sub division.
The Accountant General sent a letter to the State Government on September 9, 1955, for sanctioning either an extension in the probationary period, or the confirmation of Bahl.
He followed that up by another letter dated May 15, 1956, by way of a reminder.
Bahl has placed reliance on a note dated September 5, 1957 to show that the Secretary P.W.D. (B.&R.) had recommended his confirmation on the temporary post of Landscape Architect "which was sanctioned till 28 2 57," and that the Public Works Minister had agreed to it but had inquired the date from which the confirmation was to take effect.
The case was however not submitted to him till November 15, 1956 when the Chief Engineer wrote that there was no necessity for the post and Bahl may be served with three months ' notice and reverted to the Agriculture Department.
One section Vohra took over as Secretary, Capital Project.
In his note dated September 5, 1957, he referred to the Chief Engineer 's earlier suggestion that Bahl 's work may be watched during the extended period of six months probation upto June 14, 1957 "as a last chance." By then the Superintending Engineer had written to the Chief Engineer that he was not impressed by Bahl 's behaviour towards his colleagues and he was not "needed for the post of Landscape Architect as the work is being done by AA/SA or for execution of Landscape plans, in view of the 1094 defects of character that have repeatedly come to notice." The Secretary recommended that Bahl 's services should be terminated and he may be sent back to his parent department.
He suggested that that could be done by abolishing the post of Landscape Architect and that as Bahl was likely to get much lesser pay there, that matter could be taken up separately with the Agriculture Department.
It appears that the Estimates Committee of the Vidhan Sabha recorded a statement of Bahl on September 25, 1957, to the effect that proper thought had not been given to plantation of trees before he took over.
Reference was made in the statement to H. section Randhawa, Chairman of the Landscape Committee, and it was stated that while he might have knowledge of trees, that did not mean that he was an expert in landscaping.
Some adverse entries were made about Bahl 's work, and he made a representation to the Chief Minister for expunging them on November 5, 1957.
He specifically stated there that he had already submitted his application for appointment under the Government of India, and the Union Public Service Commission was likely to have his personal file in that connection.
For that reason he asked for early action to expunge the remarks.
The Minister concerned recorded a minute on February 11, 1958, saying that he had carefully considered the representation of Bahl and pointing out that the previous two Ministers had given him good reports.
He therefore recommended to the Chief Minister that the adverse entries made against Bahl should be expunged and he should be confirmed on completion of his period of probation.
The Chief Minister recorded his minute dated February 13, 1958, agreeing with the Minister but suggested that he may arrange to assign the requisite staff to the Landscape Architect so that his services may be fully utilised in the preparation and execution of landscape plans.
Orders were issued on April 3, 1958, expunging the adverse remarks against Bahl for the period April 1, 1955 to November 20, 1956, and December 15, 1956 to March 31, 1957.
That was followed by a minute of the Minister dated August 5, 1958, referring to his earlier note dated July 8, 1958 for confirmation of Bahl and asking for the file.
He recorded another minute on August 18, 1958, to the effect that the post of Landscape Architect was most essential and stating that Government had ordered Bahl 's confirmation and provision for staff to him.
It was stated further that order of the Government had still to be implemented.
Bahl has invited our attention to the Chief Engineer 's draft for the abolition of the post of Landscape Architect, which he sent to Randhawa on September 20, 1958, and to the note of the Secretary dated October 16, 1958, that the Committee had come to the conclusion that the post of Landscape Architect may be abolished with immediate effect.
The 1095 Committee had met under the chairmanship of the Minister and he recorded his sanction to that proposal on October 19, 1958.
The Secretary prepared a note on October 22, 1958, accordingly, stating that Bahl should be reverted to his parent department.
He also recommended that the earlier decision to expunge the adverse entries from Bahl 's service record should be reviewed and those entries allowed to stand.
The Minister agreed with that recommendation on October 24/28, 1958.
The Chief Minister passed an order on October 29, 1958, that it would not look proper to modify the orders already passed by the previous Minister about expunging the remarks with which he had agreed.
He however agreed to Bahl 's reversion to his parent department with immediate effect.
Orders were accordingly issued for his reversion, and it is not in dispute that he stood reverted on November 4, 1958, to the Agriculture Department.
Bahl felt aggrieved and filed a writ petition in the Punjab High Court on May 27, 1959.
It was traversed by the State Government, and a learned Single Judge of the High Court dismissed it on September 7, 1961, leaving the parties to bear their own costs.
Bahl preferred an appeal, but it was dismissed by the High Court on May 27, 1963.
A certificate was however issued by the High Court for appeal to this Court.
It was heard by a Bench of three judges and was dismissed on February 2, 1972.
Bahl filed an application for review of that judgment but it was dismissed on April 16, 1973.
He filed another review petition and it was dismissed on July 29,1974.
It was restored by this Court 's order dated September 30,1974, and a notice was issued to the respondent to show cause why the review petition should not be granted.
The matter was then taken up on October 27, 1975, when the Court allowed the review petition and directed that appeal to be listed for hearing.
It is in these circumstances that this appeal has come up for hearing once again.
The arguments which have been advanced by the appellant relate to mala fides, and it will be desirable to refer to the allegation in that respect in the writ petition.
He has alleged that "by his good and honest work" he had incurred the "displeasure of his senior officers who from the very beginning were averse to his being brought over as Landscape Architect." He has further alleged that "his senior officers were not happy with him" and the order for the abolition of the post of Landscape Architect was passed and he was reverted to his parent department "mala fide, the result of inordinate hostility of the High Officers of the respondent who had not taken kindly to the petitioner, and who did not like that the petitioner should hold the post of Landscape Architect.
" This has been reiterated by alleging that the post was 1096 abolished "solely by the desire to remove the petitioner".
It would thus appear that the allegations regarding mala fides or bad faith were quite vague and indefinite, and did not contain any such detail as could enable the other party to answer them adequately.
Even so, we have examined the arguments of the appellant with reference to the evidence on the record.
It has been argued that although the appellant was appointed as Landscape Architect on a temporary basis in the Capital Project, Punjab, on May 24, 1952, he was not allowed to join that post when he reported for duty at Chandigarh on June 30, 1953, and had to rejoin his post with the Government of India on September 30, 1953.
This has been cited by the appellant as the first and the clearest instance of bad faith on the part of the State Government, and he has tried to trace his subsequent misfortune from that initial episode.
We have gone through the order of appointment dated May 24, 1952, and we find that it was categorically stated in paragraph 4 that if the appellant found the terms of his appointment acceptable, he should report for duty to the Senior Architect, Capital Project, Simla, 'not latter than June 30, 1952.
" That was reiterated in the subsequent letter of June 28, 1952.
But as will appear from the reply of the respondents, the appellant did not join the post on the appointed date and asked for extension of the joining time.
That was allowed upto November, 1952, but the appellant returned to India only in January 1953.
He did not care to join his post and raised the question of higher pay.
He was allowed further extension in the joining time upto May 21, 1953, with the clear stipulation that if he did not do so his appointment would be considered as canceled.
He did not join even then, and again raised the question of higher pay.
The State Government could not therefore be blamed if it took the view that the offer of appointment was not open to him when he wanted to take over charge on June 30, 1953, after a lapse of one year from the date of the appointment, and appointed H. section Dhinse as Landscape Architect.
An attempt has been made to argue that Dhinse was a favorite of the Government and that was the motive for preventing the appellant from joining the post, but that is easily disproved by the further fact that the Government displaced H. section Dhinse and asked the Public Service Commission soon after, on April 22, 1954, to recruit a suitable officer for the post.
Nothing could therefore possibly turn on the appellant 's discomfiture in missing the first appointment for, as has been shown, he himself was to blame for it.
It has next been argued that after the appellant was selected for appointment as Landscape Architect by the Public Service Commission and took charge on November 6, 1954, the post was abolished 1097 prematurely, out of malice, simply because the authorities concerned wanted to terminate his services somehow.
The appellant tried to contend that the post of Landscape Architect was meant to continue even after November, 1958 because of the provision in the budget estimates for the year 1958 59.
The contention is futile because the appellant has himself admitted in paragraph 13 of the writ petition that the post was extended upto February 28, 1958 and the end of March, 1958 and "after that the post was extended monthly.
" It has further been stated that the extension continued upto November 4, 1958.
There is therefore no force in the argument that the post was abolished prematurely for, as has been held by the High Court, it was merely allowed to lapse on the expiry of its extended term on November 4, 1958.
The appellant has tried to argue that the abolition of the post was a device to remove him and to punish him, and he has tried to support his argument by a reference to this Court 's decision in State of Haryana vs Des Raj Sanger and another (1) with the further contention that the abolition was without reason or justification.
The Punjab Government has dealt with this point in paragraphs 15 17 of its reply and has referred to the appellant 's inability to get alongwith his subordinates and colleagues as well as with the senior officers, and his habit of proceeding on leave without prior sanction during the plantation season.
Reference has also been made to the fact that his post was temporary all through.
It has been pointed out that the question of the continuation of the post was referred to a Special Committee consisting of the Minister of Public Works, M. section Randhawa and Saroop Krishna, Secretary to the Government (Capital Project).
It has been stated that the Committee arrived at the conclusion that the post of Landscape Architect was no longer necessary and decided to abolish it for that reason.
The matter was in fact referred to the Cadre Committee which also made a similar recommendation.
The order abolishing the post is on the record, and it shows that the reason for abolishing the post was that almost all the plans which were needed for the project had been prepared and the Chief Engineers ' organisation could have no difficulty in carrying on the outstanding work of only Rs. 1.66 lakhs.
It cannot therefore be said that the post was abolished without reason or justification, with the intention of getting rid of the appellant somehow and the appellant cannot find any support from the decision in Des Raj Sanger 's case (supra).
1098 An ancillary argument has been raised that the abolition of the post was in violation of the Rules of Business of the State Government according to which a post carrying a salary of Rs. 800/ per mensem or more could be abolished only by the Council of Ministers.
While examining the argument, the trial court took notice of the fact that it was not raised in the writ petition, and examined the relevant government files for satisfying itself that the final order was passed by the Minister concerned and the Chief Minister.
It has also to be remembered that this was not really a case of abolition of the post of Landscape Architect for, as has been stated, it was sanctioned upto November 4, 1958, and was allowed to lapse thereafter.
The appellant has tried to argue that his discontinuance on the post of Landscape Architect was due to personal reasons because the Chief Engineer and the Superintending Engineer were displeased with him for pointing out certain irregularities in incurring expenditure even though it was his duty to do so for he might otherwise have been held responsible for them.
We have made a reference to the developments that took place in this connection when the appellant sent a letter on December 17, 1954, reporting that certain references were untraceable and liabilities had been incurred under verbal orders or without authority involving considerable amounts and expressing his inability to submit the statements without examining the matter.
But that could not have created any hostility against him because a recommendation was all the same made for his confirmation by the Separately concerned as mentioned in the copy of the note dated September 5, 1957 filed by the appellant.
Moreover, while the controversy regarding the alleged unauthorised expenditure was raised on December 17, 1954, the decision to revert the appellant was taken after some four years on October 29, 1958, and we are not persuaded that there is any force in the argument that the appellant 's alleged exposure of irregularities in the expenditure led to an adverse decision against him after such a long time.
It is also significant that it is not the appellant 's case that any adverse remark was entered in his confidential report before April 1, 1956.
That would not have been so if the senior officers were against him and wanted to run him down because he had made an allegation regarding the irregularities in incurring the expenditure.
The appellant has in this connection invited our attention to his statement before the Estimates Committee of the Punjab Legislature in which he pointed out the defects in the earlier planning and management, with particular reference to M. section Randhawa who was Chairman of the Landscape Committee.
The appellant stated there 1099 that while Randhawa may have knowledge of trees, that did not mean that he was an expert in landscaping.
It has been urged before us that it was that statement which proved the appellant 's undoing, and he was thrown out by Randhawa 's influence.
There is however no force in this argument also because the adverse entries against him related to the period April 1, 1956 to April 23, 1956 and November 15, 1956 to March 31, 1957, whereas the Estimates Committee met in September, 1957.
The other argument that the Chief Engineer went to the extent of preparing the memorandum for the abolition of the post of Landscape Architect at the behest of Randhawa who was then Additional Secretary, Government of India, New Delhi, and was not serving the Punjab Government, and that it was sent for his approval on September 20, 1958 before circulation, is also of no consequence because he was, all the same, a member of the Capital Project Committee while serving the Government of India.
He was therefore directly concerned with the matter and there was nothing wrong in consulting him before sending the memorandum for circulation to the other officers concerned.
In fact, as has been stated, it came up for consideration before a Committee under the chairmanship of the Minister, and there is nothing on the record to show that there was bad faith on the part of the members of the Committee including M. section Randhawa in arriving at a decision on October 16, 1958, that the post shall be abolished.
Saroop Krishna was the Secretary concerned, and the appellant has not found it possible to urge anything against him.
He has also not found any fault with the Minister under whose chairmanship the Committee met and took the decision which proved the appellant 's undoing.
We are therefore unable to think that the decision was brought about by bad faith.
The appellant has argued further that the order abolishing the post of Landscape Architect was illegal as it denied him the benefit of three months ' notice for termination of his appointment in terms of paragraph 5 of the notification which was issued by the Public Service Commission inviting applications for the post.
Reference in this connection has been made to a Secretariat note dated September 5, 1957.
There is no force in this argument because no such term was specified in the letter of temporary appointment dated October 21, 1954.
Moreover it was specified in the notification of the Public Service Commission that the post was temporary upto February, 1955, but was likely to continue thereafter.
So if the term of the post was to expire on November 4, 1958, to the appellant 's knowledge, he could not possibly claim that he should have been given three months ' notice all the same as he was fully aware of his precarious tenure from month to month.
1100 The appellant has tried to argue that the post of Landscape Architect was not continued after November 4, 1958, because the Chief Engineer wanted to recruit Hardayal Singh Johal on that post later on.
It has been pointed out that it was for that purpose that the qualifications of the post were reduced to M.Sc.
(Agriculture) as Johal did not possess any higher qualification.
This argument is again futile because while the post of Landscape Architect was allowed to lapse on November 4, 1958 it has been admitted before us by the appellant that Hardayal Singh Johal assumed charge as Executive Engineer (Horticulture) in January, 1968.
The intervening period of 10 years is sufficient to show that there was no ulterior motive of the nature suggested by the appellant.
Then it has been argued that it was out of malice that confidential reports on the appellant 's work were obtained from R. N. Dogra, Principal, Punjab Engineering College, by a letter dated March 11, 1958 for the period April 1, 1955 to March 31, 1956, and a similar report was obtained from P. L. Verma by a letter dated April 9, 1958, for the period November 6, 1954 to March 31, 1955.
The argument is of no consequence because it is not unusual, or out of the way, for the department concerned to complete the record by asking for missing reports from officers who were in a position to supply them and had not retired.
At any rate, if it had been the intention to run down the appellant, R. N. Dogra or P. L. Verma would not have missed the opportunity of entering the adverse reports at the appropriate time.
It is also the grievance of the appellant that although he had become quite senior in his parent department (Agriculture), he was reverted to a non gazetted post in the scale of Rs. 100 300 which virtually amounted to the termination of his services.
It has further been argued that even if it had been decided to discontinue the post of Landscape Architect, there was no reason why he should not have been retained on the post of S.D.O. (Horticulture).
Here again, the argument loses sight of the fact that the order which the Chief Minister had made was that the appellant should be reverted to his parent department, and if the appellant had cared to join, there, it would have been open to him to make a representation for his appointment on a proper post with due regard to his seniority and service record.
If he did not do so, and stayed away from his parent department, it is not open to him to argue that he was not given a proper post there.
While doing so the appellant could lay a claim to the post of S.D.O. (Horticulture) if it belonged to his parent department, and if that was 1101 not so, there could be no justification for his asking for appointment to that post.
Considerable reliance has been placed by the appellant on the Chief Minister 's minute dated February 1, 1958, on the Minister 's recommendation dated February 11, 1958.
The Minister stated in his minute that he considered that the "adverse entries made against him (Bahl) should be expunged and he should be confirmed on the completion of his probation." That led to the following order of the Chief Minister dated February 13, 1958, "I agree with R. M. but he may kindly arrange to assign requisite staff to the Landscape Architect so that his services may be fully utilised by the Capital Project Administration in the preparation and execution of Landscape Plans.
" The appellant could justifiably argue that what the Chief Minister had agreed to was not only the expunction of the adverse entries, but also the Minister 's proposal for his confirmation, and that an order should have been issued accordingly.
But the fact remains that order was not issued for his confirmation and, on the other hand, when the Minister concerned sent the case back to the Chief Minister on October 24/28, 1958, with the proposal to review the earlier decision for expunction of the adverse entries, and to abolish the post of Landscape Architect and to revert the appellant to his parent department, the Chief Minister passed the following order on October 29, 1958, "It would not look proper to modify the orders already passed by the previous Minister about expunging of the remarks, and agreed to by me.
I agree regarding reversion of Shri Bahal to his parent Dept. with immediate effect.
" It is therefore quite clear that after the matter had been examined further in consultation with the officers concerned, the Chief Minister modified his earlier order dated February 15, 1958 and passed an order for the appellant 's immediate reversion to his parent department.
It was therefore permissible for the department to issue orders accordingly.
At any rate, the earlier order of the Chief Minister dated February 13, 1958 could not give rise to any right in favour of the appellant as it was not expressed in the name of the Governor as required by article 166 of the Constitution and was not communicated to the appellant.
As has been held by this Court in Bachhittar Singh vs The State of Punjab(1) it was only a provisional order which was 1102 open to reconsideration by the Chief Minister and did not bind anyone.
Nothing could therefore turn on the Chief Minister 's order dated February 13, 1958, when it was specifically rescinded by his subsequent order dated October 29, 1958.
There could in fact be no question of appellant 's confirmation as Landscape Architect as it was a temporary post all through until it was allowed to lapse on November 4, 1958.
The appellant has invited our attention to some developments which took place after he demitted office on November 4, 1958.
He has pointed out that the Government reversed the earlier order expunging the adverse entries by the subsequent order dated December 18, 1958, and it has been argued that this was enough to prove bad faith.
Our attention has in this connection been invited to the Deputy Secretary 's note dated August 28, 1959, that there was no cause for reversing the earlier order.
The respondents have pointed out that the Government re examined the matter and reversed the earlier decision because of subsequent developments.
But even if it were assumed that there was no justification for restoring the remarks which had once been expunged, that could not establish bad faith in issuing the order for the appellant 's reversion as it had been passed much earlier.
It appears that the appellant made a representation to the Governor of Punjab on April 22, 1959, and he has reproduced the Governor 's minute dated July 17, 1959 thereon in his petition of appeal to this Court.
We have gone through the minute and it shows that the Governor has expressed himself strongly in favour of the appellant.
All the same, he realised that he was unable to do anything for him; and it has not been urged before us that the Governor was in a position to order the appellant 's reinstatement on the post of Landscape Architect.
It would thus appear that although the appellant has based his case almost entirely on mala fides, he has not succeeded in proving the allegation.
As has been stated, he did not furnish the necessary particulars for the allegation, so that it was not obligatory for the respondents to deal with it in details in their reply.
Even as the allegation stood, what the appellant had to prove was not malice in its legal sense, for that was not his case.
He had therefore to prove malus animus indicating that the respondent State of Punjab was actuated either by spite or ill will against him or by indirect or improper motives, but no such particulars were furnished by him.
The appellant could also establish lack of bonafide either by proving that his 1103 reversion was ordered for a collateral purpose and not for the ostensible purpose of abolishing an unnecessary post, or by proving that the ostensible purpose of abolishing the post was so unconvincing and absurd as to lack bonafide in the circumstances of the case.
Both the direct and circumstantial evidence, as well as the respondents ' admission and the surrounding circumstances of the case, were admissible to establish lack of bonafide, or bad faith, but the fact remains that, for reasons already stated, he has not succeeded in proving the allegation.
As has been held by this Court in section Pratap Singh vs The State of Punjab(1) it is for the person seeking to invalidate an order to establish the charge of bad faith.
It has to be remembered that such a charge may be made easily or without a sense of responsibility, and that is why it is necessary for Courts to examine it with care and attention.
As the appellant failed in establishing his case, we find nothing wrong with the impugned judgment of the High Court dated May 27, 1963, and the appeal is dismissed.
In the circumstances of the case, the parties are left to bear their own costs.
Before parting with the case we will like to say that even though the appellant has not succeeded in establishing mala fides or bad faith on the part of the respondent State of Punjab, it is apparent that he was a highly qualified Landscape Architect and there is nothing on the record to show that he faked integrity.
The Governor has made strong observations in his favour in his minute dated July 17, 1959, and we think it is desirable that the government or governments concerned should make a lump sum payment to him in addition to any terminal benefit he might have received already, so that he may be able to find some solace now that he has attained the age of superannuation and cannot look out for fresh employment.
It may also be mentioned that the appellant made applications for the production of some record by the State Governments but we were satisfied, while hearing the arguments, that the State Governments had placed whatever record was available with them for the disposal of this appeal and the appellant cannot have any legitimate grievance on that account.
So far as we are concerned, we have not found any difficulty in disposing of this appeal on the basis of the material on the record.
N.V.K. Appeal dismissed.
| IN-Abs | The appellant who was an employee of the State Government in the Horticulture department, was on deputation with the Central Government.
In May, 1952 he was selected by the State Public Service Commission as Landscape Architect on a temporary basis.
From time to time he sought extension of time for joining the post and it was granted.
Eventually when he reported for duty in June, 1953 he was informed that the offer made to him stood cancelled as he did not join in time and that the post had been filled by appointing someone else.
He therefore rejoined the Government of India.
In 1954 the State Service Commission again advertised the post stating that it was a temporary post but was likely to continue.
The appellant was selected for the post and joined it on November 6, 1954.
His period of probation was extended but he was not confirmed in the post.
Eventually the State Government decided to abolish the post of Landscape Architect with immediate effect and the appellant reverted to his substantive post in the State service on November 4, 1958.
The High Court dismissed the appellant 's writ petition.
In appeal to this Court it was contended on his behalf that (i) the order of premature abolition of the post was male fide in that it was the result of inordinate hostility of higher officers towards him; (ii) the discontinuance of the post was due to personal reasons because the higher officers were displeased with him for pointing out irregularities in incurring expenditure and (iii) the order abolishing the post was illegal because it denied the benefit of three months notice for termination of his appointment.
Dismissing the appeal, ^ HELD: (1) (a) Although the appellant has based his case almost entirely on mala fides, he has not succeeded in proving the allegation.
[1102G] (b) He did not furnish the necessary particulars for the allegation.
What he had to prove was not malice in its legal sense but males animus indicating that the State Government was actuated either by spite or ill will against him, 1090 or by indirect or improper motives.
It was also not shown that his reversion was ordered for a collateral purpose and not for the ostensible purpose of abolishing an unnecessary post, or by proving that the ostensible purpose of abolishing the post was so unconvincing and absurd as to lack bona fides.
Both direct and circumstantial evidence were admissible to establish lack of bona fides or bad faith, but the appellant has not succeeded in proving the allegation.
[1102 H 1103 B] (c) It is for the person seeking to invalidate an order to establish the charge of bad faith.
Such a charge may be made easily or without any sense of responsibility.
That is why courts examine it with care and attention.
[1103 C] section Pratap Singh vs The State of Punjab, ; at 741; referred to.
(2) It cannot be said that the post was abolished without reason or justification, but with the intention of getting rid of the appellant somehow.
The post was a temporary one all through.
The question of continuation of the post was referred to a special committee presided over by the Minister and that committee came to the conclusion that the post was no longer necessary and should therefore be abolished.
The Cadre Committee to which also a reference was made, made a similar recommendation.
The reason for abolishing the post was that almost all the plans which were needed for the project had been prepared and the Chief Engineer 's Organization would have no difficulty in carrying on the outstanding work.
[1097 H, 1097 E G] State of Haryana vs Des Raj Sengar, ; ; held not applicable.
(3) There is nothing on record to show that the appellant 's alleged exposure of irregularities in the expenditure led to an adverse decision against him.
While the controversy regarding the alleged unauthorised expenditure was raised in December, 1954, the decision to revert him was taken four years later.
[1098 F] (4) There was no term in the order of appointment given to the appellant that he would be entitled to a three months ' notice for termination of his appointment.
The State Public Service Commission specified in the impugned notification that the post was temporary upto February, 1955 but was likely to continue thereafter.
If the appellant knew that the term of the post was to expire in November, 1958, he could not possibly claim that he should have been given three months ' notice.
He was fully aware of his precarious tenure from month to month.
[1099 F H] (5) The earlier order of the Chief Minister dated February 13, 1958 in the appellant 's favour could not give rise to any right as it was not expressed in the name of the Governor as required by article 166 of the Constitution and was not communicated to the appellant.
It was only a provisional order which was open to reconsideration by the Chief Minister and did not bind anyone.
Nothing could, therefore, turn on the Chief Minister 's order dated February 13, 1958, when it was specifically rescinded by his subsequent order dated October 29, 1958.
There could be no question of appellant 's confirmation as Landscape Architect as it was a temporary post all through until it was allowed to lapse on November 4, 1958.
[1101 G 1102 B] 1091 Bachittar Singh vs State of Punjab, [1962] Suppl.
3 SCR 713; referred to.
(6) This was not really a case of abolition of the post of Landscape Architect, for the post was sanctioned upto November 4, 1958 and was allowed to lapse thereafter.
|
Appeal No. 206 of 1955, 63 On appeal from the judgment and order dated the 5th May 1954 of the Patna High Court in Appeal from the Original Order No. 284 of 1951 arising, out of the order dated the llth July 1951 of the Court of Subordinate Judge, Motihari in Misc.
Case No. 30 of 1951.
Veda Vyas, (section K. Kapur and Ganpat Rai, with him) for the appellant.
C.K. Daphtary, Solicitor General of India (K. B. Asthana and C. P. Lal, with him) for respondent NO. 1. 1956.
January 31.
The Judgment of the Court was delivered by BOSE J.
This appeal arises out of certain execution proceedings.
The decree which the appellant, Jainarain Rain Lundia, seeks to execute is one that directsspecific performance of a contract to sell certain shares in a private limited company known as the Ganga Devi Sugar Mills, together with a five annas share in a partnership firm called the Marwari Brothers, on payment of a sum of Rs. 2,45,000.
The facts are as follows.
The partnership firm, known as the Marwari Brothers, was formed on the 29th of February 1936.
The partners consisted of two groups called the Bettia Group and the Padrauna Group.
The Padrauna Group consisted of (1) Kedarnath Khetan and (2) a firm called Surajmal.
These two were the plaintiffs in the suit.
Kedarnath was one of the partners of the Surajmal firm.
The Bettia Group consisted of (1) Gobardhan Das (2) Jainarain Ram Lundia (3) Badri Prasad and (4) Bisheshwar Nath.
On Bisheshwar Nath 's death his son Madan Lal Jhunjhunwalla stepped into his shoes.
These persons were the defendants.
The Marwari Brothers Firm was formed for the purpose of promoting a company for starting a sugar mill in Champaran and for securing the managing agency of the company for itself for a period of ninety years.
This was done.
The capital of the company consisted of Rs. 8,00,000 divided into 800 shares of 64 Rs. 1,000 each.
The shares were distributed as follows.
In the Bettia Group Gobardhan Das and his brother Badri Prasad had 100 shares; Jainarain had 150 and Madan Lal had 100.
The Bettia Group thus had 350 shares between them.
The other group (Padrauna) held the remaining 450 shares.
About five years later the two sets of partners fell out and, as a result, the Bettia Group agreed, on 1 1 1941, to sell a certain number of their shares in the Ganga Devi Sugar Mills Limited to the Padrauna Group along with a certain share in the Marwari Brothers firm.
The exact number of shares agreed to be sold and the extent of the share in the firm was amatter of dispute but that does not concern us at this stage because we are only concerned with the final result embodied in the decree now under execution.
The Padratuna Group sued for specific performance and the dispute was carried as far as the Federal Court.
That Court affirmed the decree of the Calcutta High Court on 6 5 1949.
The substance of the decree was this: 1."It is declared that upon payment and or tender to the defendants appellants Jainarain Ram Lundia and Madan Lal Jhunjhunwala of the sum of Rs. 2,45,000 with interest thereon by the plaintiffs, the plaintiffs are entitled to 250 shares belonging to the said defendants in the Ganga Devi Sugar Mills Limited and five annas share belonging to them in the Marwari Brothers and to all dividends and profits in respect thereof with effect from 1 2 1941 2."And it is further ordered and decreed that against payment or tender by.
the plaintiffs to the said defendants of the said sum of Rs. 2,45,000 with interest as aforesaid the said defendants appel]ants and all proper parties do execute in favour of the plaintiffs proper deed or deeds of transfer or assignment of the said 250 shares in the Ganga Devi Sugar Mills Limited and the said five annas share in the Marwari Brothers This was in slight variation of the first Court 's decree.
The exact variation does not matter.
All 65 that it is necessary to note is that the plaintiffs (that is, the Padrauna Group) tendered the money some time after the first Court 's decree and before the Calcutta High Court 's decree.
The tender was not accepted as the defendants (the Bettia Group) had appealed.
It is admitted that there was no second tender after the High Court 's decree.
After the Federal Court had settled the matter, one of the defendants, Jainarain Ram Lundia, applied to the Calcutta High Court for execution.
The decree was transferred to the Subordinate Judge, Motihari, and the execution proceedings started there on 25 1 1951.
One of the plaintiffs, Kedarnath Khetan, filed an objection petition on 20 3 1951.
That is the objection we are concerned with.
Among other things, one of the objections was that the defendants were not in a position to implement the conditions imposed on them by the decree because the Marwari Brothers firm was dissolved by agreement between the parties before the Federal Court 's decree and was no longer in existence.
The present appeal turns almost entirely on that fact and on the conseq uences that flow from it.
The first Court, that is, the Subordinate Judge 's Court at Motihari to whom the decree bad been transferred, declined to go into this holding that it had no jurisdiction as a transferee Court.
The plaintiff Kedarnath appealed to the High Court and succeeded.
The High Court held that the transferee Court had jurisdiction, that the Marwari Brothers had been dissolved and that because of that the defendants could not execute the decree.
The defendants appealed here.
We will first consider the question of fact, namely, whether the Marwari Brothers was still in existence as a firm at the date of the execution application.
On this point we agree with the High Court that it was not, for the following reasons.
The plaintiff Kedarnath asserted in his objection petition that the firm had been dissolved by agreement between the parties "including the plaintiffs and the defendants".
This fact was not denied by 9 66 the defendant Jainarain Ram Lundia in his rejoinder though the fact was specifically alleged to be within his personal knowledge.
Even if he did not know whether the firm bad been dissolved or not (a fact which cannot be the case for reasons that we shall give later) he was certainly in a position to admit or deny whether the fact was within his personal knowledge.
His silence can therefore only have one meaning.
The defendant 's learned counsel contended before us that the fact had been denied by implication because Kedarnath stated that his side was, and had always been, ready to perform their part of the decree.
Counsel argued that as the plaintiffs contended that performance was not possible after the dissolution of the Marwari Brothers firm this meant that the firm was still in existence.
We reject this contention and remark in passing that this is inconsistent with another argument which was also urged in this Court, namely that the fact of dissolution was no bar to performance on the defendant 's part.
Quite apart from the language of the rejoinder, the defendant Jainarain said in paragraph 15 of his application dated 12 7 1954 made to the High Court for leave to appeal here that "the said Marwari Brothers was in existence on the date of the said conveyance, namely 14th September 1950, and died a natural death on the conveyance of the Ganga Devi Sugar Mills to North Bihar Sugar Mills".
This is a clear admission that the firm was dissolved, at any rate, on 14 9 1950.
The plaintiff 's contention is that it was dissolved much earlier but whether that was so or not will make no difference to this appeal because 14 9 1950 is also before the date of the application for execution.
The defendant 's learned counsel tried to explain this away also.
He said that the defendant did not mean that the firm was dissolved on that date but that as the only purpose for which the firm existed, namely, the managing agency of the Ganga Devi Sugar Mills, had gone the firm could no longer function.
67 In order to understand this, some further facts will be necessary.
While the plaintiff 's appeal was being heard in the High Court, the defendants made an application to that Court on 14 4 1954 asking for permission to adduce further evidence in the shape of a sale deed dated 14 9 1950.
The defendant con , tended that he had only "recently" come to know that the Ganga Devi Sugar Mills had sold all its land, machinery, etc.
to the North Bihar Sugar Mills on 14 9 1950.
This terminated the managing agency, and as the only business of the firm was this managing agency and as that was the only purpose for which the firm was formed, it was no longer able to function.
But he said that this deed would show conclusively that the firm was in existence on that date.
The High Court refused to accept this document because it considered that the only ground on which additional evidence can be admitted in appeal is when the Court is unable to pronounce judgment on the material already before it; as that was not the case here it rejected the document.
We need not decide whether there is any conflict of view between the Privy Council decisions in Kessowji Issur vs G.I.P. Rly.(1) and Parsotim vs Lal Mohar(2) on the one hand and Indrajit Pratap Sahi vs Amar Singh(3) on the other because, even if this evidence were to be admitted and were to be accepted as true, there would still be the defendant 's admission in the High Court that the firm stood dissolved at least on 14 9 1950.
We are not able to construe the statement in any other way.
The plaintiff says that the dissolution was much earlier and that the firm mentioned in the sale deed now sought to be filed was not the same firm but another firm of the same name, but even if the defendant 's version be accepted the fact still remains that even according to his statement there was a dissolution before his application for execution and that therefore the defendants were not in apposition to assign their five annas share (1) [1907] L.R. 31 I.A. 115, 122.
(2) [1931] L.R. 58 I.A. 254.
(3) [1928] L.R. 50 I.A. 183, 190, 191.
68 in the Marwari Brothers firm.
We now have to consider the effect of that.
Much of the argument about this revolved round the question whether the equitable rules that obtain before decree in a suit for specific performance con tinue at the stage of execution.
It is not necessary for us to go into that here because the position in the present case is much simpler.
When a decree imposes obligations on both sides which are so conditioned that performance by one is conditional on performance by the other execution will not be ordered un less the party seeking execution not only offers to .perform his side but, when objection is raised, satisfies the executing Court that he is in a position to do so.
Any other rule would have the effect of varying the conditions of the decree: a thing that an executing Court cannot do.
There may of course be decrees where the obligations imposed on each side are distinct and severable and in such a case each party might well be left to its own execution.
But when the obligations are reciprocal and are interlinked so that they cannot be separated, any attempt to enforce performance unilaterally would be to defeat the directions in the decree and to go behind them which, of course, an executing Court cannot do.
The only question therefore is whether the decree in the present case is of this nature.
We are clear that it is.
The relevant part of the decree has already been quoted.
It directs that "against payment or tender by the plaintiffs. the said defendants. do execute in favour of the plaintiffs proper deed or deeds of transfer of . five annas share in the Marwari Brothers.
This is not a case of two independent and severable directions in the same decree but of one set of reciprocal conditions indissolubly linked together so that they cannot exist without each other.
The fact that it is a decree for specific performance where the decree itself cannot be given unless the side seeking performance is ready and willing to perform his side of the bargain and is in a position to do so, only strengthens the conclusion that that was the meaning 69 and intendment of the language used.
But the principle on which we are founding is not confined to cases of specific performance.
It will apply whenever a decree is so conditioned that the right of one party to seek performance from the other is conditional on his readiness and ability to perform his own obligations.
The reason is, as we have explained, that to hold otherwise would be to permit an executing Court to go behind the decree and vary its terms by splitting up what was fashioned as an indivisible whole into distinct and divisible parts having separate and severable existence without any interrelation between them just as if they had been separate decrees in separate and distinct suits.
Fry on Specific Performance was quoted to us (6th edition, Chapter IV, pages 546 onwards) where the learned author states that relief can often be obtained after judgment along much the same lines as before: thus a party to a contract may, in a proper case, apply for rescission of the contract and so forth.
it was urged by the other side that even if that can be done it can only be done by the Court which passed the decree and not in execution.
We do not intend to examine this because even if these remedies also exist, provided application is made to the proper Court, it does not affect the basic principle in execution that the executing Court must take the decree as it stands and cannot go behind it.
If the decree says that on payment being made some definite and specific thing is to be given to the other side, the executing Court cannot alter that and allow something else to be substituted for the thing ordered to be given.
The learned counsel for the defendant appellant contended that even if the Marwari Brothers had ceased to exist as a firm the plaintiff was still entitled to a five annas share in its assets on dissolution.
But a five annas share in the assets of a dissolved firm which has ceased to exist is a very different thing from a five annas share in a going partnership concern; and to permit this substitution in the decree would be to alter it in a very material particular.
The defendant may or may not have the 70 right to ask the Court which passed the decree to vary it in that way but he can certainly not, ask the executing Court to do so.
The decree must either be executed as it stands in one of the ways allowed by law or not at all.
In the High Court, and also before us, much was made of the fact that the plaintiff had not re tendered the money after the decree was varied by the High Court and it was argued that that precluded him from contesting the defendant 's right to attach his property under Order XXI, rule 32(1), of the Civil Procedure Code.
The remedy provided in Order XXI, rule 32(1), is, of course, one of the remedies available in execution of a decree for specific performance but it can only be used by a person who is entitled to execute the decree, and if, by reason of his own incapacity to perform his part, he is precluded from seeking execution, Order XXI, rule 32 (1), cannot apply.
The only question that remains is whether the executing Court can consider whether the defendant is in a position to perform his part of the decree.
But of course it can.
If the executing Court cannot consider this question who can? The executing Court has to see that the defendant gives the plaintiff the very thing that the decree directs and not something else, so if there is any dispute about its identity or substance nobody but the Court executing the decree can determine it.
It is a matter distinctly relating to the execution, discharge and satisfaction of the decree and so, under section 47 of the Civil Procedure Code, it can only be determined by the Court executing the decree.
And as for the first Court 's conclusion that it could not decide these matters because it was not the Court that passed the decree, it is enough to say, as the High Court did, that section 42 of the Code expressly gives the Court executing a decree sent to it the same powers in executing such decree as if it bad been passed by itself.
The next point urged by the appellant was that as the plaintiff did not raise the present objection before the Federal Court when it passed its decree he 71 is precluded from doing so now.
It is true this would have been a good ground for resisting a decree for specific performance but is no answer to the objection to execution.
The defendant undertook to perform his part when the decree was passed and he must make good that undertaking before he can seek execution because the decree, in view of its language and intendment, must either be executed as a whole or not at all; it cannot be split up into different and un correlated parts and be executed unilaterally.
It may be observed in passing that it was as much the duty of the defendant to seek modification of the contract by the Court which passed the decree, or modification of the terms of the decree later if he did not know these facts at the time, as he says, it was of the plaintiff.
The fact remains that the decree was passed in these terms and it must either be executed as it stands or not at all unless the Court which passed it alters or modifies it.
Then it was argued that this objection to execution should have been taken by the plaintiff in the Calcutta High Court when the defendant asked for transfer of the decree to Motihari and that as that was not done it is too late now.
But here also the answer is the same.
The only question before the Calcutta High Court on the application made to it was whether the decree should be transferred or not.
Whether the plaintiff might or could have taken the objection in the High Court is beside the point because it is evident that he need not have done so on the only issue which the application for transfer raised, namely, whether the decree should be transferred or not; at best it could only be said that the plaintiff had a choice of two forums.
If the appellant 's contention is pushed to its logical conclusion it would mean that whenever a decree is transferred all objection to execution must cease unless the order of the Court directing the transfer expressly enumerates the issues that the transferring Court is at liberty to determine.
In our opinion section 42 of the Civil Procedure Code is a complete answer to this contention.
The appeal fails and is dismissed with costs.
| IN-Abs | An executing court cannot go behind a decree so as to vary its terms and when the obligations it imposes on the parties are reciprocal and inseverable, rendering partial execution impossible, the decree must be executed wholly as it stands or not at all.
This is particularly true of a decree for specific performance where the party who seeks execution must satisfy the executing court that he is in a position to perform the obligations which the decree imposes on him.
That in cases where the identity or substance of what the decree directs a party to give to the other is in dispute, the executing court alone has the power to decide it under section 47 of the Code of Civil Procedure and under section 42 of the Code the powers of the court executing a decree on transfer are identical with those of the court which passed the decree.
That although the remedy provided by O. XXI, r. 32(1) of the Code of Civil Procedure is available in execution of a decree for specific performance, it can be used only by a person entitled to execute the decree and if, by reason of his own incapacity to perform his part, he is precluded from seeking execution, 0.
XXI, r. 32(1), can have no application.
Consequently, in a case where, as in the present, the defendant sought to execute a decree for specific performance of a contract but was himself unable to perform one of the obligations the decree imposed on his party, namely, to transfer five annas share in a partnership firm, for the reason that the firm had ceased to exist by dissolution before the date of execution, he was not entitled to execute the decree.
Held further, that the defendant could not be allowed to substitute five annas share in the assets of the dissolved firm instead, as that would amount to an alteration of the decree which the execution court was not competent to make.
|
Civil Appeal No. 1727 of 1972.
(Appeal from the Judgment and order dt.
8.12.71 of the Delhi High Court in Income Tax Reference No. 30/67).
T. A. Ramachandran for the appellant.
B. B. Ahuja and Miss A. Subhashini for the respondent.
The Judgment of the Court was delivered by PATHAK, J.
This appeal by special leave is directed against the judgment of the High Court of Delhi disposing of a reference made to its by the Income Tax Appellate Tribunal on the following question: "Whether on the facts and in the circumstances of the case the sum of Rs. 24,252/ is an item taxable in the previous year under the Provisions of section 10(2) (vii), The appellant is a partnership firm carrying on business as forest contractors.
The partners are Thakur Dan Singh and his son, Thakur Mohan Singh.
The appeal relates to the assessment year 1958 59, for which the previous year is the financial year ending March 31, 1958.
The business was originally carried on by a Hindu undivided family consisting of the aforesaid father and son.
There was a total disruption of the family on March 22, 1956 and on the same day the separated members of the family constituted a partnership firm under the name and style of Messrs. D. section Bist & Sons.
The business was taken over as a running concern by the firm.
At the time when the business was owned by the family, it included three trucks.
On account of depreciation allowed in earlier years the written down value of two trucks came to nil in the assessment year 1952 53.
As regards the third truck, according to what is stated in the judgment of the High Court the written down value stood reduced to nil by the date of disruption of the Hindu undivided family.
During the previous year ending March 31, 1958, relevant to the assessment year 1958 59, two trucks were sold for a total of Rs. 12,000/ while the third truck was sold for Rs. 12,252/ .
During the assessment proceeding for the assessment year 1958 59, the Income Tax Officer held that the entire sum of Rs. 24,252/ , representing the sale proceeds of the three trucks, should be deemed to be 226 Profits of the previous year ending March 31, 1958 by virtue of the second proviso to section 10(2) (vii) of the Indian Income Tax Act, 1922, and he included that amount in the total income of the appellant.
Before the Appellate Assistant Commissioner the appellant contended ' that as no depreciation was allowed to the appellant in respect of the three trucks no question arose of computing any profit in its hands, but the contention was rejected.
The appellant was unsuccessful before the Income Tax Appellate Tribunal also.
At the instance of the appellant, a reference was made to the High Court of Delhi.
The High Court took the view that inasmuch as the partners of the appellant were the same individuals who were members of the Hindu undivided family and as the business was taken over as a running concern by the appellant from the family "there was merely a change in the style and nature of the Hindu undivided family on March 22, 1956".
In the opinion of the High Court the original cost of the trucks to the appellant would be the same as it was to the Hindu undivided family and it rejected the contention that the original cost of the three trucks in the hands of the appellant must be taken as nil.
In the result, the High Court affirmed ' that the sum of Rs. 24,252/ was taxable in the hands of the appellant by virtue of the second proviso to section 10(2) (vii).
It appears from the judgment of the High Court that the written down value of the three trucks exhausted while they were still the assets of the Hindu undivided family business, the written down value of two trucks having been exhausted in the assessment year 1952 53 and that of the third truck having been exhausted in the assessment year 1956 57.
Accordingly, when the business was taken over by the appellant the written down value of the three trucks was nil.
In defining the expression "written down value" section 10(5) (b) declares that in the case of assets acquired before the previous year the written down value means ` the actual cost of the assessee less all depreciation actually allowed to him under the Act.
" It is urged on behalf of the appellant that the actual cost to the appellant of the three trucks was nil inasmuch as the written down value had already been exhausted when the business was taken over by the appellant.
It is urged that as no depreciation could possibly have been allowed to the appellant, no question arises of applying the second proviso to section 10(2) (vii).
Now, in enacting the second proviso to section 10(2) (vii) the Legislature sought to recover back from the assessee the benefit allowed to him by way of depreciation allowance earlier, and it did so by imposing a balancing charge on the excess of the sale price over the written down value to the extent of the total depreciation allowance granted to the assessee in the past.
In the present case, the appellant could not have been allowed any depre 227 ciation allowance for the reason that from the outset when the three trucks became its property, the written down value was nil.
No question can arise of imposing balancing charge under the second proviso to section 10(2)(vii).
It is contended by the Revenue that the business was taken over as a running concern by the appellant and" therefore, account should be taken of the depreciation allowed in the hands of the Hindu undivided family.
In our opinion, it is immaterial that the business was taken over as a running concern.
Where a business is taken over as a running concern by an assessee, the cost to it of the assets must ordinarily turn on the value of the assets as on the date of acquisition.
There is no material before us evidencing an intention to the contrary.
It cannot be disputed that the actual cost to the appellant of the three trucks must be regarded as nil, and that being so no depreciation can be said to have been ever actually allowed to the appellant.
It is pointed out by the Revenue that the partners of the appellant are the same two individuals who constituted the Hindu undivided family, and reliance has been placed on the observation of the High Court that in the constitution of the firm "there was merely a change in the style and nature of the Hindu undivided family".
Now we must remember that we are dealing with a case under the Income Tax Act.
We are concerned with provisions for the computation of income of an assessee for the purpose of determining its income tax liability.
It may be, as is quite often said, that a firm is merely a compendious description of the individuals who carry on the partnership business.
But under the Income Tax Act, a firm is a distinct assessable entity.
Section 3 of the Indian Income Tax Act, 1922 treats it as such, and the entire process of computation of the income of a firm proceeds on the basis that it is a distinct assessable entity.
In that respect it is distinct even from its partners.
Commissioner of Income Tax, West Bengal vs A. W. Figgies and Company and others(1) As an assessable entity it is also distinct from a Hindu undivided family, which in itself is regarded as a separate unit of assessment under Section 3.
Raja Bejoy Singh Dudhuria vs Commissioner of Income Tax, Bengal(D).
For the purposes of the question before us it recks little that the very individuals who constituted the Hindu undivided family now constitute the appellant firm.
When depreciation allowance was allowed to the Hindu undivided family in its assessment proceedings, it was a step taken in determining the taxable income of the family.
The depreciation allowed to the family (1) (2) 228 cannot be regarded as depreciation allowed to the appellant.
We must ignore entirely the circumstance that depreciation has been allowed to the Hindu undivided family in the past.
On these considerations it is not possible to say that the second proviso to section 10(2) (vii) is attracted.
Accordingly, we hold that the sum of Rs. 24,252/ is not taxable in the hands of the appellant for the assessment year 1957 58 by virtue of the second proviso to section 10(2) (vii) of the Indian Income Tax Act, 1922" and we answer the question referred in favour of the appellant and against the Revenue.
It was strenuously contended on behalf; of the Revenue that the sum of Rs. 24252/ should be considered as capital gains under section 12B of the Act, and that it could be brought to tax under that head.
There was some debate before us whether that point can be regarded as an aspect of the question specifically referred by the Tribunal for the opinion of the High Court.
We consider it unnecessary to enter into the matter, because it is open to the Tribunal to consider whether the assessment should be confirmed on any other ground, now that the case will be before it again for disposal conformably to this judgment.
The appellant is entitled to its costs of this appeal.
P.H.P. Appeal allowed.
& Case remitted.
| IN-Abs | A Hindu Undivided Family consisting of Thakur Dan Singh and his son, Thakur Mohan Singh was carrying on business as forest contractors.
There was a total disruption of the family in March, 1956.
On that day, the written down value of three trucks owned by the Hindu Undivided Family was nil on account of depreciation allowance granted under the Income Tax Act, 1922.
On the same day when the joint family was disrupted, Thakur Dan Singh and his son Thakur Mohan Singh constituted a partnership firm.
The business of Hindu Undivided Family was taken over as a running concern by the firm.
The firm sold the three trucks for Rs. 24,252/ .
The Income Tax officer held that the entire sale proceeds should be deemed to be profits of the firm by virtue of the second proviso to section 10(2)(vii) of the Income Tax Act, 1922 and 1: he included that amount in the total income of the appellant.
The decision of the Income Tax officer was confirmed by the Appellate Assistant Commissioner, the Income Tax Appellate Tribunal and the High Court.
The High Court took the view that inasmuch as the partners of the appellants were the same individuals who were the members of the Hindu Undivided Family and as the business was taken over as a running concern by the appellants from the family, there was merely a change in the style and nature of the Hindu Undivided Family.
According to the High Court, the original cost of the trucks to the appellant would be the same as it was to the Hindu Undivided Family.
Allowing the appeal by the assessee, ^ HELD: The second proviso to section 10(2)(vii) seeks to recover back from the assessee the benefit allowed to him by way of depreciation allowance earlier.
It does so by imposing a balancing charge on the excess of the sale price over the written down value to the extent of the total depreciation allowance granted to the assessee in the past.
In the present case, the appellant could not have been allowed any depreciation allowance for the reason that from the outset when the three trucks became his property the written down value was nil.
No question of imposing a balancing charge, therefore, can arise in this case.
It is immaterial that the business was taken over as a running concern.
It is also immaterial that the partners of the firm are the same as the members of the Hindu Undivided Family.
Under s.2 of the Income Tax Act, a firm is a distinct assessable entity.
[226G H, 227A, B C] 225 Commissioner of Income Tax, Bengal vs A. W. Figgics & Co. and Ors., S.C.I. Raja Bejoy Singh Dudhuria vs Commissioner of Income Tax, Bengal, ; relied upon.
When depreciation allowance was allowed to the Hindu Undivided Family in its assessment proceedings, it was a step taken in determining the taxable Income of the family.
The depreciation allowance allowed to the family cannot be regarded as depreciation allowed to the appellant firm.
[227GH, 228A]
|
Civil Appeal NOS.
64 65 of 1969.
(From the Judgment and Decree dated 1 12 61 of the Madhya Pradesh High Court in Misc.
First Appeal No. 43 of 1959).
section K. Gambhir for the appellant in CA 64 and Respondent in CA 65/69.
L. Sanghi, K. John and J. Sinha for the respondent in CA 64 and appellant in CA 65/69.
The Judgment of Jaswant Singh and R. section Pathak, JJ. was delivered by Jaswant Singh, J. A. P. Sen, J. gave a dissenting opinion.
JASWANT SINGH, J.
These two cross appeals by certificates of fitness granted by the High Court of Madhya Pradesh at Jabalpur are directed against the judgment and decree dated December l, 1961 of the said High Court dismissing the Misc.
(First) Appeal No. 42 of 1959 preferred by the appellant from the Award dated December 20, 1958 of the II Additional District Judge, Raigarh in Miscellaneous Judicial Case No. 59 of 1958 being a reference under section 18 of the Land Acquisition Act, made at the instance of the appellant in 13 817SCI/78 186 respect of the Award dated August 23, 1957 of the Land Acquisition officer, Raigarh.
The facts giving rise to these appeals are: on an undertaking given by him to pay full compensation with interest from the date of possession to the date of payment of compensation as provided in the Land Acquisition Act, 1894 (hereinafter referred to as 'the Act ') the District Engineer, South Eastern Railway, Raigarh, took advance possession on January 17, 1957 of five plots of agricultural land admeasuring 3.38 acres and another plot of agricultural land admeasuring 0.14 acres adjoining the railway track situate in village Darogamuda, Tehsil and District Raigarh, a suburb of Raigarh belonging to respondents I and 2 respectively for doubling the railway line between Rourkela and Durg in the South Eastern Railway.
Subsequently Notification dated February 8, 1957 under section 4(1) of the Act for acquisition of the aforesaid plots of land was issued and published in the Government Gazette dated February 15, 1957.
This was followed on March 21, 1957 by a notification under section 6 of the, Act.
Although in the r statements filed by them under section 9(2) of the Act the respondents claimed compensation at the rate of Rs. 32,670/ per acre i.e. at the rate of /12/ per square foot on the ground that the plots of land in question had a great potential value as a building site and Rs. 500/ for improvements and Rs. 100/ as the value of one tree, the Special Land Acuisition officer, Raigarh by his award dated August 23, 1957 awarded compensation at the rate of Rs. 3,327/14/ per acre which roughly worked out at /1/6 per square foot on the basis of the statement of sales furnished by A.S.L.R. (L.A.) prepared by Jujhar Singh N.A.W.I. Not satisfied with the quantum of compensation, the respondents made an application to the Special Land Acquisition officer requesting him to refer the matter to the court under section 18 of the ;1 Act.
According to the request of the respondents, the Special Land .
Acquisition officer made the aforesaid references to the II Additional District Judge, Raigarh, who by his award dated December 20, 1958 enhanced the rate of compensation to /4/ per square foot and awarded Rs. 36,808/4/ and Rs. 1,524/8/ to respondents l and 2 respectively as compensation.
The Additional District Judge also allowed the solatium at the rate of 15% amounting to Rs. 5.521/4/ and Rs. 228/12/ to respondents 1 and 2 respectively.
Aggrieved by the said , Award of the II Additional District Judge, the appellant preferred an appeal to the High Court of Madhya Pradesh at Jabalpur which was registered as Miscellaneous (First) Appeal No. 43 of 1959.
In the said appeal, the respondents filed cross objections claiming enhancement of compensation by Rs. 84,518.39 P.
The High Court by its 187 judgment dated December 1, 1961 dismissed the aforesaid appeal preferred by the appellant but allowed the cross objections filed by the respondents holding the reasonable rate of compensation to be /8/per square foot.
Consequently respondent No. 1 was held entitled to Rs. 73,616 8 O as compensation and Rs. 11,042 8 0 as solatium and respondent No. 2 was held entitled to Rs. 3,049 0 0 as compensation and Rs. 457 8 O as solatium.
It is against this judgment of the High Court that the present appeals are directed.
Appearing for the appellant, Mr. Gambhir while admitting that in an appeal under Article 136 of the Constitution, the Court is only concerned with finding out whether the principles on the basis of which compensation has been computed for acquisition of land under the Act have been rightly applied or not and cannot re appraise the evidence, has urged that the Additional District Judge and the High Court have erred in treating the land in question which was primarily an agricultural land as abadi land overlooking that it had not been declared as such.
Mr. Sanghi has on the other hand urged that even according to the findings of the Additional District Judge, who made the spot inspection, as also of the High Court, it is abundantly clear that the land in question was Abadi land and has been rightly treated as such.
Mr. Sanghi has further urged that the said site has great potentialities as building site.
The question as to whether a land has potential value of a building site or not is primarily one of fact depending upon several factors such as its condition and situation, the user to which it is put or is reasonably capable of being put, its suitability for building purposes, its proximity to residential, commercial and industrial areas and educational, cultural or medical institutions, existing amenities like water, electricity and drainage and the possibility of their future extension, whether the nearby town is a developing, or a prospering town with prospects of development schemes and the presence or absence of pressure of building activity towards the land acquired or in the neighbourhood thereof.
the instant case, the fact that the land in question has a great potential value as a building site is evident not only from the observations made by the Special Land Acquisition officer himself in his aforesaid award to the effect that the land has assumed semi abadi site hut also from the following observations made in his judgment dated December 20, 1958 by the Additional District Judge who had the advantage of inspecting the site: "The land abuts Raigarh town.
It is within Municipal limits and the nazul perimeter extends upto it.
To the east of 188 the plot there are some kutcha buildings inhabited by respectable persons.
To the North is a Municipal road leading to the railway quarters to the west.
To the west beyond the railway quarters, there is further habitation` and the locality is called "Banglapara" within Municipal limits.
The plot did have a potential value as a building site and it is further supported by the fact that the plot has been used by the Railway authorities for construction of staff quarters thereon though the land was acquired for doubling the rail way line.
" It is also not disputed that the Special Land Acquisition officer did not lead any evidence worth the name to show the price of the comparable sites in question and remained content with the production only of the sale statement made by Jujhar Singh, N.A.W.I.
Now the sale statement consisted mostly of sales relating to the year 1951 which is not relevant for the question in hand.
Moreover, the sale statement by it self without examining either the vendors or the vendees or the persons attesting the sale deeds is not admissible in evidence and can not be relied upon.
The sale deed dated December 14, 1956 in favour of Dr. Das for 4,800 square feet of land out of contigious Khasra No. 256 in lieu of Rs. 2,000/ i.e., at approximately 6 1/2 annas per square foot (which has been relied upon by the Additional District Judge and the High Court) could be taken as a safe guide for determine nation of the compensation.
From the material adduced in the case, it appears that Raigarh is a growing town, that instead of utilising the land for doubling the railway track, the railway has built staff quarters thereon, that on three sides of the acquired land, there already existed pucca buildings and on the fourth side, there is a metalled road.
It is also in evidence that some lawyers have put up some constructions near the sites in question.
Taking all the facts into consideration.
it cannot be said that the basis on which the Additional District Judge and the High Court proceeded is wrong or that the quantum of compensation awarded by the High Court is in any way excessive or exorbitant.
As neither the interest nor compensation on account of severance was claimed in the High Court either by Dr. Harisingh Thakur or by Tikam Singh Thakur, we do not think they can justifiably put up claims in that behalf.
Mr. Sanghi appearing on their behalf has fairly stated that he would not like to press his cross appeal.
In the result, we do not find any merit in either of the aforesaid appeals.
W. would accordingly dismiss them with costs.
SEN J. I have had the advantage of reading the judgment by my learned brother Jaswant Singh.
Since the appeal involves an important 189 question affecting valuation which has been overlooked by the High Court, I would like to say a few words of my own.
Normally, this Court does not interfere in appeal with the valuation by the High Court in land acquisition cases, unless the judgment cannot be supported, as it stands, either by reason of a wrong application of principles or because some important point in evidence has been overlooked or mis applied: The Special Land Acquisition officer, Bangalore vs Adinarayan Setty(1).
With respect, I venture to say that the judgment of the High Court cannot be supported by reason of a wrong application of principles.
It overlooked the fact that there was no discernible basis on which the Additional District Judge could have changed the mode of valuation adopted by the Special Land Acquisition officer treating the land acquired to be agricultural land and in awarding compensation upon the basis as if it were a building site.
Indeed, there was no atempt on their part to determine the ' 'intrinsic character of the land", namely, whether the land acquired should be classified as agricultural land or not.
In the present case, the High Court obviously fell into an error in overlooking the, fact that the acquired land situate in village Darogamuda, admeasuring 3.52 acres, was, on the 8th February, 1957 i.e. On the date of the issue of the notification under section 4(1) of the Act, agricultural land.
It was recorded as a raiyati land belonging to the two claimants, Dr. Harisingh Thakur and his brother Vikram Singh Thakur who were ex gaontiyas of village Darogamuda.
The land was not recorded as abadi as wrongly assumed by the High Court.
Perhaps it was misled by the mis description of the land as abadi in the reference made by the Collector under section 18(1).
This is an admitted position between the parties.
In response to the notice of admissions and denials of documents served by the claimants, the Collector admitted panchsala khasra for the years 1952 53 to 1953 54 and kistbandi khatouni for the years 1952 53 and 1953 54.
The claimant Dr. Harisingh Thakur, AW1 admits during his crossexamination that till the month of December 1956, the lands were actually under his cultivation and he had reaped the crops before delivering possession of the same on the 17th January, 1957 to the District Engineer, South Eastern Railway.
He further admits that throughout the land was under cultivation i.e. from the time, of his forefathers.
In fact, Jujhar Singh NAW1, Assistant Superintendent Land Records, who was at the relevant time a Revenue Inspector, states that the,. land (1) [1959] Supp.
(1) S.C.R. 404.
190 acquired was a paddy field and was surrounded by agricultural lands.
That being so, the District Judge, was clearly wrong in treating the land to be abadi and calculating compensation on the footing of its being a building site.
In awarding compensation at a flat rate of Rs. 3,327.87 P. per acre, the Special Land Acquisition officer took notice of the fact that the land is situate in village Darogamuda, a suburb of Raigarh, which is a town of great commercial importance, though beyond its nazul perimeter.
He also took notice of the fact that the land abuts the railway track and there were agricultural fields on two sides.
On the other two sides, there existed kutcha hutments of backward classes and a few railway buildings.
The award of compensation at the rate of Rs. 3,327.87 P. per acre was based on average of sales of lands in recent years as prepared by Jujhar Singh, Revenue Inspector NAW 1.
The Special Land Acquisition officer accordingly observed: "The average value based on the above noted sales comes to Rs. 3,327/14/ per acre and in my opinion it truly re presents the average market value of lands in this predominantly agricultural locality which has assumed semi abadi site value due to the constructions of houses mostly by low class people besides a few buildings of Railway Department.
It is for this reason that the average value per acre comes to as much as Rs. 3,327/14/ per acre else the lands in question would have fetched lower price, available in respect of agricultural lands to which class they really belong and stand assessed as such till today.
" While it is no doubt true, as my learned brother Jaswant Singh has rightly observed, that the statement of average of sales, prepared by Jujhar Singh NAW 1, was not admissible in evidence unless the Collector proved the transactions in question, upon which it was based, there is no denying the fact that the acquired land was nothing but agricultural land and the mode of valuation had necessarily to be upon that basis.
Now, if the purpose for which the land was acquired, i.e., for the construction of staff quarters in connection with the doubling of the railway line by the South Eastern Railway, has no bearing on the question of valuation, the future possibilities of the land, which admittedly was agricultural land, lying in the vicinity of Raigarh if applied to the most lucrative use, having regard to its the then condition, was very little as a building site.
The land was lying undeveloped and undiverted.
Unless there was a development scheme, the land could not 191 be valued as a building site.
The land could, however, be put to that use if there was such development scheme.
At the time of the notification under section 4(1), there was no recent building activity near about the land, which was either under cultivation or lying desolate.
But as l have already said, the land could be put to a better use provided it was fully developed as a building site.
The claimants were, therefore, entitled to the evaluation of the land as agricultural land with an additional allowance being made for its future potentiality as a building site.
I just cannot imagine what could be the utility of the acquired land on a building site, looking to its proximity to the railway track.
It would, indeed, be very little.
In a reference under 9. 18 of the Act, the burden of proving that the amount of compensation awarded by the Collector is inadequate lies upon the claimant, and he must show affirmatively that the Collector had proceeded upon a wrong basis.
The nature and the burden of establishing that he was wrong, depend on the nature of the enquiry held by him.
When the proceedings before the Collector disclose that the award was not reasonably supported by the material before him, or when the basis was the application of a 'multiple ' which could not be justified on any rational ground, the burden can be discharged by a slight evidence.
But that is not the case here.
The claimants have led no trustworthy evidence.
It is equally well settled that where the claimant leads no evidence to show that the conclusions reached in the award were inadequate, or, that it offered unsatisfactory compensation, the award has to be confirmed.
Upon a compulsory acquisition of property, the owner is entitled to the value of the property in its actual condition, at the time of expropriation, with all its advantages and with all its possibilities, excluding any advantage due to the carrying out of the claim for the purpose for which the property is acquired.
In Vyricharla Narayana Gajapatjiraju vs Revenue Divisional Officer Vizagapatnam(1) the Privy Council state: "For the land is not to be valued merely by reference to the use to which it is being put at the time at which the value has to be determined. but also by reference to the uses to which it is reasonably capable of being put in the future.
It is possibilities of the land and not its realized possibilities that must be taken into consideration.
" The value of the acquired property, with all its possibilities has to be ll adjudged on the material on record.
(1) 66.
I.A. 104.
192 The market price must be fixed with reference to the date of the.
notification under section 4 irrespective of any trend, if any, for an increase in the value thereof.
The basis for determination of the market value of tel land within section 23 (1) (i) of the Act is the value of the land to the owner.
Only such transactions would be relevant which can fairly be said to afford a fair criterion of the value of the property as at the date of the notification.
That test is clearly not fulfilled in the present case.
Clause fifthly in section 24 interdicts the court from considering any prospective increase in value due to acquisition.
Market value of the land acquired has to be fixed with reference to the date of notification under section 4 (1) .
In Vyricharla Narayana Gajapatiraju vs Revenue Divisional Officer, Vizagapatam (supra) the Privy Council observed that where the owner is a person who could turn the potentiality of the land into account, it is immaterial that the utilization of the same potentiality is also the purpose for which the land is acquired.
The Underlying principle is that a speculative rise in price of land due to acquisition should not be an element which should enter into computation.
Sometimes the prices shown in sale deeds executed subsequent in point of time are not the actual prices paid.
The sales may be.
unreal and may not reflect the true value of the land.
There always elapses a certain interval between the time when the intention to acquire Ea certain land first becomes known and the actual notification under section 4(1) is issued.
Here though the notification under section 4(1) was issued on 8th February, 1957, but the claimants had, in fact, delivered the possession to the District Engineer, South Eastern Railway on the 17th January, 1957, and were indeed, as it appears from the evidence, aware of the fact that the land was being acquired by the South Eastern Railway much earlier, i.e., in December, 1956.
In view of this, the prospective rise in value, if any, has to be kept out of consideration.
the principles to determine the quantum of compensation are contained in section 23(1) of the Act.
The court in fixing the amount has to take into consideration the prevailing market value of the land at The date of the notification under section 4(1) and the said market value has to be determined by reference to the price which a willing seller might have reasonably expected for similar property from a willing purchaser.
The underlying principle of fixing the market value with reference to comparable sales is to reduce the element of speculation.
In a comparable sale, the features are: (i) it must be within a reasonable time of the date of notification under section 4.(1); (ii) it should be a bona fide transaction; (iii) it should be a sale of the land acquired or of the land adjacent to the acquired; and (iv) it should possess 193 similar advantages.
Before such instances of sales can be considered there must be material evidence either by the production of the sale deeds or by examining the parties to the deeds or persons having knowledge of the sales, to prove that the transactions are genuine.
In the light of these principles, the three sale deeds relied upon by the High Court, Ext.
P 14, Ext.
P 15 and Ext.
P 17, pertaining to the small portions of the acquired land executed by the claimants, could not obviously be the basis for the determination of the market value of the land.
These sale deeds had clearly been brought into existence by the claimants in quick succession, in an attempt to inflate the price of the land, after they became aware of the proposed acquisition.
Of these, the land covered by the sale deed Ext.
P 14, dated 14th December, 1956 executed by Tikam Singh Thakur, i.e., just a month before the delivery of the possession, shows a sale of a plot measuring 4,800 sq.ft.
to Dr. Dhirendra Chandra Das, AW 2, for a price of Rs. 2,000/ .
The rate works out to about 42P per sq.
It evidently could not afford a fair criterion of the value of the property on the date of the notification under section 4(1).
Dr. Das admits that he is in Railway service and when he purchased the land he knew that it was being acquired by the South Eastern Railway.
No doubt Dr. Das is a willing friend of Dr. Harisingh Thakur prepared to lend a helping hand but, by no stretch of imagination, could he be treated to be a willing purchaser.
in the true sense of the term.
Though Dr. Das asserts that he had purchased the land for building a house, he admits that he did not construct upon it because he would have been required to invest considerable money for levelling the land making it fit to be utilised as a building site.
This transaction indubitably does not appear to be a real sale and could not furnish any guide for determination of the true market value.
I am afraid, the other two sale deeds, Ext.
P 15 dated 19th December, 1956 and Ext.
P 17 dated 21st February, 1957 executed by Dr. Harisingh Thakur, by which he sold 300 sq.
Of the acquired land to Jhallu Dani, AW 13 for Rs. 150/ and 280 sq.
ft to Baido, AW 15, for Rs. 200/ were, in fact, fictitious sales effected by him after delivery of possession to the South Eastern Railway.
The transactions speak for themselves.
Indeed, Ext.
P 17 was executed by him after issue of the notification under s.4(1).
The first sale was effected by the claimants to show the price of the land to be 50P per sq.
They were evidently not satisfied by this and, therefore, brought the other sale deed into existence, a few days after the notification, showing the rate to be about 72P per sq.
It is needless to stress that such fictitious and unreal transactions which are but 194 speculative in nature could not be taken into account by the High Court at all.
In Raghubans Narain Singh vs The Uttar Pradesh Government (1) this Court quoted with approval the following passage from one of its earlier decision in N. B. Jeajabhoy vs The District Collector, Thana,(2) where it was said: "the question therefore turns upon the facts of each case.
In the context of building potentiality many questions will have to be asked and answered: whether there is pres sure on the land for building activity, whether the acquired land is suitable for building purpose, whether the extension of the said activity is towards the land acquired, what is the pace of the progress and how far the said activity has ex tended and within what time, whether buildings have been put up on the lands purchased for building purposes, what is the distance between the built in land and the land acquired and similar other questions will have to be answered.
It is the overall picture drawn on the said relevant circumstances that affords the solution.
" In Raghubans Narain Singh 's case (supra) there was evidence to the effect that there was a school building near the acquired land, that the land abutted on the road and that some houses had been built on the opposite side of the road.
It was nevertheless held by this Court that all this did not constitute evidence of building potentiality.
It was pointed out that there should be evidence, on the record, 'of building activity of a substantial nature, being carried on in the neighbourhood of the acquired land, at about the time when the notification was issued '.
There is complete absence of such evidence in this case.
It is beyond doubt that the acquired land was agricultural land, and had not been diverted for non agricultural purposes.
Indeed, the claimant, Dr. Harisingh Thakur had himself admitted the land to be agricultural land.
The land is on the outskirts of Raigarh town but that itself does not show that the land had a potential value for building purposes.
It was for the claimants to show that at the relevant time there was a tendency of the town to develop in that direction and that prior to the acquisition new buildings had been constructed in the neighbourhood.
Topography of the acquired land which abuts the railway track is given by Jujhar Singh, NAW 1, the then Revenue Inspector, who states that actually paddy used to be grown on the land.
To the north of this land, there was cultivation.
Beyond it, there was a 10 ft.
(1) [1967] I S.C.R. 489.
(2) C.A. Nos. 313 to 315 of 1965 decided on August 30, 1965.
195 broad pucca road.
About three furlongs way from the land was the house of Ambalal.
About one and a quarter miles away there was a skin godown.
In the east, there were small huts.
Beyond them, in the east, at a distance of about half a furlong, there was the house of Jairamvalji.
In the west, about a furlong away, there was an old bungalow.
At about the same distance, there is the burial ground.
In between and all around, there were agricultural fields.
That is the total evidence of the case.
On this evidence it cannot be said that valuation should be made on the basis of the potentiality of the land as building site.
In the absence of comparable sales, the only other alternative to adopt is the capitalised value.
Compensation in respect of the agricultural land should be allowed on the basis of 20 years ' purchase.
The capitalisation basis cannot, however, be accepted in a case where, as in the instant case there is no evidence of the profits yielded from the land.
I would, therefore, for these reasons allow the appeal of the State of Madhya Pradesh.
It is with reluctance that I have written this separate opinion.
There has never been a public undertaking in this country Governmental, Municipal, city or industrial, but that the land holder has generally secured anything from four to forty times as much for the land as its agricultural price, i.e., many times its real value.
This result unfortunately springs from a general tendency of District Judges in hearing a reference under s.18 of the Land Acquisition Act, 1894, to assume that purely agricultural lands, merely by their proximity to a city or town, become endowed with 'special adaptability ' as a building site.
While it is not suggested that unfairly low value should be offered, on the other hand the temptation to over generosity must be equally resisted.
Such generosity at the public expense reacts against the development and against the prosperity of the country and imposes an unnecessary burden on the taxpayer.
Per Curiam In accordance with the opinion of the majority, the appeals are dismissed with casts.
N.V.K. Appeals dismissed.
| IN-Abs | Agricultural land belonging to the respondents was acquired by the railways for doubling the railway line, compensation payable for the acquired land was fixed at Re. 1/6 per sq.
But the respondent claimed Re. /12/ per sq.
On the ground that the land had a great potential value as a building site.
On reference the Additional District Judge enhanced the rate of compensation to Re. /41 per sq.
and allowed solatium at 15%.
On appeal the High Court enhanced the compensation to Re.
/8/ per sq.
on further appeal to this Court it was contended on behalf of the appellants that the courts below had erred in treating the land, which was primarily agricultural land, as abadi land overlooking that it had not been declared as such.
[Per Jaswant Singh & Pathak, J. Sen, J. dissenting] Dismissing the appeals.
^ HELD: (1) Taking all the facts into consideration it cannot be said that the basis on which the Additional District Judge and the High Court proceeded was wrong or that the quantum of compensation awarded by the High Court was in any way excessive or exorbitant.
[188 F] (2) The question as to whether a land has potential value as a building site or not is primarily one of fact depending upon several factors such as its condition and situation, the user to which it is put or is reasonably capable of being put, its suitability for building purposes, its proximity to residential, commercial and industrial areas and educational, cultural or medical institutions, existing amenities like water, electricity and drainage and the possibility of their future extension, whether the nearby town is a developing or a prospering town with prospects of development schemes and the presence or absence of pressure of building activity towards the land acquired or in the neighbourhood thereof.
[ 87F F] (3) In the instant case it was clear from the observations of the Special Land Acquisition officer and the Addl.
District Judge that the land had great potential value as a building site.
Moreover the Spl.
Land Acquisition officer did not lead any evidence worth the name to show the price of comparable sites but remained content with the production only of the sale statement prepared by the Revenue Inspector.
The sale statement consisted mostly of sales relating to the year 1951 which is not relevant to the question on hand.
Without examining the vendors or vendees, the sale statement was not admissible in evidence and could not be relied upon.
From the material on record it was clear that Raigarh was a growing town.
Instead of utilising the land for doubling the railway track 184 the railway had built staff quarters.
On three sides of the land there were pucca buildings and on the fourth side there was a metalled road.
[187G H 188C D. [Per Sen, J.(dissenting)] 1.
Upon compulsory acquisition of property, the owner is entitled to the value of the property in its actual condition at the time of expropriation with all its advantages and with all its possibilities, excluding any advantage due to the carrying out of the claim for the purpose for which the property is acquired.
The value of the acquired property with all its possibilities had to be adjudged on the material on record.
[191 F, H] Vyricharla Narayana Gajapatiraju vs Revenue Divisional officer, Vizagapatnam, 66 IA 104, followed.
The market price must be fixed with reference to the date of the notification under section 4 irrespective of any trend, for an increase to the value thereof.
The basis for determination of the market value of the land within section 23(1)(i) of the Act is the value of the land to the owner.
Only such transactions would be relevant which can fairly be said to afford a fair criterion of the value of the ,, property as at the date of the notification.
That test is clearly not fulfilled in l? the present case[192A B] 3.
In a reference under section 18 of the Act the burden of providing that the amount of compensation awarded by the Collector is inadequate lies upon the claimant, and he must show affirmatively that the Collector had proceeded upon a wrong basis.
The nature and the burden of establishing that he was wrong, depend on the nature of the enquiry held by him.
When the proceedings before the Collector disclose that the award was not reasonably supported by the material before him or when the basis was the application of a "multiple" which could not be justified on any rational ground, the burden can be discharged by a slight evidence.
But that is not the case here.
[191C D] 4.
In the present case the High Court fell into an error in overlooking the fact that the acquired land was agricultural land.
It was recorded as a raiyati land.
The land was not recorded as abadi as wrongly assumed by the High Court.
The claimants admitted that the land was actually under cultivation.
The Revenue Inspector stated that the land was a paddy field and was surrounded by agricultural lands.
That being so the District Judge was clearly wrong in treating the land to be abadi and calculating compensation on the footing of its being a building site.
[189E 190A] 5.
Secondly, the land was lying undeveloped and undiverted.
Unless there was a development scheme the land could not be valued as a building site.
At the time of the notification under section 4(1) there was no recent building activity near about the land.
The land could be put to better use provided it was fully developed as a building site.
The claimants were therefore entitled to the valuation of the land as agricultural land with an additional allowance for its future potentiality as a building site.
[190H 191B] 6.
In fixing the amount of compensation the court has to take into consideration the prevailing market value of the land at the date of the notification unders.
4(1) and such market value has to be determined by reference to the price which a willing seller might have reasonably expected for similar property from 1 a willing purchaser.
In a comparable sale the features are: (1) it must be 185 within a reasonable time of the date of notification under section 4(1), (2) it should be a bona fide transaction; (3) it should be a sale of the land acquired or of the land adjacent to the land acquired and (4) it should possess similar advantages.
[92G 193A] 7.
In the instant case the sale deeds relied upon by the High Court could not obviously be the basis for the determination of the market value of the land.
These sale deeds had clearly been brought into existence by the claimants in quick succession in an attempt to inflate.
the price of the land after they became aware of the proposed acquisition.
The transactions which were examined by the High Court were apparently fictitious and unreal and are speculative in nature and could not be taken into account at all.
[193B C, 193H 194A] 8.
On the evidence produced it could not be said that valuation should be made on the basis of potentiality of the land as building site.
There is complete absence of evidence of building activity of a substantial nature being carried on in the neighbourhood of the acquired land at about the time when the notification was issued.
The claimants themselves did admit that the land was agricultural land.
[195B, 194F C] Raghubans Narain Singh vs The U.P. Govt.
, ; N. B. Jeejabhoy vs The District Collector, Thana, C.A. Nos. 313 to 315 of 1965 decided on Aug 1965: referred to.
In the absence of comparable sales, the only other alternative to adopt is the capitalised value.
Compensation in respect of the agricultural land should be allowed on the basis of 20 years ' purchases.
The capitalisation basis cannot, however, be accepted in a case where there is no evidence of the profits yielded from the land.
[195C]
|
N: Criminal Appeal No. 194 of 1977.
(Appeal from the Judgment and order dated 30 8 76 of the Orissa High Court in Criminal Revision No. 88/76).
Soli J. Sorabjee, Addl.
Gen. and E. C. Agarwala and Girish Chandra for the appellant.
Gobinda Mukhoty and N. R. Chowdhary for the respondent.
The Judgment of the Court was delivered by FAZAL ALI, J.
This appeal is directed against the judgment dated 30th August, 1976 of the High Court of Orissa by which the High Court has upheld the order of the Special Judge, Puri discharging respondents No. 1 and 2.
The facts of the case lie within a narrow compass and centre round an alleged conspiracy said to have been entered into between respondents No. 1 and 2 in order to commit offences under sections 5(2) and 5(1)(d) of the Prevention of Corruption Act (hereinafter referred to as the Act) read with section 120 B I.P.C.
The main charge against the respondents was that between 19 2 1972 to 30 3 1972 the respondent entered into an agreement For the purpose of obtaining pecuniary advantage for respondent No. 1 P. K. Samal and in pursuance of the said conspiracy the second respondent Debi Prasad Jena, who was the Land Acquisition officer aided and abetted the first respondent in getting a huge sum of money for a land acquired by the Government which in fact belonged to the Government itself and respondent No. 1 was a skew thereof.
It is averred in the chargesheet that respondent No. 1 by abusing his official position concealed the fact that the land which was the subject matter of acquisition and was situated in Cuttack Cantonment was really Khasmahal land belonging to the Government and having made it appear that he was the undisputed owner of the same, got a compensation of Rs. 4,18,642.55.
The charge sheet contains a number of circumstances from which the inference of the conspiracy is sought to be drawn by the police.
After the charge sheet was submitted before the Special Judge, the prosecution ousted him to frame a charge against the respondents.
The Special Judge, Puri after having gone through the charge sheet and statements made by the witnesses before the police as also other documents came to the conclusion that there was no sufficient ground for framing a charge against the respondents and he accordingly discharged them under section 227 of the Code of Criminal Procedure, 1973 hereinafter called the Code).
The Special Judge has given cogent reasons 231 for passing the order of discharge.
The appellant went up to the High Court in revision against the order of the Special Judge refusing to frame the charge, but the High Court dismissed the revision petition filed by the appellant and maintained the order of discharge passed by the Special Judge.
Thereafter the appellant moved this Court by ar, application for special leave which having been granted to the appellant, the appeal is now set for hearing before us.
The short point which arises for determination in this case is the scope and ambit of an order of discharge to be passed by a Special Judge under section 227 of the Code.
The appeal does not raise any new question of law and there have been several authorities of the High Courts as also of this Court on the various aspects and grounds on which an accused person can be discharged, but as section 227 of the Code is a new section and at the time when the application for special leave was filed, there was no direct decision of this Court on the interpretation of section 227 of the Code, the matter was thought fit to be given due consideration by this Court.
We might, state, to begin with, that so far as the present case (offences committed under the Prevention of Corruption Act) is concerned it is regulated by the procedure laid down by the Criminal Law Amendment Act under which the police has to submit, charge sheet directly to the Special Judge and the question of commitment to the Court of Session does not arise, but the Sessions Judge has nevertheless to follow the procedure prescribed for trial of sessions cases and the consideration governing the interpretation of section 227 of the Code apply mutatis mutandis to these proceedings after the charge sheet is submitted before the Special Judge.
Before interpreting and analysing the provisions of section 227 of the Code so far as pure sessions trials are concerned, two important facts may be mentioned.
In the first place, the Code has introduced substantial and far reaching changes in the Code of 1898 as amended in 1955 in order to cut out delays and simplify the procedure, has dispersed with the procedure for commitment enquiries referred to m section 206 to 213 of the Code, of 1898 and has made commitment more or less a legal formality.
Under the previous Code of 1898 the Magistrate was enjoined to take evidence of the prosecution witnesses after giving opportunity to the accused to cross examine the witnesses 2nd was then required to hear the parties and to commit the acceded to the Court of Session unless he chose to act under section 209 and found that there was no sufficient ground for committing the accused person for trial.
Under the Code the Committing Magistrate has been authorised to peruse the evidence and the documents produced by the 232 police and commit the case straightaway to the Sessions Court if the case is one which is exclusively triable by the Sessions Court.
Thus, it would appear that the legislature while dispensing with the procedure for commitment enquiry under the Code of 1898 has conferred a dual responsibility on the Trial Judge who has first to examine the case on the basis of the statement of witnesses recorded by the police and the documents filed with a view to find out whether a prima facie case for trial has been made out and then if such a case is made out to proceed to try the same.
In our view the legislature has adopted this course in order to avoid frivolous prosecutions and prevent the accused from being tried of an offence on materials which do not furnish a reasonable probability of conviction.
In the instant case, as the offences alleged to have been committed by the respondents fall within the provisions of the Act, the Special Judge has been substituted for the Sessions Judge, the procedure of the Sessions Court having been applied fully to the trial of such cases.
Thus, it is manifest that the accused has not only one opportunity and that too before the Sessions Judge for showing that no case for trial had been made out.
This was obviously done to expedite the disposal of the criminal cases.
Secondly, it would appear that under section 209 of the Code of 1898 the question of discharge was to be considered by a Magistrate.
This power has now been entrusted to a senior Judge, namely, the Sessions Judge who is to conduct the trial himself and who has to decide before commencing the trial as to whether or not charges should be framed in a particular case against the respondents The discretion, therefore, is to be exercised by a senior and more experienced Judge so as to exclude any abuse of power.
In this view of the matter, it is manifest that if the Sessions Judge exercises his discretion in discharging the accused for reasons recorded by him, his discretion should not normally be disturbed by the High Court or by this Court.
Section 227 of the Code runs thus: "If, upon consideration of the record of the case and the documents submitted therewith, and after hearing the submissions of the accused and the prosecution in this behalf, the Judge considers that there is not sufficient ground for proceeding against the accused, he shall discharge the accused and record his reasons for so doing.
" The words 'not sufficient ground for proceeding against the accused ' clearly show that the Judge is not a mere post office to frame the charge at the behest of the prosecution, but has to exercise his judicial mind to the facts of the case in order to determine whether a case for trial 233 has been made out by the prosecution.
In assessing this fact, it is not A necessary for the court to enter into the pros and cons of the matter or into a weighing and balancing of evidence and probabilities which is really his function after the trial starts.
At the stage of section 227, the Judge has merely to sift the evidence in order to find out whether or not there is sufficient ground for proceeding against the accused.
The sufficiency of ground would take within its fold the nature of the evidence recorded by the police or the documents produced before the court which ex facie disclose that there are suspicious circumstances against the accused so as to frame a charge against him.
: The scope of section 227 of the Code was considered by a recent decision of this Court in the case of State of Bihar vs Ramesh Singh(1) where Untwalia, J. speaking for the Court observed as follows: "Strong suspicion against the accused, if the matter remains in the region of suspicion, cannot take the place of proof of his guilt at the conclusion of the trial.
But at the initial stage if there is a strong suspicion which leads the Court to think that there is ground for presuming that the accused has committed an offence then it is not open to the Court to say that there is no sufficient ground for proceeding against the accused.
The presumption of the guilt of the accused which is to be drawn at the initial stage is not in the sense of the law governing the trial of criminal cases in France where the accused is presumed to be guilty unless the contrary is proved.
But it is only for the purpose of deciding prima facie whether the Court should proceed with the trial or not.
If the evidence which the Prosecutor pro poses to adduce to prove the guilt of the accused even if fully accepted before it is challenged in cross examination or rebut ted by the defence evidence; if any, cannot show that the accused committed the offence then there will be no sufficient ground for proceeding with the trial".
This Court has thus held that whereas strong suspicion may not take the place of the proof at the trial stage, yet it may be sufficient for the satisfaction of ths Sessions Judge in order to frame a charge against the accused.
Even under the Code of 1898 this Court has held that a committing Magistrate had ample powers to weigh the evidence for the limited purpose of finding out whether or not a case of commitment to the Sessions Judge has been made out.
(1) [1978]1 S.C.R. 287.
16 817 SCI/78 234 In the case of K. P. Raghavan and Anr.
vs M. H. Abbas and Anr.(1) this Court observed as follows: "No doubt a Magistrate enquiring into a case under section 209, Cr.
P.C. is not to act as a mere Post office and has to come to a conclusion whether the case before him is fit for 8 commitment of the accused to the Court of Session".
To the same effect is the later decision of this Court in the case of Almohan Das and ors.
vs State of West Bengal(2) where Shah, J. speaking for the Court observed as follows: "A Magistrate holding an enquiry is not intended to act merely as a recording machine.
He is entitled to sift and weigh the materials on record, but only for seeing whether there is sufficient evidence for commitment; and not whether there is sufficient evidence for conviction.
If there is no prima facie evidence or the evidence is totally unworthy of credit; it is the duty to discharge the accused: if there is some evidence on which a conviction may reasonably be based, he must commit the case".
In the aforesaid case this Court was considering the scope and ambit of section 209 of the Code of 1898.
Thus, on a consideration of the authorities mentioned above, the following principles emerge: (1) That the Judge while considering the question of framing the charges under section 227 of the Code has the undoubted power to sift and weigh the evidence for the limited purpose of finding out whether or not a prima facie case against the accused has been made out: (2) Where the materials placed before the Court disclose grave suspicion against the accused which has not been properly explained the Court will be, fully justified in framing a charge and proceeding with the trial.
(3) The test to determine a prima facie case would naturally depend upon the facts of each case and it is difficult to lay down a rule of universal application.
By and large however if two views are equally possible and the Judge is satisfied that the evidence produced before him while (1) A.I.R. 1967 S.C. 740.
(2) 235 giving rise to some suspicion but not grave suspicion against the accused, he will be fully within his right to discharge the accused.
(4) That in exercising his jurisdiction under section 227 of the Code the Judge which under the present Code is a senior and experienced Judge cannot act merely as a Post office or a mouth piece of the prosecution, but has to consider the broad probabilities of the case, the total effect of the evidence and the documents produced before the Court, any basic infirmities appearing in the case and so on.
This however does not mean that the Judge should make a roving enquiry into the pros and cons of the matter and weigh the evidence as if he was conducting a trial.
We shall now apply the principles enunciated above to the present case in order to find out whether or not the courts below were legally justified in discharging the respondents.
Respondent No. 1 was a Joint Secretary in the Ministry of Information and Broadcasting from April, 1966 to January, 1969.
Later he worked as Joint Secretary in the Ministry of Foreign Trade till 12 11 1971.
Thereafter, respondent No. 1 was working as Joint Secretary, Ministry of Education and Social Welfare.
The second respondent worked as Land Acquisition officer in the Collectorate, Orissa from February 1972 to 18th August, 1973.
In the year 1969 the All India Radio authorities were desirous of having a piece of land for construction of quarters for their staff posted at Cuttack.
In this connection, the said authorities approached respondent No. 1 who had a land along with structure in the Cantonment at Cuttack.
As the All India Radio authorities found this land suitable, they approached respondent No. 1 through his mother for selling the land to them by private negotiation.
As this did not materialise, the All India Radio authorities moved the Collector of Cuttack to assess the price of the land and get it acquired.
Accordingly, the Tehsildar of the area directed the Revenue officer, Cuttack; to fix the valuation of the land of respondent No. 1.
The Revenue officer reported back that the land belonged to respondent No. 1 and was his private land and its value would be fixed at Rs. 3000 per guntha.
It is common ground that the land in question was situated in Cuttack Cantonment and was a Khasmahal land which was first leased out to one Mr. Boument as far back as 1 9 1943 for a period of 30 years.
The lease was given for building purposes.
In 1954.
Mrs. Boument who inherited the property after her husband 's death transferred the 236 land to respondent No. 1 with the consent of the Khasmahal authorities.
When respondent No. 1 came to know that the land in question was required by the All India Radio authorities, he wrote a letter to Mr. section Gill on 28th October, 1970 suggesting that the land may be acquired but price fixed by mutual consent.
It may be pertinent to mention here that in this, letter a copy of which being exhibit D 4 (12) is to be found at page 86 of the paper book, respondent No. 1 never concealed the fact that the land really belonged to the Government.
In this connection, respondent No. 1 wrote thus: "I have represented to you against the revenue authorities quoting a higher price for similar Government land more adversely situated and a lower price for my land despite its better strategic location".
We have mentioned this fact because this forms the very pivot of the case of the appellant in order to assail the judgment of the courts below.
A perusal of this letter clearly shows that respondent No. 1 made no attempt to conceal that the land in question was, a Government land which was leased out to his vendor.
A copy of the original agreement which also has been filed shows that under the terms of the lease, the same is entitled to be renewed automatically at the option of the lessee and unless the lessee violates the conditions of the lease, there is no possibility of the lease being resumed.
As it is, the lease had been continuing from the year 1943 and there was no possibility or its not being renewed on 1 9 1973 when the period expired.
In these circumstances, therefore, it cannot be said that the letter written by respondent No. 1 referred to above was an evidence of a criminal intention on the part of respondent No. 1 to grab the huge compensation by practising fraud on the Government.
Respondent No. 1 a high officer of the Government and was a lessee of the Government, a fact which he never concealed and if he was able to get a good customer for purchasing his land or acquiring the same, there was no harm In writing to the concerned authority to fix the proper valuation and take the land.
There, was no question of any concealment or malpractice committed by respondent No. 1.
Apart from this, the contention of the appellant that the fact that the land being Khasmahal land belonging to the Government was deliberately suppressed by the respondents is completely falsified by the circumstances discussed hereinafter: The land in question was situated in a Cantonment area and it is not disputed that all lands in the Cantonment area were Khasmahal Lands belonging to the Government.
237 The High Court in this connection has observed as follows: "Government authorities admit that the land in question was known to be Khasmahal land from the very inception.
This must lead to an inference that the authorities knew that the interest of the opposite party No. 1 in the land was that of a lessee and the State Government was the proprietor".
The High Court has further observed that a number of witnesses who were examined by the police had stated that it was common Knowledge that all khasmahal lands in the Cantonment area in Cuttack were Government lands Relying on the statement of Mr. T. C. Vijayasekharan, Collector, Cuttack, the High Court observed as follows: "Shri Vijayasekharan who has admittedly played an important role in the land acquisition proceeding has said that it is a matter of common knowledge that all khasmahal lands in Cantonment area at Cuttack are Government lands.
He has further categorically stated that Shri P. M. Samantray did not put undue pressure of any kind".
Furthermore, it would appear that Mr. B. C. Mohanty, Land Acquisition officer submitted a report about the land in question on 15th February, 1971 in which he had clearly mentioned that the land in question was Government land and that respondent No. 1 was a Pattidar in respect of the land as shown in the record.
Thus, one of the important premises on the basis of which the charge was sought to be framed has rightly been found by the High Court not to exist at all.
The records of the Government showed the nature of the land.
Respondent No. 1 at no time represented to the All India Radio authorities or the Government that the land was his private one and the records of the Government clearly went to show that the land was a Government land.
In these circumstances, therefore, it cannot be said that respondent No. 1 acted illegally in agreeing to the land being acquired by the Government.
Another important circumstance relied on by the appellant was the great rapidity with which the land acquisition proceedings started and ended clearly shows that the respondents had joined hands to get the lands acquired and the compensation paid to respondent No. 1.
In this connection, reliance was placed on the fact that the copies of the records of rights were prepared on 30th March, 1972 in which the land was no doubt shown as having been owned by the State.
Bhujarat report was also prepared on the same date.
Respondent No. 1 presented his copy of the deed of transfer also on the same date and respondent No. 2 made the award for Rs. 4,18,642.55 also on the same 238 date.
The entire amount was disbursed also on the same date and possession also was handed over on the same date.
Prima facie, it would appear that the Officer acted in great hurry perhaps at the instance of respondent No. 1.
These circumstances are clearly explainable and cannot be said to exclude every reasonable hypothesis bu the guilt of respondent No. 1.
Admittedly, the All India Radio authorities were in a great hurry to get the land acquired and take possession of the same.
As respondent No. 1 was a high officer of the I.A.S. cadre there may have been a natural anxiety on the part of the small officers posted in the district of Cuttack to oblige respondent No. 1 by completing the proceedings as early as possible and meeting the needs of the All India Radio.
It would, however, appear that once notices under section 9(1) and 10(1) of the Land Acquisition Act were issued and the objection filed by the appellant was withdrawn, because there was no one else in the field, there was no impediment in the way of acquiring the land and taking possession from respondent No. 1.
In fact, it would appear as pointed out by the High Court that as far back as 22nd February 1972 the Land Acquisition officer who was a person other than the second respondent had sent a letter to the Government with the counter signature of the Collector for sanctioning the estimate of acquisition of 2 acres of land belonging to respondent No. 1.
Later, however, the area of the land was reduced from 2 acres to 1.764 acres and revised estimates as desired by the Revenue department were sent on 7 3 1972.
This estimate amounted to Rs. 4,18,642 55 and was sent through the A.D.M 's letter,on 8 3 1972.
The Home Department by their letter dated 11 3 1972 sanctioned the aforesaid estimate.
There after, the Government indicated to the Collector that an award might be passed for acquiring 1.764 acres of land.
These facts apart from negativing the allegations of criminal conduct against the respondents demonstrably prove the untruth of the circumstance relied upon in the charge sheet, namely, that unless the respondent No. 1 and 2 acted in concert and conspiracy with each other, respondent No. 1 could not have known the exact figure of the compensation to be awarded to him.
In this connection, reliance was placed on a letter written by respondent No. 1 to the Vigilance officer, L. section Darbari on 15th March, 1972 where he had mentioned that as Karta of the H.U.F. he would be getting a compensation of Rs. 4,18,642.55 which is to be paid to him on the 10th March, 1972 and it was argued that unless the two respondents were in league with each other how could respondent No. 1 get these details.
We are, however, unable to agree with this contention.
239 We have already mentioned that a fresh estimate for 1.764 acres was prepared and the total compensation was Rs. 4,18,642.55 as only the Raiyyati or the lessee 's interest was proposed to be acquired and this letter was sent to the Government for sanction and the estimate was sanctioned on 11 3 1972.
It was contended that no notice was given to the Khasmahal department, so that the Government could claim compensation of the proprietary interest.
It is obvious that what has been acquired in the present case is merely the Raiyyati or the lessee 's interest and as the proprietary interest vests in the Government itself, there is no question of either acquiring or claiming compensation for the interest of the Government.
In the case of Collector of Bombay vs Nusserwanji Rattanji Mistri & Ors.(1) this Court observed as follows: "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. . . .
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".
To the same effect is a later decision of this Court in the case of The Special Land Acquisition Officer, Hosanagar vs K. section Ramachandra Rao & ors.(1) where this Court observed as follows: "Mr. M. Veerappa, the learned counsel for the State of Mysore, contends that the Land Acquisition officer had not assessed the compensation payable for the rights of the respondents in the land acquired . .
We have gone through the Award made by the Land Acquisition officer.
The Land Acquisition officer appears to have valued the rights of the respondents in the lands acquired.
Whether the valuation made by him is correct or not cannot be gone into these proceedings.
" As the appellant was naturally interested in finalising the deal as quickly as possible, there could be no difficulty in finding out the esti (1) ; (2) AIR 1972 S.C. 2224.
240 mates which had been sanctioned a week before respondent No. 1 wrote the letter to the Vigilance Department.
This fact proves the bona fide rather than any wrongful conduct on the part of respondent No. 1 which may lead to an adverse inference being drawn against him.
Finally, it was argued that what was acquired by the Government was merely the lessee 's interest, but the respondent No. 1 appears to have got compensation as the owner.
This is factually incorrect.
We have already referred to the circumstances which clearly show that the Government was fully aware that it was only the lessee 's interest which was being acquired and even the fresh estimate for Rs. 4,18,642.
55, which was sent to the Government was shown as representing the Raiyyati interest.
Mr. Agarwala appearing for the respondents fairly conceded that having regard to the nature, character and situation of the land, it could not be said that the amount of compensation awarded did not represent the market value of the lessee 's interest of the land.
On the other hand, in the counter affidavit at page 87 of the paper book, it has been alleged that 16 sale deeds executed during the year 1970 and sale deeds executed during the year 1971 pertaining to the village in question were acquired at the rates varying from Rs. 42,165 to 750,000.
The High Court has also pointed out that the records before the Trial Judge show that the Collector Vijayasekharan had valued the land at the rate of Rs. 1.70 lakhs per acre as far back 1: as 3 2 1970 and if two years later the valuation was raised to Rs. 2 lakhs it cannot be said that the land was in any way over valued.
Lastly, there does not appear to be any legal evidence to show any; meeting of mind between respondents No. 1 and 2 at any time.
Although the Collector at the time of the acquisition was a distant relation of respondent No. 1 he had himself slashed down the rate of compensation recommended by the Revenue officer from Rs. 2,10,000 to Rs. 2,00,000 and it was never suggested by the prosecution that the Collector was in any way a party to the aforesaid conspiracy.
For these reasons, therefore, we find ourselves in complete agreement with the view taken by the High Court that there was no sufficient ground for trying the accused in the instant case.
Moreover, this Court could be most reluctant to interfere with concurrent findings of the two courts in the absence of any special circumstances.
For the reasons given above, the judgement of the High Court is affirmed and the appeal is dismissed.
M.R. Appeal dismissed.
| IN-Abs | The second respondent, a Land Acquisition officer, allegedly, by abusing his official position, concealed the fact that the land which was the subject matter of acquisition was really Khasmahal land belonging to the Government and having made it appear that the first respondent was the undisputed owner of the same, aided and abetted him in getting a huge sum of money as compensation.
The charge sheet was submitted before the Special Judge, and the prosecution requested him to frame a charge against the respondents under sections 5(2) and 5(1)(d) of the Prevention of Corruption Act read with section 120B IPC.
The Special Judge, Puri went through the charge sheet, statements made by the witnesses before the police and other documents, and coming to the conclusion that there was no sufficient ground for framing a charge against the respondents, discharged them under section , after giving cogent reasons for passing the order of discharge.
In revision the High Court upheld the Special Judge 's order of discharge.
Dismissing the appeal by special leave, the Court ^ HELD: 1.
The considerations governing the interpretation of section 227 of Cr.
P.C. apply mutatis mutandis to the proceedings under the Prevention of Corruption Act, after the charge sheet is submitted before the Special Judge.
At the stage of section 227, the Judge has merely to sift the evidence in order to find out whether or not, there is sufficient ground for proceeding against the accused.
The sufficiency of ground would take within its fold, the nature of the evidence recorded`by the police, or the documents produced before the court, which exfacie disclose that there are suspicious circumstances against the accused so as to frame a charge against him.
[231E, 233A B] State of Bihar vs Ramesh Singh, [1978] I SCR 257; K. P, Raghavan & Anr.
vs M. H. Abbas and Anr.
AIR 1967 SC 740; Almohan Das & Ors.
vs State of West Bengal, ; applied.
What has been acquired is merely the Raiyyati or the lessee 's interest, and as the proprietary interest vests in the Government itself, there is no question of either acquiring or claiming compensation for the interest of the Government.
[239B] Collector of Bombay vs Nusserwanji Rattanji Mistri & Ors., ; ; and The Special Land Acquisition officer, Hosanagar vs K. section Ramachandra Rao & Ors., AIR 1972 SC 2224: applied. 230
|
Civil Appeal No. 2764 of 1977.
(From the Judgment and order dated 24 11 76 of the Delhi High Court in C.R.P. No. 1264/76).
M. K. Ramamurthi and Faqir Chand for the appellant.
P. N. Lekhi and Girish Chandra for the respondent.
The Judgment of the Court was delivered by SHINGHAL J.
, This appeal by special leave is directed against an order of the Delhi High Court dated November 24, 1976, dismissing the appellant 's writ petition in timing.
The appellant was promoted to the post of Director in the All India Radio after some thirty years of service under the Government of India.
She was working as Joint Director, Family Planning, in the Directorate General of the All India Radio, when she was served with an order dated March 26, 1976, retiring her prematurely from service, with immediate effect, on the ground that she had already attained the age of 50 years on April 11, 1972, and the President was of the opinion that her retirement was in the "public interest".
The appellant made representation on April 6, 1976, but it was rejected on July 1, 1976.
She therefore filed a writ petition in the Delhi High Court under article 226 of the Constitution in which she, inter alia, made a mention of the hostile attitude of one V. D. Vyas who took over as Chairman of the 204 Central Board of Film Censors from her on February 11, 1972.
She also made a mention of the adverse remarks made by Vyas in her service record after she had ceased to work under him which, according to her, were "totally unfounded, biased, malicious and without any justification".
She stated that "her integrity had never been considered doubtful 28 years before or 4 years after the period of 21 months she spent under him.
" It was also contended that some baseless allegations were made against her because of "malicious vendetta" carried on by Vyas, and that the order of premature retirement was not in public interest but was "arbitrary and capricious", and that the retiring authority had not "applied its mind to the record" of her case.
It was particularly pointed out that as he was confirmed in the post of Director on April 28, 1973, with retrospective effect from July 10, 1970, any adverse remark in her confidential report before that date could not legitimately form the basis of the order of her premature retirement.
The appellant also pointed out that the order cast a stigma on her conduct, character and integrity and amounted to the imposition of one of the major penal ties under the Central Civil Services (Classification, Control and Appeal)Rules, 1965.
It is not in controversy, and has in fact been specifically stated in the order of premature retirement dated March 26, 1976, that the appellant was retired in the "public interest" under clause (j) (i) of rule 56.
of the, Fundamental Rules.
That rule provides as follows, "(j) Notwithstanding anything contained in this rule the appropriate authority shall, if it is of the opinion that it is in.
the public interest to do so have the absolute right to retire any Government servant by giving him notice of not less than three months in writing or three months ' pay and allowances in lieu of notice.
(i) If he is in Class I or Class II service or post and had entered Government service before attaining the age of thirty five years, after he has attained the age of fifty years.
" It is also not in dispute that the power under the aforesaid rule had to be exercised in accordance with the criteria and the procedure laid down in office memorandum No. F.33/13/61 Ests (A), dated 23rd June, 1969, of the Ministry of Home Affairs, Government of India.
It is however the grievance of the appellant that her premature retirement was not made in accordance with the requirements of the rule and the memorandum, but was ordered because of malice, and was arbitrary and capricious as the Government did not apply its mind to her service record and the facts and circumstances of her case.
It has been speci 205 fically pleaded that the power under F.R. 56(j)(i) has not been exercised "for the furtherance of public interest" and has been based on "collateral grounds".
The appellant has pointed out in this connection that her service record was examined in March, 1976, by the Departmental Promotion Committee, with which the Union Public Service Commission was associated, and the Committee considered her fit for promotion to the selection grade subject to clearance in the departmental proceedings which were pending against her, and that she was retired because of bias and animosity.
Our attention has also been invited to the favourable entry which was made in her confidential report by the Secretary of the Ministry.
Mr. Lekhi, learned counsel for the Union of India, produced the, relevant record of the appellant for our perusal.
While doing so he frankly conceded that there was nothing on the record which could justify the order of the appellant 's premature retirement.
He went to the extent of saying that the Government was not in a position to support that unfair order.
We have made a mention of the plea of malice which the appellant had taken in her writ petition.
Although she made an allegation of malice against V. D. Vyas under whom she served for a very short period and got an adverse report, there is nothing on the record to show that Vyas was able to influence the Central Government in making the order of premature retirement dated March 26, 1976.
It is not therefore the case of the appellant that there was actual malicious intention on the part of the Government in making the alleged wrongful order of her premature retirement so as to amount to malice in fact.
Malice in law IS, however, quite different.
Viscount Haldane described it as follows in Shearer and another vs Shield,(1) 'A person who inflicts an injury upon another person in contravention of the law is not allowed to say that he did so with an innocent mind; he is taken to know the law, and he must act within the law.
He may, therefore be guilty of malice in law, although, so far the state of his mind is concerned, he acts ignorantly, and in that sense innocently.
" Thus malice in its legal sense means malice such as may be assumed from the doing of a wrongful act intentionally but without just cause or excuse or for want of reasonable or probable cause.
It is however not necessary to examine the question of malice in law in this case, for it is trite law that if a discretionary power has been exercised for an unauthorised purpose, it is generally immaterial whether (1) at p. 813.
206 its repository was acting in good faith or in bad faith.
As was stated by Lord Goddard C.J., in Pilling vs Abergele Urban District Council(1), where a duty to determine a question is conferred on an authority which state their reasons for the decision, "and the reasons which they state show that they have taken into account matters which they ought not to have taken into account, or that they have failed to take matters into account which they ought to have taken into account, the court to which an appeal lies can and ought to adjudicate on the matter.
" The principle which is applicable in such cases has thus been stated by Lord Esher M.R. in The Queen on the Prosecution of Richard West brook vs The Vestry of St. Paneras(2).
" If people who have to exercise a public duty by exercising their discretion take into account matters which the Courts consider not to be proper for the guidance of their discretion, then in the eye of the law they have not exercised their discretion.
" This view has been followed in Sedlar vs Sheffield Corporation.(3) We are in agreement with this view.
It is equally true that there will be an error of fact when a public body is prompted by a mistaken belief in the existence of a nonexisting fact or circumstance.
This is so clearly unreasonable that what is done under such a mistaken belief might almost be said to have been done in bad faith; and in actual experience, and as things go, these may well be said to run into one another.
The influence of extraneous matters will be undoubted where the authority making the order has admitted their influence.
It will therefore be a gross abuse of legal power to punish a person or destroy her service career in a manner not warranted by law by putting a rule which makes a useful provision for the premature retirement of government servants only in the ' 'public interest", to a purpose` wholly unwarranted by it, and to arrive at quite a contradictory result.
An administrative order which is based on reasons of fact which do not exist raust therefore be held to be infected with an abuse of power.
So when it has been conceded by Mr. Lekhi that there was nothing on the record which would justify the impugned order dated March 26, 1976, of the appellant 's premature retirement under clause (j) (i) of (1) (2) at p. 375.
(3) 207 Rule 56 of the Fundamental Rules, and that the Government was not in a position to support that unfair order, that order must be set aside, for it amounts to an abuse of the power which was vested in the authority concerned.
The appeal is allowed with costs and it is ordered accordingly.
N.V.K, Appeal allowed.
| IN-Abs | The appellant who was working as Joint Director, Family Planning in the Directorate General of the All India Radio was prematurely retired from ser vice.
She made a representation, but it was rejected.
In her writ petition under article 226 of the Constitution she alleged that she had a long and clean record of nearly three decades but that baseless allegations had been made against her, because of malicious vendetta of the then Chairman of the Central Board of Film Censors.
She also alleged that the impugned order was arbitrary and capricious and that the retiring authority had not applied its mind to the record of her case.
The writ petition was dismissed in limine.
On the appeal, the first respondent conceded that there was nothing on the record to justify the impugned order, and that the Government was not in a position to support that unfair order.
Allowing the appeal, ^ HELD: (1) There was nothing on the record to show that the Chairman of the Central Board of Film Censors was able to influence tho Central Government m making the impugned order.
It was not therefore the case of the appellant that there was actual malicious intention on the part of the Government in making the alleged wrongful order so as to amount to malice in fact.
[205E] (2) Malice in its legal sense means malice such as may be assumed from the doing of a wrongful act intentionally but without just cause or excuse or for want of reasonable or probable cause.
[205G] .
Shearer & Anr.
vs Shields, at p. 813 referred to.
(3) It was not necessary to examine the question of malice in law as it was trite law that if a discretionary power had been exercised for an unauthorised purpose, it was generally immaterial whether its repository was acting in good faith or in bad faith.
[205H 206A] 203 Pilling vs Abergele Urban District Council.
[1950] 1 K.B. 636: referred to.
(4) The principle which is applicable in such cases is that laid down by Lord Esher M.R. in at p. 375, and followed in 3.
[206C D] (5) When a public body is prompted by a mistaken belief in the existence of a non existing fact or circumstance it will be an error of fact.
That is so clearly unreasonable that what is done under such a mistaken belief might almost be said to have been done in bad faith.
[206E] (6) When the respondent conceded that there was nothing on record to justify the impugned order, that order must be set aside for it amounts to an abuse of the power which was vested in the authority concerned as it had admitted the influence of extraneous matter.
[206H 207A] (7) It will be a gross abuse of legal power to punish a person or destroy her service career in a manner not warranted by law by putting a rule which makes a useful provision for the premature retirement of Government servants only in the "public interest", to a purpose wholly unwarranted by it, and to arrive at quite a contradictory result.
[206F] (8) An administrative order which is based on reasons of fact which do not exist must be held to be infected with abuse of power.
[206G]
|
: Review Petition No. 95 of 1978.
K.R. Nagaraja, S.K. Metha and P.N. Puri for the petitioner.
293 The order of the Court was delivered by KRISHNA IYER, J. A short narrative of the facts is necessary to explore and explode the submission that a substantial question of law arises, which merits grant of leave under article 136 of the Constitution.
The respondent is the wife of the petitioner.
She moved the Magistrate, having jurisdiction over the subject matter, for grant of maintenance under Sec.
125 of the Criminal Procedure Code.
The Court awarded maintenance, in a sum of Rs. 250/ per mensem but the order was made ex parte since the petitioner did not appear in court.
The motion for setting aside the ex parte order was dismissed whereupon a criminal revision was filed by the husband before the High Court.
During the pendency of the said petition a compromise was entered into between the parties as a result of which the wife resumed cohabitation with the husband.
This resumption of conjugal life was followed by an application by the wife (respondent) praying that her application for maintenance be dismissed and the execution proceedings for recovery of arrears of maintenance be withdrawn.
Apparently, on this basis the trial court did not proceed to recover arrears of maintenance.
But as the record now stands, the order for maintenance remains.
That has not been set aside and must be treated as subsisting.
The High Court apparently dismissed the revision petition on the score that the parties had compromised the dispute.
Later developments were not as smooth as expected.
The wife was betrayed, because her allegation is that her husband is keeping a mistress making it impossible for her to live in the conjugal home.
Naturally, the proceeded to enforce the order for maintenance.
This was resisted by the petitioner (husband) on the ground that resumption of cohabitation, after the original order for maintenance, revoked the said order.
This plea having been rejected right through, the petitioner has come up to this Court seeking leave to appeal.
The short question of law pressed before us is that the order for maintenance under section 125 of the Code is superseded by the subsequent living of the wife with the husband and is unavailable for enforcement.
Counsel has relied on a ruling of the Madras High Court in A.I.R. 1960 Madras 515.
The holding in that case is that resumption of cohabitation puts an end to the order of maintenance.
The learned Judge observed: "on the authority of the above decisions I must hold in this case that there was a reunion for some time and that put ran end to the order under section 488 Cr.
If the wife separated again from the husband, then she must file another peti 294 tion, a fresh cause of action, and obtain an order if she satisfied the Court that there is sufficient reason to leave her husband and that he neglected to maintain her.
" To the same effect is the decision of the Andhra High Court reported in 1955 Andhra Law Times Reports (Criminal) Page 244.
The head note there leads "If a wife who has obtained an order of maintenance under Sec.
488 rejoins her husband and lives with him, the order is revoked and cannot be enforced subsequently, if they fall out again.
If there are fresh grounds" such as would entitle her to obtain maintenance under Section 488, it is open to her to invoke the jurisdiction of court once again for the same relief.
" An earlier Rangoon case (A.I.R. 1931 Rangoon 89) as lends support to this proposition.
A contrary position has found favour with the Lahore High Court reported in A.I.R. 1932 Lahore p. 115.
The facts of that case have close, similarity to the present one and the head note brings out the ratio with sufficient clarity.
It reads: Shadi Lal, C. J. observed: Now, in the present case the compromise, as pointed out above, was made out of Court and no order under section 488, Criminal P. C. was made in pursuance of that compromise, Indeed, the order of the Magistrate allowing maintenance at the rate of Rs. 10 per mensem was neither rescinded nor modified, and no ground has been shown why that order should not be enforced.
If the husband places his reliance upon the terms of the compromise, he may have recourse to such remedy in a civil Court as may be open to him.
The criminal Court can not however take cognizance of the compromise and refuse to enforce the order made by it." This reasoning of the learned Chief Justice appeals to us.
We are concerned with a Code which is complete on the topic and any defence against an order passed under section 125 Cr1.
P. C. must be founded on a provision in the Code.
Section 125 is a provision to protect the weaker of the two parties, namely, the neglected wife.
If an order for maintenance has been made against the deserter it will operate until vacated or altered in terms of the provisions of the Code itself.
If the husband has a case under section 125 (4) (5) or section 127 of the Code it is open to him to initiate appropriate proceedings.
295 But until the original order for maintenance is modified or cancelled by a higher court or is varied or vacated in terms of section 125(4) or (5) ar section 127, its validity survives.
It is enforceable and no plea that there has been cohabitation in the interregnum or that there has been a compromise between the parties can hold good as a valid defence.
In this view, we hold that the decisions cited before us in favour of the proposition contended for by the petitioner are not good law and that the view taken by Sir Shadi Lal Chief Justice is sound.
A statutory order can ordinarily be demolished only in terms of the statute.
That being absent in the present case the Magistrate will execute the order for maintenance.
Our order does not and shall not be deemed to prejudice the petitioner in any proceedings under the law which he may start to vacate or vary the order for maintenance.
S.R. Petition dismissed.
| IN-Abs | The respondent obtained an ex parte maintenance award for a sum of Rs. 250/ p.m. from the Court of competent jurisdiction under Sec.
125 Crl.
Subsequently, as a result of a compromise between the parties and resumption of cohabitation an application was made by the respondent praying that her application for maintenance be dismissed and the execution proceedings for recovery of maintenance be withdrawn.
Though the Trial Court did not proceed to recover the arrears of maintenance it did not set aside the award.
As the respondent was betrayed, she proceeded to enforce the order for maintenance.
The petitioner resisted the application on the ground that resumption of cohabitation, after the original order for maintenance revoked the said order.
This plea having been rejected right through the petitioner came up by way of special leave.
Dismissing the petition, the Court, ^ HELD: the Criminal Procedure Code is complete on the topic and any defence against an order passed under section 125 Crl.
P.C. must be founded on a provision in the Code.
Section 125 b a provision to protect the weaker of the two parties, namely, the neglected wife.
If an order for maintenance has been made against the deserter it will operate until vacated or altered in terms of the provisions of the Code itself, if the husband has a case under section 125(4)(S) or section 127 of the Code it ii open to him to initiate appropriate proceedings.
But until the original order for maintenance is modified or cancelled by a higher court or is varied or vacated in terms of section 125(4) or (S) or section 127, its validity survives.
It is enforceable and no plea that there has been cohabitation in the interregnum or that there has been a compromise between the parties can hold good as a valid defence.
[294G H, 295A] A statutory order can ordinarily be demolished only in terms of the statute.
That being absent in the present case the Magistrate will execute the order for maintenance [295 B] Fazal Din vs Mt. Fatima, A.I.R 1932 Lahore P. 115; approved.
Natesan Pillai vs Jayammani, A.I.R. 1960 Madras, U. Po Chein vs Ma Sein Mya, A.I.R. 1931 Rangoon, 89, Ampavalli Veerabhadrudu vs Ampavalli Gaviramma 1955 A.l.
R. (Crl.) p. 244; over ruled.
|
Civil Appeal No. 166 of 1969.
From the Judgment and order dated 4 5 1966 of the Rajasthan High Court in D.B. Civil Misc.
Writ No. 74 of 1965.
M. N. Phadke, M. Qamaruddin, Mrs. M. Qamaruddin and V. M. Phadke for the Appellant.
section section Ray, section M. Jain, D. D. Patodia and section K. Jain for Respondents 1 and 2.
151 Appeal set down Ex parte against RR.
3 and 4.
The Judgment of the Court was delivered by SEN, J.
This appeal by certificate is directed against the judgment of the Rajasthan High Court dated May 4, 1966 holding that inclusion of the disputed property in the list of wakfs published by the Board of Muslim Wakfs, Rajasthan under sub section
(2) of section 5 of title is not binding on the respondents No6. 1 and 2, the mortgagee purchasers and restraining the Board from taking only sleeps under section 36B of the Act for evicting them from the same.
The subject matter in dispute is a two storeyed building, knows as Dharamshala or Musafirkhana, situate on Mirza Ismail Road at Jaipur.
The building was constructed by the late Haji Mohammad Ali Khan, a Sessions Judge of the erstwhile Princely State of Jaipur, who owned a considerable estate, on a plot of land admeasuring 5 bighas and 3 biswas obtained from the Mehakma Mensa Aliya Council with the approval of the Ruler of Jaipur under a Patta dated February 23, 1886 for construction of a Haveli and Dharamshala.
It appears that Haji Mohammad Ali Khan before his death in the year 1912, had executed two wills, one on February 17, 191 O and the other on July 1, 1911, by which after making several bequests he acknowledged that he had dedicated the said property in wakf, for its use as a Dharammshala and appointed his son Ehsen Ali Khan as its Mutawalli.
After the death of Haji Mohammad Ali Khan, there was a suit for partition of the property brought by his son Faiyaz Ali Khan against his brother Ehsari Ali Khan, being original Suit No. 128 of 1930 and the building was left out of partition being wakf property.
It, however, appears that the mutawalli Ehsan Ali Khan mortgaged the property with possession, with Seth Bijaylal, father of respondent No. 2, and Bhuramal, father of respondent No. 1, for Rs. 7,999, ' and executed a mortgage deed dated July 30, 1944 in Their favour for the purpose or purchasing a strip of land in front of the building from the Municipal Council Jaipur and thereafter constructed verandahs on the ground floor and the first floor.
For making this construction, he raised a further loan of Rs. 9,999/ by effecting a second mortgage by executing the mortgage deed dated July 7, 1945 in favour of the said mortgagees.
the respondents Nos. 1 and 2 purchased the ground floor of the building from Ehsan Ali Khan for Rs. 19,999/ by means of a registered sale dead dated November 23, 1954.
The consideration was applied towards satisfaction of the two previous mortgages.
Thereafter, they purchased the first floor of the said building from him for Rs. 13,999/ by means of a registered sale deed dated July 31, 1956.
152 The wakf Act, 1954 was extended to the State of Rajasthan on February 1, 1955.
The Board of Muslim wakfs, Rajashthan was constituted by the State Government on August 6, 1962 in accordance with section 9 and thereafter the Government appointed a Commissioner of Wakfs under sub s.(1) of s.4 for the purpose of making survey of wakf properties existing in the State, at the date of the commencement of the Act.
On August 30, 1962, one Shauket Ali Khan, the respondent No. 3 applied to the Commissioner of Wakfs alleging that the aforesaid property was wakf property and therefore, its transfer by Ehsan Ali Khan, who was its mutawalli, in favour of the respondents Nos. 1 and 2 was invalid and consequently prayed that the property be declared to be Wakf property and possession of the same be handed over to the wakf Committee.
The Commissioner of Wakfs accordingly issued notice to the respondents.
Nos. 1 and 2 the mortgagee purchasers.
In response to the notice, the respondents Nos. 1 and 2 appeared before the Commissioner of Wakfs on September 19, 1962 and raised a preliminary objection as to the jurisdiction denying that the disputed property was wakf property and contended that the Commissioner of Wakfs had no jurisdiction to make an enquiry as to whether a particular property is wakf property or not.
The Commissioner of Wakfs by his order Dated September 19, 1962 over ruled the objection.
Thereupon, the respondents Nos. 1 and 2 filled a writ petition before the Rajasthan High Court, but the High Court by its order dated October 11, 1962 dismissals the petition liming observing that the Commissioner had obviously no jurisdiction j to decide any question relating to the title of the respondents Nos. 1 and 2 or to eject them from the property without taking recourse to a civil suit.
The Commissioner of Wakfs, however, felt that he was not bound by these observations of the High Court since he was not served with a notice and accordingly decided to proceed with the enquiry.
consequence thereof, the respondents Nos. 1 and 2 had to participate in the proceedings.
On October 19, 1962 they filed their reply before the Commissioner of Wakfs and joined issue on the question as to whether the disputed property was wakf property or not.
In their reply they pleaded, inter alia that the property was not a wakf and that the wills had indeed been cancelled in a suit.
The Commissioner of Wakfs by his report dated December is, 1964 on the basis of the evidence led before him, held the disputed property to be wakf property recommended that it be recorded as such, and accordingly, forwarded a report to that effect to the State Government as required under sub s.(3) of s.4.
On receipt of the report of the Commissioner of Wakfs forwarded to it by the State Government under sub section
(1) of section S, the Board of Muslim 153 Wakfs published a notification for inclusion of the property in dispute A in the list of Wakfs existing in the State in the Rajasthan Rajpatra dated December 2, 1965.
Thereafter, the respondents Nos. ] and 2, filed a writ petition in the High Court challenging the legality and validity of the proceedings taken by the Commissioner of Wakfs.
It was contended that on the basis of such report, the Board of Muslim Wakfs was not entitled to include their property in the list of wakfs published under sub s.(2) of s.5.
In allowing the petition, the High Court held that the entire scheme or the , indicates that the Board of Wakfs jurisdiction is confined to matters of administration of the wakfs and not to adjudication of questions of title.
In view, it was evident that the Act did not invest the Board of Wakfs or the Commissioner of Wakfs with the power to decide the question whether a property belonged to a wakf or not; and more so, where a person claiming title is a stranger to the wakf.
It accordingly held that a Commissioner of Wakfs appointed under sub s.(1) of s.(4) of the Act has no jurisdiction under sub s.(3) of section 4 to enquire whether or not a certain property is wakf property when such a dispute is raised by such a person.
It further held that the object of section 6 is to narrow down the dispute between the Board of Wakfs, the mutawalli and the person interested in the wakf, as defined in section 3.
Consequently, the High Court held that the failure of a stranger to the wakf to institute a suit in a court of competent jurisdiction for a decision of such question, namely, whether a particular property is a wakf property or not, cannot make the inclusion of such property in the list of wakfs published by the Board under sub section
(2) of section 5 of the Act final and conclusive under sub section
(4) of section 6 of the Act.
It also held that the Board is not invested with jurisdiction to enquire into and decide the questions of title to, or possession of, the properties belonging to third parties under section 27 of the Act.
It is argued for the appellant, firstly, that the words 'for the purpose of making a survey of wakf properties ' are wide enough and confer ample power on the Commissioner 'to investigate and adjudicate ' upon the question whether a certain property is wakf property or not during the course of his survey of.
wakf properties in the State of Rajasthan; and secondly, the failure of the respondents Nos.
l and 2 to file a suit within the time allowed by sub section
(1) of section 6 of the Act makes the inclusion of the disputed property in the list of wakfs published by the Board of Wakfs under sub s.(2) of s.5, final and conclusive.
Tn support of the contentions, it is urged that the word 'therein ' in the expression 'any per son interested therein ' appearing in sub s.(1) of s.6, qualify title words 'wakf property ' and, therefore, the expression 'any person interested 817SCI/78 154 therein ' cannot, in the context in which it appears, mean 'person interested in a wakf ' as defined in section 3(h) of the Act, as wrongly assumed by the High Court.
It is therefore, urged that the right of suit given under section 6(1) of the Act can be availed of by a person affected by the publication of the list of wakfs under sub s.(2) of s.5, i.e. it includes even a stranger.
In reply, it is submitted on behalf of the respondents Nos. 1 and 2, that the scope of section 6 is to narrow down the dispute between the Board of Wakfs, the mutawalli and any person interested in the wakf, as defined in section 3(h).
It is urged that the High Court was, therefore, right in holding that 6 refers only to such a dispute and cannot affect the right and title of a stranger to the wakf, particularly of a person belonging to another religious denomination.
The submission is that the word 'therein ' in sub section
(1) of section 6, in the context and setting in which it appears, does not fit in with the words 'wakf property ' in the collocation of words, but qualifies the words 'the wakf ' immediately presiding it.
It is said that the word 'therein ' has been used to avoid repetition of the words 'the wakf ', and not to extend the ambit of the section to persons who fall outside the scope of the expression 'person interested in a wakf ' as defined in s.3(h).
It is, therefore, urged that the respondents Nos. 1 and 2 are wholly outside the purview of s.6(1) and, therefore, they must necessarily fall outside the scope of the enquiry under, s.4(1), as the provisions contained in s.4, 5 and 6 form part of an integrated scheme.
It is pointed out that on the terms of s.4 the Commissioner of Wakfs has no power ' to enquire whether or not a certain property is wakf property when such dispute is raised by a stranger to the wakf.
In support of the contention, the language of section 4 is contrasted with that of s.27 and it is said that, while the Board of Wakfs has the power to hold an enquiry as to whether a particular property is wakf property or not under s.27, the Commissioner of Wakfs has no power to hold such an enquiry.
In order to appreciate the implications of the rival contentions, it Is necessary not only to examine the scheme of the Act but also the purpose and object of the legislation.
The , "the Act", as the preamble shows, was enacted 'to provide for the better administration and supervision of wakfs '.
The avowed object and purpose of the Act was to bring the management of Wakfs, though it vests immediately in a mutawalli, subject to the supervision the State.
It was enacted to replace the Mussalman Wakf Act, 1923, which merely provided for the submission of audited accounts by mutawallis, and was found to be wanting in 155 several respects and really not of much practical value.
It was found k that proceedings could be successfully defeated simply on the plea taken by the mutawalli that there was no wakf.
To remove the lacunae, the Mussalman Wakf (Bombay Amendment) Act, 1935 amended the Act.
The Bengal Wakf Act, 1934 was enacted to create a machinery for the supervision of wakfs in Bengal.
The United Provinces followed suit and the United Provinces Muslim Wakf Act, 1936 was passed creating a Central Wakf Board.
Similarly, Bihar also passed a legislation almost on the same lines.
The working of these Acts brought out the necessity for one uniform and consolidated legislation by the Center.
It was with this view that the was enacted.
The scheme of the Act may be briefly indicated.
Section 2 makes the Act applicable to all wakfs in India except to Durgah Khawaja Saheb, Ajmer.
Section 3 defines certain terms, and the term 'wakf ' and the expression 'person interested in a wakf ' have been defined as follows: "3.(h) 'person interested in a wakf ' means any person who is entitled to receive any pecuniary or other benefits from the wakf and includes, (i) any person who has a right to worship or to perform any religious rite in a mosque, idgah, imambara, dargah, Khangah, maqbara, graveyard or any other Religious institution connected with the wakf or to participate in any religious or charitable institution under the wakf; (ii) the wakif and any descendant of the wakif and the mutawalli.
(1) 'wakf ' means the permanent dedication by a person professing Islam of any movable or irremovable property for any purpose recognised by the Muslim law as pious, religious or charitable and includes (i) a wakf by user; (ii) grants (including mashrut ul khidmat) for any purpose recognised by the Muslim law as pious, religious or charitable; and (iii)a wakf alal aulad to the extent to which the property is dedicated for any purpose recognised by Muslim law as pious, religious or charitable; and 'wakif ' means any person making such dedication. ' 156 The Act consists of several chapters and can conveniently be divided into three parts.
The first part relates to the survey of wakfs.
Chapter II is headed 'Survey of Wakfs '.
Sub section (1) of section 4 empowers the State Government to appoint for the State by a notification a Commission of Wakfs for the purpose of making survey of wakf properties existing at the time of the commencement of the Act.
Sub section (3) enjoins the Commissioner to submit his report to the State Government after making such enquiry as he may consider necessary and the report is to contain the following particulars namely: (a) the number of wakfs in the State, or as the case may be, any part thereof, showing the Shia Wakfs and Sunni Wakfs separately; (b) the nature and objects of each wakf; (c) the gross income of the property comprised in each wakf; (d) the amount of land revenue, cesses, rates and taxes payable in respect of such property; (e) the expenses incurred in the realisation of the income and the pay or other remuneration of the mutawalli of each wakf; and (f) such other particulars relating to each wakf as may be prescribed.
" Sub section (4) enjoins that the Commissioner, while making such enquiry, shall have certain powers as are vested in a civil court under the Code of Civil Procedure, 1908, namely, summoning and examining any witness, requiring the discovery and production of any document, re questioning any public record from any court or office, issuing commissions for the examination of any witness or accounts, making any local inspection or local inspection etc.
Sub section (5) of s.4 runs thus: "(5) If, during any such inquiry, any dispute arises as to whether a particular wakf is a Shia wakf or Sunni wakf and there are clear indications in the deed of wakf as to its nature, the dispute shall be decided on the basis of such deed.
" Section 5 provides for publication of a list of wakfs and is as follows: "5.(1) on receipt of a report under sub section (3) of Section 4, the State Government shall forward a copy of the same to the Board.
157 (2) The Board shall examine the report forwarded to it under sub section (1) and publish, in the official (Gazette, a list of wakfs existing in the State, or as the case may be, the part of the State to which the report relates, and containing such particulars as may be prescribed.
" Section 6, which relates to adjudication of dispute regarding wakfs, B so far as material, reads: "6.(1) If any question arises whether a particular property specified as wakf property in a list of wakfs published under sub section (2) of the section 5 is wakf property or not or whether a wakf specified in such list is a Shia wakf or Sunni wakf the Board or the mutawalli of the wakf or any person interested therein may institute a suit in a civil court of competent jurisdiction for the decision of the question and the decision of the civil court in respect of such matter shall be.
final: Provided that no such suit shall be entertained by the civil court after the expire of one year from the date of the public cation of the list of wakfs under ' sub section (2) of section 5.
. . . . (4) The list of wakfs published under sub section (2) of section S shall, unless it is modified in pursuance of a decision of the civil court under sub section (1), be final and conclusive." Chapter IIA is about the constitution of the Central Wakf Council, with which we are not concerned.
Chapter III provides for establishment of a Board of Wakfs and defines the nature of its duties, powers and functions.
This chapter also provides for certain incidental matters.
Sub section (1) of section 15 provides that the general superintendence of all wakfs in a State shall vest in the Board so established for the State, and it shall be the duty of the Board to ensure that the wakfs under its superintendence are properly maintained, controlled and administered and the income thereof is duly applied to the objects and for the purpose for which such wakfs were created or intended.
Sub section (2) enumerates the various functions of the Board.
The next stage is that of registration of wakfs.
That subject is dealt with in Chapter IV.
Section 25 lays down that every wakf, whether created before or after the commencement of the Act, shall be registered at the office of the Board.
Section 26 requires the Board to maintain a register of wakfs.
Under section 27, the Board is invested 158 with the power to decide whether a certain property is wakf property and reads as follows: "27.
(1) The Board may itself collect information regarding any property which it has reason to believe to be wakf property and if any question arises whether a particular property is wakf property or not or whether a wakf is a Sunni wakf or a Shia Wakf, it may after making such inquiry as it may deem fit, decide the question.
(2) The decision of the Board on any question under sub section (1) shall, unless revoked or modified by a civil court of competent jurisdiction, be final.
" Section 28 empowers the Board to direct a mutawalli to apply for the registration of a wakf or to supply any information regarding a wakf, and the Board may itself cause the wakf to be registered or May at any time amend the register of wakfs.
The third stage then arises.
After completing the survey and finalising the registration of wakfs, the Board which is an administrative body, is empowered to supervise and administer wakf property.
Chapter V deals with mutawallis and wakf accounts.
This chapter provides in detail as to how mutawalli shall submit budget and tho accounts and in what manner the Board will be exercising its control over the wakf properties.
Section 36A relates to transfer of immovable property of wakfs.
According to this section, no transfer of the wakf property is valid without the previous sanction of the Board.
Section 36B empowers `the Board to recover certain wakf properties transferred without the previous sanction of the Board by sending a requisition to the Collector.
Chapter VI relates to the finance of tho Board.
Chapter VII to judicial proceedings and Chapter VIII to miscellaneous matters.
It would thus appear that the Act is a complete code dealing with the better administration and supervision of wakfs.
The High Court, in its considered opinion, in the light of the historical background and precedents, observed: " The present Act No. 29 of 1954 is, no doubt an improvement on the Mussalman Wakf Act, 1923, but in our view, this also does not empower the Board of Wakfs to decide the question whether a particular property is wakf property or not, if such a dispute is raised by a person who is a stranger to wakf.
" There is a considerable body of authority interpreting section 10 of the Mussalman Wakf Act 1923, in favour of the view that where 159 the existence of a wakf was itself in dispute, the District Judge had no jurisdiction to inquire into its existence, and the matter could be settled only by instituting a regular suit.
The question came up for consideration before several High Courts in India as will appear from Nasrulla Khan vs Wajid Ali, (1) Wahid Hasan vs Abdul Rahman,(2) Syed Ali Mohammed vs Collector ff Bhagalpur,(3) Mohammad Baqar vs Mohammed Qasim,(4) Nanha Shah vs Abdul Hasan,(5) and Abdul Hussain vs Mohmmad Ebrahim Riza.(x) The general trend of opinion was that the District Judge in dealing with in application under section 10) of that Act had, in the absence of a clear provision in that behalf, no jurisdiction to try an issue as to whether certain property was wakf property.
It was pointed out that if the legislature had the intention to confer such power, there would have been a provision like section S of Charitable and Religious Trusts Act, 1920.
In Abdul Hussain vs Mohmmad Riza (supra) it was observed: "Considering the terms of the enactment and the scope and purpose of the Act is clear that the legislature intended of income of wakf properties for the purpose of providing some control on the management of properties which are admittedly wakf.
It could not have intended to include hl its scope the enquiry into the vital questions whether the disputed property is wakf property and the person in possession of it is a mutwalli, which are questions of fundamental character such as could be the subject matter of a suit alone." Though sub section
(3) of section 4 of the Act is rather unhappily worded, of the .
The does, in our opinion, furnish a complete machinery for the better administration and supervision of wakfs.
Though sub section
(3) of section 4 of the Act is rather unhappily worded, it is not a sound principle of construction to interpret expressions used in one Act with reference to their use in another Act, and decisions rendered with reference to construction of one Act cannot apply with reference to the provisions of another Act, unless the two Acts are in pari materia.
Further, when there is no ambiguity in the (1) I.L.R. 52 All. 167.
(2) I.L.R. 57 All.
(3) A.I.R. 1927 Pat.
(4) I.L.R. 7 Luck.
601 (F.B.) (5) A.I.R. 1938 Pat.
(6) I.L.R. 160 statute, it may not be permissible to refer to, for purposes of its construction, any previous legislation or decisions rendered therein.
The questions that fall for determination upon the appeal are two; first, whether a Commissioner of Wakfs appointed under sub section
(1) of section 4 of the , has the jurisdiction under sub section (3) of section 4 to enquire whether a certain property is wakf property or not when such a dispute raised by a stranger to the wakf and second, if so, whether the failure of such a person to institute a suit in a civil court of competent jurisdiction for decision of such question within a period of one year, as provided for under sub section
(1) of section 6, makes the inclusion of such property in the list of wakfs published by the Board under sub s.(2) of section 5 of the Act final and conclusive under sub section (4) of section 6 It is needless to stress that the whole purpose of the survey of wakfs by the Commissioner of Wakfs under sub section
(1) of section 4 is to inform the Board of Wakfs, as to the existence of the existing wakfs in a State, in order that all such wakfs should be brought under the supervision and control of the Board of Wakfs.
While the High Court was, in our view, right in determining the scope of sub section
(1) of section 6 of the Act, it was clearly in error in cur tailing the ambit and scope of an enquiry by the Commissioner of Wakfs under sub section
(3) of section 4 and that by the Board of Wakfs under section 27 of the.
Act In dealing with the scope of enquiry by the Commissioner of Wakfs: under sub section
(3) of section 4, the High Court adverts to the,.
heading of Chapter II and the marginal note of sub section
(1) of section 4.
It observes: "The heading of section 4 with which this chapter started was 'Preliminary survey of wakfs '.
The use of the word 'Preliminary ' in the heading is one of significance.
The weight of authority is in favour of the view that the marginal note upended to a section cannot be used for construing the section.
Lord Macnaghten in Balraj Kunwar vs Jagatpal Singh(1) considered it well settled that marginal notes cannot be referred to for the purposes of construction.
This Court after referring to the above case with approval, said in Commissioner of Income Tax vs Ahmedbhai Umedbhai Umarbhai & Co.(2): "Marginal notes in an Indian statute, as in an Act of Parliament, cannot be referred to for the purpose of construe the statute." (1) ILR 26 All.
393 (P.C.) (2) ; 161 As explained by Lord Macnaghten in the Privy Council, marginal notes A are not part of an Act of Parliament.
The very heading of Chapter II and the caption to section 4 no doubt suggest that the Commissioner makes only a preliminary survey regarding existing wakfs and the list of wakfs prepared by him is published by the Board and neither the Commissioner nor the Board is required to make any enquiry regarding, the character of the property.
That is to say, the making of survey is only an administrative act and not a quasi judicial act.
But, on a closer examination, it is, clear that while making a survey of the existing wakfs in a State under sub section
(1) of 5. 4, the Commissioner is required by sub section
(3) to submit a report to the State Government in regard to the serval matters referred to in cls.
(a) to (f) thereof.
There may be a dispute as between the Board, the mutawalli or a person interested in the wakf, as regards (a) the existence of a wakf, i.e. whether a particular property is wakf property, (b) whether it is a Shia wakf or a Sunni wakf, (c) extent of the property attached to the wakf, (d) the nature and object of the wakf, etc.
While making such an enquiry, the Commissioner is invested by sub section
(4) with the powers vested in a civil court under the Code of Civil Procedure, 1908 in respect of the summoning and examining of any witness, requiring the discovery and production of any document, requisitioning any public record from any court or office, issuing commissions for the examination of any witness or accounts, making any local inspection or local investigation etc.
In view of these comprehensive provisions, it is not disputed before us that the enquiry that the Commissioner makes for the purpose of submission of his report under sub section
(3)? while making a survey of existing wakfs in the Estate under sub section (1), is not purely of an administration nature but partakes of a quasi judicial in character, in respect of the persons falling within the scope of sub section
(1) of section 6.
It would be illogical to hold that while making a survey of wakf properties existing in the State a Commissioner of Wakfs appointed by the State Government under sub section
(1) of section 4, should have no power to enquire whether a particular property is wakf property or not.
If we may refer to sub section
(1) of section 4, so far as material, it reads: "The State Government may, by notification in the official Gazette, appoint for the State a Commissioner of Wakfs. for the purpose of making a survey of wakf properties existing in the State at the date of the commencement of this Act.
" It will be clear that the words "for the purpose of making a survey of wakf properties" is a key to the construction of the section The 162 ordinary meaning of the word "survey", as given in the Random House Dictionary of English Language, is 'to take a general or comprehensive view of or appraise, as a situation '.
If the Commissioner of Wakfs has the power to make a survey, it is but implicit that in the exercise of such power he should enquire whether a wakf exists.
The making o such an enquiry is a necessary concomitant of the power to survey.
The High Court was clearly in error in observing: "Except sub section (5) there is nothing in section 4 or in the rules made by the State to show that the Commissioner is empowered to adjudicate on a question, if one arises, whether a particular property is a wakf property or not.
" We are of the opinion that the power of the Commissioner to survey wakf properties under sub section
(1) or to enquire and investigate into the several matters set out in cls.
(e) to (f) of sub section
(3) cannot be curtailed by taking recourse to Sub 5.
The High Court was wholly wrong in understanding the true implication of sub section
(5) of section 4.
It only lays down that if, during any such enquiry, any dispute arises as to whether a particular wakf is a Shia wakf or a Sunni wakf, and there are clear indications in the deed of wakf as to its nature, the dispute shall be decided on the basis of such deed.
It, therefore, makes the wakf deed conclusive as to the nature of the wakf, i.e. whether it is a Shia or a Sunni wakf.
In our view, sub s.(5) of section 4 cannot be projected into sub section
(1) for determining the question whether a certain property is a wakf property or not.
Nor does it enter into an enquiry as to several of the matters adverted into some of the clause of sub section (3).
The matter can also be viewed from another angle.
If sections 4, 5 and 6 are parts of an integrated scheme, as asserted, then it follows as a necessary corollary that the enquiry envisaged by sub sections (1) and (3) of section 4 must cover the field defined by sub section
(1) of section 6.
The opening words of the section are: "If any question arises whether a particular property specified as wakf property in a list of wakfs published under sub section (2) of section 5 is wakf property or not or whether a wakf specified in such list is a Shia wakf or Sunni wakf . " They clearly envisage that the enquiry by the Commissioner is not con fined to the question as to whether a particular wakf is Shia wakf or Sunni wakf.
It may also embrace within itself a dispute as to whether a wakf exists.
This is a conduction which sub section
(1) of s.4 must, in its context and setting, bear.
Any other construction would, indeed, make the Act unworkable.
163 While it is true that under the guise of judicial interpretation the court cannot supply casus omissus, it is equally true that the courts in construing an Act of Parliament must always try to give effect to the intention of the legislature.
In Crawford vs Spooner(1) the Judicial Committee said: "We cannot aid the legislature 's defective phrasing of an Act, we cannot add and mend, and, by construction, make up deficiencies which are left there." To do so would be to usurp the function of the legislation.
At the same time, it is well settled that in construing the provisions of a statute the course should be slow to adopt a construction which tends to make any part of the statute meaningless or ineffective.
Thus, an attempt must always be made to reconcile the relevant provisions so as to advance the remedy intended by the statute.
It would certainly have been better if the legislature had inserted a provision like section 6 C incorporated in the Mussalman Wakf Act, 1923 by the Mussalman Wakf (Bombay Amendment) Act, 1935, which was in force in the States of Maharashtra and Gujarat, namely: "6 C. Power of the Court to enquire: (1) The court may, either on its own motion or upon the application of any person claiming to have an interest in a wakf, hold an enquiry in the prescribed manner act any time to ascertain (i) whether a wakf exists.
" Failure to insert such a provision in sub.
(3) of section 4, however, is of little consequence.
As already indicated, the power of the Commissioner to make a survey of existing wakf properties, carries, with it, by necessary implication, the power to enquire as to the existence of a wakf.
Perhaps, the legislature thought it to be a superfluity.
That leaves us with the question as to the scope of sub section
(1) of section 6.
All that we have to consider in this appeal is, whether if the Commissioner of Wakfs had jurisdiction to adjudicate and decide against the respondents Nos.
l and 2 that the property in dispute was wakf property, the list of wakfs published by the Board of Wakfs under sub section
(2) of 5. 5 would be final and conclusive against them under section 6(4) in case they had not filed a suit within a year from the publication of the lists The question as to whether the respondents Nos. 1 and 2 can be dispossessed, or their possession can be threatened by the Board of Wakfs by proceeding under section 36B without filing a suit in a civil court of competent jurisdiction does not arise for our consideration (1) [1846] 6 Moors P.C. 1.
164 In the present case, the respondents Nos. 1 and 2 who are non Muslims, contended that they are outside the scope of sub section
(1) of section 6, and consequently, they have no right to file the suit contemplated by that sub section and, therefore, the list of wakfs published by the Board of Wakfs under sub section
(2) of S!.
5 cannot be final and conclusive against them under sub section
(4) of section 6, it was urged that respondents Nos,. 1 and 2 were wholly outside the purview of sub section
(1) of section 6 and they must, therefore, necessarily fall outside the scope of the enquiry envisaged by sub section
(1) of section 4, as the provisions contained ' in sections 4, 5 and 6 form part of an integrated scheme.
The question that arises for consideration, therefore, is as to who are the parties that could be taken to be concerned in a proceeding under sub section
(1) of section 6 of the Act, and whether the list published under subs.
(2) of section S declaring certain property to be wakf property, would bind a person who is neither a mutawalli nor a person interested in the wakf.
The answer to these questions must turn on the true meaning and construction of the word 'therein ' in the, expression 'any person interest ted therein ' appearing in sub section
(1) of section 6.
In order to understand the meaning of the word 'therein ' in our view, it is necessary to refer to the preceding words 'the Board or the mutawalli of the wakf '.
The word 'therein ' must necessarily refer to the 'wakf ' which immediately pre cedes it.
It cannot refer to the 'wakf property '.
Sub section (1) of section 6 enumerates the persons who can file suits and also the questions in respect of which such suits can be filed.
In enumerating the persons who are empowered to file suits under this provision, only the Board, the mutawalli of the wakf, and 'any person interested therein ', thereby necessarily meaning any person interested in the wakf, are listed.
It should be borne in mind that the Act deals with wakfs, its institutions and its properties.
It would, therefore.
, be logical and reasonable to infer that its provisions empower only those who are interested in the wakfs to institute suits.
In dealing with the question, the High Court observes: "In our opinion, the words "any person interested therein" appearing in sub section (1) of section 6 mean no more than a person interested in a wakf as defined in clause (h) of section 3 of the Act It is urged by learned counsel for the petitioners that the legislature has not used in section 6(1) the words "any person interested in a wakf" and, therefore, this meaning should not be given to the words "any person interested therein".
This argument is not tenable because the words "any person inte 165 rested therein" appear soon after "the mutawalli of the wakf" A and therefore the word 'therein ' has been used to avoid re petition of the words "in the wakf" and not to extend the scope of the section to persons who fall outside the scope of the words "person interested in the wakf".
The purpose of section 6 is to confine the dispute between the wakf Board, the mutawalli and a person interested in the wakf.
" That, in our opinion, is the right construction.
We are fortified in That view by the decision of this Court in Sirajul Hag Khan & ors.
vs The Sunni Central Board of Wakf, U.P. & ors While construing section 5(2) of the United Provinces Muslins Wakf Act, 1936, this Court interpreted the expression "any person interested in a wakf" as meaning 'any person interested in what is held to be a wakf ', that is, in the dedication of a property for a pious, religious or charitable purpose.
It will be noticed that sub section
(1) of section 6 of the Act is based in sub section
(2) of section 5 of the United Provinces Muslims Wakf Act, 1936, which runs thus: "The mutawalli of a wakf or any person interested in a wakf or a Central Board may bring a suit in a civil court of competent jurisdiction for a declaration that any transaction held by the Commissioner of Wakfs to be a wakf is not a wakf, or any transaction held or assumed by him not to be a wakf, or that a wakf held by him to pertain to a particular sect does not be long to that sect, or that any wakf reported by such Commissioner as being subject to the provisions of this Act is exempted under section 2, or that any wakf held by him to be so exempted is subject to this Act.
" The provision to that section prescribed the period of one year 's limitation, as here, to a suit by a mutawalli or a person interested in the wakf.
The two provisions are practically similar in content except that the language of the main enacting part has been altered in sub section
(1) of section 6 of the present Act and put in a proper form.
In redrafting the section, the sequence, of the different clauses has been changed, therefore, for the expression "any person interested in a wakf" the legislature had to use the expression "any person interested therein".
The word 'therein ' appearing in sub section
(1) of section 6 must, therefore, mean 'any person interested in a waker ' as defined in section 3(h).
The object of sub section
(1) of s 6 is to narrow down the dispute between the Board of Wakfs, the mutawalli and the person interested in the wakf, as defined in section 3 (h) (1) 166 In this context, the scope of section 6 was examined by the High Court and it observed: "The purpose of sec.
6 is to confine the dispute between the Wakf Board, the mutawalli and a person interested in the wakf.
In other words, if there is a dispute whether a particular property is a wakf property or not, or whether a wakf is a Shia wakf or a Sunni wakf, then the Board or the mutawalli of the wakf or a person interested in the wakf as defined in sec.
3 may institute suit in a civil court of competent jurisdiction for the decision of the question.
They can file such a suit within one year of the date of the publication of the list of wakfs and if no such suit is filed, the list would be final and conclusive between them.
The very object of the Wakf Act is to provide for better administration and supervision of wakfs and the Board has been given powers of superintendence over all wakfs which vest in the Board.
This provision seems to have been made in order to avoid prolongation of triangular disputes between the Wakf Board, the mutawalli and a person interested in the wakf who would be a person of the same community.
It could never have been the intention of the legislature to cast a cloud on the right, title or interest of persons who are not Muslims.
That is, if a person who is non Muslim whether he be a Christian, a Hindu, a Sikh, a Parsi or of any other re ligneous denomination and if he is in possession of a certain property his right, title and interest cannot be put in jeopardy simply because that property is included in the list published under sub sec.
(2) of Sec. 5.
The Legislature could not have meant that he should be driven to file a suit in a Civil Court for declaration of his title simply because the property in his possession is included in the list.
Singularly, the legislature could not have meant to curtail the period of limitation available to him under the Limitation Act and to provide that he must file a suit within a year or the list would be final and conclusive against him.
In our opinion, sub section (4) makes the list final and conclusive only between the Wakf Board, the mutawalli and the person interested in the wakf as defined in Section 3 and to no other person.
" We are in agreement with this reasoning of the High Court.
It follows that where a stranger who is a non Muslim and is in possession of a certain property his right, title and interest therein cannot be 167 put in jeopardy merely because the property is included in the List.
Such a person is not required to file a suit for a declaration of his title within a period of one year.
The special rule of limitation laid down in proviso to sub section (1) of section 6 is not applicable to him.
In other words, the list published by the Board of Wakfs under sub section
(2) of section S scan be challenged by him by filing a suit for declaration of title even after the expiry of the period of one year, if the necessity of filing such suit arises.
Incidentally, the High Court also dealt with section 27 of the Act, and observed.
"section 27 does not seem to suggest that it empowers the Board to decide the question whether a particular property is wakf property or not, if that challenge comes from a stranger who is neither mutawalli nor a person interested in the wakf, but who belongs to another religious denomination and who claims a valid title and lawful possession over that property.
To ac kept the respondents argument would mean that the Board would be given the powers of the Civil Court to decide such disputes between itself and strangers and thus to make the Board 's decision final unless it is changed by a Civil Court of competent jurisdiction.
If a dispute is raised by a non Muslim, the Board cannot by simply entering the property in the register of wakfs drive him to take recourse to a Civil Court In our judgment, the High Court was clearly in error in dealing with section 27 or section 36B of the Act.
It appears from the writ petition field the High Court that no relief was as sought in respect of any action under section 27.
The observations of the High Court were, therefore, strictly not called for in regard to section 27.
It should have left the question open.
The question may arise if and when, action under section 27 is taken.
We, therefore, refrain from expressing any opinion as to the scope of section 27 of the Act.
Likewise, the High Court went on to consider the impact of section 36B, and observed: "In our opinion, this section cannot apply in the case of a property which is in the hands of a stranger over whom the Board has no control under the Act, simply because the Board happens to enter the property in its register.
In a case like the present one, where the petitioners claim their possession over the property as mortgagees from the year 1944 and fur their claim their title and possession as vendees over the same property from the year 1954, the Board of Wakfs cannot, by 168 simply entering the property in the list of wakfs or registering it in the register of wakfs, drive them to file a suit to establish their title or retain their possession.
It cannot also seek to dispossess them from the property by resorting to section 36B.
It is for the Board to file a civil suit for a declaration that the property in dispute is a wakf property and to obtain its possession.
" It was really not necessary for the High Court to decide whether section 36B of the Act was attracted or not, in the facts and circumstances of the case.
We must accordingly held that the Commissioner of Wakfs acted within jurisdiction in holding the disputed property to be wakf property.
It must, therefore, follow that the Board of Muslim Wakfs, Rajasthan was justified in including the property in the list of wakfs published under sub section
(2) of section S of the Act.
We must also hold, on a construction of sub section
(1) of section 6 that the list of wakfs so published by the Board was not final and conclusive under sub s (4) of section 6 against the respondents Nos.
l and 2 due to their failure to bring a suit within one year as contemplated by sub section (1) of section 6.
In view of the foregoing, the right of the respondents Nos. 1 and 2 in respect of the disputed property, if at all they have any, will remain unaffected by the impugned notification.
They are at liberty to bring a suit for the establishment of their right and title, if any, to the property.
Accordingly, the order of the High Court allowing the writ petition and declaring that the inclusion of the property in dispute in the list of wakf published by the Board bf Muslim Wakfs, Rajasthan under sub section
(2) of section 5 of the was not binding on the respondents Nos. 1 and 2 is upheld, but its direct restraining the Board of Muslim Wakfs from entering the disputed property in the register of wakfs and from dispossessing the respondents Nos. 1 and 2, except by way of a suit in a civil court of competent jurisdiction is set aside as it proceeds on the assumption that sections 27 and 36B of the Act are not applicable, which question did not arise for its consideration.
The parties are left to take recourse to their remedies according to law, with advertence to the observations made above, Subject to this modification, the appeal fails and is dismissed.
There shall he no order as to costs.
P.B.R. Appeal Dismissed.
| IN-Abs | To provide for the better administration and supervision of Wakfs, the Wakfs Act 1954, sought to bring the management of wakfs under the supervision of the State.
The Act envisages the appointment of a Commissioner of Wakfs for the purpose of survey of wakf properties existing at the time of the commencement of the Act.
The Commissioner is enjoined to submit his report to the State Government after making such enquiries as he may consider necessary.
While making enquiries the Commissioner is invested with powers as are vested in a Civil Court under the Code of Civil Procedure.
Section 6 of the Act provides that if any question arises as to whether a particular property specified in the list of wakfs published under section 5(2) was wakf property or not and such other related matters, the Board of Muslim Wakfs or the Mutawalli of the wakf or any person interested therein may institute a suit in a Civil Court for decision of the question.
Respondents 1 and 2 were mortgagee purchasers of the property in dispute, which was claimed to be wakf property.
Respondent.
No. 3 in his application to the Commissioner of Wakfs alleged that the property in dispute being wakf property its transfer by the mutawalli to the respondents was invalid and prayed that the property be taken over by the wakf committee.
While denying that the property in dispute was wakf property respondents 1 and 2 contended before the Commissioner that he had no jurisdiction to make an enquiry whether a particular property was wakf property or not.
The Commissioner rejected these contentions and submitted a report to the State Government.
On receipt of the Commissioner 's report the Board of Muslim Wakfs included the property in the list of wakfs in the Stat.
In the respondents ' Writ Petition, the High Court held (i) that the jurisdiction of the Board of Wakfs was confined to matters of administration of the wakfs and not to adjudication of questions of title and that the Act did not invest either the Board or the Commissioner with power to decide the question whether a property belonged to a wakf or not and therefore the Commissioner had no jurisdiction under section 4(3) of the Act to enquire whether or not the property was wakf property and (ii) that the failure of a stranger to the wakf to institute a suit in a court of competent jurisdiction within a period of one year on the question whether a particular property was wakf property or not could not make the inclusion of such property in the list of wakfs final and conclusive.
149 In appeal to this Court it was contended on behalf of the appellants that (i) the words "for the purpose of making a survey of wakf properties" are wide enough to confer power on the Commissioner to investigate and adjudicate upon the question whether a particular property was or was not wakf property and (ii) failure of the respondents to file a suit within the time allowed by s, 6(1) made the inclusion of the property in the list of wakfs final and conclusive.
The word "therein" occurring in "any person interested therein" in section 6 ( 1 ) qualifies the words "wakf property" and not "person interested in the wakfs" as wrongly assumed by the High Court.
Dismissing the appeal to this Court ^ HELD: While the High Court was right in determining the scope of section 6(1), it was clearly in error in curtailing the ambit and scope of enquiry by the Commissioner under section 4(3 ) .
[160 E] 1.
(a) The Commissioner of wakfs acted within his jurisdiction in holding the disputed property to be wakf property.
[168 C] (b) The whole purpose of the survey of the wakfs by the Commissioner under section 4(1) is to inform the Board of Wakfs as to existence of the wakfs in the State in order that all such wakfs should be brought under the supervision and control of the Board.
[160 D] (c) The words "for the purpose of making a survey" are the key to the construction of the section.
If the Commissioner has the power to make a survey it is but implicit that in the exercise of such power he should enquire whether or not a wakf exists.
The making of such an enquiry is a necessary concomitant of the power to survey.
The High Court was, therefore, wrong in holding to the contrary.
[162 A Bl (d) It would be illogical to hold that while making a survey of wakf properties existing in the State the Commissioner of wakfs should have no power to enquire whether a particular property was wakf property or not.
After making the survey the Commissioner is required to submit a report to the State Government in regard to the several matters referred to in clauses (a) to (f) thereof.
There may be a dispute as between the Board, the mutawalli or a person interested in the wakf, as regards the existence of wakf i.e. whether a particular property is wakf property, whether it is a Shia wakf or a Sunni wakf, the extent of the property attached to the wakf, the nature and object of the wakf and so on.
While making such an enquiry, the Commissioner is invested with the powers vested in a Civil Court under the Code of Civil Procedure, 1908.
In view of the comprehensive provisions contained in the Act the enquiry which the Commissioner makes is not purely of an administrative nature but partakes of a quasi judicial character in respect of persons falling within the scope of section 6(1).
[161 F; C E] (e) The power of the Commissioner to survey wakf properties or to enquire and investigate into the several matters set out in sub section (3) cannot be curtailed by taking recourse to section 4(S).
Sub section (S) only lays down that, if during an enquiry any dispute arises as to whether a particular wakf is a Shia wakf or Sunni wakf and if there are clear indications in the deed of wakf as to its nature, the dispute shall be decided on the basis of 150 such deed.
It, therefore, makes the wakf deed conclusive as to the nature of the wakf Sub section (5) cannot be projected into sub section (1) determining the question whether a certain property is a wakf property or not.
Nor does it enter into an enquiry as to several of the matters adverted to in some of the clauses of sub section (3).
[162 D E] (f) Moreover section 6 and section 6(1) clearly envisage that the enquiry by the Commissioner was not confined to the question as to whether a particular wakf was a Shia Wakf or Sunni Wakf.
It might also embrace a dispute is to whether a wakf existed or not.
[162 H] 2.
(a) Where a stranger is a non Muslim and is in possession of certain property, his right.
title and interest therein cannot be put in jeopardy merely because the property is included in the list of wakfs.
Such a person is not required to file a suit for a declaration of his title within a period of one year.
The special rule of limitation laid down in proviso to section 6(1) is not applicable to him.
In other words, the list published by the Board of Wakfs under section 5(2) can be challenged by him by filing a suit for declaration of title even after the expiry of the period of one year, if the necessity of filing such suit arises.
h 167 A B] (b) The word "therein" occurring in section 6(1) after the words "any person interested therein" must necessarily refer to the "Wakf" which immediately precedes it.
It cannot refer to the wakf property.
Section 6 ( 1 ) enumerates the persons who can file suits and also the questions in respect of which such suits can be filed.
In enumerating the persons who are empowered to file suits under this provision only the Board, the mutawalli of the Wakf; and "any person interested therein", thereby necessarily meaning any person interested in the wakfs, are listed.
Its provisions empower only those who are interested in the wakfs to institute suits.
[164 E Fl Sirajul Hag Khan & Ors.
vs The Sunni Central Board of Wakf, U.P. Ors., , referred to.
(c) The word "therein" in section 6(1) must mean "any person interested in a wakf" as defined in section 3(h).
The object of the section is to narrow down the dispute between the Board of Wakfs, the Mutawalli and the person interested in the wakf as defined in section 3(h).
[165 H] (d) The right of the respondents 1 and 2 in respect of the disputed property, if at all they have any, will remain unaffected by the impugned Notification.
They are at liberty to bring a Suit for the establishment of their right and title, if any, to the property.
[168 E]
|
Special Leave Petition (Civil) No. 2939 of 1978.
Appeal from the Judgment and order dated 4 10 1978 of the Gujarat High Court in Special Civil Application No. 1174 of 1977.
M. V. Gowswami for the Petitioner.
P. M. Raval, P. H. Parekh, C. B. Singh and M. Mudgal for the Respondent.
339 The order or the Court was delivered by KRISHNA IYER, J. The petitioner 's counsel, in his fighting submission, argues that his client 's fundamental right to a licence for a meat shop has been flouted by the little Limdi Municipality, founding himself on a decision of this Court in Mohd. Faruk, vs M. P. State(1).
That decision hardly helps.
There a byelaw was challenged as violative of Art 19(1)(g).
Here there is no law whatever which bans the grant of meat licences.
Indeed, there are three other licensed meat stalls and the petitioner himself had a meat licence in a shop leased to him by the same Municipality earlier which by efflux of time had expired.
The law vests a discretion to he reasonably exercised in the content of citizen 's fundamental right.
The ground on which the Municipal body has refused licence here is not irrelevant and cannot be described as unreasonable within the meaning of article 19(6) of the Constitution.
The bye laws permit the municipality, as the licensing authority, to grant or to refuse licences.
No butcher, baker or circus manager can say that he has the, unqualified right to get a licence on mere application.
It is open to the licensing council indeed, is obligatory on its part to take note of all relevant circumstances and then decide whether, in the particular spot chosen by the particular applicant" a licence should be granted.
Various factors enter the verdict and the local authorities are the best judge of these factual factors, not the court, especially this Court sitting at the third tier.
The, Limdi Municipality is stated to be a small one with a population of around 25000.
It is admitted that there are three licensed meat vendors including one who is the father of the petitioner.
The claim of the petitioner is for a fourth licence.
It is quite conceivable that the fourth may be supernumerary.
It is quite understandable that the municipality may think that it is not reasonable to grant licence to the same person or one for the father and another for the son.
Moreover, we cannot dismiss as irrelevant or obnoxious the consideration the strong feelings of the local people resulting in law and order problems.
The proximity to schools, public institutions and also residents of the locality plus the reaction or impact on those institutions and residents maybe germane from peace keeping and welfare oriented view points.
We agree that local bodies should not succumb to religious susceptibilities or fanatical sentiments in secular India and refuse licences where fundamental rights have to be respected.
Even so, in the, totality of circumstances present in the present case, it is not possible for us to postulate that there has been an abuse of discretion or a perverse use of power.
In this view, we decline to interfere.
Certainly, the munici (1) [1978] I SCR 156.
340 pal authority will take care to be alert and alive to the fundamental right of citizens and not refuse licences merely scared by mob sentiment or panicked by religious reaction.
In the instant case there is a composite lease cum cum lease of a meat shop and licence for carrying on trade in mutton.
There is no obligation on the part of the municipality to grant a lease of its property to any one who asks for it merely for the asking.
Granting a lease solely because some one offers a large donation to the municipality.
as nearly happened here, may not be correct, which this local body will note.
If the refusal of the lease or its renewal cannot be faulted, the question of grant of the licence does not arise.
In this view also we ( find it difficult to accede to the argument of the petitioner.
We agree that municipal discretion should be exercised rationally, not religiously nor ritually, but we also realize that judicial discretion should go into anxiously, not impetuously nor in disregard of the pragmatic guideline that local authorities are the best judges of local conditions.
Of course, if irrelevant criteria or perverse application vitate the decision courts will guardian the rule of law against little tyrants trampling over people 's rights or local factions fouling the council 's verdict.
The Special Leave Petition is, therefore, dismissed.
| IN-Abs | Dismissing the special leave petition, the Court, ^ HELD: 1.
No butcher, baker or circus manager can say that he has the unqualified right to get a licence on mere application.
It is open to the licencing Council Indeed, is obligatory on its part to take note of all relevant circumstances and then decide whether, in the particular spot chosen by the particular applicant, a licence should be granted or not.
[339C D] 2.
Various factors enter the verdict and the local authorities are the best judge of the factual factors, not the Court especially, the Supreme Court at the third tier The factual factors may be many, like the proximity to schools, public institutions and also residents of the locality plus the reaction or impact on those institutions and residents, the unreasonableness to grant licence to the same person or one for the father and another for the son, the need for an extra shop, other considerations which are germane from peace keeping and welfare oriented view points etc.
Certainly granting a lease solely because someone offers a large donation to the Municipality may not be correct.
[339D. G, 340B] 3.
No doubt Municipal discretion should be exercised rationally, not religiously nor ritually and judicial discretion should go into anxiously, not impetuously nor in disregard of the pragmatic guideline that local authorities are the best judges of local conditions.
Of course, if irrelevant criteria or perverse application vitiate the decision, courts will guardian the rule of law against little tyrants trampling over people 's rights or local factions fouling the council s verdict.
[340C D] In the instant case, the ground on which the Municipal body, has refused licence is not irrelevant and cannot be described as unreasonable within the meaning of article 19(6) of the constitution.
[339C] Mohd. Faruk vs M. P. State, ; ; inapplicable.
|
ON: Criminal Appeal No. 193 of 1974.
Appeal by Special Leave from the Judgment and order dated 1 3 1974 of The Delhi High Court in Criminal Appeal No. 119/72.
Frank Anthony, N. section Das Bahl and Shushil Kumar for the appellant.
E. C. Agarwala and R. M. Sachthey for the Respondent.
ii The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
The appellant before us was convicted by the learned Special Judge, Delhi of an offence under Section 5(1) (d) read with Section 5(2) of the Prevention of Corruption Act and Section 161 Indian Penal Code, and sentenced to suffer rigorous imprisonment for a period of one year on each count.
He was also sentenced to pay a fine of Rs. 100/ .
The conviction and sentence were confirmed by the High Court and the appellant has come up in appeal by special leave.
The prosecution case briefly was as follows: P.W. 6 Ram Niwas Sharma, an Architect by profession prepared building plans for one M.L. Batla and submitted them to the Delhi Development Authority for sanction.
The plans were submitted on 6th May, 1969.
They were rejected on 26th May, 1969.
Revised plans were thereafter submitted on 16th June, 1969.
Certain objections were raised and in order to comply with those objections P.W.6 went to the office of the Delhi Development Authority on 11 7 1969.
He met the accused who was overseer Section officer and asked him to be permitted to make necessary corrections in the building plans.
Instead of giving the file to P.W.6 the accused demanded a sum of Rs. 30/ as bribe.
P.W.6 told him that he did not have the money with him whereupon the accused asked him to come on 14th July, 1969, in the afternoon with the money.
On 1 4th July, 1969.
P.W.6 went to the AntiCorruption office at about 12 noon and 332 gave a report exhibit P.W.1/A to P.W.9, an Inspector of the Anti Corruption Establishment.
P.W.9 sent for P.Ws. 1 and 2 from the Sales Tax office.
The report made by P.W.6 was read over to them.
Thereafter, P.W.6 produced three ten rupee notes, the numbers of which were noted by P.W.9 in the presence of the Panch witnesses P.Ws. 1 and 2.
Thereafter it was arranged that they should all proceed to the office of the Delhi Development Authority.
There P.W. 5 was to give the bribe to the accused and on his giving the bribe to the accused, P.W. l was to give a signal to P.W. 9.
As arranged P.W.6 went to the office of the Delhi Development Authority alongwith Panch witnesses.
The Inspector stopped at the door of the room.
P.W.6 went to the table of the accused and asked him for the file for the purpose of making necessary corrections in the building plans.
The accused asked him if he has brought the money.
On his saying 'yes ' the file was taken out and given to P.W. 6.
As there were a number of other files on the table the accused, P.W. 6 took the file to another table at a distance of one or two paces from the table of the accused.
After making the corrections P.W. 6 handed over the file to the accused alongwith Its. 30/ .
Instead of taking the money the accused asked P.W. 6 to place the money in the file which he accordingly did.
The accused ' then took the file and placed it under the table, putting his foot on it.
At that stage P.W. 1 gave the agreed signal.
P.W. 9 came to the room, disclosed his identity to the accused and questioned him whether he had accepted Rs. 30/ from P.W. 6.
The accused was stunned and kept mum.
P.W. 9 was then informed by P.W. 6 and the two panch witness that the money was kept in the file under the foot of the accused.
P.W. 9 then took out the file and found the sum of Rs. 30/ in the file.
The numbers of the currency notes were compared with the numbers earlier noted at the Anti Corruption office.
Thereafter, r w. g sent the raid report.
On receipt of it, P.W. 7, Deputy Superintendent of Police took over the investigation.
After completing the investigation, a charge sheet was laid and the accused was duly tried, convicted and sentenced as aforesaid.
The defence of the accused was that P.W. 6 met him on 11th July, 1969 and.
wanted to make some corrections.
He told him that he should file the original sale deed.
P.W. 6 then said that he should come on Monday with the original sale deed.
On 14th July 1969, P.W. 6 came to his office and wanted the file for making the necessary.
corrections.
He took out the file and gave it to P.W 6.
P.W. 6 took the file to another table and brought it back to him after Or 3 minutes.
According to the accused, P.W. 6 must have put the money into the file when he had taken the file to the other table.
When the Police officer came in and questioned him about the receipt of the 333 bribe his straight away told him that he had not taken any money from P.W. 6.
According to the accused, P.W. 6 was annoyed with him on 11th July, 1969, as he thought that he (accused) was delaying his work.
He also stated that Mr. Batla the owner of the plot had threatened him with dire consequences because he had raised objections to the plans submitted by him.
Both the Panch witnesses examined by the prosecution did not fully support the prosecution case.
They resiled from the earlier statement made by them during the course of investigation.
P.W. 1 stated that when P.W. 6 went into the room where the accused was working there was some talk between P.W. 6 and the accused but he did not hear what it was.
He saw the accused taking out the file from the Almirah and giving it to P.W. 6.
P.W. 6 took it to another table and was writing something in the file.
Then he took back the file to the accused.
The accused was busy with his own work.
The complainant placed three ten Rupee notes in the file and handed over the file to the accused who placed it under the table near his feet.
P.W.6 signalled to him and he gave the agreed signal.
The Inspector then entered the room and questioned the accused about the receipt of the bribe.
The accused denied the charge.
He (P.W.1) then informed the Inspector that the money was in the file.
The money was recovered from the file.
The prosecution was permitted to cross examine him.
In cross examination his earlier statements to the Investigating officer were put to him.
He admitted in cross examination that when questioned by the Inspector the accused kept silent for some time as he was perplexed but thereafter told the Inspector that he had not taken any money.
The evidence of the other witness P.W. 2 was on the same lines as P.W. 1 except that he stated that when questioned by the Inspector the accused kept mum and was perplexed.
P.W. 2 was also cross examined by the prosecution and the statements made by him to the Investigating officer were put to him.
Shri Frank Anthony learned Counsel for the appellant submitted that the conviction was based on the uncorroborated testimony of P.W. 6 and that it should, therefore, be quashed.
He urged that Batla, Advocate who had employed P.W.6 as an Architect had been convicted in a Criminal case and that the present complaint was inspired by Batla who had previously threatened the accused with direct consequences.
He pointed out that P.Ws. 1 and 2 stated in their evidence that Batla was actually present in the Anti Corruption office when they were called there by the Inspector.
He invited our attention to the circumstance that some persons were standing near the table of the accused at the time when the bribe was supposed to have been given 334 and argued that it was most unlikely that the accused would have demanded and accepted the bribe when so many people were nearby. 'the learned Counsel further urged that the evidence of P.W.6 that he went to the office of the D.D.A. at 3 or 3.15 p.m.
On 11th July, 1969 could not be true as the noting on the file showed that the file was received at 4.45 p.m.
It was also contended that the lower Courts had erred in law in relying upon the statements made by P.Ws. 1 and 2 to the Police.
It was argued that the evidence of P.Ws. 1 and 2 rendered the evidence of P.W.6 entirely unacceptable.
It was further contended that the lower Courts were wrong in treating the conduct of the accused when questioned by the Police officer as a circumstance against him.
We are unable to agree with the submission of Shri Anthony that no conviction can ever be based on the uncorroborated testimony of a person in the position of P.W.6 who, for the sake of felicity may be described as a "trap witness '.
That a trap witness may perhaps be considered as a person interested in the success of the trap may entitle a Court to view his evidence as that of an interested witness.
Where the circumstances justify it, a Court may refuse to act upon the uncorroborated testimony of a trap witness.
On the other hand a Court may well be justified in acting upon the uncorroborated testimony of a trap witness if the Court is satisfied from the facts and circumstances of the case that the witness is a witness of truth.
Shri Anthony referred us to the decisions of this Court in Ram Prakash Arora vs The State of Punjab,(1) and Darshan Lal vs The Delhi Administration.(3) In the first case Grover, J., observed as follows: "It must be remembered that both Joginder Singh and Dalbir Singh P.Ws. were interested and partisan witnesses.
They were concerned in the success of the trap and their evidence must be tested in the same way as that of any other interested witness and in a proper case the court may look for independent corroboration before convicting the accused person".
All that Grover J., said was that in an appropriate case corroboration may be sought and not that corroboration should invariably be sought In the particular case it was found that the witnesses could not be implicitly relied upon and, therefore, corroboration was necessary.
In the second case a string of circumstances was noticed which made it necessary that evidence of the witnesses who had laid the trap should not be acted upon without independent corroboration.
This (1) A.I.R. 1973 S.C. 498.
(2) A.I.R. 1974 S.C. 218.
335 decision also does not lay down that the uncorroborated testimony of a trap witness can never be acted upon.
That the law did not require any such corroboration was laid down in The State of Bihar.
vs Basawan Singh(1), and Bhanuprasad Hariprasad Dave and Anr vs The State of Gujrat (2).
In Bhanuprasad 's case it was observed by Hegde J., as follows: (at p. 1326): "Now coming back to the contention that the appellants could not have been convicted solely on the basis of the evidence of Ramanlal and the police witnesses, we are of opinion that it is an untenable contention.
The utmost that can be said against Ramanlal, the Dy.
S.P., Erulker and Santramji is that they are partisan witnesses as they were interested in the success of the trap laid by them.
It cannot be said and it was not said that they were accomplices.
Therefore the law does not require that their evidence should be corroborated before being accepted as sufficient to found a conviction".
We have carefully gone through the evidence of P.W. 6.
After perusing the evidence of P.W. 6 we are left with the impression that P.W. 6 is a truthful witness, an impression which we share with the High Court, the final Court of fact.
He has given evidence in a straight forward manner and was unshaken in cross examination.
We are unable to discover any reason to discredit his testimony.
The suggestion which was made to him was that he was aggrieved with the accused as he thought that he was unnecessarily raising objections, That he had a hot altercation with him and that he went to the Anti Corruption office with the help of Shri Batla.
The suggestions are without substance.
P.Ws. 1 and 2 no doubt stated that Shri Batla was present in the Anti Corruption office when they were called there by P.W. 9, the Inspector.
We do not have the slightest doubt that P.Ws. 1 and 2 are not truthful witnesses and that they have given evidence in order to accommodate the accused.
Their evidence on important particulars was contradicted by their earlier statements to the Police.
Here we may refer to the grievance of Shri Anthony that the Trial Judge and the High Court treated the statements made by P.Ws. 1 and 2 to the Police as substantive evidence.
There is no justification for the grievance.
The witnesses, who were treated as hostile by the Prosecution were confronted with their earlier statements to the Police and their evidence was rejected as it was contradicated by their earlier statements.
Such use of the statements (1) ; (2) ; 336 is premissible under section 155 of the Evidence Act and the proviso to section 162(1) of the Code of Criminal Procedure read with section 145, Evidence Act.
Corroboration to the evidence of P.W. 6, if considered necessary, may be found in the following circumstances: First, his evidence is corroborated by the report Exh.
PW. 1/A which he gave to P.W. 9 that day.
Second, his evidence is corroborated by the conduct of the accused when he was questioned by P.W. 9.
P.W. 6 stated that when P.W. 9 entered the room and questioned the accused whether he had accepted Rs. 30/ from him, the accused was stunned and did not reply.
P.W. 9 also stated that the accused kept mum when challenged.
P.W. 2 stated that the accused did not reply and kept mum but added that the accused was perplexed.
Though P.W. 1 first stated in his chief examination that the accused, when questioned denied having received any bribe, later he reluctantly admitted ill cross examination that the accused kept silent for some time as he was perplexed and then denied that he had received any bribe.
The immediate reaction of the accused on being questioned by P.W. 9 is a circumstance which corroborates the testimony of P.W. 6.
another a circumstance which corroborates the testimony of P.W. 6 is that the accused was ready with the file and handed it over to P.W. 6 as soon as he asked for it, indicating thereby that the statement of P.W. 6 that the accused had asked him to come on the afternoon of 14th July, 1969, was true.
Yet another important circumstance which corroborates the evidence of P.W. 6 is that after P.W. 6 handed over the file to the accused he kept it under the table.
It was contended by the learned Counsel for the appellant that the evidence relating to the conduct of the accused when challenged by the Inspector was inadmissible as it was hit by Section 167 Criminal Procedure Code.
He relied on a decision of the Andhra Pradesh High Court in D. V. Narasimhan vs State.(1) We do not agree with the submissions of Shri Anthony.
There is a clear distinction between The conduct of a person against whom an offence is alleged, which is admissible under Section 8 of the Evidence Act, if such conduct is influenced by any fact in issue or relevant fact and the statement made to a Police officer in the course of an investigating which is hit by Section 162 Criminal Procedure Code.
What is excluded by Section 162 Criminal Procedure Code is the statement made to a Police officer in the course of investigation and not the evidence relating to the conduct of an accused person (not amounting to a statement) when confronted or questioned by a Police officer during (1) A.I.R. 1969 A.P. 271.
337 the course of an investigation.
For example, the evidence of the circumstance, simpliciter, that an accused person led a Police officer and pointed out the place where stolen articles or weapons which might have been used in the commission of the offence were found hidden, would be admissible as conduct, under Section 8 of the Evidence Act, irrespective of whether any statement by the accused contemporaneously with or antecedent to such conduct falls within the purview of Section 27 of the Evidence Act [vide Himachal Pradesh Administration vs Om Prakash(1).
The decision of the Andhra Pradesh High Court on which Shri Anthony placed reliance does not support his contention. 'where the learned Judges were not prepared to go into the question whether the evidence relating to the conduct of the accused was admissible as that question did not directly arise for consideration.
On the other hand in Zwinglee Ariel vs State of Madhya Pradesh(2), this Court appeared to be inclined to hold that evidence to the effect that the accused started trembling and showed signs of being frightened on being;, questioned by the Police officer, if proved, was admissible, and, in Rao Shiv Bahadur Singh and Anr.
vs State of Vindhya Pradesh(3), and, State of Madras vs A. Vaidyanatha Iyer(4), this Court actually relied on evidence relating to the conduct on the accused on being confronted by the Police officer with the allegation that he 'had received a bribe.
In Rao Shiv Bahadur Singh case the evidence relating to conduct on which reliance was placed was to the effect that the accused was confused and could furnish no explanation when questioned by the Police officer.
In Vaidyanatha Iyer 's case also evidence to the effect that the accused was seen trembling and that he silently produced the notes from the folds of his dhoti was acted upon.
We, therefore, do not see any reason to rule out the evidence relating to the conduct of the accused, which lends circumstantial assurance to the testimony of P.W. 6.
On a consideration of the entire evidence we arc satisfied that the appellant was rightly convicted.
The other points mentioned by Shri Anthony are of a minor character and do not warrant any interference under Article 136 of the Constitution.
The appeal is accordingly dismissed.
M.R. Appeal dismissed.
(1) ; (2) A.I.R. 1954 S.C. 15.
| IN-Abs | Prakash Chand an overseer Section officer in the Delhi Development Authority office, was charged under section 5(1)(d) read with 8.
5(2) of the Prevention of Corruptions Act and section 161 IPC, for demanding and accepting Rs. 30/ bribe from the trap witness Ram Niwas Sharma.
an architect, for permitting him to make some necessary corrections in the building plans submitted by him to comply with certain objections raised by the D.D.A. On a report by Shri Sharma, an Inspector of Anti Corruption Establishment, accompanied him to the D.D.A office, with two panch witnesses and on receiving a pre arranged signal, entered the room and challenged the accused who was stunned and kept mum.
Then three pre marked ten rupees notes were found in the file dealing with Sharma 's matter, the file was found under the table and the accused had his foot on it.
The panch witnesses did not fully support the prosecution csse.
They resiled from their earlier statements made in the course of investigation were treated as hostile by the prosecution, and were disbelieved by the Court.
The accused was duly tried, convicted and sentenced, and the conviction was upheld by the High Court.
It was contended that the uncorroborated testimony of a trap witness was not sufficient to found the conviction? and also that the evidence relating to the conduct of the accused when challanged by the police inspector was excluded by.
section and was inadmissible in evidence.
Dismissing the appeal, the Court ^ HELD: (1) We are unable to agree that no conviction can ever be based on the uncorroborated testimony of a "trap witness".
Where the circumtance justify it, a court may refuse to act upon the uncorroborated testimony of a. trap witness.
On the other hand a court may well be justified in acting upon the uncorroborated testimony of a trap witness, if the court is satisfied from the facts and circumstances of the case that the trap witness is a witness of truth.
[334C E] The State of Bihar vs Basawan Singh, ; , and Bhanuprasad Hariprasad Dave & Anr.
vs The State of Gujarat, ; , applied.
Ram Prakash Arora vs The State of Punjab, AIR 1973 SC 498 and Darshan Lal vs The Delhi Administration, AIR 1974 SC, 218; differentiated.
The conduct of a person against whom an offence is alleged, is admissible under s.8 of the Evidence Act.
What is excluded by s.162 Cr.
P.C is the 331 Statement made to a police officer in the course of investigation and not the evidence relating to the conduct of an accused person (not amounting to a statement) when confronted or questioned by a police officer, during she course of an investigation.
[336G H, 337A] D. V. Narasimluan vs State, AIR 1969 A.P. 271, held inapplicable.
Himachal Pradesh Administration vs Om Prakash, ; and Zwinglee Ariel vs State of M.P., AIR 1954 SC 15; reaffirmed.
Rao Shiv Bahadur Singh & Anr.
vs State of Vindhya Pradesh, ; and State of Madras v.A. Vaidyanatha Iyer; , , applied.
|
Civil Appeal No. 1926 of1969.
(From the Judgment and Decree dated S 2 68 of the Bombay High Court in First Appeal No. 4S1 of 1964).
Shaukat Hussain and Mohd. Mian for the appellant.
R. H. Dhebar and M. N. Shroff for the respondent.
The Judgment of the Court was delivered by SEN, J.
This appeal by certificate is directed against a judgment of the Bombay High Court, and it involves an important question namely, whether a court in dealing with a reference under s.14, Sub section
(1) of the Hyderabad Land Acquisition Act, 1309 Fasli, corresponding to section 18, sub section
(1) of the Land Acquisition Act, 1894, can go behind the reference made by the Collector if the application on which the reference has been made is beyond the period of limitation prescribed therein.
The material facts giving rise to this appeal are as follows: The case arises from that part of the erstwhile princely State of Hyderabad, known as Marathwada, which merged in the State of Bombay under the States Re organisation Act, l956.
The land belonging to the appellant admeasuring 2057 sq. yards in the city of Aurangabad, has been acquired by the State Government under s.5 of the Hyderabad Land Acquisition Act for the construction of a building for the medical college at Aurangabad.
The Government published a Notification under section 3 (1) on the 28th of February, 1958.
On the 13th of January, 1962 the Land Acquisition officer, Aurangabad made an award directing payment of Rs. 1,318.11 P. inclusive of 15 per cent solatium as compensation to the appellant at the rate of 37 np.
per sq. yard, as against his claim for payment of compensation at the rate of Rs. 10/ per sq. yard.
The said award was communicated to the appellant on the 20th of January, 1962.
The appellant instead of making an application for reference under section 14, sub section
(1) of the Act, filed an application for review before .he
Land Acquisition officer on the 5th of February, 1962 requesting him 'to revise the award ' stating further that in case it was not revised he would seek his remedy in a court of law '.
The Land Acquisition 268 officer obviously felt that the amount fixed by him was too low and accordingly on the 17th of February, 1962 made a recommendation, through the Collector, to the Secretary to the State Government that the award be reconsidered.
But, the Collector by his order dated the 23rd of March, 1962 declined to forward the same and informed the appellant that he must seek his remedy in! a court of law.
Eventually, on the 14th of May, 1962 the appellant made an application for reference under section 14, sub section
(1) of the Act and prayed that the period spent in the proceedings for the review before the Land Acquisition Officer subsequent to the date of the award be excluded while considering the question of limitation under section 14 of the Limitation Act.
A reference was made under section 14, sub section
(1) of the Act to the District Court of Aurangabad.
The Assistant Collector, Aurangabad, who was the Land Acquisition officer, while making a reference made no expression of his opinion whether the application was time barred or not, evidently taking the view that the point should be left for the decision of the court.
He, however, while making the reference gave a complete narration of facts and left the question open.
A preliminary objection was raised by the Government that the reference was incompetent, the application being time barred.
This objection prevailed and the contention of the appellant based on1 section 14 of the Limitation Act was negatived both by the Civil Judge, Senior Division Aurangabad by his order dated the 28th of June, 1962, and by the High Court of Bombay by its order dated the 5th of February, 1968 holding that the time taken between the 5th of February, 1962 and the 23rd of March, 1962 could not be excluded while computing the period of limitation prescribed under section 14, sub section
(1) of the Act inasmuch as section 14 of the Limitation Act was not applicable to the proceedings, and further, that even if it applied the appellant was not entitled to the benefit of section 14 of the Limitation Act, stating that good faith, which is also a necessary ingredient under section 14, was not established.
The learned Civil Judge raised an issue whether the application for reference was barred by limitation under section 14, sub section
(1) of the Act, and he answered that issue in the affirmative, and we have no doubt, whatever that his decision on that point, as well as that of the High Court affirming it, was right.
The application was clearly out of time.
Section 14, Sub section
(1) of the Hyderabad Land Acquisition Act, 1309 Fasli provides that: "Every person interested, who is displeased with the Taluqdar 's award may, within two months from the date of receiving notice of the award, apply to the Taluqdar in writing to refer 269 the case to the court for determination, whether his objection be to the measurement of the land, or to the amount of the compensation, or to the persons to whom it is payable or to the apportionment of the compensation among the persons interested.
" Section 15, sub section (1) enjoins that the Taluqdar in making the reference shall forward to the Court a statement in writing, containing certain particulars.
Sub section (2) there of provides that to the said statement shall be attached a schedule giving the particulars of the notices served upon, and of the statements in writing made or delivered by the parties interested respectively.
It is conceded for our present purposes that section 14, sub section
(1) of the Hyderabad Land Acquisition Act is in pari materia with the provisions of section 18 of the Land Acquisition Act, 1894.
Hence hereinafter reference will be made only to the provisions contained in the Land Acquisition Act, 1894, 'the Act '.
Learned counsel for the appellant rested his submission on the .ground that the court while dealing with a reference under section 14, sub section
(1) of the Act, cannot go behind the reference and decline to answer it.
The point regarding applicability of section 14 of the Limitation Act was rightly not pressed before us.
Nor was any contention raised by him that the application for review made by the appellant before the Land Acquisition officer on the 9th of February, 1962, asking him to revise the award should, in law, be regarded as an application under section 14, sub section
(1) of the Act.
The short question that falls for determination in the appeal is whether the court can go into a question that the application for reference was not made to the Collector within the time prescribed in section 18, sub section
(2) of the Land Acquisition Act; and if so, can it refuse to entertain the reference if it finds it to be barred by time.
There was at one time a great divergence of judicial opinion on the question.
But almost all the High Courts have now veered round to the view that the court has the power to go into the question of limitation.
It not only has the power but also the duty to examine whether the application for reference was in accordance with law i.e., whether it was made within time prescribed under the proviso to sub section
(2) of section 18 of the Act or not.
The view taken by them is that a Collector 's jurisdiction is circumscribed by the conditions laid down in section 18, sub section
(1), that if he makes a reference even though the application for reference was not in accord 270 ance with the provisions of section 18, the court acquires no jurisdiction to hear the reference and that it can refuse to hear it if it was made on a time barred application.
The matter came up twice before this Court in State of Punjab vs Mst.
Qaiser Jehan Begum & Anr.(1) and the State of U.P. vs Abdul Karim(2) in which the conflict of judicial opinion in the High Courts was noticed but not resolved as the Court in both the case,s rested its decision on a narrower ground namely that the application for a reference was not barred by time.
In Mst.
Qaiser Jehan Begum 's case (supra) it was observed: "In the view which We have taken on the question of limitation, it is unnecessary for us to decide the other question as to whether the civil court, on a reference under section 18 of the Act, can go into the question of limitation.
We have al ready stated that there is a conflict of judicial opinion on that question.
There is no one side a line of decisions following the decision of the Bombay High Court in re.
Land Acquisition Act, which have held that the civil court is not debarred from satisfying itself that the reference which it is called upon to hear is a valid reference.
There is, on the other side, a line of decisions which say that the jurisdiction of the civil court is confined to considering and pronouncing upon any one of the four different objections to an award under the Act which may have been raised in the written application for the reference.
The decision of the Allahabad High Court in Secretary of State vs Bhagwan Prasad is typical of this line of decisions.
There is thus a marked conflict of judicial opinion on the question 'This conflict, we think, must be resolved in a more appropriate case on a future occasion".
In the case before us the question doe6 not really arise and is merely academic and we prefer not to decide the question in the present case.
That question now directly arises.
It is contended on behalf of the appellant that a reference to the Court having been made by the Collector, the court had no jurisdiction to question the validity of that reference and was bound to decide the matter on merits.
In support of this contention certain authorities have been cited to us, in which it has been laid down that it is for the Collector, and the Collec tor alone, to determine whether to make a reference under section 18, sub section
(1), and if he decides to make a reference, it is not (1) ; (2) Civi] Appeal No. 2434 of 1966 decided on 23 9 1969.
271 open to the court to go behind the decision of the Collector, and hold the reference to be out of time.
Illustrative of this line of decisions is that of Allahabad High Court in Secretary of State vs Bhagwan Prasad(1).
That view has been reiterated by the Full Bench of the same High Court in the State of U.P. vs Abdul Karim(2) and in its earlier decision in Panna Lal vs The Collector of Etah(3), and the decisions in Venkateswaraswami vs Sub Collector, Bezwada(4), Hari Kishan Khosla vs State of Pepsu(5).
Chandravarkar J. in re Land Acquisition Act(6) held that it is clear from section 18 that the formalities are matters of substance and their observance is a condition precedent to be Collector 's power of reference.
He held that the court is bound to go into the question whether the reference under section 18 was within time.
He also held that the court was not only entitled, but bound, to satisfy itself that the conditions laid down in section 18 have been complied with.
In stating the principle, Chandravarkar J. Observed: "These are the conditions prescribed by the Act for the right of the party to a reference by the Collector to come into existence.
They are the conditions to which the power of the Collector to make the reference is subject.
They are also the conditions which must be fulfilled before the court can have jurisdiction to entertain the reference.
" The principle laid down by him in that case was acted upon in Sukhbir Singh vs Secretary of State(7).
In that case the Collector had made a reference, although there was no application before him as required by section 18 and the Division Bench held that being so, there was no valid reference.
But in a latter case which came before another Division Bench in Secretary of State vs Bhagwan Prasad (supra), it was held that it was not open to the court under section 18 to go behind the reference, that it was for the Collector to decide whether the conditions justifying reference have been complied with and if he thought that they had been, the court was bound to answer the reference.
This view found favour with a Single Judge of the Madras High Court in Venkateswaraswami vs Sub Collector Bezwada (supra) and a Single Judge of the Punjab High Court in Hari Krishan Khosla vs State of Pepsu (supra).
All these decisions clearly do not lay down good law.
(1) ILR 52 All.
(2) AIR.
1963 All.
(3) ILR [1959] 1 All.
(4) AIR 1943 Mad.
(5) ILR [1958] 1 Punj.
(6) I.L.R. , 285, All. 212.
272 In State of U.P. vs Abdul Karim (supra) the Full Bench of the Allahabad High Court, on its view of the scheme of the Act, declined to follow the decision of Chandavarkar, J. in re Land Acquisition Act (supra) and the long line of decisions taking the same view.
It preferred to rest its decision on the earlier view of its Full Bench in Panna Lal vs The Collector of Etah (supra) and that in Secretary of State vs Bhagwan prasad (supra).
In the light of these decisions, it held that the Collector 's jurisdiction to make a reference is not circumscribed by the conditions laid down in section 18, sub section
(1) and (2), that if he makes a reference even though the application for reference was not in accordance with the provisions of section 18, the court acquires jurisdiction to hear the reference, and that it cannot refuse to hear it even if it was made or.
a time barred application.
Upon its view, it held that the court has no power to determine or consider a question of limitation as its jurisdiction is strictly limited by the terms of the section as laid down by the Privy Council in Pramatha Nath vs Secretary of State(1).
It further held that the legislature having contemplated the Collector to be an agent of the Government, as that is the position assigned to him by the Privy council in Ezra vs Secretary of State for India(2), his status is certainly not changed by the mere fact that he is required to make a reference under section 18 if the application is within prescribed time and complies with certain conditions.
That being so, even if the Collector wrongly decides that an application is within time or satisfies other conditions, the Government as its principal, may have a remedy against him but was bound by his act so long as it remains.
The act being of the agent is their own and they are bound by it.
The Government cannot, therefore, be permitted to contend at the hearing of the reference before the court that it was illegally made.
In view of all this, the Full Bench was of the view that this class of case does not fall within the class of cases where the jurisdiction of an inferior authority depends upon the existence of a certain state of facts, as indicated by Lord Eshar, M. R. in The Queen vs Commissioners for Special Purposes of the Income tax(1).
On principle, apart from authority, it is difficult to accept the line of reasoning of the Allahabad High Court, namely, whatever might be the defects and imperfections in the reference made, once it is before the court, the court is debarred from enquiring into its validity or otherwise.
The decision in Abdul Karim 's case (supra) proceeds on a com (1) ILR (2) ILR (3) 273 plete misunderstanding of the decision of the Privy Council in Pramatha Nath vs Secretary of State (supra), where the Judicial Committee interpreting section 21 observed: "Their Lordships have no doubt that the jurisdiction of the Courts under this Act is a special one and is strictly limited by the terms of these sections.
It only arises when a specific objection has been taken to the Collector 's award, and it is confined to a consideration of that objection.
Once therefore it is ascertained that the only objection taken, is to the amount of compensation, that alone is the "matter" referred, and the Court has no power to determine or consider anything beyond it.
" All that the Privy Council intended to lay down was that the jurisdiction of the court in dealing with a reference under section 18 is restricted by the terms of the section, as enjoined by section 21.
That decision cannot be interpreted to mean that the court while, hearing a reference under section 18 cannot enquire into competency or otherwise of the reference made by the Collector, i.e., whether the conditions precedent to the exercise of power by the Collector, and, therefore, of the court, and in particular the condition regarding limitation, are fulfilled or not.
In Ezra vs Secretary of State for India (supra) the Privy Council, while dealing with the functions of the Collector in making an award under section 11 laid down that the functions of the Collector are not judicial but administrative and all that he does is to make an offer to the claimants with regard to the, valuation of the property to be acquired.
In that context, it did not think it necessary to repeat the reasoning of the judgment under appeal where the sections and the questions as a whole were very satisfactorily stated, and observed: "The proceedings of the Collector resulting in the 'award ' are administrative and not judicial.
The award in which the enquiry results is merely a decision (binding only on the collector) as to what sum I shall be tendered to the owner of the lands and if a judicial ascertainment is decided by the owner, he can obtain it by requiring the matter to be referred by the Collector to the Court.
" These observations, however, related to proceedings under Part II of the Act and not under Part III.
Ameer Ali and Stephen JJ.
, in delivering the judgment under appeal, explained the functions of the Collector under section 11 in Ezra vs Secretary of State for India(1) where they said: (1) ILR 274 "throughout the proceedings the Collector acts as the agents of Government for the purposes of acquisition.
He is in a sense of the term, a judicial officer, nor is the proceeding before him a judicial proceeding. he is not a Court.
The Government . at whose instance the land is being taken up is not entitled to demand a reference.
The reason of this is plain.
The Collector acts as the agent of the Government. and they are accordingly bound by the award of their agent.
. the Collector acts in the matter of the enquiry and the valuation of the land only as an agent of the Government and not as a judicial officer; and . consequently, although the Government . is bound by his proceedings, the persons interested are not concluded by his finding regarding the value of the land or the compensation to be awarded.
" On the basis of the Privy Council decision in Ezra 's case (supra), this Court in Harish Chandra vs Deputy Land Acquisition officer(1) held that the Collector in making an award acts as an agent of the Government, and that the legal character of the award made by the Collector was that of a tender or offer by him on behalf of the Government.
The Allahabad High Court has read more into the decision of the Privy Council in Ezra 's case (supra) than is there.
Merely because the Collector while making an award under section 11 or in serving a notice of the owner of the land under section 12, acts as an agent of the Government, it does not necessarily imply that while making a reference to the court under section 18, he acts in the capacity of an agent of the Government.
While it is true that the Collector in making the award under section 11 acts as an agent of the Government, he in making a reference to the court under section 18 acts as a statutory authority.
Section 18, sub section
(1) of the Act entrusts to the Collector the statutory duty of making a reference on the fulfilment of the conditions laid down therein.
The Collector, therefore, acting under section 18, is nothing but a statutory authority exercising his own powers under the section.
In the context, we may advert to the controversy that had arisen as a result of the Privy Council 's decision in Ezra 's case (supra) holding.
that the Legislature had assigned to the Collector the position of an: (1) [1962] 1 S.C.R. 676.
275 agent of the Government while making an award under section 11.
The problem that arose was that the claimants were left with no remedy where the Collector improperly declines to make a reference although the application fulfilled the requirements of section 18.
In The Administrator General of Bengal vs The Land Acquisition Collector, 24 Parganas(1) the Calcutta High Court while dealing with the question tried to draw a distinction between the functions of the Collector under Part Il of the Act land that under Part III, and observed: "It is admitted that up to and including the time of making his award the Collector was in no sense a judicial officer and that the proceedings before him were not judicial proceedings(Ezra vs Secretary of State) and however irregular his proceedings were, we cannot interfere with his award made under section 11 of the Act.
But when an application is made to the Collector requiring him to refer the matter to the Civil Court, the Collector may have to determine and, it seems to us, determine judicially whether the person making the application was represented or not when the award was made, or whether a notice had been served upon the applicant under sec.
12(2) and what period of limitation applies and whether the application is under the circumstances made within time.
The Collector 's functions under Part III of the Act are clearly distinguishable from those under Part II.
Part III of the.
Act relates to proceedings in Court.
In our opinion the Collector in rejecting the application was a Court and acting judicially and his order is subject to revision by this Court.
To hold otherwise would be to give finality to an award under sec.
11 even in cases in which the Collector acts irregularly and contrary to law and then refuses on insufficient grounds to make a reference under Part III of the Act.
The party aggrieved may be left without remedy which is implied by a judicial trial before the Judge.
" These observations were no doubt made in a different context but they bear some relevance to the point at issue.
The question at issue was whether the Collector 's order refusing to make a reference could be interfered with by the High Court under section 115 of the Code of Civil Procedure or section 107 of the Government of India Act, 1919.
The Calcutta High Court 's view that the Collector 's power was a judicial power and that the Collector was a Court subordinate to the High Court was obviously wrong but it persisted in taking (1) 276 that view to obviate injustice: Krishna Das Roy vs Land Acquisition Collector, Pabna;(1) Upendra Nath Roy vs Province of Bengal,(2) Leeth Elias Joseph Solomon vs H. C. Stork(3).
The Calcutta High Court tried to exercise its supervisory jurisdiction to provide the subject with a remedy.
The power of the Collector to make an order under section 18 was not judicial in nature, nor was the Collector a court subordinate to the High Court.
The other High Court, therefore, expressly dissented from the view of the Calcutta High Court: Abdul Sattar Sahib vs Special Deputy Collector, Vizagapatnam Harbour Acquisition, (4) Balkrishna Daji Gupta vs The Collector, Bombay Suburban,(5) Jagarnath Lall vs Land Acquisition Deputy Collector, Patna,(6) section G. Sapra vs Collector, Saugar;(7) Amar Nath Bhardwaj vs The Governor General in Council,(8) Kashi Pershad vs Notified Area of Mahoba.(9).
Even the Calcutta High Court later changed its view: Bhagwan Das Shah vs First Land Acquisition Collector,(10) Gopi Nath Shah vs First Land Acquisition Collector.(11) It was held that the functions of the Collector under section 18 were statutory or quasi judicial in nature.
The construction placed by the Allahabad High Court on section 18 of the Act is not borne out either by the plain language of the section itself or by accepted principles.
The following observations appear in Abdul Karim 's case (supra): "There is no support for the proposition that the necessary sine qua non of a reference is an application for Reference made in accordance with the provisions of section 18." "There is no provision.
which bars the Collector 's power to make a reference, if he is inclined to make one on a time barred application.
"If the Collector decides to make a reference the Land Acquisition Court cannot go behind the reference.
" "A Collector and a Collector alone has jurisdiction to make a reference and a reference by him is not a nullity merely because it is based on a time barred application.
" (1) (2) (3) (4) I.L.R. (5) ILR (6) I.L.R. Pat. 321.
(7) ILR (8) ILR (9) ILR 54 All. 282.
(10) (11) 277 "The facts regarding limitation of an application for reference are not required to be stated by the Collector in his reference, and indeed he is not bound to send the application along with the reference.
All that the Court has to do on receipt of the reference or can do is to hear it after giving notice of the date.
The word 'thereupon ' in Section 19 must be interpreted to mean "as soon as the collector makes a reference and states for the information of the Court various matters set out in Section 19." "A District Judge gets jurisdiction not from the Collector but from the receipt of a reference from him.
It is the receipt of the reference that confers jurisdiction upon him and not any finding of the Collector." "The Court has to perform a ministerial act of causing a notice to he given to the objector.
There is no provision entitling it to examine the question whether the Collector 's order was correct on the question of the application having been made within the prescribed time.
" The jurisdiction of the Court under the Act is a special one and strictly limited by the terms of section 18 to 21.
It only arises when a specific objection has been taken to the Collector 's award, and it is confined to a consideration of that objection.
A Court undoubtedly has certain jurisdiction over the reference, but it does not include any appellate jurisdiction over the Collector in respect of the reference made by him without statutory sanction.
" It is difficult to subscribe to these propositions which are not warranted by law.
In his celebrated judgment in The Queen vs Commissioners for Special Purposes of the Income Tax (supra) Lord Esher, M.R., while dealing with statutory Tribunals, divided them into two categories, namely: (i) "When an inferior court or tribunal or body which has to exercise the power of deciding facts, is first established by Act of Parliament, the Legislatures has to consider what powers it will give that tribunals or body.
It may in effect say that, if a certain state of facts exists and is shown to such tribunal or body before it proceeds to do certain things, it shall have jurisdiction to do such things, but not otherwise.
There it is not for them conclusively to decide 278 whether that state of facts exists, and if they exercise the jurisdiction without its existence, what they do may be questioned, and it will be held that they have acted without jurisdiction.
(ii) The legislature may intrust the tribunal or body with a jurisdiction, which includes the jurisdiction to determine whether the preliminary state of facts exists as well as the jurisdiction, on finding that it does exist, to proceed further or do something more.
When the legislature are establishing such a tribunal or body with limited jurisdiction, they also have to consider, whatever jurisdiction they give them, whether there shall be any appeal from their decision, for other wise there will be none.
" The law as enunciated by Lord Eshar has been accepted by this Court as laying down the true principle in Jagdish Prasad vs Ganga Prasad (1) The word "require" in section 18 of the Act implies.
It carries with it the idea that the written application makes it incumbent on the Collector to make a reference.
The Collector is required to make a reference under section 18 on the fulfilment of certain conditions.
The first condition is that there shall be a written application by a person interested who has not accepted the award.
The second condition is as to the nature of the objection is which may be taken, and the third condition is as to the time within which the application shall be made.
The power of the Collector to make a reference under section 18 is thus circumscribed by the conditions laid down therein, and one condition is the condition regarding limitation to be found in the proviso.
The conditions laid down in section 18 are 'matters of substance and their observance is a condition precedent to the Collector 's power of reference ', as rightly observed by Chandavarkar J. in re Land Acquisition Act (supra).
We are inclined to the view that the fulfilment of the conditions, particularly the one regarding limitation, are the conditions subject to which the power of the Collector to make the reference exists.
It must accordingly be held that the making of an application for reference within the time prescribed by proviso to section 18.
Sub section
(2) is a sine qua non for a valid reference by the Collector.
From these considerations, it follows that the court functioning under the Act being a tribunal of special jurisdiction, it is its duty to see that the reference made to it by the Collector under section 18 complies with the conditions laid down therein so as to give the court jurisdiction (1) [1959] Supp. 1 S.C.R. 733. 279 to hear the reference.
In view of these principles, we would be extremely reluctant to accept the statement of law laid down by the Allahabad High Court in Abdul Karim 's case (supra).
Every tribunal of limited jurisdiction is not only entitled but bound to determine whether the matter in which it is asked to exercise its jurisdiction comes within the limits of its special jurisdiction and whether the jurisdiction of such tribunal is dependent on the existence of certain facts or circumstances.
Its obvious duty is to see that these facts and circumstances exist to invest it with jurisdiction, and where a tribunal derives its jurisdiction from the statute that creates it and that statute also defines the conditions under which the tribunal can function, it goes without saying that before that tribunal assumes jurisdiction in a matter, it must be satisfied that the conditions requisite for its acquiring seisin of that matter have in fact arisen.
As observed by the Privy Council in Nusserwanjee Pestonjee vs Meer Mynoodeen Khan,(1) wherever jurisdiction is given to a court by an Act of Parliament and such jurisdiction is only given upon certain specified terms contained in that Act it is a universal principle that these terms must be complied with, in order to create and raise the jurisdiction for if they be not complied with the jurisdiction does not arise.
If an application is made which is not within time, the Collector will not have the power to make a reference.
In order to determine the limits of his own power, it is clear that the Collector will have to decide whether the application presented by the claimant is or is not within time, and satisfies the conditions laid down in section 18.
Even if a reference is wrongly made by the Collector the court will still have to determine the validity of the reference because the very jurisdiction of the court to hear a reference depends on a proper reference being made under section 18, and if the reference is not proper, there is no jurisdiction in the court to hear the reference.
It follows that it is the duty of the court to see that the statutory conditions laid down in section 18 have been complied with, and it is not debarred from satisfying itself that the reference which it is called upon to hear is a valid reference It is ` only a valid reference which gives jurisdiction to the court, and, therefore, the court has to ask itself the question whether it has jurisdiction to entertain the reference.
In deciding the question of jurisdiction in a case of reference under section 18 by the Collector to the court, the court is certainly not acting as a court of appeal; it is only discharging the elementary duty of satisfying itself that a reference which it is called upon to decide is a valid and (1) LR (1855) 6 M.I.A. 134.
280 proper reference according to the provisions of the Act under which it is made.
That is a basic and preliminary duty which no tribunal can possibly avoid.
The court has, therefore, jurisdiction to decide whether the reference was made beyond the period prescribed by the, proviso to sub section
(2) of section 18 of the Act, and if it finds that it was so made, decline to answer reference Beaumont C. J., delivering the judgment of the Division Bench in Mahadeo Krishna vs Mamlatdar of Alibag,(1) agreed with the view of Chandavarkar J. and observed: "It seems to me that the Court is bound to satisfy itself that the reference made by the Collector complies with the specified conditions, so as to give the Court jurisdiction to hear the reference.
It is not a question of the Court sitting in appeal or revision on the decision of the Collector; it is a question of the Court satisfying itself that the reference made under the Act is one which it is required to hear.
If the reference does not comply with the terms of the Act, then the Court cannot entertain it.
I have myself some difficulty in seeing on what principle the Court is to be debarred from satisfying itself mat the reference, which it is called upon to hear, is a valid reference.
I am in entire agreement with the view expressed by Chandavarkar J. that it is the duty of the Court to see that the statutory conditions have been complied with.
" The same view has been reiterated by almost all the High Courts except the Allahabad High Court :G. J. Desai vs Abdul Mazid Kadri(2) A. R. Banerjee vs Secretary of State,(3) K. N. Narayanappa Naidu vs Revenue Divisional Officer, Sivakasi;(4) State of Rajasthan vs L. D 'Silva,(5) Sheikh Mohommad vs Director of Agriculture, Madhya Pradesh;(6) Ramdeval Singh vs State of Bihar,(7) Anthony D 'Silva vs Kerala State;(8) Swatantra L. & F. Pct.
Ltd. vs State of Haryana,(9) and Swami Sukhanand vs Samaj Sudhar Samiti.(10) This is also the (1) TLR (2) AIR ' 1951 Bom 156.
(3) A.I.R. 1937 Cal.
(4) A.I.R. 1955 Mad.
(5) I.L.R. (6) (7) A.I.R. 1969 Pat.
(8) A.I.R. 1971 Ker. 51.
(9) I.L.R. (1974) 2 Punj.
(10) A.I.R. 1962 J. & K. 59 281 view expressed by a Full Bench of the Lahore High Court in Abdul Sattar vs Mt. Hamida Bibi.(1) The view to a contrary effect taken by the Allahabad High court in Secretary of State vs Bhagwan Prasad (supra), Panna Lal vs The Collector of Etah (supra) and State of U.P. vs Abdul Karim (supra) and by a Single Judge of the Madras High Court in Venkateswaraswami vs Sub Collector, Bezwada (supra) and by a Single Judge of the Punjab High Court in Hari Krishan Khosla vs State of Pepsu (supra) clearly do not lay down good law and these decisions are" therefore, over ruled.
It is impossible not to feel sorry for the appellant in this case, who was guilty of almost incredible folly by not filing an application for reference under section 14, sub section
(1) of the Hyderabad Land Acquisition Act, 1309 Fasli within the time prescribed therein, and is thus precluded from claiming what may be legitimately due to him by way of compensation.
But, the decision must depend upon the construction of the section and the law must take its course.
We trust that, as assured by its counsel, the State Government of Maharashtra will be generous enough to consider whether it should make an ex gratia payment to the appellant of a sufficient amount by way of compensation which will be Commensurate with the market value of the land acquired as on the 28th of February, 1958.
It certainly was a piece of land of some value as it was situate in the city of Aurangabad.
The result, therefore, is that the appeal must fail and is dismissed.
There shall be no order as to costs of this appeal and of the courts below.
M. R. Appeal dismissed.
| IN-Abs | The appellant 's land was acquired by the State Government under section 5 of the Hyderabad Land Acquisition Act, A notification under section 3(1) was published on the 28th February, l958 and on the 13th of January, 1962 the Land Acquisition officer, Aurangabad, made an award directing payment of compensation inclusive of 15% solatium to the appellant at the rate of 37 n.p.
per sq. yard as against his claim for payment of compensation at the rate of RS.10/ per sq. yard.
the award was communicated to the appellant on the 20th of January, 1962 and on the 5th February, 1962 he filed an application for review before the Land Acquisition officer who made a recommendation through the Collector to the Secretary to the State Government that the award be reconsidered.
But, the Collector by his order dated the 23rd of March, 1962 declined to forward the same.
On the 14th of May, 1962 the appellant applied for reference under section 14(1) of the Hyderabad Land Acquisition Act which is in pari materia with section 18 of the Land Acquisition Act, 1894, praying that the period spent in the proceedings for the review be excluded while computing the period of limitation prescribed under section 14 of the Limitation Act.
The Assistant Collector, Aurangabad, who was the Land Acquisition officer, made a reference to the District Court of Aurangabad, .without opining Whether the application was time barred or not.
The Government raised a preliminary objection the application being time barred.
the reference was incompetent.
The objection prevailed, both the District Court and the High Court.
The appellant contended that while dealing with a reference under section 14(1) of the Hyderabad Act, the court cannot go into the question that the application was time barred under section 18(2) of the and Acquisition Act, 1894 and tbereby refuse to entertain the reference.
Dismissing the appeal, the Court ^ HELD: (1) The power of the Collector to make a reference under section 18 is circumscribed by the conditions laid down therein.
These conditions are matters of substance and their observance is a condition precedent to the Collector 's power of reference.
The fulfilment of these conditions, particularly the one regarding limitation are the conditions, subject to which the power of the Collector to make the reference exists.
Therefore, the making of are application for reference within the time prescribed by proviso to section 18(2) is a sine qua non for a valid reference by the Collector.
[269G H, Z71B, 278FGl Abdul Sattar `Sahib vs Special Dy.
Collector, Vizagapatam Harbour Acquisition, ILR ; BalKrishna Daji Gupta vs The Collector,Bom 18 817SCI 79 266 bay Suburban, ILR ; Jagarnath Lall vs Land Acquisition Dy.
Collector Patna, ILR Pat. 321; section G. Sapre vs Collector Saugar, ILR ; Amar Nath Bhardwaj vs The Governor General in Council, ILR ; Kashi Parshad vs Notified Area of Mahoba, ILR 54 All 282, Bhagwan Dass Shall vs First Land Acquisition Collector, , and Gopi Nath Shah vs first Land Acquisition Collector, ; approved.
Of State vs Bhagwan Prasad, ILR 51 All. 96; State of U.P. vs Abdul Karim, AIR 1963 All.
556; Panna Lal vs The Collector of Etah, ILR [l959] 1 All.
628; Venkateshwarasawami vs Sub Collector, Bezwada, AIR 1943 Mad. 327 and Hari Krishan Khosla vs State of Pepsu, ILR [19S8] 1 Punj.
844; over ruled.
Krishna Das Roy vs Land Acquisition Collector Pabna, ; Upendra Nath Roy vs Province of Bengal, ; Leath Elias Joseph Solomon vs H. C. Stork, ; disapproved.
Pramatha Nath vs Secretary of State, ILR ; Ezra vs Secretary of State for India ILR and ILR ; Harish Chandra vs Deputy Land Acquisition officer, [1962] 1 SCR 676; and The Administrator General of Bengal vs The Land Acquisition Collector, 24 Parganas, ; referred to.
Where the tribunal derives its jurisdiction from the statute that creates it and that statute also defines the condition under which the tribunal can function, it is bound to see that such statutory conditions have been complied with.
The court functioning under the Act, being a tribunal of special juris diction, it us its duty to see that the reference made to it by the Collector under section 18 complies with the conditions laid down therein.
[279B C, D] Even if a reference is wrongly made by the Collector the court will still have to determine its validity, because the very jurisdiction of the court to hear a reference depends on a proper reference being made under section l8 and if the reference is not proper, there is no jurisdiction in the court.
to hear the reference.
The court has jurisdiction to decide whether the reference was made beyond the period prescribed by the proviso to sub section
(2) of section 18 of he Act, and if it finds that it was so made, deoline to answer reference.
[279EG] The Queen vs Commissioner for Special Purposes of the Income Tax, LR ; Jagdish Prasad vs Ganga Prasad, [1959] Supp. 1 SCR 733 and Nusserwanfee Pestonjee vs Meer Mynoodeen Khan, LR [1855] 6 M.I.A. 134; applied.
Land Acquisition Act, ILR ; Sukhbir Singh vs Secretary of State, ILR 49 All. 212; Mahadeo Krishna vs Mamlatdar of Alibag, ILR ; G. J. Desai vs Abdul Mazid Kadri, AIR l951 Bom.
156; A. R. Banerjee vs Secy.
of State, AIR 1937 Cal.
680, K. N. Narayanappa Naidu vs Revenue Divisional officer Sivakasi, AIR 195S Mad. 20; State of Rajasthan vs L. D. Silva, ILR [19S6] ; Sheikh Mohommad vs Director of Agri culture; M.P., ; Ramdeval Singh vs State of Bihar AIR 1969 Pat. 131; Anthony D ' Silva vs Kerala State, AIR l971 Ker. 51; Swatantra L. & F. Pvt. Ltd., vs State of Haryana, ILR [1974] 2 Punj.
7S; Swami Sukhanand vs Samaj Sudhar Samiti, AIR 1962 J & K 59; and Abdul Sattar vs Mt. Hamida Bibi Pak.
L.R. l95O Lah.
568 (FB); approved.
267 State of Punjab vs Cst.
Qaisar Jahan Begam & Anr. ; , and A State of U.P. vs Abdul Karim, [CA No. 2434/1966 decided on .
3 9 1969] referred to.
Secretary of State vs Bhagwan Prasad, ILR 52 All. 96; State of U.P. vs Abdul Karim, AIR 1963 All. 556; Pannalal vs True Collector of Etah, ILR 11959] 1 All.
628; Venkateswaraswami vs Sub Collector, Bezwada, AIR 1943 Mad. 327; and Hari Krishna Khosla vs State of Pepsu, ILR [1958] 1 Punj. 8S4; over ruled.
|
N: Criminal Appeal No. 451 of 1978.
Appeal by Special leave from the Judgment AND order dated S G 78 of the Bombay High Court in Criminal Application No. 15 of 1978.
Ram Jethmalani Ashok Desai, section J. Thakore, K. R. Krishnamurthy, Sri Narain for M/s J. B. Dadachanji and Co. for the Appellants.
H. R. Khanna and M. N. Shroff for the State of Maharashtra.
P. N. Lekhi, Girish Chandra and Miss A. Subhashini for Union of India.
The judgment of the Court was delivered by SEN, J.
This appeal by special leave directed against a judgment of the Bombay High Court dated 5th June, 1978, dismissing a petition filed by the appellant under Article 226 of the Constitution, by which he prayed for the issue of a writ of habeas corpus, and the connected petition under Article 32 of the Constitution by his wife for the issuance of a writ of habeas corpus for his release raise a common question and therefore they are disposed of by this common judgment.
A vessel known as 'Jamnaprasad ' BLS 61 valued at one lac of rupees was found grounded in a creek off the coast near village KimKhadi on the 20th August, 1977.
On receipt of information regarding the grounding of the vessel the Customs officers, Hansot, visited the spot and examined the contents of the cargo aboard the aforesaid grounded vessel.
It was laden with 12 rolls of stainless steel sheets each weighing one tonne, valued at Rs. 15,44,400/ .
The aforesaid vessel and the contraband goods found aboard it were seized by the 318 Customs officers for action under the .
They made inquiries about the whereabouts of the crew members of the aforesaid vessel 'Jamnaprasad ' and were successful in apprehending them and the others involved.
Intelligence gathered by the Customs officers clearly indicate that the appellant was the main person connected with the smuggling of the aforesaid cargo of contraband goods, namely 12 stainless steel sheets recovered from vessel 'Jamnaprasad ' BLS 61.
The appellant, who ostensibly carries on the business of manufacturing, sale and export of Umrao brand wick stoves, spray pumps, cash and jewellery metal boxes, in the name and style of "Umrao Industries" and has his factory for the manufacture of the aforesaid items at village Kim, has been detained by an order of the Addl.
Secretary to the Government of India, Ministry of Finance (Department of Revenue), New Delhi, dated the 1st of February, 1978 under sub section (1) of section 3 of the , with a view to prevent him from smuggling goods.
He was arrested and placed under detention on the 5th of February, 1978, and is at present detained in the Central Prison, Bombay.
At the time of his arrest, the appellant was served with the order of detention together with the grounds of detention with full particulars on which the order of detention was based.
On 15th February, 1978 the case was referred by the Government to the Advisory Board as required under section 8(b) of the Act to enable the Board to make its report under sub cl.
(a) of cl.
(4) of Article 22 of the.
Constitution.
The appellant made two representations against his detention to the Government, one dated the 4th and the other dated the 6th of March, 1978, which were received by the Government on the 7th and 8th March, 1978, respectively.
The Advisory Board had, in the meanwhile addressed a letter dated 21st of February, 1978, to the Government intimating that the case would be taken up on the 13th March, asking that the detenu be produced at the hearing and the Government should also forward the representation, if any, made by the appellant, together with the comments/decision of the Government, if any.
On the 13th of March, the appellant was accordingly produced before the Advisory Board.
The Government placed before the Board the two representations made by the appellant together with its comments.
The appellant was heard in person; the Government 's point of view was placed before the Advisory Board by the Deputy Secretary to the Government, Ministry of Finance, Department of Revenue, who was accompanied by the Assistant Collector.
Customs, 319 Bulsar.
On the 16th of March, 1978, the appellant sent a telegram to the Advisory Board supplementing his oral submissions.
The detaining authority rejected the representations made by the appellant on 1 8th of March, 1978.
On 10th of April, 1978 the Advisory Board submitted its report giving its opinion that there was sufficient cause for the detention.
The Government accordingly confirmed the order B, of detention.
In the light of the circumstances appearing, it was conceded that the grounds for detention set out the facts with sufficient degree of particularity and that it did furnish sufficient nexus for forming the subjective satisfaction of the detaining authority.
The order of detention was, therefore, not challenged on the ground that the grounds furnished were vague or indefinite or lacking in particulars or were not adequate or sufficient for the satisfaction of the detaining authority, or for the making of any effective representation.
It is argued that the detention of the appellant was, however, bad for two reasons namely, (1) the detention was in violation of the constitutional right guaranteed under Article 22(5), inasmuch as the Government withheld consideration of the representations made by the appellant till after the hearing before the Advisory Board, and (2) the impugned order of detention is bad due to non application of mind inasmuch as the facts alleged clearly and distinctly show that the appellant did not himself smuggle the contraband goods.
Both the contentions are, in our opinion, wholly devoid of substance.
It is urged that the Government was under a constitutional obligation to consider the representations before the hearing before the Advisory Board.
There is no quarrel with the principle but the difficulty is about the application of the principle on the facts and circumstances of the present case.
In fact, the Government has to reach its decision uninfluenced by the opinion of the Advisory Board.
It is, however, urged that the Government; in This particular case, had not made up its mind till the hearing before the Advisory Board on 13th March, 1978, and therefore, its decision reached on the 18th March was not that independent application of mind that the law requires, because by then the proceedings had: begun before the Board and the Government must have been influenced in its decision.
There is no warrant for the submission that the disposal of the 1 representations made by the Government, in the instant case, was not in conformity with Article 22(5) of the Constitution.
First, we shall 320 deal with the law on the subject before dealing with the factual aspect.
Article 22(5) of the Constitution enacts: "When any person is detained in pursuance of an order made under any law providing for preventive detention, the authority making the order shall, as soon as may be, communicate to such person the grounds on which the order has been made and shall afford him the earliest opportunity of making a representation against the order." In Abdul Karim & ors.
vs State of West Bengal(t) this Court interpreted the language of Article 22(5) and observed: "Article 22(5) does not expressly say to whom the representation is to be made and how the detaining authority is to deal with the representation.
But it is necessarily implicit in the language of article 22(5) that the State Government to whom the representation is made should properly consider the representation as expeditiously as possible.
The constitution of an Advisory Board under section 8 of the Act does not relieve the State Government from the legal obligation to consider the representation of the detenu as soon as it is received by it.
" It was further observed: "In our opinion, the constitutional right to make a representation guaranteed by article 22(5) must be taken to in elude by necessary implication the constitutional right to a proper consideration of the representation by the authority to whom it is made.
The right of representation under article 22(5) is a valuable constitutional right and is not a mere formality.
It is, therefore, not possible to accept the argument of the respondent that the State Government is not under a legal obligation to consider the representation of the detenu or that the representation must be kept in cold storage in the archives! of the Secretariat till the time or occasion for sending it to the Advisory Board is reached.
If the view point contended for by the respondent is correct, the constitutional right under article 22(5) would be rendered illusory.
" Thus the two obligations of the Government to refer the case of the detenu to the Advisory Board and to obtain its report on the one hand and to give an earliest opportunity to him to make a representation and consider the representation on the other, are two distinct obligations independent of each other.
(1) ; , 321 In Pankaj Kumar Chakrabarty & ors.
vs State of West Bengal(1), this Court again considered cl.
(5) of article 22 and enunciate the Following principle: "In our view, it is clear from cls.
4 and S of article 22 that there is a dual obligation on the appropriate Government and a dual right in favour of the detenu, namely, (1) to have his representation irrespective of the length of detention considered by the appropriate Government and (2) to have once again that representation in the light of the circumstances of the case considered by the board before it gives its opinion.
If in the light of that representation the board finds that there is no sufficient cause for detention the Government has to revoke the order of detention and set at liberty the detenu.
Thus, whereas the Government considers the re presentation to ascertain whether the order is in conformity with its power under the relevant law, the board considers such representation from the point of view of arriving at its opinion whether there is sufficient cause for detention.
" It is, therefore, well settled that in case of preventive detention of a citizen, the Constitution by article 22(5) as interpreted by this Court, enjoins that the obligation of the appropriate Government to afford the detenu the opportunity to make a representation and to consider that representation is distinct from the Government 's obligation to constitute a Board and to communicate the representation, amongst other materials, to the Board to enable it to form its opinion and to obtain such opinion.
The nature of the dual obligation of the Government and the corresponding dual right in favour of the detenu under article 22(5) was reiterated by this Court in Khairul Haque vs The State of West Bengal(2) in these words: "It is implicit in the language of article 22 that the appropriate Government, while discharging its duty to consider the representation, cannot depend upon the views of the Board on such representation.
It has to consider the representation on its own without being influenced by any such view of the Board.
There was, therefore, no reason for the Government to wait for considering the petitioner 's representation until it had received the report of the Advisory Board.
As laid down in Sk.
Abdul Karim & ors.
vs State of West Bengal (supra), the obligation of the appropriate (1) [1970] I SCR 543.
(2) W.P. No. 246 of 1969, decided on September 10, 1969.
322 Government under article 22(5) is to consider the representation made by the detenu as expeditiously as possible.
The consideration by the Government of such representation has to be, as aforesaid, independent of any opinion which may be expressed by the Advisory Board.
The fact that article 22(5) enjoins upon the detaining authority to afford to the detenu the earliest opportunity to make a representation must implicitly mean That such representation must, when made, be considered and disposed of as expeditiously as possible, otherwise, it is obvious that the obligation to furnish the earliest opportunity to make a representation loses both its purpose and meaning.
" The same procedural safeguards were reaffirmed by this Court in Jayanarayan Sukul vs State of West Bengal (1) and Dhurus Kanu vs State of West Bengal.(2) The High Court in this case, and the Delhi High Court in Thaneshwar Singh vs The Union of India & ors.(3) appear to be labouring under misconception that merely because there is no express provision in s.8(b) of the placing an obligation to forward the representation made by the detenu along with the reference to the Advisory Board, unlike those contained in s.9 of the and s.10 of the Maintenance of Intemal Security Act, 1971 there is no obligation cast on the Government to consider the representation made by the detenu before forwarding it to the Advisory Board.
We have no doubt in our mind that when liberty of the subject is involved, whether be it under the or the or the , it is the bounden duty of the court to satisfy itself that all the safeguards provided by the law have been scrupulously observed and that the subject is not deprived of his personal liberty otherwise than in accordance with law.
The relevant Articles of the Constitution having a bearing on this question is article 22.
Two of these safeguards, which relate to the observance of the principle of natural justice and which a fortiori are intended to act as a check on the arbitrary exercise of power, are tor be found in article 22(5) of the Constitution.
(1) ; (2) AIR 1975 SC 571.
(3) Cr W. No 6 of 1978 decided on September 25, 1978 (Delhi High Court) 323 When any person is detained in pursuance of an order made under any law providing for preventive detention, the authority making the order shall, as soon as may be, communicate to such person the 'grounds ' on which the order has been made and shall afford him the earliest opportunity of making representation against the order, These procedural safeguards are ingrained in our system by judicial interpretation.
The power of preventive detention by the Government under the , is necessarily subject to the limitations enjoined on the exercise of such power by Art 22(5) of the Constitution.
as constructed by this Court.
Thus, this Court in Khudiram Das vs The State of West Bengal & ors (1) observed: "The constitutional imperatives enacted in this article are two fold: (1) the detaining authority must, as soon as may be, that is, as soon as practicable after the detention, communicate to the detenu the grounds on which the order of detention has been made, and (2) the detaining authority must afford the detenu the earliest opportunity of making a representation against the order of detention.
These are the barest minimum safeguards which must be abserved before an executive authority can be permitted to preventively detain a person and thereby drown his right of personal liberty in the name of public good and social security.
" This has always been the view consistently taken by this Court in a series of decision.
It is not necessary to burden this judgment with citations of these decisions.
The view to the contrary taken by the Bombay and the Delhi High Courts that these procedural safe guards are not available to a person detained under the is clearly wrong.
The Constitution is all pervasive.
All laws made by a State must, therefore, yield to constitutional limitations and restrictions.
The citizen 's right to personal liberty is guaranteed by Article 22 irrespective of his political beliefs, class, creed or religion.
This Court has forged certain procedural safeguards in the case of preventive detention of citizens.
These safeguards might be designated as a regulative 'Postulate of Respect ', that is, respect for the intrinsic dignity of the human person.
(1) ; 324 In pursuit of the idealistic considerations as to the inherent worth and dignity of men, the Parliament, in the light of the experience gained recently, repealed the .
The repeal of that Act is necessitated to promote the citizen 's right to personal liberty, which is a fundamental and pervasive theme of the Constitution, to guard against the preventive detention of a person for political beliefs.
This was also in accord with the recommendation of the Law Commission in its Forty seventh Report, p. 2, para 1.4, that preventive detention should be retained only for preventing anti social and economic offences.
The repeal of the and the retention of the , however, does not imply that preventive detention, which is an anachronism in a democratic society like ours, can be freely used, without any power of judicial review and without any checks and balances, against persons engaged in anti social and economic offences.
This assumption by the two High Courts ignores centuries of judicial lawmaking when it denies the competence of courts to weigh competing social interests.
The courts have always viewed with disfavour the detention without trial whatever be the nature of offence.
The detention of individuals without trial for any length of time, howsoever short, is wholly inconsistent with the basic ideas of our Government.
To put it less euphemistically, the alternative is the renunciation of judicial review itself, and acceptance of the intolerable principle that the Government is the judge of its own powers.
So, this Court observed in Prabhu Dayal Deorah vs District Magistrate, Kamrup: "We say and we think it is necessary to repeat, that the gravity of the evil to the community resulting from antisocial activities can never furnish an adequate reason for invading, the personal liberty of a citizen, except in accordance with the procedure established by the constitution and the laws.
The history of personal liberty is largely the history of insistence on observance of procedure.
Observance of procedure has been the bastion against wanton assaults on personal liberty over the years.
Under our Constitution, the only guarantee of personal liberty for person is that he shall not be deprived of it except in accordance with the procedure established by law.
The need today for maintenance of supplies and services essential to the community cannot be over emphasized.
There will be no social security without maintenance of adequate supplies (1) ; at 22 23. 325 and services essential to the community.
But social security is not the only goal of a good society.
There are other values in a society.
Our country is taking singular pride in the democratic ideals enshrined in its Constitution and the most cherished of these ideals is personal liberty.
It would indeed be ironic if, in the name of social security, we would sanction the subversion of this liberty.
" The constitutional safeguards embodied in article 22(5) of the Constitution, as construed by this Court, must, therefore, be read into the provisions of section 8(b) of to prevent any arbitrary executive action.
In the instant case, however, there was no infraction or the constitutional safeguards enshrined in article 22(5).
We are satisfied that there was no failure on the part of the Government to discharge its obligation under article 22(5).
The records of the Government as well as of Advisory Board have been placed before us It clearly shows that the Government had forwarded the two representations made by the appellant on the 4th and 6th of March, 1978, alongwith its comments in writing together with a forwarding letter on the 9th of March, 1978.
From a bare perusal of the forwarding letter and the accompanying para wise comments in writing, it is amply clear that the Government had already formed an opinion that the order of detention was in conformity with its powers under the law.
It cannot, therefore, be said that the Government in rejecting the representations made by the appellant by its order dated 18th March, 1978 was, in any way, influenced by the views expressed by the Board.
Though, the Government was represented at the hearing by the Deputy Secretary, Ministry of Finance, Revenue Department, and the Assistant Collector, Customs, Bulsar, it is nobody 's case that the Advisory Board had at the hearing indicated its mind as to whether there was sufficient cause for detention.
On the contrary, the telegram sent by the appellant on the 16th March, 1978 ex facie shows that the Board had not expressed its mind at the hearing.
It is, therefore, irrefutable that the Government had taken a decision uninfluenced by what transpired at the hearing before the Board.
The matter was dealt with by the Government at all levels, and the detaining authority had come to an independent conclusion of his own by applying his mind to the facts and circumstances of the case.
Here, similarly the Board by its report dated the 10th April, 1978 independently arrived at its opinion that there was sufficient cause for detention .
326 Learned counsel for the appellant next strenuously contends that there was non application of mind on the part of the detaining authority.
It was submitted that though the order for detention was made with a view to preventing the appellant from smuggling goods, i.e., under cl.
(i) of sub section (1) of section 3 of the Act, his case on the facts revealed in the grounds for detention clearly fell under cl.(ii) of sub s.(1) of section 3, as he could not, by any stretch of imagination, be treated to be a smuggler but he was only an abettor.
May be, he instigated, organised and facilitated the act of smuggling, but it is said, the actual smuggling of the contraband goods, was by others.
His act, there fore, constituted abetment of smuggling for which there is a separate clause under section 3(i)(ii).
The order of detention cannot, therefore, be justified under s.3(1) (i).
Applying a wrong clause, it is urged, shows non application of mind.
We are afraid, the learned counsel is stretching the argument too fine.
Section 3(1) of the Act, so far material reads: The Central Government or the State Government or any officer of the Central Government, not below the rank of a Joint Secretary to that Government, specially em powered for the purposes of this section by that Government, or any officer of a State Government, not below the rank of a Secretary to that Government, specially em powered for the purposes of this section by that Government, may, if satisfied, with respect to any person (including a foreigner), that, with a view to preventing him from acting in any manner prejudicial to the conservation or augmentation of foreign exchange or with a view to preventing him from (i) smuggling goods, or (ii) abetting the smuggling of goods, or;" There is, no doubt, a distinction between an act of smuggling and abetting the smuggling of goods for purposes of preventive detention under section 3 (1) of the Act.
Nonetheless, the term "smuggling ' as defined in section 2(e) of the Act has the same meaning as in section 2(39) the , which, when read with section 111 of that Act, is wide enough to include and make liable not only the actual smuggler but also persons abetting the smuggling or contraband goods as well as all persons dealing in such goods, etc.
Though the provisions of cls.
(i) and (ii) of sub s(1) of section 3 of the Act may operate on different fields, which may sometimes, as here, overlap, still a wider meaning is given 327 to the term 'smuggling in section 2(e) of the Act, with a view to broaden the scope of preventive detention.
Sub section (1) of section 3 of the Act provides for the different grounds of detention.
Clause (i) relates lo smuggling of goods, clause (ii) relates to abetting the smuggling of goods, clause (iii) relates to engaging in transporting or concealing or keeping smuggled goods, clause (v) relates to harbouring persons engaged in smuggling goods or in abetting the smuggling of goods.
It must, therefore, be assumed that the intention of the legislature was to treat the smuggling of goods and abetting the smuggling of goods as grounds separate and distinct, and both are separate grounds for detention i.e., to take in all such activities which result in accomplishment of smuggling of contraband goods.
In a case like the present, where there is a widespread network employed by a person, it cannot be said that he is not engaged in the act of smuggling.
It is accepted before us that the appellant.
instigated, organised and facilitated the smuggling of the contraband goods in question.
Not only that but he is really the person to whom the goods belonged.
The appellant went to the extent of going to Dubai for purchasing the contraband goods, had thereafter taken delivery of the same at Dubai and had them loaded into the vessel; the vessel actually belonged to the appellant and the crew members were engaged by his agent Siddiq Hussain, who was sent from Bombay to Dubai to bring the vessel.
He took charge of the vessel as a tindel and but for the fact that the rudder of the vessel failed, the contraband stainless steel rolls would have landed in the creek near The factory of the appellant.
It is clear that Kunji Mohmed, in whose name the vessel 'Jamnaprasad ' BLS 61 was registered, was merely a dummy but the vessel actually belonged to the appellant, who had purchased it from one Kasam Jamal for a sum of Rs. 40,000/ .
It was he who got the vessel repaired at Bombay and an oil engine fitted; and, he, through his agent Siddiq Hussain Sup, engaged the members of the crew.
It appears that the appellant left for Dubai on the 18th of May, 1977 by air and returned to Bombay on the 2nd June, 1977.
He prolonged this stay at Dubai/Abu Dhabi for seven days and had to pay a fine of 100 Dirhams per day for his over stay.
During his period of stay at Dubai, he purchased 20 rolls of stainless steel sheets worth rupees 20 lacs.
It also appears that the appellant and Kunji Mohmed wanted to load the whole of the contraband good into the vessel but the driver Ali and Amad Mamad, the tindel, refused to carry such a heavy cargo.
The appellant told them that 328 he would go to Bombay and send Siddiq Hussain Sup.
It further appears that the oil engine in the vessel was replaced, with his concurrence, with a new diesel engine.
After his departure, only 12 rolls of stainless steel sheets could be loaded in the vessel by Kunji Mohmed and Amad Mamad.
There after, while the vessel was on its voyage to India it developed engine trouble and had to remain at sea for about ten days whereafter, it returned to Sarjah port in Dubai.
In the meanwhile, Siddiq Hussain Sup had reached there from Bombay, on instructions from the appellant, and took charge of the vessel as tindel.
The vessel again left Sarjah port but had W remain in the sea near Khodgam for about 8 to 10 days due to stormy weather.
After a voyage of about 6 to 7 days, the vessel reached near the coast of India outside the creek where it was found grounded.
It had to be anchored at a place known to Siddiq Hussain Sup, that is, near about the factory of Umrao Industries belonging to the appellant in village Kim, but the crew members lost the track and had to move around the creek for about 4 days because the rudder had failed.
Then lt entered the aforesaid creek, some 20 kms.
away from the factory, where it ran aground due to damage to the rudder.
During a search of the house of Kunji Mohmed, certain documents relating to the repairs of vessel No. BLS 61 and a dairy containing telephone Nos.
395279, 375943 and 361973 and also one postal receipt No. 55955 issued by Jamnagar Post office showing looking of a trunk call to telephone No. 395279 or 375943 were found.
The first two telephone numbers have been installed at the Bombay office of the appellant, while the third is at his residence at Bombay.
The postal receipt No. 55955 showed that this trunk call from Jamnagar was booked for Bombay in the name of the appellant.
Two more trunk call ticket Nos.
L. 0285 and 158, dated 18th June, 1977 showed that the former trunk call was booked by him to Okha telephone No. 91 with Siddiq Hussain Sup as P.P., while the latter was in respect of the return call (lightening) made by the appellant to the aforesaid okha telephone.
The trunk call booked from telephone No. 91 okha was to the appellant 's office telephone No. 395279 in Bombay with P. P. Babubhai.
Obviously, the over stay of the appellant at Dubai was in connection with the loading of the contraband stainless steel sheet rolls, which have been valued at Rs. 15,44,400/ .
The synchronising of the visit with the taking of the vessel to Dubai, and then loading of the stainless steel rolls for the purpose of transportation to India, are very significant and unimpeachable circumstances to show the smuggling pro pensities of the appellant.
329 It is quite clear from the facts set out in the grounds of detention, that the appellant was the person who was actually engaged in the act of smuggling of the contraband stainless steel rolls into the Indian customs waters.
It is, therefore, clear that for all intents and purposes the appellant was the actual smuggler and not a mere abettor.
Furthermore, the activities of the appellant were such that his case would be covered by both clauses (i) and (ii) of section 3(1) of the Act.
Thus, there was due application of mind.
It is manifest that the appellant could in the instant case be detained under sub s.(1) of section 3 of the both under clauses (i) and (ii) thereof.
In any case, even assuming that the appellant was merely an abettor of the smuggling of 12 rolls of stainless steel sheets on this occasion, still his activities in this transaction afforded sufficient grounds for the prognosis that he would have himself indulged in actual smuggling of the balance lot of 8 rolls of stainless steel sheets remaining behind at Dubai, if not detained, and as such cl.
(i) section 3(1) of the Act was properly invoked.
In the result, both the appeal as well as the writ petition must fail and are dismissed.
There shall be no order as to cost P.B.R. Appeal and Petition dismissed.
| IN-Abs | The appellant was detained under section 3(1) of the Conservation of Foreign Exchange an(1) Prevention of Smuggling Activities Act, 1974 with a view to prevent him from smuggling goods.
Two representations made by him against his detention were forwarded by the Government to the Advisory Board with its comments.
He was later produced before the Advisory Board.
On receipt of the Advisory Board 's report that there was sufficient cause for detention, the order of detention was confirmed by the Government.
The High Court dismissed his petition under article 226 of the Constitution.
In appeal the appellant challenged the order of detention on the ground that (1) it was in violation of the right guaranteed under article 22(5) inasmuch as the Government withheld consideration of the representations made by him till after the hearing by the Advisory Board, and (2) the impugned order of detention was bad due to non application of mind of the detaining authority inasmuch as the facts alleged clearly and distinctly showed that the appellant did not himself smuggle the goods.
Dismissing the appeal, ^ HELD: (1)(a) There was no warrant for the submission that the disposal of the representations made by the Government was not in conformity with article 22(5) of the Constitution.
[319H] (b) It is well settled that in case of preventive detention of a citizen, Art 22(5) of the Constitution enjoins that the obligation of the appropriate Government to afford the detenu an opportunity to make a representation and to consider that representation is distinct from the Government s obligation to constitute a Board and to communicate the representation, amongst other material, to the Board to.
enable it to form its opinion and to obtain such opinion.
[321E] Abdul Karim & ors.
vs State of West Bengal; , ; Pankaj Kumar Cluakrabarly & ors.
vs State of West Bengal; , , Khuairul Haque vs The State of West Bengal W. P. No. 246 of 1969, decided on September 10, 1969, Jayanarayan sukul vs State of West Bengal; , Dhurus Kanu vs State of West Bengal, AIR 1975 SC 571; referred to.
(c) The constitutional safeguards embodied in article 22(5) must be read into the provisions of section 8(b) of the Conservation of Foreign Exchange and Preventional of Smuggling Activities Act, 1974 to prevent any arbitrary executive action.
Merely because there is no express provision in section 8(b) of the Act placing an obligation to forward the representation made by the detenu along 316 with the reference to the Advisory Board unlike the provisions contained in section 9 of the and section 10 of the , it cannot be said that there is no obligation cast on the Government to consider the representation made by the detenu before forwarding it to the Advisory Board.
[325C; 322D E] Thaneshwar Singh vs The Union of India & ors.
, Cr. W. No. 6 of 197 decided on September 25, 1978 (Delhi High Court); over ruled.
(d) When the liberty of the subject is involved, whether it is under the or the or the , it is the bounden duty of the Court to satisfy itself that all the safeguards provided by the law had been scrupulously observed and that the subject was not deprived of his personal liberty otherwise than in accordance with his.
[322 G] (e) When any person is detained in pursuance of an order made under any law providing for preventive detention the authority making the order shall, as soon as may be, communicate to such person the ground on which the order had been made and shall afford him the earliest opportunity of making representations against the order.
These procedural safeguards are ingrained in our system of judicial interpretation.
The power of preventive detention by the Government under the Act is necessarily subject to the limitations enjoined on the exercise of such power by article 22(5) of the Constitution.
[323A] Khudiram Das vs The State of West Bengal & ors. ; referred to.
In the instant case there was no infraction of constitutional safeguards enshrined under article 22(5) and there was no failure on the part of the Government to discharge its obligations under that article.
Quite clearly the Government had forwarded the appellant 's two representations alongwith its comments to the Advisory Board.
A perusal of the comments of the Government make it clear that the Government had already formed an opinion that the order of detention was in conformity with its powers under the law.
It cannot be said that in rejecting the appellant 's representations the Government was influenced by the views expressed by the Board.
At the hearing the Board had not indicated its mind as to whether there was sufficient cause for detention.
It is, therefore, irrefutable that the Government had taken a decision uninfluenced by what transpired at the hearing before the Board.
The matter was dealt with by the Government all: all levels, and the detaining authority had come to an independent conclusion of its own by applying its mind to the facts and circumstances of the case.
[325D H] (2)(a) The intention of the legislature in enacting section 3(1) was to treat the smuggling of goods and abetting the smuggling of goods as grounds separate and distinct and both are separate grounds for detention i.e. to take in all such activities which result in accomplishment of smuggling of contraband goods. 'the term 'smuggling ' as defined in section 2(e) of the Act read with section 2(39) and s 111 of the Customs Act, is wide enough to include and make liable not only the actual smugglers but also persons abetting the smugglers, of contraband goods as well as all persons dealing with any such goods.
A wider meaning is given to the term 'smuggling ' in section 2(e) of the Act with a view to broaden the scope of Preventive detention.
In a case like the present where a wide 317 spread network is employed by a person, it cannot be said that he was not Engaged in the act of smuggling.
The appellant was not only the person who instigated, organised and facilitated the smuggling of the contraband goods but he was really a person to whom the goods belonged.
The facts set out in the ground of detention make it clear that the appellant was the person who was actually engaged in the act of smuggling of contraband goods into the Indian Customs waters For all intents and purposes the appellant was the actual smuggler and not a mere abettor His " activities were such that his case would be covered by both clauses (i) and (ii) of section 3(1) of the Act.
[326G H; 327A B] (b) Assuming that the appellant was merely an abettor in the smuggling of contraband goods on this occasion, still his activities in this transaction afforded sufficient grounds for the prognosis that he would have himself included in actual smuggling of the balance of contraband goods by remaining behind in the foreign country.
[329D]
|
Appeal No. 122 of 1954.
Appeal under section 109(b) read with section 110, C.P.C. from the judgment and order dated the 28th September 1953 of the Orissa High Court in O.S. No. I of 1953.
P. R. Das and Bakshi Tek Chand, with M. Mohantiand section P. Varma, for the appellant.
M. C. Setalvad, Attorney General of India.
B. Mohapatra, Advocate General of Orissa with section Mohanti and P. G. Gokhale, for the respondent.
February 3.
The Judgment of the Court was delivered by DAS C.J.
This is an appeal from the judgment and decree passed on the 28th September, 1953, by a Bench of the Orissa High Court in an Original Suit which was filed on the 24th November, 1952, in the Court of the Subordinate Judge of Cuttack and was on the 17th January, 1953, transferred to the High Court and marked as Original Suit No. 1 of 1953.
The suit was filed by the plaintiff appellant claiming as the Raja and owner of the Rajgee, known as the Kanika Raj, against the State of Orissa, praying for a declaration that the Orissa Estates Abolition Act, 1951 (hereinafter referred to as "the Abolition Act") was, in its application to the Rajgee of Kanika, invalid, unconstitutional and ultra vires the State Legislature and for an injunction restraining the State of Orissa from taking any action under the said Act.
The suit was instituted evidently under an apprehension that the State of Orissa might issue a notification under section 3(1) of the Abolition Act declaring that the Rajgee of Kanika had passed to and become vested in the State free from all encumbrances.
The High Court dismissed the suit but gave a certificate of fitness for appeal to this court.
Hence the present appeal by the plaintiff.
The plaintiff 's contention before us is that no notification under section 3(1) of the Abolition Act 10 74 can issue because (1) his land is not an "estate" as defined in section 2(g) of the Act, and (2) the plaintiff is not an "intermediary ' within the meaning of section 2(h) thereof.
In answer to this, the AttorneyGeneral, appearing on behalf of the State, makes five Submissions, viz., (a) that on the admitted facts the plaintiff 's land is an "estate" within the meaning of the Abolition Act; (b) that the plaintiff is estopped by the compromise decree passed by the Patna High Court on 2nd May 1945 in F.A. No. 15 of 1941 from contending that his land is not an "estate" within the meaning of the Abolition Act; (c) that the plaintiff 's land has been held as an "estate" ever since 1803; (d) that whatever may have been the position before 1805, the plaintiff 's land became an "estate" by Regulation XII of 1805; and (e) that in any event, the plaintiff 's 'land became an "estate" after 1805 by subsequent acts and conduct of the plaintiff and his predecessors in title.
(a): Under section 3(1) of the Abolition Act, the State Government can declare that a specified "estate" has passed to and has become vested in the State.
It is, therefore, clear that the State Government cannot make any notification with respect to land which is not an "estate".
"Estate" is defined in section 2(g) of the Abolition Act.
The material portion of that definition, as it stood at the date of the institution of the suit, was as follows: `` `estate ' means any land held by an intermediary and included under one entry in any of the general registers of revenue paying lands and revenue, free lands, prepared and maintained under the law for the time being in force by the Collector of a district,. . . . . ' ' In order to be an "estate", the land must be held by an "intermediary" and must be included under one entry in any of the general registers of revenue paying lands and revenue free lands and such general registers must be prepared and maintained under the 75 law for the time being in force.
Section 2(h), as it stood then, by its earlier part, defined an "intermediary", with reference to any "estate", to mean, amongst other things, a proprietor.
The plaintiff certainly claims to be the proprietor of his land.
Therefore, if his land is an "estate", he is clearly an "intermediary".
The case of Biswambhar Singh vs The State of Orissa and Others"), which has been relied on by learned counsel for the plaintiff has no application to the present case, for that case was concerned not with the earlier but with the latter part of the definition of "intermediary".
That the plaintiff 's land is included under one entry in the general register of revenue paying lands is not disputed.
What is contended for is that in order to make such land an "estate" the register must be prepared and maintained under the law for the time being in force.
There is no dispute that "the law for the time being ,in force" means the Bengal Land Registration Act (Bengal Act VII of 1876).
The plaintiff contends that the register in which his land is included under one entry was not prepared or maintained under the Bengal Land Registration Act.
The argument is that it is not only necessary to show that the land is included under one entry in a register but that it is also necessary to show that the register where the entry appears was prepared and maintained under the law.
Under the Bengal Land Registration Act, 1876, land can be included in the register prepared and maintained under that Act only if such land is an "estate" as defined in that Act.
The relevant part of that definition is: "3(2) 'estate ' includes: (a)any land subject to the payment of landrevenue, either immediately or prospectively, for the dis charge of which a separate engagement has been entered into with Government; (b). . . . . . . . . . (c). . . . . . . . . .
It is urged, therefore, that the preparation of a register under that Act means the making of entries in that (1) [1954] S.C.R.842 76 register of lands which are subject to the payment of land revenue for the discharge of which a separate engagement has been entered into.
Land which is not subject to payment of land revenue and for the discharge of which a separate engagement has not been entered into is not an "estate" and cannot be entered in the register prepared and maintained under the Bengal Land Registration Act.
That Act confers powers on the Collector to prepare the register in the manner specified therein and such statutory power, in order to have effect, must be exercised in strict compliance with the provisions of that Act.
The plaintiff maintains that the Rajgee of Kanika was never subject to payment of land revenue for the discharge of which a separate engagement had been entered into by him or his predecessors in title.
That the ancestors of the plaintiff were at one time independent chiefs and that the Rajgee or Killa of, Kanika was in ancient time an independent State are conceded.
Later on, the Rajas of Kanika owed nominal allegiance to the Mahrattas.
Then came the last Mahratta War and the plains of Orissa were conquered by the East India Company.
On 22nd November, 1803, there was an "Engagement" between the East India Company and Raja Balabhadra Bhanja Deo, the then Raja of Killa Kanika.
The East India Company on the same day granted a Kaool Namah to the Raja.
Under the Engagement the Raja agreed, amongst 'Other things, to pay, as annual Peshkush or tribute, 84,840 Kahuns of Cowrees, amounting to Rs. 20,407 12 1 1.
This Engagement was confirmed by clause 10 of the Treaty of Peace concluded on the 17th December, 1803, at Deogan between the East India Company and the Mahrattas which treaty was later on ratified by the GovernorGeneral in 1804.
On the 5th September, 1805, was passed the Bengal Regulation XII of 1805.
Sections 33 to 37 which are material for our present purpose were as follows: "XXXIII.
The Commissioners having granted sanads to certain zamindars, entitling them to hold, 77 their estates at a fixed jama in perpetuity, those sanads are hereby confirmed '.
The following is the list of the names of the zamindars to whom this provision is to be considered applicable: Zamindar of Killah Darpan, Zamindar of Killah Sookindah, Zamindar of Killah Muddoopore.
XXXIV.
The Commissioners having likewise granted a sanad to Futtah Mohmed, jaghirdar of Malood, entitling him and his heirs for ever, in consideration of certain services performed towards the British Government, to hold his lands exempt from assessment, such sanad is hereby confirmed.
First.
The late Board of Commissioners having concluded a settlement of the land revenue with certain zamindars, whose estates are situated chiefly in the hills and jungles, for the payment of a fixed annual quit rent in perpetuity, those engagements are hereby confirmed; and no alteration shall, at any time, be made in the amount of the revenue payable under the engagements in question to Government.
Second.
The following is a list of the mehals to which the provision in the preceding Clause is applicable: Killah Aull, : Killah Humishpore, Killah Cojang, : Killah Miritchpore, Killah Puttra, : Killah Bishenpore.
Third.
The zamindaries of Cordah and Cunka being mehals of the description of those specified in the preceding Clause, a settlement shall be concluded, as soon as circumstances may admit, for the revenue of those mehals on the principle on which a settlement has been concluded with the zamindars of the mehals specified in the preceding Clause.
XXXVI.
All Regulations relating directly or indirectly to the settlement and collection of the public revenue, or to the conduct of the officers employed in the performance of that duty, whether European or native, in the province of Bengal, which are not superseded by the foregoing rules, are hereby extended to, and declared to be in force in the zillah 78 of Cuttack.
Provided, however, that nothing herein contained shall be construed to authorize the division of the lands comprised in any estates in the zillah of Cuttack, in which the succession to the entire estate devolves according to established usage to a single heir: in cases of this nature, the Courts of Justice are to be guided by the provisions contained in Regulation X, 1800.
Provided, also, that nothing herein contained shall be construed to imply, that any part of the said Regulations are for the present to be considered to be in force in certain jungle or hill zamindarries occupied by a rude and uncivilized race of people with the proprietors of which estates engagements were formed by the late Board of Commissioners for the payment of a certain fixed quit rent or tribute to Government.
The following is the list of the names of the mehals to which this exemption from the operation of the general Regulations is to be considered applicable.
Killah Neelgerry, : Killah Toalcherry,Killah Rampore, Killah Bankey, : Killah Attgurh, Killah Hindole, Killah Joormoo, : Killah Kunjur,Killah Teegereah, Killah Nirsing : Killah Kindeapara,:Killah pore, Burrumboh, Killah Augole, : Killah Neahgurh,: Killah Deckenaul.
XXXVII.
The foregoing exemption from the operation of the general Regulations shall likewise, for the present, be considered to be applicable to the lands known by the appellation of the territory of Mohurbunge; but it shall be the duty of the Collector of the zillah to conclude a settlement with the proprietor of the estate for the payment of a fixed annual quit rent, on the principles on which a settlement has been concluded with the other bill or jungle zamindars specified in the preceding section".
It is claimed that there was at no subsequent time any such revenue settlement as was contemplated by 79 section XXXV(3) and that there was no separate engagement for payment of any land revenue at any time thereafter.
The conclusion sought to be drawn in the circumstances is that as Killa Kanika was not subject to payment of land revenue.
, for the discharge of which a separate engagement had been entered into, it was not an "estate" as defined in Bengal Land Registration Act, 1876, and that that being the posi tion, it could not have been validly entered in the register prepared and maintained under the Bengal Land Registration Act.
The action of the Collector in entering Killa Kanika as a revenue paying estate was wholly ultra vires and in the eye of the law such an entry is a nullity and does not exist.
It follows, therefore, that Killa Kanika cannot be regarded as an "estate" within the meaning of the Abolition Act because the general register in which it is included cannot be said to have been validly prepared and maintained under the law for the time being in force.
Section 4 of the Bengal Land Registration Act, 1876, directs the Collector of every district to prepare and keep up the four kinds of registers therein mentioned.
Section 7 lays down that in Part I of the general register of revenue paying lands should be entered the name of every estate which is borne on the revenue roll of the district and certain other particulars relating to every such estate as therein specified.
Therefore, if the name of Killa Kanika was borne on the revenue roll of the district, the Collector would be bound to enter the same in Part I of the general register prepared and kept up by him under section 4.
Section 20 of the Act provides that until the registers by that Act directed to be prepared were so prepared the existing registers then kept up in the office of every Collector should be deemed to be the registers kept up under the Bengal Land Registration Act, 1876.
Prior to 1876, land registers used to be maintained under the Bengal Regulation XLVIII of 1793 as amended by Bengal Regulation VII of 1800.
Existing registers mentioned in section 20 of the Bengal Land Registration Act, 1876, clearly refer to registers kept under those Regulations and the learned 80 Attorney General contends that section 20 gives a statutory validity to the registers kept under those Regulations.
Mr. P. R. Das appearing for the appellant submits that his arguments apply with equal force to the registers kept under the old Regulations referred to above.
According to him, if the Collector entered lands which were not "estate" as defined in the old Regulations, he did not exercise his statutory powers and the entry made by him was a nullity and if any of the existing registers was void as regards a particular entry, then that entry did not exist and could not be transferred to the new register and if it was transferred, such transfer was a nullity and the new register, qua that entry, was void and could not be said to have been prepared and maintained under law.
We are unable to accept the line of reasoning developed by Mr. P. R. Das.
To accede to his contention would be to add words to section 2(g) of the Abolition Act so as to make it applicable to lands which were "validly" included under one entry in any of the general registers "properly" prepared and maintained under the law for the time being in force, that is to say, the Bengal Land Registration Act 1876.
This the court has no power to do.
If section 2(g) defined "estate" as including lands mentioned in the schedule to the Act, then whatever was included in the schedule would be an "estate" within the meaning of the Abolition Act, irrespective of whether such land was or was not an "estate" within the meaning of any other Act.
The same reasoning applies when the definition includes lands entered in the general registers prepared and maintained under the Bengal Land Registration Act, 1876.
Here the reference to the register prepared or kept under the law for the time being in force was meant only to identify the particular register in which the particular land was included under one entry.
Suppose that a )register prepared and maintained under the Bengal Land Registration Act, 1876, included lands which were "estates" within the meaning of the Land Registration Act and also lands which were not 81 "estates" within the meaning of that Act. 'Suppose further that the Orissa Legislature by the Abolition Act intended to include all these lands, properly or improperly included in the register, what language would they then have used? Precisely the language they have used in section 2(g) of the Abolition Act, namely, that an "estate" means any land included in the general registers prepared and maintained under the law for the time being in force.
In other words, the definition covers lands which are factually included in the particular register referred to.
Whether they are "estates" within the meaning of the Bengal Land Registration Act, 1876, and whether they were validly or properly entered according to the provisions of that Act., appears to us to be wholly irrelevant for the purpose of construing section 3 (g) of the Abolition Act.
In our opinion, the contention of the State of Orissa on this point must be accepted.
P. R. Das appearing for the appellant objects to the plea of estoppel being raised, because it has not been included in the Statement of Case filed in the present appeal by the respondent.
Order XVIII of the Rules of this Court deals with the lodging of cases.
Under Rule I no party to an appeal is entitled to be heard by the court unless he has previously lodged his case in the appeal.
Rule 3 lays down how the case is to be prepared and what its contents should be.
Order XIX, Rule 4 provides that the appellant shall not, without the leave of the Court, rely at the hearing on any grounds not specified in the Statement of Case filed by him.
The Privy Council Practice founded on Sheo Singh Rai vs Mussumut Dakho and Moorari Lall(1) and set forth in Bentwich 3rd edition Ruling 63 at page 181 is to the same effect.
There is no rule imposing corresponding disability on the respondent.
Further even with regard to the appellant the Court may, in appropriate cases, give him leave to raise a ground not specified in the Statement of Case.
In the present case there is no question of surprise, for the plea of estoppel was pointedly raised and made the subject matter of an (1) [1878] L.R. 5 I.A. 87.
11 82 issue before the High Court and was elaborately dealt with by the High Court in its Judgment under appeal.
In the circumstances we do not consider it proper to shut out this plea of estoppel.
The plea of estoppel is sought to be founded on the compromise decree, exhibit 'O ' passed by the Patna High Court on 2nd May, 1945, in F. A. No. 15 of 1941.
The compromise decree is utilised in the first place as creating an estoppel by judgment.
In In re.
South American and Mexican Company, Ex parte Bank of England(1), it has been held that a judgment by consent or default is as effective an estoppel between the parties as a judgment whereby the court exercises its mind oil a contested case.
Upholding the judgment of Vaughan Williams, J., Lord Herschell said at page 50: "The truth is, a judgment by consent is intended to put a stop to litigation between the parties just as much as is a judgment which results from the decision of the Court after the matter has been fought out to the end.
And I think it would be very mischievous if one were not to give a fair and reasonable interpretation to such judgments, and were to allow questions that were really involved in the action to be fought over again in a subsequent action".
To the like effect are the following observations of the Judicial Committee in Kinch vs Walcott and others(2): "First of all their Lordships are clear that in relation to this plea of estoppel it is of no advantage to the appellant that the order in the libel action which is said to raise it was a consent order.
For such a purpose an order by consent, not discharged by mutual agreement, and remaining unreduced, is as effective as an order of the Court made otherwise than by consent and not discharged on appeal".
The same principle has been followed by the High Courts in India in a number of reported decisions.
Reference need only be made to the case of Secretary of State, for India in Council vs Ateendranath Das(3), (1) (2) , 493.
(3) Cal.
550, 558.
83 Bhaishanker Nanabhai and others vs Morarji Keshavji and Co.(1) and Raja Kumara Venkata Perumal Raja Bahadur, Minor by guardian Mr. W. A. Varadachariar vs Thatha Ramasamy Chetty and others (2).
In the Calcutta case after referring to the English decisions the High Court observed as follows: "On this authority it becomes absolutely clear that the consent order is as effective as an order passed on contest, not only with reference to the conclusions arrived at in the previous suit but also with regard to every step in the process of reasoning on which the said conclusion is founded.
When we say "every step in the reasoning" we mean the findings on the essential facts on which the judgment or the ultimate conclusion was founded.
In other words the finding which it was necessary to arrive at for the purpose of sustaining the judgment in the particular case will operate as estoppel by judgment".
The correctness of these principles laid down in these decisions is not disputed by Mr. P.R. Das.
Proceeding on the basis that there is such a principle of estoppel by judgment, he contends that the test laid down in the decisions referred to above is whether the judgment in the previous case could have been passed without the determination of the question which was put in issue in the subsequent case, where the plea of estoppel by the previous judgment is raised.
This leads us to a consideration of the facts, which are material to this question.
On the 4th February, 1936, the predecessor in title of the plaintiff brought a suit (O.S. No. 7 of 1936) in the Court of the Subordinate Judge of Cuttack against the Secretary of State for India in Council, praying for a declaration that the plaintiff bad a good and indefeasible title to the beds of certain rivers, by expressed or implied grant from the East India Company, alternatively for a declaration that the plaintiff had acquired an indefeasible right and title to the beds of the said rivers by prescription or adverse possession and for permanent injunction against the defendant restraining him from interfering with the (1) Bom.
283, (2) Mad.
84 rights of the plaintiff in the beds of the said rivers and the churs formed on them.
The suit was founded on, amongst others, the following allegations.
In paragraphs 3 to 6 of the plaint were pleaded that the plaintiff 's ancestors were the rulers of Killa Kanika owing allegiance to the Hindu Gajapati Kings of Orissa and were absolute owners of all lands and waters within the ambit of their territories including the two rivers therein mentioned and that after the fall of the Hindu kingdom in Orissa, and during the Afghan, Moghal and Mahratha occupation of Orissa, the Rulers of Killa Kanika, the ancestors of the plaintiff continued to be the absolute owners of the Killa including the said rivers.
In paragraph 7 of the plaint reference was made to the Engagement and Kaoolnama of 1803, whereby the Raja was said to have been confirmed in his Rajgee or proprietorship of the entire Killa and it was submitted that the said grant was intended to and did, in fact, confirm his title, to the said rivers.
In paragraph 9 of the plaint, it was acknowledged that subsequently the status of the rulers of Killa Kanika was gradually reduced to that of a Zamindar and that.
they were divested of all administrative powers, but it was claimed that nevertheless, their proprietary rights in the Killa consisting of land and water including the disputed rivers remained intact and that the tribute which had been fixed by the engagement of 1803 remained so in perpetuity as Peshkush payable by the proprietors.
In paragraph 33 it was stated that having regard to the fact that prior to the British conquest of Orissa, the plaintiffs predecessors in title had been independent rulers of Killa Kanika and as such had valid title to the said rivers within their territory and that after the British conquest the East India Company confirmed the title of the then Raja of Kanika to whatever had been in the possession of the said Raja prior to the said conquest and maintained him in possession thereof, the plaintiff claimed good and valid title to the beds of the said rivers by an express or implied grant by the said East India Company.
A claim of title to the beds of the said 85 rivers by prescription and adverse possession was also pleaded by way of alternative plea.
The written statement of the Secretary of State was filed on the 29th May, 1936, traversing the allegations in the plaint.
In paragraph 7 it was definitely pleaded that the Raja, with whom engagement had been entered into in 1803, was deposed for miisrule and his status was reduced to that of a Zamindar as a punishment and that it was as an act of mercy that he was allowed to retain the estate without an enhancement of his Peshkush.
It was submitted that in view of the treatment of the estate during the past 100 years, it was idle for the plaintiff to suggest that he retained the rights comparable to those of a Ruling Chief.
Reading the pleadings and the issues raised in the case fairly and as a whole,it appears quite clear that although the Engagement and Kaoolnama of 1803 was referred to as a grant, express or implied, from the East India Company, the plaintiff was, in substance, founding his claim on his antecedent title as the Ruling Chief of Killa Kanika which, according to him, bad been confirmed by the Engagement and Kaoolnama of 1803, which were, therefore, construed as a grant, express or implied, from the East India Company.
That the real issue on which the suit was fought out in the trial court was whether the plaintiff was an independent Ruling Chief and as such entitled to the beds of the rivers passing through his territory or was a mere Zemindar and as such having no such right is apparent from the following passage in the judgment of the Subordinate Judge "It is, therefore, too late now to suggest that the status of the plaintiff in relation to his Killa is something higher than or superior to that of a holder of an estate.
In my view, it is of no consequence, as respects the point now under consideration whether the estate is a permanently settled estate or it is a temporarily settled estate.
The question is whether the plaintiff is the holder of an estate or it is that he owns a State.
But as I have just pointed out, a private individual cannot own a State in the sense a sovereign authority owns the same".
86 After referring to the Regulations of 1805 and 1806, the learned Subordinate Judge proceeded to say: "Thus it is apparent that with the advent of the British the question of status of the plaintiff was never left in any degree of uncertainty.
All these various Regulations taken together will go to establish in an unmistakable term, that the plaintiff 's status in his relation to his Killa, was recognised from the time of the advent of the British in Orissa as that of a Zamindar, i.e., a bolder of an estate.
That being so, in relation to these rivers, or to their beds, the plaintiff 's position shall be nothing more than or superior to that of a riparian owner".
Again referring to the Engagement and Kaoolnama of 1803 the learned Subordinate Judge stated as follows: "Now taking these two documents together, it is difficult to read in them that any grant was made either expressly or impliedly by the sovereign authority in favour of the holder of the Killa.
The main provisions are that the revenue was fixed for ever, and that the holder was asked to be loyal to the Company 's Government.
Thus initially, I have been unable to associate any idea of grant as to be flowing from these engagements.
All that can be said, and perhaps the earned counsel for the plaintiff maintains to that effect, is that what rights the holder of the Killa had, in reference to the Killa, were fully and without any limitation or restriction, recognised.
It is, therefore, that the question will now be set at large for a discussion as to what rights the proprietor of the Killa had at the time when these engagements were made".
It is needless to extract further passages from the judgment.
In the result the learned Subordinate Judge answered the issues against the plaintiff and dismissed the suit.
The plaintiff appealed to the Patna High Court.
A compromise was arrived at between the parties, which was filed in court and the appeal was disposed of in accordance with the terms of the compromise petition.
The principal terms of the compromise petition were as follows: 87 "1.
That it shall be declared that the Crown and for the matter of that, the Province of Orissa, the defendant has the title to the disputed river beds, as described in the schedule of the plaint, and the plaintiff appellant acknowledges the same.
2.That the plaintiff appellant, that is the Proprietor of the Kanika Estate is the rightful owner of the fisheries of the said rivers and the defendant has not nor will have any objection to his unobstructed exclusive permanent enjoyment of the fishery rights in the said rivers at any time whatsoever.
The respondents shall not claim nor the appellant shall be liable to any assessment on that ground, other than what is payable in respect of the permanently settled estate of Killa.
3.That subject to such rights as the Crown or in other words, the Province of Orissa has in the beds of the rivers aforesaid and in the channel of waters flowing thereon, the Proprietor of Kanika Estate that is the plaintiff appellant will have his rights to the ferries over the said rivers which he has been so far enjoying and except when such ferry rights interfere with the Crown 's right in the bed of the rivers and similar rights in the waters on the channel of the rivers for the purpose of navigation and things of the kind, the Province of Orissa will not interfere with nor raise any objection to the plaintiff 's enjoyment of such rights or ferry through the length and breadth of the aforesaid rivers.
4.That such Chars, islands or other accretions formed in the said rivers as have been shown in the Civil Court Commissioner 's map prepared in this suit and now forming a part of the court 's record shall be deemed as part and parcel of the permanently settled estate of Kanika and the defendant will not be entitled to any further assessment in respect thereof.
5.That all future riparian accretions or Chars formed adjoining the banks of the rivers in dispute shall also be always deemed to be part and parcel of the said permanently settled Zamindary of Kanika and shall be so possessed by him without any further payment on assessment of land revenue over and 88 above the land revenue that has been permanently fixed.
6.That all other islands or Chars that may be formed subsequent hereto in the midst of the river being cut off from the banks thereof by waters that are tidal, unfordable and navigable in all seasons of the year shall belong to the defendant and the plaintiff or his successor in interest will have a right to possess and take settlement of the same from the defendant and the latter will have the right to levy assessment of land revenue thereon according to the principles and provisions of law as laid down in Regulation II of 1819 and this assessment will be of force from the time when the islands or Chars will appear and be capable of enjoyment irrespective of the fact whether estate holder does really enjoy it or not ' .
The declaration of the title of the State to the disputed river beds was a clear acknowledgment by the plaintiff of the State 's sovereign rights, which necessarily negatived the sovereign rights which he asserted and claimed for himself.
The declaration that the plaintiff, as the proprietor of the Kanika estate, was the ' rightful owner of fisheries in the said rivers and that the defendant would not claim any assessment on that ground was nothing but a recognition of the plaintiff 's title as the holder of a permanently settled estate.
The same observations apply to clause (3) whereby the plaintiff was declared to have the ferry rights over the said rivers, which were expressly made subject to the rights of the State in the beds of the rivers.
The provision that all future riparian accretions or Chars formed adjoining the banks of the rivers would always be deemed part of the permanently settled Zemindari of Kanika and should be possessed by him without further payment of assessment of land revenue over and above the land revenue that had been permanently fixed clearly acknowledges that the plaintiff accepted the position that he had no rights other than what he had as the holder of a permanently settled estate liable to the payment of land revenue, in contradistinction to 89 tribute fixed in perpetuity.
The provisions of clause (6) of the terms of settlement also point to the same conclusion.
Mr. P. R. Das contends that the issue in the present case is whether the land held by the plaintiff is an "estate" within the meaning of the Bengal Land Registration Act, 1876, whereas the issue in the earlier case was whether the plaintiff 's predecessors had title to the river beds by express or implied grant from the Crown.
This does not appear to us to be a fair reading of the pleadings as a whole.
The plaint in the earlier suit summarised above and the passages culled from the judgment of the trial court clearly indicate that the parties went to trial on the definite and well understood issue that the plaintiff 's claim to the river beds was founded on his anterior title as an independent Ruling Chief of Killa Kanika and that that title had been confirmed by the Engagement and Kaoolnama of 1803, which were, in a loose way, construed as a grant of the river beds, express or implied, by the East India Company.
What the parties understood by the issues on which they went to trial is clearly illustrated by the passages quoted from the judgment.
The fact that the claim in the earlier suit related only to a part of the land, namely the river beds, whereas the present case is that the entire land held by the plaintiff is not an "estate" makes no difference, for the real issue between the parties in the earlier suit was, as it is in the present suit, only concerning his status and the rights flowing therefrom.
To hold in this suit that the plaintiff is not the holder of an estate subject to payment of land revenue for the discharge of which a separate engagement has been entered into, will be to permit the plaintiff to set up a sovereign status for himself, which he actually did in the earlier case but failed to establish in the trial court and which he, by the compromise, expressly abandoned in the appeal court.
In our judgment the compromise decree precludes the plaintiff from re asserting the title, which had been negatived by the compromise decree although it related only to his claim to a part of the lands, namely 12 90 the beds of the rivers therein mentioned.
The compromise decree is also sought to be pleaded by the State against the plaintiff as estoppel by representation.
It is said, that even if the compromise had not the imprimatur of the court, it would, nevertheless, be representation that the plaintiff 's predecessor was the Zemindar of a permanently settled estate.
The compromise consisted of reciprocal concessions, those made by one party being the consideration for those made by the other.
It was on the basis of the concession made by the plaintiff 's predecessor, namely, that he was a Zemindar of a permanently settled estate, that the State gave up the benefit of the decree which had been passed in its favour by the trial court and also the right to levy assessment on the accretions of future Chars.
One of the main considerations for the compromise ,was the clear admission on the part of the plaintiff in that case that his status in respect of Killa Kanika was nothing more than that of a proprietor of a permanently settled estate liable to pay land revenue.
The High Court decided the issue of estoppel against the State on two considerations, namely, (1) that the status of the owner of Killa Kanika was not directly and substantially in issue in the earlier litigation and (2) that there was no clear evidence led on the side of the State to establish that the admission by the plaintiff in that case of his status was the main consideration for the compromise.
We are satisfied that the High Court was in error on both these points.
As already pointed out, the pleadings summarised above and the passages in the judgments quoted above clearly indicate that the status of the plaintiff was the foundation of his claim to the river beds and was consequently directly and substantially in issue in that litigation and was understood to be so by the parties themselves.
On the second ground the terms of the compromise speak for themselves.
It is quite clear that the concessions made by one party were the consideration for those made by the other party and, therefore, it was not necessary to adduce any further evidence, assuming that any evidence was 91 admissible for the purpose.
In our judgment, the finding of the High Court on this issue was clearly erroneous.
Each of the conclusions we have arrived at on the first two points is quite sufficient, by itself, to enable us to dispose of this appeal and it is not necessary for us to deal with or express any opinion on the other three points canvassed before us.
The result, therefore, is that this appeal should be dismissed with costs and we order accordingly.
| IN-Abs | The appellant sued the State of Orissa for a declaration that the Orissa Estates Abolition Act of 1951 was in its application to the Kanika Raj, of which he was the Raja and owner, invalid, unconstitutional and ultra vires the State Legislature and for an injunction restraining the State of Orissa from taking any action under the Act.
It was contended, inter alia, that no notification under section 3(1) of the Act vesting the Kanika Raj in the State of Orissa could issue as the Raj was not an estate as defined by section 2 (g) of the Act.
The contrary was asserted by the State of Orissa and its further contention was that the appellant was estopped by a compromise decree between his predecessors in title on the one band and the Secretary of State on the other from denying that the Raj was an estate as defined by the Act.
Held, that the Kanika Raj was an estate as defined by the Orissa Estates Abolition Act of 1951 and the appellant was estopped from denying it by the compromise decree.
That the real intention of the Act in defining 'estate ' as it has done in section 2(g) of the Act, was to include all lands, such as the appellant 's, which were as a matter of fact included ill the register prepared under the Bengal Land Registration Act Of 1876, and in construing the definition it is wholly unnecessary to consider whether such inclusion was valid or proper or in conformity with the meaning of an estate under that Act.
That a judgment by consent is as effective in creating an estoppel between the parties as a judgment on contest and the test is whether the judgment in the previous case could have been passed without the determination of the question which is put in issue in the subsequent case where the plea of estoppel is raised.
Held further, that there is no rule corresponding to Rule 4 of Order XIX of the Supreme Court Rules imposing a similar disability on the respondent, and even with regard to the appellant the court may in appropriate cases, give him leave to raise a ground not specified in the Statement of the Case filed by him.
|
N: Criminal Appeal No. 117 of 1978.
(Appeal from the Judgment and order dt.
5 12 77 of the Punjab & Haryana High Court in Criminal Misc.
Petition No. 3892 M of 1976).
R. section Narula, M. section Marwah and D. section Narula for the appellant.
section K. Mehta, K. R. Nagaraja and P. N. Puri for the respondents.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
Jagir Singh, the appellant in this appeal by special leave, was married to Kirpal Kaur in 1951.
Husband and wife became estranged in 1954, since when they have been living separately.
Ranbir Singh, the issue of the marriage, was born in 1954.
Jagir Singh married again and it is said that he has a son and a daughter by the second wife.
On 25th May, 1971, Kirpal Kaur and Ranbir singh filed an application for maintenance under Section 488 of the Criminal Procedure Code, 1898.
One of the defences raised by the appellant to that application was that Ranbir Singh was a major and, therefore, not entitled to claim maintenance under Section 488.
The Magistrate held that Ranbir Singh was a student who was unable to maintain himself and, therefore, the question whether he was a major or a minor was immaterial.
On 19th May, 1973, he made an order awarding maintenance at the rate of Rs. 200/ per month to Kirpal Kaur and Rs. 75/ per month to Ranbir Singh, Jagir Singh filed a revision petition before the Sessions Judge.
By consent of the parties, the Sessions Judge made a reference to the High Court recommending that the award of maintenance in favour of the wife should be reduced to Rs. 150/ per month and that the award of Rs. 75/ per month to the son should be confirmed.
The reference was accepted by the High Court.
The Criminal Procedure Code 1898 was repealed and the Criminal Procedure Code 1974 was enacted in its place.
The new Code came into force on 1st April, 1974.
On 3rd May, 1974, the appellant made an application before the Magistrate, purporting to be under Section 127 of the new Code, for cancellation of the order of maintenance in favour of the son on the ground that the son had attained majority 285 and did not suffer from any infirmity or abnormality which prevented A him from maintaining himself.
It was claimed on behalf of the appellant that under the new Code it was not permissible to award maintenance or enforce an order to maintenance in favour of a child who had attained majority and who was not unable to maintain itself by reason of any physical or mental abnormality or injury.
On 3rd June, 1974, the son filed a counter admitting that he had attained majority but claiming that he was still a student, unable to maintain himself.
The son claimed that the order in his favour had been validly passed under the old Code and continued to remain in force notwithstanding the enactment of the new Code.
On 9th May, 1975, the learned Magistrate allowed the application of the father under Section 127 of the Criminal Procedure Code 1974 and cancelled the order for maintenance made earlier in favour of the son.
Ranbir Singh, the son, filed a Revision Application before the Sessions Judge.
It was dismissed on 12th March, 1976.
The learned Sessions Judge held that the order made under Section 488 of the old Code could survive under Section 484(2) of the new Code if there was a corresponding provision under the new Code which enabled the award of maintenance to a major child.
Since there was no such corresponding provision the order under Section 477 in favour of Ranbir Singh ceased to be in force.
Ranbir Singh then filed a Revision Application before the High Court of Punjab and Haryana which was allowed on 5th December, 1977.
The High Court held that notwithstanding the change in the law which disentitled a major child from claiming maintenance, Section 125 of the new Code did correspond to Section 488 of the old Code.
Therefore, the order for maintenance in favour of Ranbir Singh was saved by Section 484(2) of the Code of 1974.
1974 Jagir Singh has preferred this appeal after obtaining special leave from this Court under Article 136 of the Constitution.
Shri R. section Narula, learned Counsel for the appellant contended that the Revision Application to the High Court was incompetent as it was barred by the provisions of Section 397(3) of the Code of Criminal Procedure 1974.
He argued that the right of the respondent to invoke the revisional jurisdiction of a superior Court became exhausted when he invoked the revisional jurisdiction of the Sessions Judge.
Shri Narula further contended that under Section 125 of the Criminal Procedure Code 1974, a major son who did not suffer from any physical or mental abnormality or injury which prevented him from maintaining himself was not entitled to get an order for maintenance in his favour and that an order made in favour of such a son under Section 488 Criminal Procedure Code of 1898 was not saved either by Section 484(2) of the Code of Criminal Procedure 1974 or Sections 6 and 24 286 of the General Clauses Act.
Shri section K. Mehta, learned Counsel for the respondent submitted that the revision application before the High Court could be treated and maintained as one directed against the order of the Sessions Judge rejecting the Revision Application made to him.
In any case he argued that the Revision Application could be treated as one under Article 227 of the Constitution.
He contended that the order of the Magistrate under Section 488 of the Criminal Procedure Code 1898 continued to be in force and that it could not be cancelled merely because Section 125 did not provide for the award of maintenance to a major son who did not suffer from any abnormality or injury.
The first question for consideration is whether the High Court was precluded from interfering with the order of the Magistrate in the exercise of its revisional jurisdiction by reason of the provisions of Section 397(3) of the Criminal Procedure Code 1974.
Section 397 which corresponds to Section 435 of the Criminal Procedure Code 1898 invests the High Court and the Sessions Judge with concurrent revisional jurisdiction over inferior criminal Courts within their jurisdiction The District Magistrate who also had revisional jurisdiction under Section 435 of the Code of Criminal Procedure 1898 is now divested of such jurisdiction.
In addition, there are, in the 1974 Code two important change Both of which are apparently designed to avoid delay and to secure prompt rather than perfect justice.
The first change is that introduced by Section 397(2) which bars the exercise of revisional power in relation to any interlocutory order passed in any appeal, enquiry, trial or other proceeding.
The second is that introduced by Section 397(3) which provides that if an application under the Section has been made by any person either to the High Court or to the Sessions Judge, and further application by the same person shall be entertained by the other of them.
We are concerned with this provision in this appeal.
The object of Section 397(3) is clear.
It is to prevent a multiple exercise of revisional powers and to secure early finality to orders.
Any person aggrieved by an order of an inferior Criminal Court is given the option to approach either the Session Judge or the High Court and once he exercises the option he is precluded from invoking the revisional jurisdiction of the other authority.
The language of Section 397(3) is clear and peremptory and it does not admit of any other interpretation.
We may also mention here that even under Section 435 of the previous Code of Criminal Procedure, while the Sessions Judge and the District Magistrate had concurrent jurisdiction, like present Section 397(3) previous Section 435(4) provides that if an application under the Section had been made either to the Sessions 287 Judge or District Magistrate no further application shall be entertained by the other of them.
In order to cross the hurdle imposed by Section 397(3) it was suggested that the revision application before the High Court could be treated as an application directed against the order of the Sessions Judge instead or an one directed against the order of the Magistrate We do not think that it is permissible to do so.
What may not be done directly cannot be allowed to be done indirectly, that would be an evasion of the statute.
It is a "well known principle of law that the provisions of an Act of Parliament shall not be evaded by shift or contrivance" (per Abbott C.J. in Fox vs Bishop of Chester(1) "To carry out effectually the object of a Statute, it must be construed as to defeat all attempts to do, or avoid doing, in an indirect or circuitous manner that which it has prohibited or enjoined" (Maxwell, 11th edition, page 109).
When the Sessions Judge refused to interfere with the order of the Magistrate, the High Court 's jurisdiction was invoked to avoid the order of the Magistrate and not that of the Sessions Judge.
The bar of Section 397(3) was, therefore, effectively attracted and the bar could not be circumvented by the subterfuge of treating the revision application as directed against the Session Judge 's order.
If the` revision application to the High Court could not be maintained under the provisions of the Criminal Procedure Code, could the order of the High Court be sustained under Article 227 of the Constitution, as now suggested by the respondent ? In the first place the High Court did not purport to exercise its power of superintendence under Article 227.
The power under Article 227 is a discretionary power and it is difficult to attribute to the order of the High Court such source of power when the High Court itself did not, in terms, purport to exercise any such discretionary power.
In the second place the power of judicial superintendence under Article 227 could only be exercised, sparingly, to keep subordinate Courts and Tribunals within the bounds of their authority and not to correct mere errors.
Where the statute banned the exercise of revisional powers by the High Court, it would indeed require very exceptional circumstances to warrant interference under Article 227 of the Constitution, since the power of Superintendence was not meant to circumvent statutory law.
In the third place it was doubtful if the High Court could exercise any power of judicial superintendence on the date of its order as the Constitution 42nd Amendment Act had by then been passed.
By the 42nd Amendment Act clause (5) was added in Article 227 of the Constitution and it says "Nothing in this article shall (1) (1824) 2 B & 635.
288 be construed as giving to a High Court any jurisdiction to question any judgment of any inferior Court which is not otherwise subject to appeal or revision".
Clause (5) of Article 227 introduced by the 42nd Amendment Act is a verbatim reproduction of Sub Section (2) of Section 224 of the Government of India Act, 1935 which it was held conferred powers of administrative superintendence only and not the power of Judicial Superintendence.
In the present case the revision application was, however, filed before the passing of the 42nd Amendment Act and it was therefore, argued by the learned Counsel for the respondent that the High Court could exercise the power of superintendence possessed by it before the 42nd Amendment.
We have serious doubts.
Article 227, before the 42nd Amendment, gave no right to any party.
An application invoking the High Court 's power of Superintendence did not create any vested right in the suitor.
There could, therefore, be no question of any vested right being taken away or not being taken away by the amendment.
It was just a question whether the High Court possessed the power of Superintendence on the date of the High Court 's order.
There is no dispute that it did not.
We do not wish to pursue the matter further as in our view there was no case to warrant interference under Article 227 of the Constitution.
In view of the foregoing discussion, the revision application to the High Court must be held to be incompetent.
In that view it is unnecessary to go into the question whether the original order under Section 488, Criminal Procedure Code, 1898 in favour of the respondent could be cancelled under Section 127 of the Criminal Procedure Code 1974, But the lower Courts went into the question at some length and detailed submissions were made before us.
We will express our opinion briefly.
Section 484(1) of the 1974 Code repeals the Code of Criminal Procedure 1898.
Section 484(2) (a) provides for the continuance and disposal of pending cases in accordance with the provisions of the old Code.
Section 484(2)(b) provides that 'all notifications published,, proclamations issued, powers conferred, forms prescribed, local jurisdictions defined, sentences passed and orders, rules and appointments made under the old Code and which are in force immediately before the commencement ' of the new Code, shall be deemed, respectively, to have been published, issued, conferred, prescribed, defined, passed or made under the corresponding provisions of the new Code.
In the present case the order of the Magistrate under Section 488 of the old Code awarding maintenance to the respondent was made on 19th May, 1973.
The new Code came into force on 1st April, 1974.
Therefore, the order was in force immediately before the commencement of the new Code.
289 It must, therefore, be deemed to have been made under the corresponding provision of the new Code.
The question,, therefore, is whether there is any provision of the new Code corresponding to the provision of the old Code under which maintenance was awarded to the respondent.
As we said, the respondent was awarded maintenance under Section 488 of the Criminal Procedure Code 1898.
Under Section 488 Criminal Procedure Code 1898 a person having sufficient means and neglecting or refusing to maintain his wife or his legitimate or illegitimate child unable to maintain itself could be ordered to make a monthly allowance for the maintenance of his wife or such child.
The word child used in Section 488 led to some controversy whether a person could be ordered to pay maintenance to a child who had attained majority but who was unable to maintain itself.
In Nanak Chand vs Chandra Kishore Agarwal & Ors.
(1) the Supreme Court held that the word 'child ' in Section 488 did not mean a minor son or daughter and that the real limitation was contained in the expression 'unable to maintain itself.
Irrespective of whether a son or daughter was a major or minor, a father was bound to maintain the son or daughter if such son or daughter was unable to maintain himself or herself.
Section 125 of the 1974 Code makes a slight departure.
Under this provision child who has attained majority is not entitled to be awarded maintenance unless such child is unable to maintain itself by reason of any physical or mental abnormality or injury.
According to Shri R. section Narula in view of the change it cannot be said that the new Code contains ally provision corresponding to the provision in the old Code which authorised the award of maintenance to a child who had attained majority and who was unable to maintain itself even if such child did not suffer from any physical or mental abnormality or injury.
Therefore, according to Shri Narula, Section 484(2) (b) does not save all order awarding maintenance in favour of a child who has attained majority and who does not suffer from any physical or mental abnormality or injury.
It is difficult to agree with the submission of Shri Narula.
To accept the submission would be to give the expression "corresponding provision" the meaning "identical provision".
Whenever an Act is repealed and re enacted there are bound to be changes and modifications.
To say that a modified provision dealing with the same subject matter in substantially the same manner as the original provision is not a corresponding provision would be to practically mullify the effect of a "Repeal and Savings" provision like Section 484(2) (b) of the new Code.
In the Shorter oxford English Dictionary Third Edition Vol.
I, the word 'correspond ' is said to mean ' (1) to answer to something else in the way H (1) A.l.
R 290 of fitness; to agree with; be conformable to; be congruous or in harmony with.
(2) To answer to in character or function; to be similar to '.
In Butterworths 'Words and Phrases Legally defined ' Second Edition Vol. 1, it is said " 'to correspond ', does not usually, or properly, mean 'to be identical with ', but 'to harmonise with ', or 'to be suitable to ' " and reference is made to Sackville West vs Holmesdale (Viscount) (1).
We are, therefore, of the view that Section 125 of the new Code corresponds to Section 488 of the old Code notwithstanding the fact that under the new Code a child who has attained majority and who does not suffer from any infirmity is not entitled to be maintained by the father.
We also note that there are no words in Section 484(2) (b) limiting its application to orders made and sentences passed which are not inconsistent with the provisions of the new Code.
There are no such limiting words as may be found as for example in Section 24 of the General Clauses Act which limits its application to an order, rule, etc. "so far as it is not inconsistent with the provisions re enacted".
This does not mean that statutory instruments made under the old Code and which are inconsistent with the provisions of the new Code continue to be effective.
All that Section 484(2) (b) says is that such statutory instruments shall be deemed to be made under the corresponding provisions of the new Code.
Their validity will have to be tested like any other statutory instruments made under the provisions of the new Code and they will have to answer the test whether they are consistent with the provisions of the new Code.
But, in the case of Judicial orders made and sentences passed such orders and sentences which have attained finality and which have created rights in parties do not have to answer the test of being consistent with the provisions of the new Code.
We, therefore, hold that the order for maintenance made in favour of the respondent must be deemed to be an order made under Section 125 of the new Code and that it does not automatically cease to be effective on the coming into force of the new Code.
The High Court arrived at this conclusion and thought that it was sufficient to hold in favour of the respondent and to allow the Revision Application.
We do not think that the High Court was right in stopping there.
The High Court should have further considered the question whether the order for maintenance which was deemed to be an order under Section 125 of the new Code could not be cancelled under the provisions of Section 127 of the new Code.
Once the, order under Section 488 is deemed to be an order under Section 125 of the new Code, it must be so deemed for all purposes including the application of Section 127 of the new Code.
Section 127 provides for consequential orders upon proof of a change in the circumstance of any person (1) (1878) L.R. 4 l. 543.
291 receiving, under Section 125, a monthly allowance, or ordered under the A same Section to pay a monthly allowance to his wife, child, father or mother, as the case may be.
The admitted attainment of majority of the respondent and the change of the law were surely circumstances which entitled the appellant to have the order in favour of the respondent cancelled.
We accordingly allow the appeal and set aside the judgment of the High Court.
B M.R. Appeal allowed.
| IN-Abs | Ranbir Singh is Jagir Singh 's son from his separated first wife.
Ill 1971 he and his mother applied for maintenance under section 488 of Cr.P.C., 1898.
Although Ranbir Singh was a major, maintenance was awarded to him on the ground that he was a student unable to maintain himself.
In April 1974, the new Cr.
P.C. came into force, and under section 127 jagir Singh applied for cancellation of the maintenance order, on the ground that the major son WAS not prevented from maintaining himself through any infirmity or abnormality, and is not entitled to maintenance under the new code.
The respondent contended that the maintenance order had been validly passed under the old Code, and continued to remain in force notwithstanding the enactment of the new Code but the Magistrate cancelled the maintenance order, Ranbir Singh 's Revision Application was dismissed by the Sessions Court, on the ground that the order made under section 488 of the Cr.P.C., 1898 would not survive under section 484(2) of the Cr.
P.C. 1974 due to the absence of a corresponding provision under the new Code, enabling his maintenance.
He then applied to the High Court for a Revision.
The High Court allowed the Revision holding that 9. 125 of the Cr.
P.C., 1974 did correspond with section 488 of the Cr.
P.C. 1898.
The appellant contended that Ranbir Singh 's Revision application to the High Court was barred by section 397(3), Cr.P.C., 1974, and was incompetent, and that his right to invoke revisional jurisdiction of a superior court became exhausted when he moved the Sessions Court in Revision.
He further contended that the maintenance order was not saved either by section 484(2), Cr.
P.G 1974 or section 6 and 24 of the General Clauses Act.
The respondent submitted that his Revision application before the High Court could be treated and maintained, as, one directed against the Sessions Judge 's order rejecting his Revision application, or It could be treated as one under article 227 of the Constitution.
Allowing the appeal, the Court.
^ HELD: (1) The power under Act.
227 is discretionary.
The power of judicial superintendence under it could only be exercised sparingly to keep subordinate courts and Tribunals within the bounds of their authority, and not to collect mere errors.
Where the statute banned the exercise of revisional 283 powers by the High Court, it would require very exceptional circumstances to A warrant interference under article 227, since the power of superintendence was not meant to circumvent statutory law.
By the 42nd.
Amendment Act, clause (5) was added in article 227, which is a verbatim reproduction of section 224(2) of the Government of India Act, 1935, conferring powers of administrative superintendence only, and not the power of judicial superintendence.
[287F H, 288A] (2) In the Cr.
Of 1974 the District Magistrate is divested of his revisional jurisdiction over inferior criminal courts.
In addition, there are two important changes apparently designed to avoid delay and to secure prompt justice.
The first change is introduced by section 397(2) which bars the exercise of revisional power in relation to any interlocutory order passed in any appeal, enquiry, trial or other proceeding.
The second change is introduced by section 397 (3) under which any person aggrieved by an order of an inferior criminal court, is given the option to approach either the Sessions Judge or the High Court, and once he exercises the option, he is precluded from invoking the revisional jurisdiction of the other authority.
The object is, to prevent a multiple exercise of revisional powers and to secure early finality to orders.
[286C F] For vs Bishop of Chestor, ; ; Maxwell (11th Edn. page 109); applied.
(3) Whenever an Act is repealed and re enacted, there are bound to be changes and modifications.
To say that a modified provision dealing with the same subject matter in substantially the same manner as the original provision is not a "corresponding provision", would be to practically nullify the effect of a "Repeal and Savings" provision like section 484 (2) (b) of the new Code.
"To correspond" does not usually, or properly, mean to be identical with but to harmonise with, or to be suitable to.
There are no words in section 484 (2) (b) limiting its application to orders made, and sentences passed, which are not inconsistent with the provisions of the new Code.
All that section 484(2)(b) says is that such statutory instruments shall be deemed to be made under the corresponding provisions of the new Code.
Their validity will have to be tested like any other statutory instrument made under the provisions of the new Code.
There validity will have to be tested like any other statutory made under the provisions of the with the provisions of the new Code.
and they will have to answer the test whether they are inconsistent with the provisions of the new Code.
But in ease of judicial orders made, and sentences passed, such orders and sentences which have attained finality and which have created rights in parties, do not have to answer the test of being consistent with the provisions of the new Code.
[289F H, 290B E] Butterworth 's (Words and Phrases legally defined)(2nd Edn Vol.
I), Shorter oxford English Dictionary (3rd Edn.
I); Sackville West vs Holmsdale (Viscount), [1870] LR. ; applied.
(4) Section 125 of the new Code corresponds to section 488 of the Cr.P.C., 1898 notwithstanding the fact that under the Cr.P.C. Of 1974, a child who has attained majority, and who does not suffer from any infirmity, is not entitled to be maintained b`y the father.
Once an order under section , is deemed to be an order under section 125 of the Cr.
P.C. 1974, it must be to deemed for all purposes, including the application of section 127 of the new Code.
[290B, G] 20 817 SCI/78 284 Nanak Chand vs Chandra Kishore Aggarwal & Ors., ; ; referred to.
|
N: Criminal Appeal No. 124 of 1972 350 Appeal by Special Leave from the Judgment and order dated 24 11 1971 of the Delhi High Court in Criminal Appeal No.54 of 1971.C. P. Lal for the Appellant.
H. R. Khanna and M. N. Shroff for the Respondent.
The Judgment of the Court was delivered by DESAI, J.
The; appellant in this appeal by special leave limited to the determination of the question: whether the sanction is valid in law or not, has been convicted for offences under section 5(2) read with section S(1) (d) of the Prevention of Corruption Act, 1947 ( 'Act ' for short), and section 161 of the Indian Penal Code, and was sentenced to suffer rigorous imprisonment for 18 months on each could and a fine of Rs. 2000/ , in default to suffer further rigorous imprisonment for a period of two months, for an offence under section 5(2) of the Act.
His appeal being Criminal Appeal No. 54 of 1971 was dismissed by the High Court of Delhi and the conviction and sentence were confirmed.
As the leave is limited to the question of the validity of sanction ac corded under section 6 of the Act, it is not necessary to set out in detail the prosecution case.
Briefly stated, the prosecution case is that the appellant who was employed at the relevant time as Investigator in the office of the Chief Controller of Imports & Exports (C.C.I.E. for short), accepted from one P.T. Toprani an amount of Rs. 250/ by way.
of illegal gratification which was not his legal remuneration in presence of witnesses on 18th June 1969 at about 5.30 p.m. near Gujarati Samaj; Sabha, Delhi.
D. section P. Badri Sharma appeared as soon as the trap arranged by him materialised and recovered the amount of Rs. 2501/ from the appellant.
After completing the investigation the appellant was charge sheeted for the offences hereinabove mentioned.
Section 6 of the, Act forbids the Court from taking cognizance, inter alia, of offences punishable under section 161, IPC and under sub section
(2) of s 5 of the Act except with the previous sanction of the authority therein set out.
Necessary sanction was accorded by the Jt.
C.C.I.E.
On 26th November 1969.
The relevant portion of the sanction reads as under: "Now, therefore, I, section P. Chablani, being the authority competent to remove the said Shri L. section Srivastava, from office do hereby accord sanction under section 6(1) (c) of the prevention of Corruption Act, 1947 for the prosecution of the said Shri L. section Srivastava, for the said offences under section 161, I.P.C. and 5(2) read with 5(1)(d) of Act II of 1947 and in 351 any other offence punishable under the provisions of law, in respect of the facts aforesaid and for the taking of cognizance of the said offences by a court of competent jurisdiction".
Mr. H. R. Khanna, learned counsel who appeared for the respondent raised a preliminary objection.
It was urged that the appellant died during the pendency of this appeal and, therefore, the appeal abates and cannot be proceeded with.
Simultaneously it was urged that if the appeal were not to abate on the only ground that the appellant was also sentenced to pay a fine of Rs. 200/ and, therefore.
it may he said that right to property of the legal representatives may he adversely affected and, therefore, they would be entitled to continue the appeal, the respondent State is prepared to concede that the sentence of fine may be set aside.
Section 394 of the Criminal Procedure Code which provides for abatement of appeals reads as under: "394.
(1) Every appeal under section 377 or section 378, shall finally abate on the death of the accused.
(2) Every other appeal under this Chapter (except all appeal from a sentence of fine) shall finally abate on the death of the appellant: Provided that where the appeal is against a conviction and sentence of death or of imprisonment, and the appellant dies during the pendency of the appeal any of his near relatives may, within thirty days of the (death of the appellant, apply to the Appellate Court for leave to continue to the appeal; and if Leave is granted, the appeal shall not abate.
Explanation In this section, "near relative" means a parent, spouse, lineal descendant, brother or sister".
The appeal by the appellant is not one under section 377 or section 378 or the Cr.
P.C. and, therefore, sub section
(1) of section 394 will not be attracted The trial for an offence under section 161 IPC and section 5(2) of the Act would be governed by the provisions of Criminal Law Amendment Act, 1952.
lt envisages setting up of Court of special Judge.
Section 8(3) of the Criminal Law Amendment Act provides that the Court of Special Judge shall be deemed to be a Court of Sessions.
Section 9 confers power upon the High Court to exercise all powers of appellate Court as if the Court of Special Judge were a Court of Sessions trying cases within the local limits of the jurisdiction of the High Court.
352 The present case would, therefore, be governed by sub section (2) of s.394, Cr.
P.C. It becomes clear from the proviso to section 394(2), Cr.
P.C. that where the appeal is against the conviction and sentence of imprisonment and the appellant dies during the pendency of the appeal, any of his near relatives may, within the time prescribed therein, apply to the appellate court before which the appeal is pending for leave to continue the appeal and if the leave is granted the appeal shall not abate.
The appellant has preferred the appeal against his conviction and sentence of imprisonment as also sentence of fine.
After his death his near relations as contemplated in the Explanation to sub section
(2) of section 394, Cr.
P.C. applied by Criminal Miscellaneous Petition No. 559 of 1978 to continue the appeal and this Court granted substitution of such near relations by its order dated 28th March 1978 and thereby granted leave to continue the appeal.
Therefore, the near relations of the deceased can continue the appeal and even if the respondent State concedes that the sentence of fine be set aside yet the appeal would not abate because the appeal against conviction and sentence of imprisonment would not abate if leave is granted to the near relations of the deceased to continue the appeal.
Such Leaving having been granted, the appeal would not abate.
There is thus no merit in the preliminary objection and it must be negatived.
Section 6 of the Act which provides for necessity of previous sanction for prosecution for any of the offences under the Act reads as.
under: "6.
(1) No court shall take cognizance of an offence punishable under section 161 ( or section 164) or section 1165 of the Indian Penal Code, or under sub section (2) or Sub section (3A) of section 5 of this Act, alleged to have been committed by a public servant, except with the previous sanction, (a) in the case of a person who is employed` in connection with the affairs of the Union and is not removable from his office save by or with the sanction of the State Government, of the Central Government.
(b) in the case of a person who is employed in connection with the affairs of a State and is not removable from his office save by or with the sanction of the Central Government, of the State Government.
(c) in the case of any other person, of the authority competent to remove him from his office.
(2) Where for any reason whatsoever any doubt arises whether the previous sanction as required under sub section 353 (1) should be given by the Central or State Government or any other authority, such sanction shall be given by that Government or authority which would have been competent to remove the public servant from his office at the time when the offence was alleged to have been committed".
Mr. Lal for the appellant contended that as the appellant was an Investigator in the office of the C.C.I.E. which at best was a Department under the over all control of the Ministry of Foreign Trade and Supply.
Government of India, the sanction to prosecute him could only be given by the Government of India.
In the alternative it was contended that as the C.C.I.E. is head of the office, he alone could accord sanction for prosecution as contemplated by section 6 and, therefore.
the sanction accorded by Jt.
C.C.I.E., an officer subordinate to C.C.I.E .
was ab initio void and the Court could not have taken cognizance of the offence.
Mr. Khanna for the respondent on the other hand contended that this case would be governed by Central Civil Services (Classification, Control and Appeal Rules, 1965 ( '1965 Rules ' for short), and in view of S.R.O. 631 issued by the President in exercise of the powers D` conferred by sub rule (2) of rule 11, clause (b) of sub rule (2) of rule 14, and sub rule (2) of rule 23 of the Central Civil Services (Classification, Control and Appeal) Rules, 1957 ( '1957 Rules ' for short), which order was saved by rule 34 of the 1965 Rules and, therefore, the Jt.
C.C.I.E. was both the appointing and disciplinary authority including the authority competent to remove the appellant from service and was accordingly competent to accord sanction under section 6(1)(c) of the Act.
Rule 11(2) of 1957 Rules provides that all appointments to Central Civil Posts, classes II, III and IV, included in the General Central Service shall be made by the authorities specified in that behalf by a general or special order of the President, or, where no such order has been made, by the authorities specified in the Schedule appended to the Rules.
Similarly, rule 14(1) provides that the President may impose any of the penalties including one of removal or dismissal from service as envisaged by rule 13 on any Government servant.
Sub rule (2) of rule 14 provides that without prejudice to the provisions of sub rule (1), any of the penalties specified in rule 1 may be imposed under sub clause (b) in respect of person appointed to a Central Civil post included in the General Central Services by the authority specified in this behalf by a general or special order of the President or where no such order has been made by the appointing authority or the authority specified in the Schedule in this behalf.
The entry at p. 38 provides that the appointing and disciplinary authority in respect of posts in non Secretariat offices other than posts in respect of which specific provision has been made by a general or special order 354 of the President, the head of office would be both the appointing and the removing authority.
Now, undoubtedly in respect of the office of the C.C.I.E., the C.C.I.E. would be the head of office.
The office of the C.C.I.E. is a non Secretariat office.
May be, the administrative department in respect of this office would be the Ministry of Foreign Trade and Supply.
But C.C.I.E. is a separate office with its own establishment and undoubtedly head of office would be the C.C.I.E.
The President in exercise of the power conferred by sub rule (2) of rule 11 and clause (b) of sub Rule (2) of rule 14 of the 1957 Rules has made a special order as contemplated by rule 11(2) and rule 14(2)(b) as under: "S.R.O. 631 In exercise of the powers conferred by sub rule (2) of rule 11, clause (b) of sub rule (2) of rule 14 and sub rule (1) of rule 23 of the Central Civil Services Classification, Control and Appeal) Rules, 1957, The President hereby directs that (1) in respect of the posts in the General Central Service, Class II specified in column 1 of Part I of the Schedule to this order, the authority specified in column 2 shall be the Appointing Authority and the authority specified in column 3 shall be the Disciplinary Authority in regard to the penalties specified in column 4, (2) in respect of the posts in the General Central Service.
Class III and the General Central Service, Class II specified in column 1 of Parts II and III of the said Schedule, the authority specified in column 2 shall be the Appointing Authority ! and the authority specified in column 3 and 5 shall be the Disciplinary Authority and Appellate Authority respectively in regard to the penalties specified in column 4".
A comprehensive Schedule is annexed to this order. 'The relevant entry is as under: Description of Post Appointing Authority competent Appellate authority to impose penalties authority penalties which it may impose (with reference to item numbers in rule 13) Authority Penalties 1 2 3 4 5 Organisation of the Chief Controller of Imports and Exports All posts in Headquarters office Joint Chief Joint Chief All Chief Controller of Controller ofController of Imports & Imports & Imports & Exports Exports Exports 355 The entries in the Schedule appended to 1957 Rules will be effective and operative subject of course to any general or special order made by the President in this behalf.
It was, however, contended that by rule 34 of 1965 Rules, 1957 Rules were repealed and, therefore, the order issued by the President in exercise of the powers conferred by sub rule (2) of rule 11 and various other rules bearing on the point would stand repealed and the order of the President would not be effective unless a similar order is issued by the President under the corresponding rule 12 of 1965 Rules.
Rule 12(1) and (2) of 1965 Rules is in pari materia with rule 14 of 1957 Rules.
Rule 12 of 1965 Rules confers power on the President to impose any of the penalties specified in rule 11 on any Government servant.
Sub rule (2)(b) provides that any person appointed to a Central Civil Post included in the General Central Service by the authority specified in this behalf by a general or special order of the President or where no such order Has been issued, by the appointing authority specified in the Schedule in this behalf, may impose any of the penalties specified in rule 11 which includes the penalty or removal from service.
Therefore, the President has the power to issue any general or special order to confer power to impose penalties as specified in rule II on any authority other than the one specified in the Schedule in this behalf.
Now, if the order issued by the President, S.R.O. 631 under corresponding rule l l and the relevant rules bearing on the subject of 1957 Rules is not shown to be inconsistent with any of the Rules included in 1965 Rules.
obviously such order would be saved Tender rule 34.
No inconsistency was shown to us as contemplated by rule 34.
Therefore, indisputably the order issued by the President, S.R.O. 631 along with the Schedule would be saved.
Once S.R.O. 631 is saved, the relevant entry hereinabove quoted in respect of the organisation of C.C.I.E. would be saved.
Accordingly the entry in the order issued by the President would supplant the corresponding entry in 1965 Rules and would have to be substituted for the entries in the relevant item in the Schedule.
The necessary consequence would be that in the case of the organisation of the C.C.I.E. for all posts in Headquarters office, Jt.
C.C.I.E. would be both the appointing and the disciplinary authority having the power to remove from service such persons belonging to Class III services.
Now, the appellant was indisputably holding a post in Class III service in the Headquarters office of the organisation of C.C.I.E.
He was at the relevant time holding, the post of Investigator which was admittedly a Civil post in Class III service in the office of C.C.I.E.
Indisputably, therefore, Jt.
C.C.I.E. would be both the appointing and disciplinary authority with power to remove him from service.
Therefore, Jt.
C.C.I.E. would be competent to accord sanction as envisaged by section 6(1)(c) of the Act.
Sanction 356 in this case having been granted by the Jt.
C.C.I.E., it was valid.
There is thus no substance in the contention of Mr. Lal.
Mr. Lal in this connection drew our attention to a decision in R. J. Singh Ahluwalia vs The State of Delhi(1) The appellant in that case was at the relevant time working as Assistant in Co ordination III of D.G.T.D. at Udyog Bhavan, New Delhi.
His contention was that sanction accorded by Shri K. Rajaram, Deputy Secretary to Government of India in the Ministry of Industrial Development and Company Affairs (Department of Industrial Development) was not valid and that he could only have been prosecuted under a sanction that may be accorded by the Home Ministry.
In respect of this contention it was conceded on behalf of the State that in the absence of such sanction the prosecution must fail.
The judgment proceeds on concession and not on any analysis or examination of the relevant provisions.
Therefore it in no way helps the appellant in this case.
This being the only point that could be raised in this appeal by limited leave and such contention being without merit, the appeal fails.
and is dismissed.
As the appellant is dead there is no question of his surrendering to Bail.
S.R. Appeal dismissed.
(1) A.I.R. 1971 S.C. 1552.
| IN-Abs | The appellant who was working as an investigator in the office of the Chief Controller of Imports and Exports was charged, found guilty and convicted and sentenced to suffer rigorous imprisonment for 18 months on each count for an offence under Sections 5(1) (d) and 5(2) of the Prevention OF Corruption Act, 1947 and section 161 I.P.C. and a fine of Rs. 200/ or in default to undergo further rigorous imprisonment under section 5(2) of the Act.
His appeal to the High Court was dismissed and the conviction and sentence were confirmed.
Special leave was granted by the Supreme Court limited to the question.
Of validity of sanction accord under section 6 of the Prevention of Corruption Act, 1947.
The appellant died during the pendency of the appeal and his near relatives were granted permission to continue the appeal.
Dismissing the appeal, the.
Court ^ HELD 1.
The preliminary objection of the State as to the abatement of the appeal because of the death of the appellant taking into account preparedness to conclude that the sentence might he set aside must be negatived.
[352D] (a) As per the proviso to section 394(2) of the Criminal Procedure Code, 1973, where the appeal is against the conviction and sentence of imprisonment and the appellant dies during the pendency of the appeal, any of his near relatives may, within the time prescribed therein, apply to the appellate Court before which the appeal is pending for leave to continue the appeal and if the leave is granted the appeal shall not abate.
[352A B] (b) The appellant, in the, instant case, has preferred the appeal against his conviction and sentence of imprisonment and also sentence of fine.
After his death his near relatives as contemplated in the Explanation to sub section (2) of section 394 Crl.
P.C., applied to continue the appeal and were granted leave to continue the appeal.
Therefore, the near relations of the deceased can continue the appeal and even if the respondent State concedes that the sentence of fine be set aside yet the appeal would not abate if leave is granted o the near relation of the deceased to continue the appeal.
[352C D] 349 2. 'The sanction accorded, for prosecution of the appellant under section 6 of the Prevention of Corruption Act, 1947 by the Joint Chief Controller of Imports and Exports is valid in law: [355H, 356A] (a) The instant case is governed by Central Civil Services (Classification, Control & Appeal) Rules, 1965 and in view of S.R.O. 631 issued by the President, in exercise of the power conferred by sub rule (2) of rule 11, clause (b) of sub rule (2) of rule 14, and sub rule (2) of rules 23 of the Central Civil Services (Classification, Control & Appeal) Rules, 1957, which order was saved by rule 34 of the 1965 Rules.
[353C D] (b) Rule 12(1) and (2) of 1965 Rules is in pari materia with rule 14 of 1957 Rules.
Rule 2 of 1965 Rules confers power on the President to impose any of the penalties specified in rule 11 on any Government servant.
Sub rule (2) (b) provides that any person appointed to a Central Civil Post included in the General Central Service by the authority specified in this behalf by a general or special order of the President or where no such order has been issued, by the appointing authority specified in the Schedule in this behalf, may impose any of the penalties specified in rule 11 which includes the penalty of removal from service.
Therefore, the President has the power to issue any general or special order to confer power to impose penalties as specified in rule 11 on any authority other than the one specified in the Schedule in this behalf.
If the order issued by the President.
S.R.O. 631 under corresponding rule 11 and the relevant rules bearing on the subject of 1957 Rules is not shown to be inconsistent with any of the Rules included in 1965 Rules, obviously such order would be saved under rule 34.
There being no inconsistency as contemplated by Rule 34, indisputably the order issued by the President S.R.O. 631 along with the schedule would be saved.
Once S.R.O. 631 is saved, the relevant entry in the schedule in respect of the origination of C.C.I.E. would be saved.
Accordingly the entry in the order issued by the President would supplant the corresponding entry in 1965 Rules and would have to be substituted for the entries in the relevant item in the Schedule.
The necessary consequence would be that in the case of the organization of The C.C.I.E. for all posts in Headquarters office, lt. C.C.I.E. would be both the appointing and the disciplinary authority having tho power to remove from service such persons belonging to Class III services.
Now, the appellant was indisputably holding a post in Class III service in the Headquarters office of the organisation of C.C.I.E.
He was at the relevant time holding the post of Investigator which is admittedly a Civil Post in Class III service in the office of C.C.I.E.
Indisputably, therefore.
C.C.I.E. would be both the appointing and disciplinary authority with power to remove him from service.
Therefore, Jt.
C.C.I.E. would be competent to accord sanction as envisaged by section 6(1)(c) of the Act.
[355B H] The fact that the administrative department in respect of the office of C.C.I.E. is the Ministry of Foreign Trade & Supply does not make any difference because C.C.I.E. is a separate office with its own establishment.[1354A] R. J. Singh Ahluwalia vs State of Delhi, A.L.R. ; distinguished.
|
N: Criminal Appeal No. 137 Of 1972.
Appeal by Special Leave from the Judgment and order dated 27 4 72 of the Allahabad High Court in Govt.
Appeal No. 128/69.
Yogeshwar Prasad, section K. Bagga and Miss Meera Bali for the appellant.
O. P. Rana for the Respondent.
The Judgment of the Court was delivered by KAILASAM, J.
This appeal is by special leave by Sambhu Dayal against the judgment of the High Court of Allahabad allowing an appeal by the Government of U.P. and setting aside the order of acquittal and restoring the conviction under sections 8 and 16 of the Prevention of Food Adulteration Act and the sentence of six months rigorous imprisonment passed by the Sub Divisional Magistrate, Jalaun.
On 1st November, 1966, Shri Raja Ram Bhatt, the Food Inspector, went to the village and found the appellant Shambhu Dayal bringing cow 's milk to Orai for sale.
The Food Inspector served a notice OD the petitioners and took sample of the milk weighing 660 grams against cash payment of 0.60 P.
He divided it in three equal parts and kept each part in a different bottle.
He added 16 drops of formalin in each bottle and then sealed the same.
One of the sealed bottles was 343 given to the petitioner.
Another bottle was sent to the Public Analyst, Lucknow, for analysis.
The Public Analyst submitted his report dated 14th December, 1966 giving his opinion that the sample was deficient in non fatty solid contents by about 15 per cent.
The charge sheet was filed on 5th February, 1967 by the Food Inspector after obtaining the sanction of the District Medical officer of Health, Jalaun at Orai.
The appellant pleaded not guilty and denied that he had sold the milk.
According to him he was taking the milk to one Pandey of village Kharra when the Food Inspector took some of it without making any payment to him.
The trial court accepted the case of the prosecution and on 10th November, 1967 convicted the appellant under section 8 read with section 16 of the Prevention of Food Adulteration Act and sentenced him to six months rigorous imprisonment.
The appellant preferred a Criminal Appeal to the Court of Sessions.
By its judgment dated 12th October, 1968 the Sessions Judge allowed the appeal and set aside the conviction and sentence imposed upon the appellant.
The State of U.P. preferred an appeal to the High Court of Allahabad.
A Division Bench of the High Court allowed the appeal and restored the conviction and sentence imposed upon the appellant by the trial court.
Miss Meera Bali, the learned advocate appearing for the appellant raised three contentions.
She submitted that the Prevention of Food Adulteration Act came into force in 1954 and before the amending Act 49 of 1964 came into force the power to appoint the Public Analyst and Food Inspector rested with the State Government only.
After the amending Act, Act 49 of 1964, sections 8 and 9 were substituted by new sections 8 and 9 which provided that the Central Government or the State Government may by notification in the official Gazette appoint a Public Analyst and a Food Inspector.
The amending Act came into force in 1964.
The State Government by notification dated 15th April, 1968, appointed Food Inspectors with effect from 1st March, 1965 and by notification dated 23rd March, 1968 appointed Dr. R. section Srivastava as the Public Analyst with effect from 1st March, 1965.
The submission of the learned counsel is that when the offence took place on 1st November, 1966 neither the Food Inspector nor the Public Analyst was empowered to function as Food Inspector or Public Analyst as the notification was made very much later on 15th April, 1968 and 23rd March, 1968 respectively.
It was submitted that the notification cannot give retrospective effect to the appointment from 1st March, 1965.
The Plea was accepted by the learned Sessions Judge but the High court held following the decision of the Allahabad High Court in Nagar 344 Mahapalika vs Ram Dhani(1) that the notification relating to the appointment of the Food Inspector and the Public Analyst issued under the unamended Act was valid even after the amendment.
Sections 8 and 9 of the Food Adulteration Act, 1950 before the amending Act 49 of 1964 stood thus: "8.
Public Analysts.
The State Government may, by notification in the official Gazette, appoint such persons as it thinks fit, and, possessing such qualifications.
as may be prescribed to be Public Analyst and define local areas over which they shall exercise jurisdiction.
(1) Subject to the provisions of Section 14, the State Government, may by notification in the official Gazette, appoint persons in such number as it thinks fit, having the prescribed qualifications to be Food Inspectors for the purpose of this Act, and they shall exercise their power within such local areas as that Government may assign to them;" The relevant amendment to sections 8 and 9 is contained in section 5 of the amending Act which reads as follows: "5.
Substitution of new Sections for Sections 8 and 9.
For sections 8 and 9 of the Principal Act, the following sections shall be substituted, namely: 8.
Public Analysts: The Central Government or the State Government may, by notifications in the official Gazette appoint such persons as it thinks fit, having the prescribed qualifications to be Public Analyst for such local areas as may be assigned to them by the Central Government, as the same may be: * * * * 9.
Food Inspectors .(1) The Central Government or the State Government may, by notification in the official Gazette, appoint such persons as it thinks fit, having the & prescribed qualifications to be Food Inspectors for such local areas as may be assigned to them by the Central Government , or the State Government as the case may be: * * * * On the facts it is not disputed that on the date of the offence neither a Public Analyst nor a Food Inspector was appointed after the amending Act 49 of 1964.
The learned counsel would like us to read (1) A.I.R. 1971 All. 53. 345 sections 8 and 9 of the Act as repealing the old sections and empowering the Central Government or the State Government to appoint the Public Analyst or the Food Inspector after the coming into force of the amending Act implying that any prior appointment of a Public Analyst or Food Inspector stood repealed.
We are usable to accept this contention.
lt is not necessary for us to go into the question whether the notifications of the Government in 1968 Appointing the Public Analyst and the Food Inspector with retrospective effect from March, 1968 are valid or not for we can rest our decision on the ground that being an amending Act the appointment of the Public Analyst and the Food Inspector made by the State Government before the amendment continued to be valid.
In Nagar Mahapalika Lucknow vs Ram Dhani, (supra) it was held that when the Food Inspector and the Public analyst were appointed under notifications Dated 27th July, 1959 issued under the provisions of , the effect of the amending Act, Act of 49 of 1964, was only to the extent that the Central Government was given concurrent powers with the State Government in the matter of appointment of Public Analyst through notification and that Act 49 of 1964 did not repeal any part of the Food Adulteration Act which then existed and amendments in the specific provisions of the said Act which were affected by Act 49 of 1964 will not have the effect of repeal of any.
part of the said Act.
We agree with the view taken by the Bench of the Allahabad High Court.
The amended sections 8 and 9 do not in any way repeal Sections 8 and 9 as they originally stood.
As to the effect of the amendment the language of the amending sections will have to be examined to field out whether the original sections were intended to be repealed.
The amending provisions should be held as part of the original statute.
Whenever the amended section has to be applied subsequent to the date of the amendment the unamended provisions of the Act have to be read along with the amended provisions as though they arc part of it.
Reading the amended section we find that there is no provision, express or implied, repealing the existing provisions or the rules made thereunder.
The section will have to be construed as being in addition to what had already existed.
The effect will be that the power of the State Government which already existed under the unamended section and the appointments made thereunder will be preserved and the action taken under the amended sections will be in addition to the powers of the State Government and the appointments which had already been made.
The second point that was raised by the learned counsel was that the sample was sent to the Public Analyst on 5th November, 1966 4 978SCI/78 346 but was analysed only on 14th December, 1966.
As the analysis was after 44 days it was submitted that the milk would not have been in a fit condition for analysis.
This contention was not accepted by the learned Sessions Judge who found that there was no evidence about the sample of milk being pasteurised or its despatch under refrigeration.
But the report of the Public Analyst clearly showed that no change had taken place in the constituents of milk which would have interfered with the analysis.
Though this point was not pressed before the High Court the learned counsel relying on a decision of the Nagpur High Court in Dattappa Mahadappa vs Secretary, Municipal Committee, Baldana, (1) submitted that where milk is analysed by the Analysts a week after the samples were taken no presumption of adulteration can be drawn in the absence of proof of the manner in which the samples were sent and the condition in which the milk was when the samples were received by him.
The learned Judge after referring to the various passages in the text book "Milk: Production and Control" by Harvey and Hill observed that taking into account that the milk was analysed by the Analyst almost a week after the samples were taken, the absence of proof of the manner in which the samples were sent and the condition in which the milk was when the samples.
were received by him detracts from the value of anlyst 's certificate.
In the present case there is evidence of the Food Inspector that he added formalin as a preservative and the report of the Public Analyst that no change had taken place in the constituents of milk which wold have interfered with the analysis.
This statement of the analyst was not challenged in any of the courts below.
Apart from the statement of the Analyst not having been questioned, in this case it is admitted that formalin was added to the milk by the Food Inspector.
The Food Inspector added 16 drops of formalin in each of the bottles and had them sealed properly.
Rule 20 of the Prevention of Food Adulteration Rules requires that in the case of milk, Cream, Dahi, Khoa and Gur a preservative known as 'formalin, that is to say, a liquid containing about 40 per cent of formaldehyde in aqueous solution in the proportion of 0.1 ml (two drops) for 25 ml or 25 grams shall be added The High Court of Allahabad in Babboo vs State(2) held that in the case.
of cow 's milk to which necessary quantity of formalin has been added according to Rules and which has been kept in normal circumstances, it retains its character and is capable of being usefully analysed for a period of about ten months.
It is unnecessary for us to specify the period for which the sample will remain unaffected but so far as this case is concerned there is the clear evidence of Public Analyst that no (1) A.I.R. 1951 Nag.
(2) A.I.R. 1970 All. 122.
347 change had taken place in the constituents of milk which would interfere with the analysis.
As this statement has not been challenged we see no reason for accepting the contention of the learned counsel that the analysis of the milk after 44 days cannot be accepted.
This contention has also to be rejected.
Lastly, the learned counsel submitted that the prosecution has not established that the appellant was taking the milk for the purpose of calc.
This plea was rejected by the High Court, accepting the evidence of P.W. 2 that he know the appellant personally and that the appellant carried on the business of selling milk in Orai and possessed a licence in selling milk in the preceding years and also in the current year.
According to the witness the appellant brought milk from the rural areas and sold it in Orai in the current year and the milk was sold by him to hotel keepers.
True evidence of this witness was accepted by the High Court and we see no reason the reject the testimony of P.W. 2.
T he plea of the appellant that he was taking the milk for supplying it to one Triyugi Narain Pandey was rightly rejected by the High Court.
In the result we are unable to accept any of the submissions made by the learned counsel for the appellant.
We confirm the conviction under Section 8(1) read with section 16 of the .
The sentence being the minimum prescribed under the Act it cannot be interfered with.
In the result the appeal is dismissed.
S.R. Appeal dismissed.
| IN-Abs | The appellant was convicted under section 8 read with section 16 of the Prevention of Food Adulteration Act by the Sub Divisional Magistrate, Jalaun and sentenced to six months rigorous imprisonment, the minimum sentence awardable under the P.O.F.A. 1950.
In appeal the Session Court reversed it, but in further appeal by the State against his acquittal and reversal of the trial court decision, the High Court of Allahabad set aside the Session 's orders and restored that of the trial court.
Dismissing the appeal by special leave the Court, ^ HELD: 1.
Sections 8 and 9 of the Prevention of Food Adulteration Act, 1950 as amended by section S of the Amending Act 49 of 1964 cannot be read as repealing the old sections and empowering the Central Government or the State Government to appoint the Public Analyst or the Food Inspector after the coming into force of the amending Act, implying that any prior appointment o '.
a Public Analyst or Food Inspector stood repealed.
[345A] 2 Whether the notifications of the Government in 1968 appointing the public Analyst and the Food Inspector with retrospective effect from March 05 are valid or not need not be looked into because being an amendment Act, the appointment of the Public Analyst and the Food Inspector made by the State Government continued to be valid.
[345B C] 3.
The amended sections 8 and 9 do not in any way repeal sections 8 and 9 as they originally stood.
As to the effect of the amendment the language of the amending sections will have to be examined to find out whether the original conditions were intended to be repealed.
The amending provisions should be held as part of the original statute.
[345D E] 4.
Whenever the amended section has to be applied subsequent to the date of the amendment, the unamended provisions of the Act have to be read along with the amended provisions as though they are part of it.
Reading the amended section, it is clear that there is no provision, express or implied, repealing the existing provisions or the rules made thereunder.
The section will have to be construed as being in addition to what had already existed.
The effect will be that the power of the State Government which already existed under the unamended section and the appointments made thereunder preserved and the action taken under the amended sections with be in addition to the powers of the State Government and the appointments which had already been made.
[345F G] 342 Nagar Mahapalika, Lucknow vs Ram Dhani, A.I.R. 1971 All. 53 approved.
The contention that the analysis of the milk after 44 days must yield to an adverse inference against the State as to adulteration cannot be accepted.
[346A] In the present case there is evidence of the Food Inspector that he added formalin as a preservative and the report of the Public Analyst that no change had taken place in the constituents of milk which would have interfered with the analysis.
This statement of the analyst was not challenged in any of the courts below.
Apart from the statement of the Analyst not having been questioned, in this case it is admitted that formalin was added to the milk by the Food Inspector.
The Food Inspector added 16 drops of formalin in each of the bottles and had them sealed properly.
Rule 20 of the Prevention of Food Aduleration Rules requires that in the case of milk, cream Dahi, Khoa and Gur a preservative known as "formalin", that is to say, a liquid containing about 40 per cent of 'formaldehyde ' in aqueous solution in the proportion of 0.1 ml.
(two drops) for 25 ml.
Or 25`grams shall be added.
There is also the clear evidence of Public Analyst that no change had taken place in the constituents of milk which would interfere with the analysis.[346D G, 347A] Babboo vs State, A.I.R. 1970 All 122; approved.
Dattappa Mahadappa vs Secy.
, Municipal Committee, Baldana, A.I.R. 1951 Nag.191 referred to.
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Civil Appeal No. 1482 of 1972.
Appeal by Special Leave from the Judgment and order dated 20th September 1971 of the Punjab and Haryana High Court in Income Tax Reference No. 12/71.
Hardayal Hardy, K. C. Dua and Miss A. Suhhashini for the Appellant.
G. C. Sharma, P. A. Francis, Anoop Sharma and P. K. Mukherjee for the Respondent.
The Judgment of the Court was delivered by BHAGWATI, J.
This appeal by special leave arises out of an assessment to income tax made on M/s Groz Backert Saboo Ltd. (hereinafter referred to as the assessee) for the assessment year 1962 63 the corresponding accounting year being the financial year being 31 st March, 1962.
The assessee set up in collaboration with M/s Theodor Groz & Soehne and Ernst Backert, West Germany (hereinafter referred to as the West German Collaborators) a factory for fabrication and manufacture of hosiery needles and it was not disputed on behalf of the assessee that this factory started business sometime prior to the commencement of the relevant year of account.
It appears that in the early part of the relevant accounting year, the assessee received from the West German Collaborators consignment of machinery costing Rs. 9,45.545/ and along with this consignment, the West German Collaborators also sent to the assessee certain goods free of cost.
These goods consisted partly of raw materials and partly of semi finished needles at various stages of manufacture.
The invoice in respect of this consignment was dated 4th April, 1961 and it showed only the price of the machinery consigned to the assessee and did not make any mention of the raw materials and semi finished needles supplied to the assessee along with this consignment, since these goods were supplied free of cost and no charge was made in respect of the same.
374 The Custom Authorities raised objection in respect of these goods and a separate invoice had, therefore, to be sent by the West German Collaborators showing Rs. 44,448.20 as the value of the raw materials, namely, wire and strip and Rs. 30,000/ as the value of the semi finished needles supplied to the assessee.
These goods were not entered in the books of account of the business immediately on receipt by the assessee but they were brought into the books for the first time on 30th September, 1961 by making the following entries: Rs. 44,448.20 debited to the account of "Wire and Strip" and credited to the "Wire and Strip Gift Account" and Rs. 30,000/ debited to the account of "Semi processed Needles" and credited to the "Semi processed Needles Gift Account".
The assesses utilised these goods in the manufacture of finished products and sold the same in the market and the sale proceeds received by the assessee were credited in the trading account maintained in the books of account of the business, since they represented revenue receipts arising from the sale of the finished products.
On 31st March, 1962, being the last date of the accounting year, the assessee closed the "Wire and Strip Gift Account" and the "Semi Processed Needles Gift Account" by transferring the respective sums of Rs. 14,448.20 and Rs. 30,000/ to the credit of the "Capital Reserve Account" and debited an aggregate sum of Rs. 74,448.20 to the trading account by making corresponding credit entries in the accounts of "Wire and Strip" and 'Semi processed Needles".
The net effect of these entries was that the profit of the assessee was reduced by Rs. 74,448.20.
The Income Tax officer, in course of the assessment of the assessee to income tax for the assessment year 1962 63, took the view that the debit of Rs. 74,448.20 was wrongly made in the trading account as on 31st March, 1962 since no monies were expended by the assessee in acquiring the raw materials and semi finished needles, but they were received by way of gift from the West German Collaborators and hence no amount was deductible in respect of the value of these goods.
The same view was taken by the Appellate Assistant Commissioner in appeal and on further appeal, the Tribunal also affirmed the same view.
This led to a Reference by the Tribunal at the instance of the assessee and the following two questions were referred for the opinion of the High Court: 1.
Whether on the facts and in the circumstances of the case, the sum of Rs. 74,448.20 being the actual value of raw material received from German Collaborators free of cost represented Revenue receipt ? 375 2.
Whether on the facts and in the circumstances of the case, the amount of Rs. 74,448/ being the actual value of raw material received free of cost from German collaborators was rightly debited at that value to the revenue account ? The High Court misapprehended the true nature and scope of the controversy between parties and seemed to proceed on the erroneous impression that what the Tribunal had held was that the raw materials and semi finished needles received by the assessee from the West German Collaborators constituted revenue receipt and its value was, therefore, liable to be taxed as income in the hands of the assessee.
The High Court held that the value of these goods could not be treated as revenue receipt because they had been received by way of gift and in any even, even if they constituted revenue receipt, they could "in no sense be income" since they were take out of the ambit of taxability by sub section (3) of section 10 of the Income Tax Act, 1961.
The High Court accordingly answered the questions referred it by the Tribunal in favour of the assessee and against the Revenue.
The Revenue thereupon brought the present appeal with special leave obtained from this Court.
It was found as a fact by the Tribunal, and indeed there was no dispute about it, that the raw materials and semi finished needles were received by the assessee from the West German Collaborators free of cost by way of gift.
These raw materials and semi finished needles were received some time in April, 1961 and it was only on 30th September, 1961 that they were for the first time introduced in the books of account of the business.
There can, therefore, be no doubt that these raw materials and semi finished needles were received by the assessee as capital assets and subsequently on 30th September, 1961 they were transferred to the business as part of its stock If that be so, the cost of these raw materials and semi finished needles to the business could not be said to be nil, but, on the principle laid down by this Court in Commissioner of Income Tax vs Sherinbai Kooka(1) and subsequently followed in Commissioner of Income Tax vs Hanrepara Tea Co. Ltd.(2), it would be the market value of there raw mate rials and semi finished needled as on 30th September, 1961.
It is now well settled by these decisions that where an assessee converts his capital assets into stock in trade and starts dealing in them, that able profit on the sale must be determined by deducting from the sale .
(1) (2) 376 proceeds the market value at the date of their conversion into stock in trade (since this would be the cost to the business) and not the original cost to the assessee.
Here, the original cost of these raw materials and semi finished needles to the assessee was undoubtedly nil because these goods were received by the assessee from the West German Collaborators free of cost, but they were introduced in the business and converted into its stock on 30th September, 1961 and, therefore, their market value as on 30th September, 1961 would represent the cost to the business and that would have to be taken into account in determining the profit arising from the sale of the manufactured products.
The entries made by the assessee in the books of account of the business on 30th September, 1961 clearly reflected this opinion.
The assessee debited the sums of Rs. 44,448.20) and Rs. 30,000/ representing respectively the market value of these raw materials and semi finished needles to the stock accounts of "Wire and Strip" and "Semi processed Needles" which would clearly show that these goods were treated by the assessee as having been introduced in the business as part of its stock at their market value represented by the sums of Rs. 44,448.20 and Rs. 30,000/ .
The position was no different than what it would have been if, instead of giving these raw materials and semi finished needles to the assessee free of cost, the West German Collaborators had gifted the sums of Rs. 44,448.20 and Rs. 30,0000/ to the assessee and the assessee had introduced these amounts in the business and an identical quantity of raw materials and semi finished needles had been purchased for the business with these amounts.
The cost of raw materials and semi finished needles thus purchased would have been clearly liable to be deducted from the sale proceeds of the finished products manufactured out of them in determining the profit of the business.
Would the position then be different if instead, the West German Collaborators gave these raw materials and semi finished needles to the assessee free of cost and the assessee introduced them in the business as part of its stock.
We do not sec and distinction in principle between these two types of cases and we are clearly of the view that the cost of these law materials and semi finished needles to the business represented by the sums of Rs. 44,448.00 and Rs. 30,000/ debited in the respective accounts of "Wire and Strip" and "Semi Processed Needles" was liable to be deducted from the sale proceeds of the finished products in arriving at the profit of the business.
It is true that initially on 30th September, 1961 the credit entries for the sums of Rs. 44,448.20 and Rs. 30,000 were made in "Wire and Strip Gift Account" and "Semi processed Needles Gift Account" respectively and it was only on the last date of the ac count year, namely, 31st March, 1962 that these amounts were trans 377 ferred to the credit of the Capital Reserve Account.
But that cannot make any difference to the correct legal inference to be drawn from the proved facts because the nomenclature of the account or accounts in which the credit entries were made is not material but what is really decisive is that these amounts were debited to the respective accounts of "Wire and Strip" and "Semi processed Needles" as representing their real value on 30th September, 1961.
These raw materials and semi finished needles were introduced in the business as part of its stock at their real value represented by the sums of Rs. 44,448.20 and Rs. 30,000/ .
The aggregate amount of Rs. 74,448.20 made up of Rs. 44,448.20 and Rs. 30,000/ was, therefore, liable to be deducted in determining the profit of the business and it was rightly debited to the trading account.
We accordingly dismiss the appeal and answer the questions referred by the Tribunal in favour of the assessee and against the Revenue.
The Revenue will pay the costs of the appeal to the assessee.
S.R. Appeal dismissed.
| IN-Abs | During the assessment year 1962 63, the corresponding accounting year being the financial year ending 31st March, 1962, in respect of goods partly of raw materials and partly of semi finished needles gifted by their collaborators in West Germany, the respondent assessee made entries in their books of account for the first time on 30th September 1961, as follows: Rs. 44.448.20 debited to the account of 'wire and strip ' and credited to the 'wire and strip Gift Account ' and Rs. 30,000 debited to the account of 'Semi processed needles ' and credited to the 'Semi processed Needles Gift Account '.
The assessee utilised these goods in the manufacture of finished products and sold the same in the market and the sale proceeds received by the assessee were credited in the trading account maintained in the books account of the business, since they represented revenue receipts arising from the sale of the finished products.
On 31st March 1962, the assessee closed the above two gift, accounts by transferring the respective sums of Rs. 41,448.20 and Rs. 30,000/ to the credit of the 'Capital Reserve Account ' and debited the aggregate sum of Rs. 74,448.20 to the trading account by making corresponding contra credit entries in the accounts of 'wire and strip ' and 'Semi processed Needles '.
The net effect of these entries was that the profit of the assessee was reduced by Rs. 74,448.20.
The income tax officer, in the course of the assessment of the assessee to income tax for the assessment year 1962 63 took the view that the debit of Rs. 74,448.20 was wrongly made in the trading account as on 31st March, 1962 since no monies were expended by the assessee in acquiring the raw materials and semi finished needles, but they were received by way of gift from the West German Collaborators and hence no amount was deductible in respect of the value of these goods.
The same view was taken by the Appellate Assistant Commissioner in appeal and on further appeal, the Tribunal also affirmed the same view.
But the High Court on a reference at the instance of the assessee, held that the value of these goods could not be treated as revenue receipt because they `had been received by way of gift and in any event, even if they constituted revenue receipt, they could "in no sense be income" since they were taken out of the ambit of taxability by sub section (3) of section 10 of the Income Tax Act, 1961.
The High Court accordingly answered the questions referred by the Tribunal in favour of the assessee and against the Revenue.
The Revenue thereupon brought the present appeal with special leave.
Dismissing the appeal, the Court ^ HELD: 1.
The cost of raw materials and semi finished needles received by the assessee from their West German Collaborators and introduced in the books of the business could not be said to be 'nil", but it would 372 be their market value as on 30th September 1961.
They were received by the assessee as capital assets and subsequently transferred to the business as part of its stock.
[375E G] Commissioner of Income Tax vs Shirinbai Kooka, 46 I.T.R. (S.C.) 61; and Commissioner of Income Tax vs Hantepara Tea Co. Ltd I.T.R. (SC) 258; applied.
Where an assessee converts his capital assets into stock in trade and starts dealing in them, the taxable profit on the sale must be determined by deducting from the sale proceeds the market value at the date of their con version into stock in trade (since this would be the cost to the business) and not the original cost to the assessee.
[375G H. 376A] In the instant case, the original cost of these raw materials and semi finished needles to the assessee was undoubtedly nil because these goods were received by the assessee from the West German Collaborators free of cost, but they were introduced in the business and converted into its stock on 30th September, 1961 and, therefore, their market value as on 30th September 1961 would represent the cost to the business and that would have to be taken into account in determining the profit arising from the sale of the manufactured products.
The entries made by the assessee in the books of account of the business on 30th September, 1961 clearly reflected this position.
The assessee debited the sums of Rs. 44,448.20 and Rs. 30,000/ representing respectively the market value of these raw materials and semi finished needles to the stock accounts of 'Wire and Strip ' and 'Semi processed Needles, which would clearly show that these goods were treated by the assessee as having been introduced in the business as part of its stock at their market value represented by the sums of Rs. 44,448.20 and Rs. 30,000/ [376A D] Commissioner of Income Tax vs Shirinbai Kooka, 46 I.T.R. (SC) 61; and Commissioner of Income Tax vs Hantepara Tea Co. Ltd. 89 I.T.R. (SC) 258; applied 3.
In principle, the position would have been the same if instead of giving raw materials and semi finished articles to the assessee free of cost the West German contractors had gifted sums of money to the assessee and the assessee had introduced these amounts in the business and an identical quantity of raw materials and semi finished products had been purchased for the business with these amounts.
The cost of raw materials and semi finished articles thus purchased would have been clearly liable to be deducted from the sale proceeds of the finished products manufactured out of them in determining the profit of the business.
[3376D F] In the instant case, the cost of the raw materials and semi finished needles.
to the business represented by the sums of Rs. 44,448.20 and Rs. 30,000/ debited in the respective accounts of 'Wire and Strip ' and 'Semi processed Needles ' was liable to be deducted from the sale proceeds of the finished products in arriving at the profit of the business.
It is true that initially on 30th September, 1961 the credit entries for the sums of Rs. 44,448.20 and Rs. 30,000/ were made in 'Wire and Strip Gift Account ' and 'Semi processed Needles Gift Account ' respectively and it this only on the last date of the account year, namely, 31st March, 1962 that these amounts were transferred 373 to the credit of the Capital Reserve Account.
But that cannot make and difference to the correct legal inference to be drawn from the proved facts because the nomenclature of the account or accounts in which the credit entries were made is not material but what is really decisive is that these amounts were debited to the respective accounts of 'Wire and Strip ' and Semi processed Needles ' as representing their real value on 30th September, 1961.
These raw materials and semi finished needles were introduced in the business as part of its stock at their real value represented by the sums of Rs. 44,448.20 and 30,000/ .
The aggregate amount of Rs. 74,448.20 made up of Rs. 44,448.20 and Rs. 30,000/ was, therefore, liable to be deducted in determining the profit of the business and it was rightly debited to the trading account.
[376F H, 377A C]
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