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Special Leave Petition (Civil) No. 4120 of 1978.
From the Judgment and Order dated 8 3 78 of the Punjab and Haryana High Court in Civil Revision No. 801/76.
Prem Malhotra and M. N. Shroff for the Petitioner.
The Order of the Court was delivered by KRISHNA IYER, J. We refuse leave but with a message tag.
The poor shall not be priced out of the justice market by insistence on court fee and refusal to apply the exemptive provisions of 185 Order XXXIII, C.P.C.
So we are distressed that the State of Haryana, mindless of the mandate of equal justice to the indigent under the Magna Carta of our Republic, expressed in Article 14 and stressed in article 39A of the Constitution, has sought leave to appeal against the order of the High Court which has rightly extended the 'pauper ' provisions to auto accident claims.
The reasoning of the High Court in holding that Order XXXIII will apply to tribunals which have the trappings of the civil court finds our approval.
We affirm the decision.
Even so it is fair for the State to make clear the situation by framing appropriate rules to exempt from levy of court fee cases of claims of compensation where automobile accidents are the cause.
Here is a case of a widow and daughter claiming compensation for the killing of the sole bread winner by a State Transport bus; and the Haryana Government, instead of acting on social justice and generously settling the claim, fights like a cantankerous litigant even by avoiding adjudication through the device of asking for court fee from the pathetic plaintiffs.
Two principles are involved.
Access to court is an aspect of Social Justice and the State has no rational litigation policy if it forgets this fundamental.
Our perspective is best projected by Cappelletti, quoted by the Australian Law Reform Commission: "The right of effective access to justice has emerged with the new social rights.
Indeed, it is of paramount importance among these new rights since, clearly, the enjoyment of traditional as well as new social rights presupposes mechanisms for their effective protection.
Such protection, moreover, is best assured by a workable remedy within the framework of the judicial system.
Effective access to justice can thus be seen as the most basic requirement the most basic 'human right ' of a system which purports to guarantee legal right.
"(1) We should expand the jurisprudence of Access to Justice as an integral part of Social Justice and examine the constitutionalism of court fee levy as a facet of human rights highlighted in our Nation 's Constitution.
If the State itself should travesty this basic principle, in the teeth of Articles 14 and 39A, where an indigent widow is involved, a second look at its policy is overdue.
The Court must give the benefit of doubt against levy of a price to enter the temple of justice 186 until one day the whole issue of the validity of profit making through sale of civil justice, disguised as court fee, is fully reviewed by this Court.
Before parting with this point we must express our poignant feeling that no State, it seems, has, as yet, framed rules to give effect to the benignant provision of legal aid to the poor in Order XXXIII Rule 9A, Civil Procedure Code, although several years have passed since the enactment.
Parliament is stultified and the People are frustrated.
Even after a law has been enacted for the benefit of the Poor, the State does not bring into force by wilful default in fulfilling the conditio sine qua non.
It is a public duty of each great branch of Government to obey the rule of law and uphold the tryst with the Constitution by making rules to effectuate legislation meant to help the poor.
The second principle the State of Haryana has unhappily failed to remember is its duty under article 41 of the Constitution to render public assistance, without litigation, in cases of disablement and undeserved want.
It is a notorious fact that our highways are graveyards on a tragic sale, what with narrow, neglected roads, reckless, unchecked drivers, heavy vehicular traffic and State Transport buses often inflicting the maximum casualties.
Now that insurance against third party risk is compulsory and motor insurance is nationalised and transport itself is largely by State Undertakings, the principle of no fault liability and on the spot settlement of claims should become national policy.
The victims, as here, are mostly below the poverty line and litigation is compounded misery.
Hit and run cases are common and the time is ripe for the court to examine whether no fault liability is not implicit in the Motor Vehicles Act itself and for Parliament to make law in this behalf to remove all doubts.
A long ago Report of the Central Law Commission confined to hit and run cases of auto accidents is gathering dust.
The horrendous increase of highway casualties and the chronic neglect of rules of road safety constrains us to recommend to the Central Law Commission and to Parliament to senitize this tragic area of tort law and overhaul it humanistically.
Another aspect must be noticed before we part with this petition.
In many States, for want of judicial manpower or other pathological causes, the accident claims pend before tribunals in heartless slowness.
Courts must give this bleeding class of cases high priority, adopt simplified procedures without breach of natural justice, try out pre trial settlements and narrow down the controversy and remember, that 'wiping every tear from every eye ' has judicial relevance.
For, law must keep its promise to Justice.
187 While we dismiss the petition for leave, we hope the Haryana State will hasten to frame rules under the Motor Vehicles Act to enable claimants for compensation to be free from payment of court fee.
M.R. Petition dismissed.
| IN-Abs | The respondents, a widow and her daughter, claimed compensation for the killing of their sole bread winner, by a Haryana State Transport bus, but could not afford to pay any court fee on their claim.
The High Court held that the exemptive provisions of Order XXXIII, CPC, will apply to Accident Claims Tribunals, which have the trappings of the Civil Court.
Dismissing the special leave petition the Court, ^ HELD: The State should frame appropriate rules to exempt from levy of court fee, cases of claims of compensation where automobile accidents are the cause.
Two principles are involved.
Firstly, access to court, is an integral part of social justice, and the State has no rational litigation policy if it forgets this fundamental, and secondly, it is the State 's duty under article 41 of the Constitution to render assistance, without litigation, in cases of disablement and undeserved want.
[185 B C, D, 186 C] M. Cappelletti, Rabels Z, (1976) 669 at 672; quoted with approval.
Obiter dictum: I.
It is a public duty of each great branch of Government to obey the rule of law and uphold the tryst with the Constitution by making rules to effectuate legislation meant to help the poor.
Now that insurance against third party risk is compulsory and motor insurance is nationalised, and transport itself is largely by State Undertakings, the principle of no fault liability and on the spot settlement of claims should become national policy.
[186 B, C, D E] II.
Courts must give the accident claims cases high priority, adopt simplified procedures without breach of natural justice, try out pre trial settlements and narrow down the controversy and remember, that 'wiping every tear from every eye ' has judicial relevance.
For, law must keep its promise to justice.
[186 G H]
|
Civil Appeal No. 1951 of 1969.
Appeal by Special Leave from the Judgment and Order dated 7 1 69 of the Allahabad High Court in Civil Revision No. 506 510 and 548 552/65.
J. P. Goyal and section K. Jain for the Appellant.
R. K. Garg, V. J. Francis and D. K. Garg for Respondent No. 1.
The Judgment of the Court was delivered by UNTWALIA, J.
This is an appeal by special leave from the judgment of the Allahabad High Court disposing of ten connected civil revisions.
Noorul Hasan Khan and others were the Zamindars of the village in which certain lands were given in Theka to Bhagwati Singh, Ram Prasad Singh and others on the 6th of March, 1948.
The Zamindari vested under the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950, hereinafter called the Act, on the 30th of June, 1952.
Disputes arose between the ex Zamindars and the ex Thekadars during the pendency of the proceedings under the U.P. Consolidation of Holding Act.
When entries in the list of tenancy holders were published under section 11 of the Consolidation of the Holdings Act relating to the lands in dispute consisting of several plots, objections were filed by both the parties.
Noorual Hasan Khan and others claimed that the plots in dispute being their exclusive Sir and Khudkasht would be deemed to have been settled with them by the State on the abolition of the Zamindari and their names should be recorded as bhumidars thereof.
On the other hand Bhagwati Singh and others claimed that they had become the Sirdars of the plots in dispute and they resisted the claim of the ex Zamindars.
The Consolidation Officer referred the matter to the Civil Judge of Azamgarh in accordance with section 12 of the Consolidation of Holdings Act.
The Civil Judge sent the matter for decision to an Arbitrator appointed under the Act as the dispute gave rise to the question of title.
Shri Kailash Chandra, an Assistant Collector, was appointed as an Arbitrator.
On consideration of the oral and documentary 979 evidence adduced before him he rejected the claim of ex Zamindars and decided the matter in favour of the ex Thekedars.
Bhagwati Singh and others were held to be the Sirdars of the plots in question.
Noorul Hasan and others filed objections to the Award before the Civil Judge.
He allowed the objections on the ground that the illegality of the Award was apparent on the face of it in as much as the Arbitrator did not apply the correct law in determining the rights of the parties.
He set aside the Award and remitted it back to the arbitrator for reconsideration in the light of his judgment.
Appeals were taken to the learned Additional District Judge who by order dated 8 12 1962 disagreed with the learned Civil Judge on the main question but affirmed his order of remand on the ground that in the Award many questions were left undetermined.
Both sides filed separate revisions before the High Court.
The High Court has allowed the revisions of the ex Thekedars and dismissed those of the ex Zamindars.
Hence this appeal.
The only point which was argued and agitated before us is whether Bhagwati Singh and others have been rightly held to be the Sirdars of the plots in question or whether the ex landlords had become the bhumidars.
The determination of this question depends upon a correct appreciation of the provisions of law contained in sections 12 and 13 of the Act.
We shall read the relevant portions of the two sections.
They are as follows : "12.
Thekedars to be hereditary tenants in certain circumstances. (1) Where any land was in the personal cultivation of a person on the Ist day of May, 1950, as a thekedar thereof and the theka was made with a view to the cultivation of the land by such thekedar personally, then notwithstanding anything in any law, document or order of court, he shall be deemed to be a hereditary tenant thereof entitled to hold, and when he has been ejected from the land after the said date, to regain possession as a hereditary tenant thereof liable to pay rent at hereditary rates.
Estate in possession of a thekedar. (1) Subject to the provisions of Section 12 and sub section (2) of this section a thekedar of an estate or share therein shall, with effect from the date of vesting, cease to have any right to or possess as such any land in such estate.
980 (2) Where any such land was in the personal cultivation of the thekedar on the date immediately preceding the date of vesting, the same shall (a) if it was sir or khudkasht of the lessor on the date of the grant of the theka, be deemed for purposes of Section 18, to be the sir or khudkasht of the lessor on the date immediately preceding the date of vesting and the thekedar shall, with effect from the date of vesting, become the asami thereof liable to pay rent at hereditary rates applicable on the date immediately preceding the date of vesting and entitled to hold the land as such for the unexpired period of the theka or for a period of five years from the date of vesting whichever is less; (b) if it was not sir or khudkasht of the lessor on the date of the grant of the theka and (i) its area does not exceed thirty acres, be deemed for purposes of Section 19 to have been held by the thekedar as a hereditary tenant liable to pay rent which shall be equal to the rent calculated at hereditary rates applicable on the date immediately preceding the date of vesting.
(ii) its area exceeds thirty acres, be deemed to the extent of thirty acres for purposes of Section 19 to have been held as a hereditary tenant as aforesaid and the remainder shall be deemed to be vacant land and the thekedar shall be liable to ejectment therefrom in accordance with the provisions of Section 209.
" It would be noticed from the provisions aforesaid that a Thekedar of an Estate ceases to have any right to hold or possess as such any land in such Estate with effect from the date of its vesting.
This is what has been provided in sub section (1) of section 13.
But it is subject to two exceptions viz.
, one the provision contained in section 12 and the other engrafted in sub section (2) of section 13.
There is no dispute between the parties that the land in possession of the Thekedars on the date of vesting was either covered by section 12(1) or section 13(2) (a).
We are not concerned in this case with section 13(2)(b) as the land admittedly was the Sir or Khudkasht of the lessor namely the Zamindars.
If such a land was in the personal 981 cultivation of a person on the 1st day of May, 1950 as a Thekedar thereof and if the Theka was made with a view to the cultivation of the land by such Thekedar personally then because of the non obstante clause occurring in sub section (1) of section 12 of the Act the Thekedar would be deemed to be a hereditary tenant of the land entitled to hold as such and liable to pay rent at hereditary rates.
If, however, the land was in personal cultivation of the Thekedar merely as a Thekedar appointed to collect rent from other tenants and incidentally allowed to cultivate the Sir or Khudkasht land of the lessor then he will be a mere asami in accordance with section 13(2)(a) of the Act.
The Arbitrator on a consideration of the Theka document found that the theka was made with a view to cultivation of the land by the Thekedar personally.
The interpretation of the Arbitrator was not such that it could enable the Civil Judge to take the view that there was an error of law apparent on the face of the record.
On the other hand it appears to us what the interpretation put by the Arbitrator was correct.
There is a subtle but clear dividing line between the two types of cases one falling under section 12(1) of the Act and the other coming within the ambit of section 13(2)(a).
In our opinion the High Court was right in its view that the Award of the Arbitrator was not fit to be interfered with.
For the reasons stated above, we dismiss this appeal but in the circumstances make no order as to costs.
N.K.A. Appeal dismissed.
| IN-Abs | The appellants and others were the Zamindars of a village in which certain lands were given on Theka to the Respondent and others on 6th March, 1948, the Zamindari having vested on 30th June, 1952.
Disputes arose between the appellants and the respondents during the pendency of proceedings under the U.P. Consolidation of Holdings Act.
The appellants and others claimed the plots in dispute being in their exclusive Sir and Khudkast would be deemed to have been settled with them by the State on the Abolition of Zamindari and their name should be recorded as Bhoomidars thereof.
Respondent and others on the other hand claimed they had become the Sirdars of the plots in dispute and resisted the claims of the Zamindars.
The dispute gave rise to the question of title.
The Civil Judge sent the matter for decision to an Arbitrator appointed under the Act.
The Arbitrator held the respondents to be the Sirdars of the plots in question.
The appellants filed objections against the award before the Civil Judge who allowed the objections, set aside the award and remitted back the award for reconsideration.
Appeals were taken to the Additional District Judge who disagreed with the Civil Judge but affirmed the order of remand.
Both sides filed separate revisions before the High Court, the revision of Respondents was allowed and dismissed those of the appellants.
The only point argued was whether Respondent and others have been rightly held to be the Sirdars of the plots in question or whether the ex landlords had become the Bhoomidars.
Dismissing the appeal.
^ HELD: That a Thekedar of an Estate ceases to have any right to hold or possess any land in such Estate with effect from the date of its vesting.
This is what has been provided in sub section (1) of section 13.
But it is subject to the exceptions viz.
, one the provisions contained in section 12 and the other engrafted in sub section (2) of section 13.
There is no dispute between the parties that the land in possession of the Thekedars on the date of vesting was either covered by section 12(1) or section 13(2)(a).
The land admittedly was the Sir or Khudkasht of the lessor namely the Zamindars.
If such a land was in the personal cultivation of a person on the Ist May, 1950 as a Thekedar thereof and if the Theka was made with a view to the cultivation of the land by such Thekedars personally then because of the non obstante clause occurring in sub section (1) of section 12 of the Act the Thekedar would be deemed to be a hereditary tenants of the land entitled to hold as such and liable to pay rent at hereditary rates.
If, however, the land was in personal cultivation of the Thekedar merely as a Thekedar appointed to collect rent from other tenants and incidentally allowed to cultivate the Sir or Khudkasht land of the lessor then he will be a mere asami in accordance with section 13(2)(a) of the Act.
The Arbitrator on a consideration of the theka document found that the theka 978 was made with a view to cultivation of the land by the Thekedar personally.
The interpretation of the Arbitrator was not such that it could enable the Civil Judge to take the view that there was an error of law apparent on the face by the record.
On the other hand it appears to us that the interpretation put by the Arbitrator was correct.
There is a subtle but clear dividing line between the two types of cases one falling under section 12(1) of the Act and the other coming within the ambit of section 13(2) (a).
The High Court was right in its that the Award of the Arbitrator was not fit to be interfered with.
[980 G H. 981 A D]
|
Civil Appeal No. 2233 of 1969.
From the Judgment and Order dated 11 3 1968 of the Rajasthan High Court in Writ Petition No. 126/62.
Sobhagmal Jain and section K. Jain for the Appellant.
E. C. Agarwala and Girish Chandra for the Respondent.
The Judgment of the Court was delivered by UNTWALIA, J.
This is an appeal by certificate by Shri Abdul Qadir from the judgment of the Rajasthan High Court dismissing his Writ Petition.
The house in question belonged to one Mohammed Amin Khan.
The appellant purchased the house from the said owner on 10 7 1948 for Rs. 12,000.
It appears that neither the appellant nor Mohammed Amin Khan was an evacuee within the meaning of the , hereinafter called the Evacuee Property Act.
But under some mistaken notion probably the appellant was treated as an evacuee and the house was declared as an evacuee property on 15 11 1951 in accordance with the Evacuee Property Act.
After such declaration the question that the property was an evacuee property could not be reopened and became final.
Upon that footing the appellant filed an application on 26 9 1953 under section 16(1) of the Evacuee Property Act, as the section then stood, for grant of a certificate.
On 27 10 1956 the Central Government granted a certificate under the unamended provision of law contained in section 16.
Pursuant to the above the appellant made an application to the Assistant Custodian of Evacuee Property for restoration of the house under sub section (2) of section 16.
The Asstt.
Custodian, respondent No. 1 passed an order on 18 3 1957 restoring the house to the appellant.
But before that Shri Ajjumal, respondent No. 2 had been inducted as a tenant in the house by the Custodian after it was declared as an evacuee property.
The appellant was directed to take symbolic possession of the house allowing the said tenant to continue in its occupation on receipt of rent from him.
The appellant came to know later that on 11 11 1960 the Central Government passed an order under section 20A of the , hereinafter 995 referred to as the Displaced Persons Act, whereby it was ordered that in respect of the house in question action be taken in accordance with the said provision of law.
On 6 12 1960 the Central Government ordered that it had revised its order dated 11 11 1960 and the petitioner was entitled to compensation only under section 20A of the Displaced Persons Act.
In the Civil Suit filed by the appellant against Ajjumal it transpired that a sale deed had been executed in his favour as he was a displaced person in occupation of the house and the appellant was entitled to compensation only.
He, therefore, filed a writ petition in the High Court to challenge the action of the Assistant Custodian, respondent No. 2 and the Union of India, respondent No. 3.
The writ case was contested by all the respondents and it was asserted that Ajjumal being a sitting allottee had to be rehabilitated and the appellant was entitled to compensation only.
The High Court has quoted section 16 of the Evacuee Property Act as it stood prior to 22 18 1956 and the section as it came into force after that date.
It has rightly pointed out that there was a change of procedure in the two provisions.
According to section 16 as it stood before 22 10 1956 the application for certificate was to be made to the Central Government and the Central Government in its discretion was to issue the certificate.
On the issuance of such a certificate after following certain procedure the restoration order had to be made by the Custodian of the Evacuee Property.
In the present case only a certificate was issued on 27 10 1956.
The High Court is right in holding that the certificate so issued in accordance with the old law was not valid.
Attempts were made before the High Court to show that the said certificate was issued pursuant to an order alleged to have been made on 1 10.1956.
The High Court was not satisfied about the correctness of this new stand.
Nothing could be pointed out to us to persuade us to take a view different from the one taken by the High Court in regard to the question of the invalidity of the certificate issued in favour of the appellant on 27 10 1956.
There is another difficulty in the way of the appellant and that comes in because of the provision of law contained in section 20A of the Displaced Persons Act.
The said section also had undergone a change from time to time and at the relevant time sub section (1) of section 20A stood as follows: (1) Where any evacuee or his heir has made an application under Sec.
16 of the Evacuee Property Act and the Central Government is of opinion that it is not expedient or 996 practicable to restore the whole or any part of such property to the applicant by reason of the property or part thereof being in occupation of a displaced person or otherwise, then, notwithstanding anything contained in the Evacuee Property Act and this Act, it shall be lawful for the Central Government (a) to transfer to the applicant in lieu of the evacuee property or any part thereof, any immovable property in the compensation pool or any part thereof, being in the opinion of the Central Government as nearly as may be of the same value as the evacuee property or, as the case may be, any part thereof, or (b) to pay to the applicant amount in cash from the compensation pool in lieu of the evacuee property or part thereof as the Central Government having regard to the value of the evacuee property or part thereof may, in the circumstances deem fit.
Explanation: The provisions of this sub section shall apply, whether or not, a certificate for the restoration of the evacuee property has been issued to the applicant under sub sec.
(1) of sec.
16 of the Evacuee Property Act, as in force before the commencement of the Administration of Evacuee Property (Amendment) Ordinance, 1956, if the evacuee property has not in fact been restored to the applicant.
" It would be noticed that the provisions of section 20A (1) have got the over riding effect by virtue of the Explanation appended to it even after a certificate for the restoration of the evacuee property had been issued to the applicant on 27 10 1956.
In spite of the certificate it was open to the Central Government not to allow restoration of the house to the appellant and to pay him compensation only.
The Central Government has adopted the latter course.
Respondent No. 2, a displaced person, was inducted as a tenant in the property long time back.
The property was sold to him also by the Custodian.
In such a situation it was just and proper to refuse restoration of the property to the appellant and to pay him compensation only.
But we were informed that the amount of compensation payable to the appellant has been determined at a somewhat low figure being in the neighborhood of Rs. 8,000 only.
The appellant had 997 purchased the house for Rs. 12,000 in the year 1948.
In that view of the matter we recommend for consideration of the Government whether it would be possible for them to enhance the amount of compensation at least to the figure of Rs. 12,000.
The matter is finally within their jurisdiction and they may decide it as they think it fit and proper to do.
For the reasons stated above this appeal fails and is dismissed but without costs.
P.B.R. Appeal dismissed.
| IN-Abs | The appellant purchased a house in July, 1948.
Although neither the vendor nor the appellant was an evacuee within the meaning of the , the appellant was treated as an evacuee and the house was declared evacuee property in 1951.
In response to the appellant 's petition filed in 1953, a certificate was granted by the Government under the unamended provisions of section 16 of the Act.
When the appellant asked for restoration of the house the Assistant Custodian passed an order in 1957 granting restoration.
In the meantime since respondent No. 2 had been inducted as a tenant in the house by the Custodian after it was declared evacuee property the appellant was asked to take symbolic possession of the house allowing the tenant to continue in possession.
Section 20A(1) of the provided that where an evacuee had made an application under section 16 of the Evacuee Property Act, 1950 and the Central Government is of opinion that it is not expedient or practicable to restore the whole or any part of the property to the applicant, it shall be lawful for the Central Government to pay to the applicant the value of the property in cash from the compensation pool in lieu of the evacuee property.
The Explanation to this section provided that the provisions of this sub section shall apply, whether or not a certificate for the restoration of the evacuee property had been issued to the applicant under section 16(1) of the 1950 Act.
The Central Government revised its earlier order dated November 11, 1960 and gave compensation to the appellant under section 20A of the 1954 Act.
The appellant 's writ petition challenging the order of the Assistant Custodian was dismissed by the High Court.
Dismissing the appeal, ^ HELD: 1.
According to section 16 of the 1950 Act, as it stood before October 22, 1956, an application for certificate was to be made to the Central Government.
On the issuance of the certificate, restoration order was made by the Custodian of Evacuee Property.
In the instant case the certificate was issued on October 27, 1956.
The High Court was therefore right in holding that the certificate issued in accordance with the old law was not valid.
[995 D F] 2.
The provisions of section 20A(1) have got the over riding effect by virtue of the Explanation appended to it even after a certificate for the restora 994 tion of the evacuee property had been issued to the applicant on October 27, 1956.
In spite of the certificate it was open to the Central Government not to allow restoration of the house to the appellant and to pay him compensation only.
The Central Government has adopted the latter course.
Respondent No. 2, a displaced person, was inducted as a tenant in the property a long time back.
The property was sold to him by the Custodian.
In such a situation it was just and proper to refuse restoration of the property to the appellant and to pay him only compensation.
[996 F H]
|
Civil Appeal Nos.
1742 1743 of 1969.
Appeals by Special Leave from the Judgment and order dated 12 12 1968 of the Allahabad High Court in R.S.A. No. 2777 of 1972.
section N. Andley, Uma Datta and T. C. Sharma for the Appellant in CA 1742/69.
A. P. section Chauhan and N. N. Sharma for Respondent No. 1 in CA 1742/69 and for the Appellant in CA 1743/69.
1000 The Judgment of the Court was delivered by KOSHAL, J.
The facts giving rise to these two cross appeals by special leave may, with advantage, be stated with reference to the following pedigree table: CHHITAR MAL | ___________________________________________________________ | | | | Salag Ram Banshi Dhar Narain Dass Bhagwan Dass | (died | | | issueless) | | | | | | | | | Balu Ram Ram Chander | | | | | | | Tirlok Chand | | | (plaintiff) | | | | | | | | | Rag Vir Ram Nath Bhagirath | | Saran (defendant) (Defendant | | No. 3) No. 4) No. 5) | | | | | | | | | Devi Sahai Piarye Lal Gopi Nath | (died in (Defendent | | 1943) No. 2) | | | | | | | | | | | Damodar Dass Smt Barfi | (defendant (daughter) | No. 6 | ____________________________________________________ | | | | Murli Kewal Ram Govind Jagananth =Smt.
Chhoti Dhar (dies Ram (died (died (died issueless (died issueless issueless in 1925) in 1952) issue in 1940 in 1955) in 1952) ____________________________________________________________ The litigation between the parties started with suit No. 1912 of 1958 instituted by Tirlok Chand for partition of properties detailed in schedules A,B and C forming part of the plaint.
His case was that 1001 the property described in schedule A had been acquired by his great grand father Chhitar Mal, that the property detailed in schedule B was jointly acquired by Salag Ram 's sons Jagannath and Govind Ram, the two of whom constituted a joint Hindu family, and that the property specified in schedule C had once belonged exclusively to Jagannath, son of Salag Ram and that it was from him that it had descended to his widow Smt.
Chhoti.
Apart from defendants Nos. 2 to 6 whose names appear in the pedigree table, Banwari Lal [who is the appellant before us in Civil Appeal No. 1742(N) of 1969] was arrayed as defendant No. 1 and he has been the real contesting defendant whose claim was based on his adoption by Govind Ram, grandson of Chhitar Mal and on two registered wills, both dated the 25th of September, 1950, purporting to have been executed by Govind Ram and Smt.
Chhoti respectively.
He claimed that the two testators had bequeathed their entire property to him, that the property covered by schedule A was acquired not by Chhitar Mal but by Salag Ram and that the one embraced by schedule C had been purchased by Smt.
Chhoti with her stridhana and was never the property of her husband Jagannath.
He therefore claimed to be entitled to all the properties in suit exclusively for himself, it being common ground between the parties that those properties were the subject matter of the two wills.
The plaintiff denied the adoption set up by defendant No. 1 and challenged the two wills as forgeries.
The trial court and the first appellate court found that the property covered by schedule A had been acquired not by Chhitar Mal but by his son Salag Ram.
There was no contest in relation to the property embraced by schedule B which was therefore treated to have been acquired jointly by Govind Ram and Jagannath as part of their joint Hindu family assets.
In relation to the property detailed in schedule C, the trial Court held that it had been acquired by Jagannath but the finding was reversed by the first appellate court which found that the acquisition was made by Smt.
Chhoti with funds of her own, her husband Jagannath having no interest therein.
On behalf of defendant No. 1 no evidence was led to prove that he had been given or taken in adoption.
The trial court therefore held that the adoption had not been proved.
In the will of Govind Ram however, there was a recital that defendant No. 1 was his adopted son and this recital was considered by the first appellate court to be sufficient to prove the adoption.
Both the wills were held to be genuine 1002 and legally valid and the suit was therefore dismissed by the trial court and the first appellate court in toto.
In second appeal the High Court upheld all the findings of fact arrived it by the first appellate court except the one relating to adoption.
The High Court was of the opinion that the recital in the will of Govind Ram about defendant No. 1 being his adopted son was not sufficient to prove the adoption which therefore was held not to have been established.
It was further held by the High Court that a half share in the property specified in schedules A and B having descended from Jagannath to Smt.
Chhoti as a life tenant only, she was not competent to will it away and that the plaintiff, along with other members of the family, was entitled to succeed to that half share.
It was vehemently contended before the High Court that even if the wills be taken to be genuine, they would operate only if defendant No. 1 was shown to have been validly adopted by Govind Ram because both Govind Ram and Smt.
Chhoti had described him as Govind Ram 's adopted son and must therefore be presumed to have executed the wills in favour of defendant No. 1 by reason of his being the adopted son of Govind Ram.
The contention was repelled by the High Court (as it had also been by the trial court) on the ground that the mention of defendant No. 1 as the adopted son of Govind Ram in each of the two wills had been made merely as a description of the devisee and not as a motivation for the execution of either will.
Support was found for this view from Ranganathan Chattiar and Another vs Periskaruppan and Another.
In the result the High Court accepted the appeal of the plaintiff in part, set aside the dismissal of the suit and remitted the case to the trial court for declaring the shares of the parties in the property which descended to Smt.
Chhoti from her husband, in the light of its (the High Court 's) judgment and for partition of the property accordingly thereafter.
Both the contesting parties feel aggrieved by the judgment of the High Court.
While defendant No. 1 claims in Civil Appeal No. 1742 of 1969 the entire property covered by schedules A, B and C, the plaintiff has filed a cross appeal (Civil Appeal No. 1743 of 1969) seeking to defeat in toto the claim of defendant No. 1. 3.
We have heard learned counsel for the parties at length.
In so before as the findings of fact are concerned they are not open to challenge before us.
The first question which learned counsel for the plaintiffs 1003 has re opened before us is whether the two wills were rightly held to be operative in favour of defendant No. 1 inspite of the fact that he was found not to have established his character as an adopted son which was the description given to him in both the wills.
To this question also we think the High Court gave the correct answer.
In this connection reference may be made to the relevant part of Govind Ram 's will and the same is extracted below : "Shri Banwarilal is the adopted son and heir of the executant.
Shrimati Chhoti is the widow of Jagannath Prasad, resident of Pilkhuwa, Pargana Dasna, Tahsil Ghaziabad.
Both the persons live along with the executant and render all due service to the executant.
Therefore, I make the following will: That after the death of the executant all my estate movable and immovable, with all other goods and household property along with Dharamshala No. 1/60 and one storeyed shop No. 1/57 bounded as given below shall be owned by Shrimati Chhoti widow of Jagannath Prasad, occupation shopkeeper, resident of Pilkhuwa, who shall have no right to sell the estate.
She shall have the right to spend for the Dharamshala the income of shop No. 1/57 connected with the Dharamshala.
After the death of Smt.
Chhoti, Banwarilal, adopted son and heir of the executant, shall be the owner .
Interpreting this document and considering the surrounding circumstances of the case, the trial court found that the motive for the execution of the will was not merely the recognition by the testator of his relationship through adoption with the devisee but mainly the existence of feelings of love and affection for him.
It was found as a fact that Banwari Lal was living with Govind Ram and Smt.
Chhoti, that he had served them during their illness and that he was affectionately attached to them so that at the time when the wills were executed there was no one nearer or dearer to Govind Ram and Smt.
Chhoti than Banwari Lal.
In this view of the matter, the failure to establish the stated relationship is not decisive of the point under consideration, and as remarked by the High Court, it appears that the testator made the will not for the reason that he had in fact and lawfully adopted Banwari Lal but for the reason that he treated Banwari Lal as an adopted son and was moved really by the service which the latter had rendered to him.
The relationship mentioned in the will was merely a description of the devisee as understood by the testator who executed the will in favour of the devisee not because of the relationship 1004 brought about by the adoption but by reason of feelings of affection which the devisee had earned by his association and assistance.
The only other noticeable point raised on behalf of the plaintiff was that the will executed by Smt.
Chhoti must be held to be wholly inoperative in so far as properties detained in schedules A and B are concerned.
There is no force in that contention either.
One half of the properties mentioned in those two schedules had vested in Smt.
Chhoti under the will of Govind Ram which itself declared that Smt.
Chhoti would hold them merely as a life tenant and that thereafter they would devolve on defendant No. 1.
In devising those properties to defendant No. 1 Smt.
Chhoti did nothing more than carry out the behest of her own testator, which behest was good in law and would have been effective even if Smt.
Chhoti had made no will in favour of defendant No. 1 in respect of the properties acquired by her under Govind Ram 's will.
On behalf of defendant No. 1 the only submission made was that the two wills must be given effect to not only with regard to the properties received by Smt.
Chhoti from Govind Ram but also in respect of those which devolved on her as a successor to her husband Jagannath.
This submission is also without substance.
Jagannath died in 1940 when Smt.
Chhoti came into his property on the usual life tenure without any right of a alienation (except for necessity) or of devise.
To the extent that she overstepped her rights in devising Jagannath 's property the will transgressed the law and has been rightly held to be inoperative, the result being that her reversioners and not her devisee would succeed to Jagannath 's share in the properties covered by schedules A and B. The situation would certainly have been different if the adoption had been proved; for, in that case, defendant No. 1 would have succeeded as the sole reversioner to the estate left by Smt.
Chhoti, being her husband 's brother 's son and therefore his nearest and sole heir.
And that is why a contention was raised on behalf of defendant No. 1 that a valid adoption had been proved and that the finding to the contrary arrived at by two of the courts below was unsupportable.
Reference in this connection was made to the recital in the will executed by Govind Ram about defendant No. 1 being the adopted son of the devisor and to the oral evidence of Raj Pal, DW 2 who attested that will and deposed that defendant No. 1 had been adopted by the testator.
These two pieces of evidence were considered by the trial court as well as the High Court, both of whom regarded the material as insufficient to hold that a valid adoption was proved.
The finding in relation to the adoption is a finding of fact which we see no reason to interfere with in the circumstances of the case.
The 1005 adoption is alleged to have taken place within about a decade immediately preceding the suit between the parties so that evidence of witnesses who were present at the actual adoption and had seen the 'giving and taking ' would normally have been available.
However, no attempt was made to produce any such witness nor to explain why no such witness was forthcoming.
Different considerations may have prevailed if proof of adoption was required to be submitted to court after a very long period of its having taken place, which is not the case here.
The statement made by the testator in the will about the adoption is certainly a piece of admissible evidence as observed in Chandreshwar Prasad Narain Singh vs Bisheshwar Pratap Narain Singh cited by learned counsel for defendant No. 1 but there is no rule of law or prudence laying down the principle that such a statement must be regarded as conclusive, and this was also the view taken in that case.
And the burden of proof of adoption was heavy on the defendant.
In this connection we may refer to the following passage in Article 512 of Mulla 's Hindu Law (14th edition): ".
But the evidence in support of an adoption must be sufficient to satisfy the very grave and serious onus that rests upon any person who seeks to displace the natural succession by alleging an adoption.
That onus is particularly heavy where the adoption is made a long time after the date of the alleged authority to adopt. " It is true, as pointed out by Mulla in a later passage occurring in the same article that when there is a lapse of a very long period between the adoption and its being questioned, every allowance for the absence of evidence to prove the factum of adoption must be favourably entertained; but then that is not the situation here as we have already pointed out.
We are therefore one with the High Court in holding that on the evidence adduced, defendant No. 1 has not been successful in establishing the alleged adoption.
In the result both the appeals fail and are dismissed with no order as to costs.
P.B.R. Appeals dismissed.
| IN-Abs | G and J were the sons of S son of M.
The plaintiff was the grandson of another son of M.
In a document purporting to have been executed by G it was stated that defendant No. 1 was his (G 's) adopted son and heir and that C (his younger brother J 's widow) and defendant No. 1 had rendered services to him, in recognition of which he bequeathed properties detailed in the will to C to be enjoyed by her during her life time and that on her death defendant No. 1 shall be their owner.
The plaintiff in his suit for partition claimed that the properties detailed in Schedule A to the plaint had been acquired by his great grandfather M, those in Schedule B were jointly acquired by G and J, both of whom constituted a joint Hindu family, and those in Schedule C which once belonged exclusively to J descended on his death to his widow C.
The plaintiff also challenged the adoption of defendant No. 1.
Defendant No. 1 on the other hand claimed that since he was the adopted son of G the properties bequeathed to him by G 's will were his exclusive properties.
He also claimed that the properties in Schedule C were purchased by J 's widow C with her stridhana, that by reason of her will he was entitled exclusively to those properties and that they never belonged to her late husband.
The trial court held that adoption had not been proved and that the motive for the execution of the will was not merely the recognition by the testator of his relationship through adoption with the devisee but mainly the existence of feelings of love and affection for him.
The first appellate court held that the recital in G 's will that defendant No. 1 was his adopted son was sufficient to prove the fact of adoption.
The High Court on the other hand was of the opinion that the recital in G 's will that defendant No. 1 was his adopted son was not sufficient to prove the adopted and that the reference to adoption had been made merely as a description of the devisee and not as a motivation for the execution of the will. ^ HELD: Defendant No. 1 had not been successful in establishing the alleged adoption.
(a) It is well established that evidence in support of an adoption must be sufficient to satisfy the very grave and serious onus that rests upon any person who seeks to displace the natural succession by alleging an adoption.
[1005 D E] (b) The burden of proof of adoption in this case lay heavily on defendant No. 1 which he has not discharged satisfactorily.
This is not a case in which the adoption had taken place a very long time the suit was filed.
It had in fact taken place within about a decade immediately preceding the suit when witnesses who were present at the ceremony and who had seen the giving and taking would normally have been available.
He did not explain why no such witness was forthcoming.
[1005 A B] (c) The relationship mentioned in the will that defendant No. 1 was his adopted son and heir was merely a description of the devisee as understood by the testator.
The will was executed not because that relationship was brought about by adoption but by reason of feelings of affection which the devisee had earned by his association with and the assistance rendered to the testator.
[1003 H 1004 A] 2.
There is no force in the contention of the plaintiff that the will executed by C must be held to be wholly inoperative in so far as properties detailed in Schedules A and B were concerned because one half of the properties mentioned in these schedules had vested in C under the will of G which itself declared that she would hold them merely as a life tenant and that thereafter they would devolve on defendant No. 1.
In devising the properties to defendant No. 1, C did no more than carry out the behest of her own testator, which behest was good in law.
[1004 A C]
|
ition No. 57 of 1979.
Mrs. K. Hingorani for the Petitioners section M. Jha and U. P. Singh for the Respondent.
The Judgment of Bhagwati and Koshal, JJ. was delivered by Bhagwati, J. Pathak, J. gave a separate Opinion.
173 BHAGWATI, J.
This petition for a writ of habeas corpus discloses a shocking state of affairs in regard to administration of justice in the State of Bihar.
An alarmingly large number of men and women, children including, are behind prison bars for years awaiting trial in courts of law.
The offences with which some of them are charged are trivial, which, even if proved, would not warrant punishment for more than a few months, perhaps for a year or two, and yet these unfortunate forgotten specimens of humanity are in jail, deprived of their freedom, for periods ranging from three to ten years without even as much as their trial having commenced.
It is a crying shame on the judicial system which permits incarceration of men and women for such long periods of time without trial.
We are shouting from house tops about the protection and enforcement of human rights.
We are taking passionately and eloquently about the maintenance and preservation of basic freedoms.
But, are we not denying human rights to these nameless persons who are languishing in jails for years for offences which perhaps they might ultimately be found not to have committed ? Are we not withholding basic freedoms from these neglected and helpless human beings who have been condemned to a life of imprisonment and degradation for years on end? Are expeditious trial and freedom from detention not part of human rights and basic freedoms ? Many of these unfortunate men and women must not even be remembering when they entered the jail and for what offence.
They have over the years ceased to be human beings they are mere ticket numbers.
It is high time that the public conscience is awakened and the Government as well as the judiciary begin to realise that in the dark cells of our prisons there are large numbers of men and women who are waiting patiently, impatiently perhaps, but in vain, for justice a commodity which is tragically beyond their reach and grasp.
Law has become for them an instrument of injustice and they are helpless and despairing victims of the callousness of the legal and judicial system.
The time has come when the legal and judicial system has to be revamped and restructured so that such injustices do not occur and disfigures the fair and otherwise luminous face of our nascent democracy.
Though we issued notice to the State of Bihar two weeks ago, it is unfortunate that on the 5th February, 1979 no one has appeared on behalf of the State and we must, therefore, at this stage proceed on the basis that the allegations contained in the issues of the Indian Express dated 8th and 9th January, 1979 which are incorporated in the writ petition are correct.
The information contained in these newspaper cuttings is most distressing and it is sufficient to stir the consci 174 ence and disturb the equanimity of any socially motivated lawyer or judge.
Some of the undertrial prisoners whose names are given in the newspaper cuttings have been in jail for as many as 5, 7 or 9 years and a few of them, even more than 10 years, without their trial having begun.
What faith can these lost souls have in the judicial system which denies them a bare trial for so many years and keeps them behind bars, not because they are guilty, but because they are too poor to afford bail and the courts have no time to try them.
It is a travesty of justice that many poor accused, "little Indians, are forced into long cellular servitude for little offences" because the bail procedure is beyond their meagre means and trials don 't commence and even if they do, they never conclude.
There can be little doubt, after the dynamic interpretation placed by this Court on article 21 in Maneka Gandhi vs Union of India(1) that a procedure which keeps such large numbers of people behind bars without trial so long cannot possibly be regarded as 'reasonable, just or fair ' so as to be in conformity with the requirement of that Article.
It is necessary, therefore, that the law as enacted by the Legislature and as administered by the courts must radically change its approach to pretrial detention and ensure 'reasonable, just and fair ' procedure which has creative connotation after Maneka Gandhi 's case supra.
Now, one reason why our legal and judicial system continually denies justice to the poor by keeping them for long years in pretrial detention is our highly unsatisfactory bail system.
It suffers from a property oriented approach which seems to proceed on the erroneous assumption that risk of monetary loss is the only deterrent against fleeing from justice.
The Code of Criminal Procedure, even after its re enactment, continues to adopt the same antiquated approach as the earlier Code enacted towards the end of the last century and where an accused is to be released on his personal bond, it insists that the bond should contain a monetary obligation requiring the accused to pay a sum of money in case he fails to appear at the trial.
Moreover, as if this were not sufficient deterrent to the poor, the courts mechanically and as a matter of course insist that the accused should produce sureties who will stand bail for him and these sureties must again establish their solvency to be able to pay up the amount of the bail in case the accused fails to appear to answer the charge.
This system of bails operates very harshly against the poor and it is only the non poor who are able to take advantage of it by getting themselves released on bail.
The poor find it difficult to furnish bail even without sureties because very often the amount of the bail fixed by the courts is so 175 unrealistically excessive that in a majority of cases the poor are unable to satisfy the police or the Magistrate about their solvency for the amount of the bail and where the bail is with sureties, as is usually the case, it becomes an almost impossible task for the poor to find persons sufficiently solvent to stand as sureties.
The result is that either they are fleeced by the police and revenue officials or by touts and professional sureties and sometimes they have even to incur debts for securing their release or, being unable to obtain release, they have to remain in jail until such time as the court is able to take up their cases for trial, leading to grave consequences, namely, (1) though presumed innocent, they are subjected to psychological and physical deprivations of jail life, (2) they are prevented from contributing to the preparation of their defence and (3) they lose their job, if they have one, and are deprived of an opportunity to work to support themselves and their family members with the result that the burden of their detention almost invariably falls heavily on the innocent members of the family.
It is hero that the poor find our legal and judicial system oppressive and heavily weighted against them and a feeling of frustration and despair occurs upon them as they find that they are helplessly in a position of inequality with the non poor.
The Legal Aid Committee appointed by the Government of Gujarat under the chairmanship of one of us, Mr. Justice Bhagwati, emphasised this glaring inequality in the following words: "The bail system, as we see it administered in the criminal courts today, is extremely unsatisfactory and needs drastic change.
In the first place it is virtually impossible 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 176 of the bail is 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 find it difficult to furnish bail even in a small amount.
" The Gujarat Committee also pointed out how the practice of fixing the amount of bail with reference to the nature of the charge without taking into account relevant factors, such as the individual financial circumstances of the accused and the probability of his fleeing before trial, is harsh and oppressive and discriminates against the poor: "The discriminatory nature of the bail system becomes all the more acute by reason of the mechanical way in which it is custormarily operated.
It is no doubt true that theoretically the Magistrate has broad discretion in fixing the amount of bail but in practice it seems that the amount of bail depends almost always on the seriousness of the offence.
It is fixed according to a schedule related to the nature of the charge.
Little weight is given either to the probability that the accused will attempt to flee before his trial or to his individual financial circumstances, the very factors which seem most relevant if the purpose of bail is to assure the appearance of the accused at the trial.
The result of ignoring these factors and fixing the amount of bail mechanically having regard only to the seriousness of the offence is to discriminate against the poor who are not in the same position as the rich as regards capacity to furnish bail.
The Courts by ignoring the differential capacity of the rich and the poor to furnish bail and treating them equally produce inequality between the rich and the poor: the rich who is charged with the same offence in the same circumstances is able to secure his release while the poor is unable to do so on account of his poverty.
These are some of the major defects in the bail system as it is operated to day.
" The same anguish was expressed by President Lyndon B. Johnson at the time of signing the Bail Reforms Act, 1966: "Today, we join to recognize a major development in our system of criminal justice: the reform of the bail system.
This system has endured 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.
177 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 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. ." The bail system, as it operates today, is a source of great hardship to the poor and if we really want to eliminate the evil effects of poverty and assure a fair and just treatment to the poor in the administration of justice, it is imperative that the bail system should be thoroughly reformed so that it should be possible for the poor, as easily as the rich to obtain pretrial release without jeopardizing the interest of justice.
It is high time that our Parliament realises that risk of monetary loss is not the only deterrent against fleeing from justice, but there are also other factors which act as equal deterrents against fleeing.
Ours is a socialist republic with social justice as the signature tune of our constitution and Parliament would do well to consider whether it would not be more consonant with the ethos of our constitution that instead of risk of financial loss, other relevant considerations such as family ties, roots in the community, job security, membership of stable organisations etc., should be the determinative factors in grant of bail and the accused should be in appropriate cases be released on his personal bond without monetary obligation.
Of course, it may be necessary in such a case to provide by an amendment of the penal law that if the accused wilfully fails to appear in compliance with the promise contained in his personal bond, he shall be liable to penal action.
But even under the law as it stands today the courts must abandon the antiquated concept under which pretrial release is ordered only against bail with sureties.
That concept is outdated and experience has shown that it has done more harm than good.
The new insight into the subject of pretrial release which has been developed in socially advanced countries and particularly the United States should now inform the decisions of our Courts in regard to pretrial release.
If the Court is satisfied, after taking into account, on the basis of information placed before it, that the accused has his roots in the community and is not likely to abscond, it can safely release the accused 178 on his personal bond.
To determine whether the accused has his roots in the community which would deter him from fleeing, the Court should take into account the following factors concerning the accused: 1.
The length of his residence in the community.
his employment status, history and his financial condition, 3.
his family ties and relationships, 4.
his reputation, character and monetary condition, 5.
his prior criminal record including any record or prior release on recognizance or on bail, 6.
the identity of responsible members of the community who would vouch for his reliability.
the nature of the offence charged and the apparent probability of conviction and the likely sentence in so far as these factors are relevant to the risk of non appearance, and 8.
any other factors indicating the ties of the accused to the community or bearing on the risk of wilful failure to appear.
If the court is satisfied on a consideration of the relevant factors that the accused has his ties in the community and there is no substantial risk of non appearance, the accused may, as far as possible, be released on his personal bond.
Of course, if facts are brought to the notice of the court which go to show that having regard to the condition and background of the accused his previous record and the nature and circumstances of the offence, there may be a substantial risk of his non appearance at the trial, as for example, where the accused is a notorious bad character or a confirmed criminal or the offence is serious (these examples are only by way of illustration), the court may not release the accused on his personal bond and may insist on bail with sureties.
But in the majority of cases, considerations like family ties and relationship, roots in the community, employment status etc. may prevail with the court in releasing the accused on his personal bond and particularly in cases where the offence is not grave and the accused is poor or belongs to a weaker section of the community, release on personal bond could, as far as possible, be preferred.
But even while releasing the accused on personal bond it is necessary to caution the court that the amount of the bond which it 179 fixes should not be based merely on the nature of the charge.
The decision as regards the amount of the bond should be an individualised decision depending on the individual financial circumstances of the accused and the probability of his absconding.
The amount of the bond should be determined having regard to these relevant factors and should not be fixed mechanically according to a schedule keyed to the nature of the charge.
Otherwise, it would be difficult for the accused to secure his release even by executing a personal bond.
Moreover, when the accused is released on his personal bond, it would be very harsh and oppressive if he is required to satisfy the court and what we have said here in regard to the court must apply equally in relation to the police while granting bail that he is solvent enough to pay the amount of the bond if he fails to appear at the trial and in consequence the bond is forfeited.
The inquiry into the solvency of the accused can become a source of great harassment to him and often result in denial of bail and deprivation of liberty and should not, therefore, be insisted upon as a condition of acceptance of the personal bond.
We have no doubt that if the system of bail, even under the existing law, is administered in the manner we have indicated in this judgment, it would go a long way towards relieving hardship of the poor and help them to secure pretrial release from incarceration.
It is for this reason we have directed the undertrial prisoners whose names are given in the two issues of the Indian Express should be released forthwith on their personal bond.
We should have ordinarily said that personal bond to be executed by them should be with monetary obligation, but we directed as an exceptional measure that there need be no monetary obligation in the personal bond because we found that all these persons have been in jail without trial for several years, and in some cases for offences for which the punishment would in all probability be less than the period of their detention and moreover, the order we were making was merely an interim order.
The peculiar facts and circumstances of the case dictated such an unusual course.
There is also one other infirmity of the legal and judicial system which is responsible for this gross denial of justice to the undertrial prisoners and that is the notorious delay in disposal of cases.
It is a bad reflection on the legal and judicial system that the trial of an accused should not even commence for a long number of years.
Even a delay of one year in the commencement of the trial is bad enough; how much worse could it be when the delay is as long as 3 or 5 or 7 or even 10 years.
Speedy trial is of the essence of criminal justice and there can be no doubt that delay in trial by itself constitutes denial 180 of justice.
It is interesting to note that in the United States, speedy trial is one of the constitutionally guaranteed rights.
The Sixth Amendment to the Constitution provides that "In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial.
" So also Article 3 of the European Convention on Human Rights provides that: "every one arrested or detained shall be entitled to trial within a reasonable time or to release pending trial.
" We think that even under our Constitution, though speedy trial is not specifically enumerated as a fundamental right, it is implicit in the broad sweep and content of Article 21 as interpreted by this Court in Maneka Gandhi vs Union of India.
We have held in that case that Article 21 confers a fundamental right on every person not to be deprived of his life or liberty except in accordance with the procedure prescribed by law and it is not enough to constitute compliance with the requirement of that Article that some semblance of a procedure should be prescribed by law, but that the procedure should be "reasonable, fair and just".
If a person is deprived of his liberty under a procedure which is not "reasonable, fair or just", such deprivation would be violative of his fundamental right under Article 21 and he would be entitled to enforce such fundamental right and secure his release.
Now obviously procedure prescribed by law for depriving a person of his liberty cannot be 'reasonable, fair or just ' unless that procedure ensures a speedy trial for determination of the guilt of such person.
No procedure which does not ensure a reasonable quick trial can be regarded as 'reasonable, fair or just ' and it would fall foul of Article 21.
There can, therefore, be no doubt that speedy trial and by speedy trial we mean reasonably expeditious trial, is an integral and essential part of the fundamental right to life and liberty enshrined in Article 21.
The question which would, however, arise is as to what would be the consequence if a person accused of an offence is denied speedy trial and is sought to be deprived of his liberty by imprisonment as a result of a long delayed trial in violation of his fundamental right under Article 21.
Would he be entitled to be released unconditionally freed from the charge levelled against him on the ground that trying him after an unduly long period of time and convicting him after such trial would constitute violation of his fundamental right under Article 21 ? That is a question we shall have to consider when we hear the writ petition on merits on the adjourned date.
But one thing is certain and we cannot impress it too strongly on the State Government that it is high time that the State Government realised its responsibility to the people in the matter of admini 181 stration of justice and set up more courts for the trial of cases.
We may point out that it would not be enough merely to establish more courts but the State Government would also have to man them by competent judges and whatever is necessary for the purpose of recruiting competent judges, such as improving their conditions of service, would have to be done by the State Government, if they want to improve the system of administration of justice and make it an effective instrument for reaching justice to the large masses of people for whom justice is to day a meaningless and empty word.
These are the reasons for which we made our order dated 5th February, 1979.
We shall now proceed to hear the writ petition on 19th February, 1979.
PATHAK, J.
It is indisputable that an unnecessarily prolonged detention in prison of undertrials before being brought to trial is an affront to all civilized norms of human liberty.
Any meaningful concept of individual liberty which forms the bedrock of a civilized legal system must view with distress patently long periods of imprisonment before persons awaiting trial can receive the attention of the administration of justice.
The primary principle of criminal law is that imprisonment may follow a judgment of guilt.
But should not precede it.
But there is another principle which makes it desirable to ensure that the accused is present to receive his sentence in the event of being found guilty.
Now, the Code of Criminal Procedure, both the old Code and the new, include provision for the release of a person on bail or on the execution of a bond without sureties for his appearance.
Nonetheless, as appears prima facie from the record before us, a large number of persons whose names, find mention in copies of the Indian Express of January 8 and 9, 1979, have been in prison for long year without even being brought to trial.
Although sufficient opportunity was given to the State of Bihar to meet the allegations made, it is unfortunate that no one has appeared on behalf of the State.
In view of the importance of the questions arising on the habeas corpus petition, we have provided further opportunity to the State to appear and accordingly have posted the petition for final hearing on February 19, 1979.
But at the same time we see no reason why interim relief should be denied to these undertrials.
After carefully considering what has been said in respect of each individual undertrial, we have considered it appropriate, in the interests of justice, to make the order of February 5, 1979 directing the release of the persons mentioned in that order on their executing a personal bond.
The order is somewhat unusual in that it directs that the personal bond to be taken in each 182 case should not be based on any monetary obligation.
The condition has been included as an exceptional measure, under the persuasive pressure of the particular facts and circumstance of the case.
In regard to the exercise of the judicial power to release a prisoner awaiting trial on bail or on the execution of a personal bond without sureties for his appearance, I have to say this briefly.
There is an amplitude of power in this regard within the existing provisions of the Code of Criminal Procedure, and it is for the Courts to fully acquaint themselves with the nature and extent of their discretion in exercising it.
I think it is no longer possible to countenance a mechanical exercise of the power.
What should be the amount of security required or the monetary obligation demanded in a bond is a matter calling for the careful consideration of several factors.
The entire object being only to ensure that the undertrial does not flee or hide himself from trial, all the relevant considerations which enter into the determination of that question must be taken into account.
A synoptic impression of what the considerations could be may be drawn from the following provision in the United States Bail Reform Act of 1966: "In determining which conditions of releases will reasonably assure appearance, the judicial officer shall, on the basis of available information, take into account the nature and circumstances of the offence charged, the weight of the evidence against the accused, the accused 's family ties, employment, financial resources, character and mental condition, the length of his residence in the community, his record of convictions, and his record of appearance at court proceedings or of flight to avoid prosecution or failure to appear at court proceedings.
These are considerations which should be kept in mind when determining the amount of the security or monetary obligation.
Perhaps, if this is done the abuses attendant on the prevailing system of pretrial release in India could be avoided or, in any event, greatly reduced See Moti Ram and Others vs State of Madhya Pradesh.
I consider it desirable to refrain from making any final comment or observation on the legality and propriety of the continued detention of the undertrial prisoners whether on the ground of infringement 183 of Article 21 of the Constitution or on other grounds.
That, I think, should await the final determination of the habeas corpus petition.
These are the reasons which have influenced me in making the order dated February 5, 1979.
While concluding, it seems desirable to draw attention to the absence of an explicit provision in the Code of Criminal Procedure enabling the release, in appropriate cases, of an undertrial prisoner on his bond without sureties and without any monetary obligation.
There is urgent need for a clear provision.
Undeniably, the thousands of undertrial prisoners lodged in Indian prisons today include many who are unable to secure their release before trial because of their inability to produce sufficient financial guarantee for their appearance.
Where that is the only reason for their continued incarceration, there may be good ground for complaining of invidious discrimination.
The more so under a constitutional system which promises social equality and social justice to all of its citizens.
The deprivation of liberty for the reason of financial poverty only is an incongruous element in a society aspiring to the achievement of these constitutional objectives.
There are sufficient guarantees for appearance in the host of considerations to which reference has been made earlier and, it seems to me, our law makers would take an important step in defence of individual liberty if appropriate provision was made in the statute for non financial releases.
| IN-Abs | In their petition for the issue of a writ of habeas corpus the petitioners stated that a large number of men and women including children were in jails for years awaiting trial in courts of law and that the offences, even if proved, would not warrant punishment for more than a few months.
Although sufficient opportunity was given, the State did not appear before the Court.
Directing the release of the undertrials on their executing a personal bond.
^ HELD : (Per Bhagwati & Koshal, JJ.) 1.
A procedure which keeps large number of people behind bars without trial for long, cannot possibly be regarded as "reasonable, just or fair" so as to be in conformity with the requirement of article 21.
It is necessary, therefore, that the law as enacted by the Legislature and as administered by the courts must radically change its approach to pre trial detention and ensure `reasonable, just and fair ' procedure which has a creative connotation after the decision of the Supreme Court in Maneka Gandhi 's case.
[174 C D] 2.
Speedy trial is of the essence of criminal justice and, therefore, delay in trial by itself constitutes denial of justice.
Though speedy trial is not specifically enumerated as a fundamental right, it is implicit in the broad sweep and content of article 21.
Speedy trial which means reasonably expeditious trial, is an integral part of the fundamental right to life and liberty enshrined in article 21, [179 H, 180 C, F] article 21 confers fundamental right on every person not to be deprived of his life or liberty except in accordance with the procedure prescribed by law and it is not enough to constitute compliance with the requirement of that Article that some semblance of a procedure should be prescribed by law, but that the procedure should be "reasonable, fair and just".
If a person is deprived of his liberty under a procedure which is not "reasonable, fair or just", such deprivation would be violative of his fundamental right under article 21 and he would be entitled to enforce such fundamental right and secure his release.
Any procedure prescribed by law for depriving a person of his liberty cannot be "reasonable, fair or just" unless that procedure ensures a speedy trial for determination of the guilt of such person.
[180 D E] 170 Maneka Gandhi vs Union of India, [1978] 2 SCR 621; referred to.
Expeditious trial and freedom from detention are part of human rights and basic freedoms.
The judicial system which permits incarceration of men and women for long periods of time without trial is denying human rights to such undertrials and withholding basic freedoms from them.
Law has become for them an instrument of injustice and they are helpless and despairing victims of the callousness of the legal and judicial system.
[173 C E, F] 4.
One reason why our legal and judicial system continually denies justice to the poor by keeping them for long years in pretrial detention is the highly unsatisfactory bail system, which suffers from a property oriented approach.
It proceeds on the erroneous assumption that risk of monetary loss is the only deterrent against fleeing from justice.
Even after its re enactment, the Code of Criminal Procedure continues to adopt the same antiquated approach.
Where an accused is to be released on his personal bond, it insists that the bond should contain a monetary obligation requiring the accused to pay a sum of money in case he fails to appear at the trial.
Moreover, as if this were not sufficient deterrent to the poor, the courts mechanically and as a matter of course insist that the accused should produce sureties who will stand bail for him and these sureties must again establish their solvency to be able to pay the amount of bail in case the accused fails to appear to answer the charge.
[174 E G] This system of bails operates very harshly against the poor and it is only the non poor who are able to take advantage of it by getting themselves released on bail.
The poor find it difficult to furnish bail even without sureties because very often the amount of the bail fixed by the Court is so unrealistically excessive that in a majority of cases the poor are unable to satisfy the police or the Magistrate about their solvency for the amount of the bail and where the bail is with sureties, as is usually the case, it becomes an almost impossible task for the poor to find persons sufficiently solvent to stand as sureties.
The result is that either they are fleeced by the police and revenue officials or by touts and professional sureties and sometimes they have even to incur debts for securing their release or, being unable to obtain release, they have to remain in jail until such time as the court is able to take up their cases for trial, leading to grave consequences, namely, (1) though presumed innocent, they are subjected to psychological and physical deprivations of jail life, (2) they are prevented from contributing to the preparation of their defence and (3) they lose their job, if they have one, and are deprived of an opportunity to work to support themselves and their family members with the result that the burden of their detention almost invariably falls heavily on the innocent members of the family.
[174 G 175 D] The bail system, as it operates today, is thus a source of great hardship to the poor and if the civil effects of poverty are to be eliminated and a fair and just treatment assured to the poor in the administration of justice, it is imperative that the bail system should be thoroughly reformed so that it should be possible for the poor, as easily as the rich, to obtain pre trial release without jeopardizing the interest of justice.
[177 C D] Risk of monetary loss is not the only deterrent against fleeing from justice.
There are also other factors which act as equal deterrents against fleeing.
Therefore, the courts, even under the law as it stands today, must abandon the antiquated concept under which pre trial release is ordered only against bail with sureties.
If the court is satisfied, after taking into account, on the basis of 171 information placed before it, that the accused has his roots in the community and is not likely to abscond, it can safely release the accused on his personal bond.
[177 E, G, H] 5.
To determine whether the accused has his roots in the community which would deter him from fleeing, the court should take into account the following factors concerning the accused: (1) The length of his residence in the community, (2) his employment status, history and his financial condition, (3) his family ties and relationships, (4) his reputation, character and monetary conditions, (5) his prior criminal record including any record of prior release on recognizance or on bail, (6) the identity of responsible members of the community who would vouch for his reliability, (7) the nature of the offence charged and the apparent probability of conviction and the likely sentence in so far as these factors are relevant to the risk of non appearance, and (8) any other factors indicating the ties of the accused to the community or bearing on the risk of wilful failure to appear.
[178 A E] If the court is satisfied on a consideration of the relevant factors that the accused has his ties in the community and there is no substantial risk of non appearance, the accused may, as far as possible, be released on his personal bond.
If facts are brought to the notice of the court showing that, having regard to the condition and back ground of the accused, his previous record and the nature and circumstances of the offence, there may be a substantial risk of his non appearance at the trial, as for example, where the accused is a notorious bad character or a confirmed criminal or the offence is serious, the court may not release the accused on his personal bond and may insist on bail with sureties.
But in the majority of cases, considerations like family ties and relationship, roots in the community, employment status etc. may prevail with the court in releasing the accused on his personal bond and particularly in cases where the offence is not grave and the accused is poor or belongs to a weaker section of the community, release on personal bond could, as far as possible, be preferred.
But even while releasing the accused on personal bond it is necessary to caution the court that the amount of the bond which it fixes should not be based merely on the nature of the charge.
The decision as regards the amount of the bond should be an individualised decision depending on the individual financial circumstances of the accused and the probability of his absconding.
The amount of the bond should be determined having regard to these relevant factors and should not be fixed mechanically according to a schedule keyed to the nature of the charge.
Otherwise, it would be difficult for the accused to secure his release even by executing a personal bond, it would be very harsh and oppressive if he is required to satisfy the court and what is said in regard to the court must apply equally in relation to the police while granting bail that he is solvent enough to pay the amount of the bond if he fails to appear at the trial and in consequence the bond is forfeited.
The inquiry into the solvency of the accused can become a source of great harassment to him and often result in denial of bail and deprivation of liberty and should not, therefore, be insisted upon as a condition of acceptance of the personal bond.
[178 F 179 D] 6.
Necessary to provide by an amendment of the penal law that if an accused wilfully fails to appear in compliance with the promise contained in his personal bond, he shall be liable to penal action.
[177 F] 7.
High time that the State Government realised its responsibility to the people in the matter of administration of justice and set up more courts for the trial of cases.
[180 H] 172 Pathak J. (concurring) (1) The primary principle of criminal law is that imprisonment may follow a judgment of guilt, but should not precede it.
There is also another principle which makes it desirable to ensure that the accused is present to receive his sentence in the event of being found guilty.
[181 E] (2) It is indisputable that an unnecessarily prolonged detention in prison of undertrials before being brought to trial is an affront to all civilized norms of human liberty and any meaningful concept of individual liberty which forms the bedrock of a civilized legal system must view with distress patently long periods of imprisonment before persons awaiting trial can receive the attention of the administration of justice.
[181 D] (3) The Code of Criminal Procedure both the old Code and the new include provisions for the release of a person on bail or on the execution of a bond without sureties for his appearance.
There is an amplitude of judicial power to release a prisoner awaiting trial on bail or on the execution of a personal bond without sureties for his appearance within the existing provisions of the Code of Criminal Procedure and it is for the Courts to fully acquaint themselves with the nature and extent of their discretion in exercising it.
It is no longer possible to countenance a mechanical exercise of the power.
What should be the amount of security required or the monetary obligation demanded in a bond is a matter calling for the careful consideration of several factors.
The entire object being only to ensure that the undertrial does not flee or hide himself from trial, all the relevant considerations which enter into the determination of that question must be taken into account.
[181 E, 182 B C] (4) The abuses attendant on the prevailing system of pre trial release in India could be avoided or, in any event greatly reduced, if considerations like "nature and circumstances of the offence charged, the weight of the evidence against the accused, the accused 's family ties, employment, financial resources, character and mental condition, the length of his residence in the community, his record of convictions, and his record or appearance at court proceedings or of flight to avoid prosecution or failure to appear at court proceedings", are taken into consideration when determining pre trial release and the amount of security or monetary obligation to be imposed.
[182 G, E F] United States Bail Reforms Act, 1966: 18 USS 3146 (b), Moti Ram & Ors.
vs State of M.P. ; ; referred to.
(5) Urgent need for a clear and explicit provision in the Code of Criminal Procedure enabling the release, in appropriate cases, of an under trial prisoner on his bond without sureties and without any monetary obligation.[183 B]
|
: Civil Appeals Nos. 191 & 192 of 1953.
Appeal from the judgment and decree dated the 27th October 1949 of the Patna High Court in Appeals from the Original Decrees Nos. 127 & 125 of 1943 arising out of the decrees dated the 30th day of April 1943 of the Court of Additional Subordinate Judge, Hazaribagh in Suits Nos. 28 & 82 of 1940 respectively.
M.C. Setalvad, Attorney General for India, N. C. Chatterjee, section Chaudhry, section N. Mukherji and B. N. Ghosh, for the appellant.
Atul Chandra Gupta and Ganpat Rai, for respondents Nos. 1 & 12.
Atul Chandra Gupta and I. N. Shroff, for respondents Nos. 2, 4, 5, 6 & 13.
Lal Narain Sinha, Bajrang Sahai and R. C. Prasad, for respondent No. 9.
Sanjib Chaudhry and R. R. Biswas, for respondent No. 10.
Sanjib Chaudhry and Ganpat Rai, for respondent No. 1 1.
Ganpat Rai, for respondents Nos.
3,7 & 8.
April 10.
The Judgment of the Court was delivered by VENKATARAMA AYYAR J.
These appeals raise questions as to the validity of a prospecting license granted on 26 3 1915 in favour of Messrs Bird and Co., by the Court of Wards as representing the Ram 328 garh Estate and of two deeds dated 23 11 1917 and 1 6 1937 executed by the Court of Wards modifying the terms of the license dated 26 3 1915.
The Ramgarh Raj is an ancient principality situate in Bihar.
It has three coal fields, Bokaro Jharia, Bokaro Ramgarh and Karanpura.
Of these, the Karanpura coal fields are the largest being of the extent of 550 sq.
miles, of which about 415 sq.
miles belonged to the estate.
On 26 11 1907 Raja Ram narain Singh, the proprietor of the estate, granted in favour of Messrs Anderson Wright & Co., a prospecting license in respect of the Bokaro Ramgarh coal fields, referred to in these proceeding as the Bokaro license.
He was also negotiating for a similar license in respect of the Karanpura coal fields (vide Exhibit 155 b dated 1 12 1912), but before anything was concluded, he died on 26 1 1913 leaving him surviving his widow, Rikinath Kaur, and a minor son, Lakshminarain Singh.
At the time of his death, the debts owing by the estate amounted to about Rs. 9 lakhs.
On 20 5 1913 the Court of Wards took over the management of the estate, and its first concern was to relieve it from the pressure of creditors, and for that purpose, to arrange for a loan on easy terms.
It was at this juncture that Messrs Bird and Co., made an application for a prospecting license for the Karanpura coal fields, and in reply thereto, the manager of the Court of Wards informed them on 4 9 1913 that "the estate being involved and anxious to pay off the debts, one of the conditions of the lease would be an advance of about Rs. 8 to Rs. 11 lakhs including salami, etc., to the estate on the same terms as advanced by the Bokaro and Ramgarh Company".
Then, there were negotiations extending over several months, a good deal of correspondence and personal discussions, and eventually on 29 7 1914 the terms were finally agreed upon, and on 26 3 1915 the deed of prospecting license was actually executed.
Its main terms were as follows: It was to be in force for a period of six years.
A sum of Rs. 1,00,000 was paid as salami.
The licensees were to pay a minimum 329 ground rent of Rs. 8,000 per annum commencing from the second year of the license, and if the leases were actually taken by the licensees, this amount was to be adjusted towards royalties payable thereunder.
The terms of the leases which were to be granted in pursuance of the license were firstly, the lessees were to pay a salami at Rs. 40 per bigha, the payment to commence either when railway facilities were 'available for transport of coal from the mouth of the pit or after a lapse of six years after the period of the license, that is to say, after 26 3 1927, whichever was earlier; secondly, royalty was to be paid on coal, dust and coke at rates specified therein, subject to a minimum of Rs. 5 per bigha payable after the first year of the lease; and thirdly, the lessees were to pay the cesses payable under the law by the occupier or tenant of the land.
As consideration for the grant of the license, Messrs Bird and Co., were to advance Rs. 9 lakhs as loan to the estate.
This amount was not to carry interest and was to be discharged by adjusting the royalties which would become payable under the leases.
If no leases were taken and the license was abandoned, then the amount of the loan was to carry interest at 4 1/2 per cent per annum from that date and it had to be repaid in half yearly instalments such that the entire debt would be discharged within a period of six years.
A mortgage bond was executed on the same date as the prospecting license embodying these terms.
The next phase of the transaction begins on 3 8 1915 with Messrs Bird and Co., applying to the Court of Wards for extension of the period of the license on the ground that as the result of war conditions, new and unexpected difficulties bad cropped up and that to achieve the purpose of the license, is was necessary to extend the period of six years fixed therefor.
This proposal was subjected to close scrutiny, and there was prolonged correspondence between Messrs Bird and Co., and the Court of Wards on the expedi ency of extending the period of license and on the terms on which such extension should be granted.
Ultimately, on 23 11 1917 the manager of the Court 330 of Wards executed a deed modifying the terms of the deed dated 26 3 1915.
Under this deed, the period of license was extended in the first instance from 6 to 12 years; that is to say, it would expire on 26 3 1927 instead of on 26 3 1921 as originally fixed.
It was then provided that if within this extended period the licensee took a lease or leases of mines of the extent of at least 10,000 bighas, then the period of the license would be extended by a second term of 12 years; i.e., up to 26 3 1939.
There was a further pro vision that if before 26 3 1939 the licensees took leases of at least 20,000 bighas, the period of the license would be extended by another term of 12 years, i.e., up to 26 3 1951.
While under the prospecting license dated 26 3 1915 a minimum ground rent of Rs. 8,000 was payable from the second year, under the deed dated 23 11 1917 a minimum ground rent of Rs. 50,000 per annum at Rs. 5 per bigha on the covenanted number of 10,000 bighas was payable from the seventh to the twelfth year.
These are the salient features of the license as revised by the document dated 23 11 1917.
Raja Lakshminarain Singh, the ward, became a major on 6 4 1919, and died shortly thereafter on 10 4 1919 leaving him surviving a minor son, Raja Kamakshya Narain Singh, the main respondent in these appeals.
The Court of Wards accordingly continued in management of the estate on behalf of the Raja until 10 8 1937, when he became a major.
On 14 7 1920, the appellant Company was registered under the provisions of the Indian Companies Act, and it took over the interests of Messrs Bird & Co., under the license dated 26 3 1915 as modified by the deed of variation dated 23 11 1917.
In pursuance of these deeds, the Company took six leases covering in all an area of 17,539 bighas on divers dates between 17 7 1922 and 17 7 1933.
Under the terms of the deed dated 23 11 1917 the appellant would be entitled to extension of the licence from 26 3 1939 for the third period of 12 years only if it had taken lease of at least 20,000 bighas before 26 3 1939.
Accordingly, it applied for and obtained three leases 331 on 2 8 1937 covering an area of 2,461 bighas, thus making up along with the six leases mentioned above, the minimum area of 20,000 bighas.
There is one more deed to which reference must now be made.
Clause 6 of the deed dated 23 11 1917 provides that the minimum royalty on areas in excess of 10,000 bighas taken on lease would not be payable till 26 3 1939.
Thereafter, the appellant would under this clause become liable to pay a minimum royalty for an area in excess of 10,000 bighas.
The appellant applied to modify this term by postponing the date of payment by a further period of 12 years.
This proposal was accepted by the Court of Wards, and on 1 6 1937 a deed was executed providing in modification of clause 6, as it stood in the deed dated 23 11 1917, that the minimum royalty for the areas in excess of 10,000 bighas was not to become payable by the company until railway facilities for transport of the coal from the mouth of the pit were available or from 26 3 1951, whichever happened earlier.
These are the three transactions, which form the subject matter of this litigation.
On 10 8 1937 the Raja became, as already stated, a major, and assumed management of the estate.
On 9 3 1939 he sent a notice to the appellant repudiating the license dated 26 3 1915 and the two deeds of variation dated 23 11 1917 and 1 6 1937 as not binding on him.
The appellant in turn sent a notice on 14 5 1940 calling upon the Raja to execute a lease in respect of 250 bighas in accordance with the deeds dated 26 3 1915, 23 11 1917 and 1 6 1937, and followed it up by instituting on 8 6 1940 Title Suit No. 28 of 1940 in the court of the Subordinate Judge of Hazaribagh for compelling specific performance thereof.
On 9 8 1940 the Raja filed Title Suit No. 82 of 1940 in the Sub Court, Hazaribagh, and therein, he pleaded that the deed dated 26 3 1915 was void, because the Court of Wards had no power to grant a prospecting license and also because it had acted with gross negligence in granting the same; and that the deeds dated 23 11 1917 and 1 6 1937 were bad, because there was no sanction therefor as required by section 18 of the 332 Bengal Court of Wards Act IX of 1879, hereinafter referred to as the Act, and also because they were not for the benefit of the estate.
He accordingly prayed for a declaration that the three deeds aforesaid were void, and for possession of the properties comprised in the leases, with mesne profits, past and future.
Both these suits, which were really cross actions involving the determination of the same points, were heard together by the Subordinate Judge of Hazaribagh, and by his judgment dated 30 4 1943 he held that the deeds dated 26 3 1915 and 23 11 1917 were intra vires the powers of the Court of Wards, that they were beneficial to the estate, and were therefore valid, and he accordingly upheld the six leases granted pursuant to those deeds.
He, however, held that the deed dated 1 6 1937 was not valid, both because the Court of Wards had not sanctioned it and also because it was not for the benefit of the estate.
In view of this finding, he held that the clause in the lease deeds dated 2 8 1937 based on the deed dated 1 6 1937 postponing the payment of minimum royalty was bad, but that the leases themselves were other wise valid.
As a result of these, findings, be granted a decree for specific ' performance in Title Suit No. 28 of 1940 and in Title Suit No. 82 of 1940 he awarded reliefs consequential on the invalidity of the deed dated 1 6 1937.
Against this judgment, the Raja preferred appeals to the High Court of Patna, F. A. No. 125 of 1943 against the decree in Title Suit No. 82 of 1940 and F.A. No. 127 of 1943 against that in Title Suit No. 28 of 1940.
The company also filed cross objections in F.A. No. 125 of 1943.
The learned Judges agreed with the Subordinate Judge that the Court of Wards was competent to grant a prospecting license, but they were of opinion that it had not applied its mind to certain important aspects of the transaction, that the interests of the ward bad suffered in consequence, and that the deed dated 26 3 1915 was therefore not valid.
Dealing next with the deed dated 23 11 1917, they held that it was void, because the Court of Wards had not sanctioned it.
They also held that it 333 was not binding on the Raja, firstly because its terms were not beneficial to him, secondly because it had been obtained by Messrs Bird and Co., on false representation, and thirdly because Mr. MacGregor, the then manager of the Court of Wards, was acting in his own interests and adversely to those of the minor ward, and the Court of Wards had been misled by him into entering into the transaction.
For these reasons, the learned Judges held that the deed dated 23 11 1937 was void and inoperative as against the ward.
Then, as regards the deed dated 1 6 1937, the learned Judges agreed with the Subordinate Judge that it was invalid on both the grounds given by him.
In the result, in Title Suit No. 82 of 1940 a declaration was made that the deeds dated 26 3 1915, 26 11 1917 and 1 6 1937 as well as the leases granted pursuant thereto were void and a decree passed in favour of the Raja for possession of the demised properties with mesne profits, past and future.
Title Suit No. 28 of 1940 instituted by the appellant for specific performance and the cross objections filed by it in F.A. No. 125 of 1943 were dismissed.
Against this judgment, the present appeals have been preferred by the company, C.A. No. 191 of 1953 being directed against the decree in F.A. No. 127 of 1943 and C.A. No. 192 of 1953 against the decree in F.A. No. 125 of 1943.
The first respondent in these appeals is the Raja of Ramgarh, the other respondents being transferees from him, and he will be referred to in this judgment as the respondent.
Though the questions that were agitated by the parties in the courts below ranged over a wide area, many of them have been abandoned in the argument before us, and the scope of the controversy in these appeals has been considerably narrowed down.
Thus, the appellant does not challenge the correctness of the decision of the courts below that the deed dated 1 6 1937 is not binding on the estate.
Mr. Atul Chandra Gupta, learned counsel for the Raja, has limited his attack on the deed dated 26 3 1915 to the ground that it was not for the benefit of the ward, because the clause therein relating to the payment of 334 cess, or more compendiously, the cess clause was less advantageous to him than the corresponding clause in the Bokaro license, and the Court of Wards executed the deed in question without bestowing any thought to it.
He attacked the deed dated 23 11 1917 on the following grounds: (1) The Court of Wards had no power to enter into a transaction, which had the effect of preventing the ward from dealing with his estate for over a period of 32 years after he attained majority, and which bound him to grant leases down to the year 1951 at the rates of salami and royalties fixed in the year 1915.
(2) In granting the deed dated 23 11 1917, the Court of Wards considered only the benefit of Messrs Bird and Co., and not of the ward.
(3) The deed is void, because no sanction had been given to it by the Court of Wards, as required by section 18 of the Act.
Before dealing with these contentions on their merits, it is necessary to consider the question which was discussed at the Bar as to the grounds on which the deeds dated 26 3 1915 and 23 11 1917 are open to attack in these proceedings.
A transaction entered into by a guardian on behalf of a minor will be valid and binding on the latter, only if it is for proved necessity or benefit.
When a transaction is entered into by a Court of Wards on behalf of the ward, is its validity to be judged on the same considerations, and is it open to the ward on attaining majority to challenge it on the ground that it was not beneficial to him? The Court of Wards is not in the same position as a guardian of a minor.
It is a statutory body, and its powers are those which are conferred on it by the statute, which creates it.
Section 14 of the Act provides that the Court of Wards may, acting through its manager, do all such things requisite for the proper care and management of the property as the proprietor of such property might do, if not disqualified.
Section 18 enacts that: "The Court may sanction the giving of leases or farms of the whole or part of any property under its charge, and may direct the mortgage or sale of any part of such property, and may direct the doing of all 335 such other acts as it may judge to be most for the, benefit of the property and the advantage of the ward".
It was in exercise of the power conferred by this section that the Court of Wards executed the two impugned deeds dated 26 3 1915 and 23 11 1917.
Now,; what is the true scope of section 18? Is the exercise of the power conferred by that section conditioned on the act being in fact for the benefit of the ward, or is it sufficient that the Court of Wards judges it to be for the benefit of the property and the advantage of the ward? The contention of Mr. Gupta for the respondent is that the words "as it may judge" do not signify that the judgment could be made without reasonable grounds therefor, that they should be construed as meaning "as it may on reasonable grounds judge", and that it is therefore open to the Court to consider whether the decision of the Court of Wards was a reasonable one to come to, and that if it came to the conclusion that it was not, then to hold that it fell out side the ambit of the authority conferred by section 18.
In support of this contention, be relied on certain ob servations in Nakkuda Ali v .
M. F. De. section Jayaratne(1).
There, the Board was considering the meaning of the words "where the Controller has reasonable grounds to believe" occurring in a Regulation of Ceylon.
In an application for certiorari to quash an order of the Controller made under this enactment, it was argued for him that the words of the Regulation left the matter to his subjective satisfaction, that his decision therefore was not liable to the questioned on the ground that, in fact, there existed no reasonable ground therefor; and the decision in Liversidge vs
Sir John Anderson(2) was relied on as establishing that position.
In negativing this contention, Lord Radcliffe observed that the words "where the Controller had reasonable grounds to believe" might mean either "where it is made out to his subjective satisfaction" or "where there are reasonable grounds on which be could believe", and that whether the words were (1) , 76.
(2) ; 336 used in the one sense or the other in the enactment on question must depend upon the context.
The question then is ultimately one of construction of the words of the particular statute.
Now, what do the words "as it may judge" in section 18 mean? Do they confer on the Court of Wards a power to be exercised if the act is, in its judgment, for the benefit of the property or the advantage of the ward, or do they confer a power to be exercised only if, in fact, the act is for the benefit of the property or the advantage of the ward? In Liversidge vs Sir John Anderson(1), Lord Atkin who held that the words of Regulation 18 B of the Defence Regulations 1939 that "if the Secretary of State has reasonable cause to believe" meant "if, in fact, there was reasonable cause for the belief", discussed what words were susceptible of importing an objective standard as contrasted with subjective satisfaction, and observed: "It is surely incapable of dispute that the words "if A has X ' constitute a condition the essence of which is the existence of X and the having of it by A.
And the words do not mean and cannot mean 'if A thinks that he has '. 'If A has a broken ankle ' does not mean and cannot mean 'if A thinks that be has a broken ankle '. 'If A has a right of way ' does not mean and cannot mean 'if A thinks that he has a right of way '. 'Reasonable cause ' for an action or a belief is just as much a positive fact capable of deter mination by a third party as is a broken ankle or a legal right".
Examining the language of section 18 in the light of these observations, we are unable to construe the words "as it may judge most for the benefit of the property and the advantage of the ward" as equivalent to "as may be for the benefit of the property and the advantage of the ward" or "as might be judged to be most for the benefit of the property and the advantage of the ward".
The statute confides in clear and unambiguous terms the authority to judge whether the act is beneficial to the estate, to the Court of Wards and not to any outside authority.
(1)[1942] A.C. 206.
337 That being the true scope of the power conferred by section 18, what are the grounds on which the exercise of such a power could be impugned in a court of law? It can be attacked on the ground that the Court of Wards did not act bona fide and in the interests of the ward, and that its action amounted to a fraud on the power.
It can also be attacked on the ground that the Court of Wards did not, in fact, apply its mind to the question whether the act was for the benefit of the property or the advantage of the ward, and that though it purported to exercise the power under section 18, it did not, in fact, come to a judgment as required by the section.
But where it has applied its mind and given thought to the question whether the act is for the benefit of the property or the advantage of the ward and comes to an honest judgment in the matter, its decision is not liable to be questioned on the ground that it was erroneous on the merits, or that it was reached without con sidering some aspects which ought to have been considered, unless the failure to consider them is of such a character as to amount to there being no exercise of judgment at all.
The question as to the limits within which courts could interfere with the exercise of a power of the nature now in question was considered at some length in Allcroft vs Lord Bishop of London: Lighton vs Lord Bishop of London(1).
There, the statute provided for certain action being taken "unless the Bishop shall be of opinion that proceedings shall not be taken".
Acting under this section the Bishop of London decided not to take proceedings, and the correctness of this decision was challenged in an application for mandamus.
It was held by the House of Lords that the Bishop having acted within his jurisdiction and exercised his judgment honestly, his decision was not liable to be questioned on the ground that it was erroneous or that be had not considered all the aspects of the matter.
The following observations of Lord Bramwell may be quoted: "Then it was said that there was something he (1) 338 had considered which he ought not to have considered, and something he had not considered which he ought to have, and so he had not considered the whole circumstances and them only.
It seems to me that this is equivalent to saying that his opinion can be reviewed.
I am clearly of opinion it cannot be.
If a man is to form an opinion, and his opinion is to govern, he must form it himself on such reasons and grounds as seem good to him".
And Lord Herschell observed: "It is impossible to read the bishop 's statement without seeing that he has honestly considered what appeared to him to be all the circumstances bearing on the question whether the proceedings should be allowed to go on.
That being so, it is not for your Lordships, on this application for a mandamus; to consider whether the bishop 's reasons are good or bad; whether they ought or ought not to have led him to form the opinion he did".
Bearing these principles in mind, the question to be considered is whether the Raja has, the burden thereof being on him, established any grounds on which the deeds entered into by the Court of Wards on 26 3 1915 and 23 11 1917 could be held to be outside the power conferred on it under section 18.
That leads us to a consideration of the four contentions on which Mr. Atul Chandra Gupta attacked the two deeds aforesaid as not binding on the estate.
The first is directed against the deed dated 26 3 1915, the point of the attack being that the clause relating to the payment of cess in that deed is less advantageous to the ward than the corresponding clause in the Bokaro license dated 26 11 1907.
To appreciate this contention, it must be stated that when Messrs Bird and Co., applied to the Court of Wards for a prospecting license, negotiations were carried on the under standing that the Bokaro license granted by Raja Ramnarain Singh was to be the basis for the contract, subject to any variation on which the parties might agree, Pursuant to this understanding, there was a discussion of the terms of the license between the representatives of Messrs Bird and Co., and the 339 officers of the Court of Wards on the 1st and 2nd April 1914.
Exhibit 130(1) is a record of those discussions in the handwriting of the Deputy Commissioner, Mr. Lister.
On 11 4 1914 Messrs Bird and Co. were informed that the Board had generally approved of the proposal, and there was a further communication to them on the 17th April 1914 that "formal sanction cannot be given until the terms are embodied in a formal document.
" On 12 5 1914 Messrs Bird and Co. sent a draft agreement for the approval of the Court of Wards, and on that, there was further correspondence and personal discussion, and ultimately, the Board gave its final sanction on 29 7 1914, and the deed which was executed by the manager on 26 3 1915 is in accordance with the draft as approved.
This deed, however, differs from the Bokaro license in one respect.
Schedule A to that license contains a draft of the mining lease to be granted in pursuance thereto, and one of the covenants contained therein is that the lessee "will also pay all Government and other cesses, taxes and other imposition which now are or may at any time hereafter during the continuance of this lease be assessed or imposed on the said lands.
" In the deed dated 26 3 1915 the corresponding clause runs as follows: "The lessee covenants to bear, pay and discharge all existing and future Government and other rates, cesses, taxes, assessments, duties, impositions, out goings and burdens whatsoever imposed or charged upon the demised premises. . which may be payable by the occupier or lessees thereof." Thus, while under the Bokaro license the lessee had to pay all the cesses imposed on the land, under the deed dated 26 3 1915 the lessees had to pay only the cesses payable by the occupier or lessee of the property.
Now, the contention of the respondent is that as it was the intention of both parties that Messrs Bird and Co. should have a license on the same terms as were contained in the Bokaro license unless otherwise agreed, and as Exhibit 130(1) shows that there was no special agreement with reference to this matter, 340 the Court of Wards must be held not to have applied its mind to the cess clause when it agreed to its inclusion in its present form in the deed of 1915, and that as it related to a matter of substance going to the root of the transaction, the deed was in its entirety void.
The basic notion on which this contention rests is that the cess clause in the deed dated 26 3 1915 is, as compared with that in the Bokaro license, distinctly disadvantageous to the ward.
But this, however, is controverted by the appellant, which contends that the difference between the two deeds with reference to the cess clause is one of form rather than of substance.
To appreciate this contention, it is necessary to refer to the provisions of the Bengal Cess Act IX of 1880.
Under sections 80 and 81 of that Act, where there is a lease of a mine, the cess payable thereon is to be borne equally by the owner and the lessee.
The Government, however, is entitled to realise the whole of it from either of them, in which case the person who pays the cess has a right to recover from the other his share of it.
The cess clause of the 1915 license is in accordance with the rights of the parties as declared in section 81 of the Act.
The contention of Mr. Gupta is that it was open to the parties to contract themselves out of their rights under section 8 1, and he relied on the decisions in Ashutosh Dhar vs Amir Mollah(1) and Mahanand Sahai vs Mussmat Sayedunissa Bibi(2) in support of this position.
There, the question related to section 41 of the Act; but it is argued that the principle underlying those decisions is equally applicable to section 81 and that, in our opinion, is correct.
The next step in the argument is that the cess clause in the Bokaro license embodies a contract modifying the rights declared by section 81 of the Act by throwing the liability for the cess wholly on the tenant; but that the clause in the 1915 deed restricts it to the obligation as declared in section 81 and has therein resulted in serious disadvantage to the proprietor.
For the appellant, it is contended that the clause in the Bokaro license could (1) (2) 341 not be construed as modifying the rights declared under section 81, because it merely provides for payment by the lessee of the entire cess, which must mean that they had to pay it in the first instance and then reimburse themselves from the proprietor, and that was how the clause was understood by the Court of Wards when it was in management.
If that was the true scope of the cess clause in the Bokaro license, it cannot be said that the cess clause in the deed of 26 3 1915 differs in substance from it.
On the question as to the interpretation to be put on the cess clause in the Bokaro license, the principle applicable thereto was thus stated in Mahanand Sahai vs Mussmat Sayedunissa Bibi (1): "It is indisputable that when an exemption is claimed from statutory liability, the contract under which exemption is claimed, must be strictly construed against the claimant and it must appear from its terms, beyond the possibility of any dispute, that the parties intended to vary the liability as imposed by the statute.
This rule is especially applicable where exemption is claimed from taxation imposed by the State".
It was accordingly held that no contract to the contrary could be spelt from the clause providing generally for payment of cess, and this view has been adopted in Balwantrao Naik vs Biswanath Missir(2) and Ramkumari Devi vs Hari Das(3).
The contention of the appellant, therefore, that the cess clause in the Bokaro license cannot be construed as a clear expression of an intention on the part of the parties to contract themselves out of the statute is not without force.
It is, however, unnecessary to decide this question, as assuming that the cess clause in the deed dated 26 3 1915 is less advantageous to the ward than that in the Bokaro license, the respondent has, before he can succeed on this contention, still to establish that the Court of Wards did not apply its mind to this matter.
And what is the evidence which he has adduced to establish it? In the pleadings, he raised (1) (2) A.I.R. 1945 Patna 417.
(3) A.I.R. 1952 Patna 239.
45 842 no such question.
At a late stage, however, he applied to amend the plaint so as to raise the contention that the deed dated 26 3 1915 was not in accordance with the Bokaro license, but that application was dismissed by the Subordinate Judge on 24 12 1942.
It was contended for the appellant that the question now sought to be argued should not be allowed to be raised at this stage as it is purely one of fact, especially in view of the order dated 24 12 1942 refusing amendment of the plaint.
But it is unnecessary to say more on this objection, as we are satisfied on the evidence on record that the Court of Wards did apply its mind to the cess clause and did adopt it after giving thought to it.
The clause in its present form appears in the draft prepared by Messrs Bird and Co. and sent to the Court of Wards for approval on 12 5 1914.
Among the officers of the Court of Wards who examined the draft was Mr. Lister, the Deputy Commissioner, who took the lead ing part in settling the terms of this transaction, and there is an alteration, though formal, in his hand in this very clause.
It is also in evidence that the draft was sent for scrutiny to Sri Sarada Charan Mitra, a retired Judge of the Calcutta High Court, who was also the legal adviser of the Ramgarh Estate, and there is an endorsement of approval in his band.
And finally, the Board gave sanction on 27 7 1914 not only to the agreement but to the very draft which was sent by Messrs Bird and Co., with the cess clause, as it appears in the deed of 1915.
It is idle in the face of all this to argue that the Court of Wards gave no thought to it.
It should be observed that the stand which the respondent took with reference to the cess clause in the courts below was different from that taken in this Court.
There, his contention was that the Court of Wards had acted with gross negligence in agreeing to a term so manifestly disadvantageous to the estate.
In other words, the argument was not that the Court of Wards failed to apply its mind to the cess clause but that it failed to realise the full implications thereof, and that the minor had consequently suffered.
That 343 would have been a good ground of attack, if the Court of Wards was in the position of a guardian of the properties of the minor, but, as already stated, that is not its true character.
It is a statutory body with powers granted to it by section 18, and its action thereunder cannot be attacked on the ground that it bad erred or was mistaken in its conclusion.
As we have held that the Court of Wards did apply its mind to the question and formed its own judgment on it, its decision is not open to question, and the attack on the deed dated 26 3 1915 must in consequence fail.
Coming next to the deed dated 23 11 1917, it was attacked on three grounds.
It was firstly contended that it was, on the very face of it, beyond the competence of the Court of Wards, and was therefore void.
In support of this contention, Mr. Gupta argued that at the time of the transaction the ward had only about a year and four months to become a major, that by extending the period of the license from 6 to 36 years the agreement in question opera ted to tie his hands and to prevent him from dealing with his estate for a period of 32 years after he became a major, that the coal mines of Karanpura were known to be very valuable and the transaction had the effect of binding the proprietor to grant leases down to 1951 and on the rates of salami and royalty fixed in 1907 in the Bokaro license and adopted in the deed of 1915 and that such a transaction was not within section 18.
It was urged that section afforded protection to a transaction entered into by the Court of Wards only if it was of such a character that it was possible on the facts to take the view that it was for the benefit of the property or the advantage of the ward, but where such a possibility is ruled out as when the transaction was manifestly not for the benefit of the estate, as for example, a gift of the properties of the minor, then the section would have no application.
The agreement dated 23 11 1917 was, it was contended, in substance a gift to Messrs Bird and Co., of a license for a period of 30 years, and that therefore section 18 could not be invoked in support of it.
344 tion was beyond the competence of the Court of Wards for any of the above reasons.
It has to be remembered that the action now in question is that of a statutory body, and that its powers and limitations with reference thereto must be found within the four corners of the Act.
Section 18 which confers authority on the Court of Wards to enter into the transaction is general and unqualified in its terms.
There is no provision in the statute such as there is in section 29(b) of the (VIII of 1890) that a lease by the Court of Wards was to enure for a period related to the minority of the ward.
Such a limitation cannot be read into section 18 for the obvious reason that the wards whose estates are to be administered under the Act, may, under section 6 of the Act, be females including majors declared incompetent to manage the properties or lunatics or persons who themselves apply that their estates might be taken over by the Court of Wards.
Nor is there any substance in the contention that as the ward would shortly be attaining majority, no transaction should be entered into so as to tie his bands or prevent him from dealing with his estate after be becomes sui juris.
The Court of Wards has not only the power but is under a duty to manage the estate, so long as it continues to be in its charge in the same manner as a prudent owner will manage his own estate, and the fact that the ward would be coming of age cannot operate to divest it of its powers and duties under the Act, though it might enter as an element in judging under section 18 whether the transaction should be entered into.
We are also unable to see any force in the contention that the transaction of 1917 was incompetent because it bad the effect of binding the ward to grant leases up to 1951 at the rates of salami and royalty fixed in the deed dated 26 3 1915.
It is not in dispute that mining leases have to be and usually are for long terms, and the respondent concedes that the terms of the 1915 license providing for the grant of a lease for 999 years on the rates of salami and royalty fixed therein 345 are not themselves open to attack.
That being so, it is difficult to see how it would make any substantial difference when the lease for 999 years runs from 1951 and not from 1921 as provided in the deed of 1915.
It was argued for the respondent with reference to certain sub leases granted by the appellant in 1922 and thereafter that the rates of salami and royalty fixed therein were much higher than those settled under the 1915 deed, and that the extension of the license period under the 1915 deed must have consequently resulted in prejudice to the ward.
But then, those leases were mostly of open mines, and stand on a different footing from prospecting licenses, and even where there was a prospecting license, there was no payment of prospecting salami or advance of a loan without interest as under the deed dated 26 3 1915, and it appears that there was some prospecting by the appellant itself with reference to the areas covered by the license.
There is accordingly no evidence on which it could be held that the terms settled in 1915 were disadvantageous to the estate.
It must be observed in this connection that no contention was raised by the respondent in his pleadings that the transaction was bad for the reason that the rates of salami and royalty fixed therein were less than the current market rates.
No issue was framed on that question, and no evidence was directed towards it, and there is nothing about it in the judgment of the trial court.
The respondent did not take this point even in his grounds of appeal in the court below, and he raised it only in the course of his argument there.
The appellant objects to this point being raised at this stage, as it is essentially one of fact on which evidence would have to be adduced and it had no opportunity to do so.
This objection must, in our opinion, prevail.
(Vide Connecticut Fire Insurance Co. vs Kavanagh(1) and M. E. Moolla Sons Ltd. vs Burjorjee(2)).
The contention that the extension of the period of license was in the nature of a gift of a period of 30 (1) (2) [1932] L.R. 59 I.A. 161. 346 years, and was therefore outside the power of the Court of Wards is clearly untenable.
Under the deed dated 23 11 1917, Messrs Bird and Co. were, in consideration of the extension of the period granted under the deed dated 26 3 1915, laid under certain obligations.
They had to pay a minimum ground rent of Rs. 50,000 per annum from the seventh to the twelfth year, and successive extensions of the period were made to depend on their having taken leases of a minimum area of 10,000 bighas in each period, which of course meant payment of royalties with a minimum fixed.
The deed dated 23 11 1917 created mutual rights and obligations and cannot be regarded as a deed of gift either in form or in substance.
In the result, the deed of 1917 cannot be held to be incompetent on any of the grounds put forward by the respondent.
It is next contended for the respondent that the deed dated 23 11 1917 was bad, because in granting an extension of the period fixed in the deed dated 26 3 1915 the Court of Wards considered only the benefit of Messrs Bird and Co., and not that of the ward, and that therefore its act was not within the protection of section 18.
The facts on which this contention is sought to be supported are these: When Messrs Bird and Co. applied on 3 8 1915 to the Court of Wards for extension of the period of the license, they gave as a reason therefor that the conditions created by war bad greatly upset their arrangements and calculations, that in consequence they were unable to raise or transport capital to India, that they had paid under the license salami of Rs. 1,00,000 and advanced a loan of Rs. 9 lakhs without interest, and that it was therefore just that the period of license should be extended so as to enable them to carry out their venture.
In his note dated 13 8 1915 Mr. Lister, the Deputy Commissioner, considered that this stand was "justifiable", and on 21 6 1916 he forwarded the proposal to the Commissioner observing that "extension.
of the period could 'not equitably be refused".
In sending this application on to the Board of Revenue on 26 6 1916, the Commissioner endorsed this opinion, 347 and also added that the extension would be in the interests of the public and of the State.
On these facts, it is argued that the Court of Wards had throughout been considering the proposal from the point of view of Messrs Bird and Co., and also from the point of view of the State, but that the interests of the minor ward did not as such figure directly and prominently in judging of the propriety of the transaction, and that however equitable it might be to show concessions to Messrs Bird and Co. in view of their previous services to the estate, that was not a ground on which the Court of Wards standing in the position of trustee to the ward could legally bind his estate, as it did by the deed dated 23 11 1917.
There would have been considerable force in this contention, if the facts had been as stated by the respondent; but they, however, were not so.
The correspondence makes it abundantly clear that the Court of Wards was considering at all stages and in all its aspects the benefit of the estate as to whether there should be at all an extension, and if so, for what period and on what terms.
In their application dated 3 8 1915, Messrs Bird and Co., apart from recounting their difficulties and the services they had done to the estate by advancing the loan, also stated that as the area covered by the license was very extensive consisting of about 415 sq.
miles, it would require a much larger period of time than that fixed in the 1915 document to survey the area and work the mines in full, that if the license was to expire in 1921, they would have to work the best and the most profitable mines, leaving the other areas to be exploited under fresh licenses, and the return to the estate from them must be poor by reason of the unprofitable and un economic character of the mines which had been left unopened, and that it was accordingly in the interests of the estate to have long term licenses on the same rates.
Referring to this aspect, the Deputy Commissioner stated in his note dated 13 6 1916 that the experience gained in the Katras and Jharia coal mines pointed to the wisdom of granting long term license, so that the mines could be worked in the best 348 interests of the proprietor and the lessee.
On 21 6 1916 when he forwarded the proposal to the Commissioner, he stated: "We are convinced that the interests of the estate and of the public are equally involved in the exploitation of this field on broad principles.
And we see no prospect of this being done except by a firm prepared to take long views and undertake the heavy preliminary burdens".
The Commissioner stated in his memorandum dated 26 6 1916 that he agreed "with the Deputy Commissioner and the manager that this is essential not only in the interests of the estate but also of the public".
In view of this evidence, it is impossible to contend that in entering into the transaction dated 23 11 1917, the Court of Wards had failed to consider the interests of the estate.
In their application dated 3 8 1915, Messrs Bird and Co. also stated that if the period of the license was not extended, it would be impossible for them or for others, in view of the war conditions, to work the mines and that the license would have to be abandoned by them.
In dealing with this aspect, the Commissioner observed in his note dated 26 6 1916 as follows: "If they were to give up the agreement, the estate would not obtain such advantageous terms from others, both on account of the present conditions arising from the war and which will continue for some time after the war, and also owing to the fact that the Geological examination of the northern portion of the Coalfied has proved disappointing and not up to previous expectation".
This again shows that the Court of Wards did apply its mind to the question whether the extension was for the advantage of the estate.
The value of a mine to an owner lies not in his abstract ownership thereof but in its being worked, so that coal and coke might be sold or royalties obtained.
The estate itself was not in a position to work the mines, and it bad to get it done by others.
If, therefore, there was a license in force for the prospecting and leasing of the mines, 349 it would certainly be to the advantage of the estate to extend the life of that license on such terms as might be for the benefit of the estate and the lessee, and it was this aspect that was considered by the Commissioner in his note.
It may be mentioned that there was some difference of opinion among the officers of the Court of Wards whether if the period of the license was to be extended from 6 to 12 years, the minimum royalty from the 7th to the 12th year should be fixed at Rs. 5 per bigha or Rs. 2 8 0 per bigha.
In that connection, Mr. MacGregor, the manager, wrote a note in which he emphasised that they were dealing with the estate of a minor, that their position was that of trustees, that considerations based on equitable grounds or public interest and the like would be out of place, and that the minimum royalty should be fixed at Rs. 5 per bigba.
Thus, the attention of the Board was pointedly drawn to the very aspects which the respondent contends ought to have been considered by it, and it decided on a consideration of all the materials to grant extension on the terms set out in the deed dated 23 11 1917.
We are unable to see any ground on which its propriety could be challenged.
It was also contended by Mr. Gupta that section 18 required that the act should be for the benefit of the property and the advantage of the ward, that these conditions were cumulative and should both of them be satisfied and that even if the license dated 23 11 1917 was for the benefit of the property, it was not for the advantage of the ward, and that therefore it was not valid under section 18.
The fallacy in this argument lies in thinking that the reference to property in section 18 is by way of antithesis to the ward.
For this, however, there is no justification.
If a transaction is for the benefit of the property, the person who would reap the advantages thereof must be the owner of the property.
It is difficult to conceive of a transaction which is for the benefit of the property but not to the advantage of its owner.
If the deed dated 23 11 1917 is for the benefit of the property by reason of the fact that it yields revenue in 46 350 the form of minimum ground rent, salami and royalty, it must equally be to the advantage of the ward who will be the person who will receive this revenue.
Assuming that both the parts of the clause in section 18 have to be read cumulatively and not disjunctively, even so, the deed dated 23 11 1917 satisfies the requirements of the section, and is consequently valid.
In the result, we must hold that the deed is not open to attack on the ground that in entering into the transaction, the Court of Wards did not consider the interests of the ward.
The last ground of attack on the deed of 1917 is that it was not sanctioned by the Board as required by section 18 of the Act, and was therefore void.
It will be remembered that the application of Messrs Bird and Co. for extension dated 3 8 1915 was the subject of considerable correspondence and discussions, and that on 26 6 1916 the Commissioner for warded the proposal as finally settled for sanction to the Board of Revenue.
On this, an order was passed by the Board on 3 7 1916 that it "accepts generally the recommendations of the Deputy Commissioner" and that "the draft deeds embodying the proposed terms should be submitted to it in order that they may be scrutinised by the Legal Remembrance".
In communicating this order to Messrs Bird and Co., the manager.
wrote to them on 12 7 1916 to send a draft of the agreement, and stated the terms on which it might be drafted.
Messrs Bird and Co., then prepared a draft and sent it on for approval to the manager.
It was then examined by the officers of the Court of Wards and by Sri Sarada Charan Mitra, and on 24 4 1917 the Commissioner sent it to the Board for sanction.
By his letter dated 13 7 1917 the Secretary to the Board wrote to the Commis sioner that "the agreement however is one of such importance that the Board agrees with the Additional Legal Remembrancer that it should be referred to the Solicitor to the Government of India before final acceptance and before it can be so referred, it is necessary to clear up the four points within the extract enclosed from a note recorded by the Additional 351 Legal Remembrancer", and the note with the four points was enclosed.
Pausing here, the question is whether the letter dated 3 7 1916 constitutes sanction as contemplated by section 18 of the Act.
It is recited in the deed dated 23 11 1917 that the agreement was sanctioned by the letter dated 3 7 1916.
Is that correct? It is argued for the appellant that section 18 does not prescribe any form in which sanction has to be given, and that further, the sanction to be given is to the transaction, not to the document embodying it and that the letter dated 3 7 1916 sanctioning generally the grant of extension is sufficient to satisfy the requirements of section 18, even though there may be details remaining to be worked out.
The decision in Gulabsingh vs Seth Gokuldas(1) was relied on in support of this position.
There, the Deputy Commissioner had sent to the Commissioner a proposal to borrow Rs. 1,00,000 from the plaintiff 's firm, and on 28th January 1891 the Commissioner was informed by the secretariat that the Chief Commissioner had accepted the proposals for the liquidation of the debt.
On the authority of this letter, the Court of Wards executed a mortgage on the 10th December 1891.
In rejecting the contention that there was no proper sanction for the mortgage as required by section 18 of Act XVII of 1885, the Privy Council observed: " It was not in their Lordships ' opinion necessary under section 18 of Act XVII of 1885 that the actual mortgage to be made by the Court of Wards should be submitted to the Chief Commissioner for his sanction, nor was it necessary that the Court of Wards should have his sanction to the precise terms of the mortgage.
The sanction which is to be inferred from the letter of January 28, 1891, empowered the Court of Wards to mortgage the property under section 18 of Act XVII of 1885".
In Ramkanai Singh Deb Darpashaha vs Mathewson (2) the Commissioner had sanctioned a patni lease, but the lease deed which was actually executed had not been submitted to his approval.
In holding (1) [1913] L.R. 40 I.A. 117.
(2) [1915] L.R. 42 I.A. 97.
352 that the sanction was sufficient, the Privy Council observed: ". . their Lordships are of opinion that when it is affirmatively established that a transaction itself in all its essential particulars has obtained the sanction of the Commissioner, and when it is requisite that the transaction be carried into effect by the preparation of the appropriate deeds, a challenge merely on the ground that the document ultimately prepared had not been submitted for sanction cannot be sustained".
The position in law, therefore, is that the requirements as to sanction must be held to be satisfied if the transaction in all its essential particulars bad been sanctioned, even though there are details to be worked out in furtherance of the sanction and there is no further sanction given to the deed as finally settled.
On these principles, there is much to be said in favour of the view contended for by the appellant that the communication dated 3 7 1916 is sufficient sanction for purposes of section 18.
But such a conclusion would be inconsistent with the letter of the Secretary of the Board dated 13 7 1917 aforesaid.
It was certainly open to the authorities to indicate the lines on which the document would have to be drafted and reserve the grant of sanction until they shall have had a full picture of the transaction, as might appear on the document.
The Board might have, if that was their intention, sanctioned the transaction unconditionally by its letter dated 3 7 1916, but it chose to make it conditional on the document being again approved by them.
Under the circumstances, the letter dated 3 7 1916 cannot be construed as a final sanction of the transaction, notwithstanding that it was so recited in the deed dated 23 11 1917.
To continue the narration, in accordance with the note of the Secretary dated 13 7 1917, the draft deed was again taken up by Messrs Bird and Co., alterations were made therein, and the revised draft was submitted to the authorities for examination.
They in their turn scrutinised the document, and sent it for the opinion of the Legal Department, and obtained 353 its suggestions.
And on 9 10 1917 the revised draft with the suggestions made in the Legal Department were returned by the Board to the authorities concerned "for information and such action as may be considered necessary".
It should be noted that the Board did not again require the document to be sent to them for scrutiny, as they did by their letter dated 3 7 1916.
In due course, the suggestions of the Legal Department which were four in number, were examined; three of them were formal in character, and were carried out.
As regards the fourth, which related to the question of payment of the minimum royalty of Rs. 8,000 during the first year, it was found that under the agreement to which the parties had come, it was not payable during the first year.
The deed having been amended suitably to the suggestions made by the Law Department, it was executed as amended on 23 11 1917.
The contention of the appellant is that the order of the Board dated 9 10 1917 is a sanction to the proposal in all its essential particulars, and that this is sufficient compliance with the requirements of section 18.
The respondent contends that even on the letter dated 9 10 1917 there were four matters reserved to be considered before the deed could be engrossed, that it was only after these matters were settled that there would be a completed agreement, and that as no sanction bad been given to it after it had finally shaped itself, the requirements of section 18 bad not been satisfied.
We are unable to uphold this contention.
It is not disputed that three of the four matters were merely formal ones, and that with reference to the fourth, the suggestion of the Legal Department proceeded on a misapprehension of what had really been agreed to by the parties.
Thus, all the essential terms of the agreement must be held to have been sanctioned by the Board by its letter dated 9 10 1917, and it is of no consequence, as laid down in Gulabsingh vs Seth Gokuldas(1) and Ramkanai Singh Deb Darpashaha vs Mathewson(2) that the document as finally drafted had not been submitted again for its appro (1) [1913] L.R. 40 I.A. 117.
(2) [1915] L.R. 42 I.A. 97.
354 val.
We should accordingly construe the letter dated 9 10 1917 as sufficient sanction under section 18.
The learned Judges of the High Court were of the opinion that Rule 242 framed under section 70 of the Act required that the sanction should be recited in the deed, and they referred to the deed dated 26 3 1915 where that had been done.
But Rule 242 applies only to leases, and is in terms inapplicable to the deed dated 23 11 1917 which is an agreement.
And both sides have argued the case on the footing that the deed in question is governed by the last clause of section 18.
We have no hesitation in holding that the Board directed by its letter dated 9 10 1917 the execution of the agreement dated 23 11 1917, and that it was validly executed under section 18.
The result, therefore, is that the deed dated 23 11 1917 is not open to attack on any of the grounds urged by the respondent, and must be upheld.
One other contention of the respondent remains to be considered, and that arises on the statement of the appellant that it does not contest the finding of the High Court that the deed dated 1 6 1937 is void.
It will be recalled that under the deeds dated 26 3 1915 and 23 11 1917 the licensees would be entitled to an extension of the period for 12 years from 26 3 1939 to 26 3 1951 provided that they had taken on lease a minimum area of 20,000 bighas, and that the appellant had, in fact, taken on lease only a total extent of 17,539 bighas under six leases during the years 1922 to 1933.
It was also provided in those deeds that for the areas taken in excess of 10,000 bighas, the minimum royalty would become payable after 26 3 1939.
The appellant applied to the Court of Wards sometime in 1934 for amendment of the deeds dated 26 3 1915 and 23 11 1917 so as to provide that the payment of minimum royalty was to commence from 26 3 1951, unless railway facilities were available earlier.
This was sanctioned by the Board, and the deed dated 1 6 1937 incorporates this amendment in the deeds dated 26 3 1915 and 23 11 1917.
As a condition of the grant of this concession, the Board required the appellant to take a lease of 2,461 bighas 355 to make up the covenanted extent of 20,000 bighas.
The appellant accordingly applied for three leases of the total extent of 2,461 bighas, and the Board gave sanction to the same on 15 7 1937, and on 2 8 1937, the lease deeds were actually executed.
One of them, that relating to Mauza Saunda, contained, in accordance with the terms of the deed dated 1 6 1937, the following covenant: "Provided always that no minimum royalty shall be payable until the expiration of 36 years from the said 26th day of March 1915 or until railway facilities shall be available as aforesaid, whichever event shall first happen".
There is some dispute as to whether the other two leases contained similar covenants, but that is immaterial for the present discussion, because if the lease of Mauza Saunda is bad on account of the aforesaid clause as contended by the respondent, then the total area taken on lease will be less than the minimum 20,000 bighas, and the appellant will have no right to the benefit of the third extension, and the suit for specific performance must fail.
Now, the contention of the respondent is that the leases dated 2 8 1937 are bad on two grounds.
He firstly argues that as the deed dated 1 6 1937 has been held to be bad, the clause in the lease providing for the postponement of payment of minimum royalty based thereon must also be held to be bad and that is conceded by the appellant and that as a deed cannot be held to be partly good and partly bad, the whole of it must be held to be void.
The fact that a clause in a deed is not binding on the ground that it is unauthorised cannot ipso facto render the whole deed void, unless it forms such an integral part of the transaction as to render it impossible to sever the good from the bad.
That is not the position here.
The effect of declaring the proviso void will leave the rest of the deed whole and intact.
The leases without the proviso are perfectly valid, and indeed, they will be more advantageous to the ward.
Secondly, it is contended that the sanction that was accorded by the Board was to the lease with the 356 covenant which has been held to be void, and that the deed without that covenant has not been sanctioned.
This contention again is clearly untenable.
Section 18 only requires that the transaction should be entered into with the sanction of the Board.
When that has been done, the force of the section is spent.
Whether the transaction turns out to be good or bad on the merits can have no effect on the sanction, which had been granted before it was entered into.
If the deed is bad on the merits, it will fail on that ground and not on the ground that by reason thereof, the sanction becomes ineffective.
And the result is the same whether the deed is bad in part or in toto.
The contention therefore that the lease deeds dated 2 8 1937 are inoperative must be rejected.
The result is that the deeds dated 26 3 1915 and 23 11 1917 are valid but not the deed dated 1 6 1937, and that the leases granted to the appellant are valid, but the clause postponing the payment of minimum royalty in the lease deed or deeds of 2 8 1937 is inoperative.
The appeals must accordingly be allowed, the decrees of the court below set aside, and these of the trial court restored.
In Civil Appeal No. 191 of 1953, the appellant will have its costs both here and in the courts below.
In Civil Appeal No. 192 of 1953, the parties will bear their own costs throughout.
It must be mentioned that during the pendency of these appeals, by virtue of notifications issued under sub section (1) of section 3 of the Bihar Land Reforms Act XXX of 1950, the Estate of Ramgarh became vested in the State of Bihar, which thereafter intervened in these appeals.
At the bearing, the State filed a memo in the following terms: 'State of Bihar recognises and accepts as valid the leases granted to the appellant Company whether granted by the Court of Wards or the Raja under the license of 26th March 1915 (as extended by the supplementary documents of 1917 and 1937).
Nothing in this compromise shall preclude the State of Bihar in future from modifying the terms and conditions of the leases in accordance with law empowering the State Government to do so".
357 The respondent raised the contention that the State had no locus standi to intervene in these proceedings and at the stage of appeal, but in the view which we have taken of the rights of the parties, a discussion of this point is purely of academic interest.
It is sufficient to direct that the above memorandum be filed and included as part of the record.
Appeals allowed.
| IN-Abs | Section 18 of the Court of Wards Act, 1879, provides that the Court of Wards "may sanction the giving of leases or farms of the whole or part of any property under its charge, and may direct the mortgage or sale of any part of such property, and may direct the doing of all such other acts as it may judge to be most for the benefit of the property and the advantage of the ward".
In exercise of the power conferred by this section the Court of Wards sanctioned a deed of prospecting license in favour of B, the predecessor in interest of the appellant, and the same was executed on 26 3 1915.
Subsequently, on 23 11 1917 the manager of the Court of Wards executed a deed modifying the terms of the deed dated 26 3 1915, by virtue of which the period of license could be extended up to 26 3 1951 under certain conditions.
On 10 8 1937 the respondent having become major assumed management of the estate and thereafter repudiated the aforesaid deeds and contested their validity on the grounds, inter alia, (1) that the deed dated 26 3 1915 was not for the benefit of the ward as the clause therein relating to the payment of the cess was less advantageous to him than the corresponding clause in the prospecting license executed by the then proprietor of the estate on 26 11 1907 in respect of another property known as the Bokaro license, and that the Court of Wards executed the deed in question without bestowing any thought to it, (2) that the Court of Wards had no power to enter into the transaction dated 23 11 1917 as it had the effect of preventing the ward from dealing with his estate for over a period of 32 years after he attained majority, (3) that in granting the deed dated 23 11 1917 the Court of Wards considered only the benefit of the grantee and not that of the ward and (4) that the deed was void because no sanction had been given to it by the Court of Wards, as required by section 18 of the Court of Wards Act, 1879.
Held, (1) that the Court of Wards is not in the same position as a guardian of the properties of a minor.
It is a statutory body with powers defined by the Court of Wards Act, 1879.
Under section 18 326 of the Act the Court of Wards is given the power to judge for itself whether a transaction entered into by it on behalf of the ward is for the benefit of the property and the advantage of the ward and its act cannot be impugned in a court of law by the ward on attaining majority unless he shows that it did not act bona fide and in the interests of the ward and that its action amounted to a fraud on the power, or that it did not, in fact, apply its mind to the question whether the act was for the benefit of the property or the advantage of theward, and that though it purported to exercise the power unders.
18, it did not, in fact, come to a. judgment as required bythe section.
Its decision cannot be questioned on the ground that it was erroneous on the merits, or that it was reached without considering some aspects which ought to have been considered, unless the failure to consider them was of such a character as to amount to there being no exercise of judgment at all; Allcroft vs Lord Bishop of London: Lighton vs Lord Bishop of London, ([1891] A.C. 666), relied on.
(2)that assuming that the cess clause in the deed dated 26 3 1915 was less advantageous to the ward than that in the Bokaro license, as the Court of Wards had applied its mind to the question and formed its own judgment on it, its decision is not open to question; (3)that the Court of Wards was competent to enter into the transaction dated 23 11 1917 and extend the period of license so as to enure for a period beyond the date of the ward coming of age, as section 18 of the Act which confers authority on the Court of Wards is general and unqualified in terms and there is no provision in the Act such as there is in section 29(b) of the , that a lease by the Court of Wards was to enure for a period related to the minority of the ward; (4)that assuming that the words in section 18 that the act should be "for the benefit of the property and the advantage of the ward" should be read cumulatively and not disjunctively, the deed dated 23 11 1917 satisfies the requirements of the section inasmuch as the benefits which the transaction conferred on the estate in the form of minimum ground rent, salami and royalty must also enure to the advantage of the ward who will be the person who will receive this revenue; (5)that the requirements as to sanction under section 18 of the Act must be held to be satisfied if the transaction in all its essential particulars had been sanctioned by the Court of Wards, even though there were details to be worked out in furtherance of the sanction and the document as finally drafted had not been submitted again for its approval.
A mere recital in the deed that the transaction was sanctioned is not conclusive and it must be shown that, as a matter of fact, sanction was given, and as the order of the Court of Wards dated 9 10 1917 contained the sanction to the proposal in 327 all its essential particulars it was sufficient compliance with the requirements of the section; Gulabsingh vs Seth Gokuldas, (40 I.A. 117) and Ramkanai Singh Deb Darpashaha vs Mathewson, (42 I.A. 97), relied on.
and (6) that section 18 only requires that the transaction should be entered into with the sanction of the Court of Wards and if the transaction subsequently turns out to be bad on the merits, either in part or in toto, it does not render the sanction originally given ineffective.
|
Special Leave Petition (Civil) No. 1207 of 1978.
From the Judgment and Order dated 28 7 1977 of the Punjab and Haryana High Court in Civil Writ No. 1457 of 1977.
Hardev Singh for the Petitioner.
S.K. Sabharwal and Subhash Sharma for the Respondents.
The following Orders were delivered: KRISHNA IYER, J. Every meritless petition for special leave commits a double sin and here we are scandalized that the sinner is the State itself.
When thousands of humble litigants are waiting in the queue hungry for justice and the docket logged court is desperately wading through the rising flood, every 'lawless ' cause brought recklessly before it is a dubious gamble which blocks the better ones from getting speedy remedy.
Here is an instance.
If this is a big 'if ' I assume some of the uncontradicted statements in the counter affidavit and writ petition to be true, read in the light of the High Court 's decision against the Government twice over that its action was mala fide and void, this disturbing petition, by the State of Punjab for leave to appeal, which I now dismiss, lays bare the basics of Power pathology and judicial philosophy in the unhappy setting of personal vendetta fuelling the politics of compulsory land acquisition.
Prof. Miller 's assertion that the Supreme Court "acting as the 'national conscience ' of the. people" does mandate standards towards which public and private behaviour must gravitate ' is as true in our jurisdiction as in his country.
1074 The factual matrix, enough to unfold why the High Court twice condemned the State 's action in a case of land acquisition as mala fide and why we endorse so that view, must be stated.
The order under appeal is brief but there is more than meets the credulous eye beneath the verbal surface available in the affidavits.
The vice of misuse of power centred round one Sri Satnam Singh Bajwa, 22nd Respondent, a former minister, a quondom M.L.A., and a continuous politician.
The 'writ petitioners ' (respondents 1 to 21 before us) seek to crucify him as the malefic presence prodding the impugned acquisition.
Since he did not enter appearance, despite service of notice, we felt that a fresh opportunity or reminder should be afforded to him to deny, if he so desired, the sinister imputations made against him.
The benefit of presumption of good faith belongs to every man, until rebutted.
Fresh notice was directed and effected to the extent feasible but he did not respond and we leave it at that.
We proceeded to hear the case after a few adjournments.
We must highlight the fact that Sri Har Dev Singh appearing for the State, struck a refreshing note of forensic propriety in dissociating himself from supporting State action if there be any, which, in the court 's view was seared with bad faith and argued that, for his part, the officers appear to have exercised power on the advice of the State 's legal remembrance without ill will or affection.
Counsel in court are 'robed ' representatives, within the parameters of the adversary system, geared to the higher cause of justice, not amoral attorneys paid to ventriloquize the case of the principal.
We cannot dismiss truth in paper logged impatience but must try, with counsel 's services, to discover the justice of the cause.
So we proceed to the facts.
Punjab, the pride of the green revolution, is a great agricultural State and, naturally, grain markets are a developmental imperative.
The whole litigation is about a piece of land sought to be taken by the State to build a new mandi.
Way back in 1962, a site apparently best suited was selected in Qadian and the then Chief Minister, Partap Singh Kairon laid the foundation stone, and a few poles erected there bear witness to this old ceremony.
Notification under Sec. 4 and declaration under Sec.
6 were reportedly issued ten years ago (1969).
But the very next year the proceedings were denotified and in 1971 the land of respondents 1 to 21 were notified.
In Punjab, a province of peasant prosperity and private ownership, land is held dear even to the point of murder, and tragic factions fester round agriculture.
Naturally, the land owners resisted and successfully impeached the acquisition on the ground of mala fides before the High Court.
This 1075 order of the court, surprisingly enough, proceeded on the admitted mala fides of the State and should have liberated this innocent piece of land from litigative laceration.
But, after a long interval, the State chased the same land and rushed through acquisition proceedings a second time invoking emergency powers under Sec.
17 of the Land Acquisition Act.
This too was assailed before the High Court on the ground of perversion of State power to satisfy the malefic appetite of a particular person, not the legitimate statutory purpose.
Struck down again by the High Court, the State was chagrinned and, perhaps, encouraged by the fact that the High Court dropped contempt proceedings, the jurisdiction under article 136 has been invoked by the Government of Punjab.
I have had the benefit of reading my learned brother 's concise judgment.
The reasons given there have my broad agreement.
Four issues may be formulated to focus specific attention.
What is mala fides in the province of exercise of power ? 2.
Is the acquisition proceeding in the instant case bad for bad faith ? 3.
Where, in the setting of Sec.
17 of the Act, do we draw the legal line between legitimate emergency power and illegitimate 'emergency excess ' ? 4.
On the facts, here, do we bastardize or legitimize the State action under challenge ? First, what are the facts ? A grain market was the public purpose for which Government wanted land to be acquired.
Perfectly valid.
Which land was to be taken ? This power to select is left to the responsible discretion of Government under the Act, subject to Articles 14, 19 and 31, (then).
The Court is handcuffed in this jurisdiction and cannot raise its hand against what it thinks is a foolish choice.
Wisdom in administrative action is the property of the Executive and judicial circumspection keeps the court lock jawed save where power has been polluted by oblique ends or is otherwise void on well established grounds.
The constitutional balance cannot be upset.
The question, then, is what is mala fides in the jurisprudence of power? Legal malice is gibberish unless juristic clarity keeps it separate from the popular concept of personal vice.
Pithily put, bad faith which invalidates the exercise of power sometimes called colourable exercise or fraud on power and oftentimes overlaps 1076 motives, passions and satisfactions is the attainment of ends beyond the sanctioned purposes of power by simulation or pretension of gaining a legitimate goal.
If the use of the power is for the fulfillment of a legitimate object the actuation or catalysation by malice is not legicidal.
The action is bad where the true object is to reach an end different from the one for which the power is entrusted, goaded by extraneous considerations, good or bad, but irrelevant to the entrustment.
When the custodian of power is influenced in its exercise by considerations outside those for promotion of which the power is vested the court calls it a colourable exercise and is undeceived by illusion.
In a broad, blurred sense, Benjamin Disraeli was not off the mark even in Law when he stated: "I repeat. that all power is a trust that we are accountable for its exercise that, from the people, and for the people, all springs, and all must exist".
Fraud on power voids the order if it is not exercised bona fide for the end designed.
Fraud in this context is not equal to moral turpitude and embraces all cases in which the action impugned is to effect some object which is beyond the purpose and intent of the power, whether this be malice laden or even benign.
If the purpose is corrupt the resultant act is bad.
If considerations, foreign to the scope of the power or extraneous to the statute, enter the verdict or impel the action, mala fides or fraud on power, vitiates the acquisition or other official act.
By these canons it is easy to hold that where one of the requisites of section 4 or section 6, viz., that the particular land is needed for the public purpose in view, is shown to be not the goal pursued but the private satisfaction of wreaking vengeance, if the moving consideration in the selection of the land is an extraneous one, the law is derailed and the exercise is bad.
No that this land is needed for the mandi, in the judgment of Government, but that the mandi need is hijacked to reach the private destination of depriving an enemy of his land through back seat driving of the statutory engine ! To reach this conclusion, there is a big 'if ' to be proved if the real object is the illegitimate one of taking away the lands of the respondents 1 to 21 to vent the hostility of Respondent 22, under the mark of acquistion for the mandi.
This is a question of fact and the High Court, twice over, within a period of seven years, held so, although the second time no specific finding of mala fides was made.
I do not quite see how else the acquisition can fail and infer, not res judicata nor contempt of court but repetition of mala fide acquisition as the real ground behind the 1077 High Court 's holding.
This court does not upset a factual finding unless it is upset by perverse assessment, absence of evidence and the like.
None such exists and I concur.
But what have respondents 1 to 21 made out ? When power runs haywire under statutory cover, more needs to be said to make good the exposure.
This takes me to a projection, in detail, on the screen of time, of the alleged politicking behind the taking of property challenged in this case.
We assume the facts, stated in the counter affidavits, to the extent not expressly denied, especially because the 22nd respondent, Shri Bajwa, has not cared to contradict the turpitude imputed to him, which is unfortunate.
We draw tentative conclusions based on the averments without the advantage of the affected party 's response.
Long ago in 1962, a site was chosen for a new grain market and the then Chief Minister, Shri Kairon, laid the foundation stone, and some surviving poles bear testimony to this ancient ritual.
This spot belonged to a cousin of Shri Bajwa and was eventually abandoned in favour of the lands of respondents 1 to 21.
This venture of 1971 was shot down by judicial fire triggered by the admitted ground of mala fides.
Years rolled by, but malice dies hard, if egged on by political scramble.
So much so, the same lands were again acquired in 1977, dispensing with so much as a statutory enquiry, undeterred by the earlier decision of the High Court.
The respondents again assailed the acquisition as fuelled wholly by vendetta.
The High Court struck down the 'declaration ' over again, and here we are with an application for leave to appeal against the adverse order.
We cannot appreciate the unusual step of quashing the acquisition twice over by the High Court on the rare score of fraud on power unless we are instructed in the bitter longevity of election hostility and the gentle genuflexion of administrative echelons when political bosses express their wishes.
The version of the contesting respondents is that two political factions go into action in all elections in Quadian, led by Respondent 22, Satnam Singh Bajwa on the one hand, and his rival Gurbachan Singh Bajwa, supported by the other respondents, on the other.
Party labels, where poll politics are personal, are less than borrowed apparel.
Satnam ran Congress and won a seat in the Punjab Assembly in 1962 in the teeth of hot contest by Gurbachan and the respondents.
This election had its impact on the mandi acquisition.
The site where the foundation stone had been laid belonged to Satnam 's cousin and this was the best of the four alternatives selected by the Site Selection Board, the least suitable, in their opinion, being of the respondents 1078 1 to 21.
But should an M.L.A. oblige his cousin and crush his rival, according to poll dharma? We cannot answer but here Satnam 's 'influence ' postponed acquisition proceedings, notwithstanding the ceremonial stone.
In 1967, again, elections came and Satnam won on the Congress ticket.
But when the Akali Party formed the Government Satnam decided to serve the people as Minister and for that purpose transferred his politics from Congress to Akali.
This ensured the safety of the cousin 's land from the mandi peril.
The Akali Government fell in 1969 but he fought as Akali, won the seat and became 'Forest Minister '.
The respondents, all the time, resisted him in vain.
When 'President 's Rule ' came, statutory notifications were issued for acquisition of the first site.
The mandi project remained frozen till then and showed signs of life during the short lived President 's Rule, only to be given up in 1970 when Satnam became State Minister of Panchayat and Development.
He struck when the iron was hot by constituting a Selection Board and appointing himself President thereof.
The choice was made of the site which was allegedly the least suitable.
Thus the axe fell on the respondents 1 to 21 and lest the take over be delayed, even the section 5A enquiry was scuttled by invoking the emergency powers under Sec. 17.
At times, natural justice is the natural enemy of intolerant authority.
Therefore, the judicial process, under article 226, invalidated the acquisition on the ground of mala fides.
Back as an M.L.A. in 1972 Satnam nurtured the faction politics, and there is reference in the writ petition to a murder and other official interference which do not directly concern the case.
He was detained and paroled, and the contestants swear that by political influence and use of relationship he revived the same acquisition once quashed by the High Court.
We skip many allegations of vice, of pressure, of defection as drawing red herring across the trail.
But the crux of the matter is that uncontradicted aspersions on Satnam having pressured the political Government to seize the contestants ' land goes a long way to affirm the High Court 's view, in the background of the long chronicle we have set out.
The indefensible resort to Sec.
17 is evidence of the length to which the executive would go to come to terms with men wielding political power.
No reason exists for us to grant leave in the case where factually the High Court has found improper attempt to take a citizen 's land.
We need not record any positive finding.
It is sufficient to state that no ground to grant leave has been made out.
The fourth point about the use of emergency power is well taken.
Without referring to supportive case law it is fundamental that com 1079 pulsory taking of a man 's property is a serious matter and the smaller the man the more serious the matter.
Hearing him before depriving him is both reasonable and preemptive of arbitrariness, and denial of this administrative fairness is constitutional anathema except for good reasons.
Save in real urgency where public interest does not brook even the minimum time needed to give a hearing land acquisition authorities should not, having regard to articles 14 (and 19), burke an enquiry under Sec.
17 of the Act.
Here a slumbering process, pending for years and suddenly exciting itself into immediate forcible taking, makes a travesty of emergency power.
No constituency in our poor country can afford Kilkenny cat politics and personality cult.
I dismiss the State 's petition.
PATHAK, J. I agree that the petition should be dismissed.
The original acquisition proceeding in respect of the land belonging to Respondents Nos. 1 to 21 was quashed by the High Court under Article 226 of the Constitution on the finding that the action was vitiated by mala fides.
A fresh attempt at acquiring the land was assailed by the said respondents and has been struck down by the High Court.
The petitioners now pray for special leave to appeal.
On a conspectus of the material on the record it does seem that the impugned acquisition proceeding cannot be sustained.
There is reason to believe that the statutory power to acquire land has been misused to satisfy the personal ends of the respondent No. 22, an individual who appears to be not without considerable political influence.
Despite an opportunity afforded to controvert the allegations made by the respondents Nos. 1 to 21, no attempt has been made by him to contradict the allegations.
A counter affidavit has been filed in this Court on behalf of the petitioners, the State of Punjab and the Extra Assistant Colonization Officer, but the material portion of the counter affidavit has been verified by its deponent "to the best of my knowledge and belief as derived from official record".
The land belonging to the respondents Nos. 1 to 21 was selected by a body described as the Site Selection Board.
There was also a New Mandi Control Board.
The deponent of the counter affidavit was not a member of either Board.
He was not a participant in the deliberations which are said to have led to the selection of the land belonging to the said respondents.
Whether or not the deliberations were effected by the influence or pressure of the respondent No. 22 is a matter to which the officials or members selecting the land could alone be 1080 privy.
In the absence of any denial of the allegations made by the respondents Nos. 1 to 21 in the writ petition by a person having personal and direct knowledge in the matter, and having regard to the entire history of the case, it is difficult to resist the conclusion that the averments in the writ petition alleging mala fides must be accepted.
The petition is dismissed.
N.V.K. Petition dismissed.
| IN-Abs | In 1962, a site was chosen for a grain market and the foundation stone for it was laid.
This spot belonged to a cousin of Respondent No. 22, an ex Minister and an influential politician.
This spot was eventually abandoned in favour of the lands of Respondents Nos. 1 to 21, which were notified in 1971.
The landowners resisted and successfully impeached the acquisition on the ground of mala fides before the High Court.
After a long interval, the State initiated acquisition proceedings in respect of the same land a second time, invoking the emergency powers under Section 17 of the Land Acquisition Act.
The Respondents Nos. 1 to 21 assailed the acquisition before the High Court on the ground that the statutory power to acquire land had been misused to satisfy the personal ends of Respondent No. 22 and that the acquisition was not for a legitimate statutory purpose.
The High Court struck down the 'declaration ', and invalidated the acquisition.
Dismissing the Special Leave Petition of the State, ^ HELD: Krishna Iyer, J.) 1.
It is fundamental that compulsory taking of a man 's property is a serious matter and the smaller the man the more serious the matter.
Hearing him before depriving him is both reasonable and preemptive of arbitrariness, and denial of this administrative fairness is constitutional anathema except for good reasons.
Save in real urgency where public interest does not brook even the minimum time needed to give a hearing, land acquisition authorities should not, having regard to Articles 14 (and 19), burke an enquiry under section 17 of the Land Acquisition Act.
[1078H 1079B] In the instant case a slumbering process, pending for years and suddenly exciting itself into immediate forcible taking, makes a travesty of emergency power.
[1079B] 1072 2.
The power to select land for acquisition proceedings is left to the responsible discretion of Government under the Act, subject to Articles 14, 19 and 31 (then).
The Court is handcuffed in this jurisdiction and cannot raise its hand against what it thinks is a foolish choice.
Wisdom in administrative action is the property of the Executive and judicial circumspection keeps the court lock jawed save where power has been polluted by oblique ends or is otherwise void on well established grounds.
[1075 F G] 3.
Legal malice is gibberish unless juristic clarity keeps it separate from the popular concept of personal vice.
Bad faith which invalidates the exercise of power sometimes called colourable exercise or fraud on power and often times overlaps motives, passions, and satisfactions is the attainment of ends beyond the sanctioned purposes of power by simulation or pretension of gaining a legitimate goal.
If the use of the power is for the fulfillment of a legal object the actuation or catalysation by malice is not legicidal.
The action is bad where the true object is to reach an end different from the one for which the power is entrusted, goaded by extraneous considerations, good or bad, but irrelevant to the entrustment.
When the custodian of power is influenced in its exercise by considerations outside those for promotion of which the power is vested, the court calls it a colourable exercise and is undeceived by illusion.
[1075H 1076C] 4.
Fraud on power voids the order if it is not exercised bona fide for the end designed.
Fraud in this context is not equal to moral turpitude and embraces all cases in which the action impugned is to effect some object which is beyond the purpose and intent of the power, whether this be malice laden or even benign.
If the purpose is corrupt the resultant act is bad.
If considerations, foreign to the scope of the power or extraneous to the statute, enter the verdict or impel the action, mala fides or fraud on power vitiates the acquisition or other official act.
[1076 D E] In the instant case the moving consideration was not that this land was needed for the mandi, in the judgment of Government, but that the mandi need was hijacked to reach the private destination of depriving an enemy of his land through back seat driving of the statutory engine.
Respondent No. 22 when he became State Minister of Panchayat and Development constituted a Selection Board and appointed himself as President thereof.
The choice was made of the site belonging to Respondents 1 to 21 and lest the take over delayed, even the S5A enquiry was scuttled by invoking the emergency power S17.
At times, natural justice is the natural enemy of intolerant authority.
The judicial process under Article 226 therefore, rightly invalidated the acquisition on the ground of mala fide.
[1076F, 1078 C E] 5.
This court does not upset a factual finding unless it is upset by perverse assessment, absence of evidence and the like.
[1077A] 6.
Counsel in court are 'robed ' representatives, within the parameters of the adversary system, geared to the higher cause of justice, not amoral attorneys paid to ventriloquize the case of the principal.
Every 'lawless ' cause brought recklessly before the Court, is a dubious gamble which blocks the better ones from getting speedy remedy.
[1074E, 1073F] 1073 (Per Pathak J. concurring) 1.
On a conspectus of the material on the record it does seem that the impugned acquisition proceeding cannot be sustained.
There is reason to believe that the statutory power to acquire land has been misued to satisfy the personal ends of the Respondent No. 22, an individual who appears to be not without considerable political influence.
Despite an opportunity afforded to controvert the allegations made by the Respondents Nos. 1 to 21, no attempt has been made by him to contradict the allegations.
[1079 E F] 2.
Whether or not the deliberations which were said to have led to the selection of the land belonging to Respondent Nos.
1 21, were affected by the influence or pressure of the Respondent No. 22 is a matter to which the officials or members selecting the land could alone be privy.
In the absence of any denial of the allegations made by the Respondents Nos. 1 to 21 in the writ petition by a person having personal and direct knowledge in the matter, and having regard to the entire history of the case, it is difficult to resist the conclusion that the averments in the writ petition alleging mala fides must be accepted.
[1079H 1080B]
|
Civil Appeal Nos.
1745 1755 of 1975.
From the Judgment and Order dated 5 9 1975 of the Andhra Pradesh High Court in Writ Petition No. 1269/75 L. N. Sinha, Attorney General for India, E. C. Agarwala and Girish Chandra for the Appellants (In CA 1755/75).
P.P. Rao, M.S. Ganesh, A.K. Ganguli and T.V. section Narasimhachari for the Appellants in Ca 1754/75.
P. Govindan Nair, A. K. Sen, Bishambar Lal, Miss Munisha Gupta and Mrs. Baby Krishnan for RR 1 2 in CA 1754/75 and CA 1755/75.
The Judgment of the Court was delivered by KRISHNA IYER, J.
These two sister appeals have gained access to this Court by certificate under Article 133 and project a 'service dispute ' between the Army and civilian wings (both engineers) of the Survey of India.
The constitutional missiles used, with success, in the encounter in the High Court by the 'civilians ' to shoot down the 'military men 's ' preferential claims under the relevant service rules, are Articles 14 and 16.
And here, in this Court, the Army Wing is fighting back to repulse the civilian wing by defusing the war head of these two fundamental rights.
Military imagery vivifies the litigative havoc when sectors of our public services go to battle against each other, though there is so much else to wage war against in the service of the people.
A narration of facts falling within a short compass will unfold the real issue, revolving round the salary, seniority and de facto promo 1039 tional disparity inter se, which has sparked off the forensic war.
The Union of India, one of the appellants, supports the stand of the military sector of the Survey Service, if we may so designate it.
A survey of the story of this conflict suggests the sombre thought that unending litigation, affecting the public services with inevitable impact on morale and efficiency, is becoming an epidemic in courts even among strategic cadres and sensitive sectors a matter almost for consternation which surely must kindle a search for constitutional alternatives for resolution of service questions without large numbers of civil servants being locked in long drawn out legal struggles.
Does the experience of 30 years under the Constitution indicate that, save where fundamental constitutional issues arise, Whitley councils, Service Tribunals and other specialised adjudicatory agencies, with the imprimatur of finality, are a more pragmatic mechanism of Service Justice ?
The factual setting, sufficient to unravel the constitutional contention, may now be delineated.
Both the appeals against the judgment of the High Court of Andhra Pradesh cover the same subject matter, although one of them is by the Central Government and the other by the members of the Survey of India from among the Defence personnel, and both have been resisted on the same basis by the civilian recruits to the Service.
A common judgment will dispose of both the cases but we must begin from the very beginning to get a hang of the controversy.
The genesis of the Survey of India, its life before birth, its genetic composition and hereditary characteristics, mould the structural engineering of the Service and, therefore, have a bearing on the issues debated before us both sides.
While the High Court has, to some extent, slurred over the chronicle, both sides have heavily stressed before us the saga of the Survey of India, each to lend strength to its point of view.
So, a peep into the bicentennial biography of the Survey of India is a necessary exercise as a starting point.
To blink at history is to lose the living link with the Past and to stumble in the Present.
Yet strangely, none such, i.e. history of the Service to serve as a lucid background is given in their statement by either party, save incidentally.
Unfortunately, the fine and fruitful art of presenting a luscent written brief is still in the long Indian Year of the Infant and we have to cull out and piece together materials which should have been set out as a scenario of meaningful development.
If the High Court has gone wrong the blame must fall in part on the Central Government which could and should have projected the story of the Survey of India, its functional complexion and recruitment rationale 1040 instead of leaving judges to run around the corridors of padded paper books or launch on speculative surmises.
The other parties fare no better, though.
And instalments of additional information during the progress of the hearing has had to make do for a comprehensive unfoldment.
Better late than never ! The story of the Survey of India has been narrated in its brief autobiography, 'Our Department ', produced on the eve of its bicentennial in 1967.
This department was born during the days of Lord Clive under happy Army stars, had a military upbringing and, in its brilliant career, achieved lustorous exploits.
Starting from an accident of history the request of a historian, Robert Orme, to an East India Company administrator, Lord Clive, for a map of Bengal the Survey of India sprang to life in embryonic form when Major Rennel was appointed to execute this survey and, thereafter, was cradled by the Army but spread out to become a dynamic department and development instrument in the decades ahead.
In war and in peace, in building the nation and defending its security, in 'civilian ' ventures and military operations the Survey of India has become a National Service in the role of adviser on survey data and kindred adventures.
Indeed, almost all ministries of the Central Government and many States have used the services of the Survey of India during the several Five Year Plans.
Look before you leap ' becomes in development terms, survey before you start, and so it is that in 1967 this great department of strategic importance is able to write its story and conclude: "25.
In short, in its ever increasing sphere of vast, diverse and widely scattered work, Survey of India has built up a unique reputation both within the country and outside as a sound, distinguished, and great Survey Organisation of the world, progressively marching forward.
expanding, adapting and modernising itself and continuing its contributions to science, security and development.
The personnel of Survey of India can legitimately take pride in the fact that they belong to this ancient and great organisation, to whom a noble, rich and priceless heritage has been bequeathed inspiring and beckoning them to greater heights of achievement, honour and glory.
" When the history of Free India comes to be written the proud contribution of the Survey of India may be printed in bold and bright 1041 characters because almost every Department of governmental activity with welfare potential has the imprint of the Survey of India at some stage or the other, as disclosed in the various materials which have come into our hands, through counsel, in the course of their submissions.
The flattering fact that the tallest peak in the World, Mount Everest, was named after the eminent Surveyor General Sir George Everest shows that even in the geological discovery of India, this Department has had a hand.
The different dimensions and directions in which the Survey of India has served the nation and science as a whole are perhaps a fall out of its adventurous alliance with military activity.
During British days, it was not an accident that the Survey of India was under the Army.
It was an inalienable companion of conquest and consolidation of defence and development a versatile genius which was put to greater good in the era of Freedom and After.
It is perhaps not so well known that the work of the Survey of India has special significance in matters of country 's defence.
The Survey of India has to organise surveys and work well ahead to provide maps at the right time and of the right places where campaigns might be fought in war.
The Chinese threat along the northern borders of the country since 1959 necessitated diverting immediately a very large potential of the Department to carry out the work of special topographical surveys for defence purposes in one of the most inhospitable and rugged terrains of the world an assignment which cost the Department many precious lives and many years of hard work.
The bulk of military survey and mapping requirements are met by Survey of India.
Though the military survey service exists, it is small and has insufficient personnel, who carry out limited technical work and such staff duties as army requires in peace time.
There have, thus, been many occasions for the Survey of India to be commended for its work for defence and development in war and peace, and for providing the basic knowledge of the land for all its users.
" 1042 The Surveyor General, for reasons of functional importance, is also the Director of Military Survey.
Topographical Mapping states: "When corrections and additions to maps of military importance are suggested by the Director, Military Survey, they should, as a general rule, be accepted by the Survey of India.
" It is necessary to notice the role of the Survey Department under the Director of Military Survey who is also the Surveyor General thus bringing out the interlacing of activity.
Obviously, there is not merely sensitivity and confidentiality but also a high degree of skill which cannot be relaxed and an instant sense of discipline, which cannot be liberalised, in view of the fact that military operations of national significance depend, in part, on the Survey of India and its service.
While it is fair to emphasise that considerable peace time developmental work is rendered by this Department, its adventurous spirit of climbing mountains, penetrating wilderness and entering into forbidden regions cannot be minimised.
Col. Sandes writing on 'The Military Engineer in India ' states: "History has shown that there is something in the training which the Survey of India, imparts to its officers which makes them peculiarly valuable in war.
Their work develops not only self reliance and initiative, but a sense of responsibility.
Everything centres on the example set by the leader of an isolated party.
As a rule, he is the only European in the small country.
He must have powers of organisation and observation: courage, determination and endurance.
In the ordinary course, he must be precise to the point of pedantry, never satisfied with unchecked work and abhorring the smallest error; yet at other times he must fling theory and practice to the winds to improvise means of rapid reconnaissance when danger threatens.
" The Military history which has moulded the character of this Department has relevance and so we quote again Lt. Col. Sandes: "As the war spread, the survey officers from India were scattered over the face of the earth; some on military duty with engineer units other flash spotting, sound ranging and triangulating in France and Belgium: and others again reconnoitering and surveying in any or all of three continents.
They worked in Salonika, North and South Russia, Italy Gallipoli, East Africa, Mesopotamia, Egypt, Syria, Persia, 1043 and on the shores of the Caspian.
One commanded a brigade in North Russia, another led a Persian army.
Ten officers of the Survey of India were killed in Action, or died on service, during the Great War, and thirteen were wounded.
Many casualties occurred in the lower ranks.
Such were the contributions of the Department towards victory in the greatest struggle of all time.
They form a fitting climax to its record in the frontier wars of India.
" If we may sketch a few lines to indicate the trait of the Corps of Indian Engineers with a view to illumine the points canvassed before us, we have to refer to the book by Major Verma and Major Anand.
The authors state: "Before the war, Military Survey as such did not exist; though for generations past, Survey of India had provided detachments for practically every military campaign or expedition.
But these parties were considered to be civilian, including their military officers in command, and they were only attached to the Army for supplies and transport.
Even in the First World War (1914 18), Survey of India detachments went out and worked in Macedonia, Mesopotamia and Persia.
But at no time before 1940 did India have any military units like the Field Survey Companies or Battalions.
Between the wars, survey and mapping for the Army was done by the Survey of India, which except for the Artillery Survey Section, Royal Artillery, was the sole military survey agency.
It had a semi military tradition, the Surveyor General held the rank of a Brigadier and his principal officers were Royal Engineers with specialist survey qualifications.
There was no survey representation at GHQ." Again "For the Department, the military responsibilities in 1938 39 were: (a) Liaison with the Armed Forces on survey and mapping.
(b) Provision of maps required by the Defence Services, covering India, Burma, Afghanistan and Iran.
1044 (c) In the event of a war, to provide and equip firstly two Fd Survey Companies and two Survey HQs for service in the NWFP, and secondly one Survey Report (admn.) (d) To carry out annually a small amount of training in military survey.
" In many Circles, Directors of the Survey of India have been Office Advisers to the 'Commander in Chief" and the work done by this Department has had in many cases military meaning.
This was reflected in the past in the officer situation and personnel complexion.
Class I Officers were all military men while Class II men were civilian graduates.
Wheeler, writing of the officer situation in British India, summed up thus: "Perhaps the greatest single factor affecting military organisation was that whereas there were nearly 60 military officers in 1925, there were only 30 in 1939; to train a civilian to be sound and efficient soldier takes a considerable time, to train a non survey soldier to become an efficient surveyor, much longer, very much longer." The military commitments of the Survey of India in the World War II made it a strategic instrument invisible to the lay but invaluable to the esoteric.
We have pressed this part of the career of the Survey of India to knock out the impression that its military component is purely a concession to the historical staffing pattern and the lack of avenues for promotion to Army engineers.
It is an in built necessity of the department in national interest.
We agree with counsel for the respondents, Sri Govindan Nair, that the early history of the Survey of India as a child of the Army cannot become an obsession to distort or debunk the enormity of its purely developmental undertakings.
It is a Civil Service which serves in national reconstruction all the time, but, at the call of the country, is ready to switch to Defence, risk anywhere and do surveys as commanded.
We must set our sights right about the civil and military range of the versatile department and not swallow the brash version that it is all 'brass '.
Its bearing on the conclusions in the case is that the court should not blindly accept all the preferences to the Army recruits as against their civilian brethren under the impression that everything in the Survey of India is Defence operation and civilian must therefore accept the crumbs as shudras of the Service.
No! Most of its work is peace time activity of a fundamental, though invi 1045 sible character to promote development in its multitude and magnitude and, indeed, in its panoramic magnificence.
But we cannot get away from the historic fact not merely the fact of history that the Survey of India is, first and foremost, an instrument of military strategy for the defence of the country although its talents are not allowed to grow into thistles but to serve wherever needed.
If competing demands come, it opts for and is therefore geared to Defence goals.
That is its first charge and, in that sense, it is Defence oriented, has an Army bias and cannot afford to ignore the indispensability of a military component.
The history of a nation is never written by the military but its history ceases to be, if its reserves of military manpower cannot be mobilised for active duty at an instant 's notice.
The Survey of India, with its signal service to the planned progress of the people, has a tryst with national security and an everyday commitment to the country 's defence requirements.
This may look over drawn but embeds a core of truth cardinal to the issue in the case why weightage to the 'uniformed ' recruits as against their counterparts in 'mufti '? Let us thus place accent on what is essential but not miss what exists as a reality.
From this angle, a legal raconteur may re tell the story slightly differently.
The Army in British India had, as one of its strategic operations, to undertake the survey of the interior and frontier of the country and had, therefore, under it a department wholly manned by military personnel.
After Independence and the enactment of the Constitution, this military limb separated from the Defence Forces, was constituted into a Civil Service with the Surveyor General at the apex and a hierarchy below of triple components together making up the Class I service.
The Service, in its new dimensions, was manned by civilian and military personnel due to functional imperatives.
The entry into the service was at the point of Deputy Superintending Surveyors, save for a category of promotees from Class II, with provision for spiralling up to higher positions.
The posts were filled according to Rules framed under the proviso to article 309 on a 50: 50 basis, as between Army engineering personnel dovetailed into the Survey of India and civilians recruited or promoted or otherwise appointed.
We miss the service perspective if we do not take a functional glimpse at the operational scale and range of the Survey of India.
What was a wholly military department previously reincarnated as the Survey of India, with a civilian inter mix, retained its meta military personality, functionally and personnel wise.
In budgetary classifica 1046 tion and administrative charge, the Survey of India was a member of the Agriculture Ministry, of the Education Ministry and currently, perhaps, correctly belongs to the Ministry of Science and Technology which is pervasive enough to embrace Defence and Development.
It is not right to regard this Service as a 'uniformed ' service, for it is ambidextrous.
But that is not really decisive of the issue before us.
What we have to understand is not so much its genetic transmigration as such or pedigree table but the nature of the service the Survey of India is expected to render, its basic functional characteristics, operational capabilities, futuristic uses and, consequentially, its meaningful personnel policy and the conditions of service dictated by the compelling necessities of these demands on the Service.
In brief, the emphasis is not on the administrative pigeonhole in which the Survey is placed for secretariat or budgetary purposes, nor on its lineage, nor, indeed on the label 'civil ' or 'Defence ' but on the nature of its duties and the relevant pattern of manpower and, most importantly, the concrete conditions of recruitment and principal career requirements while in service, having regard to the strategic essence of the goals the Service must sub serve.
So viewed, the Survey of India is army oriented.
Not merely because of heredity but markedly because of the nation 's potential demands and perennial expectations from this specialised Service, not merely in emergency but to be always on the qui vive.
We gather from the affidavit of the Senior Director, on behalf of the Union of India, that the army component is an inalienable requirement of the Survey of India if it is to fulfil its role.
He swears: "Some of the reasons for corps of Engineers being one of the sources of recruitment are as follows: (a) Survey of India may need mobilisation in the event of any emergency of war.
(b) The Corps of Engineer Officers in Survey of India form the nucleus around which mobilisation can take place quickly.
(c) The small element in the Army cannot cater for training and experience, and hence Corps of Engineer Officers are kept in Survey of India which provides the ideal ground for training and experience of these officers during peace so as to keep them fully competent technically in the event of a war or emergency.
In order to maintain an adequate balance between military and civilian officers, and to attract the higher type of Corps of Engineer Officers to the Survey of India, 50% of 1047 the total number of posts in the Class I Cadre were earmarked for the Corps of Engineer Officers.
" What, then, is the raison d ' etre of this department ? War means advance into or withdrawal from territory.
Operations involve identification of topography, climatology, environmentology, location of defence positions, marking of marching and retreating positions and artillery targets and paratroop landing positions, keeping secret strategic centres and sealing them off as out of bounds and a host of other surveys invaluably informational and immediately available for national defence.
It is obvious that if this be the functional relevance of the Survey of India, some divisions of it have to be fighting fit, always on the alert, ready to rush to the risk zones and technically capable of teaming with the ground forces in seasons of emergency and occasions of external aggression, before and after.
The Survey of India must be geared to the goal of national security if it is to justify itself in a large country of extensive mountain frontiers, border disputes, history of hot war, interior defence lines and military routes.
Of course, our imperial masters could afford, at the expense of people 's welfare, to keep such a department as a section of the Armed Forces, idle for long stretches of time but keeping their tools sharp for eventualities.
Free India could not.
Naturally, the country 's leaders, entrusted with gubernatorial responsibilities in this behalf, hit upon a golden mean of forming a separate Survey of India, no more a wing of Army.
The object was understandable.
A permanent yet considerable number of technical personnel virtually idle during peace time was a luxury.
Nevertheless, an instrument was forged which preserved the military mood of active duty but expanded and expended its sophisticated expertise during years of peace on national needs of other Ministries or States ' requirements.
It reflected the duo dexterous roles and mosaic of manpower in its recruitment policy.
We see nothing strange in this unorthodox composition, although attempts to interpret the new scheme by familiar Service moulds may mislead, as has happened in the High Court.
The Senior Director with reference to current conditions, deposes as affiant of the Central Government: "Reasons for seniority and pay protection for the Corps of Engineer Officers are as follows: (a) They suffer due to lack of higher opportunities of promotion to Brig.
Major General, Lt. General 1048 and General by their volunteering for the Survey of India.
(b) They can utmost expect to get military pension as a Colonel but not as Brig.
and higher which are substantially higher.
(c) They lose other perquisites like house rent, concessional electricity and furniture facilities, concessional Form 'D ' facilities, and many other concessions.
Unless therefore, they are given protection of seniority and pay in order to partly compensate their losses, no Corps of Engineer Officer would ever volunteer for the Survey of India.
These were the considerations for the seniority and pay protection for Corps of Engineer Officers.
Even if, for argument 's sake, it is admitted that preferential treatment is given to Corps of Engineer Officers (which it is not), it is done under the rules which have been framed based on the differences between the various sources of recruitment, and the said differences have a reasonable relation to the nature of the office to which recruitment is made.
Thus, the appointment, and terms and conditions of the Corps of Engineer Officers can legitimately be substantiated on the basis of valid classification.
" At this point we must eye at close quarters the Survey of India (Recruitment from Corps of Engineer Offices) Rules, 1950.
Primarily, it relates to the recruitment from the Corps of Engineer Officers.
The relevant part of Rule 2 runs thus: "2.
Recruitment: A Corps of Engineer Officer for appointment to the Survey of India should at the time of appointment normally have not less than three and not more than six years commissioned service, but this rule may be relaxed in exceptional cases.
Corps of Engineer Officers shall apply for appointment to the Survey of India to the Military Secretary, through the Engineer in Chief, who will transmit the applications to the Surveyor General.
When a military post falls vacant and the Military quota has not been filled the Surveyor General shall nominate an Officer or Officers from the above list.
" 1049 This Rule postulates a military quota which takes us straight to Rule 11: "11.
Method of recruitment to Survey of India Class I Service.
All future recruitment to the Survey of India Class I Cadre will be as follows: 1.
From Corps of Engineer Officers 50% 2.
From promoted Class II Civilian Officers 25% 3.
From direct recruits by competitive exami nation through the U.P.S.C. 25% The military recruits to Class I Service enter the Deputy Superintending Surveyor 's (hereinafter referred to as D.S.S.) position in the Service from where they rise on promotion as Superintending Surveyors (hereafter referred to as SS) Deputy Directors and Director, the top post being of Surveyor General.
These promotion posts are available for all categories of entrants as has been clarified in the later set of Rules called 'The Survey of India (Class I Recruitment) Rules, 1960. ' Before we part with the 1950 Rules, it is necessary to place accent on some aspects of the military officers and their career in the Survey of India.
Their sojourn in this new Department is not an exit from the Army but a long furlough, as it were.
For all practical purposes, they retain their military position and remain under military control and are liable to be called back for regular army service.
It is a kind of provisional adoption into a different family but with the ties in the natural family kept in tact.
A Corps of Engineer Officer will be qualified for recruitment only if he is in commissioned service for between three and six years.
Then he is to go through a two year period of probation during which he is to pass tests.
If he is not good, he gets back to military duty and even if he makes good, he has an option to revert to military employment.
Even after confirmation, the officer may revert during the first 20 years of commissioned service on his own request.
Even thereafter, with the approval of the Government he may revert permanently to military duty, save in the case of those who fall under Rule 4(c).
If an officer retires from the army that will involve retirement from the Survey of India too, save in the case of those who are Colonels or Lt.Ratio of the decision Colonels, covered by Rule 4(c), and 1050 retires from the army only for the reason that they have attained the requisite age limit.
Such persons under Rule 4(d) may continue in the Survey of India until the age of superannuation from civil employment.
It is important to note that an officer may be reverted permanently to military duty if he is no longer needed in the Survey of India on account of reduction in strength or unsatisfactory work.
He may also be reverted temporarily to military duty for grounds given in Rule 4(f).
Another remarkable rule is Rule 8 which speaks of wearing military uniform while in civil employment if the incumbent is willing to observe the courtesies due to military officers of superior ranks.
Rule 9 is extremely significant and reads thus: 9.
Military Promotion: A military officer in the Survey of India is expected to keep himself efficient as an army officer and will have to pass such promotion examinations, etc.
as may be laid down for other military officers of his rank and corps; such military confidential reports will be submitted on him as may be required by the military authorities.
Military Confidential Reports will be initiated and submitted in accordance with the procedure laid down in Special Army Order 24/S/51 as amended from time to time.
Military officer in the Survey of India will be considered for military substantive promotion in turn with others in their corps and their fitness for such promotion will be judged by their confidential reports.
After completing his normal period as a Lt. Colonel an officer will be eligible for promotion to full Colonel and above provided that: (i) he is a substantive Director or above in the Survey of India; (ii) there is a vacancy in the number of posts for full Colonel and above reserved for military officers in the Survey of India.
Rule 10 is also meaningful because the army officers in the Survey of India when they rise to higher positions get equivalent rise in the Army.
There is a partial assimilation but a substantial separation persists.
Once an Army Engineer, always an Army Engineer, is the gist.
Absent integration, article 14 is out of bounds such is the cumulative effect of the Service Rules, 1950 according to the learned Attorney General.
We will presently examine his claim which has been rejected by the High Court.
Also, the myth of Defence needs and consequent preferences for military recruits.
The High Court rightly formulated the crucial question when it stated: Thus, the bone of contention of the respondents is that the very nature of the work undertaken and done by the Survey of India is related to Defence purposes and the officers recruited from the army engineering corps are specially trained for this purpose.
This, according to the respondents, is the reasonable connection between the classification and the object that is sought to be served in recruitment to Class I service of the Survey of India.
The conclusions reached by the High Court also deserve to be set down at this place to facilitate a clear understanding of our approach and the basic finding of fact reached by the High Court.
The respondents have heavily relied upon this finding and have legitimately lashed the appellants ' plea as unpresentable in the face of this finding of fact.
The learned Judges observed: This claim, however, is not made out before us.
We have already referred to the various affidavits filed by the parties.
In the original counter affidavits filed by respondents, the stand taken is that because the rules provide for special privileges, they are being given to the army personnel and so the equality concept is not violated.
That is really begging the question.
When the petitioners complain that the rules made in this behalf violate the equality concept as enunciated in Articles 14 and 16, it would be futile to reply to that argument by saying that the rules so provide.
In the 1052 later affidavits some attempt is sought to be made to point out that the nature of the work carried on by the Survey of India department is essentially connected with Defence of India and that the officers recruited from the Army Corps of Engineers are specially trained for this purpose.
On the basis of the material placed before us, we are not inclined to accept that the work done by the Survey of India department is essentially of the nature and character required for defence purposes.
From the affidavits and the other material placed before us, it could be seen that the survey work done by the department is mostly concerned with the development projects and preparation of maps for various Ministries, State Governments, public sector projects and other civilian agencies.
The annexure filed along with the additional reply affidavit filed by the petitioners show that the Survey of India is a national survey organisation.
It appears to have surveyed quite a large number of development projects during the three plan periods.
The department might have prepared some maps useful for the Defence purposes.
But that is only part of the work and incidental to the nature of the survey it carries on.
Its work does not appear to be Defence oriented.
The survey done by the department is utilised by several departments of the Central and State Governments, public sector projects and other civilian agencies.
It is, therefore, making a tall claim to say that the survey is essentially of Defence nature.
Thus, the Survey of India appears to be a civilian department with a civilian budget.
Further, whenever there is an emergency there is nothing which prevents or bars the Government of India from calling upon the civilian officers also to serve on the border.
It is the stand of the petitioners that if 25 army personnel belonging to the Survey of India were called to the border area in 1962 war, as many as 70 civilian officers belonging to Class I and Class II categories were called to work in the same area.
They also assert that just like the Defence department uses some maps prepared by the Survey of India, the Forest Department, G.S.I., P.W.D. etc., also use the maps.
So we are not inclined to hold that the nature of the survey and work carried 1053 on by the Survey of India department is largely defence oriented.
Some reports are sought to be relied on in this connection.
It is true that some attempts have been made after attainment of Independence to attract officers from the army engineering corps into Survey of India department.
The impugned rules will have to be examined in the light of the circumstances that are now prevailing ever since Independence and not on the so called historical background which has, in any case, become archaic.
In regard to the special training given to the army personnel which is said to justify the classification, it appears to us that this claim is not tenable.
If the army personnel are given training in field engineering for 9 months and for 3 years in the Military Engineering College, Kirki, the qualifications required for direct recruitment of civilians are no less valuable.
Largely, only engineering graduates are recruited directly.
They have equal engineering experiences.
Further, it does not appear that the army officers had been given any survey training when they were in the army services.
It is not, therefore, possible to say that the recruits from the army are better qualified than the civilian direct recruits.
The promotees from Class II have, behind them a very long experience of not less than one decade in the work undertaken by the Survey of India department.
With this long experience of survey work, particularly belonging to this department behind them, we do not see any justification for their being discriminated against in favour of army officers.
We are not, therefore, prepared to accept that the army personnel in the Survey of India department have had any longer or better training required for Survey of India than either the direct recruits or promotees from Class II 1054 service to Class I service.
The latter two categories appear to be as qualified and as experienced as the army officers to carry out the work of Survey of India.
The only conclusion that is possible from the above discussion is that this classification made under the impugned rules between the army personnel and the civilian personnel has no reasonable connection with the object that is sought to be served.
We demur.
Why ? The 1950 Rules, in our view, have two prominent features which are basic.
The first one which we have already emphasised is that the military nominees do not shed their army service and merge into a new Service but undergo a partial absorption and preserve a substantial separateness.
The second feature, which is perhaps more hurtful to the civilian sector, turns on Rule 5 which provides for seniority.
The rule runs thus: 5.
Seniority. (1) On first appointment an officer will be in the grade of Deputy Superintending Surveyor (Formerly Assistant Superintendent) in Class I Service of the Survey of India.
(2) The seniority of military officers inter se will remain the same as in the Army.
(3) The seniority of military officers vis a vis directly recruited civilian officers will be determined by the year of allotment which will depend: (i) in the case of military officers, on the date of first commission including ante date, if any; and (ii) in the case of directly recruited civilian officers, on the date of appointment ante dated by two years.
(4) Civilian officers directly recruited on the results of any one examination will be junior to those recruited on the results of earlier examinations and senior to those recruited on the results of later examinations, the seniority inter se of those recruited in any one year being determined according to the order of merit in which they are placed by the Union Public Service Commission in the qualifying examination.
(5) Among those allotted to the same year, military officers will rank senior to directly recruited civilian officers.
1055 Rule 5A deals with promotion officiating and substantive.
A qualifying two year probation and a further three years ' service are a sine qua non for substantive promotion.
But officiating promotions are open to all the officers, preference being given to those who have done more years of actual survey work, regardless of seniority.
Even officiating posting needs the qualifying service of two years and three years, earlier referred to.
In this regard, the Class II officers who are directly promoted as S.S. have a definite advantage over the military men.
But when it comes to confirmation in substantive promotion posts, the military personnel opting into the Survey of India get the advantage of Rule 5 which bestows on them the added benefit of the period of service from the date of first commission in the Army which may be anything between three to six years as against two years of ante dated service which the civilian officers are entitled to tack on.
The 1960 Rules also require to be examined before we proceed to a discussion.
Rule 3 speaks of the sources of recruitment or appointment Direct recruitment of qualified candidates, promotion or transfer from another service, appointment from the Corps of Engineer Officers of the Ministry of Defence and, rarely, admission of other qualified persons these are the methods of entry into the service.
A direct recruit must be a graduate with Mathematics or the holder of an Engineering Degree (there are other alternatives which are of minor significance).
Rule 20A, which was an amendment made in 1965, insists that every person in the Service, appointed after the 1965 amendment, "shall be liable to serve in any defence service or post connected with the defence of India, for a period of not less than four years", including the training period.
This, incidentally, emphasises the military adaptability expected of the Service.
Rule 22 is important: 22.
Seniority (a) On the first appointment an officer will be in the grade of Deputy Superintending Surveyor (formerly Assistant Superintendent) in class I Service of the Survey of India.
(b) The seniority of military officers inter se will remain the same as in the Army.
(c) The seniority of military officers vis a vis directly recruited civilian officers will be determined by the year of allotment which will depend : (i) in the case of military officers, on the date of first commission including ante dated if any; and 1056 (ii) in the case of directly recruited civilian officers, on the date of appointment ante dated by two years.
(d) The relative seniority of all direct recruits shall be determined by the order of merit in which they are selected for such appointment on the recommendations of the Union Public Service Commission, persons appointed as a result of an earlier selection being senior to those appointed as a result of a subsequent selection.
Another rule which must be mentioned for a complete understanding is to the effect that Class II officers, when promoted to Class I, are directly appointed as S.S. and, therefore, can skip the lower position of D.S.S.
In 1970, the promotional scheme was slightly modified, but the thrust of the argument that military engineers enjoyed an advantage remained.
The attack made by the civilian wing, consisting of two groups, namely, direct recruits and Class II promotees, is against three key rules of the 1950 Scheme, viz., Rules 5, 5A and 11 and, of course, their corresponding 1970 provisions based on articles 14 and 16 and the High Court has substantially acceded on the basis that seniority prescriptions are based on irrelevant criteria and arbitrariness is writ large in some of the impugned provisions.
The Court has struck down Rules 22B, 22E of the 1960 Rules and Rules 5(2), 5(3), 5(5), 7 and 11 of the 1950 rules.
However, the Court has circumspectly declined to open the Pandora 's box and restricted the refixation of seniority and review of promotions "only from the date of the filing of the writ petition viz. 5 3 1974, because if we do it from a back date, it would be unsettling the promotions that had already been given before a challenge is made by the petitioners.
" This comprehensive narration is sufficient to inaugurate a discussion on the merits of the contentions after a formulation of the critical issues.
The points urged by the learned Attorney General are two fold.
Neither article 14 nor article 16 is violated because the Army recruits and the civilian entrants do not march into a common pool within the service of the Survey of India.
There are two sources or streams 1057 which flow into the Service but remain immiscible layers.
Since the Constitutional mandate of equal treatment applies only to equals, it cannot apply to the given situation.
Secondly, assuming there is a united cadre, even then article 16 cannot invalidate the weightage for seniority assigned to the military recruits, since sensible supportive discremen, having a rational relation to the object of the Service exists and that is sufficient panacea to cure the infirmity of differential treatment.
He further pressed that it was perfectly permissible, having regard to the different sources, to prescribe a weightage at the time of the entry into the Service.
And, in the present case, the weightage is only at the time of entry into the Service.
Thereafter, they are treated as equal for all purposes of promotion and what manifest advantage is derived by the military men in their career is a consequence of the initial addition of the commissioned service for the purposes of seniority.
These positions have been contested by Sri Govindan Nair, for the respondents, who has further argued that it is not proper for this Court to upset a finding of fact by the High Court unless there be something palpably erroneous on the face of the judgment.
This is true and we should not slightly interfere save where there is grave error.
Before we discuss these points, we must clear the ground regarding the necessity of the military presence in the survey Service.
We have already quoted from the affidavit on behalf of the Union of India, which gives condensed reasons for induction of army engineers into the Survey of India.
That terse statement crystallizes all that we have stated at some length earlier in this judgment.
An S.O.S. and the Survey of India must go into action maybe in the war torn area, maybe for post truce measurements.
More military survey literature was placed in our hands by the learned Attorney General, making up for earlier defaults, to drive home the point that multifarious though the Survey 's operations are, it does discharge duties secret, sensitive and strategic for Defence requirements which necessitate the maintenance of an Army Engineering component willy nilly.
This backdrop serves to highlight the issues on which we may turn the focus.
We may now enter the area of encounter.
What was a thoroughbred Military Engineering Corps suffered a metamorphosis by 1950 when a new set of rules of recruitment, composition and conditions of service, consistent with the new vision, rainbow of responsibilities and switch over to civilian departmentalisation, was brought about.
1058 A critical dissection of the present set up yields the result: While army engineers are definitely needed and are not expendable, the civilian accent on developmental work and the like justifies opening up the Service to recruits and promotees, non military in source.
Guided by this flexible realism and acting under the proviso to article 309 of the Constitution, the President of India has made Rules in 1950 to regulate the recruitment and conditions of service of the army personnel coming into the Survey of India.
The anatomy of the 1950 Rules is important.
It reserves 50% for the military Engineers by way of entitlement quota out of the total number to be recruited over a year as D.S.S. The other 50% was to have been divided equally between civilian recruits from the open market and the Class II officers.
But, by an amendment of 1965, a modification was made to the effect that the promotees from Class II would enter the Class I Service directly as S.S. and not as D.S.S.
Thus, the total number of vacancies each year at the D.S.S. level has to be filled by recruitment in the proportion of 50 and 25.
To illustrate for clarity, if there are 75 DSS vacancies in a given year, 50 of them are reserved for military nominees and the remaining 25 are filled up by direct recruitment from the civilians.
The expression 'recruitment ' definitely means enlisting anew into a Service and so it may be taken that the army engineering quota is 50 out of the 75 and the remaining 25 belong to the civilian recruits.
By way of contrast, the members of the Class II Service have a quota of 25% but that proportion is to be worked out, in terms of the extant rule, not based on the number of vacancies at the S.S. level but by a calculation of the total number of posts at the S.S. and higher levels in the Service.
The recruitment is only to the posts of Superintending Surveyors although the number to be so promoted is based upon totalling up the various posts at and above the S.S. level.
The total number of vacancies at the DSS level for each year shall be divided in the ratio of 2: 1 (50% for the Army Corps and 25% for direct recruits).
The 50% reserved for the army corps shall be available to be filled by those candidates.
The 25% seats to be filled by direct recruits shall be filled only by such recruits.
Even if enough direct recruits are not available they will not be filled by the army nominees but shall be kept vacant to be carried forward and filled in later years by such direct recruits.
A reasonable period for the carry 1059 forward scheme will be 3 years, not more.
Likewise, military vacancies at the DSS level each year shall be filled only by such nominees.
If enough such hands are not available, a similar procedure of carry forward will govern.
For the SS posts 25% belongs to promotees from Class II officers.
The total number will be worked out by adding all the posts of SS, Deputy Directors and Directors and Surveyor General and allotting one fourth of it as the quota for Class II promotees for appointment as SS.
Such is the reasonable interpretation of the rule.
Now we come to the bitter bone of contention between the parties.
Why should the 50% of military recruits be given a special weightage ? Should not all entrants into the DSS be treated alike without being afforded a handicap in the race? We see no difficulty in upholding this weightage, once we accept the reality that the military portion of the Survey is a compelling factor for national defence.
We hold, on a study of the materials already adverted to, that sans they army engineers the Survey of India will become a functional failure in discharging its paramount duties in times of war and in spells of peace, defence spreads beyond hot war or cold war and sustains the sense of security by a state of ever readiness.
There is enough literature to establish that the work done by the army wing of the Survey is far too important to be played with and such work is best done by that wing.
The military recruits, as has been already observed, are commissioned officers with 3 to 6 years of service.
They have a certain salary scale and period of service when they are baptised into the Survey of India.
Giving due weight to these factors, Rule 5 lays down the criteria for seniority as between the military sector of recruits and the civilian counter parts.
What needs to be appreciated is that for the very efficiency of the Survey of India, a substantial army element is structurally essential.
Army engineers are invited into this Service not because this department historically belonged to the Defence Forces but because it cannot minister to one of the major objectives of its creation if it does not have engineers with military training, aptitude, courage, discipline and dare devilry in hours of crisis.
The necessity of the Survey, not opportunity to the armymen, has determined the need to attract and, therefore, to allot a quota in the upper echelons, viz., Class I, for military engineers.
This, in turn, has desiderated the offer of reasonable terms and conditions for army men to join the Survey of India.
The military engineers belong to the Corps of Engineer Officers.
They are commissioned officers with service of 3 to 6 years before coming into the Survey which needs, not raw engineers, but men 1060 with some experience.
They have prospects and scales of pay in the Defence Department.
Why should they look at the Survey if on entry they are to lose their commissioned service and begin the rat race with civilian freshers? Why should they suffer pay cut by walking into the Survey of India? It is, therefore, fairly intelligible and basically equitable to allow military engineers credit for commissioned service and protection of already earned higher salaries.
The reasoning is simple.
The functional compulsions of the Survey of India require army engineers to be inducted, say half its Class I strength.
These engineering officers have to possess some years of experience.
How, then, can they be attracted into the Survey except by assuring them what they were enjoying in their existing service, viz., credit for the years under commission in reckoning seniority and fitment of their salary at a point in the scale of Class I officers so that, by way of personal pay or otherwise, a cut may be obviated.
To equate them with unequal civilian freshers is precisely the Procrustean exercise which is unconstitutional equality anathematised by Article 14.
Let us eye the issue from the egalitarian angle of Articles 14 and 16.
It is trite law that equals shall be treated as equals and, in its application to public service, this simply means that once several persons have become members of one service they stand as equals and cannot, thereafter, be invidiously differentiated for purposes of salary, seniority, promotion or otherwise, based on the source of recruitment or other adventitious factor.
Birth marks of public servants are obliterated on entry into a common pool and our country does not believe in official casteism or blue blood as assuring preferential treatment in the future career.
The basic assumption for the application of this principle is that the various members or groups of recruits have fused into or integrated as one common service.
Merely because the sources of recruitment are different, there cannot be apartheidisation within the common service.
They merely plead that unequals should not be forced into equality without regard to their rights.
They are unequal because their 3 to 6 years of commissioned service cannot be wished away when brought into the service shoulder to shoulder with raw recruits.
Secondly, their salaries 1061 are higher and that should not be forfeited as punishment for entering the Survey Service.
Not that the salary difference must be perpetuated but that at the point of entry into service their commissioned service and personal pay should be protected.
The Service Rules safeguard both these a just gesture without which many army engineers may not care to respond and the 'efficiency ' factor of the Survey Service will fail in their absence.
The learned Attorney General also adopted the precedentially sanctified route of escape from the magnetic field of Articles 14 and 16, that if the two sources of entry never really flowed into a homogenised sangam but remained the Ganga and the Jamuna, no question of equality arose.
A common pool where the plurality meets is a necessary postulate for the application of the equalist mandate.
Here the army engineers, it is apparent from the rules, essentially continue to be army men but wear pro tempore Survey apparel, to be doffed any time specified in the rules themselves.
Resultantly, the military and civilian members remain immiscible layers save for some purposes.
The condition of integration of men from the divergent sources being absent, rulings have held article 16 is out of the way.
Once it is agreed or found that at the entrance point the army engineers are justly given credit for the commissioned service which they carry with them, there is no further discrimination while in service on the score that they come from the Corps of Engineer Officers.
All that happens thereafter is merely a manifestation of initial advantage of credit for commissioned service.
For this reason, we negative the case of discrimination.
The relevant rulings not to burden but to brighten the points urged, may be referred to.
In B. section Gupta 's case(1) where article 16 was agitated in a battle between promotees and direct recruits, one facet of Service Jurisprudence was illumined.
We excerpt: When considering this point it must be clearly understood that this Court is not concerned with Govt. 's policy in recruiting officers to any service.
Government runs the service and it is presumed that it knows what is best in the public interest.
Government knows the calibre of candidates available and it is for the Government to determine how a particular service is to be manned whether by direct recruits or by promotees or both and, if by both, what should be the ratio between the two sources having regard to the age factor, experience and other exigencies of service.
Commissions and Committees appointed by the Government 1062 may indeed give useful advice but ultimately it is for the Government to decide for itself.
In the next place we have to remember that it would be wrong to pronounce adversely upon the new seniority rule merely because of its impact on the fortunes of any particular individual officer.
Nor will it be correct to point that an individual officer 'A ' would have fared better if the old quota rule and weightage rule had been restored.(1) We have to take an overall view to determine whether the rule now framed by the Government to determine seniority is just and fair.(2) A total conspectus does not persuade us that anything grossly unfair has been perpetrated.
Absent fusion into one integrated service, article 16 is not attracted, in a proposition entrenched by precedents.
In Shujat Ali 's case,(3) this Court pithily put it: The two categories of Supervisors were thus never fused into one class and no question of unconstitutional discrimination could arise by reason of differential treatment being given to them.
We have read Shelat, J 's observations in Wadhwa 's case(4) to reinforce our view: The principles on which discrimination and breach of articles 14 and 16 can be said to result have been by now so well settled that we do not think it necessary to repeat them here once again.
To sum up the position, the two services were from as early as 1937 and before separate.
At no stage, even after provincialisation was decided upon and the principles of its implementation were drawn up there was any integration of the two.
In fact, after considering the alternatives which the Government had before it, it opted, on consideration of difficulties of integration, for the alternative of keeping the two separate.(5) 1063 No principle under article 14 or article 16 is involved if such an integration was not brought about, for, considering the past history of the two services and the differences existing between them, Government could not be required to fuse them into one upon any principle emanating from the two Articles.(1) Going backwards still further, we find Ayyangar, J. in Joginder Singh(2) emphatically enunciating the same proposition: If, as we hold, there was no integration (and integration has no meaning unless it is complete, for there is no such thing as partial integration) either expressly or by necessary implication, it would follow that it was not the impugned rules that created the two distinct cadres but that they existed independently of the rules and the only charge that could be laid against the rules in this respect was that they failed to effect an integration.
If the government order of September 27, 1957, did not integrate them into a single service, it would follow that the two remained as they started as two distinct services.
If they were distinct services, there was no question of inter se seniority between members of the two services, nor of any comparison between the two in the matter of promotion for founding an argument based upon article 14 or article 16(1).
They started dissimilarly and they continued dissimilarly and any dissimilarity in their treatment would not be a denial of equal opportunity, for it is common ground that within each group there is no denial of that freedom guaranteed by the two articles.(3) Likewise, in Jaisinghani,(4) the same note has been struck.
To pursue precedents beyond a point is a tiring adventure which reaches a point of no return.
It is too late to upset settled law save where the point of extravaganza is reached.
Here such a situation is yet to come.
Again, Sri Govindan Nair 's submission suffers damage from the following observations in Ganga Ram 's(5) case.
1064 The direct recruits and the promotees like the petitioners in our opinion, clearly constitute different classes and this classification is sustainable on intelligible differentia which has a reasonable connection with the object of efficiency sought to be achieved.
The distinction between direct recruits and promotees as two sources of recruitment being a recognised difference, nor obnoxious to the equality clauses, the provisions which concern us cannot be struck down on the ratio of this decision.(1) Let us examine the facts briefly to see whether the fundamentals of constitutional equality are followed in the Service scheme.
The army engineers remain in 'uniform ' as it were but wear a Survey of India overcoat.
They do not merge or fuse into a single integrated service with the civilian recruits but remain as an immiscible layer of the Class I Service, the other layer being the civilians.
The two wings remain close but separate, not one homogenised family, as the various rules eloquently proclaim.
The Army engineers are formally part of the Survey of India but factually retain the vital pattern of life of the army and close nexus with their official prospects, conditions and control as if they had continued in the Army.
The 1950 Rules bring out the following incidents of service boldly.
Notwithstanding their having left the Corps Engineer Officers Service and entering the Survey Service, they continue to wear uniforms, they get notional promotions in the Army when they earn corresponding promotions in the Survey of India.
More significantly, they secure Army promotions only if they pass the requisite army tests ab extra.
They can be recalled by the Army and, for a certain period, they themselves may opt back to the army.
They continue to be broadly under the control of the Commander in Chief and when inefficiency is noticed, they can be called back to the army for being dealt with appropriately.
They have to undergo the regular periodical drills in the army and their disciplinary control is not divested from the Army Chiefs.
There are many other such details, the cumulative impact of which is that they have two masters, as it were; they are in two Services, as it were; they are under two parents natural and adopted.
This is a unique pattern where the Army members remain with one foot in the Army and the other in the Survey of India.
A conspectus of the facts and circumstances governing the 1065 service convinces us that there is no total integration of the Army personnel into the Survey Service.
They are in it and yet out of it.
This is what we may call a sui generis Service and indubitably it can be asserted that they have not fully fused into a common pool.
Absent such complete integration, Article 14 or 16 cannot be invoked.
The present case plainly falls in the hands off zone and so the court must leave the injustice, if any, to be corrected, if needed, by other processes.
Our exploration has revealed that the Survey of India is a civilian department rendering varied services to non Defence spheres of the Central Government and to State Governments.
So its composition cannot be reasonably confined to military personnel only.
But critical Defence oriented work is also done, not only in seasons of national emergency but also during peace spans.
The border line between national security by the Defence forces and developmental projects by civil services is becoming obsolete.
Defence is not only on the battle front but also in the strategic rear, in the farms and factories, in efficient supplies and essential services, in mapping second lines of defence and routes of troop movements, all of them having to be executed on a war footing.
Wings which can be mobilised at instant 's notice, forces which will build with blitz speed, have to be in the sheath to be drawn out like a sword on an alarm signal.
More than all, as earlier elaborated, the tasks of the Survey for the Defence are in times of Emergency top priority items.
So a sizeable section of men with army background, and military aptitude, with quick reflexes and familiar with Defence team work, must be kept in reserve all the time.
It follows that a good proportion of Army engineers are a 'must ' for the Survey.
It is enough to have 25% or 50% from military engineers a matter of fine tuning of policy for which the judiciary has no genius and the Administration has a reach of materials and range of expertise so that Courts must keep out, save where irrational criteria, irrelevant factors, mala fide motives or gross folly enter the verdict.
Have any such invalidatory infirmities been established by the challengers here ? If the induction of the army engineers has a nexus with the raison d 'etre of the Survey of India, the exact dosage needed to be drawn from that source for functional adequacy is not susceptible of judicial measurement.
If gross exaggeration is indulged in to boost the military component or non existent or illusory requirements are invented for the same purpose, taking for granted judicial gullibility or jurisdictional exile, the Court will call the bluff.
But here 50% of Class I services, from a historical need based or other approach, cannot be called irrational, impertinent or improvident.
1066 Likewise, the award of the length of commissioned services in the Army as service in the Survey of India cannot be dismissed as arbitrary or irrelevant.
The necessity to attract such officers is a factor.
The reality of their engineering experience on commission cannot be wished away.
The value of such experience for the Survey of India with Defence commitments argues itself.
Whether such services should be given credit wholly or at all in the new Service is more a matter of pragmatic wisdom beyond the bounds of irrationality, arbitrary fancy or departmental quasi nepotism.
It is difficult to dislodge the rules, fixing the quota and grafting of service while on Army Commission on to the Survey of India service, as favoured treatment devoid of rational foundation.
That is all there is to it.
Sri Govindan Nair, with assertive argument, gave us anxious moments when he pleaded for minimum justice to the civilian elements.
He said that the impugned rules were so designed, or did so result in the working, that all civilians, recruit or promotee, who came in with equal expectations like his military analogue, would be so outwitted at all higher levels that promotions, even in long official careers would be hopes that sour into dupes and promises that wither away as teasing illusions.
In effect, even if not in intent, if a rule produces indefensible disparities, whatever the specious reasons for engrafting service weightage for the army recruits, we may have had to diagnose the malady of such frustrating inequality.
After all, civilian entrants are not expendable commodities, especially when considerable civil developmental undertakings sustain the size of the service.
And their contentment through promotional avenues is a relevant factor.
The Survey of India is not a civil service 'sold ' to the military, stampeded by war psychosis.
Nor does the philosophy of article 14 or article 16 contemplate de jure classification and de facto casteification in public services based on some meretricious or plausible differentiation.
Constitutional legalistics can never drown the fundamental theses that, as the thrust of Thomas 's case(1) and the tail piece of Triloki Nath Khosa 's case(2) bring out, equality clauses in our constitutional ethic have an equalising message and egalitarian meaning which cannot be subverted by discovering classification between groups and perpetuating the inferior superior complex by a neo doctrine.
Judges may interpret, even make viable, but not whittle down or undo the essence of the Article.
Subba Rao J. hit the nail on the head when he cautioned in Lachhman Das vs State of Punjab:(1) The doctrine of classification is only a subsidiary rule evolved by courts to give a practical content to the said doctrine.
Overemphasis on the doctrine of classification or an anxious and sustained attempt to discover some basic for classification may gradually and imperceptibly deprive the article of its glorious content.
That process would inevitably end in substituting the doctrine of classification for the doctrine of equality; the fundamental right to equality before the law and the equal protection of the laws may be replaced by the doctrine of classification.
The quintessence of the constitutional code of equality is brought out also by Bose, J. in Bidi Supply Co. case(2) The truth is that it is impossible to be precise, for we are dealing with intangibles and though the results are clear it is impossible to pin the thought down to any precise analysis.
Article 14 sets out, to my mind, an attitude of mind, a way of life, rather than a precise rule of law.
It embodies a general awareness in the consciousness of the people at large of something that exists and which is very real but which cannot be pinned down to any precise analysis of fact save to say in a given case that it falls this side of the line or that, and because of that decisions on the same point will vary as conditions vary, one conclusion in one part of the country and another somewhere else; one decision today and another tomorrow when the basis of society has altered and the structure of current social thinking is different.
It is not the law that alters but the changing conditions of the times and article 14 narrows down to a question of fact which must be determined by the highest Judges in the land as each case arises.
The constitutional goal is to break down inequalities steadily between man and man, whether based on status or talent.
Masses of men have suffered so long from social suppressions and environmental inhibitions and to deliver them out of such stratification and petrification came the message of social justice, blowing like winds of change, with an accent on distributive justice ensured by the rule of real equal 1068 opportunity.
This basic mandate of equality cannot be subverted by the pragmatic plea of classified equality without robbing articles 14 to 16 of their spiritual kernel in the process of decoding.
Status to values must wither away in the march to the constitutional goals.
Every Article of Part III is an article of faith of our nation and is the formal expression of a moral spiritual mandate, not a string of words whose meaning of meanings can be played with by intellectual exercises favouring the Establishment.
The paramount law is value loaded.
Our freedom is in peril if equality is by judicial reconstruction, a refined validation of inequality.
Princes shall be treated equally but pariahs will continue where they are Why? because article 14 means only equality among equals, a self evident statement without solemn pronouncement.
Mr. Justice Subba Rao in Lachhman Das 's case(1) warned against this pernicious potential.
We pollute our cultural stream if we narrow the flow of constitutional equality to the little trickle of equals being made equals.
The dynamic demand of levelling up unequals to the level of the higher brackets is non negotiable albeit gradual.
This caveat is sounded in the last paragraph of the majority judgment in Triloki Nath(2) and is writ large in the whole of the concurring minority judgment.
It binds.
But we hope that this judgment will not be construed as a charter for making minute and microcosmic classifications.
Excellence is, or ought to be, the goal of all good government and excellence and equality are not friendly bed fellows.
A pragmatic approach has therefore to be adopted in order to harmonize the requirements of public services with the aspirations of public servants.
But let us not evolve, through imperceptible extensions, a theory of classification which may subvert, perhaps submerge, the precious guarantee of equality.
The eminent spirit of an ideal society is equality and so we must not be left to ask in wonderment.
What after all is the operational residue of equality and equal opportunity? The point Sri Govindan Nair made from Triloki Nath(3) is, on principle, well taken but on facts, fallacious.
The learned Attorney General, in the last instalment of information furnished in the course of his reply, did convince us that no such disaster as was painted did or would befall unless we take a myopic view.
1069 If we had been satisfied that the end product of the provision (Rule 5) was a manipulation of continued seniority, beyond allowance for some differences, a perpetual suppression of the civilian wing and a back door entry into and occupancy of all higher positions by the military men, it might have been a mockery of equality.
But the story is that some advantage is secured by the military recruits which is intended and justified.
Certainly, in the promotional scale this will be reflected.
But no monopoly of all promotions vests in the commissioned recruits.
As expressed earlier, rigid or relentless equalisation of divergent categories who have been brought into one Service is the Procrustean bed process, contrary to democratic social dynamics.
In the first few years, the army wing had a better deal but in the next spell the civilian wing more than made up.
In the next span some change occurs and a projection into the decade ahead shows that the civilians will outnumber the army men at the next two tiers.
Maybe, the Surveyor General may continue to be a 'uniformed ' engineer.
We do not see the pathetic picture held out by counsel and the differences we do notice are distances away from the creation of class legislation.
We do not strike down the rule as constitutionally obnoxious.
Sri Govindan Nair drew our attention to Pay Commission Reports which had strongly recommended fair treatment to the civilian wing by making the higher positions realistically accessible to them.
Prima facie, there is some grievance if promotions at the top are totally sealed off, not in law but in fact.
And simmering discontent of a whole wing is no small matter.
Maybe, when the apex is occupied always by a 'brass ' boss the working of the rules and of the department may be tilted.
We do consider that recommendations of the Pay Commission deserve Central Government 's early attention.
Flexible provisions for promotion to higher positions which will not make the department lop sided, or vertical division of the civilian and military wings without injury to integrity and efficiency may meet the needs of equality.
Policy is for the Executive, not the Judicative wing.
We find no unconstitutionality but discontent should not be neglected in good government.
A measure of agreement, with marginal differences in the interpretation of the rules, emerged in the course of the debate.
We may as well set it down to avoid future doubt.
The learned Attorney General stated, with a view to silence the grievance of the respondents, that for promotions beyond Superintending Surveyor, even officiating S.S. are 1070 considered.
It is not right to contend, he said, that only on confirmation they are considered for promotion as Deputy Directors.
Indeed, the learned Attorney General pointed out that many Deputy Directors have been only officiating SSs.
We accept this as correct.
Sri Govindan Nair, apprehending adverse winds in reversal of the High Court 's conclusion, raised fresh contentions which he was not permitted to put forward because they were new and urged only in the Supreme Court.
Creative thinking is good, if it dawns in good time; for, according to our processual law, arguments unborne on the record in the High Court have no chance as a post script in the Supreme Court.
For instance, he urged that commissioned officers governed by the Army Act could not be governed by any other Service Rules.
So much so, the 1950 Rules, being a deviation from the Army Rules, were invalid.
We illustrate but not exhaust and, in any case, do not investigate.
The social philosophy of our fundamental law is a perennial flow, rising and falling, rushing to push out obstructing rocks and slowing to erode a doctrinal distortion, the power being geared to the good of the people in terms of Justice, social economic and political.
From this futuristic standpoint, every decision of the Supreme Court is the focal point of the battle of the tenses, of social change versus social stability.
We leave these seminal issues for future consideration when they more directly demand decision.
Enough unto the day is the evil thereof.
We allow the appeals but intricate constitutional questions when decided by this Court to declare the law under article 141 should be an exception to the conventional rule of costs following the event, unless other circumstances warrant.
So no costs.
| IN-Abs | Rule 5 of the Survey of India (Recruitment from Corps of Engineer Officers) Rules 1950 provided that on first appointment an officer would be in the grade of Deputy Superintending Surveyor in Class I Service of the Survey of India and that seniority of military officers inter se will remain the same as in the Army.
Sub rule 5 of this rule provided that among those allotted to the same year, military officers would rank senior to directly recruited civilian officers.
Rule 11 of the Rules which dealt with the method of recruitment to Survey of India Class I Service provided that all recruitments to the Cadre would be 50% from the Corps of Engineer Officers, 25% from promoted Class II civilian officers and 25% from direct recruits by competitive examination through the Union Public Service Commission.
These Rules were amended in 1960 and 1970 but the provision relating to military engineers remained the same as in the 1950 Rules.
In a writ petition filed in the High Court, the civilian officers of the service consisting of direct recruits and Class II promotees impugned the validity of the 1950 Rules on the ground that seniority prescriptions were based on irrelevant criteria and that discrimination was writ large in the impugned provisions.
The High Court, accepting the contentions of the civilian officers, struck down certain rules of the 1950 Rules as violative of Articles 14 and 16 of the Constitution.
The High Court did not accept the contention of the Government that the nature and character of the work done by the Survey of India was essentially connected with defence purposes because the work done by the Department for the Army was done along with several other services carried on by it, namely, with the development projects, preparation of maps for various Ministries of the Central and State Governments, public sector undertakings and other agencies; assuming that the work was related to defence purposes, civilian officers were employed by the Department to do the same work and during emergencies, civilian officers were called upon to serve in border areas.
The Department had civilian budget.
For these reasons the High Court came to the conclusion that there was no ground to justify classification made under the impugned Rules between the Army officers and civilian officers because the recruits from the army could not be said to be better qualified than the civilian direct recruits and that there was no justification for adopting any discrimination in favour of the Army officers.
The impugned rules were struck down on the ground that there was no reasonable nexus with the object sought to be achieved.
1037 In appeal to this Court it was contended on behalf of the State that the constitutional mandate of equal treatment applies only to equals and in the case of recruitment to the service the sources of recruitment of Army personnel and civilian entrants are different and remain different; weightage is given only at the time of entry and thereafter officers are treated as equals for all purposes of promotion and the advantage gained by the militarymen is a consequence of the initial advantage of the commissioned service for the purposes of seniority.
Assuming that there is a unified cadre, since there exists a rational relation to the object sought to be achieved Article 16 cannot be said to have been violated.
Allowing the appeals, ^ HELD: The 1950 Rules are valid in that they have a prominent feature which is basic namely the military nominees do not shed their army service and merge into a new service to undergo partial absorption but preserve a substantial separateness.
[1054 B C] 1.
Without the military engineers the Survey of India would become a functional failure in discharging its paramount duties in times of war and peace.
The work done by the army wing of the Survey of India is far too important to be played with and such work is best done by that wing.
The military recruits are commissioned officers with three to six years of service with certain salary scales and period of service.
Giving due weight to these factors rule 5 lays down the criteria for seniority as between the military sector and the civilian sector.
For the very efficiency of the Survey of India a substantial Army element is essential.
Army engineers are invited into this service not because this department historically belonged to the defence forces but because in hours of crises it cannot minister to one of the major objectives of its creation if it does not have engineers with military training, courage and so on.
It is fairly intelligible and basically equitable to allow military engineers credit for commissioned service and protection of already earned higher salaries.
[1059 E H 1060 A B] 2.
To attract engineers into the Survey of India by assuring them all that they were enjoying in their existing service, namely, credit for the years under commission in reckoning seniority and fitment of their salary and other benefits is not discrimination or favoured treatment but justice to those whom, of necessity, the service wants.
[1060 C D] 3.
Once it is agreed that at the entrance point the Army engineers are justly given credit for the commissioned service which they carry with them there is no further discrimination while in service on the score that they come from the Corps of Engineer Officers.
All that happens thereafter is merely the manifestation of initial advantage of credit for commissioned service.
[1061 D E] Mohammad Shujat Ali & Ors.
vs Union of India & Ors. ; at 481; Ram Lal Wadwa & Anr.
vs The State of Haryana & Ors. ; at 635; State of Punjab vs Joginder Singh [1963] Supp.
2 SCR 169 at 189; section G. Jaisinghani vs Union of India & Ors. ; ; Ganga Ram & Ors.
vs Union of India & Ors.
; at 488 referred to.
The 1950 Rules bring out certain incidents of service boldly.
Notwithstanding the fact that they entered the Survey of India service.
the Army 1038 officers continue to wear Army uniforms, they get notional promotions in the Army provided they pass the requisite Army tests when they earn corresponding promotions in the Survey of India.
They can be recalled by the Army and they continue to be under the control of the Commander in Chief.
When inefficiency is noticed they can be called back to the Army for being dealt with appropriately.
A conspectus of the facts and circumstances governing the service makes it clear that there is no integration of the Army personnel into the Survey Service.
Without such complete integration Articles 14 and 16 cannot be invoked.
[1064 E G, 1065 A B] 5.
Whether 25% or 50% induction from military engineers is enough is a matter of policy for which the judiciary has no genius and the administration has a reach of materials and range of expertise, so that Courts must keep out except where rational criteria, or irrelevant factors mala fide motives or gross folly enter the verdict.
In the instant case reservation of 50% of Class I service for Army Officers cannot be called irrational, impertinent or improvident.
[1065 F H]
|
ivil Appeal Nos.
191 193 of 1978.
Appeals by Special Leave from the Judgment and Order dated 28 12 77 of the Assistant Commissioner of Sales Tax, Indore in R. C. No.
IND/1/X/XIX/5 in case No. 118/72 73 for the period 1 8 71 to 31 7 72, R. C. No. IND/I/1344 (Central) in Case No. 84/72 73 for the period 1 8 71 to 31 7 72 and R. C. No. IND/I/X/XIX/5 (TOT) 1100 in Case No. 118/72 73 for the period 15 11 71 to 31 7 72 and rectified by orders dated 7 1 1978.
V. section Desai (CA 191/78), B. R. Agarwala and P. G. Gokhale for the Appellant.
section K. Gambhir for the Respondent.
The Judgment of the Court was delivered by BHAGWATI, J.
These appeals by special leave raise common questions of law and it would be convenient to dispose them of by a single judgment.
The assessee effected certain transactions of sale of cement in accordance with the provisions of the Cement Control Order during the assessment period Ist August, 1971 to 31st July, 1972 and in the course of the assessment of the assessee to sales tax under the Madhya Pradesh General Sales Tax Act, 1958 and , a question arose whether the amount of freight which was included in the 'free on rail destination railway station ' price, but which was paid by the purchasers and hence deducted from the price shown in the invoices sent to the purchasers, formed part of the sale price so as to be liable to be included in the taxable turnover of the assessee.
The assessee, proceeding on the basis that the amount of freight did not form part of the sale price and was not includible in the taxable turnover did not show it in the returns, but the Assistant Commissioner of Sales Tax took the view that having regard to the provisions of the Cement Control Order, the amount of freight formed part of the sale price and was includible in the taxable turnover of the assessee and on this view, he passed two orders of assessment, one under the and the other under the Madhya Pradesh General Sales Tax Act, 1958, including the amount of freight in the taxable turnover of the assessee and levying tax upon it and also imposing heavy penalty on the assessee on the ground that the assessee had failed to disclose in its returns the amount of freight as forming part of the taxable turnover.
The same position obtained also in regard to the assessment period 15th November, 1971 to 31st July, 1972 and a similar order bringing the amount of freight to tax and imposing heavy penalty on the assessee was passed by the Assistant Commissioner of Sales Tax under the Madhya Pradesh General Sales Tax Act, 1958.
Since the question as to whether in respect of transactions of sale of cement governed by the Cement Control Order, the amount of freight formed part of the sale price and was liable to be included in the taxable turnover of the dealer, was pending decision in this Court, the assessee 1101 preferred appeals directly to this Court by special leave against the Orders of assessment made by the Assistant Commissioner of Sales Tax.
The assessee challenged in the appeals not only the inclusion of the amount of freight in the taxable turnover of the assessee, but also the imposition of penalty for not showing the amount of freight as forming part of the taxable turnover in the returns.
So far as the first question is concerned, namely, whether the amount of freight formed part of the sale price and was includible in the taxable turnover of the assessee so as to be exigible to sales tax, it stands concluded by a recent decision given by this Court in Hindustan Sugar Mills vs State of Rajasthan & Ors.(1) It has been held by this Court in that case that by reason of the provisions of the Cement Control Order, 1967, which governed the transactions of sale of cement entered into by the assessee with the purchasers, the amount of freight formed part of the sale price within the meaning of the first part of the definition of that term contained in sec.
2 (p) of the Rajasthan Sales Tax Act, 1954 and section 2(h) of the and was includible in the taxable turnover of the assessee.
The definition of 'sale price ' in section 2(o) of the Madhya Pradesh General Sales Tax Act, 1958 is materially in the same terms as section 2(p) of the Rajasthan Sales Tax Act, 1954, and this decision must therefore equally apply under the Madhya Pradesh General Sales Tax Act, 1958 and it must be held that the amount of freight formed part of the sale price within the meaning of the first part of the definition of that term in section 2(o) of the Madhya Pradesh General Sales Tax Act 1958 and section 2(h) of the and was rightly included in the taxable turnover of the assessee.
We may point out that the observations made by this Court in the Order dated 31st August, 1979 allowing the Review Application of the assessee in Hindustan Sugar Mills case (supra) are equally applicable in the present case and the State will do what is fair and just to the appellant as indicated by this Court in that Order.
The next question that arises for consideration is whether the Assistant Commissioner of Sales Tax was right in imposing penalty on the assessee for not showing the amount of freight as forming part of the taxable turnover in its returns.
The penalty was imposed under section 43 of the Madhya Pradesh General Sales Tax Act, 1958 and section 9 sub section (2) of the on the 1102 ground that the assessee had furnished false returns by not including the amount of freight in the taxable turnover disclosed in the returns.
Now it is difficult to see how the assessee could be said to have filed 'false ' returns, when what the assessee did, namely, not including the amount of freight in the taxable turnover was under a bonafide belief that the amount of freight did not form part of the sale price and was not includible in the taxable turnover.
The contention of the assessee throughout was that on a proper construction of the definition of 'sale price ' in section 2(o) of the Madhya Pradesh General Sales Tax Act, 1958 and section 2(h) of the , the amount of freight did not fall within the definition and was not liable to be included in the taxable turnover.
This was the reason why the assessee did not include the amount of freight in the taxable turnover in the returns filed by it.
Now, it cannot be said that this was a frivolous contention taken up merely for the purpose of avoiding liability to pay tax.
It was a highly arguable contention which required serious consideration by the Court and the belief entertained by the assessee that it was not liable to include the amount of freight in the taxable turnover could not be said to be malafide or unreasonable.
What section 43 of the Madhya Pradesh General Sales Tax Act, 1958 requires is that the assessee should have filed a 'false ' return and a return cannot be said to be 'false ' unless there is an element of deliberateness in it.
It is possible that even where the incorrectness of the return is claimed to be due to want of care on the part of the assessee and there is no reasonable explanation forthcoming from the assessee for such want of care, the Court may, in a given case, infer deliberateness and the return may be liable to be branded as a false return.
But where the assessee does not include a particular item in the taxable turnover under a bonafide belief that he is not liable so to include it, it would not be right to condemn the return as a 'false ' return inviting imposition of penalty.
This view which is being taken by us is supported by the decision of this Court in Hindustan Steel Limited vs State of Orissa(1) where it has been held that "even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute. ." It is elementary that section 43 of the Madhya Pradesh General Sales Tax Act, 1958 providing for imposition of penalty is penal in character and unless the filing of an inaccurate return is accompanied by a guilty mind, the section cannot be invoked for imposing penalty.
If the view canvassed on behalf of the Revenue were accepted, the re 1103 sult would be that even if the assessee raises a bonafide contention that a particular item is not liable to be included in the taxable turnover, he would have to show it as forming part of the taxable turnover in his return and pay tax upon it on pain of being held liable for penalty in case his contention is ultimately found by the Court to be not acceptable.
That surely could never have been intended by the Legislature.
We are, therefore, of the view that the assessee could not be said to have filed 'false ' returns when it did not include the amount of freight in the taxable turnover shown in the returns and the Assistant Commissioner of Sales Tax was not justified in imposing penalty on the assessee under section 43 of the Madhya Pradesh General Sales Tax, 1958 and section 9 sub section (2) of the .
We accordingly reject the appeals in so far they are directed against the inclusion of the amount of freight in the taxable turnover of the assessee but allow the appeals in so far as they relate to imposition of penalty of freight in the taxable turnover of the assessee but allow the appeals in so far as they relate to imposition of penalty and set aside the Orders passed by the Assistant Commissioner of Sales Tax imposing penalty on the assessee.
There will be no order as to costs of the appeals.
N. V. K. Appeals partly allowed.
| IN-Abs | The assessee (appellant) effected certain transactions of sale of cement in accordance with the provisions of the Cement Control order.
The amount of freight which was included in the 'free on rail destination railway station ' price and which was paid by the purchaser was deducted from the price shown in the invoices sent to the purchasers.
The assessee proceeding on the basis that the amount of freight did not form part of the sale price and was not includible in the taxable turnover did not show it in the returns submitted by it.
The Assistant Commissioner of Sales Tax took the view that having regard to the provisions of the Cement Control Order, the amount of freight formed part of the sale price and was includible in the taxable turnover of the assessee, and passed two orders of assessment, one under the and the other under the Madhya Pradesh General Sales Tax Act, 1958, including the amount of freight in the taxable turnover of the assessee and levying tax upon it and also imposing heavy penalty on the assessee on the ground that the assessee had failed to disclose in its returns the amount of freight as forming part of the taxable turnover.
In appeals to this Court on the questions of: (1) inclusion of the amount of freight in the taxable turnover of the assessee and (2) imposition of penalty for not showing the amount of freight as forming part of the taxable turnover in the returns.
^ HELD: 1.
(i) The amount of freight formed part of the sale price within the meaning of the first part of the definition of that term in Section 2(o) of the Madhya Pradesh General Sales Tax Act, 1958 and Section 2(h) of the ' and was rightly included in the taxable turnover of the assessee.
[1101E] (ii) In Hindustan Sugar Mills vs State of Rajasthan this Court held that by reason of the provisions of the Cement Control Order, 1967, which governed the transactions of sale of cement entered into by the assessee the amount of freight formed part of the sale price within the meaning 1099 of the first part of the definition of that term contained in Section 2(p) of the Rajasthan Sales Tax Act, 1954 and Section 2(h) of the and was includible in the taxable turnover of the assessee.
The said decision must equally apply under the Madhya Pradesh General Sales Tax Act, 1958, as the definition of 'sale price ' in Section 2(o) of the Madhya Pradesh General Sales Tax Act, 1958 is materially in the same terms as Section 2(p) of the Rajasthan Sales Tax Act, 1954.
[1101C E] 2(i) The Assistant Commissioner of Sales Tax was not justified in imposing penalty on the assessee under Section 43 of the Madhya Pradesh General Sales Tax Act, 1958 and section 9 sub section (2) of the of 1956 as the assessee could not be said to have filed 'false ' returns when it did not include the amount of freight in the taxable turnover shown in the returns.
[1103C, B] (ii) Section 43 of the Madhya Pradesh General Sales Tax Act, 1958 providing for imposition of penalty requires that the assessee should have filed a 'false ' return and a return cannot be said to be 'false ' unless there is an element of deliberateness in it.
The Section being penal in character, unless the filing of an inaccurate return is accompanied by a guilty mind, the section cannot be invoked for imposing penalty.
[1102D, 1102H] (iii) Where the assessee does not include a particular item in the taxable turnover under a bonafide belief that he is not liable so to include it, it would not be right to condemn the return as a 'false ' return inviting imposition of penalty.
[1102F] Hindustan Steel Ltd. vs State of Orissa, 25 S.T.C. 211, referred to.
In the instant case, the assessee did not include the amount of freight in the taxable turnover under a bonafide belief that the amount of freight did not form part of the sale price and was not includible in the taxable turnover.
The contention of the assessee through out was that on a proper construction of the definition of 'sale price ' in Section 2(o) of the Madhya Pradesh General Sales Tax Act, 1958 and Section 2(h) of the , the amount of freight did not fall within the definition and was not liable to be included in the taxable turnover.
It cannot be said that this was a frivolous contention taken up merely for the purpose of avoiding liability to tax.
This was a highly arguable contention.
The belief entertained by the assessee that it was not liable to include the amount of freight in the taxable turnover could not be said to be malafide or unreasonable.
It cannot, therefore, be said that the assessee filed 'false ' returns necessitating imposition of penalty.
[1102A D,E]
|
Civil Appeal No. 2522 of 1969.
From the Judgment and Order dated 12 5 1969 of the Punjab and Haryana High Court in L.P. No. 8/69.
Ravindra Bana and M. N. Shroff for the Appellant.
T. section Arora and M. L. Lahoty for the Respondent.
The Judgment of the Court was delivered by SHINGHAL, J.
One Nathi held 36 standard acres and 8 standard units of land in village Bhanguri, and as the "permissible area" within the meaning of clause (3) of section 2 of the Punjab Security of Land Tenures Act, 1953, (hereafter referred to as the Act) in his case was 30 standard acres, Collector (Surplus) Nuh, declared 6 standard acres and 8 standard units of land as "surplus area", by his order dated November 25, 1959.
Nathi died on July 14, 1965, leaving his widow Smt.
Kela Devi respondent No. 1, and his mother Smt.
Mando respondent No. 2, as heirs.
The two heirs made an application under sections 10 A(b) and 10B of the Act stating that as the land of Nathi had been inherited by them in equal shares, and the holding with each one of them was much below the "permissible area" of 30 standard acres, there was no "surplus area" within the meaning of clause (5 a) of section 2 of the Act and no part of it could therefore be utilized for allotment to other tenants.
That application was however dismissed by Collector (Surplus) on March 13, 1967, on the ground that the "surplus area" declared in Nathi 's life time had already been allotted to other tenants and could not be excluded from the holding in the hands of his widow and mother.
An appeal was taken to the Commissioner of Ambala, but it was dismissed on January 30, 1968, as he took the view that the order of allotment of the "surplus area" of Nathi 's holding amounted to "utilisation" of that land under section 10 A(a).
A revision was taken to the Financial Commissioner, but it was rejected on May 8, 1968, for the same reason.
Kela Devi and Smt.
Mando then approached the High Court of Punjab and Haryana by a writ petition under articles 226 and 227 of the Constitution.
It was opposed by the present appellants on the ground 1122 that as the "surplus area" had been declared and allotted to various tenants during the life time of Nathi (except for an area of 8 kanals in village Ghelab) the writ petitioners were not entitled to succeed, as the "surplus area" had already been utilized.
It was also pleaded that possession of eight pieces of land had already been delivered to the tenants before the death of Nathi.
The controversy before us does not relate to those pieces of land which had been allotted to various tenants and of which possession was given to them during the life time of Nathi.
The learned Single Judge of the High Court who initially heard the writ petition allowed it by his judgment dated October 29, 1968, in so far as it related to the portion of land of which possession had not been given to other tenants and, to that extent, he set aside the above mentioned orders of the Collector, the Commissioner, and the Financial Commissioner by which the application of Smt.
Kela Devi and Smt.
Mando was rejected.
An appeal was taken to a Division Bench of the High Court, but it was dismissed on May 12, 1969.
That is why the present appeal has been filed on the basis of the High Court 's certificate under Article 133 (1)(c) of the Constitution.
The only question which therefore arises for consideration is whether the High Court was right in taking the view that mere allotment of land to other tenants under section 10 A(a) of the Act did not amount to utilisation of the "surplus area" when the resettled tenants had not taken possession under the allotment orders.
It is not in controversy that it had been finally decided that the "surplus area" in the case of Nathi was 6 standard acres and 8 standard units, and a decision to that effect was taken in his life time on November 25, 1959.
It is also not in dispute that orders were made for the allotment of the "surplus area" to other tenants under section 10 A(a) of the Act which reads as follows "10 A(a) The State Government of any officer empowered by it in this behalf shall be competent to utilize any surplus area for the resettlement of tenants ejected, or to be ejected, under clause (i) of sub section (1) of section 9.
" While therefore the section empowers the State Government or its authorised officer to "utilise" any "surplus area" for the resettlement of tenants, the Act does not define what is meant by an order of utilisation under the section.
A clue to what is actually meant by that expression, is however to be found in clause (b) of section 10 A which provides as follows, 1123 "10 A(b) Notwithstanding anything contained in any other law for the time being in force and save in the case of land acquired by the State Government under any law for the time being in force or by an heir by inheritance no transfer or other disposition of land which is comprised in surplus area at the commencement of this Act, shall affect the utilization thereof in clause (a).
" The clause therefore has the effect of saving the land comprised in the "surplus area", if it has been acquired by an heir by inheritance.
So where an heir succeeds by inheritance, as in this case, that basic fact would affect the utilisation of the surplus area even if only an order has been made under clause (a) of section 10 A for its utilisation for the resettlement of other tenants but that order has not been implemented.
In order to understand the full meaning and effect to the provisions of section 10 A, it is necessary to make a cross reference to rules 18, 20 A, 20 B and 20 C of the Punjab Security of Land Tenures Rules, 1956 (hereafter referred to as the Rules).
Rule 18 deals with the procedure for allotment of "surplus area" to other resettled tenants.
Rule 20 A provides for the issue of certificates of allotment of lands to them, and rule 20 B provides for delivery of possession and makes it obligatory for the resettled tenant to take possession of the land allotted to him within a period of two months or such extended period as may be allowed by the officer concerned.
Rule 20 C provides, inter alia, for the execution of a "qabuliyat" or "patta" by a resettled tenant.
It would thus appear that while allotment of land is an initial stage in the process of utilisation of the "surplus area", it does not complete that process as it is necessary for the allottee to obtain a certificate of allotment, take possession of the land within the period specified for the purpose, and to execute a "qabuliyat" or "patta" in respect thereof.
The process of utilisation contemplated by section 10 A of the Act is therefore complete, in respect of any "surplus area", only when possession thereof has been taken by the allottee or the allottees and the other formalities have been completed, and there is no force in the argument that a mere order of allotment has the effect of completing that process.
Reference in this connection may also be made to rule 20 D of the Rules which provides that in case a tenant does not take possession of the "surplus area" allotted to him for resettlement within the period specified therefor, the allotment shall be liable to be cancelled and the area allotted to him may be utilized for the resettlement of 1124 another tenant.
It cannot therefore be dobted that a completed title does not pass to the allottee on a mere order of allotment, and that order is defeasible if the other conditions prescribed by law are not fulfilled.
So when the process of utilisation of Nathi 's "surplus area" had not been completed by the time his heirs by inheritance made the aforesaid application to the authorities concerned, it was permissible for those authorities to re examine the question whether there was any "surplus area" at all after Nathi 's holding had been inherited by his two heirs in equal shares so as to reduce the area of the holding of each one of them below the permissible area.
The High Court therefore rightly allowed the writ petition of the respondents.
As there is no force in this appeal, it is dismissed but, in the circumstances, we do not make any order as to the costs.
P.B.R. Appeal dismissed.
| IN-Abs | Out of 46 odd acres of land held by the original owner (husband of respondent No. 1 and son of respondent No. 2), the Collector declared six odd acres as surplus area under section 2(3) of the Punjab Security of Land Tenures Act, 1953 and allotted them to two other tenants.
On the death of the original owner the two heirs (respondents 1 and 2) made an application stating that since the land inherited by each of them in equal shares was below the permissible area of 30 standard acres, there was no surplus area with them and that, therefore, no part of the land could be utilized for allotment to other tenants.
The Collector rejected their application on the ground that the surplus area having been declared during the life time of the original owner, it could not be excluded from the holding in the hands of the two respondents.
The respondents failed in appeal and revision before the Commissioner and the Financial Commissioner.
A single Judge of the High Court allowed their petition under Articles 226 and 227 of the Constitution in so far as it related to the application of the land of which possession had not been given to the other tenants.
A Division Bench rejected the appellants appeal.
On the question whether mere allotment of land to other tenants amounted to utilization of the surplus area when the re settled tenant had not taken possession.
Dismissing the appeal, ^ HELD: 1.
While section 10A(a) of the Act empowers the State Government to utilize any surplus area for re settlement of tenants, the Act does not define what is meant by order of utilization under the section.
Clause (b) of the section, however, has the effect of saving the land comprised in the surplus area if it has been acquired by an heir by inheritance.
Therefore, when an heir succeeds by inheritance that basic fact would affect the utilization of the surplus area, even if an order had been made under section 10A(a) for its utilization for the resettlement of other tenants but that order had not been implemented.
[1122H, 1123A B] 2.
A conspectus of the rules made under the Act also shows that while allotment of land is an initial stage in the process of utilization of the surplus area, it does not complete that process as it is necessary for the allottee to obtain a certificate of allotment, take possession of the land within the specified period and execute necessary documents thereafter.
A mere order of allotment does not have effect of completing that process.
Rule 20D also points to the con 1121 clusion that a completed title does not pass to the allottee on a mere order of allotment and that order is defeasible if the other conditions prescribed by law are not fulfilled.
[1123 F G] In the instant case since the process of utilization of surplus area had not been completed by the time the heirs made the application it was permissible for the authorities to re examine the question whether there was any surplus area at all after the heirs had inherited the land in equal shares so as to reduce the area of the holding of each one of them below the permissible area.
[1124 B G]
|
N: Criminal Appeal No. 286 of 1973.
Appeal by Special Leave from the Judgment and Order dated 16 5 1973 of the Orissa High Court in Crl.
Revision No. 645 of 1972.
AND CIVIL APPEAL No. 2036 of 1973 Appeal by Special Leave from the Judgment and Order dated 6 3 1973 of the orissa High Court in O.J.C. No. 491/72.
J. L. Jain and Mrs. section Gopalakrishnan for or the Appellants.
G. Dass, Mrs. section Bhandare and A. N. Karkhanis for the Respondent.
The Judgment of the Court was delivered by KOSHAL, J.
By this judgment we shall dispose of Civil Appeal No. 2036 of 1973 and Criminal Appeal No. 286 of 1973, both of which have arisen from a dispute over a single piece of land and the facts leading to which may be briefly stated.
Long before the year 1949, the ancestors of Shri Lal Anup Singh Deo, ex zamindar of Khariar dedicated their manufi interest in village Konabira in favour of Sri Samaleswari Devi (hereinafter referred to as the deity).
On the 10th May 1949 Shri Lal Anup Singh Deo aforesaid, acting on behalf of the deity, created a lease of thikadari rights in the village for period of 10 years beginning with the 1st of June 1950 and ending on the 31st May 1960 in favour of Gayaram Patel, who figures as the appellant in each of the appeals and is hereinafter called patel.
The deed of lease appears at pages 5 and 6 of the paper book in Civil Appeal No. 2036 of 1973 and describes Patel thus: "Gayaram Patel son of Bisram Patel, the legal guardian of gaontia thikadari patta" The terms on which the lease was granted to Patel are reproduced below : (i) That the yearly rent payable shall be Rs. 109/ to be paid before January of every year.
322 (ii) That in case of non payment the lease is liable to be cancelled.
(iii)That all the repairs, upkeep and development works should be executed and for such works no compensation can be claimed.
All the repairs, maintenance of tanks, garden, buildings, etc., shall be carried out at your responsibility.
(iv) That no injustice should be done to the community in maintaining the abovementioned works.
(v) That no transfer is permissible in respect of the property.
(vi) That the property is to be maintained for the exclusive welfare of the community with the help, directions, orders and co operation of the Estate Officer.
(vii)That the rules and regulations for forest lands are to be obeyed.
(viii)That the cultivable lands cannot be utilised for any other purpose, nor can they be transferred or sold or otherwise dealt with to the hardship of the villagers or the tenants.
If any land is abandoned and (?) takes a new land for cultivation he will be liable under the law and be subjected to the payment of the usual rent.
The lease was acted upon and while it was in force, the orissa Estates Abolition Act, 1951 (hereinafter called the Abolition Act) was promulgated.
The object of that Act was to abolish all intermediaries and rent receivers, to vest their interest in the State, and to establish a direct relationship between the State and the tillers of the soil.
Section 3A of the Abolition Act authorised the State Government to declare by notification that such interests have passed to and become vested in the State free from all encumbrances.
A notification of that type was issued by the State Government and became effective from the 1st of June 1959.
In the meantime a Board of Trustees had been appointed under the Orissa Hindu Religious Endowments Act, 1951 (for short Endowments Act) with Shri Kailash Chandra Panigrahi as the Managing Trustee to look after the affairs of the deity on whose behalf an application under section 7 read with section 8 A(1) of the Abolition Act was made by the Managing Trustee after the said 323 notification had come into force.
It was claimed in the application that the deity was in "Khas possession" of certain lands in village Konabira and prayed that the same, be settled on it as an occupancy tenant.
The application was resisted by Patel who claimed that it was he and not the deity who enjoyed the "Khas possession" of the said land.
The application was decided by the Tehsildar Khariar, Tehsil Nawapara, acting as Collector under the Abolition Act.
He held that Patel was in "Khas possession" of only one plot of land which was designated by No. 5 and had an area of 20.14 acres but that such possession was held by him on behalf of the deity and not on his own account.
In this view of the matter he passed the order dated 13th June 1962, the operative part of which runs thus: "Sir lands in village Konabira bearing plot No. 5 with an area of 20.14 acres are settled on occupancy rights with Gayaram Patel s/o Bisram Patel, ' of Konabira, P. section Komna Distt.
Kalahandi for and on behalf of Samaleswari Devi of Kemna, the Maufidar, u/s 7(1) (b) of the Orissa Estates Abolition Act, 1951.
A fair and equitable annual rent of Rs. 6.75 np.
is determined from the date of vesting release rent from 1959 60 onwards.
" On the 21st of October 1963, the Managing Trustee of the deity made an application to the Assistant Commissioner of Endowments under section 68 of the Endowments Act complaining that he had been resisted by Patel in obtaining possession of the land of the deity and praying for recovery of possession thereof from Patel.
In his order dated the 12th of January 1970, the Assistant Commissioner of Endowments allowed the application holding that it was the deity and not Patel who had been declared to be the occupancy tenant in the order dated 13th June 1962 abovementioned.
Patel went up in revision to the Commissioner of Endowments but without success and thereafter knocked at the door of the orissa High Court with a petition under Articles 226 and 227 of the Constitution of India seeking to have the orders of the Assistant Commissioner of Endowments and the Commissioner of Endowments set aside.
The High Court however took the same view of the matter as was expressed by authority appointed under the Endowments Act and negatived the contentions raised on behalf of Patel, in its order dated 6th March 1973.
It is that order which is challenged before us in Civil Appeal No. 2036 of 1973 instituted by special leave.
In the meantime litigation had started between the deity and Patel on the criminal side also.
Claiming that the deity had recovered 324 possession of plot No. 5 abovementioned (which had by then come to be designated by No. 15 and to have an area of 22.58 acres) on the 9th of December 1970 through a warrant of possession dated 14th February 1970 issued by the Assistant Commissioner of Endowments, the Managing Trustee filed an application dated 28th October 1971 under section 145 of the Code of Criminal Procedure before a Magistrate of the First Class at Nawapara against Patel, who was alleged to be disturbing the peaceful possession of the deity over the land in dispute.
A Preliminary order attaching the property was passed by the Magistrate on the same day, i.e., 28th October 1971.
That order was however cancelled and the proceedings were dropped on the 15th November 1971 in pursuance of a report dated 6th November 1971 made by the officer incharge of the Police Station, Komna (within the territorial limits of which lay the land in dispute) to the effect that there was no apprehension of a breach of peace by the parties.
Nevertheless, on the 20th November 1971, another report was received by the Magistrate from the same officer revealing "an emergency" whereupon the Magistrate made a direction that the preliminary order dated 28th October 1971 be given effect to and that the land be attached along with the crops standing thereon.
Ultimately, the proceedings were finalised through an order dated 21st September 1972 passed by the Magistrate who held that it was Patel who was in possession of the land in dispute on the 20th November 1971, and directing that the land be restored to him.
Aggrieved by the order of the Magistrate the Managing Trustee or the deity went up in revision to the High Court, a learned Single Judge of which set aside the same and directed delivery of possession of the land to the deity on the basis of the findings given below: (1) The proceedings had terminated on the 15th November 1971 and the Magistrate has no jurisdiction to revive them five days later and to give effect to the order of attachment which already stood vacated.
(2) There had been a civil suit and a writ application in respect of the land which has terminated in favour of the deity.
(3) The matter had been taken up by the Endowments Department which had delivered all properties to the deity before the 29th April 1970.
It is this order of the High Court which is impugned in Criminal Appeal No. 286 of 1973 by special leave of this Court.
325 2.
In order to appreciate the rival contentions of learned counsel for the parties it is necessary to make a reference to the relevant provisions of the Abolition Act and to determine the party in whom the occupancy tenancy vests under section 7 thereof.
As already pointed out the object of the Abolition Act was to do away with all intermediaries and rent receivers and to establish a direct relationship between the State and the actual tillers of the soil.
The preamble of the Act states: "Whereas in pursuance of the Directive Principles of State Policy laid down by the Constitution of India it is incumbent on the State to secure economic justice for all and to that end to secure the ownership and control of all material resources of the community so that they may best subserve the common good, and to prevent the concentration of wealth and means of production to the common detriment; "AND WHEREAS in order to enable the state to discharge the above obligation it is expedient to provide for the abolition of all the rights, title and interest in land of Intermediaries by whatever name known, including the mortgagees and lessees such interest, between the raiyat and the State of Orissa for vesting in the said State of the said rights, title and interest and to make provision for other matters connected with;. " Section 2 contains definitions.
Clauses (f), (g), (h), (hh) and (j) thereof are relevant to the dispute and are extracted below: (f) "date of vesting" means in relation to an estate vested in the State the date of publication in the Gazette of the notification under sub section (1) of section 3 or sub section (1) of section 3 A in respect of such estate and in the case of surrender by an intermediary under section 4 the date of the execution of the agreement; (g) `estate ' includes a part of an estate and means any land held by or vested in an Intermediary and included under one entry in any revenue roll or any of the general registers of revenue paying lands and avenue free lands, prepared and maintained under the law relating to land revenue for the time being in force or under any rule, order, custom or usage having the force of law, and includes revenue free 326 lands not entered in any register or revenue roll and all classes of tenures or under tenures and any Jagir, inam or maufi or other similar grant; (h) `Intermediary ' with reference to any estate means a proprietor, sub proprietor, landlord, landholder, malguzar, thikadar, gaontia, tenure holder, under tenure holder, and includes an inamdar, a jagirdar, Zamindar, IIaquadar, Khorposhdar, Parganadar, Sarbarakar and Maufidar including the Ruler of an Indian State merged with the State of Orissa and all other holders or owners of interest in land between the raiyat and the State; (hh) `Intermediary interest ' means an estate or any rights or interest therein held or owned by or vested in an Intermediary and any reference to `state ' in this Act shall be construed as including a reference to `intermediary interest ' also; (j) "Khas possession" used with reference to the possession of an Intermediary of any land used for agricultural or horticultural purposes, means the possession of such intermediary by cultivating such land or carrying on horticultural operations thereon himself with his own stock or by his own servants or by hired labour or with hired stock; The provisions of section 3A have already been noted.
Then comes section 7 which is all important for the purpose of resolving the present dispute.
It states: "7.
(1) on and from the date of vesting (a) all lands used for agricultural or horticultural purposes which were in Khas possession of an Intermediary on the date of such vesting, (b) lands used for agricultural or horticultural purposes and held by a temporary lessee or lessees of an Intermediary who owns either as Intermediary or in any other capacity less than thirty three acres of land in total extent situated within the State, (c) lands used for agricultural or horticultural purposes and in possession of a mortgagee, which immediately before the execution of the mortgage bond were in Khas possession of such intermediary, 327 . . . . . . . . . . . . . . . shall, notwithstanding anything contained in this Act, be deemed to be settled by the State Government with such Intermediary and with all the share holders owning the estate and such Intermediary with all the share holders shall be entitled to retain possession thereof and hold them as raiyats under the State Government having occupancy rights in respect of such lands subject to the payment of such fair and equitable rent as may be determined by the Collector in the prescribed manner: . . . . . . . . . . . . . " Sub section (1) of section 8A requires Intermediaries to file their claims in the prescribed manner for settlement of fair and equitable rent in respect of land and buildings, which are deemed to be settled with them under section 6 or section 7, before the Collector within the specified period.
It would be seen that clauses (a), (b) and (c) of sub section (1) of section 7 protect certain Intermediaries and thus form exceptions.
to the scheme of the Act which, generally speaking, conforms to the object detailed in the preamble.
In the present case we are not concerned with clause (c).
According to learned counsel for Patel his case falls within the ambit of clause (a).
It is claimed on his behalf that he was not merely a lessee or a temporary lessee under the deity but was a thikadar and, therefore, himself an Intermediary within the meaning of the definition of that word occurring in clause (h) of section 2 and that he being in "Khas possession" of the land in dispute on the date of vesting was an Intermediary described in clause (a).
On the other hand, for the deity it is argued that Patel was granted only a temporary lease in 1949, that he did not have any status better than that of a lessee, temporary or otherwise, and that therefore his case was covered by clause (b) and not clause (a) so that it was he deity who was entitled to be regarded as the occupancy tenant on and from the date of vesting.
The whole controversy thus turns round the position which Patel came to hold in respect of the land in dispute under the lease deed of 1949 and in order to assess that position it is necessary to refer to the lease deed dated 10th May 1949.
As noted earlier that deed itself describes Patel as "gaontia thikadari patta".
Learned counsel for the deity has contended that 328 this description is really not correct and that the conditions of the lease clearly make out a case of Patel being inducted into the land as an ordinary lessee who was to till the land against payment of rent.
The contention does not appear to us to have any force.
Apart from the description of Patel as "gaontia thikadari patta" the deed contains a sure indication of the nature of the tenure granted in condition (8) which states specifically: "That the cultivable lands cannot be utilised for any other purpose, nor can they be transferred or sold or otherwise dealt with to the hardship of the villagers or the tenants.
. . . . . . . . . . . . . . " The reference to tenants is of considerable significance and points to land being under the cultivation of persons other than Patel at the moment the lease was granted.
This state of affairs is incompatible with the grant of an ordinary lease to Patel.
The tenure granted in his favour was on the other hand one conferring on him a right to collect the rents from the tenants of the deity and in lieu thereof pay a fixed sum of Rs. 109/ per annum to it so that he was correctly described in the lease deed as a gaontia or thikadar, both of which expressions describe an Intermediary as distinguished from a raiyat or an actual tiller of the soil.
Once Patel is found to be an Intermediary his case must fall within clause (b) of sub section (1) of section 7 as it was he who had the "Khas possession" of the land now in controversy, according to the findings contained in the order dated 13th January 1962 passed by the Collector and mentioned above, which have not been shown to us to suffer from any infirmity.
And if that be so, the land must be held to have vested in him, and not in the deity, as an occupancy tenant under the provisions of that section.
In the result both the appeals succeed and are accepted, the order of the High Court impugned in each being set aside and it being directed that the possession of the land in dispute attached by the order of the Magistrate in the proceedings under section 145 of the Code of Criminal Procedure be delivered to Patel as an occupancy tenant under the State.
The parties are however left to bear their own costs throughout.
N.V.K. Appeal allowed.
| IN-Abs | The ancestors of a former Zamindar dedicated their maufi interest in a village in favour of a deity.
Acting on behalf of the deity the ex zamindar created a lease of thikadari rights in the village in favour of the appellant for ten years.
The lease deed termed the appellant as "legal guardian of gaontia thikadari patta".
While the lease was in force the Orissa Estates Abolition Act, 1951 which sought to abolish all intermediaries in land and vest their interest in the State came into force.
The Act however protected certain intermediaries thereby carving out an exception to the scheme of the Act.
Meanwhile the Managing Trustee of the Board of Trustees appointed under the Orissa Hindu Religious Endowments Act, 1951 to look after the affairs of the deity filed a petition under section 7 of the Abolition Act claiming that the deity was in Khas possession of certain lands including the land lease to the appellant and prayed that the same be settled on the Board of Trustees as an occupancy tenant.
The question was eventually settled in favour of the Trustees and against the appellant.
In the Managing Trustee 's application under section 145 Cr.
P.C. asserting that the appellant was disturbing peaceful possession of the deity over the land, the Magistrate held that it was the appellant who was in possession of the land and directed that the land should be restored to him.
The High Court in revision set aside the order of the Magistrate.
In appeals to this Court the appellant contended that it was he and not the deity, who was the thikadar and therefore an intermediary within the meaning of the definition of that term in the Abolition Act and was in Khas possession of the land in dispute and so the land should be restored to him.
Allowing the appeals, ^ HELD: 1.
It was the appellant who had the Khas possession of the land, and therefore, the land must be deemed to have been vested in him, and not in the deity, as an occupancy tenant under the provisions of section 7 of the Abolition Act.
[328 F] 2.
Apart from the description of the appellant as gaontia thikadari patta, condition 8 contains a sure indication of the nature of the tenancy agreement.
It states "that the cultivable lands cannot be utilised for any other purpose nor can they be transferred or sold or otherwise dealt with to the hardship of the villagers or the tenants." [328 B C] 321 3.
The reference to tenants in this condition points to the land being under the cultivation of persons other than the appellant at the moment the lease was granted.
This position was incompatible with the grant of an ordinary lease to him.
The tenure granted in his favour was on the other hand one conferring on hint a right to collect the rents from the tenants of the deity and in lieu thereof pay a fixed sum to it.
He was, therefore, correctly described as gaontia or thinkdar, both of which expressions describe an intermediary as distinguished from a raiyat or an actual tiller of the soil.
[328 D E]
|
Civil Appeal No. 2582 of 1969.
From the Judgment and Decree dated 12 12 1961 of the Patna High Court in Appeal from Original Decree No. 50/57.
B. P. Singh for the Appellant.
D. Gobardhan for Respondents 1 2.
U. P. Singh for Respondent No. 3.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
The only question for consideration in this appeal is whether the plaint schedule properties are properties in respect of which there is a trust of a public or religious nature so as to attract the provisions of Bihar Hindu Religious Trusts Act (Act I of 1951).
The plaintiff appellant filed the suit out of which the appeal arises for a declaration that the properties were his personal properties and that there was no trust of a religious or public nature so as to attract the provisions of the Bihar Act I of 1951.
His case, as set out in the plaint, was that one Gurdyal Singh constructed a temple on his own land in the village of Dumri and installed the deities of Ramji, Lakshmanji and Sitaji in the temple.
He used to perform puja and raj bhog till his death.
The public had no concern with the idols.
After his death he was succeeded by his son Gulab Singh who became a bairagi assuming the name of Gulab Das.
Apart from the properties left by Gurdyal Singh, Gulab Das also acquired other properties.
On his death he was succeeded by his Chela Brahmdas who 1127 in turn was succeeded by his Chela Dwarika Das.
Each succeeding Mahant was succeeded by his Chela, the present Mahant being the plaintiff appellant.
Properties were acquired by the respective Mahants in their own individual names and were always treated as their personal properties.
Brahmdas constructed a temple in the village of Maudehin where also he installed the deities of Ramji, Lakshmanji and Sitaji and used to perform puja and raj bhog.
The temple and the properties were the private properties of the Mahant and the public did not have any interest or right in them.
The suit was contested by the Bihar State Board of Religious Trusts and others who pleaded that the temples and the properties were not the private properties of the Mahant and that they belonged to a Hindu Religious Trusts to which the provisions of the Bihar Religious Trusts Act were applicable.
The suit was dismissed by the Additional Sub Judge of Muzaffarpur and the decree of the Trial Court was confirmed by the High Court of Patna.
Shri B. P. Singh, learned counsel for the appellant plaintiff accepted the several findings arrived at by the High Court on various evidential matters and argued that even on those findings it could not be held that the properties belonged to a Trust of a religious or public nature.
He invited our attention to the decision of this Court in Bihar State Board Religious Trust, Patna vs Mahant Sri Biseshwar Das,(1) and submitted that on almost identical facts it had been held in that case that there was no trust for religious or public purposes.
In Bihar State Board Religious Trust, Patna vs Mahant Sri Biseshwar Das,(1) the facts found by the High Court as summarized by this Court were: "(1) that the temple was constructed by Gaibi Ramdasji and it was he who installed the deities therein; (2) that he was succeeded to the mahantship by his chela, and thereafter succession to the mahantship had been from guru to chela; (3) that the appointment of a successor has been all through out from guru to chela, the reigning mahant appointing or nominating his successor from amongst his chelas and the members of the public have had at no time any voice in the selection or nomination; (4) that the properties have always been recorded in the names of the mahants as proprietors and not in the name of the deities in the D registers, Khewats and Khatians; 1128 (5) that the mahants have been in possession and management of the asthal and the properties all throughout; (6) that the mahants acquired properties from time to time in their own names as proprietors and never in the names of the deities or the asthal, without any objection at any time from any one and dealt with some of them through deeds of sales, mortgages, leases etc." Before this Court reliance was placed on the following circumstances to prove that the properties were impressed with a trust for religious or public purposes: "(1) the fact that the mahants were vaishnav bairagis who were life long celibates; (2) that sadhus and others were given food and shelter when they visited the temple; (3) that festivals and other important Hindu dates used to be celebrated; (4) that the members of the public came to the temple for darshan without any hindrance and as of right; (5) that in the deeds and wills, whereby reigning mahants appointed or nominated their successors, the properties were described as appertaining to the asthal, and that the temple being the dominant part of the asthal and maintained for the worship and puja of the presiding deities installed therein, the properties belonged to the temple, and therefore, they were properties of a trust for religious and charitable character.
(6) The idols were installed partly on a pedestal and the temple was constructed on grounds separate from the residential quarters of the Mahant".
It was held by this Court that everyone of the circumstances was equally consistent with the character of the trust being public or private and that the onus which was on the Bihar State Religious Trust Board to establish the public nature of the trust had not been discharged.
In view of the submissions of the learned counsel for the appellant, it is necessary to refer to the findings of the High Court in the present case.
The High Court found that there was no evidence to show who the founder of the Mutt was and who built the temples.
1129 It was also found that there was no evidence to show that the temple in the village of Dumri was constructed on the land belonging to Gurdyal Singh or that the temple in the village of Maudah was constructed on land belonging to Brahmdas.
It was found that several properties were acquired by various Mahants in their names instead of in the names of the idols but the acquisition of properties was for the purposes of the Asthal or Mutt.
It was also found that from time to time gifts of land had been made by the villagers of Dumri.
It was found that the Mahants had executed Kebalas for effecting repairs of the temples and had similarly executed deeds of mortgage.
It was found that the people of the villages of Dumri and Maudah used to visit the temple without any let or hinderance and that the Mutt was so located as to suit the convenience of the villagers of both Dumri and Harpur.
It was situated on the boundary of the two villages and was on a platform at a certain height, open on all sides with plenty of space around it.
The temple in the Mutt had three doors with space for visitors.
It was noticed by the High Court that the lands were held rent free in consideration of religious services.
It is true as submitted by the learned counsel, many of the circumstances are neutral.
The fact that members of the public were permitted to go to the temple without any hindrance might not be a circumstance which by itself would conclusively establish that the temple was a public temple in the absence of an element of right in the user of the temple by the public.
Conversely the free use of the properties of the temple by the Mahant at a time when he was the sole manager of the temple and its properties would not necessarily lead to the inference that the temple was not a public temple.
Patently there can be no simple or conclusive factual tests to determine the character of a trust.
The totality of the circumstances and their effect must be considered.
Here not only do we find that members of the public were allowed free access to the temple, they were evincing much greater interest in the institution as evidenced by the circumstances that several villagers had made gifts of land to it, a circumstance which would ordinarily be consistent with the nature of the institution being public and not private.
Again, as pointed out by Venkatarama Ayyar, J., Deoki Nandan vs Murlidhar,(1) the situation of the temple would be an important circumstance in determining whether it was private or public.
The High Court has pointed out that the temple was constructed outside the village on open land between the villages of Dumri and Harpur so as to be convenient to the villagers of both the villages.
It was constructed on a high platform and was open on all sides with 1130 plenty or space around it to accommodate large number of people.
Obviously the temple was located and constructed so as to attract and accommodate large number of villagers from the two villages.
The donation of land by members of the public to the institution and the location of the temple at a place freely accessable and convenient to the public were circumstances which were absent in Bihar State Board Religious Trust, Patna vs Mahant Sri Biseshwar Das (supra).
We are satisfied that, in the circumstances the High Court was right in holding that there was a trust of a public nature.
The appeal is, therefore, dismissed with costs.
N.V.K. Appeal dismissed.
| IN-Abs | The appellant (plaintiff) the present Mahant, filed a suit for a declaration that the plaint schedule properties were his personal properties and that there was no trust of a religious or public nature so as to attract the provisions of the Bihar Hindu Religious Trust Act 1951.
It was contended in the suit that one G constructed a temple on his own land in the village, installed deities, performed puja and raj bhog till his death, that the public had no concern with the idols and that after his death he was succeeded by his son who became a bairagi.
Apart from the properties left by him, his son also acquired other properties.
On the son 's death he was succeeded by his Chela who became a Mahant.
Each succeeding Mahant was succeeded by his Chela.
Properties were acquired by the respective Mahants in their own name and treated as their personal properties.
One of the Mahants constructed a temple in a nearby village where he installed deities and performed puja and raj bhog.
It was claimed that the temple and the properties were the private properties of the Mahant and the public did not have any interest or right in them.
The suit was contested by respondent No. 1, contending that the temples and the properties were not the private properties of the Mahant and that they belonged to a Hindu Religious Trust to which the provisions of the Bihar Hindu Religious Trusts Act, 1951 were applicable.
The Trial Court dismissed the suit and its decree was confirmed by the High Court.
In the appeal to this Court, the question was whether the plaint schedule properties were properties in respect of which there was a trust of a public or religious nature so as to attract the provisions of the Bihar Hindu Religious Trusts Act, 1951.
^ HELD: 1.
The High Court was right in holding that there was a trust of a public nature.
[1130B] 2.
The fact that members of the public were permitted to go to the temple without any hinderance might not be a circumstance which by itself would conclusively establish that the temple was a public temple in the absence of an element of right in the user of the temple by the public.
Conversely the free use of the properties of the temple by the Mahant at a time when he was the sole manager of the temple and its properties would not necessarily lead to the inference that the temple was not a public temple.
[1129E] 3.
There can be no simple or conclusive factual test to determine the character of a trust.
The totality of the circumstances and their effect must be considered.
[1129F] In the instant case not only were the members of the public allowed free access to the temple, but they were evincing much greater interest in the insti 1126 tution as several villagers had made gifts of land to it, a circumstance which would ordinarily be consistent with the nature of the institution being public and not private.
[1129F] 4.
The situation of the temple would be an important circumstance in determining whether it was private or public.
[1129G] Deoki Nandan vs Murlidhar ; referred to.
In the instant case the High Court had pointed out that the temple was constructed outside the village on open land between two villages so as to be convenient to the villagers of both the villages.
It was constructed on a high platform and was open on all sides with plenty of space around it, so as to attract and accommodate large number of villagers from two villages.
This indicated that the trust was of a public nature.
[1129H 1130A] 5.
The donation of land by members of the public to the institution and location of the temple at a place freely accessible and convenient to the public were circumstances which indicated that the trust was of a public nature.
[1130B] Bihar State Board Religious Trust, Patna vs Mahant Sri Biseshwar Das,[1971] 3 S.C.R. 680, distinguished.
|
Civil Appeal No. 2614 of 1969.
From the Judgment and Order dated 20 12 1967 of the Allahabad High Court in Second Appeal No. 3105 of 1963.
G. N. Dixit and O. P. Rana for the Appellant.
Ex parte for the Respondent.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
A second appeal under section 100 of the Code of Civil Procedure 1908 was allowed by the Allahabad High Court and the matter was remanded to the Lower Appellate Court for fresh disposal in accordance with law point.
The order of remand was made under the provisions of Order XLI Rule 23 of the Civil Procedure Code 1908, as amended by the Allahabad High Court.
The 1132 successful appellant before the High Court filed an application under section 13 of the Court Fees Act, 1870 claiming a refund of the Court Fees Act, 1870 claiming a refund of the Court fee paid in the Second Appeal.
The application came before G. C. Mathur, J., who entertained a doubt whether section 13 of the Court Fees Act applied to a case of remand under the provisions of Order XLI Rule 23 Civil Procedure Code as amended by the High Court and referred the question for the consideration of a Full Bench.
Thereafter the application was heard by the Full Bench consisting of Jagdish Sahai, Pathak and Kirty, JJ.
Pathak and Kirty JJ., took the view that refund of Court Fee could be ordered under section 13 of the Court Fees Act, even where the remand was made under the amended provisions of Order XLI Rule 23.
Jagdish Sahai, J. dissented.
In accordance with the opinion of the majority, the court fees paid by the appellant before the High Court was directed to be refunded.
The State of U.P. obtained a certificate under Article 133(1)(c) of the Constitution and has preferred this appeal.
Section 13 of the Court Fees Act 1870, in so far as it is material is as follows: "If an appeal or a plaint, which has been rejected by the lower Court on any of the grounds mentioned in the Code of Civil Procedure as ordered to be received, or if a suit is remanded in appeal on any of the grounds mentioned in section 351 of the same code for a second decision of a lower court, the lower court shall grant to the appellant a certificate, authorising him to receive back from the Collector the full amount of fee paid on the memorandum of appeal".
Section 13, thus speaks of a suit remanded in appeal on any of the grounds mentioned in section 351 of the same Code i.e. the Code of Civil Procedure which was then in force.
Section 351 of the Code of Civil Procedure 1859 provided for the remand of a case by the appellate court to the lower court for a decision on the merits on the case.
where "the lower court shall have disposed of the case upon any preliminary point so as to exclude any evidence of fact whish shall appear to the appellate court essential to the rights of the parties".
If the decision on the preliminary point was reversed by the appellate court.
The Code of 1859 was repealed and replaced by the Code of 1877.
Section 562 of the 1877 Code was substantially in the same terms as section 351 of the 1859 Code.
The Code of 1882 was repealed and replaced by the Code of Civil Procedure 1908.
Order XLI Rule 23 of the 1908 Code also provided for the remand of a case 1133 to the lower court by the appellate court where the suit had been disposed of upon a preliminary point and the decision of such preliminary point was reversed in appeal by the appellate court.
In exercise of the powers vested in it under section 122 of the Code of Civil Procedure 1908, the Allahabad High Court amended the provisions of Order XLI Rule 23 so as to provide for the remand of a case by the appellate court to the trial court, not only when the suit had been decided upon a preliminary point and the decision was reversed in appeal, but also whenever the appellate court considered it necessary in the interest of justice.
The question for consideration in this appeal is whether the power to grant refund of court fees under section 13 of the Court Fees Act 1870 was attracted to a case where the appellate court remanded the case to the lower court in the interest of justice as provided by the provisions of Order XLI Rule 23 as amended by the High Court of Allahabad.
In order to answer the question a reference is necessary to section 158 of the Code of Civil Procedure 1908.
It was as follows: "158.
In every enactment or notification passed or issued before the commencement of this Code in which reference is made to or to any Chapter or section of Act VIII of 1859 or any Code of Civil Procedure or any Act amending the same or any other enactment hereby repealed, such reference shall, so far as may be practicable, be taken to be made to this Code or to its corresponding Part, Order, Section or rule".
It follows from Section 158 that reference in Section 13 of the Court Fees Act 1879 to Section 351 of the Code of Civil Procedure 1859 has to be read as reference to Order XLI Rule 23 of the Code of Civil Procedure 1908.
The submission of the learned counsel was that the reference to any provision of the Code of Civil Procedure 1908 pursuant to section 158 of the Code must be to provision occurring in the body of the main code consisting of the provisions from section 1 to section 158 and not to the provisions of the rules in the first schedule.
He further submitted that even if reference to the rules in the first schedule was permissible it should only be to the rules as enacted by the legislature itself and not as amended by the High Court.
The first part of the submission of the learned counsel has to be rejected straightaway having regard to the express reference to 'Order ' and 'Rule ' in section 158 of the Code of Civil Procedure 1908.
The second part of the submission requires a slightly closer examination.
Section 2(1) of the Code of Civil Procedure 1908 defined "Code" as including 1134 "Rules".
Section 2(18) defined "Rules" as meaning "Rules and forms contained in the first schedule or made under section 122 or section 125".
Section 121 of the 1908 Code declared that the rules in the first schedule shall have effect "as if enacted in the body of the code until annulled or altered in accordance with the provisions of part X of the Code" (section 121 to 131).
Section 122 enabled the High Court to make rules, from time to time "regulating their own procedure or the procedure of the Civil code subject to their superintendence, and made by such rules, annual, alter or add to all or any of the rules in the first schedule".
Section 126 made the rules made by the High Court subject to the previous approval of the Government of the State.
Section 127 provided that the rules so made and approved shall have the same force and effect as if they had been contained in the first schedule.
These provisions make it abundantly clear that the rules made by a High Court altering the rules contained in the first schedule as originally enacted by the legislature shall have the same force and effect as if they had been contained in the first schedule and therefore, necessarily became part of the Code for all purposes.
That is the clear effect of the definition of the expressions "Code" and "Rules" and sections 121, 122 and 127.
It does not appear to be necessary to embark upon a detailed examination of each one of these provisions, since the position appears to us to be very clear.
We, therefore, agree with the view expressed by Pathak and Kirty JJ., in Chandra Bhushan Misra vs Smt.
Javatri Devi(1), regarding the effect of section 158 of the Code of Civil Procedure and sections 2(1) to 2(18), 121, 122 and 127.
Jagdish Sahai J., was inclined to the view that the amendments made by the High Court were only fictionally embodied in the Code and that the reference to section 351 of the Code of 1859 in section 13 of the Court Fees Act was to be construed as a reference only to the provisions of Order XLI Rule 23, as originally passed by the Legislature and not as amended by the High Court.
In our opinion the view of Jagdish Sahai, J. does not give full effect to section 127 of the Civil Procedure Code 1908 which provided that the rules made by the High Court shall have the same force and effect as if they had been contained in the first schedule.
We are of the view that the question was rightly answered by the Full Bench of the Allahabad High Court and the appeal is, therefore, dismissed.
P.B.R. Appeal dismissed.
| IN-Abs | A second appeal under section 100 Code of Civil Procedure 1908 was allowed by the Allahabad High Court and the matter was remanded by the High Court under Order XLI, Rule 23 CPC as amended by the High Court to the Lower Appellant Court for fresh disposal in accordance with law.
A majority of the Division Bench allowed the respondents claim for refund of the court fees on the view that refund could be ordered under section 13 of the Court Fees Act even where the remand was made under the amended provisions of Order XLI, Rule 23.
In appeal it was contended that even if reference to the rules in the first schedule was permissible it should only be to the rules as enacted by the legislature and not as amended by the High Court.
^ HELD: A conspectus of the relevant provisions of the Code of Civil Procedure 1908 makes it clear that the rules made by the High Court altering the rules contained in the first schedule as originally enacted by the legislature shall have the same force and effect as if they had been contained in the first schedule and therefore necessarily become part of the code for all purposes.
That is the clear effect of the definition of the expression 'code ' and 'rules ' and sections 121, 122 and 127 of the Code of Civil Procedure, 1908.
[1134 C E] Chandra Bhushan Misra vs Smt.
Javatri Devi A.I.R. (56) 1969 Allahabad 142 approved.
|
Civil Appeal No. 2531 of 1969.
From the Judgment and Order dated 20 1 1969 of the Kerala High Court in A.S. No. 39/65.
P. Govindan Nair and K.J. John for the Appellant.
M.R.K. Pillai for the Respondent.
The Judgment of the Court was delivered by KOSHAL, J.
For a proper appreciation of the dispute giving rise to this appeal by Special Leave against the judgment dated 20th of 1159 January, 1969, of a Division Bench of the High Court of Kerala, a reference to various provisions of the Travancore Chitties Act (herein after called the 'Chitties Act ') being Act XXVI of 1120 (which year corresponds to years 1944 and 1945 of the Christian era) is necessary.
Clause (2) of section 3 of the Chitties Act defines a 'chitty ' thus: "A 'chitty ' means a transaction by which one or more persons hereinafter called the foreman or foremen enter into an agreement with a number of persons, that every one of the contracting parties shall subscribe a certain amount of money or quantity of grain by periodical instalments for a certain definite period and that each in his turn, as determined by lot or by auction or in such other manner as may be provided for in the variola, shall be entitled to the prize amount." "Chitty amount" is defined in clause (3) of section 3 to mean the sum total of the contributions payable by all the subscribers for any instalment without any deduction for discount.
In clause (4) the term 'discount ' is stated to mean the amount of money or quantity of grain which a prize winner has, under the terms of the variola, to forego for payment of veethapalisa, foreman 's commission or other expenses.
A 'foreman ' as per clause (6) is the person who, under the variola, is responsible for the conduct of the chitty. 'Variola ' is defined in clause (14) to be a document containing the articles of agreement between the foreman and the subscribers in relation to the chitty while, under clause (15) 'veethapalisa ' is the share of a subscriber in the discount available under the variola for rateable distribution among the subscribers at each instalment of the chitty. 'Prize amount ' says clause (9), means the chitty amount reduced by the discount.
Section 9 enumerates 13 particulars which a variola must contain and they are: (1) the full name and residence of every subscriber; (2) the number of tickets or the fraction thereof held by each subscriber; (3) the number of instalments and the amount payable for each ticket at every instalment; (4) the date on which the chitty is to begin and the date on which it is to terminate; (5) the mode of ascertaining the prize winner at the successive instalments; (6) the amount of discount which a prize winner at any instalment has to forego; 1160 (7) the mode and proportion in which the discount is distributable by way of veethapalisa, foreman 's commission and other allowance, if any; (8) the time and place at which the chitty is to be conducted; (9) the instalment at which the foreman is to get the prize; (10) the approved banks in which chitty moneys shall be invested by the foreman under the provisions of the Act; (11) the consequence which a non prized or prized subscriber, or the foreman, will be liable to in case of any violation of the variola; (12) the nature and particulars of the security offered by the foreman under section 17; and (13) any other particulars that may from time to time be prescribed by the Government.
Section 14 deals with the time and place where the drawing of prizes in a chitty shall be conducted.
Section 17 to 24 relate to the rights and liabilities of a foreman while the next three sections following provide for non prized subscribers.
Sections 29 to 32 embrace provisions regarding prized subscribers.
Sections 38, 39 and 41 relate to termination of chitties and may be reproduced here with advantage: "38.
(1) When a foreman dies or becomes of unsound mind his legal representative or his guardian as the case may be, shall, in the absence of any provision in the variola to the contrary, take the place of the foreman and have the right to continue the chitty or to make suitable arrangements for the further conduct of the chitty.
(2) When a foreman is adjudicated an insolvent under the law relating to insolvent debtors for the time being in force or withdraws from the chitty under section 24 or fails to conduct the chitty at any instalment or any other date before the next succeeding instalment as may have been agreed upon by a special resolution in that behalf, any one or more of the nonprized subscribers authorized by a special resolution may, in the absence of any provision in the variolas for the future conduct of the chitty, take the place of the foreman and have the right to continue the chitty or to make suitable arrangements for the further conduct of the chitty.
" 1161 "39.
A chitty shall be deemed to have terminated only (1) When the period fixed in the variola or the period as altered by a subsequent special resolution for the duration of the chitty has expired, or (2) when the legal representative of a deceased foreman or the guardian of a foreman of unsound mind or the subscriber or subscribers selected therefor fail to conduct the chitty or make suitable arrangements for the further conduct of the chitty as provided for in section 38; Provided however that if there are more foremen than one and one or more such foremen are living and are not disqualified to act under section 38, the chitty shall not be deemed to have terminated under this clause if there is provision in the variola enabling the remaining foreman or foremen to conduct the chitty or if the non prized subscribers agree by a special resolution to the conduct of the chitty by the remaining foreman or foremen." "41.
Except in the case of clause (1) of section 39, every non prized subscriber shall, unless otherwise provided for in the variola and subject to the provisions of section 27, be entitled to get back his contributions at the termination of the chitty without any deduction for veethapalisa, if any, received by him.
The facts are undisputed and may be briefly stated.
The plaintiff, viz., the Goodland Plantations (P) Ltd., (hereinafter referred to as the 'Company ') became a subscriber to a monthly chitty run by the Kottayam Orient Bank Limited ( 'the Orient Bank ' for short) as foreman.
The Company was to pay, like all other subscribers, a sum of Rs. 20,000/ in 50 monthly instalments of Rs. 400/ each.
The conduct of the chitty was governed by variola exhibit P 1, apart from the various provisions of the Chitties Act.
The chitty started on the 10th of September, 1960, when the Company paid the first instalment due from it.
Three other instalments were paid by the Company on 10 10 1960, 10 11 1960 and 10 12 1960 to the foreman.
On the date last mentioned, an auction was held for the prize amount for which the Company was declared to be the successful bidder, it having elected to accept a sum of Rs. 11,075/ in lieu of the full amount of Rs. 20,000/ .
The prize amount was to be paid to the Company a month later, i.e., on the 10th of January, 1961, (when the fifth instalment was to become payable) subject to the Company furnishing security for the continued 1162 performance of its part of the variola in future.
However, before that stage was reached, the Central Government, on the 17th of December, 1960, imposed a moratorium on the Orient Bank under section 45 (2) of the Banking Regulation Act, 1949, (hereinafter referred to as 'the Banking Act ') with the consequence that the Orient Bank had to suspend all business/activity.
The moratorium was enforced originally for the period ending with the 18th of March, 1961, which was later on extended upto the 16th of June, 1961, (exhibits D 1, D 2 and D 4).
The suspension of business resulted in the conduct of the chitty being discontinued so that under sub section (2) of section 39 of the Chitties Act read with section 41 thereof as also clause (14) of the variola, the chitty stood terminated and the Orient Bank in its capacity as the foreman of the chitty incurred the obligation to pay back all the contributions made by non prized subscribers.
On the 16th of May, 1961, the Central Government sanctioned under sub section (7) of section 45 of the Banking Act a Scheme prepared by the Reserve Bank of India under sub sections (4) to (6) of that section for the amalgamation of the Orient Bank with the State Bank of Travancore (hereinafter called the 'Travancore Bank ').
The Scheme provided inter alia that all the assets and liabilities of the Orient Bank would stand transferred to the Travancore Bank with effect from the 17th of June, 1961.
In relation to chitties the Scheme laid down: "If the transferor bank was acting immediately before the prescribed date as a foreman in respect of any kuri or chitty as defined in the Travancore Chitties Act (XXVI of 1120) or the Cochin Kuries Regulation (VII of 1107) the rights, duties and obligations in relation to the kuri or chitty shall be regulated in accordance with the following provisions, namely, (i) the transferee bank shall become the foreman of the kuri or chitty and shall continue to exercise all powers and to do all such acts and things as would have been exercised or done by the transferor bank, in so far as they are not in consistent with this scheme; (ii) the funds, if any, of the kuri or chitty lent to or deposited with the transferor bank, or otherwise due from that bank to the kuri or chitty shall be transferred to the transferee bank, and the liabilities corresponding to such funds shall also be payable by the transferee bank in accordance with the other provisions of this scheme; 1163 (iii) if on the prescribed date the transferor bank in its capacity as the foreman of any kuri or chitty has deposited any security for the due performance of its duties and obligations in relation to the said kuri or chitty, the said security shall continue to be available for the purposes for which it was intended, but shall if and to the extent that it is subsequently released be transferred to and vest in the transferee bank provided that the said security or as the case may be, the surplus, if any, after providing for the discharge of the duties or obligations in respect of the kuri or chitty shall be valued and utilised for the purposes of this scheme.
" Later on it was realised that the Travancore Bank would not be able to continue the chitties for which the Orient Bank had acted as foreman earlier because those chitties had terminated owing to the failure of the Orient Bank to continue to conduct them by reason of the moratorium and in order to cross this hurdle the Central Government passed another order dated the 4th of December, 1961, which was described as the Kottayam Orient Bank Limited (Amalgamation with the State Bank of Travancore) (Removal of Difficulties) Order, 1961.
That order (hereinafter called the 'impugned order ') was passed under sub section (10) of section 45 of the Banking Act and its relevant portion is extracted below: "2.
Notwithstanding anything contained in the Travancore Chitties Act or the Cochin Kuries Regulation, the suspension of any kuri or chitty for the period from the 18th December, 1960, to the 31st December, 1961, or for any part of that period and any consequent prolongation of the kuri or chitty shall have effect as though the articles in the variola(s) were altered or added to for that purpose by special resolution(s) of the subscribers of the kuri or chitties and as though the relevant provisions, if any, of the Travancore Chitties Act or the Cochin Kuries Regulation were complied with, and notwithstanding anything contained in the Travancore Chitties Act or the Cochin Kuries regulation, the failure of the foreman to conduct the kuri or chitty during the said period shall not be deemed to have terminated the kuri or chitty." "3.
Notwithstanding anything contained in the variola (s) the period fixed for the duration of the kuri or chitty shall be deemed to have been extended by the period referred to in 2 above." 1164 "4.
Notwithstanding anything contained in the Travan core Chitties Act or the Cochin Kuries Regulation, the State Bank shall continue the kuri or chitty as if the provisions, if any of the said Act or the said Regulation relating to continuance of the kuri or chitty have been complied with." "5.
All the words and expressions used herein but not defined shall have the meanings respectively assigned to them in the Travancore Chitties Act, or as the case may be, the Cochin Kuries Regulation.
" By another order dated the 15th of January, 1962, (exhibit P 4) the impugned order was amended so that the words "the 31st March, 1962" were substituted for the words "31st of December, 1961" occurring in paragraph 2 thereof.
The effect of the impugned order as amended by order exhibit P 4 was to obliterate the termination of the chitties as resulting from the suspension thereof by reason of the moratorium during the period from the 18th of December, 1960, to the 31st of March, 1962, and to enable the Travancore Bank to continue those chitties as if there had been no suspension thereof at any point of time so that they could be continued as if the relevant provisions of the Chitties Act and the relevant variolas had throughout been complied with.
The litigation started with a suit instituted by the Company on the 6th of December, 1961, claiming refund of the four instalments paid by it along with interest.
No reference was made in the plaint to the impugned order presumably because the Company had no knowledge of the existence thereof as it had been passed only a couple of days before the suit was filed.
The claim of the Company was based on the averment that the Orient Bank had failed to conduct the chitty to which the Company had subscribed, that the chitty had come to a termination by reason of the default made by the Orient Bank, that the Orient Bank had in consequence become liable for payment back to the Company of the instalments deposited by it and that the Travancore Bank (the sole defendant) had inherited the liability of the Orient Bank.
The suit was resisted on the strength of the impugned order (as amended by order exhibit P 4) but the vires of that order were challenged by the Company on whose behalf it was urged that the impugned order did not fall within the ambit of sub section (10) of section 45 of the Banking Act and that in any case that sub section itself was constitutionally invalid inasmuch as its enactment amounted to an abdication of the legislative power which, under Article 245 of 1165 the Constitution of India, vested in Parliament and in Parliament alone.
The suit was originally filed in the Court of the Munsif at Kottayam but was transferred by the High Court to its own file in 1963 because the constitutional validity of sub section (10) of section 45 of the Banking Act was questioned.
The suit was dismissed by Raman Nayar, J., who held that the impugned order fell squarely within the scope of sub section (10) of section 45 of the Banking Act, which sub section also did not suffer, according to the learned judge, from the infirmity of excessive delegation.
Sub section (10) states: "If any difficulty arises in giving effect to the provisions of the scheme, the Central Government may by order do anything not inconsistent with such provisions which appears to it necessary or expedient for the purpose of removing the difficulty." Raman Nayar, J., noted that the three requirements of the sub section were: "(1) that a difficulty should arise in giving effect to the provisions of the scheme; (2) that the order to be made must be such as appears to the Central Government to be necessary or expedient for the purpose of removing the difficulty; and (3) that the order must not be inconsistent with any of the provisions of the scheme": and found that all three of them were amply satisfied in the present case.
In his view the object of the Scheme promulgated by the Central Government on the 16th of May, 1961, under sub section (7) of section 35 of the Banking Act was that the Travancore Bank should take over the business of the chitties earlier run by the Orient Bank and conduct the same to a "successful conclusion".
However, that object, according to the learned Judge, could not be achieved as the Scheme did not provide for an obliteration of the termination of the said chitties which had already taken place under sub section (2) of section 38 of the Chitties Act read with sub section (2) of section 39 thereof and the provisions contained in the variolas.
The learned Judge was clearly of the opinion therefore that a difficulty had arisen in giving effect to the provisions of the Scheme which was sought to be remedied by the impugned order.
The argument that the Scheme 1166 did not envisage the continuation of the chitties by the Travancore Bank, that all that the Scheme provided for was that the rights and obligations of the orient Bank in relation to the chitties stood transferred to the Travancore Bank and that in consequence, the latter became liable for the return of the amounts deposited by the subscribers with the Orient Bank, was turned down by the learned Judge with the following observations: "It is no use saying that the defendant Bank could have had no difficulty in accepting that the chitty had terminated and paying off the unprized subscribers.
For, that would not be to work the scheme which clearly contemplates that the defendant bank should run the chitties to a successful conclusion.
The difficulty that stood in the way of this being done was certainly a difficulty in giving effect to the provisions of the Scheme".
For repelling the contention put forward on behalf of the Company about the constitutional invalidity of sub section (10) of section 45 of the Banking Act, the learned Judge relied on In re article 143 Constitution of India, etc.(1) and Rajnarain Singh vs Chairman, P.A. Committee (2).
Against the dismissal of its suit, the Company instituted the appeal which was accepted by the Division Bench through the judgment challenged before us.
Isaac, J., speaking for himself and Pillai, J., disagreed with the learned trial Judge as to the object of the Scheme of amalgamation and observed that in so far as the chitties were concerned, there was nothing in the Scheme to show that such object was to run them to a successful conclusion.
He was further of the opinion that there was no difficulty at all in the way of the Scheme, as originally promulgated, being given effect to In this connection he remarked: "There is no difficulty in paying the amount.
The difficulty is only for not paying it; and what was achieved by exhibits P 3 and P 4 was the creation of that difficulty.
What exhibit P 3 provides is that the period during which the chitty was not conducted would be treated as a period of suspension of the chitty by a special resolution of the subscribers.
The result of that provision was that the right of the plaintiff to get from the defendant the amount subscribed to the chitty was taken away and substituted with a liability to 1167 draw the prize amount on furnishing security for payment of future instalments.
This is a provision which is clearly inconsistent with the provisions of the Scheme.
Exhibits P 3 and P 4 are, therefore in my view beyond the scope of the power conferred on the Central Government under sub section (10) of section 45 of the Banking Companies Act." In regard to the question of constitutional validity of sub section (10), however, the Division Bench concurred with the learned trial Judge and held that sub section (10) did not suffer from excessive delegation of legislative power.
Allowing the appeal, the Division Bench decreed the suit with costs of the proceedings in both the courts.
The question of the constitutional validity of sub section (10) of section 45 of the Banking Act has not been raised before us and all that we have to determine therefore is whether the impugned order falls within or outside the scope of that sub section.
Shri Govindan Nair, learned counsel for the Company, has vehemently contended that one of the objects of the Scheme was to continue the chitties (which had earlier been conducted by the Orient Bank but had come to a termination by reason of the moratorium) to a "successful conclusion" as held by the learned trial Judge and that the finding to the contrary recorded in the impugned judgment is erroneous and after hearing him and learned counsel for the Travancore Bank at length we have no hesitation in agreeing with Shri Nair 's contention.
It is to be noted that the provision regarding chitties appears in the latter part of paragraph 2 of the Scheme, the earlier part of which may be quoted here with advantage: "(2) As from the date which the Central Government may specify for this purpose under sub section (7) of section 45 of the said Act (hereinafter referred to as the prescribed date) all rights, powers, claims, demands, interests authorities, privileges, benefits, assets and properties of the transferor bank, movable and immovable, including premises subject to all incidents of tenure and to the rents and other sums of money and covenants reserved by or contained in the leases or agreements under which they are held, all office furniture, loose equipment, plant apparatus and appliances, books, papers, stocks of stationery, other stocks and stores, all investment in stocks shares and securities all bills receivable in hand and in transit, all cash 1168 in hand and on current or deposit account (including money at call or short notice) with banks, bullion, all books debts, mortgage debts and other debts with the benefit of the securities, or any guarantee therefor, all other, if any, property rights and assets of every description including all rights of action and benefit of all guarantees in connection with the business of the transferor bank shall, subject to the other provisions of this Scheme, stand transferred to, and become the properties and assets of, the transferee bank; and as from the prescribed date all the liabilities, duties and obligations of the transferor bank shall be and shall become the liabilities, duties and obligations of the transferee bank to the extent and in the manner provided hereinafter.
Without prejudice to the generality of the foregoing provisions all contracts, deeds, bonds, agreements, power of attorney, grants of legal representation and other instruments of whatever nature subsisting or having effect immediately before the prescribed date shall be effective to the extent and in the manner hereinafter provided against or in favour of the transferee bank and may be acted upon as if instead of the transferor bank the transferee bank had been a party thereto or as if they had been issued in favour of the transferee bank.
" These pervasive provisions embraced within their ambit a complete transfer of all rights and liabilities of whatever nature, of the Orient Bank to the Travancore Bank and no special provision was therefore needed to be included in the Scheme in regard to chitties if they were not to be continued to a "successful conclusion".
As it is, the portion of paragraph 2 extracted by us earlier did provide for chitties on a special footing which could not have been the case if the rights and liabilities of the Orient Bank in regard to chitties were sought to be transferred to the Travancore Bank on the basis of the termination of the chitties which had already become operative because of the moratorium and as a consequence of suspension of the chitty business by the Orient Bank.
Nor was it necessary to provide in clause (1) occurring in paragraph 2 of the Scheme that "the transferee bank shall become the foreman. and shall continue to exercise all powers and to do all such acts and things as would have been exercise or done by the transferor bank. " if the chitties were to be dealt with as having come to a termination.
The special provision for the chitty business in the Scheme cannot be regarded as redundant and it was obviously made with a purpose 1169 which, in the circumstances of the case, could be nothing more or less than to provide for the continuation of the chitties in supersession of their termination.
No other reasonable explanation of that special provision appears to us possible.
And if that be so, the entire reasoning adopted in the impugned judgment for arriving at the conclusion that the impugned order was beyond the scope of sub section (10) of section 45 of the Banking Act would become unacceptable; for, in that case, the difficulty which the impugned order sought to overcome would become very real so that the Central Government would be fully competent under the provisions of that sub section to pass an order removing that difficulty and the order actually passed could not be considered to be inconsistent with the provisions of the Scheme to any extent or in any manner.
In the result we hold that the impugned order did not fall outside the scope of the power conferred on the Central Government under sub section (10) of section 45 of the Banking Act and reverse the finding to the contrary recorded in the impugned judgment.
Allowing the appeal, therefore, we set aside the impugned judgment and dismiss the suit but, in the circumstances of the case, leave the parties to bear their own costs throughout.
N.K.A. Appeal allowed.
| IN-Abs | The respondent Company, a subscriber, had to pay money in monthly instalments to a Chitty run by the Orient Bank.
The last instalment was paid on December 10, 1960.
The respondent was the successful bidder.
The prize amount was to be paid to the respondent on January 10, 1961.
But before that date the Central Government imposed a Moratorium, originally for the period ending with the March 18, 1961 which later on was extended upto June 16, 1961 on the Orient Bank with the result that the Orient Bank had to suspend all its business activity.
This resulted in the conduct of the Chitty being discontinued, so that the Chitty stood terminated and the Orient Bank in its capacity as the Foreman of the Chitty incurred the obligation to pay back all the contributions made by non prized subscribers.
The Central Government sanctioned a scheme under the Banking Regulation Act for the amalgamation of the Orient Bank with the appellant (Travancore Bank).
Realising that the Travancore Bank would not be able to continue the Chitties for which the Orient Bank had acted as Foreman because those Chitties had terminated owing to the failure of the Orient Bank to continue to conduct them by reason of the Moratorium, the Central Government passed an order on December 4, 1961 under section 45(10) of the Banking Act.
This order was further amended substituting the words "the 31st March 1962" for the words "31st December 1961", the effect of which was to obliterate the termination of the Chitties as resulting from the suspension thereof by reason of the moratorium during the period from December 18, 1960 to 31st March, 1962, and to enable the appellant Bank to continue those Chitties as if there had been no suspension at any point of time, so that they could be continued as if the relevant provisions of the Chitties Act and the relevant variolas had throughout been complied with.
The respondent filed a suit claiming refund of the four instalments paid by it along with interest.
There was no reference to the impugned order presumably because the respondent had no knowledge thereof.
The suit was resisted on the strength of the impugned order dated 15 1 1962, but the vires of that order was challenged by the respondent and it was urged that the impugned order did not fall within the ambit of sub section (10) of section 45 of the Banking Act and that in any case that sub section itself was constitutionally invalid.
The suit was transferred by the High Court to its own file, from the Court of Munsif as the constitutional validity of section 45(10) of the Banking Act was questioned.
The suit was dismissed.
The respondent instituted an appeal which was accepted by the Division Bench.
Disagreeing with the trial judge as to the object of the scheme of 1158 amalgamation the Division Bench held that sub section (10) did not suffer from excessive delegation of legislative power.
It was urged on behalf of the respondent in this Court that one of the objects of the scheme was to continue the Chitties to a successful conclusion as held by the trial Judge and that the finding to the contrary recorded in the impugned judgment was erroneous.
Allowing the appeal, ^ HELD: The pervasive provisions embraced in the later part of paragraph 2 of the scheme embraced within their ambit a complete transfer of all rights and liabilities, of whatsoever nature, of the Orient Bank to the appellant Bank and no special provision was therefore needed to be included in the scheme in regard to Chitties, if they were not to be continued to a successful conclusion.
As it is, the portion of paragraph 2 provides for Chitties on a special footing which could not have been the case if the right and liabilities of the Orient Bank in regard to Chitties were sought to be transferred to the appellant Bank on the basis of the termination of the Chitties which had already become operative because of the Moratorium and as a consequence of suspension of the Chitty business by the Orient Bank.
Nor was it necessary to provide in clause (1) of paragraph 2 of the scheme that "the transferee Bank shall become the forman. and shall continue to exercise all powers and to do all such acts and things as would have been exercised or done by the transferor Bank. " if the Chitties were to be dealt with as having come to termination.
The special provision for the Chitty business cannot be regarded as redundant and it was obviously made with a purpose which, in the circumstances of the case, could be nothing more or less than to provide for the continuation of the Chitties in supersession of their termination.
No other reasonable explanation of that special provision appears possible.
And if that be so, the entire reasoning adopted in the judgment of the Division Bench for arriving at the conclusion that the impugned order was beyond the scope of sub section (10) of section 45 of the Banking Act would become unacceptable; for, in that case, the difficulty which the impugned order sought to overcome would become very real so that the Central Government would be fully competent under the provisions of that sub section to pass an order removing that difficulty and the order actually passed could not be considered to be inconsistent with the provisions of the scheme to any extent or in any manner.
The impugned order therefore did not fall outside the scope of the power conferred on the Central Government under sub section (10) of section 45 of the Banking Act.
[1168 E H, 1169 A C]
|
t Petition No. 1125 of 1979 (Under Article 32 of the Constitution) M. K. Ramamurthy and R. C. Pathak for the Petitioner.
K.K. Venugopal, Addl.
Solicitor General, and Altaf Ahmed for the Respondent.
Reasons would follow.
" The reasons in support of the above order are given below: The above petition under Article 32 of the Constitution is filed by the petitioner requesting this Court to quash the order of detention bearing No. 299 304/ST dated May 23, 1979 passed by the District Magistrate, Anantnag in the State of Jammu & Kashmir under section 8(2) of the Jammu & Kashmir Public Safety Act, 1978 (Act No. VI of 1978) (hereinafter referred to as 'the Act ') directing the detention 1106 of his (petitioner 's) son, Shabir Ahmed Shah (hereinafter referred to as 'the detenu ').
The relevant part of the order of detention reads: "Whereas I, Omar Jan, District Magistrate, Anantnag, am satisfied that with a view to preventing Shri Shabir Ahmed Shah s/o Ghulam Mohammad Shah r/o Kadipora, Anantnag, from acting in any manner prejudicial to the maintenance of public order, it is necessary so to do; Now, therefore, in exercise of the powers conferred by section 8 (2) of the Jammu and Kashmir Public Safety Act, 1978 (Act No. VI of 1978), I, Omar Jan, District Magistrate, Anantnag hereby direct that the said Shri Shabir Ahmed Shah be detained in Central Jail, Srinagar.
Sd/ (Omar Jan) District Magistrate, Anantnag".
The detenu was informed in pursuance of section 13 of the Act that his detention had been ordered on the following grounds: "1.
You originally belonged to Young Man 's LEAGUE (Hamid group) which was an anti national and pro Pak organization of youngmen.
You alongwith your erstwhile associates were responsible for creating subversion and danger to the maintenance of public order by organizing antinational demonstrations and protests.
Later in the year 1975 when the Peoples ' League was formed with the avowed object of challenging the accession of the State of India and also for furthering the cause and interest of Pakistan in the State, you joined the party as an active member.
You are currently the General Secretary of the Peoples ' League.
You and Your party have shown open sympathy and have tried to elicit public opinion in favour of Mohammad Maqbool Bhat, a die hard pro Pak subversive element who has been sentenced to death on two occasions for murder, espionage and sabotage and is currently awaiting execution.
Pamphlets and posters have been issued by the Peoples ' League in support of Mohammad Maqbool Bhat.
In January and February, 1970 you joined subversive elements of Sopore area and organized the burning of reli 1107 gious places in order to create chaos in the State.
The conspiracy was, however, unearthed by Baramulla Police in time before much damage was done.
You were arrested in Case FIR No. 38/79 u/s 436 RPC P/S Sopore registered in this connection.
Much before the execution of Mr. Z. A. Bhutto in Pakistan, you and your party sent hand bills and booklets to arouse the sentiments of the people against the State Govt.
You alongwith your party members moved secretly to maintain contacts with disgruntled and undesirable elements in the valley and to arouse their base sentiments in this connection and context.
In the third week of March, 1979, when some unemployed youth started hunger strike at Lal Chowk, Anantnag, you lent support to the CPI ML and other parties who were out to create disturbances and to incite the youth to resort to violence and disorder.
On 29 3 1979 you alongwith your colleagues held a meeting and decided to disturb public order in Anantnag town in the context of pro Bhutto sentiments and demonstrations the next day.
Consequently on 30 3 1979 you alongwith your associates moved stealthily to warn the shopkeepers to close their shops.
You also incited the people to put road blocks and stop traffic.
You and your associates organized a strike in Anantnag College when it opened on 30th.
Later in the day you alongwith your associates incited youths to resort to violence and create disorder.
Consequently a lot of violence including murderous assault on the Police and the Magistracy took place in Anantnag town in which many officials were seriously injured.
A case FIR No. 98/79 u/s 302/148/336/332/149/120 B RPC was registered.
You went underground and could not be arrested for quite some time but you were arrested in the case later.
You are presently on bail in this case.
On 7 4 1979 when normalcy was being restored in Anantnag town and shops were being opened, you alongwith your associates appeared near Lal Chowk and threatened shop keepers to close shops.
Their shouting and running had the effect of creating tension in the 1108 town and many shops were closed.
Police efforts to arrest you could not succeed as you ran away in the by lanes and later went underground.
More recently you have been collaborating with antinational, pro Pak elements who come to hold secret talks and links with you.
You are a dangerous and desparate character out to create chaos, disorder, subversion and the like to achieve your ends.
Your remaining at large is prejudicial to the maintenance of public order and also to the security of the State.
I am convinced that unless you are detained there is every likelihood that you will continue to create confusion in public minds and instigate people to lawlessness and disturbance of public peace and tranquility." (The paragraphs are numbered by us for the purpose of convenience).
It may be noted that whereas the order of detention stated that it had been passed with a view to preventing the detenu "from acting in any manner prejudicial to the maintenance of public order", in the last paragraph of the grounds furnished to the detenu, it was stated that "your remaining at large is prejudicial to the maintenance of public order and also to the security of the State".
The relevant part of section 8 of the Act under which the order of detention is passed reads: "8.
Detention of certain persons. (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 the maintenance of the public order, or (ii) the maintenance of supplies and services essential to the community; or.
(b) . . . . it is necessary so to do, make an order directing that such person be detained.
1109 (2) Any of the following officers namely: (i) Divisional Commissioners, (ii) District Magistrates, may, if satisfied as provided in sub clauses (i) and (ii) of clause (a) of sub section (1), exercise the powers conferred by the said sub section.
(3) For the purpose of sub section (1), (a) "acting in any manner prejudicial to the security of the State" means making preparations for using, or attempting to use, or using or instigating, inciting, provoking or otherwise abetting the use of force, to overthrow or overawe the Government established by law in the State; (b) "acting in any manner prejudicial to the maintenance of public order" means (i) promoting, propagating or attempting to create, feelings of enmity or hatred or disharmony on grounds of religion, race, caste, community, or region; (ii) making preparations for using, or attempting to use, or using, or instigating, inciting, provoking, otherwise abetting the use of force where such preparation, using, attempting, instigating, inciting, provoking or abetting, disturbs or is likely to disturb public order; (iii) attempting to commit, or committing, or instigating, inciting, provoking or otherwise abetting the commission of, mischief within the meaning of section 425 of the Ranbir Penal Code where the commission of such mischief disturbs, or is likely to disturb public order; (iv) attempting to commit, or committing, or instigating, inciting, provoking or otherwise abetting the commission of an offence punishable with death or imprisonment for life or imprisonment for a term extending to seven years or more, where the commission of such offence disturbs, or is likely to disturb public order.
" It is seen from section 8(1) (a) (i) and section 8(2) of the Act extracted above that the Government or the District Magistrate may, if satisfied with respect to any person that with a view to preventing him 1110 from acting in any manner prejudicial to the security of the State or the maintenance of the public order, make an order directing that such person be detained.
The expression "acting in any manner prejudicial to the security of the State" is defined in clause (a) of subsection (3) of section 8 of the Act as making preparation for using, or attempting to use, or using or instigating, inciting, provoking or otherwise abetting the use of force to overthrow or overawe the Government established by law in the State.
Clause (b) of section 8(3) of the Act defines the expression "acting in any manner prejudicial to the maintenance of public order".
The distinction between the two expressions lies in the fact that while in the case of the former, the object of making preparation or instigating or abetting the use of force etc. should be with a view to overthrow or overawe "the Government established by law in the State", in the case of the latter, the object of the acts mentioned therein should be disturbance of public order.
As already mentioned, while the order of detention states that it was being made with a view to preventing the detenu from acting in any manner prejudicial to the maintenance of public order, in the grounds disclosed to him, it had been stated that the detenu 's remaining at large was prejudicial to the maintenance of public order and also to the security of the State.
We shall now briefly refer to the nature of the grounds furnished to the detenu.
First we shall deal with paragraphs (1), (3) and (5) to (7) of the grounds.
In paragraph (1) of the grounds, it is stated that the detenu alongwith his erstwhile associates was responsible for creating subversion and danger to the maintenance of public order by organizing anti national demonstrations and protests.
In paragraph (3) of the grounds, it is stated that in January and February, 1979, the detenu had joined subversive elements of Sopore area and organized the burning of religious places in order to create chaos in the State.
In paragraph (5) of the grounds, it is stated that in the third week of March, 1979, the detenu had lent support to the Communist Party of India (ML) and other parties who were out to create disturbances and to incite the youth to resort to violence and disorder when some unemployed youth started hunger strike at Lal Chowk, Anantnag.
In paragraph (6) of the grounds, it is stated that on March 29, 1979, the detenu had alongwith his colleagues held a meeting and decided to disturb public order in Anantnag town.
In paragraph (7) of the grounds, there is a reference to the detenu alongwith his associates inciting the youth to resort to violence and create disorder.
It is thus clear that paragraphs (1), (3) and (5) to (7) of the grounds, there is no reference to any attempt made by the detenu to use force to overthrow or overawe the Government established by 1111 law in the State.
Paragraphs (2), (4) and (8) of the grounds are also in no way different.
In paragraph (2) of the grounds, although there is reference to the detenu joining Peoples ' League, which had been formed with an avowed object of challenging the accession of the State of Jammu & Kashmir to India and also for furthering the cause and interest of Pakistan in the State, the act attributed to the detenu is that he had tried to elicit public opinion in favour of Mohammad Maqbool Bhat who had been sentenced to death.
An attempt on the part of any citizen to elicit public opinion in favour of a person who had been sentenced to death and to save him from the gallows cannot be considered as acting in any manner prejudicial to the security of the State because it cannot be considered as an attempt to overthrow or overawe the Government established by law in the State.
Similarly the act attributed to the detenu in paragraph (4) of the grounds cannot be considered as an act prejudicial to the security of the State as what is alleged therein is that much before the execution of Mr. Z. A. Bhutto in Pakistan, the detenu had sent hand bills and booklets to arouse the sentiments of the people.
Although it is stated that the detenu had tried to arouse the sentiments of the people against the State Government, the alleged act on the part of the detenu even if it was true could not be considered to be prejudicial to the security of the State of Jammu & Kashmir because the State of Jammu & Kashmir had nothing to do with the proposed execution of Mr. Z. A. Bhutto.
Ground No. 8 which lacks material particulars appears to be a general one.
These grounds are also vague in so far as the question of security of the State is concerned.
It is thus clear that none of the grounds supplied to the detenu falls within the scope of clause (a) of section 8(3) (1) of the Act which defines the expression "acting in any manner prejudicial to the security of the State".
It is further seen that even though it is stated in the grounds that the District Magistrate was of the view that the detenu remaining at large was prejudicial to the security of the State also, he did not make the order with a view to preventing him from acting in any manner prejudicial to the security of the State.
A combined reading of the order of detention and the grounds furnished to the detenu shows that at the time when the order was made, the District Magistrate either had no material relevant to the security of the State on which he could act or even if he had information of those grounds, he did not propose to act on it.
He, however, tried to support the order of detention by stating in the course of the grounds that by the detenu remaining at large the security of the State was likely to be prejudiced.
1112 The expressions "law and order", "public order" and "security of the State" are distinct concepts though not always separate.
Whereas every breach of peace may amount to disturbance of law and order, every such breach does not amount to disturbance of public order and every public disorder may not prejudicially affect the "security of the State".
This is borne out from the observations made by Patanjali Sastri, J. in the decision of this Court in Romesh Thappar vs The State of Madras (1) which are as follows: "As Stephen in his Criminal Law of England observes: Unlawful assemblies, riots, insurrections, rebellions, levying of war, are offences which run into each other and are not capable of being marked off by perfectly defined boundaries.
All of them have in common one feature, namely that the normal tranquillity of a civilized society is in each of the cases mentioned disturbed either by actual force or at least by the show and threat of it.
" Though all these offences thus involve disturbances of public tranquillity and are in theory offences against public order, the difference between them being only a difference of degree, yet for the purpose of grading the punishment to be inflicted in respect of them they may be classified into different minor categories as has been done by the Indian Penal Code.
Similarly, the Constitution, in formulating the varying criteria for permissible legislation imposing restrictions on the fundamental rights enumerated in article 19(1), has placed in a distinct category those offences against public order which aim at undermining the security of the State or overthrowing it, and made their prevention the sole justification for legislative abridgement of freedom of speech and expression, that is to say, nothing less than endangering the foundations of the State or threatening its overthrow could justify curtailment of the rights to freedom of speech and expression, while the right of peaceable assembly "sub clause (b)" and (c) right of association "sub clause (c)" may be restricted under clauses (3) and (4) of Article 19 in the interests of "public order," which in those clauses includes the security of the State.
The differentiation is also noticeable in Entry 3 of List III (Concurrent List) of the Seventh Schedule, which refers to the "security of a State" and "maintenance of public order" as distinct subjects of legislation.
The Constitution thus requires a line to be drawn in the field of public order or tranquillity 1113 marking off, may be, roughly, the boundary between those serious and aggravated forms of public disorder which are calculated to endanger the security of the State and the relatively minor breaches of the peace of a purely local significance, treating for this purpose differences in degree as if they were differences in kind.
" As observed by Hidayatullah, J. (as he then was) in Dr. Ram Manohar Lohia vs State of Bihar & Ors.
one has to imagine three concentric circles, in order to understand the meaning and import of the above expressions. 'Law and order ' represents the largest circle within which is the next circle representing "public order" and the smallest circle represents "security of State".
It is then easy to see that an act may affect law and order but not public order just as an act may affect public order but not security of State.
It is in view of the above distinction, the Act defines the expressions "acting in any manner prejudicial to the security of the State" and "acting in any manner prejudicial to the maintenance of public order" separately.
An order of detention made either on the basis that the detaining authority is satisfied that the person against whom the order is being made is acting in any manner prejudicial to the security of the State or on the basis that he is satisfied that such person is acting in any manner prejudicial to the maintenance of public order but which is attempted to be supported by placing reliance on both the bases in the grounds furnished to the detenu has to be held to be an illegal one vide decisions of this Court in Bhupal Chandra Ghosh vs Arif Ali & Ors.(2) and Satya Brata Ghose vs Arif Ali & Ors(3).
The order of detention is, therefore, liable to be quashed and the detenu is entitled to be set at liberty.
The petition is accordingly allowed.
In view of the above conclusion, we have not gone into the other contention urged by Mr. M. K. Ramamurthi that many of the grounds furnished to the detenu being vague, the order of detention cannot be supported even on the ground that it had been passed with a view to preventing the detenu from acting against public order.
N.K.A. Petition allowed.
| IN-Abs | The petitioner 's son (the detenu) was detained under section 8(2) of the Jammu and Kashmir Public Safety Act, 1978 by an order of the District Magistrate, Anantnag, Sections 8(1)(a)(1) and 8(2)2 of the Act state that the Government or the District Magistrate may, if satisfied with respect to any person that with a view to preventing him from acting in any manner prejudicial to the security of the State or the maintenance of the public order, make an order directing that such person be detained.
The detenu was informed that the order of detention had been passed with a view to preventing him from acting in any manner prejudicial to "the maintenance of public order".
The grounds of detention amongst others stated that the detenu had (i) indulged in subversive activities (ii) organised the burning of religious places to create chaos in the State (iii) disturbed the public order (iv) tried to elicit public opinion in favour of a person sentenced to death and that his remaining at large was prejudicial to the maintenance of public order and also the "security of the State".
The petitioner challenged the grounds of detention as vague.
Allowing the petition under Article 32 of the Constitution and directing the release of the detenu forthwith.
^ HELD: An attempt on the part of any citizen to elicit public opinion in favour of a person who has been sentenced to death and to save him from the gallows cannot be considered as acting in any manner prejudicial to the security of the State because it cannot be considered as an attempt to overthrow or overawe the Government established by law in the State.
The fact that the detenu had sent hand bills and booklets to arouse the sentiments of the people against the proposed execution of Z. A. Bhutto cannot be considered as an act prejudicial to the security of the State because the State of Jammu and Kashmir had nothing to do with the proposed execution.
The other grounds are also vague in so far as the question of security of the State is concerned.
[1111 B E] A combined reading of the order of detention and the grounds furnished to the detenu shows that at the time when the order was made, the District Magistrate either had no material relevant to the security of the State on which he could act or even if he had information of those grounds, he did not propose to act on it.
He, however, tried to support the order of detention by stating in the course of the grounds that by the detenu remaining at large, the security of the State was likely to be prejudiced.
[1111 G H] 1105 The expressions "law and order", "public order" and "security of the State" are distinct concepts though now always separate.
Whereas every breach of peace may amount to disturbance of law and order, every such breach does not amount to disturbance of public order and every public disorder may not prejudicially affect the "security of the State." [1112 A B] Romesh Thapper vs The State of Madras, [1950] S.C.R. 594 at p. 600 applied.
An act may affect law and order but not public order just as an act may affect public order but not security of State.
It is for this reason that the Act defines the expressions "acting in any manner prejudicial to the security of the State" and "acting in any manner prejudicial to the maintenance of public order ' separately.
An order of detention made either on the basis that the detaining authority is satisfied that the person against whom the order is being made is acting in any manner prejudicial to the security of the State or on the basis that he is satisfied that such person is acting in any manner prejudicial to the maintenance of public order but which is attempted to be supported by placing reliance on both the bases in the grounds furnished to the detenu has to be held to an illegal one.
[1113 C D] Dr. Ram Manohar Lohia vs State of Bihar & Others, ; Bhupal Chandra Ghosh vs Arif Ali & Others ; and Satya Brata Ghose vs Arif Ali
|
Civil Appeal No. 2229 of 1978.
From the Judgment and Order dated 12 10 1978 of the Bombay High Court in Election Petition No. 2/78.
N.N. Keshwani and Ramesh N. Keshwani for the Appellant.
A.K. Ganguli for the Respondent.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
This appeal is filed under section 116 A of the Representation of the People Act, 1951 (Act No. 43 of 1951) (hereinafter referred to as 'the Act ') against the judgment of the High Court of Bombay (Nagpur Bench) in Election Petition No. 2 of 1978 by which the election of the appellant to the Maharashtra Legislative Assembly from the Armori Constituency (No. 151) in Chandrapur District at the general election held in February, 1978 was set aside.
1137 The Armori Constituency was reserved for Scheduled Tribes.
The appellant and respondents Nos. 1 to 4 were the candidates at the election.
As the appellant secured the highest number of votes, he was declared as having been elected by the Returning Officer.
In his nomination paper, the appellant declared that he belonged to 'Mana ' community.
Respondents Nos. 1, 2 and 4 declared themselves as belonging to 'Pradhan ' community and respondent No. 3 claimed that he belonged to 'Raj Gond ' community.
After the result of the election was declared, respondent No. 1 who had secured the next highest number of votes at the election filed an election petition under section 81 of the Act before the High Court of Bombay calling in question the election of the appellant.
One of the grounds urged in the petition was that the appellant did not belong to any of the Scheduled Tribes specified in Part IX of the Schedule to the Constitution (Scheduled Tribes) Order, 1950 (hereinafter referred to as 'the Order ') as it stood at the time of the election and was not, therefore, qualified to be chosen to fill the seat which was reserved for Scheduled Tribes.
It was alleged that the appellant belonged to Kshatriya Bidwaik Mana community and not to the 'Mana ' community referred to in Entry No. 18 of Part IX of the Schedule to the Order.
Respondent No. 1 also claimed that in the event of the appellant 's election being declared as void, the Court should make a declaration that he (respondent No. 1) himself had been duly elected.
The High Court upheld the contention of respondent No. 1 that the appellant did not belong to any of the Scheduled Tribes referred to in Part IX of the Schedule to the Order and declared his election as void.
The other prayer made by respondent No. 1 that he should be declared as elected was, however, rejected.
Aggrieved by the judgment of the High Court, the appellant has come up in appeal to this Court.
It should be mentioned at this stage that in the general election held in the year 1967, the appellant was declared as a successful candidate from the very same constituency which was a constituency reserved for Scheduled Tribes at that time also and that on an election petition being filed against the appellant, the High Court held that he did not belong to any of the Scheduled Tribes mentioned in the appropriate part of the Schedule to the Order at that time and therefore he was not qualified to contest the election.
Accordingly his election was set aside.
In the appeal filed before this Court, the judgment of the High Court was affirmed vide Dina vs Narayan Singh.(1) In the course of the decision of this Court, it was held that the appellant belonged to 'Kshatriya Bidwaik Mana ' community and not to the 'Mana ' community 1138 referred to in Entry No. 12 of Paragraph 5 of Part VII A of the Schedule to the Order as it stood at the time of the said election for the reasons to which we shall advert hereafter.
In the election petition out of which this appeal arises, respondent No. 1 pleaded that the appellant belonged to 'Kshatriya Bidwaik Mana ' community which was not a tribe mentioned in the Schedule to the Order and that the appellant was not a member of the 'Mana ' community referred to in Entry No. 18 of Part IX of the Schedule to the Order as it stood at the time of the election in question.
It was further alleged that the said 'Mana ' community was a sub tribe of Gond tribe and it had no relationship with the 'Kshatriya Bidwaik Mana ' community to which the appellant belonged.
The appellant denied the above allegation that there were two types of Manas viz. (a) 'Mana ' a sub tribe of 'Gond ' referred to in Entry No. 18 of Part IX of the Schedule to the Order and (b) 'Kshatriya Bidwaik Mana ' community.
He further contended that the 'Mana ' community to which he belonged had been included in that Entry after the Schedule to the Order was amended by the Scheduled Castes and Scheduled Tribes Order (Amendment) Act, 1976.
In order to appreciate the rival contentions, it is necessary to make a brief survey of the law bearing on the question.
Article 332 of the Constitution provides that seats shall be reserved for the Scheduled Castes and the Scheduled Tribes, except the Scheduled Tribes in the tribal areas of Assam and Nagaland, in the Legislative Assembly of every State and that the number of seats for the Scheduled Castes and the Scheduled Tribes so reserved shall bear, as nearly as may be, the same proportion to the total number of seats in the Assembly as the population of the Scheduled Castes in the State or of the Scheduled Tribes in the State or part of the State, as the case may be, in respect of which seats are so reserved, bears to the total population of the State.
The expression 'Scheduled Tribes ' with which we are concerned in this case is defined in clause (25) of Article 366 of the Constitution as such tribes or tribal communities or parts of or groups within such tribes or tribal communities as are deemed under Article 342 to be Scheduled Tribes for the purposes of the Constitution.
Article 342(1) of the Constitution provides that the President may with respect to any State or Union territory and where it is a State after consultation with the Governor thereof, by public notification, specify the tribes or tribal communities or parts of or groups, within tribes or tribal communities which shall for the purposes of the Constitution be deemed to be Scheduled Tribes in relation to that State or Union Territory, as the case may be.
It was in pursuance of this constitutional provision that 1139 the President issued the Order specifying the tribes or tribal communities which should be deemed to be Scheduled Tribes in relation to the several parts of India.
Article 342(2) of the Constitution confers the power on the Parliament to modify by law the order issued under Article 342(1) by including in or excluding from the list of Scheduled Tribes specified therein any tribe or tribal community or part of or group within any tribe or tribal community.
Section 5(a) of the Act provides that a person shall not be qualified to be chosen to fill a seat in the Legislative Assembly of a State unless, in the case of a seat reserved for the Scheduled Tribes of that State he is a member of any of those tribes and is an elector for any Assembly constituency in that State.
The area in which the appellant and respondents Nos.
1 to 4 are residing is situate within the area known as Gadchiroli and Sironcha Tahsils of the Chandrapur District of the State of Maharashtra.
Prior to the amendment made in 1956, Entry No. 12 in the relevant part of the Schedule to the Order read as "Gond including Media (Maria) and Mudia (Muria)".
By the Scheduled Castes and Scheduled Tribes (Amendment) Act 63 of 1956, the said Entry No. 12 was substituted by Entry No. 12 in Paragraph (5) of Part VII A of the Schedule to the Order which was as follows: "12.
Gond, including Arakh or Arrakh Kandra Agaria Kalanga Asur Khatola Badi Maria or Koitar Bada Maria Koya Bhatola Khirwar or Khirwara Bhimma Kucha Maria Bhuta, Koilabhut Kuchaki Maria or Kollabhuti Bhar Madia (Maria) Bisonhorn Maria Mana Chota Maria Mannewar Dandami Maria Moghya or Mogia or Monghya Dhuru or Dhurwa Mudia (Muria) Dhoba Nagarchi Dhulia Nagwanshi Dorla Ojha Gaiki Raj Gatta or Gatti Sonjhari Jhareka Gaita Thatia or Thotya Gond Gowari Wade Maria or Vade Maria.
" Hill Maria The 30th tribe amongst the tribes included within the broad classification of 'Gond ' tribe is 'Mana ' tribe.
As mentioned earlier, the claim of the appellant that he belonged to the said tribe in the previous case 1140 was negatived.
In August, 1967, a Bill was introduced in the Lok Sabha proposing to amend the Schedule to the Order.
By that Bill, it was proposed to substitute the Schedule to the Order as it stood then by a new Schedule.
Part VIII of the new Schedule related to Maharashtra.
Entry No. 22 in that Part read as follows: ___________________________________________________________ Tribe Synonym Sub tribe __________________________________________________________ 1 2 3 ___________________________________________________________ "22.
Gond Koitur Arakh Kalanga Bada Madia Kandra Bhatola Koya Chhota Madi Khirwar Dandami Mad Kucha Madia Dhulia Kuchaki Madia Dhuru or Dwa Machalir Madia Dhoba Mana Dorla Mannewar Gaiki Mudia Gaita Nagarchi Gatta or Gi Nagwanshi Naikpod Ojha Sonjhari Jharekha Thatia or Thotia." _________________________________ __________________________ In the proposed Entry, 'Mana ' community was shown as a sub tribe of 'Gond ' tribe.
With the concurrence of the Rajya Sabha, the Bill was referred to a Joint Committee of the Parliament presided over by Shri Anil K. Chanda.
The Report of the Joint Committee on the Bill was presented to the Lok Sabha on November 17, 1969.
In so far as the amendments proposed to the Schedule to the Order were concerned, the Joint Committee inter alia observed at Paragraph 20(ii) thus: "20(ii).
The Committee feel that the proposal to specify the tribes, the synonyms and the sub tribes in three separate columns will not be appropriate.
As in the case of Schedule Castes Orders, the Committee are of the view that it would be best to follow the wording of article 342(1) of the Constitution and specify.
"The tribes or tribal communities, or parts of, or groups within, tribes or tribal communities".
Each of the Scheduled Tribes Orders have been modified accordingly, and in the lists of Scheduled Tribes the main tribe name is written first followed by the synonyms and subtribes in alphabetical order." 1141 The Joint Committee also recommended that the Mana sub tribe referred to in the Bill should be excluded from the Schedule to the Order altogether.
Thereafter the matter was again considered by the Parliament.
In the Statement of Objects and Reasons dated May 12, 1976 attached to the Bill, it was stated as follows: "Under the Scheduled Castes and Scheduled Tribes Orders some communities have been specified as Scheduled Castes or as Scheduled Tribes only in certain areas of the State concerned and not in respect of the whole State.
This has been causing difficulties to member of these communities in the areas where they have not been so specified.
The present Bill generally seeks to remove these area restrictions.
However, in cases where continuance of such restrictions were specifically recommended by the Joint Committee on the Scheduled Castes and Scheduled Tribes Orders (Amendment) Bill, 1967, no change is being effected.
The Committee had also recommended exclusion of certain communities from the lists of Scheduled Castes and Scheduled Tribes.
These exclusions are not being made at present and such communities are being retained in the lists with the present area restrictions.
Such of the communities in respect of which the Joint Committee had recommended exclusion on the ground that they were not found in a State are, however, being excluded if there were no returns in respect of these communities in the censuses of 1961 and 1971. . ." Thereafter the (Act No. 108 of 1976) was passed by the Parliament and it had come into force before the election in question was held.
By the above Act, the entire Schedule to the Order as it stood prior to the amendment was substituted by a new Schedule consisting of XVI parts.
Part IX of the new Schedule relates to the State of Maharashtra.
Entry No. 18 of Part IX of the new Schedule corresponds to Entry No. 22 of the Bill referred to above and to Entry No. 12 in Paragraph (5) of Part VII A of the Order as it stood prior to the amendment.
Entry No. 18 of Part IX of the Schedule to the Order after the amendment reads thus: "18.
Gond; Rajgond, Arakh, Arrakh, Agaria, Asur Badi Maria, Bada Maria, Bhatola, Bhimma, Bhuta, Koilabhuta, Koilabhuti, Bhar, Bisonhorn Maria, Chota Maria, Dhandami Maria, Dhuru, Dhurwa, Dhoba, Dhulia, Dorla, Gaiki, Gatta, Gatti, Gaita, Gond Gowari, Hill Maria, Kandra, Kalanga, 1142 Khatola, Koitar, Koya, Khirwar, Khirwara, Kucha Maria, Kuchaki Maria, Madia, Maria, Mana, Mannewar, Moghya, Mogia, Monghnya, Mudia, Muria, Nagarchi, Naikpod, Nagwanshi, Ojha, Raj, Sonjhari Jhareka, Thatia, Thotya, Wade Maria, Vade Maria.
" It is seen from the above Entry that 'Mana ' community is one of the communities included in the group of communities headed by Gond community.
It appears that the recommendation of the Joint Committee to exclude it from the Schedule to the Order was not accepted by the Parliament.
If the Schedule to the Order had not undergone any change, there would not have been any room for argument that the appellant was a person belonging to a Scheduled Tribe eligible to contest as a candidate at an election to fill a seat from the reserved constituency as the question was conducted by the judgment of this Court in Dina 's case (supra).
Mr. M. M. Phadke, learned counsel for the appellant, however, argued that a comparison of Entry No. 12 as it stood prior to the amendment and Entry No. 18 as it stood on the date of the election in question would show that the Parliament while substituting the Schedule by a new Schedule by Act No. 108 of 1976 intended to make a departure from the old law and that every person who belonged to any 'Mana ' community whether it had any affinity with Gond tribe or not would be entitled to the privilege of contesting at the election from the reserved constituency.
The question for consideration before us therefore is whether by reason of the amendment made in the year 1976, persons belonging to the Mana community to which the appellant belonged and which was not a Scheduled Tribe before such amendment can be considered as persons belonging to a Scheduled Tribe after such amendment.
Apart from Article 366(25) of the Constitution, there is no other definition of the expression "Scheduled Tribes".
Scheduled Tribes are, therefore, only those which are deemed under Article 342 of the Constitution to be Scheduled Tribes.
Hence in order to find out whether a community is a Scheduled Tribe or not, we have only to see the order which is made under Article 342 of the Constitution.
Mr. M. N. Phadke, learned counsel for the appellant drew the attention of the Court to the omission of the word 'including ' which according to him, had been used in Entry No. 12 of the Schedule as it stood prior to the amendment to indicate that the communities mentioned after it were those having affinity with the 'Gond ' tribe, from the new Entry No. 18 of Part IX of the Schedule to the Order and 1143 contended that the group of communities mentioned in Entry No. 18 need not necessarily be those having mutual affinity amongst them.
On the above basis, it was urged on behalf of the appellant that a person belonging to any 'Mana ' community should be treated as a person belonging to a Scheduled Tribe even though it had no affinity with the 'Gond ' tribe.
We find it difficult to agree with the submission made by him.
Sometimes, the word 'including ' is used in a definition to give an extended meaning also to the word defined.
In Dilworth vs Commissioner of Stamps(1), Lord Watson observed that when the word 'include ' is used in an interpretation clause to enlarge the meaning of words or phrases in a statute "these words or phrases must be construed as comprehending, not only such things as they signify according to their natural import but also those things which the interpretation clause declares that they shall include".
Sometimes the word 'includes ' is used as a synonym for 'means ' and not as a word of extension, but limitation.
This again is clear from the following observations of Lord Watson in the decision referred to above: "But the word 'include ' is susceptible of another construction, which may become imperative, if the context of the Act is sufficient to show that it was not merely employed for the purpose of adding to the natural significance of the words or expressions defined.
It may be equivalent to 'mean and include ', and in that case it may afford an exhaustive explanation of the meaning which, for the purposes of the Act, must invariably be attached to these words or expressions." In South Gujarat Roofing Tiles Manufacturers Association & Anr.
vs State of Gujarat & Anr.(2) this Court interpreted the expression 'includes ' found in Entry No. 22 which had been included in Part I of the Schedule to the by the Gujarat Government as being equivalent to 'means '.
It is significant that even when it was possible to give an extended meaning to the expression 'Mana ' appearing in Entry No. 12 in the Order before the amendment relying on the presence of the word 'including ' in that Entry, this Court gave a restricted meaning to it and held that only that 'Mana ' community which had affinity with the Gond community could be considered as a Scheduled Tribe and that Kshatriya Bidwaik Mana community to which the appellant belonged could not be treated as a Scheduled Tribe.
Now that the word 'including ' has been omitted from the present Entry No. 18, is it open to construe it as including communities which had no affinity with the principal tribe 'Gond ' mentioned first in that Entry? 1144 We do not think that it is possible to do so.
Even though the proceedings of the Joint Committee cannot be relied upon for the purpose of construing the Order, they may be looked into to ascertain the circumstances in which the several communities were grouped under one Entry or the other.
The extract from the proceedings of the Joint Committee quoted above shows that in order to avoid confusion, the Committee recommended to follow the words in Article 342 of the Constitution and to enlist the "tribes or tribal communities or parts of, or groups within, tribes or tribal communities" under specific Entries.
It also recommended that the main tribe should be mentioned first in any Entry followed by its synonyms and its sub tribes in alphabetical order.
Even without the aid of the proceedings of the Joint Committee, it is possible to arrive at the same conclusion in the context in which the word 'Mana ' is found in Entry No. 18.
Part IX of the Schedule to the Order as it stands today contains 47 Entries.
In certain entries only one community is mentioned and in certain others.
two or more communities are mentioned.
It is obvious that certain communities have been grouped together under a single entry in the light of Article 342 of the Constitution which requires parts of or groups within a tribal community also to be specified in the order issued thereunder.
It is, therefore, reasonable to hold that the communities mentioned against any specific entry are those which have mutual affinity amongst them.
It is also not possible to hold that by replacing the Schedule to the Order by a new Schedule by the , the Parliament intended to treat persons belonging to 'Kshatriya Bidwaik Mana ' community also as Scheduled Tribes.
If really that was the intention, the Parliament would have mentioned 'Mana ' community under an independent entry.
The inclusion of the 'Naikpod ' community amongst the group of communities in Entry No. 18 for the first time also is of no special significance since the appellant has admitted in the course of his evidence that 'Naikpod ' is also a tribe, found alongwith other Scheduled Tribes in that area and it is not stated that the said tribe has no affinity with them.
It may have been omitted from the order earlier due to oversight.
A reading of the Schedule to the Order also shows that where there are two communities with the same name, one having affinity with a tribe and the other not having anything to do with such tribe and both are treated as Scheduled Tribes the community which has affinity with another tribe is shown alongwith it in the same group against a single entry and the other is shown against a different entry.
This is illus 1145 trated by the inclusion of the 'koya ' community having affinity with 'Gonds ' in Entry No. 18 and the 'koya ' community having no such affinity in Entry No. 33 of Part IX of the Schedule to the Order.
If the Parliament intended to treat the appellant 's community also as a Scheduled Tribe, it would have shown 'Mana ' community under a separate entry.
No such entry is found in the Schedule.
Some arguments were addressed at the Bar on the basis of the difference in the punctuation marks used in Entry 12 and in entry 18.
It is well known that punctuation marks by themselves do not control the meaning of a statute when its meaning is otherwise obvious.
Hence we do not feel that we should deal with it in greater detail having regard to the nature of this case.
We are, therefore of the view that the 'Mana ' community included in Entry No. 18 can only be that which has affinity with 'Gonds ' and any other community which also bears the name 'Mana ' but does not have any such affinity cannot be deemed to fall within the scope of 'Mana ' in Entry No. 18.
The appellant has categorically admitted in the course of his evidence that there was no connection between his community and Gonds.
His evidence is, "We have no concern with the Gond community also.
The customs and traditions with regand to marriage of our community are different from those of the Gonds".
He has also stated in his deposition that 'I have no concern whatsoever with Gonds.
There are sub castes amongst Gonds.
Some of them are Arak, Gowari, Raj gond, Bada Magia, Madia, Ojha and Wanjari.
It is not true that Mana is a sub caste of the Gonds.
There is no community known as Gond '.
That the appellant was a member of the 'Mana ' community which has the qualification of 'Kshatriya ' is established by his admission in his deposition that he was a member of the Kshatriya Mana Shikshana Sahayak Mandal, Chandrapur.
Although in another part of his statement of objections, there are some contradictory statements, the following plea in para 9 of the said statement makes it obvious that there is a community called Kshatriya Bidwaik Mana community: "9 As to Para 11 : It is admitted that the respondent No. 1 was the Vice President for some time and also an active worker of the Kshatriya Bidwaik Mana Shikshana Sanastha.
The object of the said institution was not limited to spread education amongst the boys belonging to Kshatriya Bidwaik Mana community, and it is denied that the said 1146 society has been founded in order to give educational facilities to the students belonging to this community only".
In the appeal filed by the appellant where the question was whether he belonged to a Scheduled Tribe or not, this Court observed: "That there are sub tribes amongst the Gonds is not denied.
Names of some of those sub tribes are included in Entry 12 of Item 5 of Part VII A of the Schedule is also a matter which is beyond dispute.
The customs, manners, form of worship, and dress of the members of the Maratha Mana community are all different from the customs manner, form of worship and dress of the Gonds.
No rational explanation has been suggested why the Parliament should have, while including under Entry 12 several sub tribes of Gonds, specified Mana under that entry, if Manas had no affinity at all with Gonds.
The appellant was uncertain about the claim that he was making.
In the nomination paper filed by him he claim to be a Gond (Mana).
His subsequent explanation that he did so because the rules so required cannot be accepted as true.
He relied upon the status of a Mana in the belief that all Manas were intended to be given the benefit of the privileges conferred by the Scheduled Tribes Order.
He described himself as a Gond (Mana).
Realizing thereafter that his community had no affinity with the Gonds he stated that he was not a Gond; that he had nothing to do with the Gonds, and that his community had also nothing to do with the Gonds.
He rested his claim solely upon the description in Entry 12 in item 5 of Part VIIA of the Schedule.
But the form in which the entry is made prima facie indicates that in the view of the Legislature, Mana was a sub tribe of Gonds and a Mana who was a member of the sub tribe of Gonds alone was entitled to the privileges conferred by the Schedule to the Scheduled Tribes Order.
We therefore agree with the High Court that the appellant, merely because he belonged to the Mana community amongst the Marathas, is not eligible to stand as a candidate for election to the Maharashtra Legislative Assembly from the reserved seat of the Armori constituency in Gadchiroli tahsil of Chanda District.
" The position has not since changed even though the Schedule to the Order is substituted by a new Schedule.
There has only been a 1147 re arrangement of the Schedule with slight modification which has no effect on the question at issue in this case.
The High Court was, therefore, right in rejecting the case of the appellant that he belonged to a Scheduled Tribe, and in setting aside his election to the Maharashtra Legislative Assembly.
In the result the appeal fails and is hereby dismissed with costs.
P.B.R. Appeal dismissed.
| IN-Abs | Entry 12 of Part IX of the Schedule to the Constitution (Scheduled Tribes) Order 1950 prior to its amendment in 1956 read as "Gond including Media (Maria) and Mudia, (Muria)".
By the Scheduled Castes and Scheduled Tribes (Amendment) Act 63 of 1956 the said Entry was substituted by Entry 12 in Paragraph 5 of Part VII A of the Schedule to the Order.
It read as "12 Gond, including: Arakh or Arrah. Mana. " "Mana" was the 30th community amongst the communities included in that Entry.
In 1976 the entire Schedule to the order as it stood prior to the amendment was substituted by a new Schedule.
Entry 18 of Part IX of the new Schedule corresponding to Entry 12, prior to the amendment, showed 'Mana ' community as one of the communities included in the group of communities headed by "Gond" community.
In the election to the State Assembly held in February, 1978 the appellant was declared successful from a constituency reserved for Scheduled Tribes.
In his election petition impugning the appellant 's election respondent No. 1 who was the unsuccessful candidate challenged the election on the ground that the appellant did not belong to any of the Scheduled Tribes specified in Part IX of the Schedule to the 1950 Order as it stood at the time of the election and was therefore not qualified to be chosen to fill the seat reserved for the Scheduled Tribes.
The High Court set aside the appellant 's election.
In appeal to this Court it was contended on behalf of the appellant that while the word "including" in Entry 12 of the 1950 Order as it stood after its amendment in 1956 showed that the communities referred to therein were those having affinity with the Gond Tribe and its omission in Entry 18 as amended in 1976 showed that the group of communities mentioned in this Entry, need not necessarily be those having mutual affinity amongst them so that a person belonging to any "Mana" community should be treated as a person belonging to a Scheduled Tribe even though it had no affinity with the "Gond" tribe.
Dismissing the appeal ^ HELD: 1.
The High Court was right in setting aside the appellant 's election on the ground that he did not belong to a Schedule Tribe.
[1147 B] 1136 2.
(a) Even when the Order, before its amendment in 1976 used the term "including", this Court giving a restricted meaning to "Mana", held that only 'Mana ' community which had affinity with the 'Gond ' community could be considered as a Scheduled Tribe and that 'Kshatriya Bidwaik Mana ' community to which the appellant belonged could not be treated as a Scheduled Tribe.
[1143F G] (b) A reading of Part IX of the Schedule to the Order shows that certain communities had been grouped together under a single Entry in the light of Article 342 of the Constitution which requires part of or groups within a tribal community also to be specified in the Order.
Therefore the communities mentioned against any specific Entry are those which have mutual affinity amongst them.
[1144C E] (c) Merely because a new Schedule had been substituted for the old one it cannot be said that Parliament had intended to treat persons belonging to "Kshatriya Bidwaik Mana" community also as a Scheduled Tribe.
Where there are two communities with the same name one having affinity with a tribe and the other not having anything to do with it and both are treated as Scheduled Tribes, the community which has affinity with another tribe is shown along with it in the same group against a single Entry and the other is shown against a different Entry.
Therefore the Mana community included in Entry 18 can only be that which has affinity with 'Gonds ' and any other community which also bears the name 'Mana ' but does not have any such affinity cannot be deemed to fall within the scope of 'Mana ' in Entry 18.
[1144H, 1145C D] 3.
The term "including" is sometimes used in a definition to give an extended meaning to the word defined.
Sometimes it is used as a synonym for "means" and not as a word of extension but limitation.
[1143C D] Dilworth vs Commissioner of Stamps, [1899] A.C. 99 at pp.
105 106, South Gujarat Roofing Tiles Manufacturers Association & Anr.
vs State of Gujarat & Anr.
, ; , referred to.
|
ON: Criminal Appeal No. 147 of 1955.
Appeal by special leave from the Judgment and Order dated the 10th May 1955 of the Pepsu High Court at Patiala in Criminal Appeal No. 93 of 1954 arising out of the Judgment and Order dated the 21st June, 1954 of the Court of Sessions Judge at Barnala in Sessions Case No. 18 of 1954.
J.N. Kaushal and Naunit Lal, for the appellant.
Porus A. Mehta and P. G. Gokhale, for the respondent.
April 17.
The Judgment of the Court was delivered by CHANDRASEKHARA AIYAR J.
The appellant Basdev of the village of Harigarh is a retired military Jamadar.
He is charged with the murder of a young boy named Maghar Singh, aged about 15 or 16.
Both of them and others of the same village went to attend a wedding in another village.
All of them went to the house of the bride to take the midday meal on the 12th March, 1954.
Some had settled down in their seats and some bad not.
The appellant asked Maghar Singh, the young boy to step aside a little so that he 365 may occupy a convenient seat.
But Maghar Singh did not move.
The appellant whipped out a pistol and shot the boy in the abdomen.
The injury proved fatal.
The party that had assembled for the marriage at the bride 's house seems to have made itself very merry and much drinking was indulged in.
The appellant Jamadar boozed quite a lot and he became very drunk and intoxicated.
The learned Sessions Judge says "he was excessively drunk '? and that "according to the evidence of one witness Wazir Singh Lambardar he was almost in an unconscious condition".
This circumstance and the total absence of any motive or premeditation to kill were taken by the Sessions Judge into account and the appellant was awarded the lesser penalty of transportation for life.
An appeal to the PEPSU High Court at Patiala proved unsuccessful.
Special leave was granted by this Court limited to the question whether the offence committed by the petitioner fell under section 302 of the Indian Penal Code or section 304 of the Indian Penal Code having regard to the provisions of section 86 of the Indian Penal Code.
Section 86 which was elaborately considered by the High Court runs in these terms: "In cases where an act done is not an offence unless done with a particular knowledge or intent, a person who doe& the act in a state of intoxication shall be liable to be dealt with as if he bad the same knowledge as he would have had if he bad not been intoxicated, unless the thing which intoxicated him was administered to him without his knowledge or against his will".
It is no doubt true that while the first part of the section speaks of intent or knowledge, the latter part deals only with knowledge and a certain element of doubt in interpretation may possibly be felt by reason of this omission.
If in voluntary drunkenness knowledge is to be presumed in the same manner as if there was no drunkenness, what about those cases where mens rea is required.
Are we at liberty to place in 48 366 tent on the same footing, and if so, why has the section omitted intent in its latter part? This is not the first time that the question comes up for consideration.
It has been discussed at length in many decisions and the result may be briefly summarised as follows: So far as knowledge is Concerned, we must attribute to the intoxicated man the same knowledge as if he was quite sober.
But so far as intent or intention is concerned, we must gather it from the attending general circumstances of the case paying due regard to the degree of intoxication.
Was the man beside his mind altogether for the time being? If so it would not be possible to fix him with the requisite intention.
But if he had not gone so deep in drinking, and from the facts it could be found that he knew what he was about, we can apply the rule that a man is presumed to intend the natural consequences of his act or acts.
Of course, we have to distinguish between motive, intention and knowledge.
Motive is something which prompts a man to form an intention and knowledge is an awareness of the consequences of the act.
In many cases intention and knowledge merge into each other and mean the same thing more or less and intention can be presumed from knowledge.
The demarcating line between knowledge and intention is no doubt thin but it is not difficult to perceive that they connote different things.
Even in some English decisions, the three ideas are used interchangeably and this has led to a certain amount of confusion.
In the old English case, Rex vs Meakin(1) Baron Alderson referred to the nature of the instrument as an element to be taken in presuming the intention in these words: "However, with regard to the intention, drunkenness may perhaps be adverted to according to the nature of the instrument used.
If a man uses a stick, you would not infer a malicious intent so strongly against him, if drunk, when he made an intemperate use of it, as he would if be bad used a different kind (1) ; ; 7 Car.
& P. 295.
367 of weapon; but where a dangerous instrument is used, which, if used, must produce grievous bodily harm, drunkenness can have no effect on the consideration of the malicious intent of the party.
" In a charge of murdering a child levelled against a husband and wife who were both drunk at the time, Patteson J., observed in Regina vs Cruse and Mary his wife (1) "It appears that both these persons were drunk, and although drunkenness is no excuse for any crime whatever, yet it is often of very great importance in cases where it is a question of intention.
A person may be so drunk as to be utterly unable to form any intention at all, and yet he may be guilty of very great violence.
" Slightly different words but somewhat more illuminating were used by Coleridge J., in Reg.
vs Monkhouse(2) "The inquiry as to intent is far less simple than that as to whether an act has been committed, because you cannot look into a man 's mind to see what was passing there at any given time.
What he intends can only be judged of by what he does or says, and if he says nothing, then his act alone must guide you to your decision.
It is a general rule in criminal law, and one founded on common sense, that juries are to presume a man to do what is the natural con sequence of his act.
The consequence is sometimes so apparent as to leave no doubt of the intention.
A man could not put a pistol which he knew to be loaded to another 's bead, and fire it off, without intending to kill him; but even there the state of mind of the party is most material to be considered.
For instance, if such an act were done by a born idiot, the intent to kill could not be inferred from the act.
Sol if the defendant is proved to have been intoxicated, the question becomes a more subtle one; but it is of the same kind, namely, was he rendered by intoxication entirely incapable of forming the intent charged?" (1) ; ; (2) 368 "Drunkenness is ordinarily neither a defence nor excuse for crime, and where it is available as a partial answer to a charge, it rests on the prisoner to prove it, and it is not enough that he was excited or rendered more irritable, unless the intoxication was such as to prevent his restraining himself from committing the act in question, or to take away from him the power of forming any specific intention.
Such a state of drunkenness may no doubt exist".
A great authority on criminal law Stephen J., postulated the proposition in this manner in Beg.
vs Doherty(1) ". although you cannot take drunkenness as any excuse for crime, yet when the crime is such that the intention of the party committing it is one of its constituent elements, you may look at the fact that a man was in drink in considering whether he formed the intention necessary to constitute the crime".
We may next notice Rex vs Meade(2) where the question was whether there was any misdirection in his summing, up by Lord Coleridge, J.
The summing up was in these words: "In the first place, every one is presumed to know the consequences of his acts.
If he be insane, that knowledge is not presumed.
Insanity is not pleaded here, but where it is part of the essence of a crime that a motive, a particular motive, shall exist in the mind of the man who does the act, the law declares this that if the mind at that time is so obscured by drink, if the reason is dethroned and the man is incapable therefore of forming that intent, it justifies the reduction of the charge from murder to man slaughter".
Darling, J., delivering the judgment of the Court of Criminal Appeal affirmed the correctness of the summing up but stated the rule in his own words as follows: "A man is taken to intend the natural consequences of his acts.
This presumption may be rebutted (1) in the case of a sober man, in many ways: (1) (2) , 369 (2)it may also be rebutted in the case of a man who is drunk, by shewing his mind to have been so affected by the drink he had taken that he was incapable of knowing that what he was doing was dangerous, i.e., likely to inflict serious injury.
If this be proved, the presumption that he intended to do grievous bodily harm is rebutted".
Finally, we have to notice the House of Lord 's decision in Director of Public Prosecutions vs Beard(1).
In this case a prisoner ravished a girl of 13 years of age, and in aid of the act of rape he placed his hand upon her mouth to stop her from screaming, at the same time pressing his thumb upon her throat with the result that she died of suffocation.
Drunkenness was pleaded as a defence.
Bailhache J. directed the jury that the defence of drunkenness could only prevail if the accused by reason of it did not know what he was doing or did not know that he was doing wrong.
The jury brought in a verdict of murder and the man was sentenced to death.
The Court of Criminal Appeal (Earl of Reading C.J., Lord Coleridge J., and Sankey, J.) quashed this conviction on the ground of misdirection following Rex vs Meade(2) which established that the presumption that a man intended the natural consequences of his acts might be rebutted in the case of drunkenness by showing that his mind was so affected by the drink that he bad taken that he was incapable of knowing that what he was doing was dangerous.
The conviction was, therefore, reduced to manslaughter.
The Crown preferred the appeal to the House of Lords and it was heard by a strong Bench consisting of Lord Chancellor, Lord Birkenhead, Earl of Reading, C.J., Viscount Haldane, Lord Denedin, Lord Atkinson, Lord Sumner, Lord Buckmaster, and Lord Phillimore.
The Lord Chancellor delivered the judgment of the court.
He examined the earlier authorities in a lengthy judgment and reached the conclusion that Rex vs Meade(2) stated the law rather too broadly, though on the facts there proved the decision was right.
The position "that a person charged with a crime of violence (1) [1920] A.C. 479.
(2) 370 may show, in order to rebut the presumption that he intended the natural consequences of his acts, that he was so drunk that he was incapable of knowing what he was doing was dangerous. . . . . . which is what is said in Meade 's case, was not correct as a general proposition of law and their Lordships laid down three rules: (1)That insanity, whether produced by drunkenness or otherwise, is a defence to the crime charged; (2) That evidence of drunkenness which renders the accused incapable of forming the specific intent essential to constitute the crime should be taken into consideration with the other facts proved in order to determine whether or not he had this intent; (3)That evidence of drunkenness falling short of a proved incapacity in the accused to form the intent necessary to constitute the crime, and merely establishing that his mind was affected by drink so that he more readily gave way to some violent passion, does not rebut the presumption that a man intends the natural consequences of his acts.
The result of the authorities is summarised neatly and compendiously at page 63 of Russel on Crime, tenth edition, in the following words: "There is a distinction, however, between the defence of insanity in the true sense caused by excessive drunkenness and the defence of drunkenness which produces a condition such that the drunken man 's mind becomes incapable of forming a specific intention.
If actual insanity in fact supervenes as the result of alcoholic excess it furnishes as complete an answer to a criminal charge as insanity induced by any other cause.
But in cases falling short of insanity evidence of drunkenness which renders the accused incapable of forming the specific intent essential to constitute the crime should be taken into consideration with the other facts proved in order to determine whether or not he had this intent, but evidence of drunkenness which falls short of proving such incapacity and merely establishes that the mind of the accused was so affected by drink that he more readily gave way to some violent passion does not 371 rebut the presumption that a man intends the natural consequences of his act".
In the present case the learned Judges have found that although the accused was under the influence of drink, he was not so much under its influence that his mind was so obscured by the drink that there was incapacity in him to form the required intention as stated.
They go on to observe: "All that the evidence shows at the most is that at times he staggered and was incoherent in his talk, but the same evidence shows that he was also capable of moving himself independently and talking coherently as well.
At the same time it is proved that be came to the darwaza of Natha Singh P.W. 12 by himself, that he made a choice for his own seat and that is why he asked the deceased to move away from his place, that after shooting at the deceased be did attempt to get away and was secured at some short distance from the darwaza, and that when secured be realised what he had done and thus requested the witnesses to be forgiven saying that it bad happened from him.
There is no evidence that when taken to the police station Barnala, he did not talk or go there just as the witnesses and had to be specially supported.
All these facts, in my opinion, go to prove that there was not proved incapacity in the accused to form the intention to cause bodily injury sufficient in the ordinary course of nature to cause death.
The accused had, therefore, failed to prove such incapacity as would have been available to him as a defence, and so the law presumes that he intended the natural and probable consequences of his act, in other words, that he intended to inflict bodily injury to the deceased and the bodily injury intended to be inflicted was sufficient in the ordinary course of nature to cause death".
On this finding the offence is not reduced from murder to culpable homicide not amounting to murder under the second part of section 304 of the Indian Penal Code.
The conviction and sentence are right and the appeal is dismissed.
| IN-Abs | So far as knowledge is concerned the court must attribute to the intoxicated man the same knowledge as if he was quite sober but so far as intent or intention is concerned, the court must gather it from the attending general circumstances of the case paying due regard to the degree of intoxication.
If the man was beside his mind altogether for the time being, it would not be possible to fix him with the requisite intention.
But if he had not gone so deep in drinking and from the facts it could be found that he knew what he was about the court will apply the rule that a man is presumed to intend the natural consequences of his act or acts, That rule of law is well settled: 1.That insanity, whether produced by drunkenness or otherwise, is a defence to the crime charged; 364 2.The evidence of drunkenness which renders the accused incapable of forming the specific intent essential to constitute the crime should be taken into consideration with the other facts proved in order to determine whether or not he had this intent; 3.That evidence of drunkenness falling short of a proved incapacity in the accused to form the intent necessary to constitute the crime, and merely establishing that his mind was affected by drink so that he more readily gave way to some violent passion, does not rebut the presumption that a man intends the natural consequences of his acts.
Director of Public Prosecutions vs Board, ([1920] A.C. 479), referred to.
On the finding in the present case that although the accused was under the influence of drink, he was not so much under its influence that his mind was obscured to such an extent that there was incapacity in him to form the required intention the offence was not reduced from murder to culpable homicide not amounting to murder under the second part of section 304 of the Indian Penal Code.
|
Civil Appeal No. 2005 of 1978 Appeal under section 123 of the Jammu and Kashmir Representation of People Act, 1957 from the Judgment and Order dated the 6th September 1979 of the Jammu and Kashmir High Court in Election Petition No. 3 of 1977 D. V. Patel, Vineet Kumar and A. Srivastava for the Appellant.
Z. A. Shah, M. Veerappa, J. R. Das and R. N. Nath for the Respondent.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
This appeal is filed under section 123 of the Jammu and Kashmir Representation of the People Act, 1957 (hereinafter referred to as 'the Act ') by the appellant against the judgment of the High Court of Jammu & Kashmir in Election Petition No. 3 of 1977 dismissing an election petition filed by him on the ground that he had not complied with section 89(3) of the Act.
At the general election held in the year 1977 to elect members to the Legislative Assembly of the State of Jammu & Kashmir, the appellant and the respondent were candidates for the seat to be filled from the Handwara Assembly Constituency.
The respondent was declared as the successful candidate by the Returning Officer.
Thereafter the appellant filed an election petition before the High Court of Jammu & Kashmir challenging the validity of the respondent 's election on various grounds.
The respondent raised two preliminary objections to the election petition (1) that the petition had not been presented in accordance with sub section (1) of section 89 of the Act and (2) that the copy of the election petition had not been attested by the appellant under his own signature to be a true copy of the petition as required by section 89(3) of the Act.
The respondent contended that the petition was liable to be dismissed in view of section 94 of the Act which provided that the High Court should dismiss an election petition which did not comply with the provisions of section 89 or section 90 or section 125 of the Act.
We are not concerned with the first ground as it has been held by the High Court that the petition had been validly presented in accordance with section 89(1) of the Act.
The appellant while admitting that the copies of the election petition had not been attested by him under his own signature to be true copies of the petition pleaded that section 89(3) of the Act had been substantially complied with as the copies of the election petition had been signed by his advocate and that they had been authenticated to be true copies of the petition.
On the basis of the above pleadings, the High Court raised 1181 two preliminary issues one relating to the validity of the presentation of the election petition and the other relating to the effect of the absence of attestation of the copies of the election petition by the appellant.
After recording the evidence led by the parties on the preliminary issues and hearing the counsel for the parties, the High Court disposed of the petition by the judgment under appeal.
In the course of its judgment while the High Court upheld the case of the appellant that the petition had been validly presented under section 89(1) of the Act came to the conclusion that the petition was liable to be dismissed as required by section 94 of the Act on the ground that section 89(3) of the Act had not been complied with by the appellant.
Accordingly, the petition was dismissed.
Hence this appeal.
Section 89(3) of the Act reads: "Every election petition shall be accompanied by as many copies thereof as there are respondents mentioned in the petition and every such copy shall be attested by the petitioner under his own signature to be true copy of the petition." Section 94(1) of the Act provides: "The High Court shall dismiss an election petition which does not comply with the provisions of section 89 or section 90 or section 125".
Section 89(3) and section 94(1) of the Act correspond to section 81(3) and section 86(1) respectively of the Representation of the People Act, 1951 (Act No. 43 of 1951) (hereinafter referred to as 'the Central Act ').
There is no difference between the language of section 89(3) of the Act and the language of section 81(3) of the Central Act.
The language of section 94(1) of the Act and the language of section 86(1) of the Central Act are similar except with regard to the numbers of sections referred to therein.
Whereas in Section 94 of the Act, the High Court is required to dismiss an election petition which does not comply with the provisions of section 89 or section 90 or section 125 of the Act, section 86(1) of the Central Act requires the High Court to dismiss an election petition which does not comply with the provisions of section 81 or section 82 or section 117 of the Central Act.
The topics dealt with by sections 89, 90 and 125 of the Act are the same as the topics dealt with by sections 81, 82 and 117 of the Central Act.
Section 89 of the Act and section 81 of the Central Act deal with presentation of election petitions.
Section 90 of the Act and section 82 of the Central Act deal with the parties to the petition and section 125 of the Act and section 117 of the Central Act deal with security for costs.
1182 It is admitted that neither of the two copies of the election petition which had been filed along with it had been signed by the appellant.
Both the copies contained identical endorsements at the foot which read: "Attested true copy, Piyare Lal Handoo, Advocate".
The advocate had presented the election petition alongwith his Vakalatnama.
The crucial part of section 89(3) of the Act with which we are concerned provides that "every such copy shall be attested by the petitioner under his own signature to be a true copy of the petition" and the critical words in this part are "under his own signature".
The case of the respondent is that the requirement of section 89(3) of the Act that the copy of the election petition should be attested by the petitioner under his own signature is a mandatory one.
It is his further case that the language of section 89(3) of the Act does not permit of any other mode of compliance and, therefore, the attestation made by the counsel for the petitioner filing the election petition is no compliance with that provision.
It is, therefore, contended by him that the petition is liable to be dismissed as required by section 94 of the Act.
On the other hand, the appellant 's case is that since the copies of the petition had been signed by his advocate who had been empowered to act for him in the case it should be treated as substantial compliance with section 89(3) of the Act which having regard to its object must be considered to be directory.
The difference between a mandatory rule and a directory rule is that while the former must be strictly observed, in the case of the latter, substantial compliance may be sufficient to achieve the object regarding which the rule is enacted.
Certain broad propositions which can be deduced from several decisions of courts regarding the rules of construction that should be followed in determining whether a provision of law is directory or mandatory may be summarised thus: The fact that the statute uses the word 'shall ' while laying down a duty is not conclusive on the question whether it is a mandatory or directory provision.
In order to find out the true character of the legislation, the Court has to ascertain the object which the provision of law in question is to subserve and its design and the context in which it is enacted.
If the object of a law is to be defeated by non compliance with it, it has to be regarded as mandatory.
But when a provision of law relates to the performance of any public duty and the invalidation of any act done in disregard of 1183 that provision causes serious prejudice to those for whose benefit it is enacted and at the same time who have no control over the performance of the duty, such provision should be treated as a directory one.
Where however, a provision of law prescribes that a certain act has to be done in a particular manner by a person in order to acquire a right and it is coupled with another provision which confers an immunity on another when such act is not done in that manner, the former has to be regarded as a mandatory one.
A procedural rule ordinarily should not be construed as mandatory if the defect in the act done in pursuance of it can be cured by permitting appropriate rectification to be carried out at a subsequent stage unless by according such permission to rectify the error later on, another rule would be contravened.
Whenever a statute prescribes that a particular act is to be done in a particular manner and also lays down that failure to comply with the said requirement leads to a specific consequence, it would be difficult to hold that the requirement is not mandatory and the specified consequence should not follow.
We shall now proceed to deal with some of the decisions cited before us at the hearing of the appeal.
In one of the connected appeals which was disposed of by this Court by its common Judgment in K. Kamaraja Nadar vs Kunju Thevar & Ors.,(1) the person who had filed the election petition had deposited in the Government Treasury a sum of Rs. 1,000/ towards security under section 117 of the Central Act for the costs in favour of the Election Commission instead of in favour of the Secretary to the Election Commission as required by that section as it stood then.
It was contended that section 117 of the Central Act had been contravened thereby and that the petition was liable to be dismissed under section 90(3) (since repealed) of the Central Act which required the Election Tribunal to dismiss an election petition which did not comply with sections 81, 82 and 117 of the Central Act notwithstanding that it had not been dismissed by the Election Commission under section 85 (since repealed) of the Central Act.
Without going into the relationship between the Election Commission on the one hand and the Secretary to the Election Commission on the other for the purpose of examining the correctness of the said contention, this Court proceeded to negative it with the following observations vide at page 606 : 1184 "It would be absurd to imagine that a deposit made either in a Government Treasury or in the Reserve Bank of India in favour of the Election Commission itself would not be sufficient compliance with the provisions of section 117 and would involve a dismissal of the petition under section 85 or section 90(3).
The above illustration is sufficient to demonstrate that the words "in favour of the Secretary to the Election Commission" used in section 117 are directory and not mandatory in their character.
What is of the essence of the provision contained in section 117 is that the petitioner should furnish security for the costs of the petition, and should enclose along with the petition a Government Treasury receipt showing that a deposit of one thousand rupees has been made by him either in a Government Treasury or in the Reserve Bank of India, is at the disposal of the Election Commission to be utilised by it in the manner authorised by law and is under its control and payable on a proper application being made in that behalf to the Election Commission or to any person duly authorised by it to receive the same, be he the Secretary to the Election Commission or any one else.
" It is seen from the above decision that this Court regarded the words "in favour of the Secretary to the Election Commission" used in section 117 of the Central Act directory as the essence of section 117 of the Central Act was that the petitioner should deposit the amount by way of security for the costs of the petition and that the said amount should be at the disposal and control of the Election Commission to be used by it in the manner authorised by law.
As the amount was in fact at the disposal of the Election Commission, the Court held that section 117 of the Central Act had been complied with by the petitioner in that election petition as there was nothing else in the relative provisions which precluded the Court from taking that view.
In Ch.
Subbarao vs Member, Election Tribunal, Hyderabad(1) the question of non compliance with section 81(3) of the Central Act directly arose for consideration.
The facts of that case were these: The petitioner had filed alongwith the election petition sufficient number of copies as required by section 81(3) of the Central Act.
The election petition was type written and the copies which accompanied the petition were carbon copies of the type script.
Each 1185 of the copies bore the signature of the petitioner.
The petitioner had not, however, inserted the words 'true copy" before or above his signature.
Without going into the question whether section 81(3) of the Central Act or any portion of it was merely directory, this Court held that the signatures in original found on the copies were intended to authenticate the documents to which they were appended and that in the circumstances of that case, the absence of the words "true copy" above the signature of the election petitioner in the copies was not fatal.
The Court held that there was substantial compliance with the requirement of section 81(3) of the Central Act.
In Jagat Kishore Prasad Narain Singh vs Rajendra Kumar Poddar & Ors.(1) this Court dismissed an election petition on the ground of non compliance with section 81(3) of the Central Act as the copies furnished to the contesting respondents were not true copies as there was divergence between the allegations made in the petition and the allegations made in the copies.
This decision has no bearing on the question involved in this case.
In Satya Narain vs Dhuju Ram & Ors.(2) this Court held that the first part of section 81(3) of the Central Act which required that the election petition should be accompanied by as many copies thereof as there were respondents mentioned in the petition was mandatory in character and non compliance with it was fatal to the petition in view of section 86(1) of the Central Act.
The Court was not concerned in that case with the second part of section 81(3) of the Central Act.
In Kamalam (M.) vs Dr. V. A. Syed Mohammed,(3) the signature of the election petitioner by way of authentication appeared at the foot of the copy of the affidavit but there was no such signature separately appended at the foot of the copy of the election petition.
The respondent by way of preliminary objection to the election petition contended that since the copy of the election petition had not been attested by the petitioner under her own signature to be a true copy, there was no compliance with section 81(3) of the Central Act and hence the petition was liable to be dismissed.
The High Court accepted the said contention and dismissed the petition.
In appeal, 1186 this Court held that section 81(3) of the Central Act had been complied with for the following reasons: "Now, it is true that no signature was appended by the appellant on the copy of the election petition proper and the signature was placed only at the foot of the copy of the affidavit, but that, in our opinion, was sufficient compliance with the requirement of the last part of sub section (3) of section 81.
The copy of the affidavit was, for reasons already discussed, part of the copy of the election petition and when the appellant put his signature at the foot of the copy of the affidavit it was tantamount to appending signature on the copy of the election petition.
The law does not require that the authenticating signature must be made by the petitioner at any particular place in the copy of the election petition.
It may be at the top of the copy or in the middle or at the end.
The place of the signature is immaterial so long as it appears that it is intended to authenticate the copy.
When original signature is made by the petitioner on the copy of the election petition, it can safely be presumed, as pointed out by this Court in Ch.
Subbarao 's case (supra), that the signature is made by the petitioner by way of authenticating the document to be a true copy of the election petition.
Now, here the appellant placed her signature in original at the foot of the copy of the affidavit and the copy of the affidavit was part of a composite document, namely, copy of the election petition, and hence the signature of the appellant must be regarded as having been appended on the copy of the election petition.
In fact, the copy of the affidavit constituted the end portion of the copy of the election petition and the signature placed by the appellant at the foot of the copy of the affidavit was, therefore, clearly referable to the entire copy preceding it and it authenticated the whole of the copy of the election petition to be a true copy.
We cannot, in the circumstances, accept the contention of the respondent that the copy of the election petition was not attested by the appellant under her own signature to be a true copy of the petition.
The requirement of the last part of sub section (3) of section 81 was complied with by the appellant inasmuch as the copy of the election petition was authenticated to be a true copy by the appellant by placing her signature at the foot of the copy of the affidavit which 1187 formed part of the copy of the election petition.
The High Court was clearly in error in dismissing the election petition under sub section
(1) of sec. 86.
" It is seen from the above decision that this Court held that the second part of section 81(3) of the Central Act had been complied with after holding that the copy of the petition and the affidavit filed alongwith it as required by law constituted one single document and the signature in original of the petitioner at the foot of the affidavit satisfied the requirements of section 81(3) of the Central Act.
In none of the decisions of this Court referred to above it has been held that the absence of the signature of the election petitioner on the copies of the petition was not a material defect.
It was argued by the learned counsel for the appellant that the object of enacting sub section (3) of section 89 of the Act which was merely procedural in character being that the respondents should be able to secure copies of the election petition as early as possible to enable them to file their statement of objections to it early, it would be sufficient compliance with the said provision if the true copies are filed alongwith it and since in the instant case, there had been no allegation that the copies which were filed were not exact copies of the original election petition, the petition should have been disposed of on its merits instead of dismissing it under section 94 of the Act.
He contended that the attestation made by the advocate on the copies was sufficient to assure the respondent that the copy served on him was in reality a true copy of the election petition.
He also contended that if a suit instituted in a civil court was not to be dismissed on the ground that the copy of the plaint was not authenticated to be a true copy by the plantiff under his own signature, there was no justification for treating the second part of section 89 of the Act as mandatory.
It is true that section 89(3) of the Act is purely procedural in character and that ordinarily procedural law should not be given that primacy by courts as would defeat the ends of justice.
But if a law even though it may be procedural in character insists that an act must be done in a particular manner and further provides that certain consequences should follow if the act is not done in that manner, courts have no option but to enforce the law as it is.
A rule of limitation, for example, which is generally considered as procedural in character is strictly enforced by courts since the rule lays down that no court shall entertain a suit, an appeal or an application which is barred by time.
1188 An election to a Legislative Assembly can be called in question only by filing an election petition and not otherwise.
The right to challenge the election by filing an election petition is a statutory right and not a common law right.
A successful candidate is entitled to enjoy the privileges attached to the membership of the Legislative Assembly unless his right to do so is successfully challenged in an election petition filed within the prescribed period and in accordance with law.
Section 89(3) of the Act consists of two parts.
The first part requires that every election petition shall be accompanied by as many copies thereof as there are respondents mentioned in the petition and the second part requires that every such copy shall be attested by the petitioner under his own signature to be a true copy of the petition.
The first part of section 89(3) of the Act has been held to be a mandatory requirement by this Court in the case of Satya Narain (supra) as this Court was of the view that the copies of the election petition should be filed alongwith it in order to prevent the delay in the disposal of the election petitions.
The question whether a provision of law is mandatory or not, as observed already, depends upon its language, the context in which it is enacted and its object.
Sub section (3) of section 89 of the Act provides that a copy of the petition shall be attested by the petitioner "under his own signature" to be a true copy of the petition.
The emphasis in the above provision appears to be on the words "under his own signature".
We do not find the same expression used in section 91(1)(c) of the Act which provides that an election petition shall be signed by the petitioner and verified in the manner laid down in the Jammu and Kashmir Code of Civil Procedure (Act X of 1977), for the verification of pleadings.
Sub section (3) of section 89 of the Act was inserted by Jammu and Kashmir Act I of 1962.
Section 94 of the Act which requires the High Court to dismiss an election petition when the petitioner has not complied with the provisions of section 89 was enacted in the place of the former section 94 of the Act by Jammu and Kashmir Act XI of 1967 by the Legislature with the full knowledge of the requirements of section 89(3) of the Act.
The object of requiring the copy of an election petition to be attested by the petitioner under his own signature to be a true copy of the petition appears to be that the petitioner should take full responsibility for its contents and that the respondent or respondents should have in their possession a copy of the petition duly attested under the signature of the petitioner to be the true copy of the petition at the earliest possible opportunity to prevent any unauthorised alteration or tampering of the contents of the original petition after it is filed into court.
We have no doubt 1189 that the records and documents in the custody of courts are taken due care of by the courts and the courts would not by themselves give any scope for tampering with them.
But still experience shows that allegations are sometimes made that records in the court have been tampered with notwithstanding the care and caution taken by courts.
Such allegations may not always be without basis.
It is probably to obviate any scope for such an allegation being made or to protect the interest of the respondent, the Legislature thought of enacting sub section (3) of section 89 of the Act so that the respondent may rely on the copy served on him when he finds that the original document in the court contains allegations different from those in the copy in his custody.
A respondent would not have the same degree of assurance if a copy served on him is one attested by any person other than the petitioner himself.
The attestation by the advocate for the petitioner cannot be treated as the equivalent of attestation by the petitioner under his own signature.
If the requirement of the second part of section 89(3) that copy of the petition should contain the signature of the petitioner himself is not one of substance, there was no need to enact it as the first part of sub section (3) of section 89 of the Act would have been sufficient for it provides that every election petition shall be accompanied by as many copies thereof as there are respondents mentioned in the petition and the word "copies" mentioned therein can only mean "true copies".
The importance of the provision contained in section 94 of the Act which makes it obligatory on the part of the High Court to dismiss a petition when it is established that section 89 of the Act had not been complied with also cannot be over looked in this context.
We are, therefore, of the view that the requirement that every copy of the election petition which is intended for service on the respondent should be attested by the petitioner under his own signature is a mandatory requirement and the non compliance with that requirement should result in the dismissal of the petition as provided in section 94 of the Act.
The High Court was, therefore, right in dismissing the petition on the above ground.
For the foregoing reasons, the appeal fails and is hereby dismissed with costs.
S.R. Appeal dismissed.
| IN-Abs | Section 89(3) of the Jammu & Kashmir Representation of the People Act, 1957 reads: "Every election petition should be accompanied by as many copies thereof as there are respondents mentioned in the petition and every such copy shall be attested by the petitioner under his own signature to be true copy of the petition".
Under Section 94(1) of the Act, "The High Court shall dismiss an election petition which does not comply with the provisions of Section 89 or Section 90 or Section 125".
Sections 89(3) and 94(1) of the Act are in pari materia with sections 81(3) and 86(1) of the Central Act 43 of 1951.
In the election petition filed by the appellant in the J & K High Court challenging the verdict of the Returning Officer declaring the respondent as a successful candidate from the Handwara Constituency to the State Legislature, both the copies of the election petition contained the endorsement "Attested true copy.
Piare Lal Handoo, Advocate".
The question arose whether it was a sufficient compliance within the provisions of Section 89(3) of the Act.
Dismissing the appeal, the Court ^ HELD: 1.
The requirement in Section 89(3) of J & K Representation of People Act, 1957 that every copy of the election petition which is intended for service on the respondent should be attested by the petitioner under his own signature is a mandatory requirement and the non compliance with that requirement should result in the dismissal of the petition as provided in Section 94(1) of the Act.
[1189 F G] 2.
The object of requiring a copy of an election petition to be attested by the petitioner under his own signature to be a true copy of the petition is that the petitioner should take full responsibility for its contents and that the respondent or respondents should have in their possession a copy of the petition duly attested under the signature of the petitioner to be the true copy of the petition at the earliest possible opportunity to prevent any unauthorised alteration or tampering of contents of the original petition after it is filed into Court.
No doubt, the records and documents in the custody of Courts are taken due care of by the Courts and the Courts would not by themselves give 1178 any scope for tampering with them.
Still allegations not always without basis are sometimes made that records in the Court have been tampered with, notwithstanding the care and caution taken by Courts.
To obviate any scope for such an allegation being made or to protect the interest of the respondent, the Legislature thought of enacting sub section (3) of Section 89 of the Act so that the respondent may rely on the copy served on him when he finds that the original document in the Court contains allegations different from those in the copy in his custody.
A respondent would not have the same degree of assurance if a copy served on him is one attested by any person other than the petitioner himself.
The attestation by the advocate for the petitioner cannot be treated as the equivalent of attestation by the petitioner under his own signature.
If the requirement of the second part of section 89(3) that copy of the petition should contain the signature of the petitioner himself is not one of substance, there was no need to enact it as the first part of sub section (3) of section 89 of the Act would have been sufficient for it provides that every election petition shall be accompanied by as many copies thereof as there are respondents mentioned in the petition and the word "copies" mentioned therein can only mean "true copies".
The importance of the provision contained in section 94 of the Act which makes it obligatory on the part of the High Court to dismiss a petition when it is established that section 89 of the Act had not been complied with also cannot be overlooked in this context.
[1188 G H, 1189 A E] 3.
It is true that section 89(3) of the Act is purely procedural in character and that ordinarily procedural law should not be given that primacy by courts as would defeat the ends of justice.
But if a law even though it may be procedural in character insists that an act must be done in a particular manner and further provides that certain consequences should follow if the act is not done in that manner, courts have no option but to enforce the law as it is.
A rule of limitation, for example, which is generally considered as procedural in character is strictly enforced by courts since the rule lays down that no court shall entertain a suit, an appeal or an application which is barred by time.
[1187 F H] An election to a Legislative Assembly can be called in question only by filing an election petition and not otherwise.
The right to challenge the election by filing an election petition is a statutory right and not a common law right.
A successful candidate is entitled to enjoy the privileges attached to the membership of the Legislative Assembly unless his right to do so is successfully challenged in an election petition filed within the prescribed period and in accordance with law.
Section 89(3) of the Act consists of two parts.
The first part requires that every election petition shall be accompanied by as many copies thereof as there are respondents mentioned in the petition and the second part requires that every such copy shall be attested by the petitioner under his own signature to be a true copy of the petition.
The copies of the election petition should be filed alongwith it in order to prevent the delay in the disposal of the election petitions.
Sub section (3) of section 89 of the Act provides that a copy of the petition shall be attested by the petitioner "under his own signature".
But the same expression is not to be found in Section 91(1)(c) of the Act which provides that an election petition shall be signed by the petitioner and verified in the manner laid down in the Jammu and Kashmir Code of Civil Procedure (Act X of 1977), for the verification of 1179 pleadings.
Sub section (3) of section 89 of the Act was inserted by Jammu and Kashmir Act I of 1962.
Section 94 of the Act which requires the High Court to dismiss an election petition when the petitioner has not complied with the provisions of section 89 was enacted in the place of former section 94 of the Act by Jammu and Kashmir Act XI of 1957 by the Legislature with the full knowledge of the requirements of section 89(3) of the Act.
[1188 A G] Satya Narain vs Dhuja Ram and Ors., ; ; applied. 4.
The question whether a provision of law is mandatory or not, depends upon its language, the context in which it is enacted and its object.
The difference between a mandatory rule and a directory rule is that while the former must be strictly observed, in the case of the latter substantial compliance may be sufficient to achieve the object regarding which the rule is enacted.
Certain broad propositions which can be deduced from several decisions of courts regarding the rules of construction that should be followed in determining whether a provision of law is directory or mandatory are as follows: The fact that the statute uses the word 'shall ' while laying down a duty is not conclusive on the question whether it is a mandatory or directory provision.
In order to find out the true character of the legislation, the Court has to ascertain the object which the provision of law in question is to subserve and its design and the context in which it is enacted.
If the object of a law is to be defeated by non compliance with it, it has to be regarded as mandatory.
But when a provision of law relates to the performance of any public duty and the invalidation of any act done in disregard of that provision causes serious prejudice to those for whose benefit it is enacted and at the same time who have no control over the performance of the duty, such provision should be treated as a directory one.
Where however, a provision of law prescribes that a certain act has to be done in a particular manner by a person in order to acquire a right and it is coupled with another provision which confers an immunity on another when such act is not done in that manner, the former has to be regarded as a mandatory one.
A procedural rule ordinarily should not be construed as mandatory if the defect in the act done in pursuance of it can be cured by permitting appropriate rectification to be carried out at a subsequent stage unless by according such permission to rectify the error later on, another rule would be contravened.
Whenever a statute prescribes that a particular act is to be done in a particular manner and also lays down that failure to comply with the said requirement leads to a specific consequence, it would be difficult to hold that the requirement is not mandatory and the specified consequence should not follow.
[1182 E H, 1183 A C, 1188 D] K. Kamaraja Nadar vs Kunju Thevar and Ors.
, Subbarao vs Member, Election Tribunal Hyderabad, ; , Kamalam (M.) vs Dr. V. A. Syed Mohd., ; at p. 452; referred to.
Satya Narain vs Dhuja Ram and Ors., ; ; applied.
Jagat Kishore Prasad Narain Singh vs Rajendra Kumar Poddar and Ors., [1971] 1 SCR 821; held inapplicable.
|
Civil Appeal No. 2601 of 1969.
Appeal by Special Leave from the Judgment dated 21 8 1069 of the Allahabad High Court in Second Appeal No. 2693/63.
W.S. Barlingay and R.C. Kohli for the Appellant.
S.L. Aneja and K.L. Taneja for the Respondent.
The Judgment of the Court was delivered by SARKARIA, J.
This appeal by special leave is directed against a judgment, dated August 21, 1969, of the High Court of Allahabad, affirming on second appeal the judgment of the Civil Judge, Dehra Dun.
It arises out of these facts: Umrao Singh, respondent herein, who died during the pendency of proceedings in this Court and is substituted by his legal representatives, instituted a suit on September 26, 1961 against Ram Deo, appellant herein, for damages and for eviction from House No. 122B, Choharpur, District Dehra Dun.
Umrao Singh was the landlord of the suit premises.
Ram Deo was occupying the premises at a monthly rent of Rs. 25.
On June 13, 1960, a sum of Rs. 600 was due to the respondent from the appellant as arrears of rent and an agreement was executed between the parties on that date, according to which the tenant had to pay Rs. 50 every month to the respondent, to wit Rs. 25 towards liquidation of the compounded arrears of rent, and Rs. 25 per month towards the current rent falling due.
The appellant fell in arrears again.
Thereupon, the respondent served a notice of demand upon the plaintiff on August 21, 1961, requiring him to pay Rs. 380 as the arrears of rent (Rs. 5 being balance due from the period April 10, 1960 to May 9, 1960 and Rs. 370 for the period from May 10, 1960 to August 9, 1961) within one month from the receipt of the notice.
The tenant appellant pleaded that the parties had acted upon the said agreement dated June 12, 1960, and on settlement of accounts in April 1961, a sum of Rs. 305 was alleged to be due to the respondent.
Thereafter the appellant made another payment of Rs. 50 to the respondent on June 6, 1961.
On September 27, 1961 appellant tendered to the respondent a sum of Rs. 200.
The respondent did not 69 accept this tender, and instead, instituted the suit for damages and eviction of the appellant from the said premises.
The tenant further pleaded that the arrears of rent due at the date of notice was Rs. 75 only which did not exceed three months ' rent, that the rest of the amount (Rs. 75) demanded represented only past arrears covered by the agreement in respect of which the landlord had waived his right of ejectment.
The trial court held that from exhibit A 2, it was clear that only three months ' rent was in arrears and therefore, no ground for eviction had been made out under Section 3(a) of the U.P. (Temporary) Control of Rent and Eviction Act No. III of 1947 (hereinafter referred to as the Act).
With this reasoning, the trial court dismissed the respondent 's petition for eviction.
On appeal, the Additional Civil Judge, Dehra Dun, by his judgment dated May 29, 1963, reversed the finding of the Munsif and held that the rent which was in arrears upto June 13, 1960 and which was the subject matter of the agreement of that date, did not lose its character as "arrears of rent" merely because there was an agreement to pay the same in instalments.
On these premises, he allowed the appeal and directed eviction of the tenant.
The tenant carried a further appeal to the High Court.
The High Court affirmed the finding of the Civil Judge and dismissed the appeal.
Hence this appeal by the tenant.
Dr. Barlingay, learned counsel for the appellant has advanced two contentions.
First, that out of the amount of Rs. 150 due to the respondent at the date of the notice, Rs. 75 was due under the agreement dated June 12, 1960, and that amount could not be treated as arrears, of rent and tacked on to three months current rent in arrears, for the purpose of clause (a) of Section 3(1) of the Act.
It is argued that the liability to pay the past amount of Rs. 75 arises out of the aforesaid agreement which furnished an independent cause of action different from that founded on the rent note or the lease of the premises.
Second, that Section 114 of the Transfer of Property Act will be applicable to the situation because this is a matter on which the Rent Act is silent.
Since the tenant has cleared all the arrears of rent on the first hearing of the suit, he could not be evicted in view of the provisions contained in Section 114 of the Transfer of Property Act.
In reply, Mr. Aneja submits that the pre agreement arrears of rent did not lose their original character as arrears of rent, merely because the landlord had agreed to allow the tenant to clear them in instal 70 ments.
It is emphasised that what was intended to be an accommodation could not be turned into a handicap for the landlord.
It is argued that since on the date of the demand notice served upon the appellant, the latter was admittedly liable to pay Rs. 150; Rs. 75 towards the rent of 3 months prior to August 12, 1961 and Rs. 75 towards the rent of three months preceding the demand notice, he was in arrears of rent for a period of "more than three months" within the meaning of clause (a) of Section 3 of the Act, and, as such, was liable to be evicted.
We will now deal with the first contention canvassed by Dr. Barlingay.
The material part of Section 3 of the Act reads as follows: "3(1).
Subject to any order passed under sub section (3) no suit shall, without the permission of the District Magistrate, be filed in any civil court against a tenant for his eviction from any accommodation, except on one or more of the following grouds: (a) That the tenant is in arears of rent for more than three months and has failed to pay the same to the landlord within one month of the service upon him of a notice of demand.
(b) to (g). . . . ." In order to make out a ground for eviction under clause (a) of Section 3(1) the landlord must establish three facts: (i) that the tenant is in arrears of rent; (ii) that such arrears are of rent for more than three months, and (iii) the tenant has failed to pay the same to the landlord within one month of the service upon him of a notice of demand.
If any one of these factual ingredients is not established, no order of eviction can be passed under this Clause.
In the present case, there is no dispute that at the date of the notice, the tenant owed an amount of Rs. 150 to the landlord, out of which Rs. 75 represented three months ' rent preceding the notice.
There is also no dispute that the balance of Rs. 75 due from the tenant related to the period prior to the agreement, dated June 12, 1960, and under the agreement, the tenant was bound to pay the same in three monthly instalments, which he had, in breach of the agreement, failed to pay.
Controversy centres round the question, whether this balance of Rs. 75 could also be treated as "arrears of rent" and tacked on to the arrears of rent relating to the three months preceding the notice for the purpose of clause (a) of Section 3(1) of the Act.
In our opinion, the answer to this question must be in the negative.
As a result of the aforesaid 71 agreement, the pre agreement arrears lost their original character as "arrears of rent" and assumed the character of a consolidated debt which, under the terms of the agreement, was payable by the debtor (appellant) in monthly instalments.
The agreement had in respect of the past arrears, brought into being a new cause of action and created a liability against the tenant, independent and distinct from that founded on the rent note or the lease of the premises.
Consequently if the appellant, in breach of the agreement, defaulted to pay any instalment, the remedy of the respondent (creditor) would be to file a suit for the recovery of the amount due on the basis of the agreement, dated June 12, 1960.
Thus, the arrears of three instalments due under the agreement had ceased to be "arrears of rent" and could not be tacked on to the arrears of three months rent due at the date of the notice, for the purposes of clause (a) of Section 3(1).
The proposition can be tested by taking an example.
Supposing, the appellant had defaulted to pay four monthly instalments of Rs. 25 each in accordance with the aforesaid agreement, but had regularly paid the rent as it fell due every month for the post agreement period.
Will the respondent in such a situation be entitled to sue for the eviction of the tenant on the ground that he has committed four successive breaches and defaults under the said agreement ? The answer is an obvious 'No '.
The respondent 's remedy in such a situation, will only be to sue for the recovery of the amounts due on the foot of the aforesaid agreement.
In the light of the above discussion the conclusion is inescapable that for the purposes of clause (a) of Section 3(1) the appellant was in arrears of rent for three months, only.
In other words, he was not in "arrears of rent for more than three months" within the meaning of clause (a) and, as such, was not liable to be evicted under that clause.
The High Court and the first appellate court were in error in holding to the contrary.
In the view we take, it is not necessary to deal with the second contention canvassed by Dr. Barlingay.
In the result, we allow this appeal, set aside the decree of the High Court and dismiss the respondent 's suit.
In the circumstances of the case however, we leave the parties to pay and bear their own costs in this Court.
P.B.R. Appeal allowed.
| IN-Abs | In respect of arrears of rent the respondent landlord and the appellant who was his tenant entered into an agreement on June 13, 1960 that the tenant would pay every month Rs. 50/ representing Rs. 25/ as arrears of rent and Rs. 25/ towards the current rent.
For sometime the appellant made the payments in accordance with the agreement but thereafter fell in arrears.
The respondent served a notice of demand upon the appellant on August 21, 1961.
Eventually the respondent instituted a suit for damages and eviction of the appellant from the premises.
The appellant pleaded that the arrears of rent due at the date of notice were Rs. 75/ only which did not exceed three months rent and that the balance of the amount demanded represented only past arrears covered by the agreement in respect of which the landlord had waived his right of ejectment.
Dismissing the suit the trial court held that only three months rent was in arrears and no ground for eviction had been made out under section 3(1)(a) of the U.P. (Temporary) Control of Rent and Eviction Act, 1947.
On appeal the Civil Judge was of the view that the rent in arrears on the date of agreement did not lose its character as "arrears of rent" merely because there was an agreement to pay it in instalments.
The High Court affirmed the finding of the Civil Judge.
In appeal to this Court it was contended on behalf of the appellant that out of Rs. 150/ due to the respondent on the date of his notice only Rs. 75/ was due towards the arrears of rent for three months preceding the notice while the balance of Rs 75/ was a distinct liability under the agreement and therefore, could not be treated and tacked on as arrears of rent to the rent due for the three months preceding the date of notice, for the purpose of section 3(1) (a) of the Act.
Allowing the appeal and accepting the appellant 's contention, ^ HELD: 1.
The appellant was not in "arrears of rent for more than three months" within the meaning of section 3(1)(a) of the Act and therefore was not liable to be evicted under the clause.
[71 F] 2.
As a result of the agreement dated June 13, 1960 the pre agreement arrears lost their original character of "arrears of rent" and assumed the character of a consolidated debt, which under the terms of the agreement, was payable by the debtor (appellant) in monthly instalments.
The agreement 68 brought into being a new cause of action and created a liability against the tenant, independent and distinct from that founded on the rent note or the lease of the premises.
The arrears of three instalments due under the agreement had ceased to be "arrears of rent" and could not be tacked on to the rent due for three months preceding the date of notice, for the purpose of the section.[71 A B]
|
: Special Leave Petition (Criminal) No. 2076 of 1978.
From the Judgment and Order dated 17 3 1978 of the Punjab and Haryana High Court in Criminal Revision No. 181/77) R.L. Kohli, S.K. Sabharwal and Subhash Chander for the Petitioner.
46 R.N. Sachthey for Respondent No. 1.
Prem Malhotra for Respondent No. 2.
The Order of the Court was delivered by KRISHNA IYER, J.
What constrains us to explain at some length our reasons for rejection of leave to appeal in this case is the desideratum that every executive challenge to justice in action is a call to the court to strengthen public confidence by infusing functional freshness into the relevant law sufficient to overpower the apprehended evil.
The house of the petitioner is said to have been burgled and he alleges that he lost many valuables.
The police, on information being laid, searched and recovered the property.
Eventually, charges were framed by the trial court against one Hussan Lal, a jeweller, and one Madan Lal, an alleged collaborator (respondents Nos. 2 and 3 in this petition) under section 411 I.P.C. and one Ashok Kumar under section 380, I.P.C.
During the pendency of the criminal case, the Assistant Public Prosecutor applied for withdrawal from prosecution under section 321, Cr.
P.C. on the ground that on fresh investigation by a senior officer the alleged search and seizure were discovered to be a frame up by the concerned police officer in order to pressurise the accused Hussan Lal to withdraw a certain civil litigation.
On the court requiring a fuller application the Assistant Public Prosecutor made a fresh and more detailed petition for withdrawal which was eventually granted by the trial court, despite the petitioner 's remonstrance that the withdrawal was prompted by the political influence wielded by Hussan Lal leading to instructions from high quarters to the Assistant Public Prosecutor to withdraw from the case concerning that accused.
It was alleged that in carrying out the instructions the Assistant Public Prosecutor did not apply an independent mind.
The court nevertheless accepted the request of the Assistant Public Prosecutor and directed acquittal of Hussan Lal, while continuing the case against the remaining two accused.
The order was unsuccessfully assailed in revision before the High Court by the petitioner.
Undaunted by that dismissal, he has moved this court under article 136 of the Constitution.
In view of the startling disclosures on either side we have listened at some length to the oral submissions in supplementation of the affidavits in the record.
The three focal points of arguments are whether (i) a case which pends in court can be subject to a second police investigation without the judge even knowing about it, (ii) political considerations of the Executive vitiate the motion for withdrawal of pending proceeding, and (iii) the District Magistrate 's order to withdraw from a case communicated to the Public Prosecutor and carried out by him, is compliance with section 494.
47 When a crime is committed in this country, the assessment of guilt and the award of punishment or, alternatively, the discharge or acquittal of the accused are part of the criminal justice process administered by the courts of the land.
It is not the function of the executive to administer criminal justice and in our system, judges are not fungible, as Justice Dougles in Chandler,(1) asserted: Judges are not fungible; they cover the constitutional spectrum; and a particular judge 's emphasis may make a world of difference when it comes to rulings on evidence.
the temper of the courtroom, the tolerance for a proffered defense, and the like.
Lawyers recognize this when they, talk about 'shopping ' for a judge; Senators recognize this when they are asked to give their 'advice and consent ' to judicial appointments; laymen recognize this when they appraise the quality and image of the judiciary in their own community.
" When a case is pending in a criminal court its procedure and progress are governed by the Criminal Procedure Code or other relevant statute To intercept and recall an enquiry or trial in a court, save in the manner and to the extent provided for in the law, is itself a violation of the law.
Whatever needs to be done must be done in accordance with the law.
The function of administering justice, under our constitutional order, belongs to those entrusted with judicial power.
One of the few exceptions to the uninterrupted flow of the court 's process is section 321, Cr.
But even here it is the Public Prosecutor, and not any executive authority, who is entrusted by the Code with the power to withdraw from a prosecution, and that also with the consent of the court.
We repeat for emphasis.
To interdict, intercept or jettison an enquiry or trial in a court, save in the manner and to the extent provided for in the Code itself, is lawlessness.
The even course of criminal justice cannot be thwarted by the Executive, however high the accused, however sure Government feels a case is false, however unpalatable the continuance of the prosecution to the powers that be who wish to scuttle court justice because of hubris, affection or other noble or ignoble consideration.
Justicing, under our constitutional order, belongs to the judges.
Among the very few exceptions to this uninterrupted flow of the court process is section 494, Cr.
Even here, the Public Prosecutor not any executive authority is entrusted by the Code with a limited power to withdraw from a prosecution, with the (1) Chandler vs Judicial Council of the Tenth Circuit of the U.S. , 1970.
48 court 's consent whereupon the case comes to a close.
What the law has ignited, the law alone shall extinguish.
Although skeletal, the conditions for such withdrawal are implicit in the provision, besides the general principles which have been evolved through precedents.
Once a prosecution is launched, its relentless course cannot be halted except on sound considerations germane to public justice.
All public power is a public trust, and the Public Prosecutor cannot act save in discharge of that public trust, a public trust geared to public justice.
The consent of the court under section 321 as a condition for withdrawal is imposed as a check on the exercise.
of that power.
Consent will be given only if public justice in the larger sense is promoted rather than subverted by such withdrawal.
That is the essence of the nolle prosequi jurisprudence.
We wish to stress, since impermissible influences occasionally infiltrate into this forbidden ground, that court justice is out of bounds for masters and minions elsewhere.
We do not truncate the amplitude of the public policy behind section 494 Cr.
P.C. but warn off tempting, adulteration of this policy, taking the public prosecutor for granted.
Maybe, the executive, for plural concerns and diverse reasons, may rightfully desire a criminal case to be scotched.
The fact that broader considerations of public peace, larger considerations of public justice and even deeper considerations of promotion of long lasting security in a locality, of order in a disorderly situation or harmony in a factious milieu, or halting a false and vexatious prosecution in a court, persuades the Executive, pro bono pulico, sacrifice a pending case for a wider benefit, is not ruled out although the power must be sparingly exercised and the statutory agency to be satisfied is the public prosecutor, not the District Magistrate or Minister.
The concurrence of the court is necessary.
The subsequent discovery of a hoax behind the prosecution or false basis for the criminal proceeding as is alleged in this case, may well be a relevant ground for withdrawal.
For the court should not be misused to continue a case conclusively proved to be a counterfeit.
This statement of the law is not exhaustive but is enough for the present purpose and, indeed, is well grounded on precedents.
The promotion of law and order is an aspect of public justice.
Grounds of public policy may call for withdrawal of the prosecution.
A prosecution discovered to be false and vexatious cannot be allowed to proceed.
The grounds cover a large canvas.
But the power must be cautiously exercised, and the statutory agency to be satisfied is the Public Prosecutor in the first instance, not the District Magistrate or other executive authority.
Finally, the consent of the court is impera 49 tive.
The law was explained by this Court in M. N. Sankaranarayana Nair vs P. V. Bala Krishina & Ors.(1) "A reading of Sec.
494 would show that it is the public prosecutor who is in charge of the case that must ask for permission of the Court to withdraw from the prosecution of any person either generally or in respect of one or more of the offences for which he is tried.
This permission can be sought by him at any stage either during the enquiry or after committal or even before the judgment is pronounced.
The section does not, however, indicate the reasons which should weigh with the Public Prosecutor to move the Court for permission nor the grounds on which the Court will grant or refuse permission.
Though the Section is in general terms and does not circumscribe the powers of the Public Prosecutor to seek permission to withdraw from the prosecution the essential consideration which is implicit in the grant of the power is that it should be in the interest of administration of justice which may be either that it will not be able to produce sufficient information before prosecuting agency would falsify the prosecution evidence or any other similar circumstances which it is difficult to predicate as they are dependent entirely on the facts and circumstances of each case.
Nonetheless it is the duty of the Court also to see in furtherance of justice that the permission is not sought on grounds extraneous to the interest of justice or that offences which are offences against the State go unpunished merely because the Government as a matter of general policy or expediency unconnected with its duty to prosecutor offenders under the law directs the Public Prosecutor to withdraw from the prosecution and the Public Prosecutor merely does so at its behest.
" The position was confirmed in Bansi Lal vs Chandan Lal(2) and Balwant Singh & Ors.
vs Bihar(3).
The law is thus well settled and its application is all that calls for caution.
In the special situation of this case, two principles must be hammered home.
The decision to withdraw must be of the Public Prosecutor, not of other authorities, even of those whose displeasure may affect his continuance in office.
(1) ; (2) A.I.R. 1976 S.C. 370.
(3) ; 50 The court is monitor, not servitor, and must check to see if the essentials of the law are not breached, without, of course, crippling or usurping the power of the public prosecutor.
The two matters which are significant are (a) whether the considerations are germane, and (b) whether the actual decision was made or only obeyed by the Public Prosecutor.
In the setting of the present facts, the enquiry must be whether the considerations on which withdrawal was sought by the Assistant Public Prosecutor were germane and pertinent, and whether the actual decision to withdraw was made by the Assistant Public Prosecutor or was the result of blind compliance with executive authority.
If it appears from the material before the Court that germane or relevant considerations did not prompt the motion for withdrawal but it was the pressure of political influence, the Court will withhold its consent.
The functionary clothed by the Code with the power to withdraw from the prosecution is the Public Prosecutor.
The Public Prosecutor is not the executive, nor a flunkey of political power.
Invested by the statute with a discretion to withdraw or not to withdraw, it is for him to apply an independent mind and exercise his discretion.
In doing so, he acts as a limb of the judicative process, not as an extension of the executive.
In the present case, it appears that when the court commenced proceedings, the accused Hussan Lal complained to higher police officers that the concerned Assistant Sub Inspector had initiated the case merely for the purpose of putting pressure on him to compromise a suit against a close relative.
The allegations were enquired into by a senior officer and the District Magistrate, on the basis of the material coming to light, directed disciplinary action against the Assistant Sub Inspector and instructed the Assistant Public Prosecutor to withdraw from the case against Hussan Lal.
We find no evidence to support the allegations of political influence.
At the same time, it is necessary to point out that the District Magistrate acted illegally in directing the Assistant Public Prosecutor to withdraw.
It has been alleged that the second investigation of the case on the executive side, which led to the discovery that the earlier investigation was motivated, was vitiated by the omission to question the first informant.
That was a matter for the Assistant Public Prosecutor to consider when deciding whether or not to withdraw from the prosecution.
On the principal question arising in this case, the record shows that the Public Prosecutor applied his mind to the disclosures emerging from the second enquiry, and he found that "even the recovery wit 51 nesses Sarvashri Mato Ram and Phool Singh did not support that they had witnessed the recovery or any disclosure statement was made in their presence by Madan Lal accused.
" He found that Phool Singh at the relevant time was bed ridden and had since expired.
He also discovered that Mato Ram had stated that nothing had happened in his presence but his signatures were obtained by the Investigating Officer.
It is abundantly clear that the Assistant Public Prosecutor made an independent decision on the material before him and did not act in blind compliance with the instructions of the District Magistrate.
We cannot dispose of this petition without drawing attention to the very disturbing presence of the District Magistrate in the withdrawal proceedings.
The jurisprudence of genuflexion is alien to our system and the law expects every repository of power to do his duty by the Constitution and the laws, regardless of commands, directives, threats and temptations.
The Code is the master for the criminal process.
Any authority who coerces or orders or pressurises a functionary like a public prosecutor, in the exclusive province of his discretion violates the rule of law and any public prosecutor who bends before such command betrays the authority of his office.
May be, Government or the District Magistrate will consider that a prosecution or class of prosecutions deserves to be withdrawn on grounds of policy or reasons of public interest relevant to law and justice in their larger connotation and request the public prosecutor to consider whether the case or cases may not be withdrawn.
Thereupon, the Prosecutor will give due weight to the material placed, the policy behind the recommendation and the responsbile position of Government which, in the last analysis, has to maintain public order and promote public justice.
But the decision to withdraw must be his.
The District Magistrate who is an Executive Officer is not the Public Prosecutor and cannot dictate to him either.
Maybe, the officer had not apprised himself of the autonomous position of the Public Prosecutor or of the impropriety of his intrusion into the Public Prosecutor 's discretion by making an order of withdrawal.
Similar mistakes are becoming commoner at various levels and that is why we have had to make the position of law perfectly clear.
We emphasise that the rule of law warns off the executive authorities from the justicing process in the matter of withdrawal of cases.
Since we are satisfied that the Public Prosecutor did not yield to the directive of the District Magistrate but made an independent study of informing himself of the materials placed before the court and then sought permission to withdraw from the prosecution, we decline to reverse the order passed by the courts below.
52 This trial court was satisfied that the Assistant Public Prosecutor had not exercised the power of withdrawal for any illegitimate purpose and the High Court endorsed that conclusion.
We are not disposed to interfere with the order of the High Court.
One obvious grievance of the petitioner deserves to be remedied.
He is interested in getting back his stolen goods.
The accused claims no property in the goods.
In the event of the complainant identifying them as his property, the trial court will consider passing appropriate orders for their return to him.
Surely, criminal justice has many dimensions beyond conviction and sentence, acquittal and innocence.
The victim is not to be forgotten but must be restored to the extent possible.
The petition is rejected.
N.K.A. Petition dismissed.
| IN-Abs | The petitioner alleged that his house had been burgled and that many valuables were lost.
The police recovered the property.
Eventually, charges were also framed by the trial court against two other persons who were said to be collaborators.
During the pendency of the criminal case, the Asstt.
Public Prosecutor applied for withdrawal from prosecution under section 321, Cr.
P.C. on the ground that on fresh investigation by a senior officer the alleged search and seizure were discovered to be a frame up by the concerned police officer in order to pressurise the accused to withdraw a certain civil litigation.
The court required a fuller application, the Assistant Public Prosecutor made a fresh and more detailed petition for withdrawal which was eventually granted by the trial court, despite the petitioner 's remonstrance that the withdrawal was prompted by political influence wielded by the jeweller leading to instructions from high quarters to the Assistant Public Prosecutor to withdraw from the case concerning that accused.
It was alleged that the Assistant Public Prosecutor did not apply an independent mind in carrying out the said instructions.
The trial court nevertheless accepted the request of the Assistant Public Prosecutor and directed acquittal of the jeweller, while continuing the case against the remaining two accused.
The order was unsuccessfully assailed in revision before the High Court by the petitioner.
By special leave to appeal under Article 136 of the Constitution, it was argued on behalf of the petitioner that (i) a case which pends in court cannot be subject to a second police investigation without the judge even knowing about it, (ii) political considerations of the Executive vitiate the motion for withdrawal of pending proceeding, and (iii) the District Magistrate 's order to withdraw from a case communicated to the Public Prosecutor and carried out by him, is compliance with section 494.
Dismissing the petition, ^ HELD: When a crime is committed, the assessment of guilt and the award of punishment or, alternatively, the discharge or acquittal of the accused are part of the criminal justice process administered by the courts of the land.
It is not the function of the executive to administer criminal justice and in our system, judges are not fungible.
[47 A] When a case is pending in a criminal court, its procedure and progress are governed by the Criminal Procedure Code or other relevant statute.
To intercept and recall an enquiry or trial in a court, save in the manner and to the extent provided for in the law, is itself a violation of the law.
Whatever needs to be done must be done in accordance with the law.
The function of administering justice, under our constitutional order, belongs to those entrusted with judicial power.
One of the few exceptions to the uninterrupted flow of the 45 court 's process is section 321, Cr.
But even here it is the Public Prosecutor and not any executive authority, who is entrusted by the Code with the power to withdraw from a prosecution, and that also with the consent of the court.
To interdict, intercept or jettison an enquiry or trial in a court, save in the manner and to the extent provided for in the Code itself, is lawlessness.
The even course of criminal justice cannot be thwarted by the executive, however high the accused, however sure Government feels a case is false, however, unpalatable the continuance of the prosecution to the powers that be who wish to scuttle court justice because of hubris, affection or other noble or ignoble consideration.
Among the very few exception to this uninterrupted flow of the court process is section 494, Cr.
Even here, the Public Prosecutor is entrusted by the Code with a limited power to withdraw from a prosecution with the court 's consent whereupon the case comes to a close.
What the law has ignited, the law alone shall extinguish.
[47 D H, 48 A] The promotion of law and order is an aspect of public justice.
Grounds of public policy may call for withdrawal of a prosecution.
A prosecution discovered to be false and vexatious cannot be allowed to proceed.
But the power must be cautiously exercised, and the statutory agency to be satisfied is the Public Prosecutor in the first instance, not the District Magistrate or other executive authority.
Finally, the consent of the court is imperative.
[48 G H] There was no evidence to support the allegation of political influence.
At the same time, the District Magistrate acted illegally in directing the Assistant Public Prosecutor to withdraw.
It has been alleged that the second investigation of the case on the executive side, which led to the discovery that the earlier investigation was motivated, was vitiated by the omission to question the first informant.
That was a matter for the Assistant Public Prosecutor to consider when deciding whether or not to withdraw from the prosecution.
It is abundantly clear that the Assistant Public Prosecutor made an independent decision on the material before him and did not act in blind compliance with the instructions of the District Magistrate.
[50 F H, 51 A] The rule of law warns off the executive authorities from the justicing process in the matter of withdrawal of cases.
Since the courts were satisfied that the Public Prosecutor did not yield to the directive of the District Magistrate but made an independent study of informing himself of the materials placed before the court and then sought permission to withdraw from the prosecution, this court declined to reverse the order of the courts below.
[51 F H] M.N. Sankaranarayana Nair vs P.V. Bala Krishna & Ors. ; Bansi Lal vs Chandan Lal, AIR 1976 SC 370: Balwant Singh & Ors.
vs Bihar, ; , affirmed.
|
Civil Appeal No. 272 of 1970.
Appeal by Special Leave from the Judgment and Order dated 14 4 1969 of the Mysore High Court in W.P. No. 2889/67.
R. N. Nath and M. Veerappa for the Appellant.
2 M. Natesan and Mrs. section Gopalakrishnan for the Respondent.
The Judgment of the Court was delivered by SARKARIA, J.
Whether a motor vehicle passing through the territory of the State of Mysore on way to its destination in another State is a motor vehicle "kept" in the State of Mysore (now Karnataka) within the contemplation of Section 3(1) of the Mysore Motor Vehicles Taxation Act, 1957 (hereinafter referred to as the Taxation Act), is the short question that falls for consideration in this appeal by special leave directed against a judgment, dated April 14, 1969, of the High Court of Mysore.
The material facts bearing on the question are as follows : The respondent, M/s. T. V. Sundaram Iyengar & Sons.
Pvt. Ltd., whose registered office is in the State of Tamil Nadu, is a dealer in motor vehicles which are manufactured at Bombay.
Some of those vehicles are sold in Mysore State, while others are sold outside Mysore State.
But those vehicles which are sold outside the State of Mysore in other States pass through its territory under temporary registration number plates issued after receipt of token tax by the Bombay Motor Vehicles Authority.
Such vehicles enter the State of Mysore at its border in Belgaum District and go out at its border in Kolar District, thus running through the territory of Mysore State by road over a distance of about 400 miles.
The R.T.O., Belgaum, issued a communication, dated September 27, 1966, to the respondent demanding tax on such vehicles (new cars and chassis) passing through the territory of Mysore.
After exhausting, his remedies under the Taxation Act, the respondent filed a petition under Article 226 of the Constitution, to challenge the validity of the demand notices and the Circular, dated October 10, 1966, issued by the Transport Commissioner, directing recovery of tax at the rates specified in Part of the Schedule to the Taxation Act, in respect of those vehicles which do no more than pass through the State of Mysore to reach their destination.
The Division Bench of the High Court, who heard the writ petition held that such vehicles which merely pass through Mysore State are not those "kept" in the State of Mysore within the meaning of Section 3(2) of the Taxation Act.
and, as such, are not taxable under the Taxation Act.
In the result, the High Court allowed the writ petition and quashed the direction of the Commissioner in paragraph 6 of his Circular of October 10, 1966, for the recovery of the tax in question from the respondent.
Hence.
this appeal by the State.
3 The material part of Section 3 reads as follows : "section 3.
Levy of tax. (1) a tax at the rates specified in part A of the Schedule shall be levied on all motor vehicles suitable for use on roads, kept in the State of Mysore: Provided that in the case of motor vehicles kept by a dealer in or manufacturer of such vehicles for the purpose of trade, the tax shall only be levied and paid by such dealer or manufacturer on vehicles permitted to be used on roads in the manner prescribed by rules made under the . Explanation.
A motor vehicle of which the certificate of registration is current shall, for the purpose of this Act, be deemed to be a vehicle suitable for use on roads.
(2) Notwithstanding anything contained in sub section (1), taxes at the rates specified in Part B of the Schedule shall be levied on motor vehicles belonging to or in the possession or control of persons, not ordinarily residing in the State of Mysore and kept in the State of Mysore by such persons for periods shorter than a quarter, but not exceeding thirty days.
(3). . . . . . . . " The appellant State maintains that sub section (2) of the Section was applicable to such vehicles because while passing through the territory of the State they use the roads of the State over a distance of 400 miles during their journey interspersed by halts in the State, and therefore, it can be said that such vehicles are kept for use on roads in the State within the meaning of Section 3(2).
According to the learned counsel for the appellant the test of whether a vehicle is exigible to tax under Section 3(2) is whether it is suitable for use on roads and, in fact, substantially uses the roads in the State of Mysore.
In the present case, the argument proceeds, this test was satisfied because for an appreciable period such vehicles remain in the territory of the State and use its roads, and as such, are taxable under sub section (2) of Section 3.
The contention does not stand a close examination.
Sub section (2) is to be read with sub section (1).
Thus read, it is plain that in order to be taxable under the Section a Motor vehicle must be capable of use on road, and further it must be kept in the State of Mysore, though in the case of vehicles belonging to persons not resident in the State, the duration of such 'keeping ' may be for a 4 period shorter than a quarter but not exceeding thirty days.
In the present case, there is no dispute that the vehicles concerned are capable of use on roads, and in fact, they journey by road through the State.
The problem thus resolves itself into the issue : Whether the motor vehicles of the respondent which merely pass through the State of Mysore are 'kept ' for the duration of their journey in the State of Mysore within the meaning of Section 3(2) ? In our opinion, the High Court has rightly answered this question in the negative.
The word 'kept ' has not been defined in the Taxation Act.
We have, therefore, to interpret it in its ordinary popular sense, consistently with the context.
The word 'kept ' has been repeatedly used in the Section.
In sub section (1), it occurs in association with the phrase "for use on roads".
In that context the ordinary dictionary meaning of the word 'keep in ' is 'to retain ', 'to maintain ' or cause to stay or remain in a place 'to detain ', 'to stay or continue in a specified condition, position etc. ' In association with the use of the vehicle, therefore, the word 'kept ' has an element of stationariness.
It is something different from a mere state of transit or a course of journey through the State.
It is something more than a mere stoppage or halt for rest food or refreshment etc., in the course of transit through the territory of the State.
The unsoundness of the contention of the appellant 's counsel, viz, that a vehicle capable for use on roads, owned by a non resident, remaining for one or two days in the territory of Mysore State in course of transit, will also be exigible to tax under section 3, can be demonstrated by taking an example.
Supposing the respondents take their vehicles (capable for use on road) by rail through the territory of Mysore State to their outside destination, and in the course of that journey, the train halts for a week, in all, at stations in Mysore State, then, if the wide interpretation demanded by the appellant is adopted such vehicles will be exigible to tax.
This indeed will be an absurd result.
Such an interpretation of the word 'kept ' will be wholly beyond the ken of the Legislature.
In the view we take, we can derive support from two decisions of the English Courts.
In Dudley vs Holland,(1) the appellant carried on a garage business adjoining a public road.
He had bought a motor car in the course of 5 his business and was offering for sale in the garage showroom.
He moved that car into the public road in order to allow the showroom to be rearranged.
There was no excise licence in force for the car.
It was found there by a police constable.
The appellant was charged with unlawfully keeping on a public road a mechanically propelled vehicle for which an excise licence was not in force, contrary to Section 7 of the Vehicles (Excise) Act, 1962.
The question for the opinion of the Court was whether the mere presence of a stationary mechanically propelled vehicle on a public road, constitutes "keeping" the vehicle on the road within the meaning of Section 7 of the Vehicles (Excise) Act, 1962.
Lord Parker, C.J., who delivered the leading judgment of the Court, answered this question in the negative, in these terms: "I approach the word 'keeps ' in what seems to me the ordinary meaning of some continuing process; not a mere isolated moment, but a keeping of the car there, at any rate for some interval of time.
It is no doubt a matter of degree and fact in every case.
In my judgment, 'keeping ' means something more than that, both according to its ordinary meaning and when it appears in conjunction with the other word 'uses '.
" The principle is applicable to the present case.
A mere state of running through or even halting of the vehicle in the course of the journey through the State of Mysore for its outside destination, will not be sufficient to constitute 'keeping ' of that vehicle in the State within the meaning of Section 3.
The other case is Biggs vs Mitchell.(1) The ratio of this case has been extracted in words and Phrases Legally Defined, Vol. 3 at page 116.
In Biggs vs Mitchell, the interpretation of the word 'keep ', as used in Section 11 of Statute (1772) 12 Geo.
3 c. 61, came up for consideration.
That Section enacted that no person or persons should have or 'keep ' at any one time, being a dealer or dealers in gunpowder, more than 200 lb. of gunpowder, and not being such more than 50 lb. of gunpowder in any house, mill, etc., occupied by the same person or persons within certain limits.
The question before the Court was whether a person who receives powder in the course of transit, and makes a necessary halt, instead of sending it on immediately, can be said to be "keeping ' the same within the meaning of Section 11.
Crompton, J. answered this question thus: 6 "It seems to me that it is not made out that the mere halting in London, for the purpose of sending from one railway to another, when it is necessary that there should be halting in some place or other, is a 'keeping '. .I think there can be no keeping within section 11, when it is in course of transit." On parity of reasoning, a vehicle in transit through the State of Mysore or even making a necessary halt for a short interval during transit, cannot be said to be a vehicle 'kept ' for use on roads in the State of Mysore.
In the light of all that has been said above, we uphold the interpretation put by the High Court on Section 3 of the Taxation Act, and answer the question posed at the commencement of this judgment in the negative, and dismiss this appeal, leaving the parties to pay and bear their own costs in this Court.
P.B.R. Appeal dismissed.
| IN-Abs | The respondent bought new cars and chassis manufactured in Bombay and brought them by road.
In the course of their journey from Bombay to Madras the vehicles passed through the territory of the State of Mysore for over 400 miles.
The Road Transport Authorities of the State of Mysore demanded payment of road tax on the vehicles under section 3(2) of the Mysore Motor Vehicles Taxation Act, 1957 which provides that taxes are leviable on motor vehicles belonging to or in the possession or control of persons not ordinarily resident in the State of Mysore and kept in the State for periods shorter than a quarter but not exceeding thirty days.
Allowing the respondent 's writ petition the High Court held that vehicles which passed through the State were not "kept" in the State within the meaning of section 3(2) of the Act and so were not taxable under it.
In appeal to this court it was contended on behalf of the appellant that the vehicles passing through the territory of the State over a distance of 400 miles with halts on the way could be said to have been "kept" for use on loads in the State within the meaning of the section and were therefore taxable.
Dismissing the appeal, ^ HELD : A vehicle in transit through the State of Mysore or even making necessary halt for short intervals during transit cannot be said to be a vehicle kept for use on roads in the State of Mysore.
[6 B C] The word "kept", which has not been defined in the Act, has to be interpreted in its ordinary popular sense consistent with the context.
In association with the use of the vehicle the word "kept" has an element of stationeries which is something different from a state of transit or a course of journey through the State.
A mere state of running through or even halting of the vehicle in the course of the journey through the State for its outside destination, will not be sufficient to constitute "keeping" of that vehicle in the State within the meaning of section 3(2).
[4 C E & 5 E] Dudley vs Holland , Biggs vs Mitchell ; referred to.
|
Civil Appeal No. 2015 of 1972.
From the Judgment and Order dated 18 1 1971 of the Allahabad High Court in Civil Misc.
Writ Petition No. 4632/70.
section T. Desai, B. R. Agrawala and P. C. Gokhale for the Appellant.
V. section Desai, Miss. A. Subhashini, J. Ramamurthy and Miss R. Vaigai for the Respondent.
The Judgment of the Court was delivered by TULZAPURKAR, J.
The point raised in this appeal by certificate seems to be covered by two decisions of this Court in favour of the assessee and hence we propose to dispose of the appeal by a short Judgment.
The appellant, a firm, carries on business of manufacturing ice and preservation of potatoes in its cold storage.
It was assessed to income tax for the assessment year 1961 62 by an assessment order dated July 5, 1961 on a total income of Rs. 53,548.
In proceedings started on December 21, 1961 under section 34(1) of the Indian Income Tax Act, 1922, the Income Tax Officer found certain property income and income to the extent of one lakh from potato transactions put through in the name of benami persons by the assessee had escaped assessment and, therefore, by his order dated December 22, 1965 he brought them to tax.
The said order of the Income Tax Officer was annulled by the Appellate Assistant Commissioner in appeal on May 10, 1967 on the ground that the initiation of reassessment proceedings was not justified.
The Department allowed the matter to rest there and the Assistant Appellate Commissioner 's order became final.
On July 14, 1967 the Income Tax Officer issued a notice under section 148 of the Income Tax Act, 1961 in respect of the self same assessment year after obtaining the sanction from the Commissioner of Income Tax.
Admittedly, while seeking sanction for reopening the assessment under section 147, the Income Tax Officer in his report categorically stated that 238 the assessee had concealed the income of Rs. 1,00,000 from undisclosed source on account of benami storage of potatoes in various names and the same had escaped assessment owing to the failure on the part of the assessee to disclose his income fully and truly.
Pursuant to the notice the appellant filed a return under protest on August 14, 1967.
The appellant challenged the notice by filing a writ petition in the Allahabad High Court, inter alia, on the ground that no reassessment proceedings could be undertaken under section 147 of the 1961 Act inasmuch as in respect of the self same escaped income proceedings under section 34(1) of the 1922 Act had been undertaken and were pending on April 1, 1962, when the 1961 Act came into force and in this behalf reliance was placed on section 297(2) (d) (ii) of the 1961 Act.
The High Court rejected the contention on the ground that in order that section 297 (2) (d) (ii) should apply, the proceedings under section 34 of the 1922 Act must be legal proceedings with jurisdiction which was not the case here.
It is difficult to sustain this decision of the High Court in view of two decisions of this Court in section B. Jain vs Mahendra(1) and Gujar Mal Modi vs C.I.T.(2) where it has been held that section 297 (2) (d) (ii) is concerned with the factual pendency of proceedings under section 34 of the 1922 Act and not with their legality.
It must in fairness be stated that none of these decisions on the proper construction of section 297(2) (d) (ii) had been rendered by this Court when the Allahabad High Court decided the matter.
In section B. Jain vs Mahendra (supra) the Income Tax Officer had issued notice to the respondent assessee on January 5, 1962 under section 34(1) (a) of the 1922 Act to reopen his assessment for the assessment year 1946 47.
The High Court quashed the notice by its order dated March 6, 1963, on the ground that the notice was barred by limitation.
In the meantime the 1961 Act came into force on April 1, 1962, whereafter the Income Tax Officer again issued a notice on March 26, 1963 under section 148 of the 1961 Act.
This Court held that what section 297(2)(d)(ii) of the 1961 Act, required was the factual pendency of a proceeding under section 34 of the repealed Act, on April 1, 1962.
The question whether that proceeding was barred by limitation or not was irrelevant.
Though the earlier proceeding was quashed for the reason that notice on which the proceeding was based was issued beyond time, it could not be said that no proceeding under section 34 of the 1922 Act was either factually or legally pending at the time when the 1961 Act came into force and since the proceedings initiated 239 under section 34(1) (a) of the 1922 Act were pending at the time when 1961 Act came into force, the Income Tax Officer was not competent to issue any fresh notice under section 148 of the 1961 Act.
In Gujar Mal Modi 's case (supra) the notice under section 34(1) (a) of the 1922 Act for reopening the assessment of the deceased assessee was served only on one of the heirs of the deceased assessee.
The Assistant Appellate Commissioner set aside the assessment made pursuant to that notice on the ground that it was necessary to issue notices to all the legal representatives of the deceased assessee.
In the meantime the 1961 Act came into force and, thereafter the Income Tax Officer issued notice under section 148 of that Act to all the heirs of the deceased assessee.
This Court held that since the proceedings under section 34(1) (b) of the 1922 Act were pending on April 1, 1962, the second notice was incompetent.
In other words in both the cases this Court laid emphasis on the factual pendency of the proceedings under section 34 on the relevant date, and not their legality as being material for purposes of section 297(2)(d) (ii) of the 1961 Act.
In the case before us admittedly proceedings under section 34(1) of the 1922 Act in respect of the item of Rs. 1,00,000 (which was said to have escaped assessment) were factually pending on April 1, 1962 and, therefore, the notice under section 148 of the 1961 Act would be incompetent.
An attempt was made by counsel for the Revenue to distinguish the aforesaid decisions on the ground that in the instant case the earlier proceedings under section 34 of the 1922 Act being without jurisdiction, must be regarded as non est inasmuch as the Assistant Appellate Commissioner had annulled the revised assessment made by the Income tax Officer on the ground that the initiation of the proceedings (which was in respect of property income that had escaped assessment) was not justified inasmuch as it was not a case of omission or failure on the part of the assessee to furnish full particulars of the property income.
The submission, in our view, is factually incorrect.
The reassessment order made by the Income Tax Officer on December 22, 1965 clearly shows that he had initiated the proceedings (in respect of property income) under section 34(1) (b) i.e. in consequence of information gathered by him from Assistant Appellate Commissioner 's order for an earlier year and not under section 34(1) (a) on account of any omission or failure on the part of the assessee to make a full disclosure and during the proceedings so initiated he came across the item of Rs. 1,00,000 being the income from undisclosed source which he held had been concealed and was liable to be included under section 34(1) (a).
Therefore, the initiation of the proceedings under section 34 by the Income Tax Officer cannot be regarded as being without jurisdiction and hence 240 non est.
As stated earlier the Department allowed the Assistant Appellate Commissioner 's order whereby the reassessment order was quashed to become final.
Instead of challenging that order a fresh notice under section 148 of the 1922 Act was issued, which, in our view, the Income tax Officer was not entitled to do in view of the fact that proceedings under section 34 of the 1922 Act were factually pending on April 1, 1962 when the new Act came into force.
In the result the order passed by the High Court is set aside and the impugned notice under section 148 of the 1961 Act is quashed.
It is obvious, that if any orders are passed pursuant to the impugned notice, those will be of no avail to the Revenue.
The appeal is allowed but in the circumstances there will be no order as to costs.
S.R. Appeal allowed.
| IN-Abs | The appellant assessee is a firm carrying on business of manufacturing ice and preservation of potatoes in its cold storage.
By an assessment order dated July 5, 1961 it was assessed to income tax for the assessment year 1961 62 on a total income of Rs. 53,548/ .
The Income Tax Officer, in his proceedings started on December 21, 1961 under section 34(1) of the 1922 Act, found certain property income and income to the extent of one lakh from potato transaction put through in the name of benami persons by the assessee had escaped assessment and therefore, by his order dated December 22, 1965 he brought them to tax.
The said order of the Income Tax Officer was annulled in appeal, on May 10, 1967 on the ground that the initiation of reassessment was not justified.
This order became final as the department did not take further steps.
On July 14, 1967 the Income Tax Officer issued a notice under section 148 of the Income Tax Act, 1961 in respect of the self same assessment year after obtaining the sanction of the Commissioner of Income Tax.
Pursuant to the notice the appellant filed a return under protest on August 14, 1967.
The appellant challenged the said notice by filing a writ petition in the Allahabad High Court, inter alia on the ground that under section 297(2)(d)(ii) of the 1961 Act no reassessment proceedings could be undertaken under section 147 of the 1961 Act inasmuch as in respect of the self same escaped income, proceed ings under section 34(1) of the 1922 Act had been undertaken and were pending on April 1, 1962 when the 1961 Act came into force.
The High Court rejected the contention on the ground that in order that section 297(2)(d)(ii) should apply, proceedings under section 34 of the 1922 Act must be legal proceedings with jurisdiction.
Allowing the appeal by certificate, the Court ^ HELD : The factual pendency of the proceedings under Section 34 of the 1922 Act on the relevant date, and not their legality is material for purposes of section 297(2)(d)(ii) of the 1961 Act.
[238 D E] In the instant case: (a) admittedly proceedings under section 34(1) of the 1922 Act in respect of the item of Rupees one lakh (which was said to have escaped assessment) were factually pending on April 1, 1962 and therefore, the notice under section 148 of the 1961 Act would be incompetent, and [239 C D] 237 (b) The initiation of the proceedings under section 34 by the Income Tax Officer cannot be regarded as being without jurisdiction and hence non est.
The reassessment order made by the Income Tax Officer on December 22, 1965 clearly shows that he had initiated the proceedings (in respect of property income) under section 34(1) (b) i.e., in consequence of information gathered by him from Assistant Appellate Commissioner 's order for earlier year and not under section 34(1)(a).
[239 F H] section B. Jain vs Mahendra, and Gujar Mal Modi vs Commissioner of Income Tax, ; applied.
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Civil Appeal No. 1258 of 1969.
From the Judgment and Decree dated 17 2 1969 of the Kerala High Court in Writ Appeal No. 45 of 1968.
V. A. Seyid Mohammed and K. M. K. Nair for the Appellant.
Ex Parte for the Respondent.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
The perennial, nagging problem of delegated legislation and the so called Henry VIII clause have again come up for decision in this appeal by the State of Kerala.
Section 60 of the Madras Cooperative Societies Act 1932 and a notification issued under that provision were struck down by the High Court of Kerala on the ground of unconstitutional delegation of legislative power.
Certain consequential directions were issued by the High Court.
Those directions have long since worked themselves out and so the party who invoked the jurisdiction of the High Court under Article 226 of the Constitution has no longer any surviving interest.
The State of Kerala is, however, interested in sustaining the validity of Section 60 and has filed this appeal.
Lawyers and judges have never ceased to be interested in the question of delegated legislation and since the case, we 262 have been blessed(?) by an abundance of authority, the blessing not necessarily unmixed.
We do not wish, in this case, to search for the precise principles decided in the case, nor to consider whether N. K. Papiah & Sons vs Excise Commissioner(1) beats the final retreat from the earlier position.
For the purposes of this case we are content to accept the "policy" and "guidelines" theory and seek such assistance as we may derive from cases where near identical provisions have been considered.
It is trite to say that the function of the State has long since ceased to be confined to the preservation of the public peace, the exaction of taxes and the defence of its frontiers.
It is now the function of the State to secure to its citizens 'Social, economic and political justice ', to preserve 'liberty of thought, expression, belief, faith and worship, ' and to ensure 'equity of status and of opportunity ' and 'the dignity of the individual ' and the 'unity of the nation.
That is what the Preamble to our Constitution says and that is what is elaborated in the two vital chapters of the Constitution on Fundamental Rights and Directive Principles of State Policy.
The desire to attain these objectives has necessarily resulted in intense legislative activity touching every aspect of the life of the citizen and the nation.
Executive activity in the field of delegated or subordinate legislation has increased in direct, geometric progression.
It has to be and it is as it should be.
The Parliament and the State Legislatures are not bodies of experts or specialists.
They are skilled in the art of discovering the aspirations, the expectations and the needs, the limits to the patience and the acquiescence and the articulation of the views of the people whom they represent.
They function best when they concern themselves with general principles, broad objectives and fundamental issues instead of technical and situational intricacies which are better left to better equipped full time expert executive bodies and specialist public servants.
Parliament and the State Legislatures have neither the time nor the expertise to be involved in detail and circumstance.
Nor can Parliament and the State Legislatures visualise and provide for new, strange, unforeseen and unpredictable situations arising from the complexity of modern life and the ingenuity of modern man.
That is the raison d 'etre for delegated legislation.
That is what makes delegated legislation inevitable and indispensable.
The Indian Parliament and the State Legislatures are endowed with plenary power to legislate upon any of the subjects entrusted to them by the Constitution, subject to the limitations imposed by the Constitution itself.
The power to legislate carries with it the power to delegate.
But excessive delegation may amount to abdication.
Delegation unlimited may invite 263 despotism uninhibited.
So the theory has been evolved that the legislature cannot delegate its essential legislative function.
Legislate it must by laying down policy and principle and delegate it may to fill in detail and carry out policy.
The legislature may guide the delegate by speaking through the express provision empowering delegation or the other provisions of the statute, the preamble, the scheme or even the very subject matter of the statute.
If guidance there is, wherever it may be found, the delegation is valid.
A good deal of latitude has been held to be permissible in the case of taxing statutes and on the same principle a generous degree of latitude must be permissible in the case of welfare legislation, particularly those statutes which are designed to further the Directive Principles of State Policy.
In Harishankar Bagla and Anr.
vs The State of Madhya Pradesh,(1) the question arose whether Section 3 of the Essential Supplies (Temporary Powers) Act, 1946, which empowered the Central Government to make orders providing for the regulation or prohibition of the production, supply and distribution of essential commodities and trade and commerce therein was void for excessive delegation.
The Court said it was not and observed: ". the legislature cannot delegate its function of laying down legislative policy in respect of a measure and its formulation as a rule of conduct.
The Legislature must declare the policy of the law and the legal principles which are to control any given cases and must provide a standard to guide the officials or the body in power to execute the law.
The essential legislative function consists in the determination or choice of the legislative policy and of formally enacting that policy into a binding rule of conduct.
In the present case the legislature has laid down such a principle and that principle is the maintenance or increase in supply of essential commodities and of securing equitable distribution and availability at fair prices.
The principle is clear and offers sufficient guidance to the Central Government in exercising its powers under section 3".
In The Edward Mills Co. Ltd., Beawar vs The State of Ajmer(2), this Court considered the question whether section 27 of the Minimum Wages Act under which power was given to the Government to add to either part of the schedule any employment in respect of which it was in its opinion that minimum wages should be fixed exceeded the 264 limits of permissible delegation and was, therefore, unconstitutional.
The Court held that the legislative policy was apparent on the face of the enactment which aimed at the statutory fixation of minimum wages with a view to obviate the chance of exploitation of labour.
The intention of the Legislature was not to apply the Act to all industries but only to those industries where by reason of unorganised labour or want of proper arrangements for effective regulation of wages or for other causes the wages of labourers in a particular industry were very low.
In enacting section 27 there was, therefore, no delegation of essential legislative power.
In Pandit Banarsi Das Bhanot vs The State of Madhya Pradesh(1), this Court held that it was not unconstitutional for the Legislature to leave it to the Executive to determine details relating to the working of taxation laws such as the selection of persons on whom the tax is to be laid, the rates at which it is to be charged in respect of different classes of goods and the selection of goods in respect of which exemption from taxation might be granted etc.
In Sardar Inder Singh vs The State of Rajasthan(2), the validity of s.15 of the Rajasthan (Protection of Tenants) Ordinance which authorised the Government to exempt any person or class of persons from the operation of the Act was upheld and the argument that there was impermissible delegation of legislative power was repelled on the ground that the Preamble to the Ordinance set out with sufficient clarity the policy of the Legislature.
In Vasantal Maganbhai Sanjanwala vs The State of Bombay(3), section 6 (2) of the Bombay Tenancy & Agricultural Lands Act was challenged as permitting excessive delegation of legislative power as it enabled the Government to fix a lower rate of the maximum rent payable by the tenants of lands situate in any particular area or to fix such rate on any suitable cases as it thought fit.
This Court noticed that the Act was undoubtedly a beneficent measure, as shown by the Preamble which stated that the object of the Act was to improve the economic and social conditions of peasants and ensure the full and efficient use of land for agricultural.
Bearing in mind the Preamble and the material provisions of the Act, it was held that the power delegated was within permissible limits.
265 In Jyoti Pershad vs The Administrator for the Union Territories of Delhi,(1) Rajagopala Ayyangar, J. made some useful observations which may be extracted here: "In regard to this matter we desire to make two observations.
In the context of modern conditions and the variety and complexity of the situations which present themselves for solution, it is not possible for the Legislature to envisage in detail every possibility and make provisions for them.
The Legislature therefore is forced to leave the authorities created by it an ample discretion limited, however, by the guidance afforded by the Act.
This is the ratio of delegated legislation, and is a process which has come to stay, and which one may be permitted to observe is not without its advantages.
So long therefore as the Legislature indicates, in the operative provisions of the statute with certainty, the policy and purpose of the enactment, the mere fact that the legislation is skeletal, or the fact that a discretion is left to those entrusted with administering the law, affords no basis either for the contention that there has been an excessive delegation of legislative power as to amount to an abdication of its functions, or that the discretion vested is uncanalised and unguided as to amount to a carte blanche to discriminate.
The second is that if the power or discretion has been conferred in a manner which is legal and constitutional, the fact that Parliament could possibly have made more detailed provisions, could obviously not be a ground for invalidating the law.
" In Mohammad Hussain Gulam Mohammad vs The State of Bombay,(2) the question was about the vires of section 29 of the Bombay Agricultural Produce Markets Act.
It gave power to the State Government to add to, or amend, or cancel any of the items of agricultural produce specified in the schedule in accordance with prevailing local conditions.
The attack was on the ground that legislative power had been delegated to an extent not permissible.
The Court while noticing that section 29 itself did not provide for any criterion for determining which item of agricultural produce should be put into the schedule, nevertheless upheld its vires on the ground that guidance was writ large in the various provisions and the scheme of the Act.
It was observed that in each case the State Government had to consider whether the 266 volume of trade in the produce was of such a nature as to give rise to wholesale trade so as to merit inclusion in the schedule.
Let us now turn to section 60 of the Madras Cooperative Societies Act, 1932 whose vires is in question and which is as follows: "section 60: The State Government may, by general or special order, exempt any registered society from any of the provisions of this Act or may direct that such provisions shall apply to such society with such modifications as may be specified in the order.
" The provision is a near Henry VIII clause.
But to give it a name is not to hang it.
We must examine the preamble, the scheme and other available material to see if there are any discernible guidelines.
Sure the Cooperative Societies Act is a welfare legislation.
Its preamble proclaims: "Whereas it is expedient further to facilitate the formation and working of co operative societies for the promotion of thrift, self help and mutual aid among agriculturists and other persons with common economic needs so as to bring about better living, better business and better methods of production and for that purpose to consolidate and amend the law relating to co operative societies in the State of Madras." The policy of the Act is there and so are the guidelines.
Why the legislation ? "To facilitate the formation and working of Cooperative Societies".
Cooperative Societies, for what purpose ? "For the promotion of thrift, self help and mutual aid".
Amongst whom ? "Among agriculturists and other persons with common economic needs".
To what end ? "To bring about better living, better business and better methods of production".
The objectives are clear; the guidelines are there.
There are numerous provisions of the Act dealing with registration of societies, rights and liabilities of members, duties of registered societies, privileges of registered societies, property and funds of registered societies, inquiry and inspection, supersession of committees of societies, dissolution of societies, surcharge and attachment, arbitration etc.
We refrain from referring to the details of the provisions except to say that they are generally designed to further the objectives set out in the preamble.
But, numerous as the provisions are, they are not capable of meeting the extensive demands of the complex situations which may arise in the course of the working of the Act and the formation and the functioning of the societies.
In fact, the too rigorous application of some of the provisions of the Act may itself occasionally result 267 in frustrating the very objects of the Act instead of advancing them.
It is to provide for such situations that the Government is invested by section 60 with a power to relax the occasional rigour of the provisions of the Act and to advance the objects of the Act.
Section 60 empowers the State Government to exempt a registered society from any of the provisions of the Act or to direct that such provision shall apply to such society with specified modifications.
The power given to the Government under section 60 of the Act is to be exercised so as to advance the policy and objects of the Act, according to the guidelines as may be gleaned from the preamble and other provisions which we have already pointed out, are clear.
We are therefore of the view that section 60 is not void on the ground of excessive delegation of legislative power.
We so declare and otherwise dismiss the appeal.
N.V.K. Appeal dismissed.
| IN-Abs | Section 60 of the Madras Cooperative Societies Act, 1932, empowers the State Government to exempt a registered society from any of the provisions of the Act or to direct that such provision shall apply to such society with specified modifications.
In the appeal to this Court on the question whether Section 60 of the Act is void on the ground of unconstitutional delegation of legislative power.
^ HELD: 1.
Section 60 is not void on the ground of excessive delegation of legislative power.
[267 C] 2.
The power given to the Government under section 60 of the Act is to be exercised so as to advance the policy and objects of the Act, according to the guidelines enunciated in the preamble and the other provisions of the Act.[267 B] 3.
The Act, a welfare legislation, to facilitate the formation and working of cooperative societies consists of numerous provisions, dealing with registration of societies, rights and liabilities of members, duties of registered societies, privileges of registered societies, property and funds of registered societies, inquiry and inspection, supersession of committees of societies, dissolution of societies, surcharge and attachment, arbitration etc.
The too rigorous application of some of the provisions of the Act may itself occasionally result in frustrating the very objects of the Act instead of advancing them.
To provide for such situations, the Government was invested by section 60 with a power to relax the occasional rigour of the provisions of the Act and to advance the objects of the Act.[266 D, G; H 277 A] 4.
(i) Parliament and the State Legislatures are endowed with plenary power to legislate upon any of the subjects entrusted to them by the Constitution, subject to the limitations imposed by the Constitution itself.
The power to legislate carries with it the power to delegate.
While excessive delegation may amount to abdication, delegation unlimited may invite despotism uninhibited.
The theory has therefore been evolved that the legislature cannot delegate its essential function.
[262 H 263 A] (ii) The Parliament and the State Legislatures are not bodies of experts or specialists.
They are skilled in the art of discovering the aspirations, the expectations and the needs, the limits to the patience and the acquiescence and the articulation of the views of the people whom they represent.
They function best when they concern themselves with general principles, broad objectives and 261 fundamental issues instead of technical and situational intricacies which are better left to better equipped full time expert executive bodies and specialist public servants.
Parliament and the State Legislatures have neither the time nor the expertise to be involved in detail and circumstance.
Nor can Parliament and the State Legislatures visualise and provide for new, strange, unforeseen and unpredictable situations arising from the complexity of modern life and the ingenuity of modern man.
That is the raison d 'etre for delegated legislation.
[262 E G] (iii) The Legislature may guide the delegate by speaking through the express provision empowering delegation or the other provisions of the statute, the preamble, the scheme or even the very subject matter of the statute.
If guidance there is, wherever it may be found the delegation is valid.
A generous degree of latitude must be held permissible in the case of welfare legislation, particularly these statutes which are designed to further the Directive Principles of State Policy.
[263 B] ; , M. K. Papiah & Sons vs Excise Commissioner ; Harishankar Bagla and Anr.
vs The State of Madhya Pradesh [1955] 1 S.C.R., p. 380 @ 388: The Edward Mills Co. Ltd., Beawar vs The State of Ajmer ; Pandit Banarsi Das Bhanot vs The State of Madhya Pradesh ; Sardar Inder Singh vs The State of Rajasthan, Vasantlal Maganbhai Sanjanwala vs The State of Bombay, ; Jyoti Prasad vs The Administrator for the Union Territory of Delhi ; Mohammad Hussain Gulam Mohammad vs The State of Bombay, ; , referred to.
|
LATE JURISDICTION: Civil Appeal No. 1479 of 1971.
From the Judgment and Order dated 25 4 1969 of the Gujarat High Court in SCA No. 271/65.
G.A. Shah, N.S. Pande and M.N. Shroff for the Appellant.
P.R. Mridul, Vimal Dave and Miss Kailash Mehta for Respondent No. 1.
I. N. Shroff and H. section Parihar for Respondent No. 2.
The Judgment of the Court was delivered by SEN, J.
This appeal on certificate from a judgment of the Gujarat High Court raises a question as to the validity or otherwise or a fresh notification issued by the Government of Gujarat under section 6 of the d Acquisition Act, 1894, consequent upon an earlier notification under section 6 of the Act being discovered to be invalid.
The first respondent in this case owned certain land bearing Final Plot No. 38 forming part of Town Planning Scheme No. III (Ellis bridge) situate within the city of Ahmedabad.
At the request of the second respondent Sri Ayodhya Nagar Co operative Housing Society Ltd., registered under the Bombay Co operative Societies Act, 1925, now deemed to be registered under the Gujarat Co operative Societies Act, 1961, formed with the object of enabling its members to construct houses, the State Government on August 3, 1960 issued a notification 286 under section 4 stating that the land was likely to be needed for a public purpose.
This was followed by a notification of the State Government dated August 21, 1961 under section 6 of the Act stating that the land was to be acquired at the expense of Sri Ayodhya Nagar Cooperative Housing Society Ltd. for the public purpose specified in column 4 of the schedule annexed thereto.
The public purpose specified in column 4 of the schedule was 'For construction of houses for Sri Ayodhya Nagar Co operative Housing Society Ltd., Ahmedabad.
The entire expense of the acquisition was to be borne by the second respondent, i.e., the Co operative Housing Society.
The first respondent moved the High Court under article 226 of the Constitution challenging the validity of the notification under section 6 on the ground that the acquisition of the land for a public purpose at the expense of the second respondent was legally invalid.
On December 4, 1961 the High Court issued an ad interim injunction restraining the appellant from proceeding with the acquisition proceedings.
While this writ petition was pending, the State Government by its notification dated May 27, 1963 cancelled the notification under section 6.
on September 10, 1964 the State Government issued a fresh notification under section 6 stating that the land was to be acquired at the public expense, for the public purpose specified in column 4 of the schedule.
The public purpose specified in column 4 in the schedule was 'For housing scheme undertaken by Sri Ayodhya Nagar Co operative Housing Society Ltd. The High Court following its earlier decision in Dosabhai Ratansha Keravala vs State of Gujarat & Ors.
struck down the second notification under section 6 dated September 10, 1964.
It held inter.
alia that the first notification under section 6 issued on August 21, 1961 being an acquisition for a society at its cost, was valid and the Government could have proceeded to complete the acquisition under it but, under a false sense of apprehension as to its validity, the Government cancelled it on May 27, 1963.
There was no justification for cancelling the first notification under section 6 and even if the Government wanted to cancel it out of a feeling of apprehension as to its validity, the Government need not have taken one year and ten months to do so.
(2) After the issue of the first notification under section 6 on August 21, 1961, the notification dated August 3, 1960 under section 4 was exhausted and, therefore, could not be used to support the second notification issued under section 6 on September 11, 1964.
(3) The cancellation of the first notification under section 6 by the notification dated May 27, 1963 did not have the effect of reviving the notification under section 4 so as to make it available for supporting the second notification under section 6.
The second notifi 287 cation under section 6 not being supported by any notification under section 4 Was consequently invalid.
(4) A notification under section 6 in order to be valid must follow within a reasonable time after the issue of a notification under section 4.
The notification under section 4 was issued on August 3, 1960 and the second notification under s 6 on September 10, 1964 and there was thus an interval of about four years and one month between the two notifications.
This interval of time, could not be regarded as reasonable.
Even tested by the yardstick of reasonable time provided by the legislature in the second proviso introduced in section 6 by the Land Acquisition (Amendment and Validation) Act.
1967, namely three years, the period of about four years and one month between the two notifications under section 4 and section 6 would be clearly unreasonable.
The second notification must, therefore, be held to be invalid on this ground also.
We are clearly of the opinion that the High Court was in error m striking down the second notification under section 6 issued on September 10, 1964.
In Valjibhai.
Muljibhai Soneji.
vs State of Bombay the Court held that the Government has no power to issue a notification for acquisition of land for a public purpose, where the compensation is to be entirely paid by a company.
The first notification issued by the Government under section 6 for acquisition of the land for a public purpose, at the expense of the second respondent, the Co operative Society, was, therefore, invalid.
The State Government was, there fore, justified in issuing the second notification under section 6 after removing the lacuna i.e., by providing for acquisition of the land for the said public purpose, at public expense.
In an endeavour to support the judgment, counsel for the first respondent advanced a three fold contention.
It was urged, firstly, that successive notifications cannot be issued under section 6 placing reliance on State of Madhya Pradesh & Ors.
vs Vishnu Prasad Sharma & Ors.
It was pointed out that the Land Acquisition (Amendment and Validation) Act, 1967 had a limited scope and it validated only successive notifications issued under section 6 in respect of different parcels of land but did not validate successive notifications in respect of the same land.
Further, it was urged that the Act was not retrospective in operation and, therefore, the validity of the second notification dated September 10, 1964 had to be Adjudged with reference to the pre amendment law, i.e., according to the law as declared by this Court in Vishnu Prasad Sharma 's case.
Secondly, it was urged, on the strength of the deci 288 sion in Dosabhai Ratansha Karevala 's case (supra) that a notification under section 4 is exhausted when it is followed by declaration under section 6 It was urged that the first notification under section 6 dated August 21, 1961 was valid and the High Court was, therefore, justified in holding that with its cancellation, the notification under section 4 lapsed.
Thirdly, it was urged that there was unreasonable delay in issuing the second notification under section 6 and, this, by itself, was sufficient to invalidate it.
In Vishnu Prasad Sharma 's case the Court held that sections 4, S A and 6 are integrally connected and present a complete scheme for acquisition and, therefore, it was not open to the Government to make successive declarations under section 6.
Wanchoo J. (as he then was), speaking for himself and Mudholkar J., observed: "It seems to us clear that once a declaration under section 6 is made, the notification under section 4(1) must be exhausted, for it has served its purpose.
There is nothing in sections 4, 5 A and 6 to suggest that section 4(1) is a kind of reservoir from which the government may from time to time draw out land .
and make declarations with respect to, it successively.
If that was the intention behind sections 4, S A and 6 we would have found some indication of it in the language used there in But as we read these three sections together we can only find that the scheme is that section 4 specifies the locality, then there may be survey and drawing of maps of the land and the consideration whether the land is adapted for the purpose for which it has to be acquired, followed by objections and making up of its mind by the government what particular land out of that locality it needs.
This is followed by a declaration under section 6 specifying the particular land needed and that in our opinion completes the process and the notification under section 4(1) cannot be further used there after.
At the stage of section 4 the land is not particularised but only the locality is mentioned; at the stage of section 6 the land in the locality is particularized and thereafter it seems to us that the notification under section 4(1) having served its purpose exhausts itself.
" Sarkar J., in a separate but concurring judgment, observed: "My learned brother has said that sections 4, 5A and 6 of the Act have to be read together and.
so read, the conclusion is clear that the Act contemplates only a single declaration under section 6 in respect of a notification under section 4.
" 289 After rejecting the contention that the Government may have difficulty A in making the plan of its projects complete at a time, particularly where the project is large, and therefore, it is necessary that it should have power to make successive declarations under section 6, he observed: "I cannot imagine a Government, which has vast resources, not being able to make a complete plan of its project at a time.
Indeed, I think when a plan is made, it is a complete plan.
I should suppose that before the Government starts acquisition proceedings by the issue of a notification under section 4, it has made its plan for otherwise it cannot state in the notification, as it has to do, that the land is likely to be needed.
Even if it had not then completed its plan, it would have enough time before the making of a declaration under section 6 to do so.
I think, therefore, that the difficulty Of the Government, even if there is one, does not lead to the conclusion that the Act contemplates the making of a number of declarations under section 6.
" In the present case, the question, however, does not arise as the first notification under section 6 dated August 21, 1961 being invalid, the Government was not precluded from making a second notification.
Due to the invalidity of the notification under section 6, the notification under section 4 still held the field and on its strength another notification under section 6 could be issued.
It is, therefore, not necessary to deal with the effect of the validating Act.
The matter is squarely covered by the decision of the Court in Girdharilal Amratlal Shodan & Ors.
vs State of Gujarat & Ors.
The Court rejected the contention that by cancelling the first notification under section 6, as here, the Government must be taken to have withdrawn from the acquisition and consequently could not issue a second notification under section 6.
there also the first notification under section 6 was invalid and of no effect, as the Government had no power to issue a notification for acquisition for a public purpose where the compensation was to be paid entirely by a company? as held by this Court in Sham Behari & Ors.
vs State of Madhya Pradesh & Ors.
It will be noticed that in Girdharilal Amratlal Shodan 's case the facts were identical.
On August 3, 1960 the Government of Gujarat issued a notification under section 4 in respect of certain land falling in Final Plot No. 460 of the Town Planning Scheme No. III of Elisbridge in the city of Ahmedabad, stating that the land was likely to be needed for a public purpose, viz., for construction of houses for Sri Krishna 290 kunja Government Servants ' Co operative Housing Society Ltd. On July 18, 1961 the State Government issued a notification under section 6 stating that the land was to be acquired for the aforesaid public purpose at the expense of Sri Krishnakunj Government Servants ' Co operative Housing Society Ltd.
On September 22, 1961, the landholder filed a writ petition in the High Court for an order quashing the notification under section 6.
During the pendency of the proceedings, the Government issued a notification dated April 28, 1964 cancelling the aforesaid notification dated July 18, 1961.
On August 14, 1964 the Government issued a fresh notification under section 6 stating that the land notification under section 6 staling that the land was needed to be acquired at the public expense for a public purpose viz, for the housing scheme undertaken by Sri Krishnakunj Government Servants ' Co operative Housing Society Ltd. The contention was that by cancelling the first notification under section 6, the Government must be deemed to have withdrawn from the acquisition and cancelled the notification under section 4, and therefore, could not issue the second notification under section 6, without issuing a fresh notification under section 4.
It was also urged that the power of the State Government to issue a notification under section 6 was exhausted, and the Government could not issue a fresh notification under section 6.
The Court rejected both the contentions observing: "Having regard to the proviso to ' section 6, of the Act, a declaration for acquisition of the land for a public purpose could only be made if the compensation to be awarded for it was to be paid wholly or partly out of public revenues or some fund controlled or managed by a local authority.
The Government had no power to issue a notification for acquisition for a public purpose where the compensation was to be paid .
entirely by a company.
The notification dated JULY 18, 1961 was, therefore, invalid and of no effect, see Shyam Behari vs State of Madhya Pradesh.
The appellants filed the writ petition challenging the aforesaid notification on this ground.
The challenge was justified and the notification was liable to be quashed by the Court.
" "The State Government realised that the notification was invalid, and without waiting for an order of Court.
cancelled the notification on April 28, 1964.
The cancellation was in recognition of the invalidity of the notification.
The Government had no intention of withdrawing from the acquisition.
Soon after the cancellation, the Government issued a fresh notification under section 6 whereas in this case the notifi 291 cation under section 6 is incompetent and invalid, the Government may treat it as ineffective and issue a fresh notification under section 6.
This is what, in substance, the Government did in this case.
The cancellation on April 28, 1964 was no more than a recognition of the invalidity of the earlier notification.
" The first notification issued under section 6 on August 21, 1961 was obviously invalid and of no effect.
By the issue of this notification, the Government had not effectively exercised its powers under section 6.
In the circumstances, the Government could well issue a fresh notification under section 6 dated September 10, 1964.
In State of Gujarat vs Musamiyan Imam Haider Bux Razvi & Anr. etc.
this Court while reversing the decision of the Gujarat High Court in Dosabhai Ratansha Kerravala (supra) on which the High Court based its decision, has laid down two important principles: (1) In view of the decisions of this Court in Pandit Jhandu Lal & Ors.
vs The State of Punjab & Ors., Ratilal Shankarbhai & Ors.
vs State of Gujarat & Ors.
and Ram Swarup vs The District Land Acquisition Officer, Aligarh & Ors.
the acquisition of land for a co operative housing society is a public purpose.
The Government is the best Judge to determine whether the purpose in question is a public purpose or not; and, it cannot be said that a housing scheme for a limited number of persons cannot be construed to be a public purpose inasmuch as the need of a section of the public may be a public purpose.
(2) When a notification under section 6 is invalid, the government may treat it as ineffective and issue a fresh notification under section 6, and nothing in section 48 of the Act precludes the government from doing so, as held by this Court in Girdharilal Amratlal Shodan.
The High Court had not the benefit of these decisions when it held that acquisition of land for a co operative housing society was not a public purpose and, therefore, the first notification dated August 21, 1961 issued under section 6 of the Act was valid.
The substratum on which the decision of the High Court rests has, therefore, disappeared.
This Court in Musamiyan 's case distinguished the decision in State of Madhya Pradesh & Ors.
vs Vishnu Prasad Sharma & Ors.
(supra) by quoting the passage referred to above.
The decision in Vishnu Prasad Sharma 's case is not an authority for the proposition that where a notification under section 6 is found to be invalid it cannot be followed by a fresh notification under section 6.
In fact, the decision of the High Court 292 runs counter to what it had observed in Dosabhai Ratansha Keravala 's case, after referring to the decisions of this Court in Vishnu Prasad Sharma 's case and Girdharilal Amratlal Shodan 's case: "If the first section 6 notification is invalid, that is, non est, section 4 notification cannot be regarded as exhausted, for its purpose is yet unfulfilled; its purpose could be fulfilled only by issue of a valid notification under section 6.
" There remains the question whether the High Court was right in quashing the second notification under section 6 on the ground of unreasonable delay in its issuance.
The respondent had not taken any such ground in the writ petition filed by him.
The High Court was, therefore, not justified in observing that 'the appellant had not explained the delay by filing any affidavit '.
We fail to appreciate that if there was no ground taken, there could be no occasion for filing of any such affidavit.
Further, the delay, if any, was of the respondent 's own making.
He had challenged the first notification under section 6, presumably on the ground that the acquisition being for a public purpose, could not be made at the expense of the second respondent.
The challenge was justified and the State Government, therefore, withdrew the first notification under section 6 without waiting for an order of the High Court.
The cancellation was in recognition of the invalidity of the notification.
The Government had no intention of withdrawing from the acquisition.
Thereafter, the Government issued a fresh notification under section 6 making a declaration for acquisition of the land for a public purpose at public expense.
There is nothing in the Act which precludes the Government from issuing a fresh notification under section 6, if the earlier notification is found to be ineffective.
The delay of one year and four months between the date of cancellation and the issue of the second notification cannot be regarded to be unreasonable, in the facts and circumstances of the case.
In somewhat similar circumstances, this Court recently in Gujarat State Transport Corpn.
vs Valji Mulji Soneji held the delay of about fifteen years in making the second notification under section 6 not to be unreasonable.
We cannot, therefore, uphold the High Court 's decision that the second notification must be struck down on the ground of delay.
In the result, the appeal succeeds and is allowed with costs, the judgment of the High Court is set aside, and the writ petition filed by the first respondent is dismissed.
Respondent No. 1 shall bear the costs.
N.K.A. Appeal allowed.
| IN-Abs | The first respondent owned certain Land forming part of a town planning scheme, situated within the city limits.
At the request of the second respondent, a Corporative Housing Society, the State Government issued a Notification under section 4 of the Act on August 3, 1960 stating that the land was likely to be needed for a public purpose and it was followed by a further notification of the State Government under Section 6 of the Act dated August 21, 1961 that the land was to be acquired at the expense of the Cooperative Housing Society for the public purpose specified in column 4 of the Schedule to the notification.
The entire expense of the acquisition was to be borne by the second respondent.
The first respondent moved the High Court under Article 226 of the Constitution challenging the validity of the notification under section 6 of the Act.
During the pendency of the Writ Petition, the appellant by a notification dated May 27, 1963 cancelled the earlier notification under section 6 and issued a fresh notification.
The High Court struck down the second notification dated September 10, 1964 issued under section 6 of the Act.
In the appeal to this Court, on the question of the validity of the 2nd notification dated September 10, 1964. ^ HELD: (i) The High Court was in error in striking down the second notification under section 6 of the Act issued on September 10, 1964.
(ii) This Court in Valjibhai Muljibhai Soneji vs State of Bombay has held that the Government has no power to issue a notification for acquisition of land for a public purpose, where the compensation is to be entirely paid by a company.
[287 C D] In the instant case the first notification issued by the Government for acquisition of land for a public purpose at the expense of the second respondent, the cooperative society was therefore, invalid and the Govt.
was justified in issuing the second notification under section 6 after removing the lacuna by providing for acquisition of the land for public purpose, at public expense.
[287 D E] (iii) The acquisition of land for cooperative housing society is a public purpose.
The Govt.
is the best judge to determine whether the purpose in question is a public purpose or not.
It cannot be said that a Housing Scheme for a limited number of persons cannot be construed to be a public purpose.
When a notification under section 6 of the Act is invalid, the Govt.
may treat it as ineffective and issue a fresh notification under section 6 of the Act 2nd nothing in section 48 of the Act precludes the Government from doing so.
[291 C E] 285 Girdharilal Amratlal Shodan & Ors.
vs State of Gujarat Madhya Pradesh & Ors.
; , Pandit Jhandu Lal & Ors.
vs The State of Punjab & Ors. ; Ratilal Shankarbhai & Ors.
vs State of Gujarat & Ors.
A.I.R. , Ram Swarup vs The District Land Acquisition Officer, Aligarh & Ors. , referred to.
(iv) In the instant case, tho Respondent had not taken any ground in the Writ Petition with regard to the delay in the issuance of the second notification.
The High Court was therefore, not justified in observing that "the appellant had not explained the delay by filing any affidavit.
" If there was no ground taken, there could be no occasion for filing of any such affidavit.
[292 B C] (v) There is nothing in the Act which precludes the Govt.
from issuing a fresh notification under section 6 of the Act if the earlier notification is found to be ineffective.
The delay of one year and four months between the date of cancellation and the issue of the second notification cannot be regarded to be unreasonable.
[292 E F] Gujarat State Transport Corpn.
vs Valji Mulji Soneji
|
Civil Appeal Nos.
1993 1994 or 1977.
Appeals by Special Leave from the Judgment and Order dated 22 3 77 of the Madras High Court in C.M.P. Nos.
3449 and 3563 of 1976.
M.R.M. Abdul Karim and section Shaukat Hussain for the Appellant.
A. K. Sen (In C.A. 1993), Mrs. Shyamala Pappu (C.A. 1994), and A. V. Rangam for the Respondent.
It is the art of the great either who with a line reveals infinity.
It is the art of the great dramatist who with a significant word shakes the soul.
Schiller, said Coleridge, burns a city to create his effect of terror: Shakespeare drops a handkerchief and freezes our blood.
For this exquisite reason, brevity is the soul of art and justicing including judgment writing, must practise the art of brevity, especially where no great issue of legal moment compels long exposition.
Therefore, we mean to be brief to the bare bones, with a few facts here and a brief expression of law there, by adopting the technique which "is simply the perfect economy of means to an end".
For another reason also the need for parsimony exists.
The court is in crisis, docket logged and fatigued.
A judgment can be brief but not a blank and there is no reason to repeat the details of a case where there is an exhaustive statement in the judgment under appeal, as in this case.
We adopt these long pages of judicial manuscript and abbreviate our conclusion in a few pages.
The appellant plaintiff, a woman was on terms of intimacy with the respondent defendant, a wealthy man who had enjoyed a long and intimate relationship with her.
The respondent owned a lovely mansion on the Marina in Madras which he agreed to sell to the appellant for a consideration of around Rs. 4 lakhs way back in April 1967.
This was subject to an equitable mortgage over the property in favour of the South Indian Bank, Coimbatore.
When the two separated litigation erupted.
A suit for specific performance of the agreement to sell was brought where both sides took up unrighteous positions, and 295 the trial court (the original side of the High Court of Madras) decreed the suit directing the plaintiff to deposit the mortgage amount plus Rs. 5,000 with interest at 11 per cent till the date of payment.
The whole consideration, except the mortgage amount and a sum of Rs. 5,000 had already been paid at the time of the agreement and possession had been made over to the plaintiff by the defendant.
The decree also provided that the amount should be deposited into court by the time specified therein, failure to do which would result in the suit itself being dismissed.
The amount was not deposited within the time limited but some months later the plaintiff paid the mortgage money to the mortgagee bank and took an assignment of its rights and got herself impleaded as second plaintiff in the suit which, by then, had been instituted by the bank against the present defendant (O.S. No. 154 of 1968).
Eventually, the mortgage suit resulted in a decree in favour of the present plaintiff (second plaintiff therein); and the amount now due has, by now, swollen to around Rs. 11 lakhs or so.
An appeal had been carried by the plaintiff appellant to a Division Bench of the High Court which rejected most of her contentions except one.
The court, while affirming that the direction to make a deposit into court within three months was valid, vacated the default clause, namely, the dismissal of the suit on non payment within the time.
Read in the light of Section 28 of the Specific Relief Act and the rulings on the point which were cited before us, the proper course in this situation was to pass a decree for specific performance, which would, for all practical purposes, be a preliminary decree.
The suit would continue and be under the control of the court until appropriate motion was made by either party for passing a final decree.
The plaintiff appellant moved the court by interlocutory applications for giving credit to the amount paid by her to the mortgagee bank and to pass a final decree in her favour.
That was not granted.
Various skirmishes, essentially of an interlocutory nature, took place.
Ultimately, on two applications, one by the plaintiff appellant and the other by the defendant respondent the court made a judgment which is the subject matter of this appeal.
The plaintiff 's application was dismissed and extension of time by way of adjustment of the mortgage amount paid was refused and a decree for recession of the contract for sale was passed and for delivery of possession with mesne profits.
It is perfectly open to the court in control of a suit for specific performance to extend the time for deposit, and this Court may do so even now to enable the plaintiff to get the advantage of the agreement to sell in her favour.
The disentitling circumstances relied upon by the defendant respondent are off set by the false pleas raised in the course of the 296 suit by him and rightly negatived.
Nor are we convinced that the application for consideration and extension of time cannot be read, as in substance it is, as a petition for more time to deposit.
Even so, specific performance is an equitable relief and he who seeks equity can be put on terms to ensure that equity is done to the opposite party even while granting the relief.
The final end of law is justice, and so the means to it too should be informed by equity.
That is why he who seeks equity shall do equity.
Here, the assignment of the mortgage is not a guideless discharge of the vendor 's debt as implied in the agreement to sell but a disingenuous disguise to arm herself with a mortgage decree to swallow up the property in case the specific performance litigation misfires.
To sterilise this decree is necessary equity to which the appellant must submit herself before she can enjoy the fruits of specific performance.
In the present case, with all that has been said by both sides and we have heard at great length arguments by Shri Abdul Karim for the appellant and Shri A. K. Sen and Smt.
Shyamala Pappu for the respondents it is clear that an opportunity for the appellant to deposit into court the amount directed by the trial court, together with interest down to date at 11 per cent., should be accorded.
We are not discussing the principles of law as they are well settled and do not require reiteration.
The equitable terms we have adverted to earlier must be remembered in this context.
The appellant who was bound to discharge the mortgage acted contrary to the agreement because, instead of paying the mortgage money and extinguishing the mortgage (which was, perhaps, a pardonable exercise, in lieu of deposit into court) she, under some ill advice took an assignment of the equitable mortgage with a view to using it against the respondent.
Surely, this was not consistent with the understanding assumed under the contract.
This justifies the view of the High Court that as a price for the indulgence of being allowed to deposit long after the due date was over the unrighteous advantage gained by taking an assignment of the mortgage should be nullified.
In brief, while the appellant may be allowed to deposit the amount due under the agreement, viz., Rs. 3,45,000 together with interest at 11 per cent.
from April 1967 upto date, the mortgage decree in her favour must be extinguished, save to the extent of the cash then paid.
The High Court expressed a slightly drastic though similar view, somewhat loosely, thus: After we have expressed our opinion and dictated this order, the learned counsel for the Plaintiff orally requests us to permit the Plaintiff to deposit the entire amount as directed by the learned trial Judge in the Court.
Having regard to the 297 fact that no such stand was taken at any earlier stage and this request has been orally made only after we have dictated this order, we do not see any justification whatever for complying with this request.
We may also point out that there is no actual undertaking given by the plaintiff herself that even if we give such an opportunity to the Plaintiff to deposit the sum of Rs. 3,45,000 into this Court now, she will give up her right under the mortgage decree, which she has obtained against the defendant in the present suit in O.S. No. 154 of 1968.
(emphasis added) We agree with the substance of this direction, but without going that far pass a conditional decree.
We should have taken long pages and elaborate argument in substantiation of the course we adopt, but for reasons adduced at the very beginning, we decline to do so.
We gather that in many jurisdictions the highest Court, which hears the arguments at enormous length and has the advantage of a complete statement of facts and discussion of law in the judgment under appeal, limits itself to a severe economy of words in the statement of its reasoning.
We regard this as a wholesome step.
Natural justice necessitates full hearing, not a flood of words of forbidding length.
We direct that a decree be passed that the plaintiff appellant do deposit within six months from to day the entire sum of Rs. 3,45,000 together with interest due upto date at the rate of 11 per cent.
, together with an undertaking that she would give up all her rights under the mortgage decree passed in her favour in O.S. No. 154 of 1968, except to the extent of the amount actually paid to the South Indian Bank for taking the assignment.
If these two conditions are fulfilled, the appeal will stand allowed and a final decree for specific performance passed.
In the event of non compliance with either of these conditions the appeal will stand dismissed with costs.
| IN-Abs | In 1967 the respondent agreed to sell his house to the appellant for a sum of Rs. 4 lakhs which then was subject to an equitable mortgage in favour of a bank.
The trial court decreed the suit for specific performance directing the plaintiff to deposit the mortgage amount within a specified time with interest at 11 per cent till the date of payment and that failure to pay the amount would result in the suit being dismissed.
At the time of the agreement the plaintiff paid the whole consideration except the mortgage amount and obtained possession of the house.
The plaintiff did not deposit the mortgage amount within the prescribed time.
She paid the mortgage money to the bank some months afterwards and took an assignment of its rights.
In the suit filed by the bank against the defendant she got herself impleaded as second plaintiff.
Eventually the mortgage suit resulted in a decree in favour of the appellant.
By this time the amount had swollen to Rs. 11 lakhs.
On appeal a division bench of the High Court vacated the default clause.
The plaintiff 's application for giving credit to the amount paid by her to the mortgage bank and to pass a final decree in her favour was not granted by the High Court.
The High Court ultimately passed a decree for recession of the contract for sale and for delivery of the possession with mesne profits.
^ HELD: The High Court should pass a decree that the plaintiff appellant should deposit within six months the entire consideration together with interest due upto date at the rate of 11 per cent together with an undertaking that she would give up all her rights under the mortgage decree passed by the High Court, except to the extent of the amount actually paid to the bank for taking the assignment.
[297 E] It is open to the court in control of a suit for specific performance to extend the time for deposit and this Court may do so even now to enable the plaintiff to get the advantage of the agreement to sell in her favour.
The disentitling circumstances relied upon by the defendant are offset by the false pleas raised in the course of the suit by him and rightly negatived.
Specific performance is an equitable relief and he who seeks equity can be put on terms to ensure that equity is done to the opposite party even while granting the relief.
[295 H] In the instant case the assignment of the mortgage is not a guileless discharge of the vendor 's debt as implied in the agreement to sell but a disingenuous disguise to arm herself with a mortgage decree to swallow up the property in case the specific performance litigation fails.
The appellant acted contrary to the agreement because instead of paying the mortgage money and extinguishing the mortgage she took an assignment of the equitable mortgage with a view 294 to use it against the respondent.
This was not consistent with the understanding assumed under the contract.
[296 C]
|
Tax Reference No. 1A of 73.
Tax Reference under section 257 of the Income Tax Act 1961 made by the Income Tax Appellate Tribunal, Ahmedabad in R.A. No. 66 (AHD) of 1971 72 arising out of I.T.A. No. 1697 of 1967 68 decided on 10 9 71 Assessment year 1962 63.
86 AND Tax Reference Nos.
10 14 of 1975 Tax Reference under section 257 of the Income Tax Act, 19(1 made by the Income Tax Appellate Tribunal, Ahmedabad in R.A. Nos.
140 144/AHD/73 74 arising out of I.T.A. Nos.
2098 2102/AHD/7172 for assessment years 1963 64 to ]97 68.
V.S. Desai (in T.R. No. 1A/73), B.B. Ahuja and Miss A. Subhashini for the Appellant.
Sanat P. Mehta, Ravinder Narain, A.N. Haskar and Shri Narain for the Respondent.
Dr. Devi Pal, P.V. Kapur, S.R. Agarwal, Praveen Kumar and R.K. Chaudhary for the Intervener (Indian Sugar Mills).
Dr. Devi Pal and D.N. Gupta for the Intervener (Bengal Chamber).
R.N. Bajoria, S.R. Agarwal and Praveen Kumar for the Intervener (Indian Chamber, Calcutta).
F.S. Nariman, N. Nettar, A.K. Sanghi and O.P. Vaish for the Intervener (Indian Chamber, New Delhi).
The Judgment of P.N. Bhagwati, N. L. Untwalia and V. D. Tulzapurkar, JJ. was delivered by Bhagwati, J. R.S. Pathak, J. gave a separate opinion and A.P. Sen, J. gave a dissenting opinion.
BHAGWATI, J.
These tax references have been made by the Tribunal directly to this Court under Section 257 of the Income Tax Act, 1961 (hereinafter referred to as the Act), since there is a conflict of opinion amongst different High Courts as to the interpretation of the words "not involving the carrying on of any activity for profit" occurring at the end of the definition of "charitable purpose" in clause (15) of Section 2.
Originally these references came up for hearing before a Bench of three Judges but having regard to the great importance of the question involved and the serious repercussions, which an adverse decision might have on a large number of public trusts in the country, the Bench thought it desirable to refer the cases to a larger Bench and that is how these references have now come before us.
Though the references are six in number.
they relate to the same assessee and raise the same question, only the assessment years being different.
The assessee is the Surat Art Silk Cloth Manufacturers Association, a company incorporated under the Indian.
87 Companies Act, 19]3.
The original Memorandum of Association set out the objects for which the assessee was incorporated, but we are not concerned with it since vital amendments were made in the Memorandum with effect from 14th July, 1961 at the time when the assessee was permitted under section 25 of the to omit the word "limited" from its name by order of the Central Government and it is the amended Memorandum which governed the assessee during the relevant assessment years.
The amended objects, so far as material, were as follows: (a) To promote commerce and trade in Art ilk Yarn, Raw Silk, Cotton Yarn, Art Silk Cloth.
Silk Cloth and Cotton Cloth.
(b) To carry on all and any of the business of Art Silk Yarn, Raw Silk, Cotton Yarn as well as Art Silk f loth, Silk Cloth and Cotton Cloth belonging to and on behalf of the members.
(c) To obtain import Licences for import of Art Silk Yarn, Raw Silk, Cotton Yarn and other Raw Mate rials as well as accessories required by the members for the manufacture of Art Silk, Silk and Cotton Fabrics.
(d) To obtain Export Licences and export cloth manu factured by the members (e) To buy and sell and deal in all kinds of cloth and other goods and fabrics belonging to and on behalf of the Members.
(f) X X X (g) X X X (h) X X X (i) X X X (j) X X X (k) X X X (l) X X X (m) X X X (n) To do all other lawful things as are incidental or conducive to the attainment of the above objects.
Clause 5 of the Memorandum provided in sub clause (1) that the income and property of the assessee wheresoever derived shall be applied solely for the promotion of its objects as set forth in the 88 Memorandum and sub clause (2) directed that no portion of the income or property shall be paid or transferred, directly or indirectly, by way of dividend, bonus or otherwise by way of profit, to persons, who at any time are or have been members of the assessee or to any one or more of them or to any person claiming through anyone or more of them.
What should happen to the assets in case of winding up or dissolution of the assessee, was set out in clause 10 of the memorandum and it provided that the property remaining after satisfaction of all the debts and liabilities shall not be distributed amongst the members of the assessee but shall be given or transferred to such other company having the same objects as the assessee, to be determined by the members of the assessee at or before the time of the dissolution or in default? by the High Court of Judicature that has or may acquire jurisdiction in the matter.
The income and property of the assessee were thus liable to be applied solely and exclusively for the promotion of the objects set out in the memorandum and no part of such income cr property could be distributed amongst the members in any form or under any guise or utilised for their benefit either during the operational existence of the assessee or on its.
winding up and dissolution.
The assessee carried on various activities for promotion of commerce and trade in Art Silk Yarn, Silk Yarn, Art Silk Cloth and Silk Cloth.
The income of the assessee was h derived primarily from two sources.
One was annual subscription at the rate of Rs. 3/ per power loom collected by the assessee from its members and the other was commission calculated on the basis of a certain percentage of the value of licences for import of foreign yarn and quotas for purchase of indigenous yarn obtained by the assessee for the members.
There was no dispute between the parties in regard to the first category of income derived from annual subscription collected from the members and it was conceded by the Revenue to be exempt from tax but the real controversy centered round the taxability of the second category of income.
The amount collected by the assessee from the members in respect of licences for import of foreign yarn was credited in an account styled "Vahivati Kharach" while the amount collected in respect of quotas of indigenous yarn was credited in another account called "Building Fund".
The assessee constructed a building out of the amount credited to the "Building Fund" during the accounting year relevant to the assessment year 1965 66 and it was let out to various tenants and the rent received .
from them augmented the income of the assessee.
The assessee claimed in the course of assessment to income tax for the assessment year 1962 63 that it was an 89 institution for a charitable purpose and its income was, therefore, exempt from tax under Section 11 sub section ( 1 ) of the Act.
This claim was rejected by the Income tax officer on the ground that the objects of the assessee were not charitable within the meaning of sec.
2 clause (15).
The assessee carried the matter in appeal and, in the appeal, the view taken by the Appellate Assistant Commissioner was that the purpose of the assessee was pre dominantly development of Art Silk Industry which was an object of general public utility, but since the Income tax officer had not examined whether the object involved the carrying on of an activity for profit and had also not considered whether the other conditions of section 11 sub section (1) were satisfied, the Appellate Assistant Commissioner set aside the order of assessment and remanded the case to the Income tax officer with a direction to make a fresh assessment after considering these issues.
The Tribunal on further appeal at the instance of the Revenue did not agree with the procedure adopted by the Appellate Assistant Commissioner and taking the view that the Appellate Assistant Commissioner should not have set aside the order of assessment and made an order of remand for making a fresh assessment but instead, if he wanted any further facts, he should have called for a remand report from the Income tax officer and then disposed of the appeal by deciding whether the assessee was entitled to exemption from tax under section 11 sub section (1), the Tribunal directed the Appellate Assistant Commissioner to submit a remand report on the question "whether the objects for which the assessee company has been established are for charitable purposes within the meaning of section 2(15) and whether it satisfies the other conditions laid down under section 11." The Appellate Assistant Commissioner in his remand report found in favour of the assessee on both the points referred to him and after considering the remand report, the Tribunal confirmed the view taken by the Appellate Assistant Commissioner that the primary purpose for which the assessee was established was to promote commerce and trade in Art Silk and Silk Yarn and Cloth as set out in sub clause (a) of Clause (3) of the Memorandum of Association and the other subjects set out in sub clause (b) to (e) of clause (3) were merely subsidiary objects and since the primary purpose was plainly advancement of an object of general public utility, the first part of the requirement for falling within the last head of "charitable purpose" in sec.
2 clause (15) was satisfied.
The Tribunal also agreed with the Appellate Assistant Commissioner that this primary purpose for which the assessee was constituted did not involve the carrying on of any activity for profit, because whatever activity was carried on by the assessee in fulfil 90 ment of the primary purpose was for advancement of an object of general public utility and not for profit.
The Tribunal pointed 1 out that there was no dispute in regard to the fulfillment of the other conditions mentioned in section 11 and held that, in the circumstances, the income of the assessee was entitled to exemption under sub section (1) of section 11.
The Revenue, being aggrieved by the decision of the Tribunal, made an application for a reference and since there was a conflict of decisions between the Calcutta and y Mysore High Courts on the one hand and Kerala and Andhra Pradesh High Courts on the other in regard to the true interpretation of the words "not involving the carrying on of any activity for profit", the Tribunal referred the question "whether on the facts and in the circumstances of the case, the assessee is entitled to exemption under sec.
11 (1) (a) of the Income tax Act, 1961" directly to this Court.
So far as the assessment years 1963 64 to 1967 68 are concerned, the assessment proceedings followed the same pattern and the Tribunal, following its earlier decision for the assessment years 1962 63, held the assessee to be exempt from tax in respect of its income under section 11 sub section (1) and thereupon, at the instance of the Revenue an identical question of law for each assessment year was referred by the Tribunal directly to this Court.
Now before we proceed to consider the true meaning and connotation of the words "not involving the carrying on of any activity for profit" occurring at the end of the definition of "charitable purpose" in section 2 clause (15), it will be convenient to dispose of a short contention raised on behalf of the Revenue in Tax Reference Nos.
10 to 14 of 1975.
The Revenue urged that the objects for which the assessee was incorporated did not fall within the Category denoted by the words "advancement of any other object of general public utility" since the objects set out in sub clauses (b) to (e) of clause (3) of Memorandum of Association were for the benefit only of the members of the assessee and not for the benefit of a section of the public.
It was contended that in order that a Purpose may qualify for being regarded as an object of general public utility, it must be intended to benefit a section of the public as distinguished from specified individuals.
The section of the community sought to be benefitted must be sufficiently defined and identifiable by same common quality of a public or impersonal nature and where there is no such common quality uniting the potential beneficiaries into a class, the purpose would not be liable to be regarded as a "charitable purpose".
The argument was that since the members of the assessee did not constitute a section of the 91 public, but were merely specified individuals, the objects set out in sub clauses (b) to (e) of clause (3) which were meant to benefit only the members of the assessee could not be regarded as objects of general public utility and hence the assessee could not be said to be an institution for a "charitable purpose" within the meaning of section 2 clause (15).
We do not think it is open to the Revenue to urge this contention in the present References.
These References having been made under section 257 on account of a conflict of decisions amongst different High Courts in regard to the true interpretation of the words "not involving the carrying on of any activity for profit" in section 2 clause (15), it is only that particular question which can be decided by this Court in these References.
Section 257 provides that if, on an application made under section 256, the Tribunals of the opinion that, on account of a conflict in the decisions of High Courts in respect of any particular question of law, it is expedient that a reference should be made direct to the Supreme Court, the Tribunal may draw up a statement of the case and refer it through its President direct to the Supreme Court.
It is only the particular question of law on which there is a conflict of decisions in the High Courts that can be referred by the Tribunal directly to this Court.
Here in the present case the conflict of decisions amongst the different High Courts was as to what is the true scope and meaning of the words "not involving the carrying on of any activity for profit" in section 2 clause (15) and whether on account of the presence of these words, the purpose for which the assessee was constituted, though falling within the words "advancement of an object of general public utility" would not be a charitable purpose within the meaning of section 2 clause (15) and it was on account of conflict of decisions on this question that a direct reference was k made to this Court by the Tribunal.
This Court cannot travel beyond the particular question of law which has been referred to it by the Tribunal on account of conflict in the decisions of the High Courts.
It cannot in a direct reference deal with a question of law on which there is no conflict of decisions amongst the High Courts because such a question would be outside the jurisdiction of the Tribunal to refer under section 257.
It is possible that a situation may arise where there may be two questions of law arising from the order of the Tribunal, one in respect of which there is a conflict of decisions amongst different High Courts and the other in respect of which there is no such conflict of decisions and in such a situation it may become necessary to consider whether one single reference comprising both questions should be made to 92 the High Court or two references can be made, one to the High Court and the other to this Court.
We do not wish to express any opinion on this rather intriguing question but one thing is clear that a question of law in respect of which there is no conflict of decisions amongst different High Courts cannot be referred to this Court under section 257.
The contention that the objects of the assessee did not fall within the category "advancement of any other object of general public utility" and were, therefore, not charitable within the meaning of section 2 clause (15) cannot, in the circumstances, be allowed to be raised in these References.
But even if such a contention were permissible, we do not think there is any substance in it.
The law is well settled that if there are several objects of a trust or institution, some of which are charitable and some non charitable and the trustees or the.
managers in their discretion are to apply the income or property to any of those objects, the trust or institution would not be liable to be regarded as charitable and no part of its income would be exempt from tax.
In other words, where the main or primary objects are distributive, each and everyone of the objects must be charitable in order that the trust or institution might be upheld as a valid charity Vide Mohd. Ibrahim vs Commissioner of Income tax and East India Industries (Madras) Ltd. vs Commissioner of Income tax.
But if the primary or dominant purpose of a trust or institution is charitable, another object which by itself may not be charitable but which is merely ancillary or incidental to the primary or dominant purpose would not prevent the trust or institution from being a valid charity: Vide Commissioner of Income tax, Madras vs Andhra Chamber of Commerce(3) The test which has, therefore, to be applied is whether the object which is said to be non charitable is a main or primary object of the trust or institution or it is ancillary or incidental to the dominant or primary object which is charitable.
It was on an application of this test that in Commissioner of Income tax vs Andhra Chamber of Commerce (supra), the Andhra Chamber of Commerce was held to be a valid charity entitled to exemption from tax.
The Court held that the dominant or primary object of the Andhra Chamber of Commerce was to promote and project trade, commerce and industry and to aid stimulate and promote the development of trade, commerce and industry and to watch over and protect the general commercial interests of India or any part thereof and this was clearly an object of general 93 public utility and though one of the objects included the taking of steps to urge or oppose legislation affecting trade, commerce or manufacture, which, standing by itself, May be liable to be condemned as non charitable, it was merely incidental to the dominant or primary object and did not prevent the Andhra Chamber of Commerce from being a valid charity.
The Court pointed out that if "the primary purpose be advancement of objects of general public utility, it would remain charitable even if an incidental entry into the political domain for achieving that purpose e.g. promotion of or opposition to legislation concerning that purpose, was contemplated." The Court also held that the Andhra Chamber of Commerce did not cease to be charitable merely because the members of the chamber were incidentally benefitted in carrying out its main charitable purpose.
The Court relied very strongly on the decisions in Commissioner of Inland Revenue vs Yorkshire, Agricultural Society and Institution of Civil Engineers vs Commissioner of Inland Revenue for reaching the conclusion that merely because some benefits incidentally arose to the members of the society or institution in the course of carrying out its main charitable purpose, it would not by itself prevent the association or institution from being a charity.
lt would be a question of fact in each case "whether there is so much personal benefit, intellectual or professional, to the members of the society or body of persons as to be incapable of being disregarded".
It is this criterion which has to be applied in the present case and if we do so, it is clear that the dominant or primary purpose of the assessee was to promote commerce and trade in Art Silk Yarn, law Silk, Cotton Yarn, Art Silk Cloth, Silk Cloth and Cotton Cloth as set out in sub clause (a) of clause (3) of the Memorandum and the objects specified in sub clauses (b) to (e) of clause (3) were merely incidental to the carrying out of this dominant or primary purpose.
The objects set out in sub clauses (b) to (e) of clause (3) were, in fact, in the nature of powers conferred upon the assessee.
for the purpose of securing the fulfillment of the dominant or primary purpose.
The Revenue, it may be conceded, is right in contending that these objects or powers in sub clauses (b) to (e) or clause (3) would benefit the members of the assessee, but this benefit would be incidental in carrying out the main or primary purpose forming the basis of incorporation of the assessee.
If, therefore, the dominant or primary purpose of the assessee was charitable, the subsidiary objects set out in sub clauses 94 (b) to (e) of clause (3) would not militate against its charitable character and the purpose of the assessee would not be any the less charitable.
Now having regard to the decision of this Court in Commissioner of Income tax vs Andhra Chamber of Commerce (supra), there can be no doubt that the dominant or primary purpose to promote commerce and trade in Art Silk Yarn, Raw Silk, Cotton Yarn, Art Silk Cloth, Silk Cloth and Cotton Cloth fell within the category of advancement of an object of general public utility.
It is true that according to the decision of the Judicial Committee of the Privy Council in All India Spinners Association vs Commissioner of Income tax, the words "advancement of any other object of general public utility" would exclude objects of private gain, but this requirement was also satisfied in the case of the assessee, because the object of private profit was eliminated by the recognition of the assessee under section 25 of the and clauses 5 and 10 of its Memorandum.
It must, therefore, be held that the income and property of the assessee were held under a legal obligation for the purpose of advancement of an object of general public utility within the meaning of section 2 clause (15) .
But the question still remains whether this primary purpose of the assessee, namely, to promote commerce and trade in Art Silk ; Yarn, Raw Silk, Cotton Yarn, Art Silk Cloth, Silk Cloth, and Cotton Cloth could be said to be "not involving the carrying on of any activity for profit." This question arises on the terms of section 2 clause (15) which gives an inclusive definition of "charitable purpose".
It provides that "charitable purpose" includes "relief of the poor, education, medical relief and the advancement of any other object of general public utility not involving the carrying on of any activity for profit.
" It is now well settled as a result of the decision of this Court in M/s. Dharamdipti vs Commissioner of Income tax that the words "not involving the carrying on of any activity for profit" qualify or govern only the last head of charitable purpose and not the earlier three heads.
Where therefore the purpose of a trust or institution is relief of the poor, education or medical relief, the requirement of the definition of "charitable purpose" would be fully satisfied, even if an activity for profit is carried on in the course of the actual carrying out of the primary purpose of the trust or institution.
But if the purpose of the trust or institution is such that it cannot be regarded as covered by the heads of "relief of the poor, 95 education and medical relief", but its claim to be a charitable purpose rests only on the last head "advancement of any other object of general public utility", then the question would straight arise whether the purpose of the trust or institution involves the carrying on of any activity for profit.
The last head of "charitable purpose" thus requires for its applicability, fulfillment of two conditions (i) the purpose of the trust or institution must be advancement of an object of general public utility; and (ii) that purpose must not involve the carrying on of any activity for profit.
The first condition does not present any difficulty and, as we have already pointed out above, it is fulfilled in the present case, because the primary purpose of the assessee, namely, promotion of commerce and trade in Art Silk Yarn, Raw Silk Cotton Yarn, Art Silk Cloth, Silk Cloth and Cotton Cloth is clearly advancement of an object of general public utility.
But the real difficulty arises when we turn to consider the applicability of the second condition.
What do the words "not involving the carrying on of any activity for profit" mean and what is the nature of the limitation they imply, so far as the purpose of advancement of an object of general public utility is concerned ? It would be convenient at this stage to refer briefly to the legislative history of the definition of "charitable purpose in the Income tax law of this country, as that would help us to understand the true meaning and import of the words "not involving the carrying on of any activity for profit".
These restrictive words, it may be noted, were not to be found in the definition of "charitable purpose" given in sub section (3) of section 4 of the Indian Income tax Act, 1922 and they were added for the first time when the present Act was enacted.
What were the reasons which impelled the legislature to add these words of limitation in the definition of "charitable purpose" is a matter to which we shall presently advert.
but before we do so, we may usefully take a look at the definition of "charitable purpose" in Section 4 sub section (3) of the Act of 1922.
There, "Charitable purpose" was defined as including "relief of the poor, education, medical relief and the advancement of any other object of general public utility" without the additive words "not involving the carrying on of any activity for profit".
Now it is interesting to compare this definition of "charitable purpose" with the concept of "charity" under English Law.
The English Law of charity has grown round the Statute of Elizabeth, the Preamble to which contained a list of purpose regarded as worthy of protection as being charitable.
These purposes have from an early stage been regarded merely as examples and have through the centuries been considered as guide 96 posts for the courts in the differing circumstances of a developing and fast changing civilization and economy.
Whenever a question has arisen whether a particular purpose is charitable, the test has always been whether it is or is not within the spirit and intendment of the Preamble to the Elizabeth Statute.
The law has been developed by analogy upon analogy and it is to be found in the large case of case law that has been built up by the courts in over the years.
The result is that the concept of charity in English Law is as vague and undefined as it is wide and elastic and every time there has to be a search for analogy from the Preamble to the Statute of Elizabeth or from decided cases.
An early attempt to simplify this problem by a classification under main heads was made by Sir Samuel Romilly when he tried to subsume charitable purposes under four heads in the following summary submitted by him in the course of arguments in Morice vs Bishop of Durham "relief of the indigent, the advancement of learning, the advancement of religion and the advancement of objects of general public utility".
This classification was adopted in substance by Lord Macnaghten in his classic list of charitable purposes in Special Commissioners vs Pemsel where the learned Law Lord pointed out that charity in its legal sense comprises four principal divisions: trusts for the relief of poverty, trusts for the advancement of education, trusts for the advancement of religion and trusts for other purposes beneficial to the community not falling under any of the preceding heads.
" It will be noticed that the first head inn the definition of "charitable purpose" both in the Act of 1922 and in the pursuant Act is taken from the summary of Sir Samuel Romilly; the second from the classification of Lord Macnaghten after omitting the word "advancement"; the third is a new head not to be found either in the summary of Sir Samuel Romilly or in the classification of Lord Macnaghten while the fourth is drawn from the last head in the summary of Sir Samuel Romilly.
The definition of "charitable purpose" in Indian Law thus goes much further than the definition of charity t be derived from the English cases, because it specifically includes medical relief and embraces all objects of general public utility.
In English Law it is not enough that a purpose falls within one of the four divisions of charity set out in Lord Macnaghten 's classification.
It must also be within the spirit and intendment of the Preamble to the Statute of Elizabeth if it is to be regarded as charitable.
There is no such limitation so far as Indian Law is concerned even if a purpose is not within the spirit and intendment 97 of the Preamble to the Statute of Elizabeth, it would be charitable if it falls within the definition of "charitable purpose" given in the Statute.
Every object of general public utility would, therefore, be charitable under the Indian Law, subject only to the condition imposed by the restrictive words "not involving the carrying on of any activity for profit" added in the present Act.
It is on account of this basic difference between the Indian and English law of charity that Lord Wright uttered a word of caution in All India Spinners ' Association vs Commissioner of Income tax (supra) against blind adherence to English decisions on the subject.
The definition of "charitable purpose" in the Indian Statute must be construed according to the language used there and against the background of Indian life.
The English decision may be referred to for help or guidance but they cannot be regarded as having any binding authority on the interpretation of the definition in the Indian Act.
With these prefatory observations, we may now turn to examine the crucial words "not involving the carrying on of any activity for profit".
One question of semantics that was posed before us was and that is a question which we must first resolve before we can arrive at the true meaning and effect of these words whether these words qualify "advancement" or "object of general public utility".
What is it that must not involve the carrying on of any activity for profit in order to satisfy the requirement of the definition; "advancement" or "object of general public utility ? The Revenue contended that it was the former and urged that whatever be the object of general public utility, its 'advancement ' or achievement must not involve the carrying on of any activity for profit, or in other words, no activity for profit must be carried on for the purpose of achieving or attaining the object of general public utility.
The argument was that if the means to achieve or carry out the object of general public utility involve the carrying on of any activity for profit, the purpose of the trust or institution, though falling within the description "any other object of general public utility" would not be a charitable purpose and the income from business would not be exempt from tax.
Now, if this argument is right it would not be possible for a charitable trust or institution whose purpose is promotion of an object of general public utility to carry on any activity for profit at all.
Not only would it be precluded from carrying on a business in the course of the actual carrying out of the primary purpose of the trust or institution, out it would also be unable to carry on any business even though the business is held under trust or legal obligation to 98 apply its income wholly to the charitable purpose or is carried on by the trust or institution by way of investment of its monies for the purpose of earning profit which, under the terms of its constitution, is applicable solely for feeding the charitable purpose.
The consequence would be that even if a business is carried on by a trust or institution for the purpose of accomplishing or carrying out an object of general public utility and the income from such business is applicable only for achieving that object, the purpose of the trust or institution would cease to be charitable and not only income from such business but also income derived from other sources would lose the exemption.
This would indeed be a far reaching consequence but we do not think that such a consequence was intended to be brought about by the legislature when it introduced the words 'not involving the carrying on of any activity for profit" in section 2 clause (15).
Our reasons for saying so are as follows: It is clear on a plain natural construction of the language used by the Legislature that the ten crucial words "not involving the carrying on of any activity for profit" go with "object of general public utility" and not with "advancement".
It is the object of general public utility which must not involve the carrying on of any activity for profit and not its advancement or attainment.
What is inhibited by these last ten words is the linking of activity for profit with the object of general utility and not its linking with the accomplishment or carrying out of the object.
It is not necessary that the accomplishment of the object or the means to carry out the object should not involve an activity for profit.
That is not the mandate of the newly added words.
What these words require that The object should not involve the carrying on of any activity for profit.
The emphasis is on the object of general public utility and not on its accomplishment or attainment.
The decisions of the Kerala and Andhra Pradesh High Courts in Commissioner of Income tax vs Cochin Chamber of Commerce and Industry and Andhra Pradesh State Road Transport Corporation vs Commissioner of Income tax in our opinion lay down the correct interpretation of the last ten words, in section 2 clause (15).
The true meaning of these last ten words is that when the purpose of a trust or institution is the advancement of an object of general public utility, it is that object of general public utility and not its accomplishment or carrying out which must not ll involve the carrying on of any activity for profit.
99 It is true that the consequences of a suggested construction cannot alter the meaning of a statutory provision where such meaning is plain and unambiguous, but they can certainly help to fix its meaning in case of doubt or ambiguity.
Let us examine that would be the consequence of the construction contended for on behalf of the Revenue.
If the construction put forward on behalf of the Revenue were accepted, then, as already pointed out above, no trust or institution whose purpose is promotion of an object of general public utility, would be able to carry on any business, even though such business is held under trust or legal obligation to apply its income wholly to the charitable purpose or is carried on by the trust or institution for the purpose of earning profit to be utilised exclusively for feeding the charitable purpose.
If any such business is carried on, the purpose of the trust or institution would cease to be charitable and not only the income from such business but the entire income of the trust or institution from whatever source derived, would lose the tax exemption.
The result would be that no trust or institution established for promotion of an object of general public utility would be able to engage in business for fear that it might lose the tax exemption altogether and a major source of income for promoting objects of general public utility would be dried up.
It is difficult to believe that the legislature could have intended to bring about a result so drastic in its consequence.
If the intention of the legislature were to prohibit a trust or institution established for promotion of an object of general public utility from carrying on any activity for profit, it would have provided in the clearest terms that not such trust or institution shall carry on any activity for profit, instead of using involved and obscure language giving rise to linguistic problems and promoting interpretative litigation.
The legislature would have used language leaving no doubt as to what was intended and not left its intention to be gathered by doubtful implication from an amendment made in the definition clause and that too in language far from clear.
Moreover, another consequence of the construction convassed on behalf of the Revenue would be that section 11 sub section (4) would be rendered wholly superfluous and meaningless.
Section 11 sub section (4) declares that for the purpose of section 11 'property held under trust" shall include a business undertaking and, therefore, a business can also be held under trust for a charitable purpose and where it is so held, its income would be exempt from tax, provided of course, the other requisite conditions for exemption are satisfied.
It may be pointed out that section 11 sub section (4) where it provides that a 100 business may also be properly held under trust, does not bring about any change in the law, because even prior to the enactment of that provision, it was held by the Judicial Committee of the Privy Council in the Tribune 's case that property in the corresponding section 4(3) (i) of the Act of 1922 included business and this principle was affirmed by the pronouncements of this Court in J. K. Trust vs Commissioner of Income Tax and Commissioner of Income Tax vs Krishna Warrier.
(3) Section 11 sub section (4) merely gave statutory recognition to this principle.
Now section 13(1) (bb), introduced in the Act 1961 with effect from 1st April, 1977, provides that in the case of a charitable trust or institution for the relief of the poor, education or medical relief which carries on any business, income derived from such business would not be exempt from tax unless the business is carried on in the course of the actual carrying out of a primary purpose of the trust or institution.
Where therefore, there is a charitable trust or institution falling within any of the first three categories of charitable purpose set out in section 2 clause (15) and it carries on business which is held by it under trust for its charitable purpose, income from such business would not be exempt by reason of section 13(1)(bb).
Section 11 sub section (4) would, therefore, have no application in case of a charitable trust or institution falling within any of the first three heads of 'charitable purpose '.
Similarly, on the construction contended for on behalf of the Revenue, it would have no applicability also in case of a charitable trust or institution falling under the last head of 'charitable purpose ' because according to the contention of the Revenue, even if a business is held under trust by a charitable trust or institution for promotion of an object of general public utility, income from such business would not be exempt since the purpose would cease to be charitable.
The construction contended for on behalf of the Revenue would thus, have the effect of rendering section 11 sub section (4) totally redundant after the enactment of sec.
13(1)(bb).
We do not think, we can accept such a construction which renders a provision of the Act superfluous and reduces it to silence.
If there is one rule of interpretation more well settled than any other, it is that if the language of a statutory provision is ambiguous and capable of two constructions, that construction must be adopted which will give meaning and effect to the other provisions of the enactment rather than that which will give none.
The construction which we are placing of section 2 clause (15) leaves a certain area o '; operation to section 11 sub section (4) notwithstanding the enactment of section 101 13(i) (bb) and we must, therefore, in any event prefer that construction to the one submitted on behalf of the Revenue.
We must, however, refer to the decision of this Court in Indian Chamber of Commerce vs Commissioner of Income tax because that is the decision on which the strongest reliance was placed on behalf of the Revenue.
The question which arose for decision in that case n was whether income derived by the Indian Chamber or Commerce from arbitration fees levied by the Chamber, fees collected for issuing certificates of origin and share of profit for issue of certificates of weighment and measurement was exempt from tax under section 11 read with section 2 clause (15) of the Act.
The argument of the Indian Chamber of Commerce (hereinafter referred as the assessee) was that its objects were primarily promotional and protective of Indian trade interests and other allied service operations and they fell within the broad sweep of the expression "advancement of any other object of general public utility" and its purpose was, therefore, charitable within the meaning of section 2 clause (15) and its income was exempt from tax under section 11.
The Revenue, on the other hand, contended that though the objects of the assessee were covered by the expression "advancement of any other object of general public utility" the activities of the assessee which yielded income were carried on for profit and the advancement of accomplishment of these objects of the assessee, therefore, involved carrying on of activities for profit and hence the purpose could not be said to be charitable and the income from these activisms could not be held to be exempt from tax.
These rival contentions raised the same question of interpretation of section 2 clause (15), which has arisen in the present case.
Krishna Iyer, J. speaking on behalf of the Court lamented the obscurity and complexity of the language employed in section 2 clause (15) a sentiment with which we completely agree and after referring, to the history of the provision the learned Judge proceeded to explain what according to him was the true interpretation of the last concluding words in section 2 clause (15).
The learned Judge said: "So viewed, an institution which carries out charitable purposes out of income "derived from property held under trust wholly for charitable purposes" may still forfeit the claim to exemption in respect of such takings or incomes as may come to it from pursuing any activity for profit.
Notwithstanding the possibility of obscurity and of dual meanings when the emphasis is shifted from "advancement" to "object" used in section 2(15), we are clear in our minds that by the 102 new definition the benefit of exclusion from total income is taken away wherein accomplishing a charitable purpose the institution engages itself in activities for profit.
The Calcutta decisions are right in linking activities for profit with advancement of the object.
If you want immunity from taxation, your means of fulfilling charitable purposes, must be unsullied by profit making ventures.
The advancement of the object of general public utility must not involve the carrying on of any activity for profit.
If it does, you forfeit.
The Kerala decisions fall into the fallacy of emphasizing the linkage between the objects of public utility and the activity carried on.
According to that view, whatever the activity, if it is inter wined with, wrapped in or entangled with the object of charitable purpose even if profit results, therefrom, the immunity from taxation is still available.
This will result in absurd conclusions.
Let us take this very case of a chamber of commerce which strives to promote the general interests of the trading community.
If it runs certain special types of services for the benefit of manufacturers and charges remuneration from them, it is undoubtedly an activity which, if carried on by private agencies, would be taxable.
Why should the .
Chamber be granted exemption for making income by methods which in the hands of other people would have been exigible to tax ? This would and up in the conclusion that a chamber of commerce may run a printing press, advertisement business, market exploration activity or even export promotion business and levy huge sums from its customers whether they are members of the organisation or not and still claim a blanket exemption from tax on the score that the objects cf general public utility which it has set for itself implied these activities even though profits or surpluses may arise therefrom.
Therefore, the emphasis is not on the object of public utility and the carrying on of related activity for profit.
On the other hand, if in the advancement of these objects the chamber resorts to carrying on of activities for profit, then necessarily section 2(15) cannot confer cover.
The advancement of charitable objects must not involve profit making activities.
That is the mandate of the new amendment".
It will thus be seen that Krishna Iyer, J. accepted the contention of the Revenue that the means of accomplishing or carrying out an object of general public utility must not involve the carrying on of any activity for profit or to use the words of the learned Judge "must be unsullied 103 by profit making ventures" and even if a business is carried on by n A trust or institution for earning profit to be applied wholly for an object of general public utility, the trust or institution would forfeit the claim for exemption from tax.
The view taken by him was that the benefit of the exemption would be taken away where in accomplishing or carrying out an object of general public utility, the trust or institution engages itself in activity for profit or in other words, the trust or institution should not resort to carrying on of an activity for profit for the purpose of accomplishment or attainment of the object of general public utility.
This view clearly supports the construction canvassed on behalf of the Revenue for our acceptance, but, with the greatest respect to the learned Judges who decided the Indian Chamber of Commerce case, we think, for reasons already discussed, that this view is incorrect and we cannot accept the same.
We have already examined the language of section 2 clause (15) and pointed out how the plain natural meaning of the words used by the Legislature in that definitional clause does not accord with the contention of the Revenue.
We have said enough on the subject and nothing more need be said about it.
It is enough to point out that in a subsequent decision in Commissioner of Income tax vs Dharmodayan Company which came by way of an appeal from the judgment of the Kerala High Court, this Court itself has, in effect and substance, departed from this view and adopted the same construction which has commended itself to us.
The question which arose in this case was whether the income from business of conducting kurries carried on by the assessee was exempt from tax.
The contention of the Revenue was that since the assessee was an institution established for promoting an object of general public utility and this purpose was sought to be achieved out of the income of the business of conducting kurries, the last concluding words of section 2 clause (15) were attracted and the income of the assessee was disentitled to exemption from tax.
This contention was, however, rejected by the Kerala High Court which took the view that the business of conducting Kurries was held under trust to apply its income for the charitable purpose of the assessee and was rot carried on as a matter of advancement of that charitable purpose and hence it was not possible to say that the purpose of the assessee involved the carrying on of an activity for profit so as to attract the mischief of the last few words in section 2 clause (15).
Krishna Iyer, J., in the Indian Chamber of Commerce case, while discussing the judgment of the Kerala High Court in the Dharmodayan case, observed, consistently with the interpretation placed by him on the last concluding words in section 2 clause (15), that the decision 104 of the Kerala High Court in this case proceeded on a wrong test and impliedly, therefore, was incorrectly decided.
But this court while disposing of the appeal from the decision of the Kerala High Court differed from the view taken by Krishna Iyer, J. and upheld the Judgment of the Kerala High Court.
This Court pointed out that the facts of Dharmodayan case were not before Krishna Iyer, J. and that the test applied by Kerala High Court was held by him to be wrong on the assumption that the case fell under the last clause of section 2 clause (15) but, in fact, this assumption was invalid, as Dharmodayan case was not one falling under the last part of the definitional clause.
The finding of the Kerala High Court was that the business of conducting kurries was a business held under trust for applying its income to the charitable purpose and it was not carried on as a matter of advancement of the primary purpose of the trust or in the course of carrying out such purpose and it could not, therefore, be said that the primary purpose of the trust involved the carrying on of an activity for profit within the meaning of the last concluding words in section 2 clause (15).
This Court thus held in no uncertain terms that if a business is held under trust or legal obligation to apply its income for promotion of an object of general public utility or it is carried on for the purpose of earning profit to be utilised exclusively for carrying out such charitable purpose, the last concluding words in section 2 clause (15) would have no application and they would not deprive the trust or institution of its charitable character.
What these last concluding words require is not that the trust or institution whose purpose is advancement of an object of general public utility should not carry on any activity for profit at all but that the purpose of the trust or institution should not involve the carrying on of any activity for profit.
So long as the purpose does not involve the carrying on of any activity for profit, the requirement of the definition would be net and it is immaterial how the monies for achieving or implementing such purpose ' are found, whether by carrying on an activity for profit or not.
We may point out that even in Sole Trustees Lokshikshan Trust vs Commissioner of Income Tax, a decision which, as we shall presently point out, does not commend itself to us on another point, the same interpretation has been accepted by this Court.
We must then proceed to consider what is the meaning of the requirement that where the purpose of a trust or institution is advancement of an object of general public utility, such purpose must not involve the carrying on of any activity for profit.
The question that is necessary to be asked for this purpose is as to when can the purpose of a trust or institution be said to involve the carrying on of any activity 105 for profit.
The word "involve" according to the Sherter Oxford Dictionary "to enwrap in anything, to enfold or envelop; to contain or imply".
The activity for profit must, therefore, be interwined or wrapped up with or implied in the purpose of the trust or institution or in other words it must be an integral part of such purpose.
But the question again is what to do we understand by these verbal labels or formulae what is it precisely that they mean ? Now there are Two possible ways of looking at this problem of construction.
One interpretation is that according to the definition what is necessary is that the purpose must be of such a nature that it involves the carrying on of any activity for profit in the sense that it cannot be achieved without carrying on an activity for profit.
On this view, if the purpose can be achieved without the trust or institution engaging itself in an activity for profit, it cannot be said that the purpose involves the carrying on of an activity for profit.
Take for example a case where a trust or institution is established for promotion of sports without setting out any specific mode by which this purpose is intended to be achieved.
Now obviously promotion of sports can be achieved by organising cricket matches on free admission or no profit no loss basis and equally it can be achieved by organising cricket matches with the predominant object of earning profit.
Can it be said in such a case that the purpose of the trust or institution does not involve the carrying on of an activity for profit, because promotion of sports can be done without engaging in an activity for profit.
If this interpretation were correct, it would be the easiest thing for a trust or institution not to, mention in its constitution as to how the purpose for which it is established shall be carried out and then engage itself in an activity for profit in the course of actually carrying out of such purpose and thereby avoid liability to tax.
That would be too narrow an interpretation which would defeat the object of introducing the words "not in the carrying on of any activity for profit".
We cannot accept such a construction which emasculates these last concluding words and renders them meaningless and ineffectual.
The other interpretation is to see whether the purpose of the Trust or institution in fact involves the carrying on of an activity for profit or in other words whether an activity for profit is actually carried on as an integral part of the purpose or to use the words of Chandrachud, J. as he then was in Dharmodayan case, "as a matter of advancement of the purpose".
There must be and activity for profit and it must be involved in carrying out the purpose of the trust or institution or to put it differently, it must be carried on in order to advance the purpose or in the course of carrying out the purpose of the trust or institution.
It is then that the inhibition of the 8 868SCI/79 106 exclusionary clause would be attracted.
This appears to us to be a more plausible construction which gives meaning and effect to the last concluding words added by the legislature and we prefer to accept it.
Of course, there is one qualification which must be mentioned here and it is that if the constitution of a trust or institution expressly provides that the purpose shall be carried out by engaging in an activity which has a predominant profit motive, as, for example, where the purpose is specifically stated to be promotion of sports by holding cricket matches on commercial lines with a view to making profit, there would be no scope for controversy, because the purpose would, on the face of it, involve carrying on of an activity for profit and it would be non charitable even though no activity for profit is actually carried on or, in the example given, no cricket matches are in fact organised.
The next question that arises is as to what is the meaning of the expression "activity for profit".
Every trust or institution must have a purpose for which it is established and every purpose must for its accomplishment involve the carrying on of an activity.
The activity must however, be for profit in order to attract the exclusionary clause and the question therefore is when can an activity be said to be one for profit? The answer to the question obviously depends on the correct connotation of the proposition "for".
This proposition has many shades of meaning but when used with the active participle of a verb it means "for the purpose of" and connotes the end with reference to which something is done.
It is not therefore enough that as a matter of fact an activity results in profit but it must we carried on with the object of earning profit.
Profit making must be the end to which the activity must be directed or in other words, the predominant object of the activity must be making of profit.
Where the activity is not pervaded by profit motive but is carried on primarily for serving the charitable purpose, it would not be correct to describe it as an activity for profit.
But where, on the other hand, an activity is carried on with the predominant object of earning profit, it would be an activity for profit, though it may be carried on in advancement a of the charitable purpose of the trust or institution.
Where an activity is carried on as a matter of advancement of the charitable purpose or for the purpose of carrying out the charitable purpose, it would not be incorrect to say as a matter of plain English grammar that the charitable purpose involves the carrying on of such activity, but the predominant object of such activity must be to subserve the charitable purpose and not to earn profit.
The charitable purpose should not be submerged by the profit making motive; the latter should not masquerade under the guise of the former.
The purpose the 107 trust, as pointed out by one of us (Pathak, J.) in M/s Dharmodipti vs Commissioner of Income Tax, Kerala (supra) must be "essentially charitable in nature" and it must not be a cover for carrying on an activity which has profit making as its predominant object.
This interpretation of the exclusionary clause in section 2 clause (15) derives considerable support from the speech made by the Finance Minister while introducing that provision.
The Finance Minister explained the reason for introducing this exclusionary clause in the following words; 'The definition of "charitable purpose" in that clause is at present so widely worded that it can be taken advantage of even by commercial concerns which, while ostensibly severing a public purpose, get fully paid for the benefits provided by them namely, the newspaper industry which while running its concern on commercial lines can claim that by circulating newspapers it was improving the general knowledge of the public.
In order to prevent the misuse of this definition in such cases, the Select Committee felt that the 1 words "not involving the carrying on of any activity for profit" should be added to the definition.
It is obvious that the exclusionary clause was added with a view to over coming the decision of the Privy in the Tribune cases where it was held that the object of supplying the community with an organ of educated public option by publication of a newspaper was an object of general public utility and hence charitable in character, even though the activity of publication of the newspaper was carried on commercial lines with the object of earning profit.
The publication of the newspaper was an activity engaged in by the trust for the purpose of carrying out its charitable purpose and on the facts it was clearly an activity which had profit making as its predominant object, but even so it was held by the Judicial Committee that since the purpose served was an object of general public utility, it was a charitable purpose.
It is clear from the speech of the Finance Minister that it was with a view to setting at naught this decision that the exclusionary clause was added in the definition of 'charitable purpose '.
The test which has, therefore, now to be applied is whether the predominant object of the activity involved in carrying out the object of general public utility is to subserve the charitable purpose or to earn profit.
Where profit making is the predominant object of the activity, the purpose, though an object of general public utility, would cease to be a charitable purpose.
But where the predominant object of the activity is to carry out the charitable purpose and not to earn profit, it would not lose its character of a charitable purpose merely because 108 some profit arises from the activity.
The exclusion any clause does not require that the activity must be carried on in such a manner that it does not result in any profit.
It would indeed be difficult for persons in charge, of a trust or institution to so carry on the activity that the expenditure balances the income and there is not resulting profit.
That would not only be difficult of practical realisation but would also reflect unsound principle of management.
We therefore, agree with Beg.
J. when he said in Sole Trustee, Lok Sikshana Trust case (supra) that "if the profits must necessarily feed a charitable purpose under the terms of the trust, the mere fact that the activities of the trust yield profit will not alter the charitable character of the trust.
The test now is, more clearly than in the past, the genuineness of the purpose tested by the obligation created to spend the money exclusively or essentially on charity." The learned Judge also added that the restrictive condition "that the purpose should not involve the carrying on of any activity for profit would be satisfied if profit making is rot the real object" (emphasis supplied).
We wholly endorse these observations.
The application of this test may be illustrated by taking a simple example.
Suppose the Gandhi Peace Foundation which has been established for propagation of Gandhian thought and philosophy, which would admittedly be an object of general public utility, undertakes publication of a monthly journal for the purpose of carrying out charitable object and charges a small price which is more than the cost of the publication and leaves a little profit, would it deprive the Gandhi Peace Foundation of its charitable character ? The pricing of the monthly journal would undoubtedly be made in such a manner that it leases some profit for the Gandhi Peace Foundation, as, indeed, would be done any prudent and wise management, but that cannot have the effect of polluting the charitable character of the purpose, because the predominant object of the activity of publication of the monthly journal would be to carry out the charitable purpose by propagating Gandhian thought and philosophy and not to make profit or in other words, profit making would not be the driving force behind this activity.
But it is possible that in a given case the degree or extent of profit making may be of such a nature as to reasonable lead lo the interference that the real object of the activity is profit making and not serving the charitable purpose.
If, for example, in the illustration given by us, it is found that the publication of the monthly journal is carried on wholly on commercial lines and the pricing of the monthly journal is made on the same basis on which it would be made by a commercial organisation leaving a large margin of profit.
109 it might be difficult to resist the inference that the activity of publication of the journal is carried on for profit and the purpose is non charitable.
We may take by way of illustration another example given by Krishna Iyer, J. in the Indian Chamber of Commerce case where a blood bank collects blood on payment and supplies blood for a higher price on commercial basis.
Undoubtedly, in such a case, the blood bank would be serving an object of general public utility but since it advances the charitable object by sale of blood as an activity carried on with the object of making profit, it would be difficult to call its purpose charitable.
Ordinarily there should be no difficulty in determining whether the predominant object of an activity is advancement of a charitable purpose or profit making.
But cases arc round to arise in practice which may be on the border line and in such cases the solution or the problem whether the purpose is charitable or not may involve much refinement and present real difficulty.
There is, however, one comment which is necessary to be made whilst we are on this point and that arises out of certain observations made by this Court in Sole Trustee Lok Sikshana Trust case (supra) as well as Indian Chamber of Commerce case.
It was said by Khanna, J. in Sole Trustee Lok Sikshana Trust cases; ". . . . . if the activity of a trust consists of carrying on a business and there are no restrictions on its making profit, the court would be well justified in assuming in the absence of some indication to the contrary that the object of the trust involves the carrying on of an activity for profit.
" And to the same effect, observed Krishna Iyer, J. in the Indian Chamber of Commerce case when he said: "An undertaking for a business organisation is ordinarily assumed for profit unless expressly or by necessary implication or by development surrounding circumstances the making of profit stands loudly negatived a pragmatic condition, written or unwritten proved by a prescription of profits or by long years of invariable practices or spirit from some strong surrounding circumstances indicative of anti profit motivation such a condition will nullify for charitable purpose.
" Now we entirely agree with the learned Judges who decided these two cases that activity involved in carrying out the charitable purpose must not be motivated by a profit objective but it must be undertaken for the purpose or advancement or carrying out of the charitable purpose.
110 But we find it difficult to accept their thesis that whenever an activity is carried on which yields profit, the inference must necessarily be drawn, in the absence of some indication to the contrary, that the activity is for profit and the charitable purpose involves the carrying on of an activity for profit.
We do not think the Court would be Justified in drawing any such inference merely because the activity results in profit.
It is in our opinion not at all necessary that there must be a provision in the constitution of the trust or institution that the activity shall be carried on profit no loss basis or that profit shall be prescribed.
Even if there is no such express provision, the nature of the charitable purpose, the manner in which the activity for advancing the charitable purpose is being carried on and the surrounding circumstances may clearly indicate that the activity is not propelled by a dominant profit motive.
What is necessary to be considered is whether having regard to all the facts and circumstances of the case, the dominant object of the activity is profit making or carrying out a charitable purpose.
If it is the former, the purpose.
would not be a charitable purpose, but, if it is the latter, the charitable character of the purpose would not be lost.
If we apply this test ill the present case, it is clear that the activity of obtaining licences for import of foreign yarn and quotas for purchase of indigenous yarn, which was carried on by the assessee, was k not an activity for profit.
The predominant object of this activity was promotion of commerce and trade in Art Silk Yarn, Raw Silk Cotton Yarn, Art Silk Cloth, Silk Cloth and Cotton Cloth, which was clearly an object of general public utility an(l profit was merely a bye product which resulted incidentally in the process of carrying out the charitable purpose.
It is significant to note that the aSsessee was a Company recognised by the Central Government under Section 25 of the and under its Memorandum of Association, the profit arising from any activity carried on by the assssee was liable to be applied solely and exclusively for the promotion of trade and commerce in various commodities which we have mentioned above and no part of such profit could be distributed amongst the members in any form or under any guise.
The profit of the assessee could be utilised only for the purpose of feeding this charitable purpose and the dominant and real object of the activity of the assessee being the advancement of the charitable purpose, the mere fact that the activity yielded profit did not alter the charitable character of the assessee.
We are or the view that the Tribunal was right in taking the view that the purpose for which the assessee was established was a charitable purpose within the meaning of section 2 clause (15) and 111 the income of the assessee was exempt from tax under sec.
The A question referred to us in each of these references must, therefore, be answered in favour of the assessee and against the Revenue.
The Revenue will pay the costs of the assessee in two sets; one in one Reference Case No. 1A/73 and the other in Reference Cases Nos.
10 14 of 1975.
PATHAK, J.
To the judgment prepared by my learned brother Bhagwati, I propose to add a separate judgment, Persuaded by the considerable importance of the question which arises and because of a somewhat different perspective in which the point appears to me.
The controversy in these references centres on the true interpretation of the words "not involving the carrying on of any activity for profit" in the definition of the expression "charitable purpose" by section 2(15) of the Income Tax Act, 1961.
The preceding enactment, the Indian Income Tax Act, 1922 provided, by section 4(3)(i), for the exclusion from the total income of an assessee of any income derived from property held under trust or other legal obligation wholly for charitable purposes.
The words "charitable purpose" were defined as including "relief of the poor, education, medical relief and the advancement of any other object of general public utility.
" The terms in which the benefit was conferred were not sufficient, it appears, to provide against its misuse by a certain class of tax payer.
Advantage was taken of the judicial construction given by the courts to the content of the provision.
As long ago as l 939, the Privy Council had in The Trustees of the `Tribune '(1) held that the object of a trust of supplying the public with an organ of educated public opinion constituted an object of general public utility and was a charitable object.
It was found that the newspaper and press had not been established for the private profit of the testator or any other individual.
The circumstance that the purpose of the trust envisaged a commercial activity, the newspaper charging its readers and advertises at ordinary commercial rates, was held not to detract from the conclusion that it was an object of general public utility.
While enacting the Income Tax Act, 1961, Parliament added a new dimension to the definition of "charitable purpose".
A restrictive clause has been inserted, and section 2(15) of the Act defines "charitable purpose" as including "relief of the poor, education, medical relief, and the advancement of ally other object of general public utility y not 112 involving the carrying on of any activity for profit.
" The Finance Minister explained in Parliament: "The other objective of the Select Committee, limiting the exemption only to trusts and institutions whose object is a genuine charitable purpose has been achieved by amending the definition in clause 2(15).
The definition of 'charitable purpose ' in that clause is at present so widely worded that it can be taken advantage of even by commercial concerns which, while ostensibly serving a public purpose, get fully paid for the benefits provided by them, namely, the newspaper industry, which while running its concern on commercial lines can claim that by circulating newspapers it was improving the general knowledge of the public.
In order to prevent the misuse of this definition in such cases, the Select Committee felt that the words 'not involving the carrying on of any activity for profit ' should be added to the definition.
1) The new scheme, besides redefining "charitable purpose", added a second safeguard directed to protecting the grant of the tax benefit at another point.
A new set of provisions controlled the utilisation of the accumulated income derived from the charitable trust or institution.
Section 11 of the Act, in its material provisions, as originally framed declared: "(1) Subject to the provisions of sections 60 to 63, the following income shall not be included in the total income of the previous year of the person in receipt of the income (a) income derived from property held under trust wholly for charitable. purposes, to the extent to which such income is applied to such purposes in India; and, where any such income is accumulated for application to such purposes in India, to the extent to which the income so accumulated is not in excess of twenty five per cent of the income from the property or rupees ten thousand, whichever is higher; (b) income derived from property held under trust in part only for such purposes, the trust having been created before the commencement of this Act, to the extent to which such income is applied to such purposes in India; and where any such income is finally set apart for application to such purpose in India, to the extent to which the income so set 113 apart is not in excess of twenty five per cent, of the income.
A from the property held under trust in part; (c). . . . . (2) Where the persons in receipt of the income have complied with the following conditions, the restriction specified in clause (a) or clause (b) of sub section (1) as respects accumulation or setting apart shall not apply for the period during which the said conditions remain complied with (a) such persons have, by no ice in writing given to the Income tax officer in the prescribed manner, specified the purpose for which the income is being accumulated or set apart and the period for which the income is to be accumulated or set apart, which shall in no case exceed ten years; (b) the money so accumulated or set apart is invested in any Government security as defined in clause (2) of section 2 of the (XVIII of 1944), or in any other security which may be approved by the Central Government in this behalf.
(3) Any income referred to in sub section (1) or sub section (2) as is applied to purposes other than charitable . . . as aforesaid or ceases to be accumulated or set apart for application thereto or is not utilised for the purpose for which it is so accumulated in the year immediately following the expiry of the period allowed in this behalf shall be deemed to be the income of such person of the previous year in which it is so applied, or ceases to be so accumulated or so set apart or, as the case may be, of the previous year immediately following the expiry of the period aforesaid." Further restrictions were imposed by section 12A and section 13.
Section 13 barred the exemption in the case of a trust for charitable purposes or a charitable institution, created or established after the commencement of the Act, if the trust or institution was created or established for the benefit of any particular religious community or caste.
The exemption was also barred, subject to certain modifications, if any part of the income, or any property of such trust or institution, was M used or applied for the benefit of the author of the trust or founder of the institution or of a person who had made a substantial contribu 114 tion to such trust or institution or of a relative of such author, founder or contributor.
The net of restrictive provisions in relations to the utilisation of the income of the trust or institution was tightened still further by successive amendments to the Act.
It was relaxed in one particular, that to earn the exemption the money accumulated or set apart could alternatively be deposited in a Post office Savings Bank account or a banking company to which the Banking Regulation Act, 194 applies, or a banking co operative society, or was deposited with a financial corporation providing long, term finance for industrial development in India and approved by the Central Government for the purposes of section 36(1)(viii).
A notable amendment, inserted as cl.
(bb) in section 13(1), provided that the exclusion of the income derived from any business carried on by a charitable trust or institution for the relief of the poor, education or medical relief, was not permissible unless "the business is carried on in the course of the actual carrying out of a primary purpose of the trust or institution.
" This amendment, brought in with effect from April 1, 1977, was pertinent to the first three heads set forth in the definition of "charitable purpose" and affected the operation of section 11 with reference to that part of the definition.
Simultaneously, cl.
(d) was also inserted in section 13 (l) which, operating subject to cl.
(bb), insisted that to earn the exemption on income the funds of the charitable trust or institution should be invested o deposited in the forms or modes specified in section 13(5).
The scheme embodied in the statute protected the tax benefit from misuse by reference to two principle vantage points, (a) a cautiously worded definition of "charitable purpose", which intended that trusts created and institutions established for purposes not "charitable within that definition should not be entitled to the benefit, and (b) provisions which carefully control the application of the accumulated income flowing from the property held under trust or owned by the institution.
The first relates to the very purpose of the trust or institution, the second to the manner in which the resulting income is employed.
We are concerned in these references with the former. an(l it is therefore necessary to avoid resting the construction of section 2(15) on considerations pertinent to the latter.
While construing the definition of ' 'charitable purpose" in section 2(15), it is imperative to remember that what we are considering is a definition.
It is a definition and nothing more.
The operative provision is enacted elsewhere in the Act.
Viewed in that light, the meaning of the definition is capable of clearer resolution.
115 Section 2(15) says that "charitable purpose" includes relief of the poor, education, medical relief, and the advancement of any other object of general public utility not involving the carrying on of any activity for profit.
The first three heads of "charitable purpose" are defined in specific and clearly disclosed terms.
Relief of the poor, education and medical relief.
The fourth head is described generally as a residuary head (although that description appears inapt to what finds place in an "inclusive" definition).
Now, it is important to note that the purpose described is "the advancement of any other object of general public utility. ".
The object is not the purpose.
The advancement of the object is the purpose.
Harking back to the first three heads of charitable purpose, the definition defines purpose in terms of an activity.
When Sir Samuel Romilly, in the course of his argument in Morice vs Bishop of Durham(l) summarised the main heads of charity, they included "relief of the indigent, the advancement of learning, the advancement of religion, and the advancement of objects of general public utility." Note the sense of action, of something to be done in relation to an object.
When Lord Macnaghten adopted the classification of charitable purposes in Special Comrs.
vs Pemsel(2), he spoke of "trusts for the relief of poverty, trusts for the advancement of education, trusts for the advancement of religion, and trusts for other purposes beneficial to the community not falling under any of the preceding heads." In the Indian law, the relief of poverty and the advancement of education were embodied as "relief of the poor" and "education".
Medical relief was added.
And for the fourth head, with which we are concerned, the language, an echo of Sir Samuel Romilly 's classification, referred to "the advancement of any other object of general public utility. ".
It will be at once evident that the word "object" cannot by itself connote an activity.
It represents a goal towards which, or in relation to which, an activity is propelled.
The element of activity is embodied in the word "advancement".
If "charitable purpose" is defined in terms of an activity, that is to say, the advancement of an object, the restrictive clause "not involving the carrying on of any activity for profit", which is also descriptive of an activity, must necessarily relate to "the advancement of an object. ".
I am of opinion, therefore, that the restrictive clause must be read with "the advancement of any other object of general public utility" and not with "the object of general public utility.
En passant, it may be observed that much confusion can be avoided if in the context of the fourth head the purpose of the trust or institution is referred to as the "purpose" and 116 not as the "object" of the trust or institution, because the purpose there is defined as "the advancement of an object '.
It being clear then that the charitable purpose is the advancement of the object, and that the advancement must not involve carrying on 13 of an activity for profit, I proceed to the next step.
The words "activity for profit" should, I think, be taken as descriptive of the nature of the activity.
It is an activity of a kind intended to yield profit.
It is a profit making activity.
That it may not actually yield profit during any period does not deny its true nature.
Conversely if profit has resulted from an activity, that does not, without anything more, classify it as an "activity for profit".
Therefore, for a purpose to fall under the fourth head of "charitable purpose", it must constitute the, advancement of an object of general public utility in which the activity of advancement must not involve a profit making activity.
The word "involving" in the restrictive clause is not without significance.
An activity is involved in the advancement of an object when it is enwrapped or enveloped in the activity of advancement.
In another case, it may be interwoven into the activity of advancement, so that the resulting activity has a dual nature or is twin faceted.
Since we are concerned with the definition af "charitable purpose", and the definition defines in its entirety a "purpose" only it will be more appropriate tc, speak of the purpose of profit making being enwrapped or enveloped in the purpose of the advancement of an object of general public utility or, in the other kind of case, the purpose of profit making being interwoven into the purpose of the advancement of that object giving rise to a purpose of possessing a dual nature or twin facets.
Now, section 2(15) clearly says that to constitute a "charitable purpose", the purpose of profit making must be excluded.
In my opinion the requirement is satisfied where there is either a total absence of the purpose of profit making or it is so insignificant compared to the purpose of advancement of the object of general public utility that the dominating role of the latter renders the former unworthy of account.
If the profit making purpose holds a dominating role or even constitutes all equal component with the purpose of advancement of the object of general public utility, then clearly the definition in section 2(15) is not satisfied.
When applying section 11, it is open to the tax authority in an appropriate case to pierce the veil of what is proclaimed on the surface by the document constituting the trust or establishing the institution, and enter into an ascertainment of the true purpose of the trust or institution.
The true purpose must be genuinely and essentially charitable.
117 Now, the definition of a purpose is a thing apart from the mode or method employed for carrying out the purpose.
Yet the nature of the purpose controls in some degree the mode which is open for carrying it out.
If the purpose is charitable in reality, the mode adopted must be one which is directed to carrying out the charitable purpose.
It would include, in my opinion, a business engaged in for carrying out the charitable purpose of the trust or institution.
The carrying on of such a business does not detract from the purpose which permeates it, the end result of the business activity being the effectuation of the charitable purpose.
business activity carried on not with a view to carrying out the charitable purpose of the trust but which is related to a non charitable purpose or constitutes an end in itself falls outside the scope of the trust, and indeed may betray the fact that the real purpose of the trust is not essentially charitable If it is a business entered into for working out the purpose of the trust or institution, that is to say, in the course of, and with a view to, the realisation of the charitable purpose, the income therefore will be entitled to exemption under section 11.
In this connection, it is appropriate to note that s 11(4) specifically defines "property held under trust" as including a business undertaking.
Moreover, when it was found that judicial decisions had held the restrictive clause in section 2(15) to control the fourth head only, and not also the first three heads in the definition, Parliament attempted to secure its original intent by enacting cl.
(bb) in section 13(1).
The two provisions represent the mode of finding finance for working out the purpose of the trust or institution, by deriving income from the corpus of the trust property and also from an activity carried on in the course of the actual carrying out of the purpose of the trust or institution.
At this stage, it will be appropriate to point out that the question whether a trust is created or an institution is established for a charitable purpose falls to be determined by reference to the real purpose of the trust or the institution and not by the circumstance that the income derived can be measured by standards usually applicable to a commercial activity.
The quantum of income is no test in itself.
It may be the result of an activity permissible under a truly charitable purpose for, as has been observed, a profitable activity in working out the charitable purpose is not excluded.
I am unable to agree, with respect, with all that has fallen from H. R. Khanna and A. C. Gupta, JJ.
in Sole Trustee, Loka Shikshana Trust vs Commissioner of Income tax, Mysore that the terms of the trust must impose restrictions on making profits otherwise the purpose of the trust must be regarded 118 as involving the carrying on of a profit making activity.
On the contrary, 1 find myself in agreement with Beg, J. to the extent that he says, in the same case, that it is the genuineness of the purpose, that it is truly charitable, which determines the issue.
It seems necessary to me that a distinction must constantly be maintained between what is merely a definition of "charitable purpose" and the powers conferred for working out or fulfilling that purpose.
While the purpose and the powers must correlate, they cannot be identified with each other.
Reference may, of course, be made to the nature and width of the powers as evidence of the charitable or non charitable nature of the purpose.
For the same reason, I a.m compelled, with respect, to hold that the observations of Krishna Iyer, J. speaking for the Court in Indian Chamber of Commerce vs Commissioner of Income tax, West Bengal ll(1) do not accord with what I believe to be a true construction of section 2(15).
If that decision can be justified, it can be only on the basis that in the opinion of the court the true purpose of the trust or institution was not essentially charitable.
I am unable to accept the proposition that if the purpose is truly charitable,, the attainment of the purpose must rigorously exclude any activity for profit.
I am also unable to endorse the position that by permitting, the trust or institution to carry on an activity which brings in profit, although that activity is carried on in the course of the working out of the purpose of the trust or institution, "business men have a high road to tax avoidance".
It was apparently not brought to the notice of the learned judges that a carefully enacted scheme has been incorporated in the Act which closely controls the utilisation of the trust income, and that the tax exemption is conditional on the observance of the statutory conditions stipulated in that schedule.
on the facts of the present reference s which are set out in the judgment prepared by my brother Bhagwati, I have no hesitation in holding that the purpose of the respondent company falls within the definition of section 2(15) of the Income Tax Act, 1961.
Sub clause (a) of clause 3 of the Memorandum of Association declares that the purpose for which the company has been established is "to promote commerce and trade in Art Silk Yarn, Raw Silk, Cotton Yarn, Art Silk Cloth, Silk Cloth and Cotton Cloth.
" The promotion of commerce and trade has been held by this Court in Commissioner of Income Tax vs Andhra Chamber of Commerce(2) to be an object of general public utility, and there is nothing to show that, viewed as the "purpose" for which the company was incorporated, the sub clause involves the 119 carrying on of any activity for profit.
The remaining sub clauses enumerate the powers for which it has been constituted.
Having regard to the interpretation placed by me on the words defining the Fourth head of "charitable purpose" in section 2(15) of the Act, I answer the question referred in each of the references in the affirmative, in favour of the assessee and against the Revenue.
The Revenue will pay the costs of the assessee in two sets, one in Tax Reference Case No. lA of 1973 and the other in Tax Reference Case Nos. 10 to 14 of 1975.
SEN J. I have had the advantage of reading the judgment prepared by my learned brother Bhagwati J.
I regret my inability to share the views expressed by him as to the construction of the expression 'charitable purpose" as defined in section 2(15) of the Income tax Act, 1961.
I am of the opinion that the two decisions in Sole Trustee, Loka Shikshana Trust vs C.I.T. (1) and Indian Chamber of Commerce vs C.I.T.(2) lay down the correct law and still hold good.
In the definition of "charitable purpose", contained in section 2(15) of the Act of 1961, the words "not involving the carrying on of any activity for profit", which did not find place in the Act of 1922, qualify only the fourth head of charitable purpose viz., "any other object of general public utility", and not any of the first three heads.
The definition of "charitable purpose" in section 2(15) is in these terms: "2(15) 'charitable purpose ' includes relief of the poor, education, medical relief, and the advancement of any other object of general public utility not involving the carrying on of any activity for profit;" It has brought about radical changes in the system of taxation of income and profits of charities, with particular reference to 'objects of general public utility ' to prevent tax evasion, by diversion of business profits to charities.
After the experience gained in the 39 years that followed the enactment of the Act of 1922, it came to be realised that many activities for profit were not subject to tax on income merely because they could be regarded as objects of general public utility.
What was amiss under the Act of 1922 was not the idea of giving income tax relief in respect of charity, but undue width of the range of what ranks as a charity for that purpose.
It is the Vagueness of the expression "any other object of general public utility 120 "that impelled Parliament to insert the restrictive words "not involving the carrying on of any activity for profit".
It is not permissible for the Court to whittle down the plain language of the section.
"It would be contrary to all rules of construction", in the words of Khanna J., speaking for himself and Gupta J. in Loka Shikshana Trust "to ignore the impact of the newly added words 'not involving the carrying on of any activity for profit ' and to construe the definition as if the newly added words were either not there or were intended to be otiose and redundant, i.e., as qualifying and affirming the position under the Act of 1922".
Such a construction would, I am afraid, frustrate the very object of the legislation The section is self explanatory.
The relative simplicity of the language brings out the necessary legislative intent to counter act tax advantages resulting from so called 'charities in camouflage '.
No distinction had been made by the Act of 1922 between the well known charities of relief to the poor, education and medical relief on the one hand and charities resulting from the advancement of any other object of general public utility, on the other hand.
But such a distinction has been introduced by the definition of the term "charitable purpose" in section 2(15) though the definition is an inclusive one.
The restriction is that the advancement of objects of general public utility should not involve the carrying on of any activity for profit.
If it involved any such activity, the charity will fail outside the definition of charitable purpose in section 2(15).
This change has radically altered the law and whenever the advancement of an object of general public utility involved an activity for profit that object will cease to be a charitable purpose.
So, in such cases, the income from the activity for profit cannot be exempted from tax under section 11 of the Act.
The object of this addition of the restrictive words "not involving the carrying on of any activity for profit." was to clearly overcome the decision in In re The Trustees of the Tribune(1), All India spinners ' Association vs C.I.T.(2) and J.K. Trust vs C.l.
T.(8) All these cases arose under section 4(3) (i) of the Act of 1922, which did not include the words "not involving the carrying on of any activity for profit".
and they are no longer good law.
There is a distinction between "a business held under trust. ' and "a business carried on by or on behalf of the trust".
Section 11(1) exempts income derived from property held under trust wholly for 121 charitable or religious purposes, to the extent to which such income is applied to such purposes in India.
Section 11(4) includes within the "property held under trust" a business undertaking so held.
Therefore, income from a business undertaking held under a trust for a charitable purpose is exempt under section 11 ( 1 ) .
There is, therefore, no statutory bar or restriction to earn exemption in respect of income derived from a business undertaking, if such business undertaking is held under a trust for a charitable purpose.
That 'property ' ill section 11(1) includes business has been well established not only by the decisions of the Privy Council dealing with the corresponding provision in section 4(3) (i) of the Act of 1922 in Tribunes Trustees (supra) and Spinners Association (supra) but also by the two decisions of this Court in C.I.T. vs Radhaswami Satsang Sabha(1) and C.I.T. vs P. Krishna Warrier(2).
The first essential condition for exemption under section 11(1) is that the 'property ' from which the income is derived must be held under trust or other legal obligation.
Section 11(4) gives a statutory recognition of the law laid down by this Court in Radhaswami Satsang Sabha namely that business is property and if a business is held in trust wholly for a charitable purpose, the income therefrom will be exempt under section 11(1).
As already stated above, the Act of 1961 now defines 'charitable purpose ' to include 'relief of the poor, education, medical relief, and the advancement of any other object of general public utility not involving the carrying on of any activity for profit '.
It is accepted that the words 'not involving the carrying on of any activity for profit ' qualify only the fourth head of charitable purpose stated in the definition viz. 'any other object of general public utility '.
Consequently, it is clear that in cases falling under the first three heads of charitable purpose stated in the definition imposes no ban on the carrying on of any activity for profit.
The restrictive words 'not involving the carrying on of any activity for profit ' were deliberately introduced in the definition of charitable purpose in section 2(15) to cut down the wide ambit of the fourth head viz. 'any other object of general public utility ' as a measure to check avoidance of tax.
Indubitably, engagement in activity for profit by religious or charitable trusts provides scope for manipulation for tax avoidance.
The Parliament, however, thought that it will not be desirable to ban an activity for profit which arises in the pursuit of the primary object of the trust created with the object of relief the poor, education or medical relief.
122 A study made by the Department of Company Affairs of 75 trusts, of which 62 were charitable, showed that the business houses creating the trusts had mostly appropriated the trust funds for their own businesses.
Considering the problem of tax avoidance through formation of charitable and religious trusts, the Public Accounts Committee in a recent report( ') observed that 'while trusts fulfil a laudable social objective, they have also been used as a device to avoid tax '.
The Committee also took note of the fact that out of 45 trusts connected with industrial houses and having a corpus of Rs. 24.11 crores, the investments by 32 trusts in concerns connected with the industrial houses were SO per cent or more of their funds.
In some cases, it was noticed that the investment in such concerns amounted to as much as 90 per cent of the funds of the trusts.
In other words, the big business houses established their own 'charitable trusts ' because they find it financially advantageous to filter money through them.
In the United States of America, despite several provisions for preventing misuse of funds of public trusts, taxpayers still find ways and means to use charity as a cover for tax avoidance.
In his revealing study 'The Rich and the Super Rich ' Ferdinand Lundberg(2) observes: ". foundations can do anything that is financially possible, without any sort of public supervision or regulation.
In the sphere of finance, name it and they can do it, tax free.
" He goes on to add: "It is mainly because of the Protean utility of the foundation, particularly in the evasion of taxes, that nearly everyone in the community of wealth has come now to share the original insight of only a few such as the pioneering Carnegie and Rockfeller.
" Avoidance of tax through the media of charitable trusts is a malady prevalent in other countries as well.
The British Royal Commission on Taxation of Profits and Income observed that the vagueness of definition of 'charity ', or more precisely the absence of a definition, has enabled very substantial benefits of exemptions to be claimed by activities which, in extreme cases, had no real connection with the idea of charity at all.
The Royal Commission on Taxation for Canada also took note of this problem in its report and 123 recommended that charity should pay income tax on business A income.
There has been a sharp conflict of opinion upon the construction of the crucial words 'not involving the carrying on of any activity for profit ', qualifying the fourth head of charity, 'advancement of any other object of general public utility '.
According to the Kerala High Court in C.I.T. vs Indian Chamber of Commerce,(2) C.I.T. vs Cochin Chamber of Commerce (3) and C.I.T. vs Charmodayan & Co.
,(4) it was observed that in order to take an object of general public utility outside the scope of the definition, that object must involve carrying on of any activity for profit.
The Calcutta High Court in C.I.T. vs Indian Chamber of Commerce(5) took a view different from that of the Kerala High Court observing that the fourth head of charity 'the advancement of any other object of general public utility not involving the carrying on of any activity for profit ' plainly indicates that it is not the object of general public utility which would involve the carrying on of any activity for profit, but the advancement of that object.
Otherwise, the Calcutta High Court held that 'it would lead to a contradictory situation and be destructive of the limitation which the Parliament in its wisdom thought it necessary to impose.
It further observed that that was the only way to avoid a conflict between sections 11 and 2(15), specially with the provisions of section 11(1)(a) and 11(4).
This Court resolved the conflict in Loka Shikshana Trust (supra) and Indian Chamber of Commerce (supra) by holding that the words 'not involving the carrying on of any activity for profit ' govern the word 'advancement ' and not the words 'object of general public utility ' and observed that if the advancement or attainment of the object involves an activity for profit, tax exemption would not be available.
F The words 'charity ' and charitable purpose ' must be construed in their legal or technical sense which is different from their popular meaning.
Charity is a word of art, of precise and technical meaning and an exhaustive definition of charity in the legal sense has never been attempted.
The cases in which the question of charity has come before the Courts are legion, and not all the decisions, even of the highest authority, are easy to reconcile.
124 In England, the locus classicus on the subject is the decision of Lord Macnaghten in Commissioner for Special Purposes of Income tax vs Pemsel decided in the House of Lords.
In that case Lord Macnaghten, after explaining that no doubt the popular meanings of the words 'charity ' and 'charitable ' do not coincide with their legal meaning, but when used in such expressions as 'charitable uses ' 'charitable trust ' or 'charitable purposes ', the word has a well settled technical meaning, observed: " 'Charity ' in its legal sense comprises four principal divisions: trusts for the relief of poverty; trusts for the advancement of education; trusts for the advancement of religion; and trusts for other purposes beneficial to the community not falling under any of the preceding heads.
" The fourth head of this classification has been the subject of much discussion in cases in England.
In some of them it has been held to be synonymous with 'philanthropic ', while in others it has been given a narrower meaning.
In Re. Macduff(2) it was held that while a charitable purpose may well be a purpose of general utility, all purposes of general utility cannot be deemed to be charitable.
It was observed that the words 'public utility ' are so large that they comprehend purposes which are not charitable.
This view was affirmed on appeal, and with regard to Pemsel 's case Lord Justice Lindley observed: "I am certain that Lord Macnaghten did not mean to say that every object of public general utility must necessarily be.
charitable.
Some may be and some may not be.
" The fourth head of Lord Macnaghten 's four fold classification is vague because of its generality, I do not think much useful purpose would be served by referring to the other English cases dealing with the subject, or in attempting to reconcile the dicta of eminent Judges contained in some of them.
It will be sufficient for our present purposes to say that the Indian Legislature while enacting the Act of 1922 appears to have steered clear of these difficulties by using phraseology which is much wider and more comprehensive than that of Lord Macnaghten 's fourth head of classification.
It was in 1896 that Lord Lindley and other Law Lords held in Macduff 's case that the words "general public utility were very wide in their scope, that every object of public utility was not necessarily a charitable purpose ', and yet 22 years later in 1918.
125 when the Explanation to section 4 (3) of the Income tax Act, 1922 was placed on the statute book, the Indian Legislature while practically adopting Lord Macnaghten 's phraseology in enumerating the first three heads of the definition, described the fourth as 'advancement of other objects of general public utility, without any restriction or qualification whatever.
The Courts, therefore, felt it their duty to give full effect to the plain meaning of the words used in section 4(3) of the Act of 1922.
In section 4(3) the Legislature deliberately refrained from qualifying in any way the words "any other object of general public utility", and there was nothing in the context which indicated that it was intended to give them a restricted meaning.
It was, therefore, not open to the Courts or other authorities whose duty it was to interpret the section, to cut down the plain and comprehensive meaning of the words used, simply because they would give to the expression "charitable purpose" a meaning which is hot in accord with popular notions.
In re.
The Trustees of the Tribune (supra) the Privy Council held that the object of supplying State with an organ of educated public opinion was an object of public utility, and it was a charitable object, in the absence of a motive of private profit, even though the newspaper charged its readers and advertisers at ordinary commercial rates.
The case established that under the Act of 1922, the charitable institutions which carried out trade at a profit was exempt in respect of the profits, provided the institution was held on a charitable trust and the profits were and could be applied only to the charitable purposes of the institution.
The result of this and other similar decisions was that a charitable institution could escape the payment of tax on income earned from business provided it could be shown that the money was spent for an "object of general public utility".
Exemption from income tax of the income of charitable trusts provides opportunities for tax avoidance.
The fact that some of charitable trusts are created for the purpose of evasion or avoidance of tax is virtually endemic, an unmitigated well known evil.
The question of tax avoidance through formation of charitable and religious trusts has been engaging the attention of the Government for quite some time.
Before coming into force of the Income tax Act, 1961, section 4(3) (i) of the Act of 1922 governed exemption of income of charitable trusts.
H The definition of the expression "charitable purpose" in section 2 (15) of the Act is different from the definition of that expression in s.4 126 (3) (i) of the Act of 1922.
The words "not involving the carrying on of any activity for profit" were inserted in the Act of 1961 at the Select Committee stage.
The Committee was of the opinion that the definition of "charitable purpose" needed a change to eliminate the tax avoidance device in built in it.
It first considered the insertion of the words "other than the furtherance of an undertaking for commercial profit", after the sentence "any other object of general public utility", but subsequently this was changed to "not involving the carrying on of any activity for profit" and thus the changed definition of "charitable purpose" in section 2 (15) of the present Act was brought in.
The main object was to take away the element of 'business ' from 'charity '.
The then Finance Minister while introducing the Bill had said.
"The definition of 'charitable purpose ', in that clause is at present so widely worded that it can be taken advantage of even by commercial concerns which, while ostensibly serving a public purpose, get fully paid from the benefits provided by them, namely, the newspaper industry which while running its concern on commercial lines can claim that by circulating newspapers it was improving the general know ledge of the public.
In order to prevent the misuse of this definition in such cases, the Select Committee felt that the a; words 'not involving the carrying on of any activity for profit ' should be added to the definition.
" The words "not involving the carrying on of any activity for profit have changed the picture completely, and the decision of the Privy Council in Trustees of the Tribune (supra) and Spinners ' Association (supra) as well as that of this Court in Radhaswami Satsang Sabha (supra), J. K. Trust vs C.I.T. and C.I.T. vs Andhra Chamber of Commerce(o) are now of academic interest only.
Parliament by introducing these words have not only curtailed the scope of the fourth head of charity, 'advancement of any other object of general public utility ', but also left little room for the tax payers to manoeuvre the diversion of their business profits to charity.
Even assuming that the dominant object is the promotion or advancement of any other object of general public utility ', if it involves any activity for profit, i.e., any business or commercial activity, then it ceases to be a "charitable purpose" within the meaning of section 2 (15).
In that event, the profits derived from such business 127 are not liable to exemption under section 11 (1) read with section 2 (15).
The A concept of 'profits to feed the charity ' is also of no avail.
That is because the concept of profits to feed the charity ' can only arise under the first three heads of 'charitable purpose ' as defined in section 2 (15) of the Act, i.e., "relief of the poor ", "education" and "medical relief", but they are not germane insofar as the fourth head is concerned, viz., "the advancement of any other object of general public utility".
If the fulfillment of an object of general public utility is dependent upon any activity for profit, it ceases to be a charitable purpose.
This Court in Loka Shikshana Trust (supra) and Indian Chamber of Commerce (supra) has had occasion to deal with the legal significance of the words "not involving the carrying on of any activity for profit" added to the definition of "charitable purpose as contained in s 2 (15) of the Act.
After referring to the Finance Minister 's speech it observed that the amended provision was directed at a change of law as it was declared by the Privy Council in Trustees of the Tribune (supra).
The case of Loka Shikshana Trust first brought out the legislative intent.
This was a typical case of an abuse of the tax exemption given to charitable institutions that brought about a change in the law.
It was a case of a trust constituted by a person who appointed himself the sole trustee with absolute discretion and the entire activity of the trust was in fact that of running a wide circulation newspaper.
It was claimed that the mere act of printing and publishing and circulating a newspaper was tantamount to carrying out the charitable object of education.
By claiming exemption of tax, the trust funds had over the years, swelled from about Rs. 4,000/ to nearly Rs. 2 lakhs.
During the assessment year in question, the total receipts of the trust were of the tune of Rs. 22 lakhs.
It was entirely a commercial activity and there was not even a semblance of spending any part of the income on the object of education by way of granting scholarships or providing means of education and so on.
The Court laid down that if the object of the charitable trust is advancement of any object of general public utility, any income derived by it from any activity for profit, will not be entitled to exemption under section 11 of the Act, having regard to the words "not involving the carrying on of any activity for profit", introduced in the definition of the term 'charitable purpose ' as contained in section 2 (15).
Khanna J., speaking for the Court, pointed out that as a result of the addition of the words "not involving the carrying on of any activity for profit", at the end of the definition in section 2(15) of the 128 Act, even if the purpose of the trust is "advancement of any other object of general public utility", it would not be considered to be "charitable purpose" unless it is shown that the advancement of such object does not involve the carrying on of any activity for profit, saying "It is also difficult to subscribe to the view that the newly added words "not involving the carrying on of any activity for profit" merely qualify and affirm what was the position as it obtained under the definition given in the Act of 1922.
If the legislature intended that the concept of charitable purpose should be the same under the Act of 1961, as it was in the Act of 1922, there was no necessity for it to add the new words in the definition.
The earlier definition did not involve any ambiguity and the position in law was clear and admitted of no doubt after the pronouncement of the Judicial Committee in the cases of Tribune and All India Spinners ' Association.
If despite that fact the legislature added new words in the definition of charitable purpose, it would be contrary to all rules of construction to ignore the impact of the newly added words and to so construe the definition as if the newly added words were either not there or were intended to be otiose and redundant.
" Beg J., who delivered a separate but concurring judgment, while discussing the scope of section 2 (15), observed: "As a rule, if the terms of the trust permit its operation 'for profit ', they became, prima facie, evidence of a purpose falling outside charity.
They would indicate the object of profit making unless and until it is shown that the terms of the trust compel the trustee to utilise the profits of business also for charity.
This means that the test introduced by the amendment is: Does the purpose of a trust restrict spending the income of a profitable activity exclusively or primarily upon what is "charity" in law ? If the profits must necessarily feed a charitable purpose, under the terms of the trust, the mere fact that the activities of the trust yield profit will not alter the charitable character of the trust.
The test now is, more clearly then in the past, the genuineness of the purpose tested by the obligatory created to spend the money exclusively or essentially on 'charity '.
li that obligation is there, the income becomes entitled to exemption.
That in our opinion, is the most reliable test." 129 These observations of Beg J. were in the nature of an obiter dictum, as on facts he held the trust in that case to be actually engaged in activity for profit.
I shall, however, deal with the observations later as they create some difficulty.
The matter was put beyond the pale of controversy by the Court in Indian Chamber of Commerce (supra).
The assessee was a Chamber of Commerce.
Its objects were to promote and protect trade interests and other allied service operations falling within the expression the advancement of any other object of general public utility".
The Chamber deriv d income from (i) arbitration fees levied by it, (ii) fees collected for issuing certificates of origin, and (iii) share in the profits made by issuing certificates of weighment and measurement.
The question was whether tile activates of the Chamber being activities carried on for profit, in the absence of any restriction in its memorandum and articles of association against the making of profit from such activities the income of the Chamber from those activities was liable to income tax or was exempt from income tax under section 11 read with section 2(15).
D Krishna Iyer, J., speaking on behalf of himself, Gupta and Fazal Ali J.T., referred to the legislative history, the evil sought to be remedied, and the speech of the Finance Minister, which gave the "true reason for the remedy", said: "The obvious change as between the old and the new definitions is the exclusionary provision introduced in the last few words.
The history which compelled this definitional modification was the abuse.
to which the charitable disposition the statute to charitable purposes was subjected, by exploiting businessman.
You create a charity, earn exemption from the taxing provision and run big industries virtually enjoying the profits with a seeming veneer of charity, a situation which exsuscitated Parliament and constrained it to engraft a clause deprivatory of the exemption in the institution fulfilling charitable purposes undertook.
activities for profit and thus sought to hoodwink the statute.
The Finance Minister 's speech in the House explicates the reason for the restrictive condition." (Emphasis supplied) He lamented the legislative obscurity in the definition of charitable purpose in section 2(15) of tho Act but observed that the Court must adopt a construction which advances the legislative intent, stating: "The evil sought to be abolished is thus clear.
The inter pretation of the provision must naturally fall in line with the advancement of the object.
" 130 The whole object of adding the words "not involving the carrying on of any activity for profit" at the end of the definition of 'charitable purpose ' in section 2(15), in the words of Krishna Iyer J., was: "This expression, defined in section 2(15), is a term of art and embraces object of general public utility.
But, under cover of charitable purposes, a crop of camouflaged organisations sprung up.
The mask was charitable, but the heart was hunger for tax free profit.
When Parliament found this dubious growth of charitable chemelsons, the definition in section 2(15) was altered to suppress the mischief by qualifying the broad object of "general public utility" with the additive "not involving the carrying on of any activity for profit.
The core of the dispute before us is whether this intentional addition of a "cut back" clause expels the chamber from the tax exemption zone in respect of the triune profit fetching sub enterprises undertaken by way of service or facility for the trading community." A realistic line of reasoning, according to him, is to interpret 'charitable purpose" in such a manner that 'we do not burke any word ', 'treat any expression as redundant ' or 'miss the accent of the amandatory phrase '.
He struck a note of warning regarding the 'possibility of obscurity ' and 'dual meanings ' by shifting of emphasis from 'advancement ' to 'object ' used in section 2(15).
The emphasis is not on the object of public utility and the carrying on of related activity for profit.
On the other hand, if in the advancement of these objects, the trust resorts to carrying on of activities for profit, then necessarily section 2(15) cannot confer cover.
The advancement of charitable objects must not involve profit making activities.
That according to him, is the mandate of the new law.
In reaching that conclusion he observes: "In our view, ll e ingredients essential to earn freedom from tax are discernible from the definition, if insightfully, actually read against the brooding presence of the evil to be suppressed and the beneficial object to be served.
The policy of the statute is to give tax relief for charitable purpose, but what falls outside the page of charitable purpose '? The institution must confine itself to the carrying on of activities which are not for profit.
It is not enough if the object be one of general public utility.
The attainment of that object shall not involve activities for profit " In conclusion, he sums up the legislative intent, saying: "To sum up, section 2(15) excludes from exemption the carrying on of activities for profit even if they are linked with 131 the objectives of general public utility, because the statute interdicts, for purpose of tax relief, the advancement of such objects by involvement in the carrying on of activities for profit.
" The dictionary meaning of the word "involve" is "to envelop, to entangle, to include, to contain, to imply": Shorter oxford Dictionary, 3rd ed., p. 1042.
The word "involve" thus contemplates the advancement of the object of general public utility being sought to be achieved by carrying on of an activity for profit.
That conclusion is inevitable on a proper analysis of the two decisions.
In Loka Shikshana Trust, the object of the trust could not be achieved without carrying on the business of publication of newspapers.
In Indian Chamber of Commerce, the income from fees from arbitration or fees for issuing certificates of weighment and measurement, might have been conceived as part of its objects of assisting trade and commerce.
If the profit making activity is thus the appointed means of achieving a charitable object of general public utility, then, the profit would be taxable.
At p. 803 of the Report, Krishna Iyer J., speaking for the Bench, held that "by the new definition, the benefit of exclusion from the total income is taken away where in accomplishing a charitable purpose the institution engaged itself in activities for profit".
A reading of section 2(15) and section 11 together shows that what is frowned upon is an activity for profit by a charity established for advancement of an object of general public utility the course of accomplishing its objects.
These being the principles upon which exemption of income derived from property held under trust by an object of general public utility under section ll(l) read with section 2(15) can be claimed, it is clearly inconsistent with them to hold that if the dominant or primary purpose was 'charity ', it was permissible for such an, object of general public utility, to augment its income by engaging in trading or commercial activity.
That would be clearly against the whole scheme of the Act.
I need hardly say that, if the altered definition of 'charitable purpose ' in section 2(15) were to be applied, according to the well known canons of construction, no such point would for a moment be arguable.
There can be no doubt that Parliament wanted to bring about a change in the law to prevent tax avoidance by diversion of business profits to pseudo charities.
Surely, it cannot be said that Parliament did not mean what it intended to achieve, by introducing the restrictive words "not involving the carrying on of any activity for profit".
It clearly meant to prevent tax free profits from being ploughed back in business.
But it is said that the law is different; and the point upon which the case 132 must turn cannot be more distinctly put that was put by Beg J. in his judgment in Loka Shikshana Trust.
The observations of Beg J. have given rise to a controversy that the condition that the purpose should not involve the carrying on of any activity for profit would be satisfied if profit making is not the real object; and that if the terms of the trust permit the carrying on of business activity for profit it would prima facie indicate the object of profit making unless those terms indicate the real object to be charitable by compelling the trustees to utilize the business profit for charity.
This is contrary to what Khanna and Gupta JJ.
stated.
While they observed that 'if the terms of the trust do not impose restrictions on profit making, the court would be well justified in assuming.
In the absence of some indication to the contrary, that the object of the trust involved the carrying oil of an activity for profit.
To quote again, Beg J. Observed: "If the profits must necessarily feed a charitable purpose, under the terms of the trust, the mere fact that the activities of the trust yield profit will not alter the charitable character of the trust".
On the basis of the observations of Beg J. it is, asserted that the test now is, more clearly than in the past, the genuineness of the purpose tested by the obligation created to spend the money exclusively or essentially on 'charity '.
It is stated that despite the addition of the words "not involving the carrying on of any activity for profit" in section 2(15) of the Art, there is a distinction between (a) a business being held under trust where profits feed a charity in which case the income of such trust would be wholly exempt, and (b) the carrying on of a business in carrying out what is conceived as a charitable purpose in which case the income may be taxable.
It is said that the distinction is fine, but must be kept in view.
The so called distinction, in my opinion, is without any basis whatever.
It runs counter to the very abject and purpose of the legislation.
Under the existing provisions, if the object of purpose of a trust is relief of the poor, education or medical relief, the trust can carry on an activity for profit provided it is in the course of carrying out the primary object of the trust.
However, if the object of the trust is advancement of an object of general public utility and it carried on.
any activity for profit, it is excluded from the ambit of charitable purpose defined in section 2(15).
The distinction is clearly brought out by the provision contained in section 13(1)(bb) inserted by Tax Laws (Amendment) Act.
1975, which provides that in case of a charitable trust or institution for the relief of the poor, education or medical relief, which carries on any business,, any income derived from such business, unless the business is carried on in the course of the actual carrying out of a 133 primary purpose of the trust or institution shall not be excluded from the total income of the previous year.
It seems that the attention of Beg J. in Loka Shikshana Trust (supra) was not drawn to the fact that he was dealing with a case falling under the fourth head of charity "advancement of any other object of general public utility", the ambit of which was restricted by the qualifying clause "not involving the carrying on of any activity for profit", aud, therefore, there was no occasion for him to observe, "if the profits must necessarily feed a charitable purpose, under the terms of the trust, the mere fact that the activities of the trust yield profit will not alter the charitable character of the trust".
These considerations can only arise under the first three heads of charity viz., 'relier of the poor ', 'education ' and 'medical relief ' In C.I.T. Kerala vs Dharmoddyam Co.,(1) Dharmaposhanam Co. vs C.I.T., Kerala(2) and Dharmadipti vs C.I.T., Kerala(3) the Court had occasion to deal with the definition of 'charitable purpose ' in section 2(15).
In Dharmodayam, the finding of the Kerala High Court was that the kuri business was itself held under trust or religious or charitable purpose, and therefore, the Court observed: "lt is a necessary implication of this finding that the business activity was not undertaken by the respondent in order to advance any object of general public utility.
It, therefore did not become necessary to enquire whether conducting the kuri business involved the carrying on of my activity for profit, in as much as the income derived by the assessee from the kuries was exempt from tax under section 11(1) (a).
" In Dharposhanam, it was held that the income from the, business of conducting, kuries and money lending fell under the residual general head 'any other object of general public utility ' and being carried on or profit could not be regarded as charitable purpose under section 2(15).
In Dharmadipti, the Court came to a contrary conclusion because the income from the kuri business was derived from a business held under trust for charitable purposes.
In all these cases, there was nonfulfillment of one condition or the other, i.e., either the business was not held under trust or being an object of general public utility was engaged in an activity for profit.
With respect, I venture to say that if an object of general public utility is engaged in an activity for profit, it ceases 134 to be a charitable purpose and, therefore, the income is not exempt under 6.
11(i) (a).
In case of a trust falling under any of the first three heads of charity, viz., 'relief of the poor ', 'education ' and 'medical relief ' it may engage in any activity for profit, and the profits would not be taxable if they were utilized for the primary object of the trust.
In other words, the business carried on by them is incidental or ancillary to the primary object viz., relief of the poor, education and medical relief.
To illustrate, a charitable hospital holding buildings on trust may run a nursing home.
The profits of the nursing home owned and run by the trust will be exempt under section 11(4), because the business is carried on by the trust in the course of the actual carrying out of the primary purpose of the trust.
The concept of 'profits to feed the charity ', therefore, is applicable only to the first three heads of charity and not the fourth.
It would be illogical and, indeed, difficult to apply the same consideration to institutions which are established for charitable purposes of any object of general public utility.
Any profit making activity linked with an object of general public utility would be taxable.
The theory of the dominant or primary object of the trust cannot, therefore, be projected into the fourth head of charity, viz., 'advancement of any other object of general public utility ', so as to make the carrying on of a business activity merely ancillary or incidental to the main object.
In fact, if any other view to prevail, it would lead to an alarming result detrimental to the revenue.
The whole object of inserting the restrictive words 'not involving the carrying on of any activity for profit ' in the stricter definition of 'charitable purpose ' in section 2(15) to make the range of favoured activity less flexible than it had been hitherto before i.e., to prevent big business houses from siphoning of a substantial portion of their income in the name of charity, would be defeated.
The danger of permitting diversion of business profits, which was sought to be prevented by Parliament is but apparent.
In my opinion, the restrictive words 'not involving the carrying on of any activity for profit ' in the definition of 'charitable purpose ' in s.2(15) of the Income tax Act, 1961 must be given their due weight.
Otherwise, it would have the effect of admitting to the benefits of exemption the fourth indeterminate class viz., objects of general public utility engaged in activity for profit contrary to the plain words of s.2(15).
Modern legislation has changed in pattern towards re casting taxes and provisions with very wide language, while at the same time dealing in much more detail with some crees of law.
Judges, 135 in part, responding to general trends of law, but also reacting to A the farm of modern tax legislation, must be prepared to take account of the context and purposes of the change brought about.(1) Most Judges, in dealing with tax legislation, have refused to engage in what Megarry J. calls "a bout of speculative judicial legislation" to cut down the wide words of the statute: Inland Revenue Commissioner vs Brown.(2) In Harrison vs Nairn Williamson(3) Goulding J. Observes: "The way I have to approach this pure question of verbal interpretation is, I think, to give the words used by Parliament their ordinary meaning in the English language, and if, consistently with ordinary meaning, there is a choice between two alternative interpretations, then to prefer the construction that maintains a reasonable and consistent scheme of taxation without distorting the language.
" Both the Judge 's conclusion, and his reasoning, were adopted expressly in the Court of Appeal, where the Court was exercised by the fact that the taxpayer 's interpretation of the section in question might lead to a most obvious way of tax evasion.
This attitude was rejected earlier by Megarry J. in the following comment: 'There is high authority for saying that it scarcely lies in the mouth of the taxpayer who plays with fire to complain of burnt fingers ' Reeves vs Evans Boyce and Northcott Syndicate(4) Lord Justice Sellers in F. section Securities vs I.R.C.(6) also found that "enrichment without any service to the community and without taxation is hard to countenance".
Lord Reid in Greeberg vs I.R.C.(6) voices the same concern about the prevailing attitude to tax statutes, saying: "Parliament is very properly determined to prevent this kind of tax evasion, and if the courts find it impossible to give very wide meanings to general phrases the only alter native may be for Parliament to do as some other countries have done and introduce legislation of a more sweeping character.
" 136 It is legitimate to look at the state of law prevailing leading to the legislation so as to see what was the mischief at which the Act was directed.
This Court has on many occasions taken judicial notice of such matters as the reports of parliamentary committees, and of such other facts as must be assumed to have been within the contemplation of the legislature when the Acts in question were passed.
In C.I.T., M.P. & Bhopal vs Sodre Devi(1) the question before the Court was as to the construction of section 16(3) of the Income tax Act, 1922.
After finding that the word 'individual ' occurring in the aforesaid sub section was ambiguous, Bhagwati J. observed: "In order to resolve this ambiguity therefore we must of necessity have resort to the state of law before the enactment of the provisions, the mischief and the defect for which the law did not provide; the remedy which the legislature resolved and appointed to cure the defect; and, the true reason for the remedy." The then prevailing law relating to exemption of income of charitable trusts contained several loopholes.
The Law Commission in its Twelfth Report felt the need to eliminate the tax avoidance device in built in the definition of 'charitable purpose ' in section 4(3) of the Act of 1922, by insertion of an Explanation to the effect: "Explanation: In this sub section 'property ' does not include 'business '.
" The Direct Taxes Administration Enquiry Committee in their report (1958 59) observed as follows: "The existing provisions relating to exemption of the income of charitable trusts under Section 4(3) (i) of the Income tax Act contain certain loopholes which help the formation of pseudo charitable trusts." "Another wide loophole rests in the interpretation of the word 'property ', whereunder a trust could carry on business which had nothing to do with the primary object of the trust itself and still yet exemption in respect of the income from this business.
Courts have held that business can also be 'property ', held under trust.
Certain amendments in Section 4(3) (i) of the Income tax Act were made through the Indian Income tax (Amendment) Act, 1953 to try to ensure that income of a 'charitable ' business got e exemption only if the business was carried on behalf of a religious and charitable institution and was carried on in 137 the course of implementing a primary purpose of the institution or the work of the business was mainly done by the beneficiaries of the institution.
This was done by adding proviso (b) to Section 4(3) (i) of the Indian Income tax Act.
That proviso says that the income derived from property held under trust for religious or charitable shall not be exempt and shall consequently be included in the total income." "Courts have, however, taken the view that the above two conditions (in the proviso) for getting exemption apply only where business is carried on behalf of a religious or charitable institution and not where the business itself is held upon trust, and that as such the income of such a business would still be entitled to exemption under the substantive part of Section 4(3) (i) despite nonfulfillment of the conditions set out in the proviso.
" Adopting the recommendation of the Select Committee, Parliament inserted the words "not involving the carrying on of any activity for profit" in the definition of the expression 'charitable purpose ' in section 2(15) of the Act.
The report of the Public Accounts Committee made a comprehensive study of the problem and indicated the magnitude of avoidance of tax through formation of charitable trusts, and considered whether the words 'not involving the carrying on of any activity for profit ' should be deleted, but recommended against its deletion.
The Direct Taxes Enquiry Committee (otherwise know as the Wanchoo Committee) considered the question whether the restriction of trusts in the matter of engaging in activities for profit should be removed and made the following recommendations.
"It is in this background that we address ourselves to the question as to whether religious or charitable trusts enjoying tax exemption should be permitted to carry on any activity for profit.
Indubitably, engagement in activity for profit by such trusts provides scope for manipulations for tax avoidance.
We, however, consider that it will not be desirable to ban an activity for profit which arises in the pursuit of the primary purpose of a trust created with the object of relief of the poor, education or medical relief.
For instance, 10 868SCI/79 138 in the case of a trust for vocational training, it would be essential for the trust to carry on its vocation.
We, there.
fore, recommend that law should be suitably amended to provide that where a trust for the religion of the poor, education or medical relief derives income from any activity for profit, its income would be exempt from income tax only if the said activity for profit is carried on in the course of the actual carrying out of a primary purpose of the institution.
We wish to make it abundantly clear that even where a business is settled in trust, the trust should fulfil this condition if it is to enjoy tax exemption in respect of the income from such business.
So far as trusts for any other object of general public utility are concerned, pursuit of any activity for profit should continue to render them ineligible for tax exemption.
The Direct Taxes Laws Committee in Chapter 2 (Interim Report, December 1977) on charitable trusts considered the question whether the above expression in the definition should be deleted and recommended the deletion of the above expression stating: "We have received a large number of representations on the hardship caused as a result of the total banning of activity for profit so far as trusts having the fourth category objects are concerned.
It has been pointed out that activities for ;.
profit are essentially fund raising in nature, without which charities cannot exist.
We find considerable substance in these representations.
We are aware that some trusts have abused the provisions enabling them to carry on business ' I and that, sometimes, expansion or consolidation of business is by itself, sought to be justified as furtherance of charity.
such abuses would particularly arise where a business is merely held by a charitable trust as property unconnected with the objects of charity.
The remedy, in our opinion, lies in the direction of proper enforcement of the provisions relating to application of trust funds for charitable purposes and not of totally banning all activities for profit.
Moreover, it is noticed that charitable trusts generally have objects falling under all the four categories.
Very often, a trust has come into difficulties on account of a single object under the fourth category, even though all the important objects fall under the first three categories.
We, therefore, 139 recommend deletion of the words "not involving the carrying on of any activity for profit" occurring in section 2(15).
" The Government, however, has not accepted the recommendation.
I fail to comprehend when the recommendation has not been acted upon by the Government by suitable legislation, how can this Court by a process of judicial construction achieve the same result.
Fears expressed at the Bar that this harsh measure enacted by, Parliament has shrivelled and dried up many genuine charities, does not take into account that it had to step in when the tax exemptions available to charitable and religious trusts started being misused for the unworthy purposes of tax avoidance.
The law has been so re structured to prevent allergy to taxation masquerading as charity.
It cannot be disputed that many business houses have abused the provision relating to exemption from tax by carrying on activities for profit as a means for expansion and consolidation of business, which was sought to be justified as in furtherance of charity, i.e., charity became big business.
Now, the law is designed to prevent this misuse of tax exemption in the name of charity.
It is not the function of a court of law to give the words a strained and unnatural meaning.
It may be that many genuine charitable trusts promoting objects of general public utility are severely affected and are caught in between the two extremes.
But this call for a change in the law.
I am only reiterating what has been said over and over again in deal with taxing Acts.
In Cape Brandy Syndicate vs Inland Revenue Commissioner(l) the principle was formulated and stated by Rowlat J. in his own terse language: "In a taxing Act one has merely to look 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.
" In Inland Revenue Commissioner vs Ross & Coulter( ') Lord Thanketro in describing 'the harsh consequences of a taxing provision ' said: ".
If the meaning of the provision is reasonably clear, the courts have no jurisdiction to mitigate such harshness." 140 The judicial attitudes cannot be formed in isolation from Legislative processes, particularly in connection with Tax avoidance provisions.
I would, accordingly, answer the references in favour of the Revenue and against the assessee.
The Commissioner will be entitled to his costs.
| IN-Abs | The assessee which was an incorporated company, carried on various activities for promotion of commerce and trade in art silk yarn, art silk cloth and silk cloth.
Its other objects were to obtain licences for import of raw material needed by its members, to obtain licences for export of cloth manufactured by its members and to do all other lawful things as are incidental or conducive to the attainment of the objects.
Its income and property were to be applied solely for the promotion of its objects and no portion of the income or property was to be paid or transferred directly or indirectly by way of dividend, bonus or profits to its members.
In the event of its winding up or dissolution, surplus of assets over liabilities, if any, could not be distributed amongst the members but was liable to be given or transferred to some other company having the same objects as the assessee, to be determined by the members of the assessee or by the High Court which has jurisdiction in the matter.
The assessee received income by way of annual subscription from its members (the revenue conceded that this amount was exempt from tax) and commission on the basis of certain percentage of the value of licences for import of foreign yarn and quotas for the purchase of indigenous yarn.
The assessee constructed a building out of the amounts received and the rent received from the tenants was an additional source of its income.
The assessee 's claim for exemption under section 11(1) of the Income Tax Act was rejected by the Income Tax Officer on the ground that its objects were not charitable within the meaning of section 2(15) of the Act.
On the other hand the Appellate Assistant Commissioner held that the assessee 's income was entitled to exemption under section 11 (1) because the activities carried on by the assessee were in fulfillment of the primary purposes which did not involve the carrying on of any activity for profit.
This view of the Appellate Assistant Commissioner was affirmed by the Appellate Tribunal in appeal by the revenue.
In view of the conflicting decisions amongst different High Courts on the interpretation of the words "not involving the carrying on of any activity for profit" in the definition of charitable purpose in section 2(15) of the 1961 Act the Appellate Tribunal referred to this Court, under section 257 of the Act.
78 the question whether the assessee was entitled to exemption under section 11(1) of the Act.
It was contended on behalf of the revenue that if the means to achieve or carry out the object of general public utility involve the carrying on of any activity for profit, the purpose of the trust, though falling within the description "any other object of general public utility", would not be a charitable purpose and the income from business would not be exempt from tax.
Dismissing the appeal, ^ HELD: (Per majority Bhagwati, Untwalia and Tulzapurkar, JJ) 1.
The contention that the objects of the assessee did not fall within the category of "advancement of any other object of general public utility" and were not charitable within the meaning of section 2(15) in that its members were merely specified individuals who did not constitute a section of the public cannot be allowed to be raised in this reference.
In a reference under section 257 of the Income Tax, Act, 1961 the Tribunal is not competent to refer to this Court a question in respect of which there is no conflict of decisions amongst different High Courts nor can this Court travel beyond the particular question of law referred to it by the Tribunal on account of conflict in the decisions of the High Courts.
[92 A B] 2.
(a) It is well settled that where the main or primary objects are distributive, each and every one of the objects must be charitable in order that the trust of institution may be upheld as a valid charity.
But if the primary or dominant purpose of a trust is charitable another object which by itself may not be charitable but which is merely ancillary or incidental to the primary or dominant purpose would not prevent it from being valid charity.
[92 D E] (b) The test which has to be applied is whether the object which is said to be non charitable is the main or primary object of the trust or institution or it is ancillary or incidental to the dominant or primary object which is charitable.[92 F] Mohd. Ibrahim vs Commissioner of Income tax 57 Indian Appeal 260; East India Industries (Madras) Ltd. vs Commissioner of Income tax, [1967]3 SCR 356; Commissioner of Income tax, Madras vs Andhra Chamber of Commerce, 65 ITR 722=[1965] 1 SCR 565, Commissioner of Inland Revenue vs Yorkshire Agricultural Society ; 13 Tax Case.
58; Institution of Civil Engineers vs Commissioner of Inland Revenue ; referred to.
In the instant case the income and property of the assessee are held under a legal obligation for the purpose of advancement of an object of general public utility within the meaning of section 2(15) of the Act.
The dominant or primary purpose of the assessee is to promote commerce and trade in art silk yarn etc., which is charitable and the other objects are in the nature of powers conferred upon the assessee for the purpose of securing fulfillment of the dominant or primary purpose.
They would no doubt benefit the members of the assessee but this benefit would be incidental in carrying out the main or primary purpose of the assessee.
If therefore the dominant or primary purpose of the assessee.
79 was charitable the subsidiary objects would not militate against its charitable character and the purpose of the assessee would not be any the less charitable.
[93 E G] 3.
It is settled law that the words "advancement of any other object of general public utility" would exclude objects of private gain; but this requirement is also satisfied in the present case because the object of private profit is eliminated by the recognition of the assessee under section 25 of the and the objects set out in clauses 5 and 10 of its Memorandum of Association [94 C D] 4.
Where the purpose of a trust or institution is relief of the poor, education or medical relief, the requirement of the definition of "charitable purpose" would be fully satisfied even if an activity for profit is carried on in the course of the actual carrying out of the primary purpose of the trust or institution.
But if the purpose of the trust or institution is such That it cannot be regarded as covered by the heads of "relief of the poor, education and medical relief" but its claim to be a charitable purpose rests only on the last head "advancement of any other object of general public utility" then it requires, for its applicability, fulfillment of two conditions, namely, (i) the purpose of the trust or institution must be advancement of an object of general public utility; and (ii) the purpose must not involve the carrying on of any activity for profit.
[94 G H] M/s.
Dharamdipti vs Commissioner of Income Tax, ; , referred to.
The words "not involving the carrying on of any activity for profit" qualify or govern only the last head of charitable purpose and not the earlier three heads.
[94 G] 6.
The meaning of the words "not involving the carrying on of any activity for profit" added in section 2(15) of the 1961 Act is that when the purpose of a trust or institution is the advancement of an object of general public utility it is that object of general public utility and not its accomplishment which must not involve the carrying on of any activity for profit.
[94 H] 7.
If the argument of the Revenue that if the means to achieve the object of general public utility involve the carrying on of any activity for profit, the purpose of the trust though falling within the description "any other object of general public utility" would not be a charitable purpose and the income from business would not be exempt from tax it right it would not be possible for a charitable trust whose purpose is promotion of an object of general public utility to carry on any activity for profit at all.
[97 F H] 8.
The consequence would be that even if a business is carried on by a trust or institution for the purpose of accomplishing or carrying out an object of general public utility and the income from such business is applicable only for achieving that object, the purpose of the trust would cease to be charitable and not only income from such business but also income derived from other sources would lose the exemption.
Such a far reaching consequence was not intended to be brought about by the legislature when it introduced the words "not involving the carrying on of any activity for profit" in section 2(15).
[98 B C] 80 9.
What is inhibited by the words "not involving the carrying on of any activity for profit" is the linking of an activity for profit with the object of general public utility and not its linking with the accomplishment or carrying out of the object.
It is not necessary that the accomplishment of the object or the means to carry out the object should not involve an activity for profit.
That is not the mandate of the newly added words.
What these words require is that the object should not involve the carrying on of any activity for profit.
The emphasis is on the object of general public utility and not on its accomplishment or attainment.
[98 E G] Commissioner of Income tax vs Cochin Chamber of Commerce and Industry, and Andhra Pradesh State Road Transport Corporation vs Commissioner of Income tax, approved.
If the intention of the legislature were to prohibit trusts of this nature from carrying on any activity for profit it would have made such a provision in the clearest terms that no such trust or institution shall carry on any activity for profit.
[99 E F] 11.
Section 13(1)(bb) introduced in the Act with effect from April 1, 1977 provides that in the case of a charitable trust for the relief of the poor, education or medical relief which carries on any business, income derived from such business would not be exempt from tax unless the business is carried on in the course of the actual carrying out of a primary purpose of the trust or institution.
Where, therefore, a charitable trust falling within any of the first three categories of charitable purpose set out in section 2(15) carries on business which is held in trust for the charitable purpose, income from such business would not be exempt by reason of section 13(1)(bb) and section 11(4) would, therefore, have no application in the case of a charitable trust falling within any of the first three heads of charitable purpose.
Similarly, on the construction contended for by the Revenue it would have no applicability in the case of a charitable trust falling under the last head of charitable purpose, because in such a case income from business would not be exempt since the purpose would cease to be charitable.
The construction contended for by Revenue would have the effect of rendering section 11(4) totally redundant after the enactment of section 13(1) (bb).
A construction which renders a provision of the Act superfluous and reduces it to silence cannot be accepted.
[100 C F] 12.
If the language of a statutory provision is ambiguous and is capable of two constructions that construction must be adopted which will give meaning and effect to the other Provisions of the enactment rather than that which will none.
[100 G] 13.
If a business is held under trust or legal obligation to apply its income for promotion of an object of general public utility or it is carried on for the purpose of earning profit to be utilised exclusively for carrying out such charitable purpose, the last concluding words in section 2(15) would have no application and they would not deprive the trust or institution of its charitable character.
What these last concluding words require is not that the trust or institution whose purpose is advancement of an object of general public utility should not carry on any activity for profit at all but that the purpose of the trust or institution should not involve the carrying on of any activity for profit.
So long as the purpose does not involve the carrying on of any activity for 81 profit, the requirement of the definition would be met and it is immaterial how the monies for achieving or implementing such purpose are found, whether by carrying on an activity for profit or not.
[104 D G] Commissioner of Income tax vs Dharmodayan Company, followed.
Indian Chamber of Commerce vs Commissioner of Income tax wrongly decided.
The Trustees of the Tribune, ; Commissioner of Income tax vs Krishna Warrier; 53 I.T.R. 176, J.K. Trust vs Commissioner of Income tax and Sole Trustees Lokshikshana Trust vs Commissioner of Income tax referred to.
It has therefore to be seen whether the purpose of the trust or institution in fact involves the carrying on of an activity for profit or in other words whether an activity for profit is actually carried on as an integral part of the purpose "as a matter of advancement of the purpose".
There e Must be an activity for profit and it must be involved in carrying out the purpose of the trust or institution that is, it must be carrying on in order to advance the purpose or in the course of carrying out the purpose of the trust or institution.
It is then that the inhibition of the ex.
Exclusionary clause would be attracted.
[105 G H] 15.
Every trust or institution must have a purpose for which it is established and every purpose must for its accomplishment involve the carrying on of an activity.
The activity must be for profit in order to attract the exclusionary clause.
[106 D] 16.
The preposition "for" in the phrase "activity for profit" has many shades of meaning but when used with the active principle of a verb it means "for the purpose of" and connotes the end with reference to which something is done.
[106 E] 17.
Where an activity is not pervaded by profit motive but is carried on primarily for serving the charitable purpose, it would not be collect to describe it as an activity for profit.
But where an activity is carried on with the predominant object of earning profit, it would be an activity for profit, though it may be carried on in advancement of the charitable purpose of the trust or institution.
Where an activity is carried on as a matter of advancement of the charitable purpose, it would not be incorrect to say as a matter of plain English grammar that the charitable purpose involves the carrying on such activity, but the predominant object of such activity must be to subserve the charitable purpose and not to earn profit.
[106 F H] Dharamdipti vs Commissioner of Income tax, Kerala, ; referred to.
The test to be applied is whether the predominant object of the activity involved in carrying out the object of general public utility is to subserve the charitable purpose or to earn profit.
Where the predominant object of the activity is to carry out the charitable purpose and not to earn profit, it would not lose its character of a charitable purpose m rely because some profit arises 82 from the activity.
The exclusionary clause does not require that the activity must be carried on in such a manner that it does not result in any profit.
The restrictive condition that the purpose should not involve the carrying on of any activity for profit would he satisfied if profit making is not the real object.[107 G H] 19.
(a) The observations in Lok Shikshana Trust and Indian Chamber of Commerce that activity involved in carrying out the charitable purpose must not be motivated by a profit objective but it must be undertaken for the purpose of advancement or carrying out of the charitable purpose are correct.
But the further observation that whenever an activity is carried on which yields profit, the inference must necessarily be drawn.
in the absence of some indication to the contrary, that the activity is for profit and the charitable purpose involves the carrying on of an activity for profit is not correct.
[109 H; li) A Bl (b) It is not necessary that there must be a provision in the constitution of the trust or institution that the activity shall be carried on a "no profit no loss" basis or that the profit shall proscribed.
Even if there is no such express provision.
the nature of the charitable purpose, the manner in which the activity for advancing the charitable purpose is being carried on, and the surrounding circumstances may clearly indicate that the activity is not propelled by a dominant profit motive.
What is necessary to be considered is whether having regard to all the facts and circumstances of the case, the dominant object of the activity is profit making or carrying out a charitable purpose.
If it is the former the purpose would not he a charitable purpose but if it is the latter the charitable character of the purpose would not be lost.
[110 C D] In the instant case, the activity of obtaining licences for import of foreign yarn and quotas for purchase of indigenous yarn was not an activity for profit.
The predominant object of the activity was the promotion of commerce and trade in those commodities which was clearly an object of general public utility and profit was merely a by product which resulted incidentally in the process of carrying out charitable purpose.
The assessee 's profit could he utilized only for feeding this charitable purpose.
The dominant and real object of the activity being the advancement of the charitable purpose the mere fact that the activity yielded profit did not alter the charitable character of the assessee .
Per Pathak J. (concurring) In the scheme under the Income tax Act.
1961 for exemption from income tax of income derived from property held under trust for charitable purposes, two safeguards have been provided.
One arises from the limited definition of "charitable purpose" by section 2(15), Income tax Act, 1961.
and the other is provided by the controls imposed on the utilisation of accumulated income derived from the charitable trust or institution.
The first relates to the very purpose of the trust or institution, the second to the application of the resulting income.
In construing what is a "charitable purpose" under section 2(15) of purpose Act, considerations pertinent to the application of the accumulated income should not ordinarily be taken into account.
[114 F G] The first three heads of "charitable purpose" in section 2(15) of the Act arc defined in specific terms.
namely, relief of the poor, education and medical relief.
The fourth head is described generally as a residuary head.
The 83 definition of "charitable purpose" with reference to the fourth head shows that the purpose is the "advancement of any other object of general public utility. ".
The charitable purpose is not the "object of general public utility", it is the advancement of the object.
The definition defines "charitable purpose" in terms of an activity.
An object by itself cannot connote an activity.
It represents a goal towards which, or in relation to which.
an activity is propelled.
The element of the activity is embodied in the word "advancement".
If "charitable purpose" is defined in terms of an activity, the restrictive clause "not involving the carrying on of any activity for profit" must necessarily relate to "the advancement" of the object contemplated.
[115 B C] The words "activity for profit" should be taken as descriptive of the nature of the activity.
It is an activity of a kind intended of yield profit.
Conversely if profit has resulted from an activity, that has does not, without anything more, classify it as an "activity for profit".
[116 B C] The requirement of section 2(15) is satisfied where there is either a total absence of the purpose of profit making or it is so insignificant compared to the purpose of advancement of the object of general public utility that the dominating role of the latter renders the former unworthy of account.
If the profit making purpose holds a dominating role or even constitutes an equal component with the purpose of advancement of the object of general public utility, then the definition in section 2(15) is not satisfied.
[116 G H] If the purpose is charitable in reality, the mode adopted must be one which is directed to carrying out the charitable purpose.
The carrying on of such a business does not detract act from the purpose which permeates it, the end result of the business activity being the effectuation of the charitable purpose.
A business activity carried on not with a view to carrying out the charitable purpose of the trust but which is related to a non charitable purpose falls outside the scope of the trust.
If it is a business entered into for working out be purpose of the trust or institution with a view to realisation of the charitable purpose, the income therefrom would be entitled to exemption under section 11.
Section 11(4) and section 13(1)(bb) represent the mode of finding finance for working out the purpose of the trust or institution by deriving income from the corpus of the trust property and also from an activity carried on in the course of actual carrying out of the purpose or the trust or institution.
[117 B E] A distinction must be maintained between what is merely a definition of "charitable purpose" and the powers conferred for working out or fulfilling that purpose.
While the purpose and the powers must correlate they cannot be identified with each other.
[118 B] In the instant case the purpose of the assessee falls within the definition of section 2(15).
The objects of the assessee were to promote commerce and trade, which have been held to be an object of general public utility and, there is nothing to show that the relevant sub clause of the Memorandum of Association involves the carrying on of any activity for profit.
The remaining sub clauses enumerate powers for which the company was constituted.
[118 G H] The Trustees of the Tribune, , Commissioner of Income tax vs Andhra Chamber of Commerce , referred 84 Sale Trustees, Loka Shikshana Trust vs Commissioner of Income tax, Mysore ; Indian Chamber of Commerce vs Commissioner of Income tax, West Bengal II not approved.
Per Sen, J. (dissenting) The two decisions in Sole Trustees Lok Shikshana Trust vs C.I.T. and Indian Chamber of Commerce vs C.I.T. lay down the law correctly and are still good law.
[119 D] 1.
The words "not involving the carrying on of any activity for profit" occurring in section 2(15) of the Act quality only the fourth head of charitable purpose namely "any other object of general utility" and not the first three heads.
[119 E] 2.
It is the vagueness of the expression "any other object of general public utility" occurring in section 4(3)(i) of the 1922 Act which impelled Parliament to insert the restrictive word "not involving the carrying on of any activity for profit. ' It is not permissible for the court to whittle down the plain language of the section.
It would be contrary to all rules of construction to ignore the impact of the newly added words and to construe the definition as it the newly added words were either not there or were intended to be otiose and redundant.
Such a construction would frustrate the very object of the legislation.
The relative simplicity of the language brings out the necessary legislative intent to counteract tax advantages resulting from the 'so called charities in camouflage.
[119 H; 120 A C] 3 .
The restriction introduced by the definition of the term "charitable purpose" in section 2(15) is that the advancement of objects of general public utility should not involve the carrying on of any activity for profit.
If it involved any such activity the charity would fall outside the definition.
[120 D E] 4.
There is no statutory bar to earn exemption in respect of income derived from a business undertaking if such business undertaking is held under a trust for a charitable purpose.
The first essential condition for exemption under section 11(1) is that the property from which the income is derived must be held under trust or other legal obligation.
Section 11(4) gives a statutory recognition to the principle that the business is property and if a business is held in trust wholly for a charitable purpose, the income therefrom would be exempt under section 11(1) [121 B D] In re.
The Trustees of the Tribune ; All India Spinner 's Association vs C.I.T. ; C.I.T. vs P. Krishna Warriar C.I.T. vs Andhra Chamber of Commerce ; J.K. Trust vs C.I.T. referred to.
The restrictive words "not involving the carrying on of any activity for profit" were deliberately introduced in the definition to cut down the wide ambit of the fourth head as a measure to check avoidance of tax.
Engagement in an activity for profit by religious or charitable trusts provides scope for manipulation for tax evasion.
[121 F G] 6 Even assuming that the dominant object of a trust is the promotion or 'advancement of any other object of general public utility, if it involves any activity for profit i.e. any business or commercial activity, then it ceases to be a charitable purpose within the meaning of section 2(15).
In that event the profits derived from such business are not liable to exemption under section 11(1) 85 read with section 2(15).
The concept of profits to feed the charity is also of no avail.
That is because the concept of 'profits to feed the charity ' can only arise under the first three heads of 'charitable purpose ' as defined in section 2(15) of the Act, that is, "relief of the poor" "education" and "medical relief" but they are not germane in so far as the fourth head is concerned.
If the fulfillment of an object of general public utility is dependant upon any activity for profit, it ceases to be a charitable purpose.
A reading of section 2(15) and section 11 together shows that what is frowned upon is an activity for profit by a charity established for advancement of an object of general public utility in the course of accomplishing its objects.
[126 H; 127 A B] 7.
It would be clearly inconsistent to hold that if the dominant or primary purpose was 'charity ' it would be permissible for such an object of general public utility to augment its income by engaging in trading or commercial activity.
[131 F] 8.
If the object of the trust is advancement of an object of general public utility and it carried on an activity for profit, it is excluded from the ambit of charitable purpose defined in section 2(15).
The distinction is clearly brought out by the provision contained in section 13(1)(bb) which provides that in case of a charitable trust or institution for the relief of the poor, education or medical relief which carries on any business, any income derived from such business, unless the business is carried on in the course of the actual carrying out of a primary purpose of the trust or institution, shall not be excluded from the total income of the previous year.
[132 G H] 9.
If the advancement of an object of general public utility involves the carrying on of an activity for profit, it ceases to be a charitable purpose and, therefore, the income is not exempt under section ll(l)(a).
In case of a trust falling under any of the first three heads of charity, namely, 'relief of the poor ' 'education ' and 'medical relief ' it may engage in any activity for profit and the profits would not taxable if they were utilized for the primary object of the trust.
In other words the business carried on by them is incidental or ancillary to the primary object namely relief of the poor, education and medical relief.
The concept of 'profits to feed the charity ' therefore is applicable only to the first three heads of charity and not the fourth.
It would be illogical to apply the same consideration to institutions which are established for charitable purposes of any object of general public utility.
Any profit making activity linked with an object of general public utility would be taxable.
The theory of the dominant or primary object of the trust cannot.
therefore, be projected into the fourth head of charity, namely,, 'advancement of any other object of general public utility ' so as to make the carrying on of any business activity merely ancillary or incidental to the main object.
[134 A E] 10.
The restrictive words 'not involving the carrying on of any activity for profit ' in the definition of "charitable purpose" in section 2(15) must be given their due weight.
Otherwise, it would have the effect of admitting to the benefits of ' exemption the fourth in determinate class, namely, objects of general public utility engaged in activity for profit contrary to the plain words of section 2(15).
[134 G]
|
Civil Appeal No. 818 of 1978 Appeal by Special Leave from the Judgment and order dated 10 4 1978 of the Punjab and Haryana High Court in Civil Revision No. 458 of 1978 (O & H) G. L. Sanghi, B. Datta, K. K. Manchanda and Ishwar Chand Jain for the Appellant.
P. Govindan Nair and N. Sudhakaran for the Respondent.
The Judgment of the Court was delivered by KRISHNA IYER, J.
The Holmesian homily that the life of the law is not logic but experience directs our humane attention, in this appeal against an order in execution for eviction of an advocate in Chandigarh, affirmed by court after court, to a reading of the textual definition of 'tenant ' [s.2 (i)] in the context of the broad embargo on ejectment of urban dwellings in section 13 of the East Punjab Rent Restriction Act, 1949 (hereinafter referred to as the Act).
Chandigarh, a blossom in the desert, has served as the capital of two States; and, with explosive expansion, thanks to the marvellous human resources of Punjab & Haryana, become a crowded, though not yet chaotic, city with chronic accommodation scarcity.
Consequently, laissez faire law, in the matter of landlord 's right to evict his tenant, was subject to the act with effect from 4 11 1972.
From then on, tenant could be dispossessed except on the ground set out in section 13.
But if a landlord had already obtained a decree for eviction earlier to this dateline, was he to be restrained by section 13 which forbade even execution of decrees against tenants, or was he free from the statutory fetters because the defendant had ceased to be a tenant on the passing of the decree, having forfeited his status by the destructive effect of a com promise, as in this case? An advocate, under this Act, belongs to a 'scheduled ' class of tenants whose dwellings enjoy special protection.
The appellant advocate tenanted a building belonging to the respondent.
The latter sued for possession and the former, with refreshing realism, entered into a compromise and agreed to vacate by a certain date on certain terms regarding rent which do not bear upon the dispute before us, 143 A decree in terms thereof was passed on 9 10 1972.
Then came the Act, which by extension of its operation, applied to Chandigarh with effect from 4 11 1972.
Had the decree been passed but a few days later, the Act would have admittedly interdicted the eviction because of section 13.
Had the decree been made and executed a day before the extension of the Act, the years of litigative procrastination of eviction might have been impossible.
These mystic 'might have beens ' are gambles of time which spill beyond our jurisdiction and statutory cognisance.
The salvation of the appellant is certain if he be a 'tenant ' within the meaning of the Act.
His eviction is certain if the definition of 'tenant ' does not ensconce him in its amplitude.
Decisions of peripheral relevance, but of different kernel, have been cited on both sides, and the one which has tilted the scales in the Chandigarh jurisdiction in favour of decree holder landlord is Subudhi 's case.
Precedents are law 's device to hold the Present prisoner of the Past and must bind only if squarely covered.
Subudhi 's case decided under the Orissa House Rent Control Act, 1958, is not one such.
The key word is 'tenant ' and if under the Act the appellant fills the bill definitionally he is immune from eviction when read with section 13.
Subudhi (supra) turns on a significantly different definition which cuts down the wide connotation by a tail end qualification.
The semantic sweep of section 2 (i) in our Act, by clear contrast takes in a wider group and we have no indication in that judgment whether a provision like section 13 which makes the restriction applicable also to decrees was present in the Act there debated.
Therefore, we side step those rulings and go straight to the two provisions and their meaning in the statutory setting.
It is too platitudinous to preach and too entrenched to shake, the proposition that rent control legislation in a country of terrible accommodation shortage is a beneficial measure whose construction must be liberal enough to fulfil the statutory purpose and not frustrate it.
So construed, the benefit of interpretative doubt belongs to the potential evictee unless the language is plain and provides for eviction.
That intendment must, by interpretation, be effectuated.
This is the essence of rent control jurisprudence.
Section 2(i) reads: "tenant" means any person by whom or on whose account rent is payable for a building or rented land and included a tenant continuing in possession after the termina 144 tion of the tenancy in his favour, but does not include a person placed in occupation of a building or rented land by its tenant, unless with the consent in writing of the land lord, or a person to whom the collection of rent or fees in a public market, cart stand or slaughter house or of rents for shops has been farmed out or leased by a municipal, town or notified area committee: (emphasis added) In this context, we may also read section 13 (1) which is integral to and makes impact upon the meaning of section 2(i) even if there be any marginal obscurity.
Eviction of tenants (1) A tenant in possession of a building or rented land shall not be evicted therefrom in execution of a decree passed before or after the commencement of this Act or otherwise and whether before or after the termination of the tenancy, except in accordance with the provisions of this Section, or in pursuance of an order made under section 13 of the Punjab Urban Rent Restriction Act, 1947, at subsequently amended.
(emphasis added) The expression 'tenant ' includes 'a tenant continuing in possession after the termination of the tenancy in his favour '.
It thus includes, by express provision, a quondam tenant whose nexus with the property is continuance in possession.
The fact that a decree or any other process extinguishes the tenancy under the general law of real property does not terminate the status of a tenant under the Act having regard to the carefully drawn inclusive clause.
Even here, we may mention by way of contrast that Subudh 's case (supra) related to a statute where the definition in section 2 (5) of that Act expressly included "any per son against whom a suit for ejectment is pending in a court of competent jurisdiction" and more pertinent to the point specially excluded "a person against whom a decree or order for eviction has been made by such a court.
" We feel no difficulty in holding that the text, rein forced by the context, especially section 13, convincingly includes ex tenants against whom decrees or eviction might have been passed, whether on compromise or otherwise.
The effect of the compromise decree, in counsel 's submission, is that the tenancy has been terminated.
No body has a case that the appellant is not continuously in possession.
The conclusion is inevitable that he remains a tenant and enjoys immunity under section 13(1).
The execution proceedings must, there fore, fail because the statutory road block cannot be removed.
Indeed, an application under the Act was filed by the landlord defendant which 145 was dismissed because the ground required by the Act was not made out.
We have been told by counsel, and supporting citations have been brought to our notice, that the High Court at Chandigarh has taken the contrary view for some time.
It is better to be ultimately right rather than consistency wrong.
The interpretation we have given in section 2(i) is strengthened by our conviction that a beneficial statute intended to quieten a burning issue affecting the economics of the human condition in India should be so interpreted as to subserve the social justice purpose and not to subvert it.
Even apart from this value vision, the construction we have adopted is sustainable.
We have laid down the law on the disputed questions raised before us, but we are not called upon to make any decree pursuant to our decision because, taking the clue from certain observations of the court in the course of the arguments, the parties have come together and reached a fair solution of the problem revolving round the house property.
A conflict is best resolved by the parties pursuading themselves to see the ability of continued dispute and enlightened by the law settled the controversy in a manner that promotes the interests of both.
We find that both sides in the present case have produced an enlighten settlement and put in the court an agreement to sell the property covered by the appeal by the landlord to the tenant.
A copy of the agreement has been put in the record which is annexed as appendix to this Judgment.
In this view we dispose of the appeal by formally dismissing it because there is no longer any relief needed in this appeal.
ORDER The Judgment having been delivered counsel for the respondent represented that the Agreement, which has been made and appendixed to the Judgment be treated as an undertaking mutually between the parties to the Court.
Counsel on both sides have no objection to this course and so we record the Agreement incorporated in the judgment as an undertaking to the Court made by the parties in regard to their respective obligations.
| IN-Abs | The appellant, an Advocate, tenanted a ' building belonging to tho respondent.
The respondent sued the appellant for possession of the premises and by a compromise, the Appellant agreed to vacate the premises by a certain date.
A decree in terms thereof was passed.
Then the Act came into being which by extension of its operation applied to Chandigrah with effect from 4 11 1972.
It was contended that (i) had the decree been passed but a few days later, the Act would have admittedly interdicted the eviction because of Section 13 thereof; and had the decree been made and executed a day before the extension of the Act, the years of litigative procrastination of eviction might have been impossible.
The salvation of the appellant is certain if he be a "tenant" within the meaning of the Act and his eviction is certain if the definition of tenant does not cover him in its amplitude and (ii) that the effect of compromise decree is that the tenancy of the appellant has been terminated.
Accepting the appeal, ^ HELD: An advocate, under this Act, enjoys special protection.
lt is too platitudinous to preach and too entrenched to shake the proposition that rent control legislation in a country of terrible accommodation shortage is a beneficial measure whoso construction must be liberal enough to fulfil the statutory purpose and met frustrate it.
So construed, the benefit of interpretative doubt belongs to the potential evictee unless the language is plain and provides for eviction.
That intendment must, by interpretation, be effectuated.
This is the essence of rent control jurisprudence.
[143 E G] The expression 'tenant includes a 'tenant ' continuing in possession after the termination of the tenancy in his favour '.
It thus includes, by express provision, a quondam tenant whose nexus with the property is continuance in possession.
The fact that a decree or any other process extinguishes the tenancy under the general law of real property does not terminate the status of a tenant under the Act having regard to the carefully drawn inclusive clause.
Subudhi 's case ; related to a statute where the definition in section 2(5) of that Act expressly included "any person against whom a suit for ejectment is pending in a court of competent jurisdiction" and more pertinent to the point specially excluded "a person against whom a decree or order for eviction has been made by such a court." [144 E G] (ii) The text, reinforced by the context, especially of section 13, convincingly includes ex tenants against whom decrees for eviction might have been passed, 142 whether on compromise or otherwise.
Nobody has a case that the appellant is not continuously in possession.
The conclusion is inevitable that he remains tenant and enjoys immunity under section 13 (1) of the Act.
The execution proceedings, must therefore fall, because the statutory road block cannot be removed.
[A conflict is best resolved by the parties as both sides in the present case have produced an enlightened settlement by an agreement to sell the property in dispute by the respondent to the appellant.
[144 G H]
|
ION: Criminal Appeal No. 15 of 1955.
Appeal by special leave from the judgment and order dated the 24th March, 1953 of the Calcutta High Court in Criminal Appeal No. 94 of 1952 arising out of the Judgment and order dated the 22nd April 1952 373 of the Court of Sessions Judge, Murshidabad in Sessions Trial No. 1 of 1952.
Jai Gopal Sethi, (C. F. Ali and P. K. Ghosh, with him) for the appellants.
B.Sen, (I. N. Shroff, for P. K. Bose, with them) for the respondent.
April 18.
The Judgment of the Court was delivered by JAGANNADHADAS J.
This is an appeal by special leave against the judgment of the High Court of Calcutta confirming the conviction and sentence of each of the two appellants before us, by the Sessions Judge of Murshidabad.
The appellants were tried on a charge under section 302/34 of the Indian Penal Code by the Sessions Judge with a jury.
The jury returned a unanimous verdict of guilty against each under the first part of section 304 read with section 34 of the Indian Penal Code.
The learned Judge accepted the verdict and convicted them accordingly and sentenced each of the appellants to rigorous imprisonment for ten years.
In order to appreciate the points raised before us, it is desirable to give a brief account of the prosecution case.
The two appellants jointly made a murderous assault on one Saurindra Gopal Roy at about 6 30 p.m. on the 3rd November, 1951.
There was, owing to litigation, previous enmity between the deceased and the appellants.
All of them belonged to a village called Mirzapur which is within the police station Beldanga, district Murshidabad.
The deceased along with two friends of his, of the same village, examined as P.Ws. 1 and 2, attended a foot ball match that evening at Beldanga.
The match was over by 5 p.m. and all the three of them were returning together to their village.
In the course of the return they were passing at about 6 30 p.m. through a field, nearly half a mile away from the village.
The two appellants each having a lathi and a Hashua (sickle) in his hand, emerged from a bush nearby and rushed towards the deceased and his companions.
P.W. 1 49 374 was first struck with a lathi and thereupon both P.Ws. 1 and 2 moved away to a distance.
The appellants assaulted the deceased and inflicted on him a number of serious injuries.
The two companions of the deceased, P.Ws. 1 and 2, ran towards the village and shouted for help whereupon a number of people from the village came and collected at the spot.
Information was also carried to the son as well as to the brother of the deceased.
They also came on the scene.
The brother, by name Radhashyam, proceeded at once to the Beldanga police station and lodged the first information report at about 7 30 p.m.
The police officer came to the scene and recorded a statement from the deceased who was then still alive.
He was thereafter taken to the hospital at Beldanga.
At the hospital the Medical Officer also took a statement from him (exhibit 4).
He died some time thereafter.
P.Ws. 1 and 2, the companions of the deceased, were the only eye witnesses to the murderous assault.
The prosecution relied also on certain statements said to have been made by the deceased after the assault.
The deceased is said to have stated to P.W. 7 one of the villagers who first came on the scene, after hearing the shouts of P. Ws. 1 and 2, that the two appellants were his assailants.
A little later, when his son and his brother, P.W. 3 came there, he is also said to have stated to P.W. 3 that the two appellants were the assailants.
Accordingly the first information report gave the names of the two appellants as the assailants.
Similar statements are said to have been made by the deceased to the police officer when he came on the spot and later to the Medical Officer when he was taken to the hospital.
The evidence, therefore, in support of the prosecution case was mainly, that of the two eye witnesses, P.Ws. 1 and 2, and of the four dying declarations, two of them oral and two written.
There was considerable scope for criticism about the evidence of the two eye witnesses.
The evidence relating to the dying declarations was also open to attack in view of the nature of the injuries inflicted on the deceased.
These included incised wounds on the occipital region and an incised wound 375 in the brain from out of which a piece of metal was removed on dissection.
This, as was urged, indicated the likelihood of the deceased having lost his consciousness almost immediately and hence the improbability of any statements by the deceased.
But the medical evidence on this point was indecisive.
There can be no doubt however that the reliability of the prosecution evidence was open to serious challenge in many respects.
But learned counsel for the appellants has not been able to raise either before the High Court or before us any objection to the verdict, on the ground of misdirection or non direction, of a material nature, in the charge to the jury by the Sessions Judge. 'On the other band, the charge brought out every point in favour of the appellants and against the prosecution evidence.
It erred, if at all.
in that the learned Judge involved himself in a great deal of elaboration.
The only flaw in the charge which, learned counsel for the appellants could attempt to make out, was that the exposition therein of the legal concept underlying section 34 of the Indian Penal Code was obscure and that it would not have been correctly appreciated by the jurors.
It may be that this could have been expressed in more lucid terms.
But we are unable to find that there was any misdirection or non direction therein.
Nor do we see any reason to think that the jury has been misled.
Thus there was no real attack either in the High Court or here as against the learned Judge 's charge to the jury.
Accordingly, the only points urged before us are the following.
1.The circumstances of the case and the nature of the charge to the jury made it incumbent on the learned Judge to disagree with the jury and to refer the case to the High Court under section 307 of the Code of Criminal Procedure.
2.In the alternative, the learned Sessions Judge having expressed himself in his charge to the jury, definitely for acquittal, he should not have accepted its verdict, though unanimous, without giving satisfactory reasons for such acceptance.
The learned Judge having, in his charge speci 376 fically cautioned the jury against communal prejudice in the following terms "your deliberations and verdict should not be influenced by any communal considerations,", should have refused to accept the verdict as having been vitiated by communal bias.
It may be stated that all the jurors were Hindus and that the accused were both Muhammadans.
The suggestion is that in view of the fact that thescene Of occurrence was near the border between West and East Bengal, it should have been appreciated that communal bias was, at the time, almost inevitable.
4.There has been virtually no examination of the accused by the Sessions Judge under section 342 of the Code of Criminal Procedure and the trial has been vitiated thereby.
In advancing the first two of the above contentions learned counsel for the appellants assumes and asserts that the Sessions Judge in his charge to the jury was unequivocally of the opinion that there was no reliable evidence on which the conviction could be based and that the appellants should be acquitted.
On this assumption, he urges that, when in the circumstances the jury gave a unanimous verdict of guilty, his obvious duty was either to express his dis agreement with the verdict of the jury and refer the whole case for the consideration of the High Court under section 307 of the Code of Criminal Procedure, or, at the least, to have placed on record his reasons why in spite of his clear opinion against the prosecution case, he did not consider it necessary to disagree from the verdict of the jury.
In order to substantiate this point of view, learned counsel took us through various portions of the charge to the jury and we have ourselves perused carefully the entirety of it.
As already stated, the learned Judge undoubtedly pointed out in his charge all the weaknesses of the prosecution evidence in great detail.
It is also likely that be was inclined for an acquittal.
But we are not satisfied that he came to a definite and positive conclusion that there should be acquittal.
While pointing out the weakness of the prosecution evidence with a leaning against its reliability he has not specifically 377 rejected every important item of the prosecution evidence.
It was only in some places that he stated categorically that he would not accept a particular item of evidence and would advise the jurors to reject it.
In other places, while pointing out the infirmities of the evidence, he was not so categorical and positive, as to what his own opinion on that item of evidence was.
For instance, out of the two eye witnesses, P.Ws. 1 and 2, the learned Judge said, so far as P.W. 2 is concerned, as follows: "Personally speaking I am not satisfied with the evidence of recognition of the accused persons as the assailants of Sourindra Gopal furnished by P.W. 2, Satyapada.
You will be advised, gentlemen, not to rely upon the evidence of P.W. 2".
As regards the evidence of the other eye witness, P.W. 1, however he summed it up as follows: "You should take a comprehensive view of all matters and then decide whether you should act upon the evidence of recognition of the accused persons as the assailants of Sourindra furnished by P.W. 1, Bhupati".
There was similar difference in the expression of his opinions with reference to the evidence of the dying declarations of the deceased.
It may be recalled that the evidence of the oral dying declarations is of statements to P.W. 7, Phani, and P.W. 3, Radhashyam.
The evidence of statement to P.W. 7 was given by a number of witnesses, viz. P.Ws. 6, 7, 8, 9, 10, 11) 12 and 13.
Out of these so far as the evidence of P. W. 9 is concerned, the learned Judge specifically stated as follows: "I should tell you that you should not believe P.W. 9 when he stated on being questioned by Phani, Sourindra mentioned Moseb and Sattar as his assailants".
But he did not rule out the evidence of the others on this item in the same manner.
Then again, when he dealt with the question whether the slip of paper, exhibit 4, is genuine the learned Judge noticed that the said paper was shown to have been taken from the medical officer P.W. 17 into the possession of the In 378 vestigating Officer, P.W. 35, about a month later and commented on it as follows: "Personally speaking I see no reasonable explanation as to why the I.O. should not have seized exhibit 4 from P.W. 17 immediately after it was recorded, if it was recorded on 3rd November, 1951, and sent it to the Magistrate forthwith".
All the same, the learned Judge also remarked thus: "You will consider very seriously whether you have any reason to disbelieve the evidence of P. Ws. 17, 32 and 33".
P.Ws. 32 and 33 are witnesses who spoke to the statement of the deceased said to have been taken by the Doctor, P. W. 17.
Taking the charge to the jury, therefore, comprehensively we are unable to find that the learned Judge rejected the prosecution evidence and arrived at a clear and categorical conclusion in his own mind that the appellants were not guilty.
We are, therefore, unable to accept the assumption of learned counsel for the appellants that the Judge agreed with the unanimous verdict of the jury against his own personal conviction, as to the guilt of the accused.
It appears to us, therefore, that there is no foundation, as a fact, for the argument that the learned Judge should have made a reference to the High Court under section 307 of the Code of Criminal Procedure or that, in any case, he should have placed on record his reasons for agreeing with the verdict of the jury notwithstanding his own personal opinion to the contrary.
Assuming however that the charge to the jury in this case can be read as being indicative of a definite opinion reached by the Sessions Judge in favour of the appellants, it does not follow that merely on that account he is obliged to make a reference under section 307 of the Code of Criminal Procedure.
What is required under that section is not merely disagreement with the verdict of the jury but the additional factor that the learned Sessions Judge "is clearly of opinion that it is necessary for the ends of justice to submit the case to the High Court".
It is now well settled, since the decision of the Privy Council in 379 Ramnugrah Singh vs King Emperor(1) that under section 307 of the Code of Criminal Procedure a Session,, Judge, even if he disagrees with the verdict of the jury must normally give effect to that verdict unless he is prepared to hold the further and clear opinion "that no reasonable body of men could have given the verdict which the jury did".
We are certainly not prepared to say that the present case satisfies that test or that the charge to the jury indicated any such clear conclusion.
Indeed it is to be noticed that on intimation by the jury of its unanimous verdict, the learned Judge has recorded that he "agreed with and accepted the verdict".
We have no doubt that it was perfectly competent for him to do so.
Learned counsel urges that this acceptance is a judicial act and that having regard to the whole tenor of the Judge 's charge to the jury, he was at least under a duty to himself and to the appellate court to record his reasons for acceptance of the verdict of the jury.
We are unable to agree with this contention.
It may be that in a case where a Judge in his charge to the jury has clearly and definitely expressed himself for acquittal, it would be very desirable, though not imperative, that he should give his reasons why be changed his view and accepted the verdict of the jury.
But we can find no basis for any such contention in this case.
The two further contentions that remain which are enumerated above as 3 and 4, were not raised before the High Court.
We are reluctant to allow any such contentions to be raised on special leave.
The point relating to the possibility of the verdict having been the result of bias has no serious basis.
It appears to us that the learned Sessions Judge had no justification in this case for imagining the possibility of such bias and giving a warning to the jury in this behalf.
This is not a case which arose out of any incident involving communal tension.
The likelihood of any such bias is not to be assumed merely from the fact of the appellants being Mubammadans and the jurors being Hindus.
Nor is it right to take it (1) [1946] L.R. 73 I.A. 174.
380 for granted merely from the fact of proximity of the place of trial to the border between West and East Bengal.
On the other hand, it is not without some relevance that when the jury was empanelled at the commencement of the trial, there was absolutely no such objection taken.
Nor was the right of challenge to the jurors exercised.
Learned counsel for the appellants has very strenuously argued before us, the point relating to the inadequacy of the examination of the appellants under section 342 of the Code of Criminal Procedure.
Now, it is true that the examination in this case was absolutely perfunctory.
The only questions put to each of the accused in the Sessions Court, and the answers thereto were the following: "Q. You have heard the charges made and the evidence adduced against you.
Now say, what is your defence? What have you got to say? A.
I am innocent.
Will you say anything more? A. No. Q. Will you adduce any evidence in defence? A. No." There can be no doubt that this is very inadequate compliance with the salutary provisions of section 342 of the Code of Criminal Procedure.
It is regrettable that there has occurred in this case such a serious lacuna in procedure notwithstanding repeated insistence of this Court , in various decisions commencing Tara Singh 's case(1) on a due and fair compliance with the terms of section 342 of the Code of Criminal Procedure.
But it is also well recognised that a judgment is not to be set aside merely by reason of inadequate compliance with section 342 of the Code of Criminal Procedure.
It is settled that clear prejudice must be shown.
This court has clarified the position, in relation to cases where accused is represented by counsel at the trial and in appeal.
It is up to the accused or his counsel in such cases to satisfy the Court that such inadequate examination has resulted in miscarriage of justice.
This Court in its judgment (1)[1951] S.C.R. 729.
381 in the latest case on this matter, viz. K. C. Mathew and Others vs The State of Travancore Cochin(1) (delivered on the 15th December, 1955) has laid down that "if the counsel was unable to say that his client had in fact been prejudiced and if all that he could urge was that there was a possibility of prejudice, that was not enough".
Learned counsel could not, before us, make out any clear prejudice.
All that learned counsel for the appellants urges is, that this might be so in a case where the trial was with the assessors and the Judge 's view on the evidence was the main determining factor.
But he contends that the same would not be the case where the trial is with the aid of a jury.
Learned counsel urges that a full and clear questioning in a jury trial does not serve the mere purpose of enabling the accused to put forward his defence or offer his explanation, which may be considered along with the entire evidence in the case.
The jury would, he suggests also, have the opportunity of being impressed one way or the other by the method and the manner of the accused, when giving the explanation and answering the questions and that the same might turn the scale.
Learned counsel urges, therefore, that the non examination or inadequate examination under section 342 of the Code of Criminal Procedure in a jury trial must be presumed to cause prejudice and that a conviction in a jury trial should be set aside and retrial ordered, if there is no adequate examination under section 342 of the Code of Criminal Procedure.
We are not prepared to accept this contention as a matter of law.
The question of prejudice is ultimately one of inference from all the facts and circumstances of each case.
The fact of the trial being with the jury may possibly also be an additional circumstance for consideration in an appropriate case.
But we see no reason to think that in the present case this would have made any difference.
We are, therefore, not Prepared to accept the argument of the learned counsel for the appellants in this behalf.
In any case, an argument of this kind which would, if accepted, (1)[1955] 2 S.C.R. 1057.
50 382 necessitate a retrial, is one that ought to be put forward at the earliest stage and at any rate at the time of the regular appeal in the High Court.
This cannot be entertained for the first time in an appeal on special leave.
For all the above reasons this appeal is dismissed.
| IN-Abs | A Sessions Judge, even if he disagrees with the verdict of the Jury, must normally give effect to that verdict unless he is clearly of opinion that no reasonable body of men could have given the verdict which the Jury did.
Ramnugrah Singh vs King Emperor, ([1946] L.R. 73 I.A. 174), relied on.
A Sessions Judge need not record his reasons for accepting the verdict of the Jury.
In a case where a Judge in his charge to the Jury, has clearly and definitely expressed himself for acquittal, it would be desirable though not imperative, that he should give his reasons why he changed his view and accepted the verdict of the Jury finding the accused guilty.
Even where the examination of the accused under section 342 Cr.
P.C. is perfunctory the judgment cannot be set aside unless clear prejudice is shown.
Tara Singh 's case, ([1951] S.C.R. 729), referred to.
K.C. Mathew and Others vs The State of Travanore Cochin, ([1955] 2 S.C.R. 1057), relied on.
Prejudice cannot be presumed from the fact that the trial is by a jury though that is a circumstance which may be taken into consideration.
An argument which would, if accepted, necessitate a retrial, ought to be put forward at the earliest stage and at any rate before the High Court in appeal and cannot be entertained for the first time in an appeal on special leave.
|
Civil Appeal No. 3530 of 1 979.
Appeal by Special Leave from the Judgment and order dated 2 2 1979 of the Madras High Court in A.S. No. 924/74.
K. section Ramamurthy, P. N. Ramalingam and A. T. M. Sampath for the Appellant.
K. Rant Kumar and K. Jayaram for the Respondent.
309 The Judgment of the Court was delivered by KAILASAM, J.
The appellants in the appeal by special leave are plaintiffs 1 to 5 in the suit.
The plaintiffs 1 to 5 are sisters and defendants 1 to 2 are their brothers.
The third defendant is their unmarried sister.
They are the children of the late Muthukumaraswamy Gounder who died intestate on 20 12 1962 leaving his father Vanavaraya Gounder who was managing all the ancestral joint family property as the head of the Hindu Undivided Joint Family till his death on 5 3 1972.
The plaintiffs claimed that on the death of Muthukumaraswamy Gounder his 1/3rd share in the joint family property devolved on his sons and daughters, his sons, defendants 1 and 2 taking 1/3rd share each in l/3rd share of the family property by birth and in the balance all the sons and daughters of Muthukumaraswamy Gounder taking an equal share each.
The plaintiffs claimed to have been in joint possession of the properties alongwith Vanavaraya Gounder and his other sons.
Similarly on the death of Vanavaraya Gounder, his 1/3rd share in the family properties devolved upon his heirs, the plaintiffs and defendants 1 to 3 being entitled to certain shares.
The claim in the plaint is that each of the plaintiffs is entitled to a share in the suit properties as heirs to Late Muthukumaraswamy Gounder and also as heirs to late Vanavaraya Gounder, their grand father.
Each plaintiff claimed that she was entitled to 1/72 share in the suit properties as heirs to their father Muthukumaraswamy Gounder and also to 1/96 share as heirs to their grand father Vanavaraya Gounder.
It was alleged in the plaint that since the death of Vanavaraya Gounder, defendants nos.
1 to 6 failed to give the plaintiffs their share of income and the plaintiffs could not remain in joint possession.
The plaintiffs repeatedly demanded partition and the defendants 1 to 6 were evading.
The plaintiffs claimed that each of the plaintiffs as co owners are in joint possession of the suit properties and this action was laid to convert the joint possession into separate possession so far as the shares of the plaintiffs are concerned.
For the purposes of court fee and jurisdiction, the plaintiffs valued their share of the property and paid court fee of Rs. 200 under section 37(2) of the Tamil Nadu Court Fees and Suits Valuation Act.
The relief prayed for was for partition of the properties and for allotment of their separate share, for accounts and for other reliefs.
In the written statement, the defendants 1 to 2, the brothers, con tended that the properties were divided in the year 1946 during the life time of Muthukumaraswamy Gounder and that Muthukumaraswamy was enjoying the properties separately.
Regarding possession of 310 the plaintiffs, defendants l to 3 the contesting defendants alleged in paragraph 18 of the written statement as follows : "The suit as framed is not maintainable in law.
The plaintiffs have framed the suit as though they are in joint possession and enjoyment of the suit properties.
The plaintiffs are out of possession and they are living in different villages.
While it is so the allegation that they are in joint possession v of the suit properties is not correct.
The plaintiff ought to J have paid court fee under section 37(i) of the Court Fees Act and not under 37(ii) of the Act.
They ought to have paid the court fee at the market value of the suit properties and unless the court fee at the market rate is paid they arc not entitled to claim any share." The Subordinate Judge who tried the suit did not frame any preliminary issue regarding court fee as required under section 12 of the Court Fees Act but proceeded to try all the issues together.
The Subordinate Judge granted preliminary decree for partition and possession of the plaintiffs ' 1/72 share in B. Schedule properties, and to certain shares in deposit in State Bank of India at Pollachi, and to the share in the Gnanambika Mills, on payment of court fees by the plaintiffs under section 37(i) of the Court Fees Act.
The Court granted time for payment of court fee till 15 2 1973.
As the court fee was not paid, the Trial Court dismissed the suit, by its judgment dated 7 2 1974.
The plaintiffs filed two appeals A.S. No. 811 of 1975 against the decision of the Subordinate Judge holding that the plaintiffs are liable to pay court fee on the market value of the property under section 37(1) of the Court Fees Act and A.S. No. 924 of 1974 against the order dismissing the suit.
The High Court heard both the appeals together and disposed them of by a common judgement.
When the appeals were taken up, the defendants/respondents contended that the court fee ought to have been paid on the plaint under section 37(1) and also on the memorandum of appeal before the High Court and as the proper court fee has not keen paid, the appeals ought to be dismissed.
The High Court accepted the contention raised by the defendants and held that the plaintiffs arc liable to pay court fee under S.37(1) of the Tamil Nadu Court Fees Act.
In coming to its conclusion, the High Court mainly relied on .
paragraph 12 of the plaint which reads as follows: "Since the death of Vanavaraya Gounder the defendants 1 to 6 failed to give the plaintiffs their share of income and 311 the plaintiffs could not remain in joint possession.
Therefore, the plaintiffs repeatedly demanded partition and the defendants 1 to 6 were evading.
The 3rd plaintiff sent a notice through her counsel to defendants 1, 2 and 5 to which the 3rd plaintiff received replies containing false and untenable allegations.
" The High Court proceeded to observe that while the statement that The plaintiffs were in joint possession with the defendants occurring in other paragraphs of the plaint is merely a formal statement repeating the statutory language, the statement contained in paragraph 12 of the plaint constitutes a statement of fact in the context in which paragraph 12 occurs and consequently paragraph 12 of the plaint contains a clear averment that the plaintiffs could not remain in joint possession and that was the reason why they repeatedly demanded partition.
If so, on the date of the suit, the plaintiffs were not in possession.
The High Court held that court fee is payable under section 37(1) of the Court Fees Act.
D On reading of the plaint as a whole, we arc unable to agree with the view taken by the High Court.
It is settled law that the question of court fee must be considered hl the light of the allegation made in the plaint and its decision cannot be the either by the pleas in the written statement or by the final decision of the suit on merits.
All the material allegations contained in the plaint should should be construed and taken as a whole vide section Rm .
section Sp.
Sathappa Chettiar vs section Ram Ar.
Ramanathan Chettiar.
The plaint in paragraph 5 states that Muthukumaraswamy Gounder died intestate and undivided and Muthukumaraswamy 's father Vanavaraya Gounder was managing all the ancestral joint family property as the head of the Hindu undivided joint family till his death.
In paragraph 8 the plaintiffs stated that on the death of Muthukumaraswamy Gounder his 1/3rd share in the joint family properties devolved upon his sons and daughters.
It further alleged that the plaintiffs were in joint possession of the properties alongwith Vanavaraya Gounder and his other sons.
In paragraph 9, it is stated that each of the plaintiffs is entitled to a share in the suit properties as heirs of the late Muthukumaraswamy Gounder and also as heir of the late Vanavaraya Gounder.
In paragraph 11, it is stated that since the death of Vanavaraya Gounder defendants 1 to 6 are receiving the income from the properties and are liable to account to the plaintiffs.
In paragraph 12, it is stated that since the death of Vanavaraya Gounder defendants 1 to 6 failed to give the 312 plaintiff their share of income and the plaintiffs could not remain in joint possession.
Therefore the plaintiffs demanded partition and the defendants 1 to 6 were evading.
Again in paragraph 13, it is claimed that each of the plaintiff as co owners is in joint possession of the suit properties? and this action is laid to convert the joint possession into separate possession so far as the shares of the plaintiffs are concerned.
Throughout the plaint, the plaintiffs have asserted that they are in joint possession.
We are unable to agree with the High Court that recitals in all the paragraphs is merely a formal statement repeating.
the statutory language.
The plea in paragraph 12 which was relied on by the High Court states that the defendants 1 to 6 failed to give the plaintiffs their share of the income and the plaintiffs could not remain in joint possession.
The plea that they were not given their due share would not amount to dispossession.
Reading the plaint at its worst against the plaintiffs, all that could be discerned is that as the plaintiffs were not given their share of the income, they could not remain in joint possession.
The statement that they arc not being paid their income, would not amount to having been excluded from possession.
The averment in the plaint cannot be understood as stating that the plaintiffs were not in possession.
In fact, the defendants understood the plaint as stating that the plaintiffs are in joint possession of the suit properties.
In paragraph 18 of the written statement the defendants plaintiff that the plaintiffs have framed the suit as though they are in joint possession and enjoyment of the suit properties.
Asserting that the plaintiffs were out of possession, the defendants stated: "While it is so the allegation that they are in joint possession of the suit properties, is not correct." The Trial Court has not placed any reliance on the recitals in para 12 of the plaint on which the judgment of the High Court is based.
The Trial Court found on evidence that the plaintiffs never enjoyed the suit properties at any time.
This finding is not enough for, the mere fact that the plaintiffs were not paid their share of the income or were not in actual physical possession, would not amount to the plaintiff.; having been excluded from joint possession to which they arc in law entitled.
On a consideration of the plaint as a whole and giving it its natural meaning, we are unable to agree with the conclusion arrived at by the High Court.
section 37 of the Tamil Nadu Court Fees and Suit Valuation Act n relates to Partition Suits.
section 37 provides as follows: 37(1) In a suit for partition and separate possession of a share of joint family property or of property owned, jointly 313 or in common, by a plaintiff who has been excluded from possession of such property, fee shall be computed on the market value of the plaintiff 's share.
37(2) In a suit for partition and separate possession of joint family property or property owned, jointly or in common by a plaintiff who is in joint possession of such property, fee shall be paid at the rates prescribed.
It will be seen that the court fee is payable under section 37(1) if the plaintiff is 'excluded" from possession of the property.
The plaintiffs who are sisters of the defendants, claimed to be members of the Joint Family, and prayed for partition alleging that they are in joint possession Under the proviso to S.6 of the (Act 30 of 1956) the plaintiffs being the daughters of the male Hindu who died after the commencement of the Act, having at the time of the death an interest in the Mitakshara coparcenary property, acquired an interest by devolution under the Act.
It is not in dispute that the plaintiffs are entitled to a share.
The property to which the plaintiffs are entitled is undivided 'joint family property! '; though not in the strict sense of the term.
The general principle of law is that in the case of co owners, the possession of one is in law possession of all, unless ouster or exclusion is proved.
To continue to be in joint possession in law, it is not necessary that the plaintiff should be in actual possession of the whole or part of the property.
Equally it is not necessary that.
he should be getting a share or some income from the property.
So long as his right to a share and the nature of the property as joint is not disputed the law presumes that he is in joint possession unless he is excluded from such possession.
Before the plaintiffs could be called upon to pay court fee under section 37(1) of the Act on the ground that they had been excluded from possession, it is necessary that on a reading of the plaint, there should be a clear and specific averment in the plaint that they had been "excluded" from joint possession to which they are entitled in law.
The averments in the plant that the plaintiff could not remain in joint possession as he was not given any income from the joint family property would not amount to his exclusion from possession.
We are unable to read into the plaint a clear and specific admission that the plaintiff had been excluded from possession.
In the result the appeal is allowed with cost.
As we have found that the Trial Court was in error in directing the plaintiffs to pay the court fee under section 37(1), the preliminary decree for partition and possession of 1/72 share in the B. Schedule properties and the shares in 314 deposit in State Bank of India at Pollachi, and in the share in the Gnanambika Mills, is confirmed.
The direction by the Trial Court as to payment of Court Fee under section 37(1) of the Court Fees Act and the judgment of the High Court in A.S. No. 924/1974 and A.S. 811 /75 are set aside.
S.R. Appeal allowed.
| IN-Abs | The plaintiffs, appellants filed a suit for partition and separate possession of their individual share as per law and paid a court fee at the rates prescribed under section 37 (ii) of the Tamil Nadu Court Fees and Suit Valuation Act.
There was a specific allegation that they were in joint possession.
The Trial Court decreed the suit but directed the plaintiffs appellants to pay the court fec under Section 37 (ii) of the Act.
As the difference in court fee was not paid the trial Court dismissed the suit.
Two appeals were filed by the appellants in the High Court, one against the decision that they were liable to pay court fee (m the market value of the property under section 37 (1) and another against the order dismissing the suit.
The High Court heard the two appeals together and disposed of the appeals accepting the contention of the respondents/defendants that the Court fees are payable both on the plaint and on the memorandum of appeals under Section 37 (I ) of the Act.
Allowing the appeal by special leave, the Court ^ HELD: 1.
It is settled law that the question of Court fee must be considered in the light of the allegation made in the plaint and its decision cannot be influenced either by the pleas in the written statement or by the final decision of the suit on merits.
All the material allegations contained in the plaint should be construed and taken as a whole.
[311 D E] In the instant case: (a) on reading of the plaint as a whole, it is clear that throughout the plaint, the plaintiffs/appellants have asserted that they were in joint possession and therefore the observation of the High Court that recite in all the paragraphs is merely a formal statement repeating the statutory language is not correct.
(b) the plea that they were not given their due share would not amount to dispossession.
Reading the plaint at its worst against the plaintiffs, all that could be discerned is that as the plaintiffs were not given their share of the income, they could not remain in joint possession.
The statement that they are not being paid their income.
would not amount to having been excluded from possession.
The averment in the plaint cannot be understood as stating that the plaintiffs were not in possession.
In fact, the defendants understood the plaint as stating that the plaintiffs are in joint possession of the suit properties.
In paragraph 18 of the written statement the defendants pleaded 308 that the plaintiffs have framed the suit as though they are in joint possession and enjoyment of the suit properties.
Asserting that the plaintiffs were out of possession, the defendants stated: "while it is so, the allegation that they arc in joint possession of the suit properties, is not correct." The mere fact that the plaintiffs were not paid their share of the income or were not in actual possession would not amount to the plaintiffs having been excluded from joint possession to which they are in law entitled.[1311D, 312 B F] section Rm.
section Sri Cathanna Chettiar vs section RM.
Ramanathen Chettiar, @ PP 1031 32; followed.
Under section 37(1) of the Tamil Nadu Court Fees and Suit Valuation Act, relating to partition suits, the Court fee is payable, if the plaintiff is "excluded" from possession of the property.
The general principle of law is that in the case of co owners, the possession of one is in law possession of all, unless ouster or exclusion is proved.
To continue to be in joint possession in law it is not necessary that the plaintiff should be in actual possession of the whole or part of the property.
Equally it is not necessary that he should be getting a share or some income from the property.
So long as his right to a share and the nature of the property as joint is not disputed the law presumes that he is in joint possession unless he is excluded from such possession Before the plaintiffs could be Called upon to pay court fee under section 37 (1) of the Act on the ground that they had been excluded from possession it is necessary that there should be a clear and specific averment in the plaint that they had been "excluded" from joint possession to which they are entitled in law [1313 B. D F] In the instant case: (a) The averments in the plaint that the plaintiff could not remain in joint possession as he was not given any income from the joint family property would not amount to his exclusion from possession.
[313 F G] (b) The plaintiffs who are sisters of the defendants claimed to be members of the joint family and prayed for partition alleging that they are in joint possession.
Under the proviso to section 6 of the (Act 30 of 1956), the plaintiffs being the daughters of the male Hindu who died after the commencement of the Act, having at the time of the death an interest in the Mitakshara coparcenary property, acquired interest by devolution under the Act.
The property to which the plaintiffs are entitled is undivided 'joint family property ', though not in the strict sense of the term.
[313 C D]
|
Civil Appeal Nos. 1212, 2089 and 2237 of 1978.
From the Judgment and order dated 15 6 1978 of the Gujarat High Court in Special Civil Application No. 1150 of 1976.
Y.S. Chitale, J.C. Bhatt, A.K. Sen, J.M. Nanavati, D.C. Gandhi, A.G. Menses, K.J. John and K.K. Manchanda for the Appellants in C.A. 1212 and 2237/78 and RR.
1 in CA 2089.
V.M. Tarkunde, Y.S. Chitale, P.H. Parekh and N.J. Mehta for the Appellant in CA 2089 and R. 1 in CA 1212.
M.C. Bhandare and B. Datta for the Intervener in CA 1212 (Ahmedabad Nagar Employee Union).
R.K. Garg, Vimal Dave and Miss Kailash Mehta for the Intervener Gujarat Steel Tubes Mazdoor Sabha in CA 1212.
The Judgment of V.R. Krishna Iyer, and D.A. Desai, JJ was delivered by Krishna Iyer, J.A.D. Koshal, J. gave a dissenting Opinion.
154 KRISHNA IYER, J.
Every litigation has a moral and, these appeals have many, the foremost being that the economics of law is the essence of labour jurisprudence.
The case in a nutshell An affluent Management and an indigent work force are the two wings of the Gujarat Steel Tubes Ltd. which manufactures steel tubes in the outskirts of Ahmedabad city and is scarred by an industrial dispute resulting in these appeals.
This industry, started in 1960, went into production since 1964 and waggled from infancy to adulthood with smiling profits and growing workers, punctuated by smouldering demand, strikes and settlements, until there brewed a confrontation culminating in a head on collision following upon certain unhappy happenings.
A total strike ensued, whose chain reaction was a wholesale termination of all the employees, followed by fresh recruitment of workmen, de facto breakdown of the strike and dispute over restoration of the removed workmen.
This cataclysmic episode and its sequel formed the basis of a Section 10A arbitration and award, a writ petition and judgment, inevitably spiralling up to this Court in two appeals one by the Management and the other by the Union which have been heard together and are being disposed of by this common judgment.
The arbitrator held the action of the Management warranted while the High Court reversed the Award and substantially directed reinstatement.
The Judge Perspective A few fundamental issues, factual and legal, on which bitter controversy raged at the bar, settle the decisional fate of this case.
A plethora of precedents has been cited and volumes of evidence read for our consideration by both sides.
But the jural resolution of labour disputes must be sought in the law life complex, beyond the factual blinkers of decided cases, beneath the lexical littleness of statutory texts, in the economic basics of industrial justice which must enliven the consciousness of the court and the corpus juris.
This Court has developed Labour Law on this road basis and what this Court has declared holds good for the country.
We must first fix the founding faith in this juristic branch before unravelling the details of the particular case.
Viewing from this vantage point, it is relevant to note that the ethical roots of jurisprudence, with economic overtones, are the clan vital of any country 's legal system.
So it is that we begin with two quotations one from the old Testament and the other from Gandhiji, the Indian New Testament as perspective setters.
After all, 155 industrial law must set the moral legal norms for the modus vivendi between the partners in management, namely, Capital and Labour.
Cain reported, when asked by God about his brother Abel, in the Old Testament: 'Am I my brother 's keeper ? ', 'Yes ' was the implicit answer in God 's curse of Cain.
In the fraternal economics of national production, worker is partner in this biblical spirit.
In our society, Capital shall be the brother and keeper of Labour and cannot disown this obligation, especially because Social Justice and Articles 43 and 43A are constitutional mandates.
Gandhiji, to whom the Arbitrator has adverted in passing in his award, way back in March 1946, wrote on Capitalism and Strikes h the Harijan: "How should capital behave when labour strikes ? This question is in the air and has great importance at the present moment.
One way is that of suppression named or nicknamed 'American '.
It consists in suppression of labour through organised goondaism.
Everybody would consider this as wrong and destructive.
The other way, right and honorable, consists in considering every strike on its merits and giving labour its due not what capital considers as due, but what labour itself would so consider and enlightened public opinion acclaims as just.
In my opinion, employers and employed are equal partners, even if employees are not considered superior.
But what we see today is the reverse.
The reason is that the employers harness intelligence on their side.
They have the superior advantage which concentration of capital brings with it, and they know how to make use of it.
Whilst capital in India is fairly organised, labour is strike in a more or less disorganised condition in spite of Unions and Federation.
Therefore, it lacks the power that true combination gives.
Hence, my advice to the employers would be that should willingly regard workers as the real owners of the concerns which they fancy they have created.
Tuned to these values are the policy directives in Articles 39, 41, 42, 43 and 43A.
They speak of the right to an adequate means of livelihood, the right to work, humane conditions of work, living wage ensuring a decent standard of life and enjoyment of leisure and participation of workers in management of industries.
De hors these man 156 dates, law will fail functionally.
Such is the value vision of Indian Industrial Jurisprudence.
The Matrix of facts A Pre view The nidus of facts which enwomb the issues of law may be elaborated a little more at this stage.
In the vicinity of Ahmedabad City, the appellant is a prosperous engineering enterprise which enjoys entrepreneureal excellence and employs over 800 workmen knit together into the respondent Union called the Gujarat Steel Tubes Mazdoor Sabha (the Sabha, for short).
Fortunately, the industry has had an innings of escalating profits but the workmen have had a running complaint a raw deal.
Frequent demands for better conditions, followed by negotiated settlements, have been a lovely feature of this establishment, although the poignant fact remains that till the dawn of the seventies, the gross wages of the workmen have hovered round a harrowing hundred rupees or more in this thriving Ahmedabad industry.
The course of this precarious co existence was often ruffled, and there was, now and then, some flare up leading to strike, conciliation and even reference under Section 10.
When one such reference was pending another unconnected dispute arose which, alter some twists and turns, led to an industrial break down and a total strike.
The episodic stages of this bitter battle will have to be narrated at length a little later.
Suffice it to say that the Management jettisoned all the 853 workman and recruited some fresher to take their place and to keep the wheels of production moving.
In the war of attrition that ensued, labour lost and capitulated to Capital.
At long last, between the two, a reference to arbitration of the disputes was agreed upon under Section 10A of the (the Act, for short).
The highlight of the dispute referred for arbitration was whether the termination orders issued by the Management against the workmen whose names were set out in the annexure to the reference were "legal, proper and justified"; if not, whether the workmen were 'entitled to any reliefs including the relief of reinstatement with continuity of service and full back wages '.
The arbitrator 's decision went against the Sabha while, on a challenge under Article 226, the High Court 's judgment virtually vindicated its stand.
This is the hang of the case.
The substantial appeal is by the Management while the Sabha has a marginal quarrel over a portion of the judgment as disclosed in its appeal.
The 'jetsam ' workmen, a few hundred in number, have been directed to be reinstated with full or partial back pay and this is the bitter bone of contention.
157 A stage by stage recapitulation of the developments is important to get to grips with the core controversy.
Sri Ashok Sen, for the appellant Management, and Sri Tarkunde for the respondent Sabha, have extensively presented their rival versions with forceful erudition.
Sri R.K. Garg, of course, for some workmen has invoked with passion the socialist thrust of the Constitution as a substantive submission and, as justificatory of the workmen 's demands, relied on the glaring contrast between the soaring profits and the sagging wages, while Sri Bhandare has pressed the lachrymose case of the several hundreds of 'interregnal ' employees whose removal from service, on reinstatement of the old, might spell iniquity.
Olive Branch Approach: At this stage we must disclose an effort at settlement we made with the hearty participation of Sri Ashok Sen and Sri Tarkunde at the early stages of the hearing.
The golden rule for the judicial resolution of an industrial dispute is first to persuade fighting parties, by judicious suggestions, into the peace making zone, disentangle the differences, narrow the mistrust gap and convert them, through consensual steps, into negotiated justice.
Law is not the last word in justice, especially social justice.
Moreover, in our hierarchical court system the little man lives in the short run but most litigation lives in the long run.
So it is that negotiation first and adjudication next, is a welcome formula for the Bench and the Bar, Management and Union.
This 'olive Branch ' approach brought the parties closer in our court and gave use a better understanding of the problem, although we could not clinch a settlement.
So we heard the case in depth and felt that some of the legal issues did merit this court 's declaratory pronouncement, settlement or no settlement.
Mercifully, counsel abbreviated their oral arguments into an eight day exercise, sparing us the sparring marathon of 28 laborious days through which the case stretched out in the High Court.
Orality ad libitem may be the genius of Victorian era advocacy but in our 'needy ' Republic with crowded dockets, forensic brevity is a necessity.
The Bench and the Bar. must fabricate a new shorthand form of court methodology which will do justice to the pockets of the poor who seek right and justice and to the limited judicial hours humanly available to the court if the delivery system of justice is not to suffer obsolescence.
The facts: Back to the central facts.
Proof of the 'efficient ' management of the Gujarat Steel Tubes Ltd. is afforded by the testimony of larger turnover and profits, year after year, from the beginning down 158 to date.
The mill was commissioned in January 1964 but by the accounting year 1971 72 the turnover had leapt to Rs. 560 lakhs.
It scaled to Rs. 680 lakhs the next year, to Rs. 1136 lakhs the year after and to Rs. 20 crores in 1974 75.
This enterprise entered the export trade and otherwise established itself as a premier manufactory in the line.
Steel shortage is the only shackle which hampers its higher productivity.
But its increasing shower of prosperity was a sharp contrast, according to Sri Garg, to the share of the wage bill.
The worker star ted on a magnificent sum per mensem of Rs. 100/ in toto even as late as 1970, although some workmen, with more service, were paid some what higher.
The extenuatory plea of the Management, justificatory of this parsimony, was that other mill hands were receiving more niggardly wages in comparable enterprises.
Probably, unionisation, under these luridly low paid circumstances, caught on and a workers ' union was born somewhere around 1966.
A sensible stroke of enlightened capitalism persuaded the Management to enter into agreements with the Union, somewhat improving emoluments and ameliorating conditions.
By 1968, the Sabha, a later union, came into being and commanded the backing of all or most of the mill hands.
By March 1969, the Sabha presented a charter of demands, followed by resistance from the Management and strike by the workers.
By July 1969, a settlement with the Sabha was reached.
Agreements relating to the various demands brought quiet and respite to the industry although it proved temporary.
A vivid close up of the sequence and consequence of the dramatic and traumatic events culminating in the reference to arbitration and the impugned award is essential as factual foundation for the decision of the issues.
Even so, we must condense, since labyrinthine details are not needed in a third tier judgment.
Broad lines with the brush bring out the effect, not minute etches which encumber the picture.
An agreement of futuristic import with which we may begin the confrontational chronicle is that of April 1970.
Clause 6 thereof runs thus: "Management of the Company agrees to implement recommendations of the Central Wage Board for Engineering Industries as and when finally declared and all the increments granted to workmen from time to time under this agreement shall be adjusted with those recommendations provided that such adjustment shall not adversely affect the wages of workman.
" The engineering industry, where India is forging ahead, was apparently exploitative towards labour, and to make amends for this un 159 healthy position, the Central Wage Board was appointed in 1964 although it took six long years to recommend revision of wages to be implemented with effect from 1 1 1969.
Meanwhile, the masses of workers were living 'below the broad line ' Saintly patience in such a milieu was too much to expect from hungry demands and pressing for the recommendations of the Wage Board to be converted into immediate cash.
But, as we will presently unravel, Wage Board expectations ' were proving teasing illusions and premises of unreality because of non implementation, viewed from the Sabha 's angle.
The Management, on the other hand, had a contrary version which we will briefly consider.
Luckily, agreed mini increases in wages were taking place during the years 1970, 1971 and 1972.
Likewise, bonus was also the subject of bargain and agreement.
But in September 1971, an allegedly violent episode broke up the truce between the two, spawned criminal cases against workers, led to charges of go slow tactics and lock outs and burst into suspension, discharge and dismissal of workmen.
The crisis was tided over by continued conciliations and two settlements.
We are not directly concerned with the cluster of clauses therein save one.
64 workmen had been discharged or dismissed, of whom half the number were agreed to be reinstated.
The fate of the other half (32 workers) was left for arbitration by the Industrial Tribunal.
The dark clouds cleared for a while but the sky turned murky over again, although the previous agreement had promised a long spell of normalcy.
The Sabha, in October 1972, met and resolved to raise demands of which the principal ones were non implementation of the Wage Board recommendations, bonus for 1971 and wages during the lockout period.
The primary pathology of industrial friction is attitudinal.
The Management could have (and, indeed, did, with a new Union) solved these problems had they regarded the Sabha as partner, not saboteur.
Had the bitter combativeness of the Sabha been moderated, may be the showdown could have been averted.
Apportioning blame does not help now, but we refer to it here because Sri Ashok Sen, with feeling fury, fell foul of the criticism by the High Court that the Management had acted improperly in insisting on arbitration, and argued that when parties disagreed, arbitral reference was the only answer and the workers ' fanatical rejection of arbitration made no sense We need not delve into the details of the correspondence relied on by either side to reach the truth.
For, the Unions case is that in the prior settlement between the two parties arbitral reference came only after negotiations failed.
That was why they 160 pressed the Management to reason together, avoiding wrestling with each other before a slow moving umpire.
Sri Tarkunde, for the Sabha, urged that the workmen were not intransigent but impatient and pleaded for a negotiated settlement since the main point in dispute, namely the implementation of the Central Engineering Wage Board 's recommendations, was too plain to admit of difference, given good faith on both sides.
We will examine the substance of this submission later but it needs to be emphasised that workmen, surviving on starving wages and with notoriously fragile staying power, are in no mood for adjudicatory procedures, arbitral or other, if the doors of negotiation are still ajar.
The obvious reason for this attitude is that the litigative length of the adjudicatory apparatus, be it the tribunal, the court or the arbitrator, is too lethargic and long winded for workmen without the wherewithal to survive and is beset with protracted challenges either by way of appeal upon appeal or in the shape of writ petitions and, thereafter, appeals upon appeals.
The present case illustrates the point.
Where workmen on hundred rupees a month demand immediate negotiation the reason is that privations have no patience beyond a point.
Now and here, by negotiation, is the shop floor glamour.
In this very matter, although the controversy before the arbitrator fell within a small compass, he took a year and ninety printed pages to decide, inevitably followed by a few Years and hundred and thirty printed pages of judgment in the High Court and a longer spell in this Court with slightly lesser length of judgment.
Which workman under Third World Conditions can withstand this wasting disease while hunger leaves no option save to do or die ? Raw life, not rigid logic, is the mother of law.
After the demands were raised by the Union, the main issue being implementation of the Wage Board recommendations, a stream of correspondence, meetings and inchoate settlements ensued, but the crucial question, which would have meant 'cash and carry ' for the workmen, baffled solution.
Do negotiate since the application of the Wage Board recommendations are beyond ambiguity, was the Sabha 's peremptory plea.
We differ; therefore, go to arbitration, was the Management 's firm response.
A stalemate descended on the scene.
No breakthrough being visible, the Sabha charged the Management by its letter of January 25, 1973 with breach of clause 6 of the Agreement of August 4, 1972 which ran thus: "That the parties agree that for a period of 5 years from the date of this settlement all disputes will be solved by mutual negotiations or, failing that, by joint arbitration under 161 Section 10A of the I.D. Act, 1947.
Neither party shall take any direct action including go slow, strike and lock out for a period of 5 years from the date of this settlement." Various aspersions of anti labour tactics were included in the Sabha 's letter but the most money loaded item was the grievance about the Wage Board recommendations.
The temper, by now, was tense.
The Management, on the same day, (January 25, 1973) set out its version on the notice board and the High Court 's summary of it runs thus .
"The notice stated that during the course of the meeting with the representatives of the Sabha held on January 20, 1973 the Company had expressed its willingness to implement the Wage Board recommendations according to its interpretation on and with effect from January 1, 1969 without prejudice to the rights and contentions of the workmen and leaving it open to the parties to take the matter to arbitration for resolution of the points of dispute.
The Sabha, however, had turned down this suggestion and it came to the notice of the Company that workmen were being instigated by making false representations.
The Company clarified that on and with effect from January 1, 1972 every workman would be entitled to the benefits of Wage Board recommendations, irrespective of whether the concerned workman had put in 240 days attendance." The Sabha 's answer was a strike two days later.
This event of January 27 was countered quickly by the Management restating its attitude on the Wage Board recommendations, asserting that the strike was illegal and in breach of the settlement of August 4, 1972 and wholly unjustified because the offer of reference to arbitration, negotiations failing, had been spurned by the Sabha.
The notice wound up with a command and a caveat: "If the workmen do not immediately resume duty, the Company would not be under any obligation to continue in service those 32 workmen who have been taken back in service pursuant to the settlement dated August 4, 1972.
Besides, if (the workmen) continue causing loss to the Company from time to time in this manner, the Company will not also be bound to implement the Wage Board, recommendations on and with effect from January 1, 1969, which may also be noted.
The Company hereby withdraws all its proposals unless the Workmen withdraw the strike and resume work within two days.
" 162 This threat was dismissed by the workmen as a brutum fulmen and the strike continued.
The Management, therefore, came up on the notice board castigating the Sabha with irresponsible obduracy in waging an illegal and unjustified strike.
A warning of the shape of things to come was given in this notice.
The High Court has summed it up thus: "The Company gave an intimation that in view of such obstinate attitude on the part of the Sabha and the workmen, it had decided to withdraw its earlier offer to implement the Wage Board recommendations on and with effect from January 1, 1969 as already cautioned in the notice dated January 27, 1973.
The said decision must be taken to have been thereby communicated to the workmen and Sabha.
The notice further stated that having regard to the obdurate, unreasonable and illegal attitude adopted by the workmen and Sabha, the Company had decided to take disciplinary proceedings against the defaulting workmen.
In this connection, the attention of the workmen was drawn to the fact that the strike was illegal not only because of the terms of the settlement dated August 4, 1972 but also because of the pendency of the reference relating to reinstatement of 32 workmen before the Industrial Court and, that, therefore, the Company was entitled to take disciplinary action against them.
Finally, the Company appealed to the workmen to withdraw their illegal and unjustified strike forthwith and to resume work." These exercises notwithstanding, the strike raged undaunted, the production was paralysed and the Management retaliated by an elaborate notice which dilated on its preparedness to negotiate or arbitrate and the Sabha 's unreason in rejecting the gesture and persisting on the war path.
The stern economic sanction was brought home in a critical paragraph: "By this final notice the workmen are informed that they should withdraw the strike and resume work before Thursday, February 15, 1973.
If the workmen resume duty accordingly, the management would be still willing to pay salary according to the recommendations of the Wage Board on and with effect from January 1, 1969.
Furthermore, the management is ready and willing to refer to the arbitration of the Industrial Tribunal the question as to whether the management has implemented the settlement dated August 4, 1972 and all other labour problems.
In spite of this, if the workmen do not resume duty before Thursday, February 15, 1973.
then the Company will terminate the services of all workmen who are on strike and thereafter it will run the 163 factory by employing new workmen.
All workmen may take note of this fact.
" The count down thus began.
February 15, 1973 arrived, and the Management struck the fatal blow of discharging the strikers all the labour force, 853 strong and recruiting fresh hands and thus work was resumed by February 19, 1973.
This public notice was allegedly sent to the Sabha and circulated to such workmen as hovered around the factory.
It is common case that the notice of February 15,1973, was not sent to individual workmen but was a signal for action.
The drastic consequence of disobedience was spelt out in no uncertain terms: "The workmen are hereby informed that they should resume duty on or before Monday, February 19, 1973 failing which the Management will presume that the workmen want to continue their strike and do not wish to resume work until their demands as aforesaid are accepted by the management.
Parallel negotiations were going on even while mailed fist manoeuvres were being played up thanks to the basic goodwill and tradition of dispute settlements that existed in this company.
Even amidst the clash of arms, bilateral diplomacy has a place in successful industrial relations.
The Management and the Sabha allowed the talks to continue which, at any rate, clarified the area of discord.
One thing that stood out of these palavers was that both sides affirmed the pre condition of negotiations before arbitration over differences although the content, accent and connotation of 'negotiations ' varied with each side.
No tangible results flowed from these exercises and the inevitable happened on February 21, 1973 when the Management blotted out the entire lot of 853 workmen from the roster, by separate orders of discharge from service, couched in identical terms.
The essential terms read thus : "Your services are hereby terminated by giving you one month 's salary in lieu of one month 's notice and accordingly you are discharged from service.
You should collect immediately from the cashier of the factory your one month 's notice pay and due pay, leave entitlements and gratuity, if you are entitled to the same.
The payment will be made between 12 noon and 5 p.m.
If and when you desire to be employed, you may apply ill writing to the Company in that behalf and on receipt of the application, a reply will be sent to you in the matter." 164 Casual workmen were issued separate but similar orders.
The Management did record its reasons for the action taken, on February 20, 1973 and forwarded them to the Sabha and to the individual workmen on request.
The anatomy of this proceeding is of critical importance in deciding the character of the action.
Was it a harm less farewell to the workmen who were unwilling to rejoin or a condign punishment of delinquent workmen ? The separate memorandum of Reasons refers to the strike as illegal and unjustified and narrates the hostile history of assault by workmen of the officers, their go slow tactics and sabotage activities, their contumacious and a host of other perversities vindicating the drastic action of determining the services of all the employees.
The concluding portion reads partly stern and partly non committal: "In the interest of the Company it is decided to terminate the services of all the workmen who are on illegal and unjustified strike since 27th January, 1973.
Under the circumstances, it is decided that the services of all the workmen who are on illegal and unjustified strike should be terminated by way of discharge simpliciter.
These workmen, however, may be given opportunity to apply for employment in the Company and in case applications are received for employment from such employees, such applications may be considered on their merits later on.
It may be mentioned here that while arriving at the aforesaid decision to terminate the services of the workmen, various documents, notices, correspondence with the Union and others, records of production, etc. have been considered and therefore the same are treated as part of the relevant evidence to come to the conclusion as aforesaid.
FINAL CONCLUSION The services of all the workmen who are on illegal and unjustified strike since 27 1 1973 should be terminated by way of discharge simpliciter and they should be offered all their legal dues immediately.
The Administrative Manager is hereby directed to pass orders on individual workers as per draft attached.
We thus reach the tragic crescendo when the Management and the workmen fell apart and all the workmen 's services were severed.
Whether each of these orders using, in the contemporaneous reasons, 165 the vocabulary of misconduct but, in the formal part, the expression 'discharge simpliciter ', should be read softly as innocent termination or sternly as penal action, is one of the principal disputes demanding decision.
We may as well complete the procession of events before taking up the major controversies decisive of the case.
The total termination of the entire work force of 853 employees was undoubtedly a calamity of the first magnitude in a country of chronic unemployment and starving wages.
Nevertheless, under certain circumstances, discharge of employees may well be within the powers of the Management subject to the provisions of the Act.
With all the strikers struck off the rolls there was for a time the silence of the grave.
The conditional invitation to the employees to seek de novo employment by fresh applications which would be considered on their merits, left the workers cold.
So the factory remained closed until April 28, 1973 when, with new workers recruited from the open market, production recommenced.
Among the militants, the morale which kept the strike going, remained intact but among the others the pressure to report for employment became strong.
Re employment of discharged workmen began and slowly snowballed, so that by July 31, 1973 a substantial number of 419 returned to the factory.
The crack of workman 's morale was accelerated by escalating reemployment and the Management 's restoration of continuity of service and other benefits for re employed hands.
The Employer relied on this gesture as proof of his bond fides.
Meanwhile, there were exchanges of letters between and 'trading ' of charges against each other.
The Management alleged that the strikers were violent and prevented loyalists ' return while the Sabha was bitter that goondas were hired to break the strike and promote blacklegs.
These imputations have a familiar ring and their impact on the legality of the discharge of workmen falls for consideration a little later.
The stream of events flowed on.
The Sabha protested that the Management was terrorising workmen, exploiting their sagging spirit and illegally insisting on fresh applications for employment while they were in law continuing in services.
With more 'old workers ' trickling back for work and their discharge orders being cancelled, the strike became counter productive.
Many overtures on both sides were made through letters but this epistolary futility failed to end the imbroglio and brought no bread.
The worker wanted bread, job, and no phyrric victory.
A crescent of hope appeared on the industrial sky.
The Management but out a 'final offer ' on May 31, 1973, calling on all workmen 166 to rejoin last the remaining vacancies also should be filled by fresh recruits.
The Sabha responded with readiness to settle and sought some clarifications and assurances.
The employer informed : "Our offer is open till 10 6 1973.
From 11 6 1973 we shall recruit new hands to the extent necessary.
Thereafter workers who will not have reported for work shall have no chance left for re employment with us.
We repeat that those workers who will report for work will be taken back in employment with continuity of their services, that the orders of discharge passed against them on 21 2 1973 shall be treated as cancelled and they will also be paid the difference in wages from 1969 as per the recommendations of the Wage Board.
" The Sabha was willing and wrote back on June 8, 1973 but sought details about the attitude of the Management to the many pending demands.
Meanwhile, the sands of time were running out and so the Sabha telegraphed on 9th June that the workers were willing to report for work but were being refused work.
They demanded the presence of an impartial observer.
The reply by the Management repelled these charges, but there was some thaw in the estrangement, since the time for return to work of the strikers was extended upto 16 6 73.
An apparent end to a long strike was seemingly in sight with the Sabha sore but driven to surrender.
On 13 6 73 the Sabha Secretary wrote back: "This is a further opportunity to you even now to show your bona fides.
If you confirm to take all the workmen discharged on 21 2 1973 as stated in your various letters and to give them intimation and reasonable time to join, l will see that your offer is accepted by the workmen.
" Here, at long last, was the Management willing to 'welcome ' back all the former employees and the Sabha limping back to the old wheels of work.
Was the curtain being finally drawn on the feud ? Not so soon, in a world of bad blood and bad faith; or may be, new developments make old offers obsolete and the expected end proves an illusion.
Anyway, the victor was the Management and II the vanquished the Sabha and the re employment offered was watered down.
In our materialist cosmos, often Might is Right and victory dictates morality ! 167 Hot upon the receipt of the Sabha 's letter accepting the offer the Management back tracked or had second thoughts on full re employment.
For, they replied with a long catalogue of the Sabha 's sins, set out the story of compulsion to keep the production going and explained that since new hands had come on the scene full re employment was beyond them.
In its new mood of victorious righteousness, the Management modified the terms of intake of strikers and saddled choosy conditions on such absorption suggestive of breaking the Sabha 's solidarity: "As on the present working of the Company, the Company, may still need about 250 more workers including those to be on the casual list as per the employment position prior to the start of the strike.
You may, therefore, send to us immediately per return of post the list of the workers who can and are willing to join duty immediately so as to enable us to select and employ the workmen as per the requirement of the Company.
Further, it would also be necessary for you to state in your reply that you have called off the strike and have advised the workers to resume the work as otherwise it is not clear from your letter as to whether you are still advocating the continuance of the strike or that you have called off the strike.
Therefore, unless we have a very definite stand known from you on this issue, it may not be even now possible for us to enter into any correspondence with you.
We may again stress that if your tactics of prolonging the issue by correspondence are continued the management would be constrained to fake new recruits and in that case, at a later date it may not be even possible to employ as many workmen as may be possible to employ now.
" Nothing is more galling, says Sri Tarkunde, than for a Union which has lost the battle and offered to go back to work to be told that it should further humiliate itself by formally declaring the calling off of the strike.
Sentiment apart, the Sabha had agreed to go back, but then the Management cut down the number to be re employed to 250 and, even this, on a selective basis.
This selection could well be to weed out Union activists or to drive a wedge among the Union members.
These sensitive thoughts and hard bargains kept the two apart.
The Sabha, wounded but not wiped 168 out, did not eat the humble pie.
The Management, on account of the intervening recruitments and injuries inflicted by the strike, did not budge either.
At this point we find that out of 853 employees who had been sacked 419 had wandered back by July 31, leaving 434 workmen at flotsam.
Their reinstatement became the focus of an industrial dispute raised by the Sabha.
A few more were left out of this jobless mass, and through the intercession of the Commissioner of Labour both sides agreed to resolve their disagreement by arbitral reference under Sec.
10A of the Act, confining the dispute to reinstatement of 400 workmen discharged on February 21 1973.
A reference under Sec.
10A materialised.
The 'Labour litigation ' began in May 1975 and becoming 'at each remove a lengthening chain ' laboured from deck to deck and is coming to a close, hopefully, by this decision.
Is legal justice at such expensive length worth the candle or counter productive of social justice? Is a streamlined alternative beyond the creative genius of Law India? An aside As urgent as an industrial revolution is an industrial law revolution, if the rule of law were at all to serve as social engineering.
The current forensic process needs thorough overhaul because it is over judicialised and under professionalised, lacking in social orientation and shop floor know how and, by its sheer slow motion and high price, defects effective and equitable solution leaving both Managements and Unions unhappy.
If Parliament would heed, we stress this need.
Industrial Justice desiderates specialised processual expertise and agencies.
This factual panorama, omitting a welter of debatable details and wealth of exciting embellishments, being not germane to the essential issues, leads us to a formulation of the decisive questions which alone need engage our discussion.
The Management might have been right in its version or the Sabha might have been wronged as it wails, but an objective assessment of the proven facts and unbiased application of the declared law will yield the broad basis for working out a just and legal solution.
Here, it must be noticed that a new Union now exists even though its numerical following is perhaps slender.
We are not concerned whether it is the favoured child of the Management, although it has received soft treatment in several settlements which have somewhat benefited the whole work force and suggests a syndrome not unfamiliar among some industrial bosses allergic to strong unions.
169 The central problem on the answer to which either the award of the arbitrator or the judgment of the High Court can be sustained as sound is whether the discharge of the workmen en masse was all innocuous termination or a disciplinary action.
If the latter.
the High Court 's reasoning may broadly be invulnerable.
Secondly, what has been mooted before us is a question as to whether the evidence before the Arbitrator, even if accepted at its face value, establishes any misconduct of any discharged workman and further whether the misconduct, if any, made out is of such degree as to warrant punitive discharge.
Of course, the scope of Section 11A as including arbitrators, the power of arbitrators, given sufficiently wide terms of reference, to examine the correctness and propriety of the punishment, inter alia, deserve examination.
Likewise the rules regarding reinstatement, retrenchment, back wages and the like, fall for subsidiary consideration.
Prefatory to this discussion is the appreciation of the constitutional consciousness with regard to Labour Law.
The Constitution of India is not a non aligned parchment but a partisan of social justice with a direction and destination which it sets in the Preamble and article 38, and so, when we read the evidence, the rulings, the statute and the rival pleas we must be guided by the value set of the Constitution.
We not only appraise Industrial Law from this perspective in the disputes before us but also realise that ours is a mixed economy with capitalist mores, only slowly wobbling towards a socialist order, notwithstanding Sri Garg 's thoughts.
And, after all ideals apart. 'law can never be higher than the economic order and the cultural development of society brought to pass by that economic order '.
The new jurisprudence in industrial relations must prudently be tuned to the wave length of our constitutional values whose emphatic expression is found in a passage quoted by Chief Justice Rajamannar of the Madras High Court.
The learned judge observed : "The doctrine of 'laissez faire ' which held sway in the world since the time of Adam Smith has practically given place to a doctrine which emphasises the duty of the state to interfere in the affairs of individuals in the interests of the social well being of the entire community.
As Julian Huxley remarks in his essay on "Economic Man and Social Man": "Many of our old ideas must be retranslated, so to speak, into a new language.
The democratic idea of freedom, for instance, must lose its nineteenth century meaning of individual liberty in the economic sphere, and become adjusted to new conception of social duties and responsibilities.
170 When a big employer talks about his democratic rights to individual freedom, meaning thereby a claim to socially irresponsible control over a huge industrial concern and over the lives of tens of thousands of human beings whom it happens to employ, he is talking in a dying language." Homo economicus can no longer warp the social order.
Even so the Constitution is ambitiously called socialist but realists will agree that a socialist transformation of the law of labour relations is a slow though steady judicial desideratum.
Until specific legislative mandates emerge from Parliament the court may mould the old but not make the new law. 'Interstitially, from the molar to the molecular ' is the limited legislative role of the court, as Justice Holmes said and Mr. Justice Mathew quoted (see [1976] 2 S.C.C. at p. 343).
The Core Question Right at the forefront falls the issue whether the orders of discharge are, as contended by Sri Tarkunde, de facto dismissals, punitive in impact and, therefore, liable to be voided if the procedural imperatives for such disciplinary action are not complied with, even though draped in silken phrases like 'termination simpliciter '.
It is common case that none of the processes implicit in natural justice and mandated by the relevant standing orders have been complied with, were we to construe the orders impugned as punishment by way of discharge or dismissal.
But Sri Ashok Sen impressively insists that the orders here are simple terminations with no punitive component, as, on their face, the orders read.
To interpret otherwise is to deny to the employer the right, not to dismiss but to discharge, when the law gives him option.
An analysis of the standing orders in the background of disciplinary jurisprudence is necessitous at this point of the case.
The Model Standing orders prescribed under Section 15 of the , apply to this factory.
Order 23, clauses (1) and (4), relate to termination of employment of permanent workmen.
Termination of their services on giving the prescribed notice or wages in lieu of such notice is provided for.
But clause (4A) requires reasons for such termination of service of permanent workmen to be recorded and, if asked for, communicated.
This is obviously intended to discover the real reason for the discharge so that remedies available may not be defeated by clever phraseology of orders of termination.
Clause (7) permits the services or non permanent workmen to be terminated without notice 171 except when such temporary workmen are discharged by way of punishment.
Punitive discharge is prohibited unless opportunity to show cause against charges of misconduct is afforded (Standing order 15).
Orders of termination of service have to be by the Manager and in writing and copies of orders shall be furnished to the workmen concerned.
Standing order 24 itemizes the acts and omissions which amount to misconduct "According to clause (b) of the said Standing order, going on an illegal strike or abetting, inciting instigating or acting in furtherance thereof amounts to misconduct.
Standing order 25 provides for penalty impossible on a workman guilty of misconduct.
Accordingly amongst other punishments, a workman could be visited with the penalty of discharge under order 23 of dismissal without notice for a misconduct [see sub clauses (f) and (g) of clause ( 1 ) j. Clause (3) provides that no order of dismissal under sub clause (g) of clause (1) shall be made except after holding an enquiry against the workman concerned in respect of the alleged misconduct in the manner set forth in clause (4).
Clause (4) provides for giving to the concerned workman a charge sheet and an opportunity to answer the charge and the right to be defended by a workman working in the same department as himself and production of witnesses and cross examination of witnesses on whom the charge rests.
Under clause (6), in awarding punishment the Manager has to take into account the gravity of the misconduct, the previous record, if any, of the workman, and any other extenuating or aggravating circumstances.
" The finding of the Arbitrator that the workmen went on a strike which was illegal and in which they had participated is not disputed.
In this background, the application of the procedural imperatives before termination of services of the workmen, in the circumstances of the present case, has to be judged.
This, in turn, depends on the key finding as to whether the discharge orders issued by the management were punitive or non penal.
The anatomy of a dismissal order is not a mystery, once we agree that substance, not semblance, governs the decision.
Legal criteria are not so slippery that verbal manipulations may outwit the court.
Broadly stated, the face is the index to the mind and an order fair on its face may be taken at its face value.
But there is more to it than that, because sometimes words are designed to conceal deeds 172 by linguistic engineering.
So it is beyond dispute that the form of the order or the language in which it is couched is not conclusive.
The court will lift the veil to see the true nature of the order.
Many situations arise where courts have been puzzled because the manifest language of the termination order is equivocal or misleading and dismissals have been dressed up as simple termination.
And so, judges have dyed into distinctions between the motive and the foundation of the order and a variety of other variations to discover the.
true effect of an order of termination.
Rulings are a maze on this question but, in sum, the conclusion is clear.
If two factors coexist, an inference of punishment is reasonable though not inevitable.
What arc they ? If the severance of service is effected, the first condition is fulfilled and if the foundation or causa causans of such severance is the servant 's misconduct the second is fulfilled.
If the basis or foundation for the order of termination is clearly not turpitudinous or stigmatic or rooted in misconduct or visited with evil pecuniary effects, then the inference of dismissal stands negated and vice versa.
These canons run right through the disciplinary branch of master and servant jurisprudence, both under Article 311 and in other cases including workmen under managements The law cannot be stultified by verbal haberdashery because the court will lift the mask and discover the true face.
It is true that decisions of this Court and of the, High Courts since Dhingra 's case ; have been at times obscure.
if cited de hors the full facts.
In Samsher Singh 's case the unsatisfactory state of the law was commented upon by one of us, per Krishna Iyer, J., quoting Dr. Tripathi for support: "In some cases, the rule of guidance has been stated to be 'the substance of the matter ' and the 'foundation ' of the order.
When does 'motive ' trespass into 'foundation ' ? When do we lift the veil of form to touch the 'substance ' ? When the Court says so.
These 'Freudian ' frontiers obviously fail in the work a day world and Dr. Tripathi 's observations in this context are not without force.
He says: 'As already explained, in a situation where the order of termination purports to be a mere order of discharge without.
173 stating the stigmatizing results of the departmental enquiry a Search for the 'substance of the matter ' will be indistinguishable from a search for the motive (real, unrevealed object) of the order.
Failure to appreciate this relationship between motive (the real, but unrevealed object) and from (the apparent, or officially revealed object) in the present con text has lead to an unreal inter play of words and phrases wherein symbols like 'motive ', 'substance ' 'form ' or 'direct ' parade in different combinations without communicating precise situations or entities in the world of facts. ' The need, in this branch of jurisprudence, is not so much to reach perfect justice but to lay down a plain test which the administrator and civil servant can understand without subtlety and apply without difficulty.
After all, between 'unsuitability ' and 'misconduct ' thin partitions do their bounds divide '.
And over the years, in the rulings of this Court the accent has shifted, the canons have varied and predictability has proved difficult because the play of legal light and shade has been baffling.
The learned Chief Justice has in his judgement, tackled this problem and explained the rule which must govern the determination of the question as to when termination of service of a probationer can be said to amount to discharge simpliciter and when it can be said to amount to punishment so as to attract the inhibition of Art 311.
" Masters and servants cannot be permitted to play hide and seek with.
the law of dismissals and the plain and proper criteria are not to be misdirected by terminological cover ups or by appeal to psychic processes but must be grounded on the substantive reason for the order, whether disclosed or undisclosed.
The Court will find out from other proceedings or documents connected with the formal order of termination what the true ground for the termination is.
If, thus scrutinized, the order has a punitive flavour in cause or consequence, it is dismissal.
If it falls short of this test, it cannot be called a G punishment.
To put it slightly differently, a termination effected because the master is satisfied of the misconduct and of the consequent desirability of terminating the service of the delinquent servant, it is a dismissal, even if he had the right in law to terminate with an innocent order under the standing order or otherwise.
Whether, in such a case the grounds are recorded in a different proceeding from the formal order does not detract from its nature.
Nor the fact that, after being satisfied of the guilt, the master abandons the enquiry and proceeds to 174 terminate.
Given an alleged misconduct and a live nexus between it and the termination of service the conclusion is dismissal.
even if full benefits as on simple termination, are given and non injurious terminology is used.
On the contrary, even if there is suspicion of misconduct the master may say that he does not wish to bother about it and may not go into his guilt but may feel like not keeping a man he is not happy with.
He may not like to investigate nor take the risk of continuing a dubious servant.
Then it is not dismissal but termination simpliciter, if no injurious record of reasons or punitive pecuniary cut back on his full terminal benefits is found.
For, in fact, misconduct is not then the moving factor in the discharge.
We need not chase other hypothetical situations here.
What is decisive is the plain reason for the discharge.
not the strategy of a non enquiry or clever avoidance of stigmatizing epithets.
If the basis is not misconduct, the order is saved.
In Murugan Mills, this Court observed: "The right of the employer to terminate the services of his workman under a standing order, like cl.
17(a) in the present case, which accounts to a claim "to hire and fire ' an employee as the employer pleases and thus completely negatives security of service which has been secured to industrial employees through industrial adjudication.
came up for consideration before the Labour Appellate Tribunal in Buckingham and Carnatic Co. Ltd. vs Workers of the Company.
The matter then came up before this before this Court also in Chartered Bank vs Chartered Bank Employees Union(3) and the Management of U.B. Dutt & Co. vs Workmen of U. B. Dutt & Co.(4) Wherein the view taken by Labour Appellate Tribunal was approved and it was held that even in a case like the present the requirements of bona fides was essential and if the termination of service was a colourable exercise of the power or as a result of victimization or unfair labour practice the industrial tribunal would have the jurisdiction to intervene and set aside such termination.
The form of the order in such a case is not conclusive and the Tribunal can go behind the order to find the reasons which led to the 175 order and then consider for itself whether the termination was a colourable exercise of the power or was a result of victimisation or unfair labour practice.
If it came to the conclusion that the termination was a colourable exercise of the power or was a result of victimisation or unfair labour practice.
it would have the jurisdiction to intervene and set aside such termination.
" Again, in Chartered Bank vs Employees Union his Court emphasised: " .
The form of the order of termination is not conclusive of the true nature of the order, for it is possible that the form may be merely a camouflage for an order of misconduct.
It is, therefore, always open to the Tribunal to go behind the form and look at the substance and if it comes to the conclusion, for example, that though in form the order amounts to termination simpliciter, it in reality cloaks a dismissal for misconduct, it will be open to it to set it aside as a colourable exercise of the Power.
" A rain of rulings merely adds to the volume, not to the weight of the proposition, and so we desist from citing all of them.
A bench of seven judges of this Court considered this precise point in Shamsher Singh 's case and Chief Justice Ray ruled: "The form of the order is not decisive as to whether the order is by way of punishment.
Even an innocuously worded order terminating the service may in the facts and circumstances of the case establish that an enquiry into allegations of serious and grave character of misconduct involving stigma has been made in infraction of the provision of Article 311.
In such a case the simplicity of the form of the order will not give any sanctity.
That is exactly what has happened in the case of Ishwar Chand Agarwal.
The order of termination IS illegal and must he set aside." Simple termination or Punitive Discharge ? We must scan the present order of discharge of 853 workmen and ask the right questions to decide whether they are punishments or innocent terminations.
Neither judicial naivete nor managerial ingenuity will put the court off the track of truth.
then, are the diagnostic factors in the orders under study ? An isolated reading of the formal notices terminating their services reveals no stigma, no penalty, no misconduct.
They have just been told 176 off.
But the Management admits that as required by the Standing orders it has recorded reasons for the discharge.
There, several pages of damnatory conduct have been heaped on the workers collectively accounting for the resort of the Management to the extreme step of discharging the whole lot, there being no alternative.
Sri A. K. Sen took us through the various appeals made by the Management, the losses sustained.
the many offers to negotiate and arbitrate, the Sabha 's deaf obduracy and resort to sudden strike and violent tactics and, worst of all, its attempts to persuade the Central Government to take over the factory as a `sick ' mill.
These ordeals were, described by Sri Ashok Sen graphically to justify the submission that the Management had no choice, caught between Scylla of strike and Charybdis of take over, but to get rid of the strikers and recruit new workers.
If the employer did not discharge the strikers they were adamant and would not return to world, and the very closure compelled by the Sabha was being abused by it to tell the Central Government that for three months there had been no production and so the mill qualified to be taken over as `sick ' under the Industries (Development and Regulation) Act.
If the Management discharged the workers to facilitate fresh recruitment and save the factory from statutory takeover the cry was raised that the action was dismissal because an elaborate enquiry was not held.
The Management had avoided injury to the workmen, argued Sri Sen, by merely terminating their services without resort to disciplinary action and recording the uncomplimentary grounds in a separate invisible order.
He also underscored the fact that the strike was illegal and unjustified as concurrently held by the Arbitrator and the High Court.
We agree that industrial law promotes industrial life, not industrial death, Any realism is the soul of legal dynamics.
Any doctrine that destroys industrial progress interlaced with social justice is lethal juristic and cannot be accepted.
Each side has its own version of the role of the other which we must consider before holding either guilty.
Sri Tarkunde told us the tale of woe of the workmen.
In 3 country where the despair of Government is appalling unemployment it is a terrible tragedy to put to economic death 853 workmen.
And for what? For insisting that the pittance of Rs. 100 per month be raised in terms of the Central Wage Board recommendations, as long ago agreed to by the Management but put off by the tantalizing but treacherous offer of arbitration.
When the point admitted of easy negotiated solution.
Arbitration looks nice, but.
since 1969, the hungry families have been yearning for a morsel more, he urged.
Blood, toil, sweat and tears for the workers and all the profits ' and production for the Management, was the industrial irony! Knowing that every arbitral or other adjudicatory agency in 177 India, especially when weak Labour is pitted against strong Capital in the sophisticated processual system, consumes considerable time, the lowly working class is allergic to this dilatory offer of arbitration.
They just don 't survive to eat the fruits.
Such was his case.
The story of violence was also refuted by Sri Tarkunde, since the boot was on the other leg.
Goondas were hired by the Management to sabotage the fundamental right to strike and with broken hearts several of them surrendered.
When, at last, the Sabha agreed to see that all workmen reported for work within the extended time, the Management took to the typical tactics of victimisation of refusing work for all, as first offered, and of picking and choosing even for the 250 vacancies.
Moreover, other conditions were put upon the Sabha calculated to break unionism which those familiar with trade union movements would painfully appreciate.
This insult and injury apart, the orders of termination were painly dismissals for a series of alleged misconducts which were chronicled in separate proceedings.
The formal order was like a decree, the grounds recorded contemporaneously were like the judgment, to use court vocabulary.
It was obvious that the foundation for the termination was the catena of charges set out by the Management.
The true character of the order could not be hidden by the unfair device of keeping a separate record and omitting it from the normal communication.
Law is not such an ass as yet and if the intent and effect is damnatory the action is disciplinary.
Between these two competing cases, presented by counsel, we have to gravitate towards the correct factual legal conclusion.
A number of peripheral controversies have been omitted from this statement, for brevity 's sake.
When two high tribunals have spread out the pros and cons it is supererogation for this Court to essay likewise, and miniaturization is a wise husbandry of judicial resources.
First, we must decide whether the order of termination was a punitive discharge or a simple discharge.
Here we reach the dilemma of the law for discovering unfailing guidelines to distinguish between discharge simpliciter and dismissal sinister.
The search for infallible formulae is vain and only pragmatic humanism can help navigate towards just solutions.
We have earlier explained that from Dhingra 's case to Shamsher Singh 's case, the law has been dithering but some rough and ready rules can be decocted to serve in most situations.
Law, in this area, is a pragmatist, not a philologist, and we have set out the dual diagnostic tests applicable in such cases.
178 It was not retrenchment, according to the Management.
Then what was it ? If there was work to be done, why terminate services of workmen except as punishment ? Because, argued Sri Sen, the workers did not work, being on strike and the Management, bent on keeping the factory going, needed workmen who work.
To recruit fresh hands into the lists and to keep the old hands on the roster was double burden, and, therefore, the strikers had to be eased out to yield place to new recruits.
The object was not to punish the workmen but to keep the factory working Accepting this plea, as it were, the award of the arbitrator has exonerated the Management of the charge of dismissal while the High Court has held the action to be dismissal for misconduct and therefore bad in law.
In our opinion, the facts of the case before us speak for themselves Here are workmen on strike.
The strike is illegal.
The Management is hurt because production is paralyzed.
The strikers allegedly indulge ill objectionable.
activities.
The exasperated Management hits back by ordering their discharge for reasons set out in several pages in the appropriate contemporaneous proceeding.
Misconduct after misconduct is flung on the workers to justify the drastic action In all conscience and common sense, the discharge is the punishment for the misconduct.
The Management minces no words.
What is explicity stated is not a colourless farewell to make way for fresh hands to work the factory until the strike is settled but a hard hitting order with grounds of guilt and penalty of removal.
The inference is inevitable, however, ingenious the contrary argument, that precisely because the Management found the workmen refractory in their misconduct they were sacked.
Maybe, the management had no other way of working the factory but that did not change the character of the action taken.
Once we hold the discharge punitive the necessary consequence is that enquiry before punishment was admittedly obligatory and confessedly not undertaken.
The orders were bad on this score alone.
Sri A. K. Sen urged that in a dismissal the employee is denied some of the retiral and other benefits which he gets in a simple discharge, and here all the employees were offered their full monetary benefits, so that it was wrong to classify the orders of discharge as punitive.
Maybe, a dismissed servant may well be disentitled to some, at least, of the financial benefits which his counterpart who is simply discharged may draw.
But that is not a conclusive test.
Otherwise, the master may 'cashier ' his servant and camouflage it by offering full retiral benefits.
Dismissal is not discharge plus a price.
The substance of 179 the action is the litmus test.
In the present case, the penal core, 'tied ,4.
in tooth and claw, shows up once we probe; and the non committal frame of the formal order is a disguise.
For a poor workman loss of his job is a heavy penalty when inflicted for alleged misconduct, for he is so hungry that, in Gandhiji 's expressive words, he sees God Himself in a loaf of bread.
Before we leave this part of the case, a reference to some industrial law aspects and cases may be apposite though a little repetitive Standing orders certified for an industrial undertaking or the model Standing orders framed under the Industrial Employment Standing orders Act provide for discharge simpliciter, a term understood in contradistinction to punitive discharge or discharge by way of penalty.
It is not unknown that an employer resorts to camouflage by garbing or cloaking, a punitive discharge in the innocuous words of discharge simpliciter.
Courts have to interpose in order to ascertain whether the discharge is one simpliciter or a punitive discharge, and in doing so the veil of language is lifted and the realities perceived.
In the initial stages the controversy raised was whether the court/tribunal had any jurisdiction to lift such a veil.
Prove and penetrate so as to reveal the reality, but this controversy has been set at rest by the decision in Western India Automobile Association vs Industrial Tribunal Bombay.
The wide scope of the jurisdiction of industrial tribunal, ' court in this behalf is now well established.
If standing orders or the terms of contract permit the employer to terminate the services of his employee by discharge simpliciter without assigning reasons, it would be open to him to take recourse to the said term or condition and terminate the services of his employee but when the validity of such termination is challenged in industrial adjudication it would be competent to the industrial Tribunal to ensure whether the impugned discharge has been effected in the bona fide exercise of the power conferred by the terms of employment.
If the discharge has been ordered by the employer in bona fide exercise of his power, then the industrial tribunal may not interfere with it; but the words used in the order of discharge and the form which it may have taken are not conclusive in the matter an(l the industrial tribunal would be entitled to go behind the words and form and decide whether the discharge is a discharge simpliciter or not If it appears that the purported exercise of power to terminate the Services of the employee was in fact the result of the misconduct alleged against him.
then the tribunal would be justified in dealing with the dispute on the basis; that, despite its appearance to the contrary.
the order of discharge is in effect an order of dismissal.
In the exercise of this power, the 180 court/tribunal would be entitled to interfere with the order in question [see Assam Co. vs Its Workmen].
In the matter of an order of discharge of an employee as understood within the meaning of the the iron of the order and the language in which it is couched are not decisive.
If the industrial court is satisfied that the order of discharge is punitive or that it amount; to victimisation or unfair labour practice it is competent to the Court/tribunal to set aside the order in a proper case and direct reinstatement of the employee [see Tata oil Mills Co. Ltd. vs Workmen].
The form used for terminating the service is not conclusive and the tribunal has jurisdiction to enquire into the reasons which led to such termination In the facts of the case it was found that Standing orders provided that an employee could ask for reasons for discharge in the case of discharge simpliciter.
Those reasons were given before the tribunal by the appellant, viz., that the respondents services were terminated because he deliberately resorted to go slow and was negligent in the discharge of his duty.
It was accordingly held that the services of the employee were terminated for dereliction of duty and go slow in his work which clearly amounted to punishment for misconduct and.
therefore.
to pass an order under cl.
17(a) of the Standing orders permitting discharge simpliciter in such circumstances was clearly a colorable exercise of power to terminate services of a workman under the provision of the Standing orders.
In these circumstances the tribunal would be justified in going behind the order and deciding for itself whether the termination of the respondent 's services could be sustained (vide Management of Murugan Mills Ltd. vs Industrial Tribunal, Madras & Anr.
This view was affirmed in Tata Engineering & Locomotive Co. Ltd. vs section C. Prasad & Anr.(4).
After approving the ratio in Murugan Mills case, this Court in L. Michael & Anr.
vs M/s. Johnson Pumps India Ltd observed that the manner of dressing up an order did not matter.
The slightly different observation in Workmen of Sudder office, Cinnamare vs Management was explained by the Court and it was further affirmed that since the decision of this Court in the Chartered Bank vs The Chartered Bank Employee 's Union it has taken the consistent view that if the termination of service is a colourable exercise of power vested in the management or is a result of victimization 181 or unfair labour practice, the court/tribunal would have jurisdiction to intervene and set aside such termination.
It was urged that a different view was taken by this Court in Municipal Corporation of Greater Bombay vs P. section Malvenkar & ors.
The employee in that was discharged from service by paying one month 's wages in lieu of notice This action was challenged by the employee before the Labour Court and it was contended that it was a punitive discharged.
The Corporation contended that wider Standing order No. 26 the Corporation had the power to discharge but there was an obligation to give reasons if so demanded by the employee.
The Corporation had also the power to discharge by way of punishment.
The Court in this connection observed as under: "Now one thing must be borne in mind that these are two distinct and independent powers and as far as possible either should be construed so as to emasculate the other cr to render it ineffective.
One is the power to punish an employee for misconduct while the other is the power to terminate simpliciter the service of an employee without any, other adverse consequence.
proviso (i) to clause (1) of Standing order 26 requires that the reason for termination of the employment should be given in writing to the employee when exercising the power of termination of service of the employee under Standing order 26.
Therefore, when the service of an employee is terminated simpliciter under Standing order 26, the reason for such termination has to be given to the employee and this provision has been made in the Standing order with a view to ensuring that the management does not act in an arbitrary manner.
The management is required to articulate the reason which operated on its mind in terminating the service cf the employee.
But merely because the reason for terminating the service of the employee is required to be given and the reason must obviously not be arbitrary, capricious or irrelevant it would not necessarily in every case make the order or termination punitive in character so as require compliance with the requirement of clause (2) of Standing order 21 read with Standing order 23.
Otherwise.
the power of termination of service of an employee under Standing order 26 would be rendered meaningless and futile for in no case it would be possible to exercise it.
Of course, if misconduct of the employee constitutes the 182 foundation for terminating his service, then even if the order of termination is purported to be made under Standing order 26, it may be liable to be regarded as punitive in character attracting the procedure of clause (2) of Standing order 21 read with Standing order 23, though even in such a case it may be argued that the management n has not punished the employee but has merely terminated his service under Standing order 26.
" It does not purport to run counter to the established ratio that the form of the order is not decisive and the Court can lift the veil.
How ever, it may be noted that there was an alternative contention before the Court that even if the order of discharge was considered punitive in character, the employer corporation had led evidence before the labour court to substantiate the charge of misconduct and that finding was also affirmed.
We are satisfied that the Management, whatever its motives vis a vis keeping the stream of production flowing, did remove from service, on punitive grounds, all the 853 workmen.
The law is trite that the Management may still ask for an opportunity to make out a case for dismissal before the Tribunal.
The refinements of industrial law in this branch need not detain u.s because the arbitrator did investigate and hold that the workmen were guilty of misconduct and the 'sentence ' of dismissal was merited, even as the High Court did reappraise and reach, on both counts, the reverse conclusion.
The sweep of Article 226 Once we assume that the jurisdiction of the arbitrator to enquire into the alleged misconduct was exercised, was there any ground under Article 226 of the Constitution to demolish that holding ? Every wrong order cannot be righted merely because it is wrong.
It can be quashed only if it is vitiated by the fundamental flaws of gross miscarriage of justice, absence of legal evidence, perverse misreading of facts, serious errors of law on the face of the order, jurisdictional failure and the like.
While the remedy under Article 226 is extraordinary and is of Anglo Saxon vintage, it is not a carbon copy of English processes.
Article 226 is a sparing surgery but the lancet operates where injustice suppurates.
While traditional restraints like availability of alternative remedy hold back the court, and judicial power should not ordinarily rush in where the other two branches fear to tread, judicial daring is not daunted where glaring injustice demands even affirmative action.
183 The wide words of Article 226 are designed for service of the lowly numbers in their grievances if the subject belongs to the court 's province and the remedy is appropriate to the judicial process.
There is native hue about Article 226, without being anglophile or anglophobic in attitude.
Viewed from this jurisprudential perspective, we have to be cautious both in not overstepping as if Article.
226 were as large as an appeal and not failing to intervene where a grave error has crept in.
Moreover, we sit here in appeal over the High Court s Judgement.
And an appellate power interferes not when the order appealed is not right but only when it is clearly wrong.
The difference is real, though fine.
What are the primary facts which have entered the Tribunal 's verdict in holding the strikers guilty of misconduct meriting dismissal ? We must pause to remove a confusion and emphasise that the dismissal, order is not against the Union but the individual workers.
What did each one do ? Did his conduct, when sifted and scrutinised, have any exculpation or extenuation ? Not strikers in the mass, but each worker separately, must be regarded as the unit of disciplinary action.
Each one 's role and the degree of turpitude, his defence on guilt and punishment, must be adjudged before economic death sentence is inflicted.
A typical trial process instance will illumine the point.
Suppose there is case of arson and murder in a village because of communal faction and a hundred men from the aggressive community are charged in court with serious offences.
Suppose further that convincing testimony of the provocation and aggression by that community is produced.
Can any single member of the violent community be convicted on 'mass ' evidence, without specific charges of participation or clear proof of constructive involvement ? Judicial perspicacity clears this common fallacy.
It is dangerous to mass convict on the theory of community built.
Anger sometimes brings in this error.
In our assessment, the arbitrator has been swayed by generalities where particularities alone would have sufficed.
A long story may be made short by skipping the details and focussing on essentials.
We must, in fairness, state that the Arbitrator, an experienced and accepted tribunal in labour disputes, has exhaustively brought into the Award all available details pro and con with over emphasis here and there.
There are only a few confusions in his long award but, regrettably, they happen to be on a few fundamentals.
The foremost, of course, is a mix up between mob misconduct and individual guilt.
The next is getting lost in the oceanic evidence while navigating towards a 1 specified port.
The High Court too has excelled in marshalling the details and handling the legal issues, although, even there, shortcomings 184 on basic issues have been pointed out by Sri A. K. Sen. We too are apt to err and reverse ourselves although we try our best to avoid error.
The Supreme Court is final not because it is infallible; it is infallible; because it is final.
propose to examine the essential issues from the perspective We have set out and in their proper jurisprudential bearings.
If misconduct was basic to the discharge and no enquiry precedent to the dismissal was made the story did not end there in favour of the workmen.
The law is well settled that the Management may still satisfy the tribunal about the misconduct.
As a fact the arbitrator held misconduct proved.
He further found that the circumstances justified dismissal though he decided the order to mean discharge simpliciter Was misconduct proved against each discharged worker at least before the arbitrator ? If it was, did every worker deserve punitive discharge ? Dual jurisdictional issues arise here which have been argued at some length before us.
The position taken up by Sri Sen was that the High Court could not, under Article 226, direct reinstatement, and even it felt that the arbitrator had gone wrong in refusing reinstatement, the court could only demolish the order and direct the arbitrator to reconsider the issue.
What belonged, as a discretionary power, to a tribunal or other adjudicatory body could not be wrested by the writ court.
To put it pithily, regarding the relief of reinstatement, the arbitrator could but would not and the High Court would but could not.
(We will deal later with the point that the arbitrator had himself no power under Section 11 A of the Act but did have it in view of the wide terms of reference.) The basis of this submission as we conceive it.
is the traditional limitations woven around high prerogative writs.
Without examining the correctness of this limitation, we disregard it because while Article 226 has been inspired by the royal writs its sweep and scope exceed hide bound British processes of yore.
We are what we are because our Constitution framers have felt the need for a pervasive reserve power in the higher judiciary to right wrongs under our conditions.
Heritage cannot hamstring; nor custom constrict where the language used is wisely wide.
The British paradigms are not necessarily models in the Indian Republic.
So broad are the expressive expressions designedly used in Article 226 that any order which should have been made by the lower authority could be made by the High Court.
The very width of the power and the disinclination to meddle, except where gross injustice or fatal illegality and the like are present inhibit the exercise but do not abolish the power.
185 We may dilate a little more on Article 226 vis a vis awards of arbitrators.
The first limb of the argument is that when there is a voluntary joint submission of an industrial dispute to an Arbitrator named by them under section 10A of the , he does not function as a Tribunal and is not amenable to the jurisdiction of that Court under Article 227 or under Article 226.
Without further elaboration this contention can be negatived on a decision of this Court in Rohtas Industries Ltd. & Anr.
vs Rohtas Industries State Union ors.
(1) This Court observed that as the Arbitrator under section 10A has the power to bind even those who are not parties to the reference or agreement and the whole exercise under section 10A as well as the source of the force of the Award on publication derived from the statute, it is legitimate to regard such an arbitrator now as part of the infrastructure of the sovereigns dispensation of justice, thus falling within the rainbow of statutory tribunals amenable to judicial review.
The second limb of the argument was that a writ of certiorari could not be issued to correct errors of facts.
In this connection after affirming the ratio in Engineering Mazdoor Sabha vs Hind Cycle Ltd., this Court observes that what is important is a question of law arising on the face of the facts found and its resolution ex facie or sub silentio.
The Arbitrator may not state the law as such; even then such acute silence confers no greater or subtler immunity on the award than plain speech.
We do not dilate on this part of the argument as we are satisfied that be the test the deeply embedded rules to issue certiorari or the traditional grounds to set aside an arbitration award 'thin partition do their bounds divide ' on the facts and circumstances of the present case.
Broadly stated, the principle of law is that the jurisdiction of the High Court under Article 226 of the Constitution is limited to holding the judicial or quasi judicial tribunals or administrative bodies exercising the quasi judicial powers within the leading strings of legality and to see that they do not exceed their statutory jurisdiction and correctly administer the law laid down by the statute under which they act.
So long as the hierarchy of officers and appellate authorities created by the statute function within their ambit the manner in which they do so can he no ground for interference.
The power of judicial supervision of the High Court under Article 227 of the Constitution (as it then stood) is not greater than those under Article 226 and it must be limited to seeing that a tribunal functions within the limits of its authority [see Nagendra Nath Bora & Anr.
vs The Commissioner of Hills Division & Appeals, Assam & ors.(a) ].
This led to a proposition that in 186 exercising jurisdiction under Article 226 the High Court is not constituted a Court of appeal over the decision of authorities, administrative or quasi judicial.
Adequacy or sufficiency of evidence is not its meat.
It is not the function of a High Court in a petition for a writ under Art 226 to review the evidence and to arrive at an independent finding on the evidence.
[See State of Andhra Pradesh vs section Shree Rama Rao ] A constitution Bench of this Court in P. H. Kalyani vs M/s .
Air France, Calcutta ) succinctly set out the limits of the jurisdiction of the High Court in dealing with a writ petition.
It was said that in order to justify a writ of certiorari it must be shown that an order suffers from an error apparent on the face of the record.
It was further pointed out that in the finding of fact is made by the impugned order and it is shown that it success from an error of law and not of fact, a writ under Article 226 would issue, and, while so saying, the decision in Nagendra Nath Bora 's case was affirmed.
Following the aforementioned decision, the Gujarat High Court in Navinchandra Shakerchand Shah vs Manager, Ahmedabad Coop.
Department Stores Ltd. observed that the amended Article 226 would enable the High Court to interfere with an Award of the industrial adjudicator if that is based on a complete misconception of law or it is based on no evidence or that no reasonable man would come to the conclusion to which the Arbitrator has arrived.
Even apart from, but while approving, the Gujarat ruling in 19 G.L.R. p. 108 cited before us, we are satisfied that the writ power is larger given illegality and injustice, even if its use is severely discretionary as decided cases have repeatedly laid down.
We over rule the objection of invalidity of the High Courts order for want of power.
The more serious question is whether the arbitrator had the plenitude of power to re examine the punishment imposed by the Management, even if he disagreed with its severity.
In this ease the arbitrator expressed himself as concurring with the punishment.
But if he had disagreed, as the High Court, in his place, did, could he have interfered? Armed with the language of Sec.
11A, which confers wide original power to the tribunal to re fix the 'sentence ', Sri Sen argued that an arbitrator was uncovered by this new Section.
So, even if he would, he could not.
And, in this case if he could, he would not.
There the matter ended, was the argument.
We disagree.
Even if he could.
he would not, true; but that did not preclude the High Court from reviewing the order in exercise of its extraordinary constitutional power.
Moreover, Sec.
11A did clothe the arbitrator with similar 187 power as tribunals, despite the doubt created by the abstruse absence A of specific mention of 'arbitrator ' in Sec.
11A. This position needs closer examination and turns on interpretational limitations.
At this stage, to facilitate the discussion, we may read the provision: "11A. Where an industrial dispute relating to the discharge or dismissal of a workmen has been referred to a 1 Labour Court, Tribunal or National Tribunal for adjudication and, in the course of the adjudication proceedings, the Labour Court, Tribunal or National Tribunal, as the case may be, is satisfied that the order of discharge or dismissal was not justified, it may, as it thinks fit, or give such other relief to the Workman on such terms and conditions, if any, as it thinks fit, or give such other relief to the workman, including the award of any lesser punishment in lieu of discharge or dismissal as the circumstances of the case may require: Provided that in any proceeding under this section the Labour Court Tribunal or National Tribunal as the case may be, shall rely on the materials on record and shall not take any fresh evidence in relation to the matter".
11A was introduced in purported implementation cf the I.L.O. recommendation which expressly referred, inter alia to arbitrators.
The Statement of objects and Reasons which illumines the words of the legislative text when it is half lit, even if it cannot directly supplement the section, does speak of the I.L.o. recommendations and, in terms of tribunals and arbitrators.
When it came to drafting Section 11A the.
word 'arbitrator ' was missing.
Was this of deliberate legislative design to deprive arbitrators, who discharge identical functions as tribunals under the , of some vital powers which vested in their tribunal brethren ? For what mystic purpose could such distinction be ? Functionally, tribunals and arbitrators being to the same brood.
The entire scheme, from its I.L.O. genesis, through the objects and Reasons, fits in only with arbitrators being covered by Section 11A, unless Parliament cheated itself and the nation by proclaiming a great purpose essential to industrial justice and, for no rhyme or reason and wittingly or unwittingly, withdrawing one vital word.
Every reason for clothing tribunals with Sec.
11A powers applies a fortiori to arbitrators.
Then why omit ? Could it be a synopic omission which did not affect the semantics because a tribunal, in its wider connotation, embraced every adjudicatory organ, including an arbitrator ? An economy of words is a legislative risk before a judiciary accustomed to the Anglo Saxon meticulousness in 188 drafting.
We may easily see meaning by one construction.
A 'tribunal ' is merely a seat of justice or a judicial body with jurisdiction to render justice.
If an arbitrator fulfils this functional role and he does how can he be excluded from these scope of the expression ? A caste distinction between courts, tribunals, arbitrators and others, is functionally fallacious and, in our context, stems from confusion.
The Section makes only a hierarchical, not functional, difference by speaking of tribunals and national tribunals.
So we see no ground to truncate the natural meaning of 'Tribunal ' on the supposed intent of Parliament to omit irrationally the category of adjudicatory organs known as arbitrators.
To cut down is to cripple and the art of interpretation makes whole, not mutilates, furthers the expressed purpose, not hampers, by narrow literality.
Section 2(r) defines Tribunal thus: 'Tribunal ' means an Industrial Tribunal constituted under Section 7A and includes an Industrial Tribunal constituted before the 10th day of March, 1957, under this Act, Prima facie it is a different category from arbitrators but all statutory definitions are subject to contextual changes.
It is perfectly open.
to the court to give the natural meaning to a word defined in the Act if the context in which it appears suggests a departure from the definition because then there is something repugnant in the subject or context.
Then what is the natural meaning of the expression "Tribunal"? A 'tribunal ' literally means a seat of justice.
May be, justice is dispensed by a quasi judicial body, an arbitrator, a commission, a court or other adjudicatory organ created by the State.
All these are tribunals and naturally the import of the word embraces an arbitration tribunal.
Stroud 's Judicial Dictionary (Vol.
4 p. 3093) speaks of 'Tribunal in this, wider sense and quoted Fry, L.J. in Dawkins vs Rokeby [L.R. 8 Q.B. 255, affirmed, "I accept that, with this qualification that I do not like the word 'tribunal '.
The word is, ambiguous, because it has not like 'court ' any ascertainable meaning in English law" (Royal Acsuarium vs Parkinson. , cited COURT) .
There is a reference to the bishop 's commission of enquiry as judicial tribunal and, significantly, specific mention has been made in these terms.
189 "Disputes between employers and employees are A referred to such tribunals as the Civil Service Arbitration Tribunal, National Arbitration Tribunal and the Industrial Disputes Tribunal".
(Stroud 's Judicial Dictionary p. 3094) We have hardly any doubt that 'tribunal ' simpliciter has a sweeping signification and does not exclude 'arbitrator '.
Here we come upon a fundamental dilemma of interpretative technology vis a vis the judicative faculty.
What are the limits of statutory construction ? Does creativity in this jurisprudential area permit travel into semantic engineering as substitute for verbalism ? It is increasingly important for developing countries, where legislative transformation of the economic order is an urgent item on the national agenda, to have the judiciary play a meaningful role in the constitutional revolution without ferreting out laws in the draftsman, once the object and effect are plain.
Judges may not be too 'anglo phonic ' lest the system fail.
It is edifying to recall from Robert Stevens ' Law and Politics of the House of Lords as a judicial body: "Moreover, Macmillan, who began to specialize in the increasingly frequent tax appeals, continued to develop this highly artificial approach in Inland Revenue Commissioner vs Ayrshire Employers Mutual Insurance Association, when Parliament had clearly intended to make the annual surpluses of mutual insurance companies subject to tax, Macmillan found a particularly formalistic argument to show that this had not been the effect of section 31 of the Finance Act of 1933.
He was then happily able to announce, "The Legislature has plainly missed.
Of this decision Lord Diplock was later to say that "if, as in this case, the Courts can identify the target of Parliamentary legislation their proper function is to see that it is hit: not merely to record that it has been missed.
Here is judicial legislation at its worst.
"(3) ' We would rather adopt Lord Diplock 's thought and have the court help hit the legislative target, within limits, than sigh relief that the legislative fire has missed the bull 's eye.
Of course, the social philosophy of the Constitution has, as ruled by this court in several cases, a role in interpretative enlightenment and judicial value vision.
190 We may reinforce this liberal rule of statutory construction, being a matter of importance in the daily work of the Court, by reference even to Roman Law from Justinian 's days down to the American Supreme Court.
"Not all special cases can be contained in the laws and resolutions of the Senate", said the Roman jurist Jullianus, "but where their meaning is manifest in some case, the one who exercises jurisdiction must apply the provision analogously and in this way administer justice." Prof. Bodenheimer has explained that Civil Law does not regard words as the sole basis of law but allows it to be modified by purpose. "Celsus added the following admonition to these general principles of interpretation: "The laws should be liberally interpreted, in order that their intent be preserved". "Samuel Thorne has shown that, during certain periods of English medieval history, the position of the Common Law towards the construction of statutes was similar to the general attitude of the Roman and Civil Law.
Statutes were frequently extended to situations not expressly covered by them.
"(3) Plowden pointed out that "when the words of a statute enact one thing, they enact all other things which are in the like degree," Plowden demonstrated that a statutory remedy at that time was deemed to be merely illustrative of other analogous cases that deserved to be governed by the same principle. "our law (like all others) consists of two parts, viz. OF body and soul, the letter of the law is the body of the law, and the sense and reason of the law is the soul of the law.
And it often happens that when you know the letter, you know not the sense, for sometimes the sense is more confined and contracted than the letter, and sometimes it is more large and extensive"(5) Prof. Bodehheimer states that the American trend is towards a purpose oriented rather than a plain meaning rule in its rigid orthodoxy.
In United States vs American Trucking Association.
The U.S. Supreme Court wrote: "When the plain meaning has led to absurd or futile results . this Court has looked beyond the words to the Purpose of the Act.
Frequently, however, even when the 191 plain meaning did not produce absurd results but merely an unreasonable one "plainly at variance with the policy of the legislation as a whole" this Court has followed that purpose rather than the literal words.
When aid to construction of the meaning of words, as used in the statute, is available, there can certainly be no "rule of law" which forbids its use, how ever, clear the words may be on "superficial examination.
" B In the present case, as the narration of the facts unfolded, the reference of the dispute was to an arbitrator.
He reinvestigated and reassessed the evidence bearing on the guilt of the discharged workmen after giving an opportunity to both sides to adduce evidence thereon Admittedly, he had this power.
But had he the follow up power, if he held the men guilty of punitive misconduct, to reweigh the quantum of punishment having regard to the degree of culpability ? This jurisdiction he enjoys if Sec.
11A includes 'arbitrators '.
This, in turn, flows from our interference as to whether the word 'tribunal ' takes in an adjudicatory organ like the arbitrator.
It is plain that the expression 'arbitrator ' is not expressly mentioned in Section 11A.
Nevertheless, if the meaning of the word 'tribunal ' is wider rather than narrower, it will embrace arbitrator as well.
That is how the dynamics of interpretation are, in one sense, decisive of the fate of the present appeal.
Competing interpretative angles have contended for judicial acceptance English preferences apart, Indian socio legal conditions must decide the choice in each situation.
Sometimes Judges are prone to castigate creative interpretation in preference to petrified literality by stating that Judges declare the law and cannot make law.
The reply to this frozen faith is best borne out by Lord Radcliffe 's blunt words: " There was never a more sterile controversy than that upon the question whether a judge makes law.
Of course he does.
How can he help it ?.
Judicial law is always a reinterpretation of principles in the light of new combinations of facts.
Judges do not reverse principles once well established, but they do modify them, extend them, restrict them and even deny their application to the combination in hand.
Lord Devlin in his "Samples of Lawmaking", agreed that Judges are fashioners of law, if not creators out of material supplied to them and went on to observe: "If the House of Lords did not treat itself as bound by its own decisions, it might do its own lopping and pruning 192 . and perhaps even a little grafting, instead of leaving all that for the legislature.
But it could not greatly alter the shape of the tree.
" Even so eminent a Judge as Lord Reid leaned to the view that the law should be developed since it was not static and, in this limited sense, Judges are law makers although this view prevented "technical minded Judges (from pressing) precedents to their logical conclusions".
On the whole, a just and humanist interpretative technique, meaning permitting, is the best.
We do not mean to conclude that Judges can take liberties with language ad libitem and it is wholesome to be cautious as Lord Reid in Shaw vs D.P.P. warned: "Where Parliament fears to tread it is not for the courts to rush in.
" We are persuaded that there is much to learn from Lord Denning 's consistent refrain about the inevitable creative element in the judicial process in the interpretative area.
We permit ourselves a quote from Lord Denning because Shri A. K. Sen did draw our attention to straightening the creases as permissible but not stitching the cloth, making a critical reference to the controversial activism of which Lord Denning was a leading light: "The truth is that the law is uncertain.
rt does not cover all the situations that may arise.
Time and again practitioners and judges are faced with new situations where the decision may go either way.
No one can tell what the law is until the courts decides it.
The judges do every day make law, though it is almost heresy to say so.
If the truth is recognized then we may hope to escape from the dead hand of the past and consciously mould new principles to meet the needs of the present." Mr. Justice Mathew in Kesavananda Bharti 's case referred with approval and so do we to the observations of Justice Holmes.
"I recognize without hesitation that Judges do and must legislate.
but they can do so only interstitially; they are confined from molar to molecular motions.
" 193 Arthur Selwyn Miller writes, "Some have called it (the Supreme A Court) the highest legislative chamber in the nation.
Although there is no question that the Court can and does make law, and does so routinely, . ".
Assuming the above approach to be too creatively novel for traditionalism, let us approach the same problem from a conventional angle authenticated by case law.
The question of construction of section 11A was argued at length, as to whether an omission of any reference to Arbitrator appointed under section 10A in section 11A would suggest that the Arbitrator under section 10A, notwithstanding the terms of reference, would not enjoy the power conferred on all conceivable industrial adjudicators under section 11A.
It was said, after referring to the objects and reasons in respect of the bill which was moved to enact section 11A in the , that while the I.L.O. had indicated that an arbitrator selected by the parties for adjudication of industrial dispute must be invested with power by appropriate legislation as found in section 11A, the Parliament, while enacting the section in its wisdom, did not include the Arbitrator even though other adjudicators of industrial disputes have been conferred such power and, therefore, it is a case of Sasus omissions.
Reliance was placed on Gladstone vs Bower where the question arose whether a reference to a tenancy from year to year in section 2(1) of the Agricultural Holdings Act, 1948 would also cover a tenancy for 18 months which could be terminated at the end of the first year.
The submission was that even though no notice was necessary at common law because the tenancy would automatically terminate at the expiry of the specified period of tenancy, the tenancy took effect as tenancy from year to year by virtue of section 2(1) of the Act so that it continued until terminated by notice to quit and, therefore the landlord was not entitled to possession without notice.
It was further contended that if a tenancy from year to year was to get the protection of the Act it is inconceivable that tenancy for a longer duration would not qualify for that protection.
Court of Appeal negatived this contention holding that this is a case simply of casus omissus and the Act is defective.
The court further held that if it were ever permissible for the Court to repair a defective Act of Parliament, the Court would be very glad to do so in this case so far as the Court could.
The Court will always allow the intention of a statute to override the defects of wording buts the Court 's ability to do so is limited by the recognised canons of interpretation.
The Court may, for example, prefer an alternative construc 194 tion which is less well fitted to the words but better fitted to the intention of the Act.
But here, for the reasons given by the learned Judge, there is not alternative construction; it is simply a case of something being overlooked.
The Court cannot legislate for a casus omissions.
To do so would be to usurp the function of the legislature [see Magor & St. Mellons Rural District Council vs Newport Corporation.
Where the Statute 's meaning is clear and explicit, words cannot be interpolated.
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 [see Crawford 's "Construction of Statutes".
1940 Edn., p. 269 extracted in section Narayanaswami vs G. Panneerselvam.] Undoubtedly, the Court cannot put into the Act words which 'are not expressed, and which cannot reasonably he implied on any recognised principles of construction.
That would be a work of legislation, not of construction, and outside the province of the Court [see Kamalaranjan vs Secretary of State(3).] Similarly, where the words of the statute are clear it would not be open to the Court in order to obtain a desired result either to omit or add to the words of the statute.
This is not the function of the Court charged with a duty of construction.
This approach has, however, undergone a sea change as expressed by Denning, I. J. in Seaford Court Estates Ltd. vs Asher wherein he observed as under: "When a defect appears a Judge cannot simply fold his hands and blame the draftman.
He must set to work on the constructive task of finding the intention of Parliament. and then he must supplement the written words so as to give 'force and life ' to the intention of legislature . , A judge should ask himself the question how, if the makers of the Act had themselves come across this ruck in the texture of it, they would have straightened it out ? He must then do as they would have done.
A judge must not alter the material of which the Act is woven, but he can and should iron out the creases." (Approved in State of Bihar & Anr.
vs Dr. Asis Kumar Mukherjee & ors.
where in he observed as under: 195 This long excursion has become important because, once in a while, social legislation which requires sharing of social philosophy between the Parliament and the Judiciary; meets with its Waterloo in the .
higher courts because the true role of interpretation shifts from Judge to Judge.
We are clearly of the view that statutory construction which fulfills the mandate of the statute must find favour with the Judges, except where the words and the context rebel against such , flexibility.
We would prefer to be liberal rather than lexical when reading the meaning of industrial legislation which develops from day to day in the growing economy of India.
The necessary conclusion from this discussion is that the expression 'tribunal ' includes, in the statutory setting, an arbitrator also.
Contemporaneous par legislative material may legitimately be consulted when a word of wider import and of marginal obscurity needs to be interpreted.
So viewed, we are not in a 'sound proof system ' and the I.L.O. recommendation accepted by India.
and the objects and Reasons of the amending Act leave no doubt about the sense, policy and purpose.
Therefore Section 11A applies to the arbitrator in the present case and he has the power to examine whether the punishment imposed in the instant case is excessive.
So has the High Court, if the Award suffers from a fundamental flaw.
A study of the lengthy award discloses no mention of Section 11A, and presumably, the authority was unmindful of that provision while rendering the verdict.
In a limited sense, even prior to Section 11A, there was jurisdiction for a labour tribunal, including an arbitrator, to go into the punitive aspect of the Management 's order.
This Court has, in a catena of cases, held that a mala fide punishment is bad in law and when the punishment is grotesquely condign or perversely harsh or glaringly discriminatory, an easy inference of bad faith, unfair labour practice or victimisation arises.
The wider power tn examine or prescribe the correct punishment belongs to tribunal/arbitrator even under Sec. 11 in no enquiry (or a defective enquiry which is bad, and, therefore, can be equated with a 'no enquiry ' situation) has been held by the Management.
For, then, there is no extant order of guilt or punishment and the tribunal determines it fresh.
In such a virgin situation both culpability and quantification of punishment arc within the jurisdiction of the tribunal/arbitrator.
The present is such a case.
Volleys of rulings from both sides were fired during arguments, the target being the limited area of the tribunal 's power to overturn the quantum of punishment awarded by the Management.
We do not think it necessary to re gurgitate all that has been said by this Court 196 upto now, since it is sufficient to bring out the correct law in the light of the leading citations.
It is incontrovertible that where, as here, no enquiry has been held by the Management, the entire subject is at large and both guilt and punishment, in equal measure, may be determined, without inhibition of jurisdiction, by the tribunal.
Lastly, as rightly urged by counsel for the Sabha, an arbitrator has all the powers the terms of reference, to which both sides are party, confer.
Here, admittedly, the reference is very widely worded and includes the nature of the punishment.
The law and the facts do not call for further elaboration and we hold that, in any view, the arbitrator had the authority to investigate into the propriety of the discharge and the veracity of the misconduct.
Even if section 11A is not applicable, an Arbitrator under section 10A is bound to act in the spirit of the legislation under which he is to function.
A commercial arbitrator who derives his jurisdiction from the terms of reference will by necessary implication, be bound to decide according to law and, when one says 'according to law ', it only means existing law and the law laid down by the Supreme Court being the law of the land, an Arbitrator under section 10A will have to decide keeping in view the spirit of section 11A [See Union of India vs Bungo Steel Furniture Pvt.
Ltd. (1967)] 1 S.C.R. 324].
The Jurisdictional hurdles being thus cleared, we may handle the basic facts and the divergences between the Arbitrator and the High Court before moulding the final relief.
Prefatory to the discussion about the factum of misconduct and its sequel, we must remind ourselves that the strike was illegal, having been launched when another industrial dispute was pending adjudication.
23 (a) appears, at a verbal level, to convey such a meaning although the ambit of sub clause (a) may have to be investigated fully in some appropriate case in the light of its scheme and rationale.
It looks strange that the pendency of a reference on a tiny or obscure industrial dispute and they often pend too long should block strikes on totally unconnected yet substantial and righteous demands.
The constitutional implications and practical complications of such a veto of a valuable right to strike often leads not to industrial peace but to seething unrest and lawless strikes.
But in the present case, both before the arbitrator and the High Court, the parties have proceeded, on the agreed footing that the strike was illegal under Section 23(a).
We do not reopen the issue at this late stage and assume the illegality of the strike.
The Fatal Flaw in the Award: The Achilles heel of the arbitrator 's award is where he makes, as a substitute for specific and individuated findings of guilt and 197 appropriate penalty vis a vis each workmen, a wholesale survey of A the march of events, from tension to breakdown, from fair settlement to illegal and unjustified strike, from futility of negotiation to readiness for arbitration, from offer of full re employment to partial taking back on application by workmen in sack cloth and ashes, by picking and choosing after a humble declaration that the strike has been formally buried, from episodes of violence and paralysis of production to backstage manoeuvres to get the factory taken over as a 'sick mill ', and after a full glimpse of this scenario, holds that the Sabha was always in the wrong, and inevitably, the Management was surely reasonable AND, ergo, every employee must individually bear the cross of misconduct and suffer dismissal for the sins of the Sabha leadership its secretary was not an employee of the mill by some sub conscious doctrine of guilt by association! Non Sequitur.
Each link in the chain of facts has been challenged by the respondents but let us assume them to be true, to test the strength of the legal fibre of the verdict.
(We may mention by way of aside, D. that the Company seems to be a well managed one.) The cardinal distinction in our punitive jurisprudence between a commission of enquiry and a Court of Adjudication, between the cumulative causes of a calamity and the specific guilt of a particular person, is that speaking generally, we have rejected, as a nation, the theory of community guilt and collective punishment and instead that no man shall be punished except for his own guilt.
Its reflection in the disciplinary jurisdiction is that no worker shall be dismissed save on proof of his individual delinquency.
Blanket attainder of a bulk of citizens on any vicarious theory for the gross sins of some only, is easy to apply but obnoxious in principle.
Here, the arbitrator has found the Sabha Leadership perverse, held that the strikers should have reasonably reported for work and concluded that the Management had, for survival, to make do with new recruits.
Therefore what ? What, at long last, is the answer to the only pertinent question in 6.
a disciplinary proceeding viz. what is the specific misconduct against the particular workmen who is to lose his job and what is his punitive desert? Here you can 't generalise any more than a sessions judge can, by holding a faction responsible for a massacre, sentence every denizen of that factions village to death penalty.
The legal error is fundamental, although lay instinct may not be outraged.
What did worker A do ? Did he join the strike or remain at home for fear of vengeance against blacklegs in a para violent situation ? Life 198 and limb are dearer than loyalty, to the common run of men, and discretion is the 'better part of valour.
Surely, the Sabha complained of Management 's goondas and the latter sought police aid against the unruly core of strikers.
In between, the ordinary rustic workmen might not have desired to be branded blacklegs or become martyrs and would not have reported for work.
If not being heroic in daring to break through the strike cordon illegal though the strike be were misconduct, the conclusion would have been different.
Not reporting for work does not lead to an irrebuttable presumption of active participation in the strike.
More is needed to bring home the mens rea and that burden is on the prosecutor, to wit the Management.
Huddling together the eventful history of deteriorating industrial relations and perverse leadership of the Sabha is no charge against a single worker whose job is at stake on dismissal.
What did he do ? Even when lawyers did go on strike in the higher Courts or organize a boycott, legally or illegally, even top law officers of the Central Govt.
did not attend court, argued Shri Tarkunde, and if they did not boycott but merely did not attend, could workers beneath the bread line be made of sterner stuff.
There is force in this pragmatic approach.
The strike being illegal is a non issue at this level.
The focus is on active participation.
Mere absence, without more, may not compel the conclusion of involvement.
Likewise, the further blot on the strike, of being unjustified, even if true, cuts no ice.
Unjustified, let us assume; so what? The real question is, did the individual worker, who was to pay the penalty, actively involve himself in this unjustified misadventure ? or did he merely remain a quiescent non worker during that explosive period ? Even if he was a passive striker, that did not visit him with the vice of activism in running an unjustified strike.
In the absence of proof of being militant participant the punishment may differ.
To dismiss a worker, in an economy cursed by massive unemployment, is a draconian measure as a last resort.
Rulings of this Court have held that the degree of culpability and the quantum of punishment turn on the level of participation in the unjustified strike.
Regrettably, no individualised enquiry has been made by the Arbitrator into this significant component of delinquency.
Did any dismissed worker instigate, sabotage or indulge in vandalism or violence ? The Management 's necessity to move the mill into production for fear of being branded a 'sick unit ' is understandable.
Of course, collective strike is economic pressure by cessation of work and not exchange of pleasantries.
It means embarrassing business.
Such a quandary cannot alter the law.
Here the legal confusion is obvious.
199 No inquest into the Management 's recruitment of fresh hands is being made at this stage.
The inquiry is into the personal turpitudes of particular workmen in propelling an illegal and unjustified strike and the proof of their separate part therein meriting dismissal.
The despair of the Management cannot, by specious transformation of logic, be converted into the despair of each of the 853 workmen.
Sympathies shall not push one into fallacies.
We may now concretize this generalised criticism of the otherwise well covered award.
The crowd of documents and camping attitudes must have added to the strain on the Arbitrator.
"A voluminous record of documents and correspondence has been produced before me by both sides.
There have been allegations and counter allegations made by both sides not only against each other but even against the Police, the Department of Labour and persons in Authority.
The history has been sought to be traced right from the inception of the Company in 1966 or 1967, by the Company to show that their conduct has been always proper and above reproach and by Sabha to establish that not only the Gujarat Steel Tubes Ltd. were not fair to the employees but that every action of theirs good or bad was ill motivated, was executed with some sinister ulterior motives.
" The Award set out the history of the Company, its vicissitudes, the hills and valleys, the lights and shadows, of industrial relations with mob fury and lock outs and allied episodes often ending in settlements and pious pledges.
Then the Arbitrator stressed Clause 6 of the Agreement of December, 1971 which bespoke a no strike zone for five years.
There was reference to the Management 's promise to implement the Wage Board recommendations.
The Arbitrator was upset that despite Clause a strike was launched but was not disturbed that despite the Wage Board proposals, negotiations were being baulked and an interminable arbitral alternative was being offered by the Management.
He exclaimed: "If such a settlement arrived at was not respected and implemented the, machinery provided by law would lose all meaning and so also the sanctity of the word of the Management or the word of the union.
It is, therefore, essential tn ascertain who was responsible for the breach of the agreement so solemnly entered into.
Serious breach by management is alleged and this is given as a reason or is made as an cause for getting rid of the obligations 200 arising out of the agreement which specifically could not be terminated for five years.
" The narration continues and the following conclusion is reached: "It is thus very clear that the company had fully discharged its obligation under the agreement in respect of 64 discharged or dismissed workmen and the other workmen and the allegation made by the Sabha of the company having made a breach thereof is not correct.
" We thus see, that at this stage, the arbitrator has merely made r) a generalised approach as if a commission of inquiry were going into the conduct of the Management and the Sabha to discover who was blameworthy in the imbroglio.
The award then swiveled round to a study of the case of the Sabha vis a vis the triple grievances, the Sabha had: "I shall first deal with the grievance regarding demands for implementation of the recommendations of the Wage Board".
The long and sterile correspondence was set out and the arbitrator arrived at the conclusion that the insistence on reference to arbitration as against negotiation was justified on the part of the Management: "I, therefore, have accepted the version of: the Management and disbelieved the motivated denial of the Sabha in this respect.
" The culmination of the protracted discussion on the atmosphere and environment, rather than on the actual charge against each worker, was recorded in the Award: "I have exhaustively, perhaps more exhaustively than even necessary, dealt with the allegations made by the Sabha that the Management had committed breach of agreement by refusing to accede to the demand of the Sabha for implementation of recommendations of the Wage Board.
There appears to be no doubt that the Management had agreed to implement the recommendation of the Wage Board.
There is also not the least doubt the Management was ready and willing to implement the recommendations of the Wage Board it was because it was prevented by .
the Sabha from doing so." 201 An analysis of the Management 's conduct in the matter of non implementation of the Wage Board recommendation was thereafter made by the Arbitrator and he wound up thus : "I am satisfied that the Company had not committed any breach of the settlement dated 4 8 1972 at least so far as implementation of the recommendations of the Wage Board is concerned.
" The question of bonus for the year 1971 was also considered and dismissed and the Sabha 's case to that extent was negatived.
Again, the plea for wages for the period of the lock out was also negatived with the observations : "I fail to see how the Sabha can allege breach of the agreement dated 4 8 1972 in view of the clear unequivocal terms contained in clause 4 of that Agreement.
" In this strain the Award continued and the refrain was the same that the Sabha was in the wrong.
The Award even went to the exaggerated extent of morbidly holding that the workers were wearing printed badges which, along with other circumstances, amounted to a breach of the agreement ! The Award then moved on to the strike of January 27, 1973 because it led to the dismissal of all the workmen.
Until this stage, the arbitrator was merely painting the background and, at any rate, did not engage himself in isolating or identifying any worker or any misconduct.
He merely denounced the Sabha, which is neither here nor there, in the matter of disciplinary proceedings against each individual workman.
He missed the meat of the matter.
The relevant portion of the Award based on generalisation proved this error : "I am concerned herein with the question whether the discharge or dismissal of the 400 workmen was legal and proper or not and what relief to grant to them.
Approached from any point of view the action of the Company appears to me to be legal, proper and justified and the demands on behalf of these workmen must be rejected.
" A condemnation of the Sabha and an approval of the Management 's handling of the strike are miles away from the issue on hand.
202 We observe here also an unfortunate failure to separate and scan the evidence with specific reference to charges against individual workman.
On the contrary, all that we find in the award is an autopsy of the strike by the Sabha and a study of its allegedly perverse postures.
A disciplinary inquiry resulting in punishment of particular delinquents cannot but be illegal if the evidence is of mass misconduct by unspecified strikers led by leaders who are perhaps not even workmen.
We are constrained to state that pointed consideration of facts which make any of the 400 workmen guilty, is a search in vain.
The award being ex facie blank from this vital angle, the verdict must prima facie rank as void since vicarious guilt must be brought home against the actively participating members of a collectivity by positive testimony, not by hunch, suspicion or occult intuition.
The short position is this.
Is there a punishment of any workman ? If yes, has it been preceded by an enquiry ? If not, does not the Management desire to prove the charge before the tribunal ? If yes, what is the evidence, against whom, of what misconduct ? If individuated proof be forthcoming and relates to an illegal strike, the further probe is this : was the strike unjustified ? If yes, was the accused worker an active participant therein ? If yes, what role did he play and of what acts was he author ? Then alone the stage is set for a just punishment.
These exercises, as an assembly line process are fundamental.
Generalisation of a violent strike of a vicious Union leadership, of strikers fanatically or foolishly or out of fear, failing to report for work, are good background material.
Beyond that, these must be identified by a rational process, the workmen, their individual delinquency and the sentence according to their sin.
Sans that, the dismissal is bad.
Viewed from this perspective, the Award fails.
The Arbitrator comes to grips with the core question of discharge simpliciter versus dismissal as punishment but not with the identification of delinquents and delinquency.
After referring to Order 23 of the Model Standing Orders he goes on to state the law correctly by extracting observations from the Assam Oil Company case.
Another vital facet of industrial law is that when no enquiry has been held by the Management before imposing a punishment (or the enquiry held is defective and bad), the whole field of delinquency and consequent penalty is at large for the tribunal.
Several rulings support this logic.
We are constrained to hold that a certain observation made per incuriam by Mr. Justice Vaidyalingam, strongly relied on by Sri A. K. Sen, does not accurately represent the law, although the learned 203 Judge had earlier stated the law and case law correctly, if we may say so with respect.
A selective study of the case law is proper at this place.
Before we do this, a few words on the basis of the right to strike and progressive legal thinking led by constitutional guidelines is necessitous.
The right to unionise, the right to strike as part of collective bargaining and, subject to the legality and humanity of the situation, the right of the weaker group, viz., labour, to pressure the stronger party, viz., capital, to negotiate and render justice, are processes recognised by industrial jurisprudence and supported by Social Justice.
While society itself, in its basic needs of existence, may not be held to ransom in the name of the right to bargain and strikers must obey civilised norms in the battle and not be vulgar or violent hoodlums, Industry, represented by intransigent Managements, may well be made to reel into reason by the strike weapon and cannot then squeal or wail and complain of loss of profits or other ill effects but must negotiate or got a reference made.
The broad basis is that workers are weaker although they are the producers and their struggle to better their lot has the sanction of the rule of law.
Unions and strikes are no more conspiracies than professions and political parties are, and, being far weaker, need succour.
Part IV of the Constitution, read with article 19, sows the seeds of this burgeoning jurisprudence.
The Gandhian quote at the beginning of this judgement sets the tone of economic equity in Industry.
Of course, adventurist, extremist, extraneously inspired and puerile strikes, absurdly insane persistence and violent or scorched earth policies boomerang and are anathema for the law.
Within these parameters the right to strike is integral to collective bargaining.
Responsible trade unionism is an instrument of concerted action and the laissez faire law that all strikes are ipso facto conspiracies, is no longer current coin even in Adam Smith 's English country.
Lord Chorley, in Modern Law Review, Vol. 28, 1965, p. 451, is quoted as saying that law must be altered as a consequence of Rookes vs Barnard, so as to remove the effects of decisions of conspiracy and intimidation.
He goes on to state that Allen vs Flood and Quinn vs Leathem taking the conspiratorial view must never be permitted to be quoted in courts.
In contrast, reference was made to Willis on Constitutional Law, pp. 878 879, wherein the Supreme Court of America reflects the impact of capitalistic development and the economic views of the judges and the fact that the judges are members of a social order and a social product and the decisions are due more to the capitalistic system and the world of ideas in which the judges live.
Our Constitution is clear 204 in its mandate, what with article 39A superadded and we have to act in tune with the values enshrined therein.
The benign attitude towards strike being what we have outlined, the further question arises whether in the light of the accepted finding that the strike as such was illegal and, further, was unjustified, all the strikers should face the penalty of dismissal or whether individual cases with special reference to active participation in the strike, should be considered.
A rapid but relevant glance at the decided cases may yield dividends.
In India General Navigation and Railway Co. Ltd. vs Their Workmen, (supra) this court did observe that if a strike is illegal, it cannot be called 'perfectly justified '.
But, between 'perfectly justified ' and 'unjustified ' the neighbourhood is distant.
More illegality of the strike does not per se spell unjustifiability.
For, in Crompton Greaves Ltd. vs Workmen (supra) this Court held that even if a strike be illegal, it cannot be castigated as unjustified, unless the reasons for it are entirely perverse or unreasonable an aspect which has to be decided on the facts and circumstances of each case.
In that decision, this Court awarded wages during the strike period because the Management failed to prove that the workmen resorted to force and violence.
Even in India General Navigation and Railway Co. Ltd. (supra) where the strike was illegal and affected a public utility service, this Court observed that "the only question of practical importance which may arise in the case of an illegal strike, would be the kind or quantum of punishment, and that, of course, has to be modulated in accordance with the facts and circumstances of each case.
There may be reasons for distinguishing the case of those who may have acted as mere dumb driven cattle from those who have taken an active part in fomenting the trouble and instigating workmen to join such a strike or have taken recourse to violence." The court after holding that the strike was illegal "and that it was not even justified" made a pregnant observation : "To determine the question of punishment, a clear distinction has to be made between those workmen who are only joined in such a strike, but also took part in obstructing the loyal workmen from carrying on their work, or took part in violent demonstrations, or acted in defiance of law and order, on the one hand, and those workmen who were more or less silent participators in such a strike, on the other hand.
It is not in the interest of the industry that there should be a wholesale dismissal of all the workmen who merely participated in such a strike.
It is certainly not in the 205 interest of the workmen themselves.
An Industrial Tribunal, therefore, has to consider the question of punishment, keeping in view the overriding consideration of the full and efficient working of the Industry as a whole.
The punishment of dismissal or termination of services, has, therefore, to be imposed on such workmen as had not only participated in the illegal strike, but had fomented it, and had been guilty of violence or doing acts detrimental to the maintenance of law and order in the locality where work had to be carried on." After noticing the distinction between peaceful strikers and violent strikers, Sinha, J., in that case, observed "it must be clearly understood by those who take part in an illegal strike that thereby they make themselves liable to be dealt with by their employers.
There may be reasons for distinguishing the case of those who may have acted as mere dumb driven cattle from those who have taken an active part in fomenting the trouble and instigating workmen to join such a strike, or have taken recourse to violence.
" The same line of dichotomy is kept up : "Both the types of workmen may have been equally guilty of participation in the illegal strike, but it is manifest that both are not liable to the same kind of punishment.
" Significantly, the Court stressed the need for individual chargesheet being delivered to individual workmen so that the degree of misconduct of each and the punitive deserts of each may be separately considered.
We may as well refer to a few more rulings since considerable argument was expended on this point.
This Court in M/s. Burn & Co. Ltd. vs Their Workmen & Ors.(1) clearly laid down that mere participation in the strike would not justify the suspension or dismissal of workmen particularly where no clear distinction can be made between those persons and the very large number of workmen who had been taken back into service although they had participated in the strike.
After referring to the ratio in M/s. Burn & Co. Ltd. case, this Court in Bata Shoe Co. (P) Ltd. vs D. N. Ganguly & Ors.(2) observed that there is no doubt that if an employer makes an unreasonable discrimination in the matter of taking back employees there may in certain circumstances be reason for the industrial tribunal to interfere; but the circumstances 206 of each case have to be examined before the tribunal can interfere with the order of the employer in a properly held managerial inquiry on the ground of discrimination.
The Court then proceeded to determine the facts placed before it.
Sri Sen specifically pointed out that in the Bata Shoe Co. 's case this Court distinguished the decision in India General Navigation & Railway Co. Ltd. 's and observed that the decision in that case was on the facts placed before the Court.
In fact, Bata Shoe Co. 's case does not lay down any distinct proposition about the treatment to be meted out to participants in strike and actually it is a decision on its own facts.
In The Swadeshi Industries Ltd. vs Its Workmen(1), the Management after holding that the strike was illegal, terminated the services of 230 workmen without framing any chargesheet or holding any enquiry.
It was contended that the strike was not legal.
The Court observed that collective bargaining for securing improvement on matters like basic pay, dearness allowance, bonus, provident fund and gratuity leave and holidays was the primary object of a trade union and when demands like these were put forward and thereafter a strike was resorted to in an attempt to induce the company to agree to the demands or at least to open negotiations the strike must prima facie be considered justified.
As the order of termination was found to be illegal it was held that reinstatement with back wages must follow as a matter of course, not necessarily because new hands had not been inducted.
In I. M. H. Press, Delhi vs Additional Industrial Tribunal Delhi & Ors.
,(2) this Court was called upon to examine the ratio in Model Mills(3) case and India General Navigation & Railway Co. Ltd. case and this Court in terms affirmed the ratio in India General Navigation & Railway Co. Ltd. case observing that mere taking part in an illegal strike without anything further would not justify the dismissal of all the workmen taking part in the strike.
In Indian Iron & Steel Co. Ltd. & Anr.
vs Their Workmen(4), this Court observed that the management of a concern has power to direct its own internal administration and discipline but the power is not unlimited and when a dispute arises, Industrial Tribunals have been given the power to see whether the termination of service 207 of a workman is justified and to give appropriate relief.
It may be noticed that the decision is prior to introduction of section 11A.
It would thus appear that the important effect of omission to hold an enquiry was merely this that the tribunal would have to consider not only whether there was a prima facie case but would decide for itself on the evidence adduced whether the charges have been made out.
A defective enquiry in this connection stood on the same footing as no enquiry and in either case the tribunal would have jurisdiction to go into the entire matter and the employer would have to satisfy the tribunal that on the facts the order of dismissal or discharge was proper.
(see Workmen of Motipur Sugar Factory (Pvt.) Ltd. vs Motipur Sugar Factory(1), and Provincial Transport Service vs State Industrial Court) (2).
Once, therefore, it was held that the enquiry was not proper, it was irrelevant whether the workman withdrew from the enquiry or participated in it, the decision had to be on appraisal of evidence, and if it was found that the enquiry was not proper the whole case was open before the labour court to decide for itself whether the charge of misconduct was proved and what punishment should be awarded (see Imperial Tabacco Company of India Ltd. vs Its Workmen) (3).
As against the above propositions, Sri Sen relied upon the observations of this Court in Oriental Textile Finishing Mills, Amritsar vs Labour Court, Jullundur & Ors.(4).
We fail to see how it runs counter to the established principle.
The Court, in fact, held that even where the strike is illegal, before any action was taken with a view to punishing the strikers a domestic enquiry must be held.
Even though the Standing Orders prescribing enquiry before punishment did not provide for any such enquiry the Court held that nonetheless a domestic enquiry should have been held in order to entitle the management to dispense with the service of the workmen on the ground of misconduct, viz., participation in the illegal strike.
After so saying, the Court agreed with the view of the Court in Indian General Navigation & Railway Co. Ltd. case and reaffirmed the principle that mere taking part in an illegal strike without anything further would not necessarily justify the dismissal of all the workers taking part in the strike and that if the employer, before dismissing a workman, gave him sufficient opportunity of explaining his conduct and no question of mala fides or victimisation arose, 208 it was not for the tribunal in adjudicating the propriety of such dismissal to look into the sufficiency or otherwise of the evidence led before the enquiry officer or insist on the same degree of proof as was required in a court of law, as if it were sitting in appeal over the decision of the employer.
Another aspect of this case emphasised that it could not be dogmatised as a matter of law that an overt act such as intimidation or instigation or violence was necessary in order to justify termination of service for participating in an illegal strike.
On the facts of that case, even though it was found that no domestic enquiry was held, reinstatement was refused on the ground that misconduct was made out.
Sri Sen, of course, relied on this judgment to show that where a strike was resorted to and the workers were called upon to join service within the stipulated time, on their failure it was open to the company to employ new hands.
This is reading more into the ruling than is warranted.
We cannot agree that mere failure to report for duty, when a strike is on, necessarily means misconduct.
Many a workman, as a matter of prudence, may not take the risk of facing the militant workmen or the Management 's hirelings for fear, especially when there is evidence in the case from the Sabha that the Management had hired goondas and from the Management that the striking vanguard was violent.
It is also possible, in the absence of evidence to the contrary, that several workmen might not be posted with the Management 's notice of recall or the terms on which they were being recalled.
In this view, we are not able to uphold the conclusion of the arbitrator that the punishment of dismissal was appropriate for the entire mass of workmen whose only guilt, as proved was nothing more than passive participation in the illegal and unjustified strike by not reporting for duty.
The verdict is inevitable that the discharge is wrongful.
The only comment we reluctantly make about the otherwise thorough award of the Arbitrator is that omnibus rhetoric about the obnoxious behaviour of a class may not make do for hard proof of specific acts of particular persons where a punitive jurisdiction is exercised.
What, then, is the normal rule in the case of wrongful dismissal when the workmen claim reinstatement with full back wages ? The High Court has held the discharge wrongful and directed restoration 209 with an equitable amount of back wages.
The following rulings of this Court, et al, deal with this subject : The recent case of Hindustan Tin Works vs Its Employees (1) sets out the rule on reinstatement and back wages when the order of this Court, et al, deal with this subject : "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 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 work of the workman contrary to the relevant law or in breach of contract and simultaneously deprived the workman of his earnings.
If 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 workmen 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 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 litigative activity of the employer.
If the employer terminates the service illegally and the termination is motivated as in this 210 case, viz., to resist the workmen '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 with full back wages.
Articles 41 and 43 of the Constitution would assist us in reaching a just conclusion in this respect. . .
In the very nature of things there cannot be a strait 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.
" Dealing with the complex of considerations bearing on payment of back wages the new perspective emerging from article 43A cannot be missed, as explained in Hindustan Tin Works, Labour is no more a mere factor in production but a partner in Industry, conceptually speaking, and less than full back wages is a sacrifice by those who can best afford and cannot be demanded by those, who least sacrifice their large 'wages ' though can best afford, if financial constraint is the ground urged by the latter (Management) as inability to pay full back pay to the former.
The morality of law and the constitutional mutation implied in article 43A bring about a new equation in industrial relations.
Anyway, in the Hindustan Tin Works ' case 75 per cent of the past wages was directed to be paid.
Travelling over the same ground by going through every precedent is supererogatory and we hold the rule is simple that the discretion to deny reinstatement or pare down the quantum of back wages is absent save for exceptional reasons.
It must be added however that particular circumstances of each case may induce the court to modify the direction in regard to the quantum of back wages payable as happened in the India General Navigation and Railway Co. Ltd. vs Their Workmen (Supra).
We may, therefore, have to consider, when finally moulding the relief, what, in this case, we should do regarding reinstatement and back wages.
A Sum up We may now crystallise our conclusions in the light of the long discussion.
The basic assumption we make is that the strike was not only illegal but also unjustified.
On the latter part, a contrary 211 view cannot be ruled out in the circumstances present but we do not reinvestigate the issue since the High Court has proceeded on what both sides have taken for granted.
The Management, in our view, did punish its 853 workmen when it discharged them for reasons of misconduct set out in separate but integrated proceedings, even though, with legal finesse, the formal order was phrased in harmless verbalism.
But fine words butter no parsnips, and law, in its intelligent honesty, must be blunt and when it sees a spade, must call it a spade.
The action taken under the general law or the standing orders, was illegal in the absence of individualised chargesheets, proper hearing and personalised punishment, if found guilty.
None of these steps having been taken, the discharge orders were still born.
But the Management could, as in this case it did, offer to make out the delinquency of the employees and the arbitrator had, in such cases, the full jurisdiction to adjudge de novo both guilt and punishment.
We hold that sec.
11A does take in an arbitrator too, and, in this case, the arbitral reference, apart from sec.
11A, is plenary in scope.
In the second chapter of our sum up, the first thing we decide is that article 226, however restrictive in practice, is a power wide enough, in all conscience, to be a friend in need when the summons comes in a crisis from a victim of injustice; and, more importantly, this extraordinary reserve power is unsheathed to grant final relief without necessary recourse to a remand.
What the tribunal may, in its discretion, do, the High Court too, under article 226, can, if facts compel, do.
Secondly, we hold that the Award suffers from a fundamental flaw that it equates an illegal and unjustified strike with brazen misconduct by every workman without so much as identification of the charge against each, the part of each, the punishment for each, after adverting to the gravamen of his misconduct meriting dismissal.
Passive participation in a strike which is both illegal and unjustified does not ipso facto invite dismissal or punitive discharge.
There must be active individual excess such as master minding the unjustified aspects of the strike, e.g., violence, sabotage or other reprehensible role.
Absent such gravamen in the accusation, the extreme economic penalty of discharge is wrong.
An indicator of the absence of such grievous guilt is that the Management, after stating in strong terms all the sins of the workmen, took back over 400 of them as they trickled back slowly and beyond the time set, with continuity of service, suggestive of the dubiety of the inflated accusations and awareness of the minor role of the mass of workmen in the Engineers strike.
Furthermore, even though all sanctions short of 212 punitive discharge may be employed by a Management, in our current conditions of massive unemployment, low wages and high cost of living, dismissal of several hundreds, with disastrous impact on numerous families, is of such sensitive social concern that, save in exceptional situations, the law will inhibit such a lethal step for the peace of the Industry, the welfare of the workmen and the broader justice that transcends transient disputes.
The human dimensions have decisional relevance.
We hold the discharge orders, though approved by the Arbitrator, invalid.
The last part of our conclusions relates to the relief which must be fashioned with an eye on mutual equities.
We cannot ignore a few raw realities since law is not dogmatics but pragmatics, without temporising on principle.
The Management 's limitations in absorbing all the large number of discharged employees all at once when, steel, the raw material, is scarce, is a problem.
Likewise, their inability to pay huge sums by way of back wages or otherwise, without crippling the progress of the industry, cannot be overlooked but cannot be overplayed after Hindustan Tin Works.
Another factor which cannot be wished away is the presence of over a couple of hundred workmen, with varying lengths of service, who may have to be sacked if the old workmen are to be brought back.
It is a problem of humanist justice.
Lastly, the rugged fact of life must not be missed that some of the workmen during the long years of desperate litigation, might have sought jobs elsewhere and most of them perhaps have, for sheer survival, made at least a starving wage during the prolonged idle interval.
This factor too is a weak consideration, tested by the reasoning in Hindustan Tin Works.
Moreover, rationalisation of re absorption of the removed workmen requires attention to the classification of permanent workmen and their casual counterparts.
Every proposal must be bottomed on the basic economic fact that the beneficiaries are from the many below the destitution line.
This Court has, in a very different context though, has drawn attention to the Gandhian guideline: "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.
" It is apt here.
This perspective informs our decision.
What did the High Court do regarding reinstatement and should we modify and why? If the discharge is bad, reinstatement is the rule.
In India General Navi 213 gation, Punjab National Bank and Swadeshi Industries, et al, restoration, despite large numbers, was directed.
But most rules have exceptions wrought by the pressure of life and Oriental, was relied on to contend that reinstatement must be denied.
There is force in the High Court 's reasoning to distinguish Oriental, as we hinted earlier and we quote: "There were only 22 workmen involved in that case.
The management had made genuine and persistent efforts to persuade the concerned workmen to call of the strike and join work.
Those efforts were made at three different stages, namely, (1) immediately after the workers went on the lightening strike and before chargesheets were issued, (2) after the charges were dropped and individual notices were sent to the workmen asking them to resume work by specified dates and (3) after the orders of termination were served and conciliation proceedings were commenced pursuant to the demand notice.
But this is not all.
Even the Labour Officer and Labour Inspector had tried to persuade the concerned workmen to joint duty before the charge sheet came to be issued.
As against these repeated bona fide attempts on the part of the management and an outside agency to persuade the erring workmen, they not only did not resume work but also failed to acknowledge or send a reply to the individual notices served upon them requesting them to resume work and they appear to have made it a condition precedent to their joining duty that the suspended workmen should also be taken back.
Even under such circumstances, the management did not straightaway terminate their services but gave individual notices requiring the concerned workmen to show cause why their names should not be struck off and asked them to submit their reply by a certain date.
Even those notices were not replied.
It is only thereafter that the services of the concerned workmen came to be terminated.
It is against this background that the Supreme Court held that there was "a persistent and obdurate refusal by the workmen to joint duty" notwithstanding the fact that "the management has done everything possible to persuade them and give them opportunities to come back to work" and that they had without any sufficient cause refused to do so which constituted "misconduct" so as to 'justify the termination of their services".
214 ".
If the workmen had been approached individually, not only those amongst them who were unwilling to join strike but were prevented from joining work would have taken courage to resume duty but even those amongst them who were undecided could also have been won over.
That apart, those notices, as their contents disclose, were hardly persuasive efforts.
They were a mixture of ultimatums, threats, complaints and indictment of the workmen and the Sabha.
Was it, therefore, a genuine effort on the part of a keenly desirous employer to offer an olive branch? In Oriental, orders of termination were passed only after giving individual notices to the concerned workmen to showcause why their names should not be struck off.
Besides, those notices were given after charges formally served upon each workmen earlier were dropped and persuasive efforts made in the meantime had failed.
None of those steps was taken herein.
All that happened was that in one of the notices meant for mass consumption and circulation, such intimation was given.
" Even so, during the several years of the pendency of the dispute, surely some workmen would have secured employment elsewhere as was conceded by counsel at a certain stage, and it is not equitable to recall them merely to vindicate the law especially when new workmen already in precarious service may have to be evicted to accommodate them.
In the course of the debate at the Bar we gained the impression that somewhere around a hundred workmen are likely to be alternatively employed.
Hopefully, there is no hazard in this guess.
Another, facet of the relief turns on the demand for full back wages.
Certainly, the normal rule, on reinstatement, is full back wages since the order of termination is non est.
[see Lad 's case(1) and Panitole Tea Estate 's case(2)].
Even so, the industrial court may well slice off a part if the workmen are not wholly blameless or the strike is illegal and unjustified.
To what extent wages for the long interregnum should be paid is, therefore, a variable dependent on a complex of circumstances.
[See for e.g. paras 3 and 4].
We are mindful of the submission of Sri Tarkunde, urged in the connected appeal by the Sabha, that where no enquiry has preceded 215 a punitive discharge and the tribunal, for the first time, upholds the punishment this Court has in D. C. Roy vs The presiding Officer, Madhya Pradesh Industrial Court, Indore & Ors.(1) taken the view that full wages must be paid until the date of the award.
There cannot be any relation back of the date of dismissal to when the Management passed the void order.
Kalyani(2) was cited to support the view of relation back of the Award to the date of the employer 's termination orders.
We do not agree that the ratio of Kalyani corroborates the proposition propounded.
Jurisprudentially, approval is not creative but confirmatory and therefore relates back.
A void dismissal is just void and does not exist.
If the Tribunal, for the first time, passes an order recording a finding of misconduct and thus breathes life into the dead shall of the Management 's order, predating of the nativity does not arise.
The reference to Sasa Musa in Kalyani enlightens this position.
The latter case of D. C. Roy vs The Presiding Officer, Madhya Pradesh Industrial Court, Indore & Ors.
(supra) specifically refers to Kalyani 's case and Sasa Musa 's case and holds that where the Management discharges a workmen by an order which is void for want of an enquiry or for blatant violation of rules of natural justice, the relation back doctrine cannot be invoked.
The jurisprudential difference between a void order, which by a subsequent judicial resuscitation comes into being de novo, and an order, which may suffer from some defects but is not still born or void and all that is needed in the law to make it good is a subsequent approval by a tribunal which is granted, cannot be obfuscated.
We agree that the law stated in D. C. Roy (supra) is correct but now that the termination orders are being set aside, the problem does not present itself directly.
Even the other alternative submission of Sri Tarkunde that if the plea of the Management that the order is a discharge simpliciter were to be accepted, the result is a retrenchment within the meaning of section 2(00) which, in this case, is in violation of section 25F and therefore bad, is not a point urged earlier.
We are disposed to stand by the view that discharge, even where it is not occasioned by a surplus of hands, will be retrenchment, having regard to the breadth of the definition and its annotation in ; But the milieu in which the order was passed in February 1973 is not fully available, viewed from this new angle.
So we decline to go into that contention.
216 Final Relief We are concerned with 400 workmen, some of whom have been claimed by death or other irreversible causes casualties of litigative longevity ! are 370 workmen are left behind, of whom 239 are admittedly permanent.
We have already stated that 100, out of them, are probably fixed up elsewhere.
So, we exclude them and direct that the remaining 139 alone will be reinstated.
A list of the aforesaid 100 workmen will be furnished to the Management by the Sabha within two weeks from today.
That shall be accepted as correct and final.
While reinstatement is refused for these 100 workmen, when shall they be deemed to have ceased to be in service for drawal of terminal benefits ? Their discharge orders having been quashed, they remain in service until today.
We concluded the arguments on August 3, 1979 and on the eve of the closure of counsel 's submissions certain inconclusive settlement proposals were discussed.
We, therefore, consider August 3, 1979 as a pivotal point in the calender with reference to which the final relief may be moulded.
We direct that the 100 workmen for whom reinstatement is being refused will be treated as in service until August 3, 1979 on which date they will be deemed to have been retrenched.
We direct this step with a view to pragmatise the situation in working out the equities.
These 100 will draw all terminal benefits plus 75 per cent of the back wages.
This scaling down of back pay is consistent with the assumption that somewhere in the past they had secured alternative employment.
The long years and the large sum payable also persuade us to make this minor cut.
Of course, in addition, they will be entitled to retrenchment benefits under section 25F of the Act, and one month 's notice pay.
The remaining 139 will be awarded 50 per cent of the back wages since we are restoring them.
The High Court has adopted this measure and so we do not depart from it.
The case of the hundred stands on a slightly different footing, because some compensation in lieu of refusal of reinstatement is due to them and that also has entered our reckoning while fixing 75 per cent for them.
The computation of the wages will be such as they would have drawn had they continued in service and on that the cut directed will be applied.
We have disposed of the case of the permanent workmen except to clarify that in their case continuity of service will be maintained and accrual of benefits on that footing reckoned.
The next category relates to casual employees, 131 in number of whom 57 have less 217 than nine months ' service.
The policy of the Act draws a distinction between those with service of 240 days and more and others with less.
The casuals with less than nine months service are 57 in number and we do not think that this fugitive service should qualify for reinstatement especially when we find a number of intermediate recruits, with longer though untenable service, have to be baled out.
We decline reinstatement of these 57 hands.
The other 74 must be reinstated although nationally but wrongly they are shown as casual.
In the 'life ' sense, all mortals are casuals but in the legal sense, those with a record of 240 days on the rolls, are a class who have rights under industrial law.
We direct the 74 long term casuals aforesaid to be reinstated but not the 57 short term ones.
To this extent, we vary the High Court 's order.
We adopt the directive of the High Court regarding the back wages to both categories of casuals except that for the lesser class of 57 casuals, a flat sum of 1000/ more will be paid as a token compensation in lieu of reinstatement.
The reinstated casuals (74 of them) will be put back as casuals but will be confirmed within six months from the date of rejoining since it is meaningless to keep them as casual labourers when they are, by sheer length of service, on the regular rolls.
Two issues remain When are the workmen to be retaken and what is to happen in the meanwhile ? How is the amount payable by the Management to be discharged and on what terms ? Many years have flowed by, thanks to the long drawn out litigation.
Further delay in putting back the workers will be unfair.
But the Management pleads that steel shortage cuts into the flesh of the factory 's expansion, without which additional intake of workers is beyond their budget unless considerable time for reabsorption were given.
But the lot of the workmen is unspeakable while the overall assets and outlook of the Company are commendable enough to bear an increased wage bill.
Divas cannot complain when Lazarus asks for more crumbs.
Even if a slight slant be made in favour of the Management, the direction to them to take back, in order of seniority, the first 70 out of the 139 permanent workmen on or before December 31, 1979 and the rest on or before March 31, 1980 is the least that is just.
Until those dates the workmen will be paid 2/3rd of their wages as now due.
Of course, if any workmen fails to report for work within 15 days of service of written notice to him, with simultaneous copy to the Sabha, he will not be eligible for any more reinstatement or wages.
218 The back wages run into a large sum but a good part has been paid under the stay order of this Court.
We make it clear that the payments made will be given credit and the balance if paid as directed below and within the time specified will not carry interest.
If default is made, the sums in default will carry 10 per cent interest.
The figures of amounts due will be worked out by both sides and put into Court in 10 days from now.
Half the amount determined by the Court, after perusing both statements, will be paid directly to the workmen or deposited with the Industrial Tribunal who will give notice and make disbursements, on or before 31 3 1980 and the other half on or before 30 9 1980.
The conclusions may be capsulated for easier consumption.
Out of 370 workmen directed to be reinstated by the High Court, 239 are permanent.
It is assumed that 100 have found alternative employment and are not interested any more in reinstatement and they are to be excluded from the direction of reinstatement.
The Company must, therefore, reinstate 139 permanent workmen and the list of 100 workmen who are not to be reinstated would be supplied by the Sabha within two weeks from the date of this judgment.
The discharge order in respect of 100 workmen herein before mentioned would be set aside and they are deemed to be in service till August 3, 1979, when they will be retrenched and they will be paid retrenchment compensation as provided in section 25F plus one month 's pay in lieu of notice, the compensation to be worked out on the basis of the wages that will be admissible under the recommendations of the Engineering Wage Board as applicable to the Company.
This amount will be paid in lieu of reinstatement and they will also be paid 75 per cent of the back wages.
The remaining 139 permanent employees would be paid 50 per cent of the back wages as directed by the High Court.
3. 70 out of 139 permanent workmen directed to be reinstated should be provided actual employment on or before December 31, 1979, and the rest on or before March 31, 1980.
During this period and till the actual reinstatement each one of these 139 workmen should be paid 2/3 of the monthly wages from August 9, 1979, when the hearing in this case concluded.
50 per cent of the amount that becomes payable to each workmen under the directions herein above given will be paid on or before March 31, 1980, and the balance on or before September 30, 1980, and till then the amount will carry interest at the rate of 10 per cent.
219 4.
In respect of casual workmen whose service was less than 9 months on the date of dismissal it would not be proper to grant reinstatement.
They are 57 in number.
The remaining casual workmen 74 in number shall be reinstated.
In case of 57 casual workmen to whom reinstatement is refused, the direction of the High Court is confirmed with the further addition that each one will be paid Rs. 1,000/ over and above the amount payable under the direction of the High Court and this would be in lieu of reinstatement.
Casual workmen 74 in number and having service of more than 9 months on the date of dismissal will be treated as confirmed within six months of the date of their rejoining and they will be offered reinstatement by March 31, 1980, and the High Court 's direction for back wages in their respect in confirmed.
With these modifications, we dismiss both the appeals.
The Management appellant will pay the costs of the Sabha respondent, advocates fee being fixed at Rs. 5,000/ .
An Afterword This litigation, involving many workmen living precariously on post wages amidst agonising inflation and a Management whose young budget, what with steel scarcity, may well be shaken by the burden of arrears, points to the chronic pathology of our Justice System the intractable and escalating backlog in the Forensic Assembly Line that slowly spins Injustice out of Justice and effectually wears down or keeps out the weaker sector of Indian life.
This truma is felt more poignantly in Labour litigation and the legislature fails functionally if it dawdles to radicalise, streamline and simplify the conflict resolution procedures so as to be credibly available to the common people who make up the lower bracket of the nation.
The stakes are large, the peril is grave, the evils are worse than the prognostics of Prof. Lawrence Tribe (of the Harvard Law School) : "If court backlogs grow at their present rate, Our children may not be able to bring a lawsuit to a conclusion within their lifetime.
Legal claims might then be willed on, generation to generation like hillbilly feuds; and the burdens of pressing them would be contracted like a hereditary disease.
" Law may be guilty of double injustice when it is too late and too costly for it holds out remedial hopes which peter out into sour dupes and bleeds the anaemic litigant of his little cash only to tantalise him into a system equal in form but unequal in fact.
The price of 220 this promise of unreality may be the search by the lowly for the reality of revolutionary alternatives.
Compelled by the crisis in the Justice System, we sound this sombre judicial note.
We direct payments and reinstatements as spelt out earlier, within the specificated time, and, hopefully, leave the case with the thought that, given better rapport between the partners in production, the galvanic Gujarat Steel Tubes Ltd., will forge ahead as a paradigm for the rest.
KOSHAL, J. I have had the advantage of going through the judgment of my learned brother Iyer, J., but after giving the same my most serious consideration I regret that I find myself unable to endorse it as I hold a different opinion in relation to three important findings arrived at by him, namely, (a) that the discharge of workmen amounted really to their dismissal because the motivation for it was their alleged misconduct.
(b) that an arbitrator would fall within the ambit of the term "Tribunal" as used in sub section (2) of section 11A of the (hereinafter called the 1947 Act), and (c) that the High Court acted within the four corners or its jurisdiction under article 227 of the Constitution of India while interfering with the finding of the arbitrator that the workmen were correctly punished with dismissal if the orders of discharge could be construed as such.
I am therefore appending this note which may be read in continuation of that judgment.
The parties are admittedly governed by the (hereafter referred to as the "S.O. Act" section 15(2) of which empowers the appropriate Government to make rules, inter alia setting out model standing orders for the purposes of that Act.
The expression 'standing orders ' is defined in section 2(g) of the S.O. Act to mean rules relating to the matters set out in the schedule thereto, items 8 and 9 of which run thus : "8.
Termination of employment, and the notice therefor to be given by the employer and workmen.
221 "9.
Suspension or dismissal for misconduct and acts or omissions which constitute misconduct.
" The appropriate Government (in this case the Government of Gujarat) has prescribed Model Standing Orders (M.S.Os.
for short) under section 15(2) of the S.O. Act.
The relevant part of M.S.O. 23 is extracted below : "23.
(1) Subject to the provisions of the Industrial disputes Act, 1947, the employment of a permanent workman employed on rates other than the monthly rates of wages may be terminated by giving him fourteen days ' notice or by payment of thirteen days ' wages (including all admissible allowances) in lieu of notice.
"(2). . . . . . "(3). . . . . . "(4) The employment of a permanent workman employed on the monthly rates of wages may be terminated by giving him one month 's notice or on payment of one month 's wages (including all admissible allowances) in lieu of notice. "(4 A) The reasons for the termination of service of a permanent workman shall be recorded in writing and communicated to him, if he so desires, at the time of discharge, unless such communication, in the opinion of the Manager, is likely directly or indirectly to lay any person open to civil or criminal proceedings at the instance of the workman. "(5). . . . . . "(6). . . . . . "(7) All classes of workmen other than those appointed on a permanent basis may leave their service or their service may be terminated without or pay in lieu of notice : Provided that services of a temporary workman shall not be terminated as a punishment unless he has been given an opportunity of explaining the charges of misconduct alleged against him in the manner prescribed in Standing Order 25. "(8). . . . . . . "(9). . . . . . " 222 M.S.O. 24 enumerates 25 kinds of acts or omissions on the part of a workman which amount to misconduct.
Clauses (a) and (b) of the M.S.O. describe two of such acts thus : "(a) willful insubordination or disobedience, whether or not in combination with another, of any lawful and reasonable order of a superior; (b) going on illegal strike or abetting, inciting, instigating or acting in furtherance thereof;" M.S.O. 25 lays down the manner in which a workman guilty of misconduct may be dealt with.
It states : "25.
(1) A workman guilty of misconduct may be (a). . . . . . . . (b). . . . . . . . (c). . . . . . . . (d). . . . . . . . (e). . . . . . . . (f) discharged under Order 23; (g) dismissed without notice. "(2). . . . . . . . "(3) No order of dismissal under sub clause (g) of clause (1) shall be made except after holding an inquiry against the workman concerned in respect of the alleged misconduct in the manner set forth in clause (4). "(4) A workman against whom an inquiry has been held shall be given a charge sheet clearly setting forth the circumstances appearing against him and requiring explanation.
He shall be given an opportunity to answer the charge and permitted to be defended by a workman working in the same department as himself.
Except for reasons to be recorded in writing by the officer holding the inquiry, the workman shall be permitted to produce witnesses, in his defence and cross examine any witnesses on whose evidence the charge rests.
A concise summary of the evidence led on either side and the workman 's plea shall be recorded. "(5) . . . . . . . . .
" Clauses (3) and (4) of M.S.O. 25 speak of an inquiry only in the case of an order falling under sub clause (g) of clause (1) of 223 that M.S.
It is thus quite clear (and this is not disputed) that the only sub clause of clause (1) of M.S.O. 25 to which the provisions of clauses (3) and (4) of that M.S.O. would be attracted is sub clause (g) and that if an order of discharge falls under M.S.O. 23 an inquiry under clauses (3) and (4) of M.S.O. 25 would not be a prerequisite thereto even though such an order is mentioned in subclause (f) of clause (1) of that M.S.O.
And that is why it has been vehemently urged on behalf of the workmen who were discharged en masse and who were not taken back by the Management that the orders of discharge made in relation to them amount really to orders of dismissal and are bad in law by reason of the fact that no inquiry of the type above mentioned was held before they were passed.
Under M.S.Os. 23 and 25 the Management has the power to effect termination of the services of an employee by having recourse to either of them.
In action taken under M.S.O. 23 no element of punishment is involved and the discharge is a discharge simpliciter; and that is why no opportunity to the concerned employee to show cause against the termination is provided for.
Dismissal, however, which an employer may order, is, in its very nature, a punishment, the infiction of which therefore has been made subject to the result of an inquiry (having the semblance of a trial in a criminal proceeding).
Exercise of each of the two powers has the effect of the termination of the services of the concerned employee but must be regarded, because of the manner in which each has been dealt with by the M.S.Os., as separate and distinct from the other.
It was vehemently argued on behalf of the workmen that once it was proved that the order of discharge of a workman was passed by reason of a misconduct attributed to him by the management, the order cannot but amount to an order of dismissal.
But this argument, to my mind, is wholly without substance, and that for two reasons.
For one thing, clause (1) of M.S.O. 25 specifically states in sub clause (f) that a workman guilty of misconduct may be discharged under M.S.O. 23.
This clearly means that when the employer is satisfied that a workman has been guilty of misconduct, he may (apart from visiting the workman with any of the punishments specified in sub clauses (a), (b), (c), (d) and (e) of clause (1) of M.S.O. 25) either pass against him an order of discharge for which no inquiry precedent as provided for in clauses (3) and (4) of M.S.O. 25 would be necessary, or, may dismiss him after holding such an inquiry.
Which of the two kinds of order the employer shall pass is left entirely to his own discretion.
224 It is true that the employer cannot pass a real order of dismissal in the garb of one of discharge.
But that only means that if the order of termination of services of an employee is in reality intended to punish an employee and not merely to get rid of him because he is considered useless, inconvenient or troublesome, the order, even though specified to be an order of discharge, would be deemed to be an order of dismissal covered by sub clause (g) of clause (1) of M.S.O. 25.
On the other hand if no such intention is made out, the order would remain one of discharge simpliciter even though it has been passed for the sole reason that a misconduct is imputed to the employee.
That is how, in my opinion, M.S.Os. 23 and 25 have to be interpreted.
The argument that once an alleged misconduct is shown to have been the motive for the passage of an order of discharge, the same would immediately and without more, amount to an order of dismissal, is not warranted by the language used in M.S.O. 25 which specifically gives to the employer the power to get rid of "a workman guilty of misconduct" by passing an order of his discharge under M.S.O. 23. 5.
Secondly, the reasons for the termination of service of a permanent workman under M.S.O. 23 have to be recorded in writing and communicated to him, if he so desires, under clause 4 A) thereof.
Such reasons must obviously consist of an opinion derogatory to the workman in relation to the performance of his duties; and whether such reasons consist of negligence, work shirking or of serious overt acts like theft or embezzlement, they would in any case amount to misconduct for which he may be punished under M.S.O. 25.
It is difficult to conceive of a case in which such reasons would not amount to misconduct.
The result is that M.S.O. 23 would be rendered otiose if termination of service thereunder for misconduct could be regarded as a dismissal and such a result strikes at the very root of accepted canons of interpretation.
If it was open to the Court to "lift the veil" and to hold an order of discharge to amount to a dismissal merely because the motive behind it was a misconduct attributed to the employee, the services of no employee could be terminated without holding against him an inquiry such as is contemplated by clauses (3) and (4) of M.S.O. 25. 6.
The interpretation placed by me on M.S.Os. 23 and 25 finds ample support in Bombay Corporation vs Malvankar(1) of which the 225 facts are on all fours with those in the present case.
Miss P. section Malvankar, respondent No. 1 in that case, was a clerk in the employment or the Bombay Electric Supply and Transport Undertaking which was being run by the Bombay Corporation.
Her services were terminated on the ground that her record of service was unsatisfactory.
It was however stated in the order of termination of her services that she would be paid one month 's wages in lieu of notice and would also be eligible for all the benefits as might be admissible under the Standing Orders and Service Regulations of the Undertaking.
Those Standing Orders correspond to the standing orders with which we are here concerned.
Thereunder, two powers were conferred on the employer, one being a power to impose punishment for misconduct following a disciplinary inquiry under clause (2) of Standing Order 21 read with Standing Order 23 and the other one to terminate the service of the employee by one calendar month 's written notice or pay in lieu thereof under Standing Order 26.
The question arose as to which power had been exercised by the employer in the case of Miss Malvankar and Jaswant Singh, J., delivering the judgment of the Court on behalf of himself and Bhagwati, J., was answering that question when he made the observations reproduced from his decision by my learned brother Iyer, J. This Court was then clearly of the opinion that (a) the power to terminate the services by an order of discharge simpliciter is distinct from and independent of the power to punish for misconduct and the Standing Orders cannot be construed so as to render either of these powers ineffective; and (b) reasons for termination have to be communicated to the employee and those reasons cannot be arbitrary, capricious or irrelevant but that would not mean that the order of termination becomes punitive in character just because good reasons are its basis.
The Court further remarked that if the misconduct of the employee constituted the foundation for terminating his service then it might be liable to be regarded as punitive but this proposition was doubted inasmuch as "even in such case it may be argued that the management has not punished the employee but has merely terminated his service under Standing Order 26".
So all that remains to be determined in this connection is as to when would misconduct be the `foundation ' of an order of dis 226 charge.
Merely because it is the reason which weighed with the employer in effecting the termination of services would not make the order of such termination as one founded on misconduct, for, such a proposition would run counter to the plain meaning of clause (1) of M.S.O. 25.
For an order to be `founded ' on misconduct, it must, in my opinion, be intended to have been passed by way of punishment, that is, it must be intended to chastise or cause pain in body or mind or harm or loss in reputation or money to the concerned worker.
If such an intention cannot be spelled out of the prevailing circumstances, the order of discharge or the reasons for which it was ostensibly passed, it cannot be regarded as an order of dismissal.
Such would be the case when the employer orders discharge in the interests of the factory or of the general body of workers themselves.
That this is what was really meant by the judicial precedents which use the word `foundation ' in connection with the present controversy finds support from a number of decisions of this Court.
In The Chartered Bank, Bombay vs The Chartered Bank, Employees ' Union(1) this Court held that if the termination of service is a colourable exercise of the power vested in the management or is a result of victimization or unfair labour practice, the Industrial Tribunal will have jurisdiction to intervene and set aside such termination.
Applying this principle to the facts of the case before it, this Court ruled : "We are satisfied that the management has passed the order of termination simpliciter and the order does not amount to one of dismissal as and by way of punishment" (emphasis supplied).
This case was followed in The Tata Oil Mills Co., Ltd., vs Workmen(2) where Gajendragadkar, C.J., who delivered the judgment of the Court, stated the law thus : "The true legal position about the Industrial Courts ' jurisdiction and authority in dealing with cases of this kind is no longer in doubt.
It is true that in several cases, contract of employment or provisions in Standing Orders authorise an industrial employer to terminate the service of his employees after giving notice for one month on paying salary for one month in lieu of notice, and normally, an employer may, in a proper case, be entitled to exercise the said power.
But where an order of discharge passed by an 227 employer gives rise to an industrial dispute, the form of the order by which the employees ' services are terminated, would not be decisive; industrial adjudication would be entitled to examine the substance of the matter and decide whether the termination is in fact discharge simpliciter or it amounts to dismissal which has put on the cloak of a discharge simpliciter.
If the Industrial Court is satisfied that the order of discharge is punitive, that it is mala fide, or that it amounts to victimization or unfair labour practice, it is competent to the Industrial Court to set aside the order and in a proper case, direct the reinstatement of the employee.
In some cases, the termination of the employee 's services may appear to the Industrial Court to be capricious or so unreasonably severe that an inference may legitimately and reasonably be drawn that in terminating the services, the employer was not acting bona fide.
The test always has to be whether the act of the employer is bonafide or not.
If the act is mala fide, or appears to be a colourable exercise of the powers conferred on the employer either by the terms of the contract or by the standing orders, then notwithstanding the form of the order, industrial adjudication would examine the substance and would direct reinstatement in a fit case. ".
The same test was laid down for determining whether an order of discharge could be construed as one ordering dismissal in The Tata Engineering and Locomotive Co., Ltd., vs section C. Prasad(1) by Shelat and Bhargava, JJ. : "No doubt, the fact that the order was couched in the language of discharge simpliciter is not conclusive.
Where such an order gives rise to an industrial dispute its form is not decisive and the tribunal which adjudicates that dispute can, of course, examine the substance of the matter and decide whether the termination is in fact discharge simpliciter or dismissal though the language of the order is one of simple termination of service.
If it is satisfied that the order is punitive or mala fide or is made to victimise the workmen or amounts to unfair labour practice, it is competent to set it aside.
The test is whether the act of the employer is bona fide.
If it is not, and is a colourable 228 exercise of the power under the contract of service or standing orders, the Tribunal can discard it and in a proper case direct reinstatement.
" The Chartered Bank, Bombay vs The Chartered Bank Employees ' Union (supra) was followed by this Court in Workmen of Sudder Office, Cinnamore vs Management(1) and therein stress was laid on the employer 's right to terminate the services of a workman by an order of discharge simpliciter under the terms of the contract where there was no lack of bona fides, unfair labour practice or victimization.
So the real criterion which formed the touchstone of a test to determine whether an order of termination of services is an order of discharge simpliciter or amounts to dismissal is the real nature of the order, that is, the intention with which it was passed.
If the intention was to punish, that is, to chastise, the order may be regarded as an order of dismissal; and for judging the intention, the question of mala fides (which is the same thing as a colourable exercise of power) becomes all important.
If no mala fides can be attributed to the management, the order of discharge must be regarded as one having been caused under M.S.O. 23 even though the reason for its passage is serious misconduct.
It is in light of the conclusion just above arrived at that the discharge of the workmen in the instant case has to be judged.
The question of intention or mala fides is really one of fact (of which the arbitrator was, in my opinion, the sole judge, unless his finding on the point was vitiated by perversity in which case alone it was liable to be reviewed by the High Court).
The discussion of the evidence by the arbitrator in his award is not only full and logical but, in my opinion, also eminently just.
At all material times the Management was out to placate the Sabha (and therefore, the workmen) and gave to it a long rope throughout.
The attitude of the Sabha on the other hand was one of intransigence and obduracy.
According to the settlement of the 4th of August, 1972, it was not open to the workmen to resort to a strike till the expiry of a period of five years; nor could the Management declare a lock out till then.
Any disputes arising between the parties, according to the terms arrived at, were to be sorted out through negotiations or, failing that, by recourse to arbitration.
A dispute was raised by the Sabha soon thereafter over the implementation of the recommendations of the Central Engineering Wage Board (hereinafter called the Board), the payment of bonus 229 for the year 1971 and wages for an earlier lock out.
In paragraph 7.47 of its award the Board had made the following recommendations : "7.47.
After considering the problem in its entirety, we agreed to divide the industry into five regions or areas as under and in doing so, we have also considered the prevailing wage levels at different places and the cost of living at important centres in these places.
"1. Bombay City and Greater Bombay including Thana Ambarnath & Kalyan Industrial Areas. "2.
Calcutta, Greater Calcutta, Howrah Industrial area, Jamshedpur Industrial area, Durgapur, Asansol and Ranchi industrial areas.
Madras industrial area, Bangalore industrial area, Hyderabad industrial area, Poona Chinchwad industrial area, Delhi industrial area and Ahmedabad. "4.
Coimbatore, Nagpur, Bhopal, Kanpur, Baroda and Faridabad industrial areas.
The rest of the country.
" This classification was made for the purpose of granting `area allowance ' which varied with the category in which the area of the situation of a factory fell.
No allowance was to be paid to the factories falling in category 5 and on the basis of the phraseology used by the Board the Management contended that Ahmedabad industrial area (in which its factory was situated) fell within that category.
This interpretation of the categorisation made by the Board was not acceptable to the Sabha who claimed that the factory was covered by category 3; and this was an issue on which the Sabha was not prepared to climb down.
Similarly, the Sabha was adamant on the question of bonus for the year 1971 which it claimed at 16 per cent over and above 8.33 per cent allowed by statute with the plea that bonus at that rate had been paid in the earlier year.
This being the position and negotiations between the parties held at two meetings convened on 14 12 1972 and 20 1 1973 having ended in a fiasco, the Management offered to have the disputes resolved by arbitration but that again was a course not acceptable to the Sabha which, however, accused the Management of flouting the settlement dated the 4th of August , 1972, by not coming to the negotiating table.
The attitude adopted by the Sabha was, to say the least, most unreason 230 able.
It could not have its own way in taking certain matters as final and non negotiable.
Nor can it be said that stand taken by the management was unreasonable.
Paragraph 7.47 of the award of the Board categorized various factories with reference to the areas which were either described by the names of the cities in which they were situated or by the names of certain industrial areas.
Ahmedabad was mentioned as such and so was Calcutta while the other areas were mentioned as such and such industrial areas.
It was thus a very reasonable plea put forward on behalf of the Management that only Ahmedabad city and not Ahmedabad industrial area was included in category 3 and that that industrial area fell within category 5.
On the other hand, the Sabha interpreted the word `Ahmedabad ' occurring in category 3 to include Ahmedabad industrial area (in which lay the factory in question) and demanded area allowance for its workers on that score.
The reasonableness of the plea of the Management is obvious and it was the attitude of the Sabha which lacked reason in that on the failure of the negotiations they spurned the offer of the Management for arbitration on the question of interpretation of the categorisation.
It can also not be said that the objection regarding payment of bonus raised by the Management was not a reasonable one.
The argument that the stand of the Management that the negotiations between them and the Sabha on the questions of interpretation of the Board 's award and bonus having failed as there was no meeting ground on either of them, they could be referred to arbitration, lacked reason, is wholly unacceptable.
The attitude of the Sabha in insisting on negotiations being held only on the basis of certain propositions formulated by it amounted really to a refusal to negotiate the points in dispute and the Management was therefore not left with any alternative except to suggest an arbitration as envisaged in the settlement dated the 4th of August, 1972.
Later developments reveal a similar state of affairs in so far as the attitude of the Sabha is concerned.
Over and over again it was asked not to precipitate a strike and to act within the terms of the settlement but the advice fell on deaf ears.
Even after the strike which, it is admitted on all hands, was illegal and certainly not envisaged by the settlement of the 4th of August, 1972, the Management continued to make requests to the Sabha to send back the workers, but again no heed was paid to those requests.
On the other hand, the Sabha began making suggestions to the Government to take over the factory.
Ultimately, when the Management was faced, to adopt means to rehabilitate the factory by reports to fresh 231 recruitment, they had no option except to terminate the services of its workmen.
Each one of the orders of termination of services which were actually passed, was on the face of it wholly innocuous inasmuch as it did not stigmatise in any manner whatsoever the concerned workman.
The Management had however to record reasons for the discharge in pursuance of the provisions of clause (4A) of M.S.O. 25 and those reasons did charge each worker with misconduct inasmuch as he had taken part in the illegal strike and had refused to resume duty inspite of repeated demands made by the Management in that behalf.
All the same, the Management made it clear that inspite of such misconduct it had no intention of punishing the workers who were given not only the benefit of an order of discharge simpliciter but also the option to come back to work within a specified period in which case they would be reinstated with full benefits.
An intention not to punish could not be expressed in clearer terms and is further made out from the fact that more than 400 workers who resumed duty were reinstated without break in service.
In passing the orders of discharge, therefore, the Management did nothing more than act under M.S.O. 23 and its action cannot be regarded as amounting to dismissal in the case of any of the workers.
They had the right to choose between a discharge simpliciter and a dismissal and, in the interests of the factory and the members of the Sabha and perhaps on compassionate grounds also, they chose the former in unequivocal terms.
The intention to punish being absent, the finding of the High Court that the order of discharge amounted to one of dismissal cannot be sustained.
I now turn to the interpretation of sub section (2) of section 11A of the 1947 Act.
It is a well settled canon of interpretation of statutes that the language used by the legislature must be regarded as the only source of its intention unless such language is ambiguous, in which situation the preamble to the Act the Statement of Objects of and Reasons for bringing it on the Statute book and the purpose underlying the legislation may be taken into consideration for ascertaining such intention.
That the purpose of the legislation is to fulfil a socio economic need, or the express object underlying it, does not come into the picture till an ambiguity is detected in the language and the court must steer clear of the temptation to mould the written word according to its own concept of what should have been enacted.
That is how I propose to approach the exercise in hand.
For the sake of convenience of reference I may set out the provisions of clauses (aa) and (r) of section 2, of sub sections (1) 232 and (2) and the opening clause of sub section (3) of section 11, and of the whole of section 11A of the 1947 Act: "2.
(aa) `arbitrator ' includes an umpire;" "2.
(r) `Tribunal ' means an Industrial Tribunal constituted under section 7A and includes an Industrial Tribunal constituted before the 10th of March, 1957, under this Act;" "11.
(1) Subject to any rules that may be made in this behalf, an arbitrator, a Board, Court, Labour Court, Tribunal or National Tribunal shall follow such procedure as the arbitrator or other authority concerned may think fit. "(2) A conciliation officer or a member of a Board, or Court or the presiding officer of a Labour Court, Tribunal or National Tribunal may for the purpose of inquiry into any existing or apprehended industrial dispute, after giving reasonable notice, enter the premises occupied by any establishment to which the dispute relates. "(3) Every Board, Court, Labour Court, Tribunal and National Tribunal shall have the same powers as are vested in a Civil Court under the Code of Civil Procedure, 1908.
when trying a suit, in respect of the following matters, namely: . . " "11A.
Where an industrial dispute, relating to the discharge or dismissal of a workman has been referred to a Labour Court, Tribunal or National Tribunal for adjudication and, in the course of the adjudication proceedings, the Labour Court, Tribunal or National Tribunal, as the case may be, is satisfied that the order of discharge or dismissal was not justified, it may, by its award, set aside the order of discharge or dismissal and direct reinstatement of the workman on such terms and conditions, if any, as it thinks fit, or give such other relief to the workman including the award of any lesser punishment in lieu of discharge or dismissal as the circumstances of the case may require: Provided that in any proceeding under this section the Labour Court, Tribunal or National Tribunal, as the case may be, shall rely only on the materials on record and shall not take any fresh evidence in relation to the matter.
" Section 2 of the Act specifically lays down that unless there is anything repugnant in the subject or context, the expressions defined 233 therein would have the meanings attributed to them.
Throughout the Act therefore, while 'arbitrator ' would include an umpire, a 'Tribunal ' would not include an arbitrator but would mean only an Industrial Tribunal constituted under the Act, unless the context makes it necessary to give the word a different connotation.
In sub section (1) of section 11, it is conceded, the word 'Tribunal ' has been used in accordance with the definition appearing in clause (r) of section 2 because an arbitrator is separately mentioned in that sub section.
In sub sections (2) and (3) of that section a Board, a Labour Court, a Tribunal and a National Tribunal have been invested with certain powers.
Would a Tribunal as contemplated by sub sections (2) and (3) then include an arbitrator ? My reply to the question is all emphatic 'no '.
It is well settled that if a term or expression is used in a particular piece of legislation in one sense at one place, the same sense will pervade the entire legislation wherever the term is used unless an intention to the contrary is expressed.
Here the word 'Tribunal ' has been used in three sub sections of the same section and no reason at all is fathomable for the proposition that it means one thing in sub section (1) and something different in sub sections (2) and (3).
It may also be mentioned here that in all the three sub sections the word 'Tribunal ' has a capital 'T ' which is also part of the expression 'Tribunal ' as occurring in clause (r) of section 2 and thus connotes a proper noun rather than the generic word 'tribunal ' as embracing all institutions adjudicating upon rights of contending parties.
A third and perhaps a clinching reason for this interpretation is available in the use of the expression "National Tribunal" along with the word "Tribunal" in all the three sub sections which militates against the argument that the word "Tribunal" as used in sub sections (2) and (3) means an institution of that type.
If the word "Tribunal" as used in sub sections (2) and (3) means such an institution, then the use of the expression "National Tribunal" would be redundant and redundancy is not one of the qualities easily attributable to a legislative product.
In that case, in fact, other words used in the two sub sections last mentioned, namely, 'Court ' and 'Labour Court ' would also become redundant.
In this view of the matter, the word "Tribunal" as used in all the first three sub sections of section 11 must be held to have been used in the sense of the definition occurring in clause (r) of section 2. 12.
Section 11A is just the next succeeding section and therein a part of the arrangement adopted is the same as in sub sections (2) and (3) of section 11 so that powers are conferred by it on a "Labour 16 868SCI/79 234 Court, Tribunal or National Tribunal" which arrangement is repeated in the section thrice over.
That the word "Tribunal" as used in section 11A has the same meaning as it carries in the three sub sections of section 11 is obvious and I need not repeat the reasons in that behalf; for, they are practically the same as have been set out by me in relation to section 11. 13.
In my opinion the language employed in section 11A sufferers from no ambiguity whatever and is capable only of one meaning, i.e., that the word 'Tribunal ' occurring therein is used in the sense of the definition given in clause (r) of section 2.
It is thus not permissible for this Court to take the Statement of Objects and Reasons or the purpose underlying the enactment into consideration while interpreting section 11A. I may mention here however that a perusal of the Statement of Objects and Reasons forming the background to the enactment of section 11A leads me to the same conclusion.
In that Statement a reference was specifically made to tribunals as well as arbitrators in, terms of the recommendations of the International Labour Organization.
But inspite of that the word 'arbitrator ' is conspicuous by its absence from the section.
What is the reason for the omission ? Was it consciously and deliberately made or was it due to carelessness on the part of the draftsmen and a consequent failure on the part of the legislature ? In my opinion the Court would step beyond the field of interpretation and enter upon the area of legislation if it resorts to guess work (however intelligently the same may be carried out) and attributes the omission to the latter cause in a situation like this which postulates that the pointed attention of the legislature was drawn to the desirability of clothing an arbitrator with the same powers as were sought to be conferred on certain courts and tribunals by section 11A and it did not accept the recommendation.
I would hold, in the circumstances, that the omission was deliberately made.
It follows that the powers given to a Tribunal under section 11A are not exercisable by an arbitrator who, therefore, cannot interfere with the punishment (awarded by the employer) in case he finds misconduct proved.
The last point on which I differ with the finding of my learned brother relates to the exercise by the High Court of its powers under article 227 of the Constitution of India.
As pointed out by him the High Court, while discharging its functions as envisaged by that article, does not sit as a court of appeal over the award of the arbitrator but exercises limited jurisdiction which extends only to 235 seeing that the arbitrator has functioned within the scope of his legal authority.
This proposition finds full support from Nagendra Nath Bora and Another vs The Commissioner of Hills Division and Appeals, Assam and Others(1), P. H. Kalyani vs M/s. Air France, Calcutta(2), state of Andhra Pradesh vs section Sree Rama Rao(3) and Navinchandra Shakerchand Shah vs Manager, Ahmedabad Cooperative Department Stores Ltd.(4), all of which have ben discussed at length by him and require no further consideration at my hands.
In this view of the matter it was not open to the High Court to revise the punishment (if the discharge is regarded as such) meted out by the Management to the delinquent workmen and left in tact by the arbitrator whose authority in doing so has not been shown to have been exercised beyond the limits of his jurisdiction.
I need not go into the other aspects of the case.
In view of my findings (a) that the orders of discharge of the workmen could not be regarded as orders of their dismissal and were, on the other hand, orders of discharge simpliciter properly passed under M.S.O. 23; (b) that the arbitrator could not exercise the powers conferred on a Tribunal under section 11A of the 1947 Act and could not therefore interfere with the punishment awarded by the Management to the workmen (even if the discharge could be regarded a punishment), and (c) that in any case the High Court exceeded the limits of its jurisdiction in interfering with the said punishment purporting to act in the exercise of its powers under article 227 of the Constitution of India, the judgment of the High Court must be reversed and the order of the arbitrator restored.
The three appeals are decided accordingly, the parties being left to bear their own costs throughout.
O R D E R The appeals are dismissed substantially with such modifications as are indicated in the decretal part of the judgment of the majority.
V.D.K. Appeals dismissed.
| IN-Abs | The appellant manufactures steel tubes in the outskirts of Ahmedabad city.
It started its business in 1960, went into production since 1964 and waggled from infancy to adulthood with smiling profits and growling workers, punctuated by smouldering demands, strikes and settlement until there brewed a confrontation culminating in a head on collision following upon certain unhappy happenings.
A total strike ensued whose chain reaction was a whole sale termination of all employees followed by fresh recruitment of workmen defacto breakdown of the strike and dispute over restoration of the removed workmen.
As per the last settlement between the management and the workmen of 4th August, 1972, it was not open to the workmen to resort to a strike till the expiry of a period of five years; nor could the management declare a lock out till then.
Any dispute arising between the parties, according to the terms arrived at were to be sorted out through negotiation or, failing that by recourse to arbitration.
The matter was therefore, referred to an arbitrator and the arbitrator by his award held the action cf the management warranted.
The respondent challenged the decision of the arbitrator under Article 226/227 of the Constitution and the High Court of Gujarat reversed the award and substantially directed reinstatement.
Hence the appeals both by the Management and the workmen.
Dismissing the appeals and modifying the awards substantially, the Court ^ HELD: (By Majority) Per Iyer J.
On behalf of D. A. Desai J. and himself.
(i) The basic assumption is that the strike was not only illegal but also unjustified.
[210 H] 147 (ii) The management did punish its 853 workmen when it discharged them for reasons of misconduct set out in separate but integrated proceedings; even though with legal finesse, the formal order was phrased in harmless verbalism.
[211 A] (iii) The action taken under the general law or the standing orders, was illegal in the absence of individualised charge sheets, proper hearing and personalise punishment if found guilty.
None of these steps having been taken, the discharge orders were still born.
But, the management could, as in this case it did, offer to make out the delinquency of the employees and the arbitrator had, in such cases, the full jurisdiction to adjudge de novo both guilt and punishment.
[211 B C] (iv) Section 11A of the does take in an arbitrator too, and in this case, the arbitral reference, apart from section 11A is plenary in scope.
[211 C D] (v) Article 226 of the Constitution, however restrictive in practice Is a power wide enough in all conscience, to be a friend in need when the summons comes in a crisis from a victim of injustice; and more importantly this extra ordinary reserve power is unsheathed to grant final relief without necessary recourse to a remand.
What the Tribunal may in its discretion do the High Court too under Article 226, can, if facts compel so.
[211 D E] (vi) The Award, in the instant case, suffers from a fundamental flaw that it equates an illegal and unjustified strike with brozen misconduct by every workman without so much as identification of the charge against each, after adverting to the gravamen of his misconduct meriting dismissal.
Passive participation in a strike which is both illegal and unjustified does not ipso facto invite dismissal or punitive discharge.
There must be active individual excess such as master minding the unjustified aspects of the strike, e.g., violence, sabotage or other reprehensible role.
Absent such gravamen in the accusation, the extreme economic penalty of discharge is wrong.
An indicator of the absence of such grievous guilt is that the management, after stating in strong terms all the sins of workmen, took back over 400 of them as they trickled back slowly and beyond the time set, with continuity of service, suggestive of the dubiety of the inflated accusations and awareness of the minor role of the mass of workmen in the lingering strike.
Furthermore, even though all sanctions short of punitive discharge may be employed by a Management, low wages and high cost of living, dismissal of several hundreds with disastrous impact on numerous families is of such sensitive social concern that, save in exceptional situations, the law will inhibit such a lethal step for the peace of the industry, the welfare of the workmen and the broader justice that transcends transcient disputes.
The human dimensions have decisional relevance.
The discharge orders though approved by the Arbitrator are invalid.
[211 E H, 212 A B] HELD FURTHER: 1.
In a society, capital shall be the brother and keeper of labour and cannot disown this obligation of a partner in management, especially because social justice and Articles 43 and 43A are constitutional mandates.
The policy directions in Articles 39, 41, 42, 43 and 43A speak af the right to an adequate means of livelihood, the right to work, humane conditions of work, living wages ensuring a decent standard of life and enjoyment of leisure and participation of workers in management of industries.
De hors these 148 mandates, law will fail functionally.
Suck is the value vision of Indian Industrial Jurisprudence.
[155 B, G H, 156 A] 2.
Jural resolution of labour disputes must be sought in the law life complex beyond the factual blinkers of decided cases, beneath the lexical littleness of statutory tests, in the economic basics of industrial justice which must enliven the consciousness of the Court and the corpus juris.
[154 F G] The golden rule for the judicial resolution of an industrial dispute is first to persuade fighting parties, by judicious suggestions, into the peace making zone, disentangle the differences, narrow the mistrust gap and convert them through consensual steps, into negotiated justice.
Law is not the last word in justice, especially social justice.
Moreover in an hierarchical system, the little man lives in the short run but most litigation lives in the long run.
So it is that negotiation first and adjudication next, is a welcome formula for the Bench and the Bar, the Management and Union.
[157 C E] The anatomy of a dismissal order is not a mystery, once it is agreed that substance, not semblance, governs the decision.
Legal criteria are not so slippery that verbal manipulations may outwit the Court.
The fact is the index of the mind and an order fair on its face may be taken at its face value.
But there is more to it than that, because sometimes words are designed to conceal deeds by linguistic engineering.
The form of the order of the language in which it is couched is not conclusive.
The Court will lift the veil to see the the nature of the order.
[171 G H. 172 A] If two factors motive and foundation of the order co exist, an interference of punishment is reasonable though not inevitable.
If the severance of service is effected the first condition is fulfilled and if the foundation or causa causans of such severance is the servant 's misconduct, the second is fulfilled.
If the basis or foundation for the order of termination is clearly not turpitudes or stigmatic or rooted in misconduct or visited with evil pecuniary effects, then the inference of dismissal stands negated and vice versa.
These canons run right through the disciplinary branch of master and servant jurisprudence, both under Article 311 and in other cases including workmen under managements.
The law cannot be stultified by verbal haberdashery because the Court will lift the mask and discover the true face.
[172 C E] Masters and servants cannot be permitted to play hide and seek with the law of dismissals and the plain and proper criteria are not to be misdirected by terminological cover ups or by appeal to psychic processes but must be grounded on the substantive reason for the order, whether disclosed or undisclosed.
The Court will find out from other proceedings or documents connected with the formal order of termination what the true ground for the termination is.
If thus scrutinised the; order has a punitive flavour in cause or consequence, it is dismissal.
If it falls short of this test, it cannot be called a punishment.
A termination effected because the master is satisfied of the misconduct and of the consequent desirability of terminating the service of the delinquent servant, it is a dismissal even if he had the right in law to terminate with an innocent order under the standing order or otherwise.
Whether, in such a case the grounds are recorded in a different proceeding from the formal order does not detract from its nature.
Nor the fact that, after being satisfied of the guilt, the master abandons the enquiry and proceeds to terminate.
Given 149 an alleged misconduct and a live nexus between it and the termination of service the conclusion is dismissal, even if full benefits as on simple termination are given and non injurious terminology is used.
[173 E H, 174 A] On the contrary, even if there is suspicion of misconduct, the master may say that he does not wish to bother about it and may not go into his guilt but may feel like not keeping a man he is not happy with.
He may not like to investigate nor take the risk of continuing a dubious servant.
There it is not n dismissal, but termination simpliciter, if no injurious record of reasons or punitive pecuniary cut back on his full terminal benefits is found.
For, in fact, misconduct is not then the moving factor in the discharge, What is decisive is the plain reason for the discharge, not the strategy of a non enquiry or clever avoidance of stigmatising epithets.
If the basis is not misconduct, the order is saved.
[174 B D] Management of Murugan Mills vs Industrial Tribunal ; ; Chartered Bank vs Employees ' Union ; ; Western India Automobile Association vs Industrial Tribunal, Bombay ; Assam Oil Co. vs Workmen; , ; Tata Oil Mills Co. vs Workmen, ; @ 130; Tata Engineering & Locomotive Co. Ltd. vs S.C. Prasad & Anr. ; L. Michael and Anr.
vs M/s. Johnson Pumps India Ltd., ; Workmen of Sudder Office, Cinnamore vs Management, , Municipal Corporation of Greater Bombay vs P.S. Malvankar; , ; referred to.
Every wrong order cannot be righted merely because it was wrong.
It can be quashed only if it is vitiated by the fundamental flaws of gross miscarriage of justice, absence of legal evidence, perverse misreading of facts, serious errors of law on the face of the order, jurisdictional failure and the like.
[182 P G] While the remedy under article 226 is extraordinary and is of Anglosaxon vintage, it is not a carbon copy of English processes.
Article 226 is a sparing surgery but the lancet operates where injustice suppurates.
While traditional restraints like availability of alternative remedy hold back the Court, and judicial power should not ordinarily rush in where the other two branches fear to tread.
judicial daring is not daunted where glaring injustice demands even affirmative action.
The wide words of Article 226 are designed for service of the lowly numbers in their grievances if the subject belongs to the Court 's province and the remedy is appropriate to the judicial process.
There is a native hue about article 226, without being anglophilic or anglophobic in attitude.
Viewed from this jurisprudential perspective the Court should be cautious both in not over stepping as if Article 226 were as large as an appeal and not failing to intervene where a grave error has crept in.
And an appellate power interferes not when the order appealed is not right but only when it is dearly wrong.
The difference is real, though fine.
[182 G H, 183 A B] The principle of law is that the jurisdiction of the High Court under Article 226 of the Constitution is limited to holding the judicial or quasi judicial powers within the leading sings of legality and to see that they do not exceed their statutory jurisdiction and correctly administer the law laid down by the statute under the Act.
So long as the hierarchy of officers and appellate authorities created by the statute function within their ambit the manner in which they do so can be no ground for interference.
The power of judicial supervision of the High Court under Article 227 of tho Constitution (as it then stood) is not 150 greater than those under Article 226 and it must be limited to seeing that a tribunal functions within the limits of its authority.
The writ power is large, given illegality and injustice even if its use is severely disciplinary.
The amended Article 226 would enable the High Court to interfere with an Award of the industrial adjudicator if that is based on a complete misconception of law or it is based on no evidence, or that no reasonable man would come to the conclusion to which the Arbitrator has arrived.
[15 E G 1 86 D E] Navinchandra Shanker Chand Shah vs Manager, Ahmedabad Cooperative Department Stores Ltd., @ 140; approved.
Rohtas Industries & Anr.
vs Rohtas Industries Staff Union and Ors. ; followed.
Nagendranath Bata and Anr.
vs The Commissioner of Hills Divisions and Appeals, Assam & Ors.
, ; ; Engineering Mazdoor Sabha vs Hind Cycle Lrd.
[1963] Suppl.
1 SCR 625; State of A.P. vs Sreeeama Rao, ; @ 33; P. H. Kalyani vs M/s Air France, Calcutta, ; ; referred to. "Tribunal" simpliciter has a sweeping signification and does not exclude Arbitrator.
A tribunal literally means a seat of justice, may be, a commission, a Court or other adjudicatory organ created by the State.
All these are tribunal and naturally the import of the word, in Section 2(r) of the , embraces an arbitration tribunal.
[188 E F H 189 A] Dawking vs Rokely, L.R. 8 Q.B. 255; quoted with approval.
An Arbitrator has all the powers under the terms of reference, to which both sides are party, confer.
In the instant case, the Arbitrator had the authority to investigate into the propriety of the discharge and the veracity of the mis conduct.
Even if section 11A of the is not applicable, an Arbitrator under Section 10A is bound to act in the spirit of the legislation under which he is to function.
A commercial Arbitrator who derives his jurisdiction from the terms of reference will by necessary implication be bound to decide according to law and when one says "according to law", it only means existing law and the law laid down by the Supreme Court being the law of land, an Arbitrator under section 10A will have to decide keeping in view the spirit of section 11A. [196 B D] Union of India vs Bungo Steel Furniture (P) Ltd. ; ; referred to.
Per Koshal J. (Contra) 1.
The orders of discharge could not be regarded as orders of their dismissal and were on the other hand, orders of discharge simpliciter properly passed under Model Standing order 23.
[235 C D] (a) Clauses (3) and (4) of M.S.O. 25 speak of an inquiry only in the case of an order falling under sub clause (g) of clause (1) of that M.S.O. The only sub clause of clause (1) of M.S.O. 25 to which the provisions of clauses (3) and (4) of that M.S.O. would be attracted is sub clause (g) and if an order of discharge falls under M.S.O. 23, an inquiry under clauses (3) and 151 (4) of M.S.O. 25 would not be a pre requisite thereto even though such an a older is mentioned in sub clause (f) clause (1) of that M.S.O. [222 H, 223 A] (b) Under M.S.O.s.
23 and 25, the Management has the powers to effect termination of the services of an employee by having recourse to either or them.
In action taken under M.S.O. 23, no element of punishment is involved and the discharge is a discharge simpliciter; and that is why no opportunity to the concerned employee to show cause against the termination is provided for.
Dismissal, however, which an employer may order is in its very nature, a punishment, the infliction of which therefore has been made subject to the result of an inquiry (having the semblance of a trial in a criminal proceeding).
Exercise of each of the two powers has the effect of the termination of the services of the concerned employee but must be regarded, because of the manner in which each has been dealt with by the M.S.O. as separate and distinct from the other.
[223 C E] (c) To contend that once it was proved that the order of discharge of a workman was passed by reason of a misconduct attributed to him by the management, the order cannot but amount to an order of dismissal is wrong for two reasons.
For one thing, clause (1) of M.S.O. 25 specifically states in sub clauses (f) that a workman guilty of misconduct may be discharged under M.S.O. 23.
This clearly means that when the employer is satisfied that a workman has been guilty of misconduct he may [apart from visiting the workman with any of the punishments specified in sub clauses (a), (b), (c), (d) and (e) of clause (1) of M.S.O. 25] either pass against him an order of discharge for which no inquiry precedent as, provided for in clauses (3) and (4) of M.S.O. 25 would be necessary, or may dismiss him after holding such an inquiry which of the two kinds of order, the employer shall pass is left entirely to his discretion.
[223 E H] It is true that the employer cannot pass a real order of dismissal in the garb of one of discharge.
But that only means that if the order of termination of services of an employee is in reality intended to push an employee and not merely to get rid of him because he is considered useless, inconvenient or troublesome, the order even though specified to be an order of dismissal covered by sub clause (g) of clause (1) of M.S.O. 25.
On the other hand if no such intention is made out the order would remain one of discharge simpliciter even though it has been passed for the sole reason that a misconduct is imputed to the employee.
That is how M.S.Os. 23 and 25 have to be interpreted.
M.S.O. 25 specifically gives to the employer the power to get rid of "a workman guilty of misconduct ' by passing an order of his discharge under M.S.O. 23.
[224 A D] Secondly, the reasons for the termination of service of a permanent workman under M.S.O. 23 have to be recorded in writing and communicated to him if he so desires, under clause (4 A) thereof.
Such reasons must obviously consist of an opinion derogatory to the workman in relation to the performance of his duties, and whether such reasons consist of negligence, work shirking or of serious overt acts like theft or embezzlement, they would in and case amount to misconduct for which he may be punished under M.S.O. 25.
There being no case in which such reasons would not amount to misconduct, the result is that M.S.O. 23 would be render otiose if termination of service thereunder for misconduct could be regarded as a dismissal and such a result strikes at the very root of accepted canons of interpretation.
If it was open to the Court to.
"lift 152 the veil" and to hold an order of discharge to amount to dismissal merely because the motive behind it was a misconduct attributed to the employee, the services of an employee could be terminated without holding against him an inquiry such as is contemplated by clauses (3) and (4) of M.S.O. 25.
[224 D G] Bombay Corporation vs Malvankar ; ; applied.
Merely because it is the reason which weighed with the employer in effective the termination of services would not male the order of such termination as one founded on misconduct, for such a proposition would run counter to the plain meaning of clause (1) of M.S.O. 25.
For an order to be "founded" an misconduct, it must be intended to have been passed by way of punishment, that is, it must be intended to chastise, or cause pain in body or mind or harm or loss in reputation or money to the concerned worker.
If such an intention cannot be spelled out of the prevailing circumstances, the order of discharge or the reasons for which it was ostensibly passed, it cannot be regarded as an order of dismissal.
Such would be the case when the employer orders discharge or the interests of the factory or of the general body of workers.
[226 A C] Chartered Bank, Bombay vs The Chartered Bank Employees Union, ; ; The Tata Oil Mills Co. Ltd. [1964] 2 SCR p. 123; The Tara Engineering and Locomotives Co. Ltd. vs S.C. Prasad, ; Workmen of Sudder Office, Cinnamore vs Management, followed.
The real criterion which formed the touchstone of a test to determine whether an order of termination of services is an order of discharge simpliciter or amounts to dismissal is the real nature of the order, that is, the intention with which it was passed.
If the intention was to punish, that is to chastise, the order may be regarded as an order of dismissal; and for judging the intention, the question of mala fides (which is the same thing as colourable exercise of power) becomes all important.
If no mala fides can be attributed to the management, the order of discharge must be regarded as one having been passed under M.S.O. 23 even though the reason for its passage is serious misconduct.
(2) The arbitrator could not exercise tho power conferred on a Tribunal under section 11A of the 1947 Act and could not therefore interfere with the punishment awarded by the Management to the workmen (even if the discharge could be regarded a punishment).
[235 D E] Throughout the I.D. Act, while 'arbitrator ' would include an umpire, a Tribunal would not include an arbitrator but would mean only an Industrial Tribunal constituted under the Act unless the context makes it necessary to give the word a different connotation.
In sub section (1) of section 11, the word 'Tribunal ' has been used in accordance with the definition appearing in clause (r) section 2 because an arbitrator is separately mentioned in that sub section.
In sub sections (2) and (3) of that section a Board, a Labour Court, a Tribunal and a National Tribunal have been invested with certain powers.
A Tribunal as contemplated by sub sections (2) and (3) then, would not include an arbitrator.
[233 A B] It is a well settled canon of interpretation of statutes that the language used by the Legislature must be regarded as the only source of its intention unless such language is ambiguous, in which situation the Preamble to the Act, the statement of objects of and Reasons for bringing it on the statute book and 153 the purpose underlying the legislation may be taken into consideration for ascertaining such intention.
That the purpose of the legislation is to fulfil a socio economic need, or the express object underlying it does not come into the picture till an ambiguity is detected in the language and the Court must steer clear of the temptation to mould the written word according to its own concept of what should have been enacted.
It is thus not permissible for the Supreme Court to take the statements of objects and Reasons or the purpose underlying the enactment into consideration, while interpreting section 11A of the I.D. Act.
[231 F G, 234 Cl 3.
The High Court exceeded the limits of its jurisdiction in interfering with the said punishment, in the instant case, purporting to act in the exercise of its powers under Article 227 of the Constitution of India.
[235 E F] The High Court, while discharging its functions as envisaged by that Article, does not sit as a Court of Appeal over the Award of the Arbitrator but exercises limited jurisdiction which extends only to seeing that the arbitrator has functioned within the scope of his legal authority.
In this view of the matter it was not open to the High Court to revise the punishment (if the discharge is regarded as such) meted out by the Management to the delinquent workmen and left intact by the arbitrator whose authority in doing so has not been shown to have been exercised beyond the limits of his jurisdiction.
[234 G E, 235 A C] Nagendra Nath Bora and Anr.
vs The Commissioner of Hills Division and Appeals, Assam and Ors.
, ; ; P. H. Kalyani vs M/s Air France, Calcutta, ; , of A.P. vs Sree Rama Rao, ; ; Navinchandra Shakerchand Shakerchand Shah vs Manager Ahmedabad Cooperative Stores Ltd, ; referred to.
|
ivil Appeal Nos.
171 172 of 1973.
From the Judgment and Order dated 9 3 1972 of the Calcutta High Court in I.T Reference No. 117/67.
D. V. Patel, section P. Nayar and Miss A. Subhashini for the Appellant.
B. B. Ahuja (Amicus Curiae) for the Respondent.
TULZAPURKAR, J.
These two appeals by certificate raise an important question as regards the proper construction of section 33B of the Indian Income Tax Act, 1922 with particular bearing on the scope of sub section
(4) thereof and the effect of sub section
(2) (b) on the sub section
The facts giving rise to the aforesaid question may briefly be stated: The assessment years involved are 1957 58 and 1958 59 corresponding to the accounting years ending March 31, 1957 and March 31, 1958 respectively.
On or about August 5, 1960 the respondent assessee submitted voluntary returns, inter alia, for the said two assessment years alongwith a declaration dated August 8, 1960.
The assessment for these years were completed on August 12, 1960 by the Income Tax Officer, 'E ' Ward, District II(1) Calcutta on total incomes of Rs. 7,000/ and 7,500/ respectively, the same having been made in the status of unregistered firm consisting of three partners, namely, 273 Asha Devi Vaid, Santosh Devi Vaid and Sugni Devi Vaid with equal shares.
On August 2, 1962, the Commissioner of Income Tax issued a notice to show cause why the said assessments should not be cancelled under section 33B of the Act as he felt that the completed assessments were erroneous as being prejudicial to the interests of the revenue and that the Income Tax Officer, 'E ' Ward, District II(1) Calcutta had no territorial jurisdiction over the case of the assessee.
The notice was served on the assessee on August 3, 1962 and the hearing was fixed by the Commissioner for August 6, 1962.
On the ground that none appeared and that there was no application for adjournment, the Commissioner passed his order under section 33B ex parte on that date.
By his said order the Commissioner cancelled the assessments made by the Income Tax Officer on August 12, 1960 on three grounds: (a) that some of the partners were minors and were not competent to enter into any partnership agreement with the result that the status of unregistered firm assigned to the assesse by the Income Tax Officer was clearly wrong and as such the assessments deserved to be cancelled, (b) that the books of account were unreliable and they were not properly examined by the Income Tax Officer with the result that the assessments made were prejudicial to the interests of the revenue and (c) that the Income Tax Officer concerned had no territorial jurisdiction over the case which fell within the jurisdiction of Income Tax Officer, District III(II) Calcutta, and directed the I.T.O. having proper jurisdiction to make fresh assessments after examining the record of the assesse in accordance with law.
In the appeals preferred to the Appellate Tribunal under section 33B(3) the respondent assessee challenged the said order of the Commissioner on various grounds.
The Tribunal, negativing all other contentions of the respondent assessee, came to the conclusion that on merits the facts justified the assumption of jurisdiction under section 33B by the Commissioner but held that the Commissioner had not conformed to the requirements of natural justice by putting to the respondent assessee what case it had to meet and by giving due opportunity for explaining the same.
The Tribunal noted that the Commissioner had disposed of the matter at 11.30 A.M. when none appeared on behalf of the respondent assessee while the notice served upon the latter permitted filing of objections at any time during the course of August 6, 1962 and objections had been filed by the respondent assessee later in the day.
The Tribunal, therefore, allowed the appeals, vacated the Commissioner 's order dated August 6, 1962 and remanded the case to him with the 274 direction to dispose it of afresh after giving due opportunity to the respondent assessee.
Feeling aggrieved by the Tribunal 's aforesaid order dated July 5, 1965 the appellant sought to refer a set of six questions of law said to arise out of the said order to the Calcutta High Court but the Tribunal referred the following two questions only for the opinion of the High Court: "1.
Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the assumption of jurisdiction by the Commissioner under section 33B of the Income Tax Act was valid in law? 2.
Whether, on the facts and in the circumstances of the case, the Tribunal acted properly by vacating the order of the Commissioner under section 33B of the said Act and in directing him to dispose of the proceedings under the said section afresh after giving due opportunity to the assessee?" The High Court disposed of the Reference (I.T. Reference No. 117 of 1967) by its judgment dated March 9, 1972 whereby it answered the first question in the affirmative against the assessee, that is to say, on merits it held that the assessments made by the Income Tax Officer required revision at the hands by the Commissioner.
As regards the second question the High Court was of the view that it comprised two aspects, one relating to the vacating of the Commissioner 's order and the other relating to the giving of a direction to him to dispose of the case under section 33B afresh after giving due opportunity to the assessee and the High Court held that in exercise of its appellate powers the Tribunal acted properly in vacating or cancelling the Commissioner 's order but did not act properly in directing him to dispose of the case afresh under section 33B(1) because the period of limitation of two years prescribed under section 33(2)(b) for him to act under section 33B(1) had expired and answered the question accordingly (i.e. in the affirmative on the first aspect and in the negative on the second aspect).
In doing so the High Court held that the provision of sub section 2(b) was absolute and covered even a revisional order of the Commissioner passed in pursuance of a direction given by any appellate authority and relied in that behalf on the aspect that, unlike 2nd proviso to sec.
34(3), there was no provision removing or relaxing the bar of limitation on the power of the Commissioner under section 33B(2) (b) .
The High Court preferred the view of the Assam High Court in C.I.T. vs Sabitri Debi 275 Agarwalla(1) to the view of the Bombay High Court in C.I.T. vs Kishoresingh Kalyansinh Solanki(2).
The Revenue has come up in appeal to this Court challenging the aforesaid view of the High Court.
Since the question relates to the proper construction of section 33B of the Act with particular bearing on the scope of the appellate powers of the Tribunal under sub section
(4) thereof and the effect of sub section
(2) (b) thereon, it will be desirable to note the material provisions of section 33B.
Under sub section
(1) power has been conferred upon the Commissioner to revise Income Tax Officer 's orders but the exercise of such power is regulated by the two conditions mentioned therein, namely, (a) he must consider the order sought to be revised to be erroneous as being prejudicial to the interests of the revenue and (b) he must give an opportunity to the assessee of being heard before revising it.
Sub section
(2) (b) prescribes a period of limitation in negative words by providing that "no order shall be made under sub section
(1) after the expiry of two years from the date of the order sought to be revised.
" Sub section
(3) confers on the assessee a right to prefer an appeal to the Appellate Tribunal against the Commissioner 's order made under sub section
(1) while sub section
(4) indicates the powers of the Appellate Tribunal in dealing with such appeal by providing that "such appeal shall be dealt with in the same manner as if it were an appeal under sub section
(1) of section 33".
Two things stand out clearly or a fair reading of the two concerned provisions, namely, sub section
(2) (b) and sub section
The bar of limitation contained in sub s (2) (b) is on the Commissioner 's power to pass revisional orders under sub section
(1) and the same appears to be absolute in the sense that it applies to every order to be made under sub section
At the same time sub section
(4) confers on the Appellate Tribunal very wide powers which it has while dealing with an appeal under section 33(1).
In other words, the Appellate Tribunal has power "to pass such orders thereon (i.e. on the appeal) as it thinks fit".
In Hukumchand Mills(3), case this Court has explained that the word "thereon" restricts the jurisdiction of the Appellate Tribunal to the subject matter of the appeal which merely means that the Tribunal cannot adjudicate or give a finding on a question which is not in dispute and which does not form the subject matter of the appeal but the words "pass such orders thereon as it thinks fit" include all the powers (except possibly the power of enhancement) which are conferred on the Assistant Appellate Commissioner by section 31 and consequently the Tribunal has authority in exercise of its appellate powers to set aside the order appealed against and direct fresh assessment in the light of the observations made by it in its 276 judgment.
In other words, similar power is possessed by the Appellate Tribunal while dealing with the appeal under sub section (4) of section 33B.
The question that arises for our consideration is whether such a direction to dispose of the case afresh can be given to the Commissioner by the Appellate Tribunal when the period of limitation prescribed under sub section
(2) (b) has expired ? In other words, whether sub section (2) (b) of section 33B has the effect of attenuating or curtailing the appellate powers of the Tribunal under sub section
(4) ? Counsel for the Revenue contended that it was a well settled principle that all the parts of a section or statute should be construed together and that every clause of a section should be construed with reference to the context and other clauses thereof, so that the construction put on a particular provision makes a consistent enactment of the whole statute.
He further urged that the object of conferring revisional power upon the Commissioner under section 33B(1) obviously was to correct erroneous orders of Income Tax Officer in so far as they were prejudicial to the interests of the revenue and such object would be defeated if the bar of limitation contained in sub section
(2)(b) is held applicable to revisional orders passed by the Commissioner in pursuance of or in obedience to a direction given or order made by the Appellate Tribunal in appeal under section 33B(4) or for that matter by the High Court or Supreme Court in case the matter is carried to those Courts.
According to him it would be proper to construe the provision in sub section 2(b) as being applicable to suo motu revisional orders passed by the Commissioner under sub section
(1) and not to orders passed by him in pursuance of a direction issued to him by the Tribunal in appeal.
He urged that there was no reason why sub section
(2) (b) should be regarded as having the effect of attenuating or curtailing the very wide appellate powers conferred upon the Tribunal.
He further urged that no argument could be based on the absence of a provision, similar to the 2nd proviso to section 34(3), in section 33B of the Act the support of his contention strong reliance was placed by him upon the Bombay High Court 's decision in Solanki 's case (supra).
On the other hand, counsel for the assessee canvassed the High Court 's view for our acceptance by pointing out that both sections 33B and 34(3) together with the second proviso were introduced in the Act by the same Amending Act 1948 but in section 33B no provision for removing or relaxing the bar of limitation contained in sub section
(2)(b) was made and hence it was not for the Court to supply a casus omissus.
He also relied on the fact that in the 1961 Act the necessary provision has been enacted in section 263(3) which also showed that in the absence of such provision in section 33B of the 1922 Act the bar of sub section
(2) (b) was 277 applicable to every order of the Commissioner irrespective of whether it was made suo motu or in pursuance of a direction issued by the appellate authority.
According to him since the bar of limitation contained in sub section
(2) (b) of section 33B always operated for the benefit of the assessee as the same accorded finality to the assessment orders, the appellate powers of the Tribunal under sub section
(4) must be regarded as having been curtailed to the extent that the Tribunal cannot remand the case to the Commissioner for making fresh assessment if by then the limitation has expired.
Two principles of construction one relating to casus omissus and the other in regard to reading the statute as a whole appear to be well settled.
In regard to the former the following statement of law appears in Maxwell on Interpretation of Statutes (12th Edn.) at page 33: Omissions not to be inferred "It is a corollary to the general rule of literal construction that nothing is to be added to or taken from a statute unless there are adequate grounds to justify the inference that the legislature intended something which it omitted to express.
Lord Mersey said: 'It is a strong thing to read into an Act of Parliament words which are not there, and in the absence of clear necessity it is a wrong thing to do. ' 'We are not entitled, ' said Lords Loreburn L.C., 'to read words into an Act of Parliament unless clear reason for it is to be found within the four corners of the Act itself. ' A case not provided for in a statute is not to be dealt with merely because there seems no good reason why it should have been omitted, and the omission in consequence to have been unintentional." In regard to the latter principle the following statement of law appears in Maxwell at page 47: A statute is to be read as a whole "It was resolved in the case of Lincoln College [(1595) 3 Co. Rep. 58b, at p. 59b] that the good expositor of an Act of Parliament should 'make construction on all the parts together, and not of one part only by itself. ' Every clause of a statute is to 'be construed with reference to the context and other clauses of the Act, so as, as far as possible, to make a consistent enactment of the whole statute. ' (Per Lord Davey in Canada Sugar Refining Co., Ltd. vs R : 278 In other words, under the first principle a casus omissus cannot be supplied by the Court except in the case of clear necessity and when reason for it found in the four corners of the statute itself but at the same time a casus omissus should not be readily inferred and for that purpose all the parts of a statute or section must be construed together and every clause of a section should be construed with reference to the context and other clauses thereof so that the construction to be put on a particular provision makes a consistent enactment of the whole statute.
This would be more so if literal construction of a particular clause leads to manifestly absurd or anomalous results which could not have been intended by the Legislature. "An intention to produce an unreasonable result", said Danckwerts L.J. in Artemiou vs Procopiou(1) "is not to be imputed to a statute if there is some other construction available.
" Where to apply words literally would "defeat the obvious intention of the legislation and produce a wholly unreasonable result" we must "do some violence to the words" and so achieve that obvious intention and produce a rational construction, (Per Lord Reid in Luke vs I.R.C. 1968 AC 557 where at p. 577 he also observed: "this is not a new problem, though our standard of drafting is such that it rarely emerges.
In the light of these principles we will have to construe sub section
(2) (b) with reference to the context and other clauses of section 33B. Section 33B was introduced in the Indian Income Tax Act, 1922 by the Income Tax and Business Profit Tax (Amendment) Act, 1948 with effect from March 30, 1948 and the object of introducing the same was obviously to confer revisional powers upon the Commissioner to correct the erroneous orders of an Income Tax Officer in so far as they were prejudicial to the interests of the revenue.
The language of the sub sec.
(1) clearly suggests that the said power was contemplated to be exercised suo motu by the Commissioner inasmuch as the opening words show that it was upto the Commissioner to call for and examine the record of any proceedings under the Act and on examination of the record if he were satisfied that any order passed by an Income Tax Officer was erroneous as being prejudicial to the interests of the revenue he could revise the same after giving an opportunity to the assessee of being heard.
It is true that sub section
(2) (b) thereof prescribed a period of limitation on his power by providing that no order shall be made under sub section
(1) after the expiry of two years from the date of the order sought to be revised by the Commissioner and a literal construction of sub section
(2) (b) also suggests that the bar of limitation imposed thereby was absolute in the sense that it applied to every kind of order to be made under sub section
(1) and no distinction was made between a 279 suo motu order and an order that might be made by him pursuant to a direction given by any appellate or other higher authority but the question is whether such a literal construction should be accorded to that provision ? As stated earlier sub section
(3) conferred on an assessee a right to prefer an appeal to the Appellate Tribunal against the Commissioner 's order made under sub section
(1) and under sub section
(4) the Tribunal had authority to deal with the impugned order of the Commissioner in such manner as it deemed fit in exercise of its appellate powers; for instance, it could confirm the impugned order, it could annul that order, it could after vacating it remand the case back to the Commissioner for making a fresh assessment in the light of the observations made by it in its judgment or it could, after calling for a remand report, rectify the erroneous order of the Income Tax Officer.
Further there was no period prescribed within which an appeal against the impugned order of The Commissioner had to be disposed of by the Tribunal and in the normal course on rare occasions such appeals would have been heard and disposed of before the expiry of two years from the date of the Income Tax Officer 's order which was regarded as erroneous by the Commissioner.
More often than not such appeals would come up for hearing after the expiry of the said period of two years a fact fully known and within the contemplation of the Legislature when it introduced the section in the Act in 1948.
In these circumstances did the Legislature intend to attenuate or curtail the appellate powers which it conferred on the Appellate Tribunal in very wide terms under sub section
(4) by enacting sub section
(2) (b) prescribing a time limit on the Commissioner 's power to revise an erroneous order of the Income Tax Officer when the Commissioner was seeking to exercise the same not suo motu but in pursuance of or obedience to a direction from the Appellate authority ? According to the construction contended for by the assesses and which found favour with the High Court the answer was in the affirmative because sub section
(2) (b), on its literal construction, was absolute.
In our view such literal construction would lead to a manifest y absurd result, because in a given case, like the present one, where the appellate authority (Tribunal) has found (a) the Income Tax Officer 's order to be clearly erroneous as being prejudicial to the interests of the revenue and (b) the Commissioner 's order unsustainable as being in violation of principles of natural justice how should the appellate authority exercise its appellate powers ? obviously it could not withhold its hands and refuse to interfere with Commissioner 's order altogether for, that would amount to perpetuating the Commissioner 's erroneous order, nor could it merely cancel or set aside the Commissioner 's wrong order without doing anything about the Income Tax Officer 's order, for.
that would result in perpetuating the Income Tax 280 Officer 's order which had been found to be manifestly erroneous as being prejudicial to the revenue.
But such result would flow from the view taken by the High Court which has held that the Tribunal acted properly in vacating the Commissioner 's order but did not act properly in directing him to dispose of the proceedings afresh after giving opportunity to the assesses.
Such manifestly absurd result could never have been intended by the Legislature.
Moreover, it was fairly conceded by the counsel for the assesses before us that in exercise of its appellate powers it was open to the Tribunal itself to call for a remand report from either the Commissioner or the Income Tax Officer and rectify the Income Tax Officer 's erroneous order after giving opportunity to the assesses and in doing so no question of limitation would arise.
It was also not disputed by him that it was equally open to the Tribunal to set aside the Commissioner 's order and remand the case directly to the Income Tax Officer giving the requisite direction to rectify his erroneous order and thereupon the Income Tax Officer could carry out the Tribunal 's direction.
for, admittedly, the bar of limitation under 1) sub section
(2) (b) was only on the Commissioner 's paver to make an assessment afresh and not on the Income Tax Officer.
If this be the correct position then it is gravely anomalous that the Tribunal should not be in a position to set aside the Commissioner 's order and remand the case back to the Commissioner for making a fresh assessment because in the meantime two years ' period of limitation has expired, for, it would mean that the Tribunal was prevented from achieving the desired effect directly through the Commissioner but it could do so indirectly through the Income Tax Officer.
A literal construction placed on subs.
(2) (b) would lead to such manifestly absurd and anomalous results, which, we do not think, were intended by the Legislature.
These considerations compel us to construe the words of sub section (2)(b) as being applicable to suo motu orders of the Commissioner in revision and not to orders made by him pursuant to a direction or order passed by the Appellate Tribunal under sub section
(4) or by any other higher authority.
Such construction will be in consonance with the principle that all parts of the section should be construed together and every clause thereof should be construed with reference to the context and other clauses thereof so that the construction put on that particular provision makes a consistent enactment of the whole statute.
Having regard to the above discussion we are clearly of opinion that the view taken by the Bombay High Court in Solanki 's case (supra) on the construction of sub section
(2) (b) of section 33B is correct and we approve of it.
In Sabitri Devi Agrawalla 's case (supra) the Assam High Court took a contrary view and held that under section 33B(4) of the 281 Act the Tribunal would not be justified in remanding the case to the Commissioner after the two years had expired from the date of the order sought to be revised.
The decision seems to rest on three aspects: (a) it being fiscal statute the same must be strictly construed, (b) the bar of limitation contained in sub section
(2)(b) was absolute and unqualified and covered all types of orders and (c) that unlike the second proviso to section 34(3) there was no provision for removing or relaxing the bar of limitation on the power of the Commissioner under section 33B (2) (b) and that since section 33B as well as section 34(3) with second proviso had been introduced in the Act by the same Amending Act of 1948 there was a deliberate omission to make a provision removing of relaxing the 'oar of limitation in section 33B and for such an omission the remedy lay with the Legislature and not with the Court.
The Assam High Court also alluded to the fact that under the 1961 Act the Legislature had made a provision removing or relaxing the bar of limitation in section 263(3).
As regards aspect (b) we have already dealt with it above.
As regards aspect (a) it is well settled that the principle that the fiscal statute should be construed strictly is applicable only to taxing provisions such as a charging provision or a provision imposing penalty and not to those parts of the statute which contain machinery provisions and by no stretch could section 33B be regarded as a charging provision.
As regards aspect (c) we have already pointed out above that a casus omissus has not to be readily inferred and it could not be inferred from the mere fact that both sections 33B and 34(3) together with the second proviso were inserted simultaneously in the Act by the same Amending Act of 1948 and that in the case of former a relaxing provision was not made as was made in the case of the latter provision, firstly because the two provisions operated in distinct fields and secondly it would be improper to do so without comparing the various stages of amendments through which each set of these provisions had undergone since inception.
The further aspect that the Legislature has in the 1961 Act made the requisite provision removing or relaxing the bar of limitation in section 263(3), is, in our view, not of much consequence.
Irrespective of the question whether the second proviso to section 34(3) was enacted ex majore cautella or not (over which conflicting views obtain), it is clear to us that section 263(3) of the 1961 Act must be regarded as an ex majore cautella provision.
Admittedly, at the time when the said provision was enacted in the 1961 Act, the Bombay view held the field and, there was no decision to the contrary of any other High Court.
Obviously, therefore, the enactment of section 263(3) must be regarded as declaratory of the law which was already prevailing and this position has been clarified in the Notes on Clauses of the Income Tax Bill 1961 where it has been stated that sub cl.
(3) of section 263 was new and had been 19 282 added to get over the difficulty experienced in (wrongly state 'caused by ') the Bombay High Court 's; decision in Solanki 's case (supra) .
The enactment of an ex majore cautella provision in the 1961 Act would, therefore, be a legislative recognition of the legal position that obtained as a result of judicial pronouncement qua the 1922 Act.
In our view, therefore.
the Assam case was wrongly decided.
Reference may now be made to a decision of this Court in Pooran Mall 's case, where in a similar situation arising under section 132 of the Income Tax Act, 1961, a restricted construction was accorded by this Court to sub section
(5) thereof which prescribed certain period of limitation.
In that case pursuant to an authorisation issued under section 132(1) of the 1961 Act searches were carried out on October 15 and 16, 1971 at the residence and business premises of P, an individual, and at certain office premises of the firms in which he was a partner, and jewellery, cash and account books were seized.
There was also a search of two banks and a restraint order was made under section 132(3) in respect of l 14 silver bars pledged with those banks on the ground that they were the property of P.
On January 12, 1972, the Income Tax Officer passed a summary order under section 132(5) on the basis that all the assets seized and 114 silver bars belonged to P. Thereupon, P & Sons, one of the firms in which P was a partner, and P filed a writ petition in the High Court challenging the order dated January 12, 1972 and on April 6, 1977, on the basis of the consent of the parties, the High Court quashed the order and permitted the department to make a fresh enquiry after giving an opportunity to the petitioner and pass a fresh order within two months.
After a fresh enquiry the Income Tax Officer passed an order on June S, 1972.
holding that the silver bars belonged to P, the individual, and not the firm, P and Sons.
Thereupon, the firm and P again filed a writ petition challenging the second order.
The High Court held that the Income Tax Officer had no jurisdiction to pass that order beyond the period prescribed in section 132(5) and set aside the order and directed the return of the 114 bars of silver.
This Court held, inter alia, that the order made in pursuance of a direction given ' under section 132(12) or by a Court in writ proceedings, was not subject to the limitation prescribed under section 132(5).
At page 394 this Court has observed thus: "Even if the period of time fixed under section 132(5) is held to be mandatory that was satisfied when the first order was made.
Thereafter, if any direction is given under section 132(2) or by a Court in writ proceedings, as in this case, we do not think an order made in pursuance of such a 283 direction would be subject to the limitations prescribed under A section 132 (5) .
Once the order has been made within ninety days the aggrieved person has got the right to approach the notified authority under section 132(11) within thirty days and that authority can direct the Income Tax Officer to pass a fresh order.
We cannot accept the contention on behalf of the respondents that even such a fresh order should be passed within ninety days.
It would make the sub sections (11) and (12) of section 132 ridiculous and useless.
" It may be pointed out that in section 132 there is no provision removing or relaxing the bar of limitation contained in section 132(5) enabling the Income Tax Officer to pass an order afresh pursuant to any direction issued to him by a higher authority under section 132(12) and even the this Court took the view that the limitation prescribed under section 132(5) will be applicable only to the initial order to be made by the Income Tax Officer and not to an order that would be made by him pursuant to a direction from the Board or notified authority.
The concerned provisions were read together and such construction was put on sub section
(5) of section 132 as made a consistent enactment of the whole statute.
In the result, we are of opinion that the answer given by the High Court to the second aspect of the second question referred to it was clearly wrong and, in our view, the Tribunal 's order vacating the Commissioner 's order and directing the Commissioner to make assessment afresh after giving due opportunity to the respondent assessee was proper.
The appeal is accordingly allowed but in the circumstances, there will be no order as to costs.
V.D.K. Appeal allowed.
| IN-Abs | In respect of the accounting years ending March 31, 1957 and March 1958 respectively on the voluntary returns submitted by the respondent, the Income Tax Officer 'E ' Ward District II (1) Calcutta completed the assessment for these years (1957 58 and 1958 59) on total incomes of Rs. 7000/ and Rs. 7500/ respectively, the same having been made in the status of unregistered firm consisting of three partners, namely Asha Devi Vaid, Santosh Devi Vaid and Sugni Devi Vaid with equal shares.
On August 2, 1962, the Commissioner of Income Tax issued notice to show cause why the said assessments should not be cancelled under section 33B of the Act as he felt that the completed assessments were erroneous as being prejudicial to the interests of the Revenue and the Income Tax Officer 'E ' Ward District II(1) Calcutta had no territorial jurisdiction over the case of the assessee.
The notice was served on the assessee on August 3, 1962 and the hearing was fixed by the Commissioner for August 6, 1962.
On the ground that none appeared and there was no application for adjournment, the Commissioner passed his order under section 33B ex parte on that date.
By his said order the Commissioner cancelled the assessments made by the Income Tax Officer on three grounds (a) that some of the partners were minors and were not competent to enter into any partnership agreement with the result that the status of unregistered firm assigned to the assessee by the Income Tax Officer was clearly wrong and as such the assessments deserved to be cancelled; (b) that the books of accounts were unreliable and they were not properly examined by the Income Tax Officer with the result that the assessments made were prejudicial to the interests of the revenue and (c) that the Income Tax Officer has no territorial jurisdiction over the case which fell in the jurisdiction of Income Tax Officer, District III Calcutta and directed the Income Tax Officer having proper jurisdiction to make fresh assessments after examining the records of the assessee in accordance with law.
The appeals preferred to the Appellate Tribunal under section 33B(3) were accepted.
Finding that the Commissioner 's order passed at 11.30 A.M. ex parte was bad in as much as the notice served upon the assessee permitted filing of objections at any time during the course of August 6, 1962 and the objections were in fact filed later in the day, the Tribunal remanded the case with the direction to dispose it of afresh after giving due opportunity to the respondent assessee.
On a reference to the High Court at the instance of the appellant, the 269 High Court held: (a) the assumption of jurisdiction by the Commissioner under section 33B of the Income Tax Act was valid in law; (b) the Tribunal acted properly in vacating or cancelling the Commissioner 's order, but, (c) the Tribunal did not act properly in directing the Commissioner to act under section 33B(1) because the period of limitation of two years prescribed under section 33(2)(b) for him to act under section 33B(1) had expired.
In doing so, the High Court held that the provision of sub section 2(b) was absolute and covered even a revisional order of the Commissioner passed in pursuance of a direction given by any appellate authority.
Allowing the appeal by Certificate, the Court ^ HELD: 1.
Under sub section (1) of section 33B of the Income Tax Act, power has been conferred upon the Commissioner to revise Income Tax Officer 's orders but the exercise of such power is regulated by the two conditions mentioned therein namely, (a) he must consider the order sought to be revised to be erroneous as being prejudicial to the interests of the revenue and (b) he must give an opportunity to the assessee of being heard before revising it.
Sub section
(2)(b) prescribes a period of limitation in negative words by providing that "no order shall be made under sub s(1) after the expiry of two years from the date of the order sought to be revised".
Sub s.(3) confers on the assessee a right to prefer an appeal to the Appellate.
Tribunal against the Commissioners ' order made under sub s.(1) while sub section
(4) indicates the power of the Appellate Tribunal in dealing with such appeal by providing that "such appeal shall be dealt with in the same manner as if it were an appeal under sub s.(1) of section 33".
Two things stand out clearly on a fair reading of the two concerned provisions, namely, sub s.(2)(b) and sub s.(4).
The bar of limitation contained in sub section
(2)(b) is on the Commissioner 's power to pass revisional orders under sub section
(1) and the same appears to be absolute in the sense that it applies to every order to be made under sub s.(1).
At the same time sub s.(4) confers on the Appellate Tribunal very wide powers which it has while dealing with an appeal under section 33(1).
In other words, the Appellate Tribunal has power "to pass such orders thereon (i.e. on the appeal) as thinks fit.
" The word "thereon" restricts the jurisdiction of the Appellate Tribunal to the subject matter of the appeal which merely means that the Tribunal cannot adjudicate or give a finding on a question which is not in dispute and which does not form the subject matter of the appeal but the words "pass such orders thereon as it thinks fit" include all the powers (except possibly the power of enhancement) which are conferred on the Assistant Appellate Commissioner by section 31 and consequently the Tribunal has authority in exercise of its appellate powers to set aside the order appealed against and direct fresh assessment in the light of the observations made by it in its judgment.
In other words, similar power is possessed by the Appellate Tribunal while dealing with the appeal under sub s.(4) of section 33B. [275 A H, 276 A] Hukamchand Mills 's case, ; applied.
Two principles of construction are relating to casus omissus and the other in regard to reading the statute as a whole are well settled.
Under the first principle, a casus omissus cannot be supplied by the Court except in the case of clear necessity and when reason for it is found in the four corners of the statute itself but at the same time a casus omissus should not be readily inferred and 270 for that purpose all the parts of a statute or section must be construed together and every clause of a section should be construed with reference to the context and other clauses thereof so that the construction to be put on a particular provision makes a consistent enactment of the whole statute.
This would be more so if literal construction of a particular clause leads to manifestly absurd or anomalous results which could not have been intended by the Legislature.
[277 B, 278 A B] Artemiou vs Procopiou, , Luke vs Inland Revenue Commissioner and 577 Quoted with approval.
The object of introducing Section 33B with effect from March 30, 1948 was to confer revisional powers upon the Commissioner to correct the erroneous orders of an Income Tax Officer in so far as they were prejudicial to the interests of the revenue.
The language of the sub sec.(1) clearly suggests that the said power was contemplated to be exercised suo motu by the Commissioner inasmuch as the opening words show that it was upto the Commissioner to call for and examine the record of any proceedings under the Act and on examination of the record if he were satisfied that any order passed by an Income Tax Officer was erroneous as being prejudicial to the interests of the revenue he could revise the same after giving an opportunity to the assessee of being heard.
It is true that sub s.(2)(b) thereof prescribed a period of limitation on his power by providing that no order shall be made under sub s.(1) after the expiry of the two years from the date of the order sought to be revised by the Commissioner and a literal construction of sub s.(2)(b) also suggests that the bar of limitation imposed thereby was absolute in the sense that it applied to every kind of order to be made under sub s.(1) and no distinction was made between a suo motu order and an order that might be made by him pursuant to a direction given by any appellate or other higher authority.
Sub s.(3) conferred on an assessee a right to prefer an appeal to the appellate Tribunal against the Commissioner 's order made under sub section (1) and under sub s.(4) the Tribunal had authority to deal with the impugned order of the Commissioner in such manner as it deemed fit in exercise of its appellate powers; for instance, it could confirm the impugned order, it could annul that order, or it could after vacating it remand the case back to the Commissioner for making a fresh assessment in the light of the observations made by it in its judgment or it could after calling for a remand report, rectify the erroneous order of the Income Tax Officer.
Further there was no period prescribed within which an appeal against the impugned order of the Commissioner had to be disposed of by the Tribunal and in the normal course on rare occasions such appeals would have been heard and disposed of before the expiry of two years from the date of the Income Tax Officer 's order which was regard as erroneous by the Commissioner.
More often than not such appeals would come up for hearing after the expiry of the said period of two years a fact fully known and within the contemplation of the Legislature when it introduced the section in the Act in 1948.
[278 E H, 279 A D] 4.
The Legislature did not intend to attenuate or curtail the appellate powers which it conferred on the appellate Tribunal in very wide terms under sub s.(4) by enacting sub section 2(b) prescribing a time limit on the Commissioner 's power to reverse an erroneous order of the Income Tax Officer when the Commissioner was seeking the exercise the same not suo motu but in pursuance of or obedience to a direction from the appellate authority.
Any contrary and literal construction would lead to manifestly absurd result, because in a given 271 case, like the present one where the appellate authority (Tribunal) has found (a) the Income Tax Officer 's order to be clearly erroneous as being prejudicial to the interests of the revenue and (b) the Commissioner 's order unsustainable as being in violation of principles of natural justice; it would be difficult for the appellate authority to exercise its powers.
Obviously it could not withhold its hands and refuse to interfere with Commissioner 's order altogether, for, that would amount to perpetuating the Commissioner 's erroneous order, nor could it merely cancel or set aside the Commissioner 's wrong order without doing anything about the Income Tax Officer 's order, for that, would result in perpetuating the Income Tax Officer 's order which had been found to be manifestly erroneous as being prejudicial to the revenue.
Moreover, in exercise of its appellate powers it was open to the Tribunal itself to call for a remand report from either the Commissioner or the Income Tax Officer and rectify the Income Tax Officer 's erroneous order after giving opportunity to the assessee and in doing so no question of limitation would arise.
It was equally open to the Tribunal to set aside the Commissioner 's order and remand the case directly to the Income Tax Officer giving requisite direction to rectify his erroneous order and thereupon the Income Tax Officer would carry out the Tribunal 's direction for, admittedly, the bar of limitation under sub s.(2)(b) was only on the Commissioner 's power to make an assessment afresh and not on the Income Tax Officer.
If this be the correct position then it is gravely anomalous that the Tribunal should not be in a position to set aside the Commissioner 's order and remand the case back to the Commissioner for making a fresh assessment because in the meantime two years ' period of limitation has expired, for, it would mean that the Tribunal was prevented from achieving the desired effect directly through the Commissioner but it could do so indirectly through the Income Tax Officer.
A literal construction placed on sub s.(2) (b) would lead to such manifestly absurd and anomalous results, which, were not intended by the Legislature.
Therefore, the words of sub section 2(b) should be construed as being applicable to suo motu orders of the Commissioner in revision and not to orders made by him pursuant to a direction or order passed by the Appellate Tribunal under sub s.(4) or by any other higher authority.
Such construction will be in consonance with the principle that all parts of the section should be construed together and every clause thereof should be construed with reference to the context and other clauses thereof so that the construction put on that particular provision makes a consistent enactment of the whole statute.
[279 D H, 280 A G] Commissioner of Income Tax vs Kishoresingh Kalyan Singh Solanki, ; approved.
It is well settled that the principle that the fiscal statute should be construed strictly is applicable only to taxing provisions such as a charging provision or a provision imposing penalty and not to those parts of the statute which contain machinery provisions and by no stretch could section 33B be regarded as charging provision.
[281 C D] 6.
A casus omissus has not to be readily inferred and it could not be inferred from the mere fact that both sections 33B and 34(3) together with the second proviso were inserted simultaneously in the Act by the same Amending Act of 1948 and that in the case of former a relaxing provision was not made as was made in the case of the latter provision, firstly because the two provisions operated in distinct fields and secondly it would be improper to do so without compar 272 ing the various stages of amendments through which each set of these Provisions had undergone since inception.
The further aspect the Legislature has in the 1961 Act made the requisite provision removing or relaxing the bar of limitation, in section 263(3), is, not of much importance.
Irrespective of the question whether the second proviso to section 34(3) was enacted ex majore cautella or not (over which conflicting views obtain) it is clear that section 263(3) of the 1961 Act must be regarded as an ex majore cautella provision.
Admittedly, at the time when the said provision was enacted in the 1961 Act, the Bombay view held the field and there was no decision to the contrary of any other High Court.
Obviously, therefore, the enactment of section 263(3) must be regarded as declaratory of the law which was already prevailing and this position has been clarified in the Notes on Clauses of the Income Tax Bill 1961 where it has been stated that sub cl.
(3) of section 263 was new and had been added to get over the difficulty experienced in (wrongly stated 'caused by ') the Bombay High Court 's decision in Solanki 's case.
The enactment of an ex majore cautella provision in the 1961 Act would, therefore, be a legislative recognition of the legal position that obtained as a result of judicial pronouncement qua the 1922 Act.
[281 E H, 282 A] C.I.T. vs Sabitri Devi Agarwalla, over ruled.
Pooran Mall 's case, ; relied on.
|
Civil Appeal No. 2031 of 1979.
Appeal by Special Leave from the Judgment and Order dated 20 1 79 of the Rajasthan High Court (Jaipur Bench) at Jaipur in S.B. Revision No. 112/76.
Soli J. Sorabjee, Solicitor General, Subhodh Markendya and Girish Chandra for the Appellants.
Balakrishna Gaur for the Respondent.
The Judgment of the Court was delivered by KRISHNA IYER, J.
An odd case of sentence of three months ' civil imprisonment and attachment of assets of the Central Government and two of its officers for default in instant reinstatement of a Railway Inspector removed from service for misconduct occasions this appeal by special leave.
300 The Court System is neither a cloistered virtue nor a self righteous process and readily re examines, in its appellate crucible, the judgments rendered at lesser levels even if the subject matter be, as here, alleged disobedience of a judicial order.
Justice is not hubristic and truth triumphs by self criticism.
And so, this Court, in keeping with such an invigilative perspective, must review the punitive directive of the trial court, affirmed upto the High Court but challenged before us, that the Union of India and its officers in the Railway Department the appellants do suffer distraint of property and imprisonment of person for the contempt of its authority by non compliance with its order of injunction.
This case disturbs us somewhat and constrains us to go to the basics in a certain branch of the jurisprudence of contempt of court.
As will presently appear, the synthesis of two seemingly antithetical creeds, both vital to our Republic is the key to the crucial issue projected by this appeal where disobedience of a mandatory injunction to retain in service, pendente lite, the respondent, a railway inspector, regardless of the disciplinary proceedings which had by then allegedly culminated in his exist from service.
The court shall neither be imperious nor be obsequious.
The law, in the area of contempt of court, must avoid the extremes of hyper reactivity to marginal indifference to judicial authority out of pragmatic difficulties and of hypo respect for court commands in a cavalier spirit of 'the court has no guns.
Why care ? ' The fluid, yet valid, concept of 'contempt of court ' keeps judges under the rule of law; for, personal liberty, under our constitutional order, is protected by a processual armour, even if its deprivation be the product of the judicial process.
This caveat is called for in the present case where we are confronted by a bizarre order of contingent imprisonment of unspecified servants and coercive attachment of un particularised properties of the Union of India.
And yet, this order has survived two appeals before arriving here by special leave.
The facts are few and the law is not abstruse; yet, in our view, the order under appeal is an overzealous command with fatal failings writ on its face.
The respondent, an Inspector in the Western Railway, was proceeded against for misconduct.
He did not show up when the 'show cause ' notice was issued; and when the disciplinary steps proceeded further, he artfully rushed to the munsif 's court, by passing the departmental process, and sued for a declaration of immunity and permanent injunction against further governmental action.
Inevitably, he moved for an ad interim injunction to restrain the Railways from affecting his position in service by continuing the disciplinary enquiry and to continue to pay his full salary.
After hearing both sides the court 301 issued, on April 15, 1974, such an injunction or freeze order, which was appealed against in vain; and eventually, the revision to the High Court also proved fruitless.
The blanket order, which was sustained, reads thus: I, therefore, order and direct the N.A. Union of India and its employees not to implement or otherwise put in effect the order of dismissal at 18 1 74 or any other one removing, terminating or dismissing the services of the applicant as I.O.W. Of Western Railways and direct further that the applicant shall be retained and continued on post, power, pay, privileges and perquisites attached to the post of Inspector of Works, W. Rly, and in the same manner as if no orders of removal or any other one were passed.
In other words he shall be placed in the position as he held it on 14 1 1974 in the matter of pay, power, privileges and all other perquisites that he availed and enjoyed on 14 1 1974 and immediately before.
The appellants, hopefully but harmfully, as events proved, awaited the decision in the higher courts before implementing the direction for reinstatement.
But even while the case of injunction was pending in the District Court, in appeal, an application under 0.39 R.2(3) or disobedience was filed on 15 7 1974.
The trial judge held the appellants guilty and passed a nebulous sentence against nameless culprits on January 5, 1976 in these terms.
It is also clear that the non applicants according to the decision of this court dated 15 4 74 have not continued payment of the wages and other allowances and therefore it fully proved that the non applicants have not carried out the order dated 15 4 74 of this court.
Now the non applicants are hereby further ordered that if they fail to comply with the order dated 15.4.74 within 15 days the opposite party shall be visited with the order of attachment of property and sending them to civil jail.
As the non applicant No. 2 has been transferred from Kota Division, therefore, the compliance of the order will be made by the present Divisional Superintendent, Kota.
(Translation furnished in court by the learned Solicitor General) An unsuccessful appeal and an unrewarding revision ensued.
The High Court hortatively told the Union of India that the law is the King of Kings and, admonished in high sounding style 302 that the state functionaries should atleast after 28 years of the functioning of the Constitution and rule of law in this country, realise understand and literally and faithfully implement the judicial pronouncement by showing respect to law All the officers, the citizens in general, the litigants and the State functionaries in all seriousness should keep the following internal saying of the great jurist Maharshi Manu as uppermost in our mind, i.e. 'Law is the King of Kings far more rigid and powerful than they, there is nothing higher than law; and by its powers the weak shall prevail over the strong and justice shall triumph '.
I wish this should not only be exhibited as the guide lines in all Government offices, important public institutions, street corners and road corners but acts upon both in letter and spirit by all irrespective of the office, profession, status and assignment which one holds in life.
We agree but wish to add that the Manu text be exhibited also in courts halls together with Cromwell 's famous statement which the great Judge, learned Hand wanted should be hung on legislative and court halls: 'l beseech you, in the bowels of Christ, think it possible that you might be mistaken ! ' If we scan the anatomy of the Munsif 's order, which was upheld all along, we notice awesome implications that if, within 15 days, compliance with the injunction did not take place which implied payment of long years ' salaries and re induction into service of the respondent (who had by then been removed), all of which required much more time to secure sanctions and drawls of moneys in a mammoth hierarchical machine the opposite parties (who, among them ?) shall be visits with the order of attachment of property (which ?) and sending them (whom ? to civil jail (for how long ?).
As the non applicant No. 2 has been transferred from Kota Division therefore, the compliance of the order will be made by the present Divisional Superintendent, Kota (and so, the transferee officer was in peril of imprisonment ?).
The bracketed interrogations are ours, briefly to indicate that where liberty and property are to be deprived it is fundamental that vagueness is a fatal vice even if the issuing authority be the court.
The infirmity was corrected in small part by the High Court in revision as will presently notice Anyway, this order was stayed by the High Court on 5 3 1976 until it finally dismissed the revision on January 20, 1979.
And it is the appellant 's case that salaries thereafter have been paid, calculations have been made, sanctions obtained and money withdrawn and all the 303 dues of years are ready to be distributed.
The question is whether the action for disobedience was legal and justified and, in any case, the draconian punishment of Government by attaching its properties and putting its servants in jail was a desertion of judicial discretion whole hall mark is to be firm but not authoritarian, liberal but not petulant.
and ever informed by realism and impressed with contrition.
We have here an interlocutory injunction, though unusual, whose soundness is being tested in a separate proceeding in this Court.
Let use pro tempore, assume its valid existence and focus on the folk up of alleged breach and visitation of punishment.
What was the direction ? Could it be practical to comply within that time, having due regard to the inertia of administrative processes ? Was there recusant refusal, and, if so, by whom, in the conspectus of facts here? When does the court go to the extreme of imprisonment of Government servants at lesser levels, who have to act on orders from above, for disobedience? Is it the path of judicial discretion to temper justice with mercy or practise the opposite ? Above all.
though arising in limine, can there be an order of contingent attachment of unspecified properties ? Can the court imprison any one unidentified in the order by making an omnibus direction leaving the life giving parts blanks to be filled up long after the judgment and.
perhaps, to allow the bailiff to seize whom he regards as the violatory? May be, 'Hurry Kills ' and 'hasten slowly ' are mottos good for every one who exercises power either at the wheel of an automobile or through the pen of a public functionary.
We will proceed to resolve these questions which unbosom their answers in their very formulation For instance, does not the mere asking call for the obvious answer that no order by however high a power can be fair or reasonable if it jeopardises the person of a citizen wearing the armour of part III, without so much as specificating the identity of the human being upon whom the authority is to lay hands.
And yet, the learned Munsif merely directed that 'the opposite party ' (plurality of three, including the Central Government) be sent to civil jail.
Moreover, the order notices that the Divisional Superintendent (P2) has been transferred and yet the innocent transferee is put in peril of incarceration.
Realising this fatal Haw, the High Court sought to repair the yawning tear by making the in observation cum direction: The learned Munsif Magistrate, who passed the earlier ll order on January 5, 1976 could not proceed with the proceedings for sending the petitioners concerned to Civil Jail 304 and also of attachment of the property.
It would be for the Munsif concerned to name the officer concerned who is required to be sent to Jail and further to give details of the property to be attached for the purpose of compelling compliance as per finding already given in judgment dated January 5, 1976 as modified in appeal.
(emphasis added) The court was relentless even when informed that the payment of salary pursuant to the order passed by the High Court had already been made.
The concluding portion of the High Court 's judgment stated that the Munsif concerned should take prompt action "for executing his order in respect of sending concerned officer to jail and the attachment of the property concerned as mentioned in his judgment . " Both the orders keep the identity of the key persons and properties in uncertainty.
We are a little startled that a court in the contempt jurisdiction should deprive the personal liberty of a person without naming in the order whom the Court 's bailiff should take into custody or the jail authorities should receive.
Equally clearly, how could property be taken without its being particularised in the judgment, disregarding procedural obligations ? It is not as if without hearing the officer to be jailed and his case against detention considered, the Munsif give ad hoc details of property to be attached without hearing the owner thereof as to his version about why his property should not be touched.
The constitutional sanctity of liberty and the (then) protection of property will become chimerical and the processual law will hang limp is the substantive order is silent and identifying the offender is left over as a ministerial measure.
The High Court was in error in leaving it to the trial court to designate such names when it actually issued the ministerial order to execute its decretal order.
Nameless humans cannot be whisked off to prison even in the name of contempt by insertion of the name after the judgment is delivered.
Natural justice is pervasive doctrine integral to processual fair play in Indian jurisprudence.
For this reason alone, the extent order under challenge is vulnerable against both the attachment of unspecified property and detention of unnamed contemners.
Independently of this invalidatory circumstance, it is apparent that there is no ground for judicial indignation once the facts are appreciated in their realistic setting.
The order of injunction was made by the trial court on 15 4 74 and brought before the High Court where the revision petition was dismissed on 3 1 1979.
Strictly speaking, the order of injunction had not been stayed and should have been obeyed.
305 It is no excuse to say that when appeal and revision pend, litigative hopes lull people into insouciance.
While this is not prudent, it is component in, judging about obstinate non compliance.
To institute a proceeding for disobedience of an injunction commanding reinstatement of a government servant purportedly removed from service by the higher officers of the Railway, together with payment of salary for prior periods, is a stultification of the jurisdiction, if sufficient time is not given.
A little touch of realism would have easily convinced the High Court that a government servant of the Union of India who has been removed from service for misconduct could not be reinstated with full back pay immediately the order was made by the Court.
It had to be communicated to various officers, orders had to be made at various levels, files had to move and notings made for gestation before implementation.
All this takes time and when the court order is eventually effectuated, the salary of the officer will, of course, have to be paid with effect from the original date of the impugned threat of action.
To proceed to punish in haste without pausing to realise how government functions is not fair in this drastic jurisdiction where personal freedom is in peril.
The description of is processes, as prevalent in the days of Lord Curzon, holds good to day.
Here are his impatient words dipped in pungent ink: ".
the administration had become ponderous, like an elephant 'very stately, very powerful, with a high standard of intelligence, but with a regal slowness in its gait '" "Round and round, like the diurnal revolution of the earth, went the file, stately, solemn, sure and slow: and now, in due season, it has completed its orbit, and I am invited to register the concluding stage.
" We are in no mood to condone willful procrastination nor suffer wanton stagnation in Administration as a ground for default in obeying court orders.
The Law does not respect lazy bosses nor 'cheeky ' evaders .
But no proof of that species of guilt has been brought to our notice Mere inaction has no long mileage where means rea is a sine qua non We, therefore, regard the court 's order, holding the appellants in contempt, a hasty measure, probably annoyed by absence of instant compliance.
306 The severity of the sentence is beyond comprehension.
We cannot understand how the court could ignore the fact that salary had been paid from the date of the High Court 's order upto date and the readiness to pay the back salaries, on securing the appropriate sanction and drawl of cheque, had been represented to the court.
Before us, the learned Solicitor General said that the entire back wages were ready to be paid and the necessary cheque had already beery drawn.
We see no inclination on the part of the Government of India to adopt a challenging attitude against the court 's writ.
it is well known that the contempt power should be kept sheathed and the swore should be drawn only sparingly if the court is convinced that there has been willful defiance or disobedience.
Moderation lends dignity to power and we feel that the facts of the present case far from call for any stronger step than an admonition to comply within a realistic spell of time and stiffer action thereafter.
We do not take the view that the Union of India should be shown undue indulgence or its officer singular solicitude.
But once there is clear evidence of active obedience, V coupled with expression, of regret delayed though the compliance be due to the inevitable time lag induced by paper logged procedures, the court may be clement.
Here, compliance and contrition are now present.
In these circumstances, we allow the appeal and record the undertaking of the Union of India, the 1st appellant, that the entire salary due to the respondent will be paid within one week from to day.
| IN-Abs | The respondent a railway employee was proceeded against by the department for misconduct.
He did not respond to the 'show cause ' notice issued to him and when the disciplinary proceedings proceeded ex parte he filed a suit for a declaration of immunity and permanent injunction against further departmental action.
He also moved an application for an ad interim injunction to restrain the department from affecting his position in service by continuing the disciplinary enquiry and to continue to pay his full salary.
After hearing, the Munsif directed that the respondent be placed in the same position that he held prior to the commencement of the departmental enquiry in the matter of pay, privileges and all other perquisites that he availed and enjoyed.
The department appealed against this order, and awaited the decision in the District Court before implementing the direction for re instatement.
In the meanwhile the respondent filed an application under Order 39 rule 2(3) of the Code of Civil Procedure for disobedience of the injunction order.
The trial court finding that there was non compliance with the Munsif 's order, directed 15 days time for compliance with the said order and on failure thereof, directed that the department shall be visited with the order of attachment of its property and its officers be sent to the civil jail.
An unsuccessful appeal and an unrewarding revision was the lot of the department.
The High Court made an observation cum direction that as the Munsif could not proceed with the proceedings for disobedience of the court 's order, it would be for the Munsif concerned to name the officer concerned who is required to be sent to jail and to give details of the property to be attached, for the purpose of compelling compliance with the court 's order.
Allowing the appeal to this Court, ^ HELD :1. 1.
The High Court was in error in leaving it to the trial court to designate the names when it actually issued the ministerial order to execute its decretal order.
Nameless humans cannot be whisked off to prison even in the name of contempt by insertion of the name after the judgment is delivered 2.
A government servant of the Union of India who had been removed from service for misconduct could not be reinstated with full back pay immediately the order was made by the Court.
It had to be communicated to 299 various officers, orders had to be made at various levels, files had to move and notings made for gestation before implementation.
All this takes time and when the court order is eventually effectuated, the salary of the officer will, of course, have to be paid with effect from the original date of impugned threat of action.
To proceed to punish in haste without pausing to realise how government functions is not fair in this drastic jurisdiction where personal freedom is in peril.
[305 B D] 3.
The constitutional sanctity of liberty and protection of property will become chimerical and the processual law will hang limp if the substantive order is silent and identifying the offender is left over as a ministerial measure.
[304 F] 4.
Where liberty and property are to be deprived it is fundamental that vagueness is a fatal vice even if the issuing authority be the court.
[302 G] In the instant case, the orders passed by the Munsif and the High Court keep identity of the key persons and properties in uncertainty.
For this reason alone, the orders are vulnerable against both the attachment of unspecified property and detention of unnamed contemners.
[304 C G] 5.
The law, in the area of contempt of court, must avoid the extremes of hyper reactivity to marginal indifference to judicial authority out of pragmatic difficulties.
[300 E] 6.
The fluid, yet valid, concept of contempt of court, keeps judges under the rule of law; for personal liberty is protected by a processual armour, even if its deprivation be the product of the judicial process.
[300 E] 7.
The contempt power should be kept sheathed and the sword should be drawn only sparingly if the court is convinced that there has been wilful defiance or disobedience.
[306 C] 8.
Once there is clear evidence of active obedience, coupled with expression of regret, delayed though the compliance be due to the inevitable time lag induced by the paper logged procedures, the court may be clement.
[306 D]
|
ivil Appeal No. 133 or 1979.
Appeal by Special Leave from the Judgment and order dated 13 6 1972 of the Assam High Court in Income Tax Reference No. 2/64.
H. M. Verma and N. R. Choudhary for the Appellant.
S.C. Manchanda, S.P. Nayar and Miss A. Subhashini for the Respondent.
The Judgment of the Court was delivered by BHAGWATI, J.
This appeal by special leave raises a question of law relating to the interpretation of section 2(6A) (e) of the Indian Income Tax Act, 1922.
The question is in fact concluded by a decision of this Court in Commissioner of Income tax vs C.P. Sarathy Mudaliar but, it has been argued on behalf of the Revenue that this decision is in conflict with an earlier decision given by this Court in Commissioner of Income tax vs Rameshwarlal Sanwarmal and hence the question should be referred to a larger Bench.
We shall presently consider these two decisions, but we may point out straight away that, in our opinion, there is no conflict between these two decisions and the question is completely cover d by the decision in Commissioner of Income tax vs C. P. Sarathy Mudaliar (supra)).
The facts giving rise to the appeal are not in dispute and we may briefly state the same in order to appreciate how the question arises for determination.
The assessee is the Hindu Undivided Family of M/s. Rameshwarlal Sanwarmal consisting of section M. Saharia as manager and karta and 372 his wife and a minor son.
The assessment year with which we are concerned in the appeal is 1956 57, the relevant accounting year being the year ending Ramanavami Sambat 2012, that is, 18th April, 1956.
During this assessment year, the assessee was the beneficial owner of certain shares in a private limited company called Shyam Sunder Tea Co. (P) Limited.
These shares though beneficially owned by the assessee stood in the name of S.M. Saharia in the register of shareholders of the Company.
The assessee also owned 3 business concerns, namely, Nilmony Shop, Saharia & Co. and Saharia Industrial Corporation.
The Company advanced loans to these 3 business concerns during the relevant assessment year and since it was a company in which public were not substantially interested, a question arose in the assessment of the assessee to income tax, whether the loans advanced to these 3 business concerns could be regarded as "deemed dividend" of the assessee under section 2(6A)(e) of the Act? 'he Income tax officer took the view that the loans advanced to the 3 business concerns were attributable to the accumulated profits of the company to the extent of Rs. 4,48,045 and since the assessee which owned the 3 business concerns was the beneficial owner of the shares standing in the name of section M. Saharia, the conditions of section 2(6A) (e) were satisfied and the loans were liable to be regarded as "deemed dividend" taxable in the hands of the assessee under section 2(6A) (e).
The assessee preferred an appeal against the order of assessment but the Appellate Assistant Commissioner agreed with the view taken by the Income tax officer and held that since section M. Saharia held shares in the company as representing the assessee and the loans were advanced to the three business concerns belonging the assessee out of the accumulated profits of the company, the Income tax officer was justified in treating the loans as "deemed dividend" under section 2(6A) (e); and taxing them in the hands of the assessee.
The matter was carried in further appeal to the Tribunal and several arguments were advanced on behalf of the assessee resisting the applicability of section 2(6A) (e), but of them, there are two which are material for our purpose and they are: first, that since the assessee was not a registered holder of shares in the company, the loans advanced to the three business concerns of the assessee could not be regarded aS loans advanced to a share holder so as to attract the applicability of section 2(6A) (e); and secondly, even if the loans could be treated as "deemed dividend" under section 2(6A) (e), they could be taxed only ill the hands of section M. Saharia, the registered shareholder and not : in the hands of the, assessee.
Both these arguments were negatived by the Tribunal and so also were the other subordinate arguments and the appeal was rejected and the assessment confirmed.
This led 373 to a reference application by the assessee and on the application, five A. questions of law were referred by the Tribunal to the High Court.
There were, in fact, six questions but for the purpose of the present appeal, it is not necessary to refer to the first question, since it related to the assessment year 1955 56 and it raised a point of limitation which was ultimately decided in favour of the assessee and there is no dispute about it.
The other five questions related to the taxability of the loans advanced to the three business concerns of the assessee as "deemed dividend" under section 2((A)(e) and each of these questions brought in issue different aspect of taxability.
It is the first of these questions which is material and we may re produce it as follows: "Whether on the facts and in the circumstances of the case, and on a true interpretation of the terms of section 2(6A) (e) of the Income tax Act, 1922, the Tribunal was right ill holding that the amounts of Rs. 2,21,702 (gross) and Rs. 3,43,505 (net) were taxable as dividends in the hands of the applicant H.U.F. for the assessment year 1955 56 and 1956 57 respectively, when the shares were registered in the name of Sri section M. Saharia, the karta of the family ?" This question referred to both the assessment years 1955 56 and 1956 57, but we are not concerned in this appeal with the controversy relating to the assessment year 1955 56 and hence we shall confine ourselves only to the assessment year 1956 57.
Now two distinct aspects were comprised in this question and both were argued before the High Court.
One was whether the loans advanced to the three business concerns of the assessee could be regarded as "deemed dividend" within the meaning of section 2(6A) (e) and the other was whether these loans, even if regarded as "deemed dividend" could be taxed in the hands of the assessee.
The High Court decided both these aspects of the question in favour of the assessee and held that the word "share holder" in section 2(6A) (e) meant registered share holder or in other words, a shareholder whose name is recorded in the Register of the company as the holder of the shares and since the advance in the present case was made to the assessee which was not a registered share holder, it could not be regarded as "deemed dividend" within the meaning of section 2(6A) (e) and that even if it be assumed that the advance was liable to be regarded as "deemed dividend" under section 2(6A) (e), it could be taxed as dividend income only of the registered share holder and not Only of the assessee.
This view taken by the High Court rendered it unnecessary to decide the other four questions and the High Court 374 accordingly declined to consider them.
The result of this decisions was that the assessment made by the Revenue Authorities was set aside in so far as it included the loans advanced by the company to the three business concerns of the assessee as deemed dividend and taxed it in the hands of the assessee.
The Revenue, being aggrieved by the decision of the High Court, preferred an appeal after obtaining special leave of this Court.
Now it seems that through some inadvertence which is difficult to understand, the Revenue attacked only that part of the order of the High Court which held that the "deemed dividend" could be assessed to tax only in the hands of S.M. Saharia, the registered share holder and no in the hands of the assessee which was merely the beneficial owner cf the shares.
Neither in the statement of case filed on its behalf nor in the course of the arguments the Revenue assailed the correctness of the view taken by the High Court that since the assessee was not a registered shale holder, loans advanced to the assessee could not be regarded as "deemed dividend" under section 2(6) (e).
The result was that the only question that came to be considered by this Court was whether the "deemed dividend under section 2(6A)(e) could be taxed in the hands of the beneficial owner of the shares or it could be brought to tax only in the assessment of the registered share holder and the view taken was that where the shares acquired with the funds of one person are held ill the name of another, it is the former who is assessable to tax on the dividend on those shares and this principle would apply equally on the 'deemed dividend ' under section 2(6A)(e).
This Court did not consider whether the loans granted to the three business concerns o the assessee could at all be regarded as 'deemed dividend ' within the meaning of section 2(6A)(e) when the assessee was not a registered share holder and the decision of the High Court to the effect that the assessee not being a registered share holder, the loan advanced to it advanced not be regarded as 'deemed dividend ' under section 2(6A)(e) remained undisturbed.
Now obviously, so long as the decision of the High Court on this point was not over ruled, the question whether the amount of the loans was taxable as "deemed dividend" in the hands of the assessee could not be answered in favour of the Revenue.
But sometimes even Homer nods and through same unfortunate inadvertence for which the counsel appearing on behalf of the assessee in that case must accept full responsibility, this Court discharged the answer given by the High Court in favour of the assessee and in its place substituted an answer, in favour o the, Revenue.
This decision of the Court is reported in Commissioner of Income tax vs Rameshwar Lal Sanwarlal (supra).
375 Since the first question relating to the assessment year 1956 57 was answered by this Court in favour of the Revenue, the Reference went to the High Court for consideration of the remaining questions that had not been answered by the High Court.
It appears that at the hearing of the Reference the first two out of the remaining four questions were not pressed on behalf of the assessees and only the last two questions were argued before the High Court.
Both these questions were considered by the High Court and they were answered in favour of the Revenue and against the assessee.
The assessee thereupon preferred the present appeal after obtaining special leave from this Court.
There is only one contention advanced on behalf of the assessee in support or the appeal, namely, that the amounts of the loans advanced to the three business concerns of the assessee could not be regarded was 'deemed dividend ' within The meaning of section 2(6A)(e) since the assessee was not a registered share holder of the company.
This contention was sought to be supported by the decision of this Court in Commissioner of Income tax vs C.P. Sarathy Mudaliar (supra).
Now there can be no doubt that the decision of this Court in C.I.T. vs C.P. Sarathy Mudaliar (supra) lays down that it isl only where a loan is advanced by a company to a registered share holder out of its accumulate(i profits that it would be liable to be regarded as 'deemed dividend ' under sec.
2(6A)(e) and a loan to a beneficial owner of the share docs not come within the mischief of that section and if this decision represents the correct law on the subject, the amounts of loans advanced to the three business concerns o the assessee would not possibly be brought within the net o taxation as 'deemed dividend '.
But the argument urged on behalf of the Revenue was that it was not open to the assessee to raise this contention based on the decision in Commissioner of Income tax vs C. P. Sarathy Mudaliar (supra), since it was covered by the first question which had already been answered in favour of the Revenue by this Court.
The Revenue conceded That this contention was not specifically raised before the Court when the first question came to be considered but it must be held to have been impliedly decided against the assessee, since the first question could not be answered ill favour of the Revenue on any other hypothesis.
This argument of the Revenue does appear to be very plausible It first blush, but if it is scrutinised closely it will be apparent that it is fallacious and cannot be accepted.
The most important circumstance which it ignores is that when the Reference was first heard by the High Court, the first question was decided in favour of the assessee on two counts, one was that since the assessee was not a registered share holder of the company, the loans advanced to the three business 376 concerns of the assessee could not be regarded as 'deemed dividend ' within the meaning of section 2(6A) (e) and the other was that even if they could be treated as 'deemed dividend ' under section 2(5A) (e), they could be taxed only in the hands of section M. Saharya, the registered share holder and not in the hands of the assessee who was merely a beneficial owner of the shares.
When the Revenue preferred an appeal against the judgment of the High Court, the Revenue should have assailed the decision of the High Court in both its limbs, but through some inadvertence which is difficult to understand, the Revenue challenged by the second limb of the decision ignoring completely the first.
The result was that the decision of the High Court that the amounts of loans advanced to the three business concerns of the assessee did not fall within the definition of 'deemed dividend ' in section 2(6A)(e) remained intact and unaffected by the decision of this Court in the appeal.
Now, it is true that this Court could not have answered the first question against the assessee without over ruling this part of the decision or the High Court, but through some unfortunate error, this Court set aside the answer given by the High Court in favour of the assessee without considering whether this part of the decision of the High Court was right o wrong.
When no contention was raised on behalf of the Revenue before this Court that the decision of the High Court on this point was wrong and that even though the assessee was not a registered shareholder, the amounts of loans advanced to the three business concerns of the assessee were still liable to be regarded as "deemed dividend" under section 2(6A) (e) and no such contention formed the subject matter of discussion before this Court and this Court had, therefore, no occasion to consider this question, it is difficult to see how it can be said merely from the answer given by this Court in favour of the Revenue that this contention was impliedly decided in favour of the Revenue.
It would be straining logic to an absurd limit to say that though this contention was not raised, not argued, not discussed and not decided, yet it must be held to have been impliedly decided because through an error committed by this Court, an answer was given in favour of the Revenue in ignorance of the true position.
lt would also not be right to hold that merely because this Court erroneously answered the first question against the assessee without considering whether the view taken by the High Court on this point was incorrect, the assessee must be precluded from raisin the contention that the assessee not being a registered share holder, the amounts of loans advanced to the three business concerns of the assessee did not fall within the definition of "deemed dividend" under section 2(6A)(e).
Why should the assessee, which had the decision of the High Court of this point in its favour and 377 which decision was not assailed by the Revenue in the appeal and which remained undisturbed by this Court, be prejudiced on account of an obvious error committed by the court.
The proper way of looking at the decision of this Court would be to regard the answer given in favour of the Revenue to be confined only to the aspect considered and decided by this Court.
The only aspect considered by this Court was whether the "deemed dividend" under section 2(6A) (e) could be taxed in the hands of the beneficial owner of the shares or it could be assessed to only in the hands of the registered shareholder, and this Court held that "deemed dividend" did not stand on any different footing from actual dividend and just as actual dividend was liable to be taxed in the hands of the beneficial owner of the shares, so also "deemed dividend" must be held liable to be taxed in the assessment of the beneficial owner.
This Court did not decided the question whether a loan advanced to a beneficial owner of the shares can be regarded as "deemed dividend" within the meaning of section 2(6A) (e) an the answer given by this Court in favour of the Revenue cannot be said to extend to this aspect of the question.
We would, therefore, hold that the first question still remains to be answered so far as this aspect of the question is concerned and it is open to the, assessee to contend that the amounts of loans advanced to the three business concerns of the assessee could not be regarded as "deemed dividend" under section , 2(6A)(e), since the assessee was not a registered shareholder.
It is also obvious from what we have said above that there is no conflict between the decisions of this Court in C.I.T. vs Rameswarlal Sanwarmal and C.I.T. vs C.P. Sarathy Mudaliar (supra).
The question whether, on a proper construction of section 2(6A) (e), a loan advance to a beneficial owner of the shares would be liable to be regarded Ll; "deemed dividend" was not raised or argued before this Court in C.I.T. vs Rameswarlal Sanwarmal and this Court was not called upon to decide it and hence there is no discussion about it in the judgment of this Court nor is there any decision on it.
It is only in the subsequent decision in C.I.T. vs C. P. Sarathy Mudaliar (supra) that this question came up for the first time before this Court for consideration and this Court held that when sec.
2(6A) (e) speaks of a "shareholder" it refers to the registered shareholder and not to the beneficial owner and hence a loan granted to a beneficial owner of the shares who is not a registered shareholder cannot be regarded as a loan advanced to a "shareholder" of he company so as to be within the mischief of section 2(6A(e).
There is thus no conflict at all between the decisions in.
C.I.T. vs C. P Sarathy Mudaliar (supra and C.I.T. vs Rameswarlal Sanwarlal.
In fact, Mr. Justice Hegde was, a common Member of the Bench in both 378 the cases and the subsequent decision in C.l.
T. vs C. P. Sarathy Mudaliar was given within less than a month after the decision in C.l.
T. vs Rameshwarlal Sanwarmal.
lt is impossible to believe that Mr. Justice Hegde was oblivious of the decision in C.I.T. vs Rameswarlal Sanwarmal when he delivered the judgment in C.l.
T. vs C. P. Sarathy Mudaliar.
The Revenue lastly contended that the decision in C.I.T. vs C.P. Sarathy Mudaliar is incorrect and we must refer the present case to a larger Bench.
Now it is obvious that before we can be persuaded to accede to this request, we must be satisfied that the decision in Com missioner of Income Tax vs C. P. Sarathy Mudaliar is wrong.
But having given our most anxious consideration, we find ourselves unable to disagree with the view taken in that decision.
What section 2(6A) (e) is designed to strike at is advance or loan to a "shareholder" and the t word "shareholder" can mean only a! registered shareholder.
It is difficult to see how a beneficial owner of shares whose name does not appear in the register of shareholders of the company can be said o be a "shareholder".
He may be beneficially entitled to the shares but he is certainly not a "shareholder".
It is only the person whose name is entered in the register of shareholders of the company as the holder of the shares who can be said to be a shareholder qua the company, and not the person beneficially entitled to the shares.
It is the former who is a "shareholder" within the matrix and scheme of the company law and not the latter.
We are, therefore, of the view that it is only where a loan is advanced by the company to a registered shareholder and the other conditions set out in section 2(6A) (e) are satisfied that the amount of the loan would be liable to be regarded as 'deemed dividend ' within the meaning of section 2(6A) (e).
The amount of the loan would not fall within the mischief of this section if it is granted to a beneficial owner of the shares who is not the registered shareholder.
The decision in C.I.T. vs C. P. Sarathy Mudaliar does, in our opinion, lay down the correct interpretation of section 2(6A) (e).
Now in the present case it was common ground that the loans were advanced to the three business concerns of the assessee which was a Hindu Undivided Family and this Hindu Undivided Family was not the registered holder of any shares in the company but it was the beneficial owner of certain shares which stood in the name OF the Manager and Karta, Shri section M. Saharya.
The loans were thus advanced to the beneficial owner of the shares and not to the registered shareholder and hence they could not be regarded as loans advanced to a "shareholder" of the company within the meaning of section 2(6A) (e).
Section 2(6A) (e) was accordingly not attracted and the amounts of the loans could not be taxed as deemed dividends 379 in the hands of the assessee.
We accordingly answer the first question A in favour of the assessee so far as this aspect is concerned.
In view of this answer to the first question, it is not necessary to consider the other two questions decided by the High Court on remand.
The learned counsel appearing on behalf of the assesses, in fact, did not press them.
There will he lo order as to costs of the appeal.
| IN-Abs | The assessee, a Hindu Undivided Family, owned certain shares in a private limited company in which the public were not substantially interested.
Though the shares were beneficially owned by the Hindu Undivided Family, they stood registered in the name of its Karta.
From out of its accumulated profits the company gave loans, in the assessment year 1956 57.
to three business concerns which were owned by The assessee.
Section 2(6! (e) of the Indian Income Tax Act, 1922 provided that where a private company in which public were not substantially interested gave loans to its shareholders from out of its accumulated profits such loan would be treated as "deemed dividend" in the hands of the shareholders.
The Income Tax officer treated the loans as "deemed dividend" in the hands of the assessee on The ground that though the shares stood in the name of the Karta, the assessee being the beneficial owner, the conditions of section 2(6A) (e) were satisfied.
This view of the Income Tax officer was upheld by the Appellate Assistant Commissioner.
The Appellate Tribunal rejected the contentions of the assessee that the loans could not be taxed as "deemed dividend" in its hands because it was not the registered owner of the shares; and (2) assuming that they could be treated as "deemed dividend" they could be taxed only in the hands of the karta.
The Tribunal referred six questions to the High Court.
Answering two out of the si questions, the High Court held that (1) the loans could not be treated aS "deemed dividend" in the assessee 's hands because the term shareholder used in the section meant only a person whose name is recorded in the company 's register of shareholders and (2) even assuming that the loans were "deemed dividend" they could be taxed only in the hands of the registered shareholder (the Karta).
The assessment made by the Income Tax officer was accordingly set aside.
In appeal to this Court, instead of questioning the correctness of the answers returned by the High Court the Revenue attacked only that part of the High Court 's order which held that "deemed dividend" could be taxed only in the hands of the registered shareholder.
Therefore the question before this Court was whether "deemed dividend" could be taxed in the hands of the beneficial owner of shares or could be brought to tax only in the hands of the registered shareholder.
This Court answered that where shares are acquired with the funds of one person but are registered in the name of another it is the beneficial owner who should be taxed on the dividend on the shares and that this 370 principle applies equally to "deemed dividend" under the section.
Even so, this Court discharged the answer given by the High Court in favour of the assessee and substituted an answer in favour of the Revenue.
Placing reliance on the decision of this Court in C.I.T. vs Sarathy Mudaliar where it was held that a loan advanced by a company to a beneficial owner did not fall within the mischief of section 2(6A)(e) the assessee contended that loans in this case could not be taxed as "deemed dividend" in its hands.
The Revenue on the other hand contended that (I) since in the earlier case of Rameswarlal Sanwarmal this Court had answered the reference in favour of the Revenue and that decision was final the later decision in Sarathy Mudaliar 's case would not be available to the assessee; (2) although the present question was not specifically considered by this Court on the earlier occasion it must be held to have been impliedly decided against the assessee and (3) that the decision in Sarathy Mudaliar 's case was incorrect and should be referred to a larger bench. ^ HELD: The arguments of the Revenue are fallacious.
When the Revenue came in appeal to this Court in the earlier case of Rameswarlal Sanwarmal it challenged only the second part of the High Court 's decision ignoring the first part.
The result was that the first part of the High Court 's decision that loans advanced to The business concerns of a beneficial owner of shares could not be regarded as 'deemed dividend" in his hands and that the loans in the sent case did not fall within the meaning of section 2(6A)(e) remained intact and unaffected by the decision of this Court.
This Court could not have answered the first question against the assessee without over ruling the first part of the High Court 's decision.
However, through inadvertence, this Court set aside the High Court 's answer without considering whether this part of tile decision was right or wrong.
When no contention was raised on behalf of the Revenue that even if the assessee was not a registered shareholder loans advanced to its business concerns would be "deemed dividend" in its hands and there was no occasion for this Court to consider the question, from the mere fact that an answer was given in favour of the Revenue, it cannot be said that this contention was impliedly decided in its favour.
[376 C H] 2.
The proper Way of looking at the decision of this Court in Rameswarlal Sanwarmal would be to regard the answer given in favour of the Revenue to be confined only to the aspect considered and decided by this Court, namely, that "deemed dividend" did not stand on any different tooting from actual dividend and just as actual dividend is liable to be taxed in the hands of the beneficial 6 owner of the shares.
so too "deemed dividend" must be held liable to be taxed ill the hands of the beneficial owner.
This Court did not consider whether a loan to a beneficial owner could be regarded as "deemed dividend".
Therefore, this aspect of the question still remained to be answered and it was open to the assessee to contend that the loans advanced to its business concerns could not be regarded as "deemed dividend" within the meaning of the section since the assessee was not a! registered shareholder.
[377 A D] 3 (1) The decision of this Court in Sarathy Mudaliar 's case laid down the law correctly and there is no need to refer the case to a larger bench.
The 371 question whether a loan advanced to beneficial owner of shares would be liable to be regarded as "deemed dividend" was neither raised nor considered by this Court in Rameswarlal Sanwarmal 's case but came up for consideration for the first time in Sarathy Mudaliar 's case only.
There is thus no conflict between the two decisions, [77 E l] (b) It is only where a loan is advanced by a company to a registered shareholder the other conditions set out in the section are satisfied that the amount of the loan would be liable to be regarded as "deemed dividend".
The amount of loan would not fall within The mischief of the section if it is granted to a beneficial owner of the shares.
[378 E F] In the instant case the loans were advanced not to the registered shareholder but to the business concerns of the beneficial owner.
Hence they could not be regarded loans advanced to a shareholder of the company within the meaning of the section.
[378 H
|
N: Criminal Appeal No. 718 of 1979 From the Judgment and Order dated 11 10 1979 of the Gujarat High Court in Criminal Appeal No. 110/77.
A.K. Trivedi and S.S. Khanduja for the Appellant.
The Judgment of the Court was delivered by FAZAL ALI, J.
This appeal is preferred by the three accused in Sessions Case No. 46 of 1976 against their conviction and sentence 354 imposed upon them by the High Court under the .
The three appellants were tried by the Sessions Judge for commit ting offences punishable under section 302/120 B/323/324 read with section 34 and 109 of the Indian Penal Code for committing the murder of one Karsan Kala on 19 1 1976.
The learned Sessions Judge acquitted all the three appellants of the charges levelled against them.
The State of Gujarat filed an appeal against the order of Sessions Judge acquitting them, to the High Court of Gujarat.
A division Bench of the High Court in Criminal Appeal No. 110/77 allowed the appeal of the State and reversed the order of acquittal by the Learned Sessions Judge and convicted them for offences under section 302/120 B and sentenced them to imprisonment for life.
They were also convicted tor lesser offences and sentenced to varying terms of imprisonment The prosecution strongly relied on the evidence of three eye witnesses Rata Mala, Ganesh and Ruda.
Rata Mala was an injured eye witness having receives several incised injuries.
The evidence of Ruda not accepted.
The complainant Savai Kala, the brother of the deceased saw the latter part of the occurrence when the deceased was being carried away by the accused.
When Savai Kala questioned, the accused attacked him and he was also injured The High Court in an elaborate judgment after thoroughly scrutinising the evidence of the eye witnesses accepted their testimony.
It observed that the evidence of the eye witnesses Rata Mala is most reliable and trustworthy and so also the evidence of Ganesh.
The High Court has referred to the circumstance under which the order of acquittal could be interfered 1, with in the light of the various decisions of this Court.
The High Court taking into consideration the reasons given by the Sessions Judge for not accepting the testimony of the eye witnesses found them to be totally unacceptable.
We have been taken through the evidence of the material witnesses.
We have no hesitation in agreeing with the conclusion arrived at by the High Court that the reasons given by the l rial Court for acquitting the accused are totally unacceptable.
After hearing the learned counsel and examining the petition of appeal and after going through the relevant parts of the judgment of the High Court and the Sessions Court.
we find that there are no sufficient grounds of interference.
The appeal is summarily dismissed under S 384 of the Code of Criminal Procedure.
After we pronounced our judgment dismissing the appeal summarily under section 384 of the Code of Criminal Procedure, but before signing 355 the judgment, a decision of this Court Sita Ram & Ors.
vs State of U.P. was brought to our notice wherein the scope of the power of the Courts to dismiss an appeal summarily under section 384 of the Code of Criminal Procedure has been referred.
In that case an appeal was preferred to this Court under section 379 of the Code of Criminal Procedure, 1973 read with section 2(a) of the .
The appeal was listed for preliminary hearing under Rule 15(1) (c) of O.XXI of the Supreme Court Rules 1966.
The Appellants filed an application for adducing additional grounds, namely, (1) the provisions under cl.
(c) of sub rule (1) of Rule 15 of Order XXI of the Supreme Court Rules empowering the Court to dismiss the appeal summarily is ultra vires being inconsistent with the provisions of the ; (2) the power of the Supreme Court to frame rules under article 145 of the Constitution cannot be extended to annul the rights conferred under an Act of Parliament and (3) an appeal under the cannot be dismissed summarily without calling for the records ordering notice to the State and without giving reasons.
When the petition fr leave to adduce additional grounds came up before the Court, this Court ordered : "The appellants have challenged the constitutional validity of cl.
(c) of sub rule (1) of rule 15 of O.XXI of the Supreme Court Rules, which enables an appeal of the kind with which we are concerned, to be placed for hearing ex parte before the Court for admission.
In that view of the matter, we think that unless the question of the constitutional validity of the rule is decided, we cannot have a preliminary hearing.
Of this appeal for admission.
Let the records, therefore, be placed before the Hon 'ble the Chief Justice for giving such direction as he may deem fit and proper.
" The matter was placed before a Bench of five Judges by the Hon 'ble the Chief Justice as the constitutional validity of cl.
(c) of rule 15(1) of O.XXI of Supreme Court Rules, was challenged.
Alongwith the question of constitutional validity, two other grounds referred to earlier were also raised.
The contention of the Learned Counsel that a right of appeal cast an obligation on the Court to 356 send for records of the case, to hear both the parties and to make reasoned judgment, was not accepted by the judgment of the Court.
Reasons given by the Court are as follows: "Counsel for the appellant insisted that an absolute right of appeal as he described it, casts an inflexible obligation on the court to send for the record of the case, to hear both parties, and to make a reasoned Judgment.
Therefore, to scuttle the appeal by a summary hearing on a preliminary posting absent record, ex parte and absolved from giving reasons is to be absolutist a position absonent with the mandate of the Enlargement Act Act, indeed, of the Constitution in Article 134(1).
Counsel 's ipsi dixit did not convince us but we have pondered over the issue in depth, being disinclined summarily to dismiss.
" Regarding the power of the Court to summarily dismiss the appeal under section 384 of the Code of Criminal Procedure, the submission of the Learned Counsel was that the provisions of the Code of Criminal Procedure are not applicable to the Supreme Court which contention was not accepted by the Court.
Neither in the application for adducing additional grounds or in the order of the Court directing the matter to be placed before the Constitution Bench, there was any reference to The validity of section 384 of the Code of Criminal Procedure.
Neither was it pleaded during the arguments that section 384 of the Code of Criminal Procedure is ultra vires of the Constitution.
As the question of validity of section 384 the Code of Criminal Procedure was neither raised nor argued, a discussion by the Court after "pondering over the issue in depth ' would not be a precedent binding on the Courts.
The decision is an authority for the proposition that Rule ]5(1)(c) of O.XXI of the Supreme Court Rules should be read down as indicated in the decision.
We are satisfied for the reasons stated above that the decision is no authority regarding the scope of section 384 of the Code of Criminal Procedure.
The order cf dismissal of the appeal summarily will stand, P.B.R. Appeal dismissed.
| IN-Abs | The appellants who were charged with the offence of committing murder were acquitted by the Sessions Judge.
But on appeal by the State, the High Court convicted and sentenced them.
In their appeal under section 2(a) of the , this court, after a detailed analysis of the High Court 's judgment and the evidence led in the case summarily dismissed the appeal under section 384 of the Code of Criminal Procedure, 1973.
After the pronouncement of the judgment but before it was signed, the attention of the court was drawn to the judgment in Sita Ram vs State of U.P. ; which, according to them, held that the Supreme Court had no power to summarily dismiss an appeal under section 384, Cr.
P.C. in an appeal under section 2(a) of the 1970 Act.
Dismissing the appeal.
^ HELD: The decision in Sita Ram vs State of U.P. is no authority regarding the power of the court to summarily dismiss an appeal under section 384 of the Criminal Procedure Code.
In that case neither in the application for adducing additional grounds nor in the order of the Court directing the matter to be placed before the constitution bench was there any reference to the validity of section 384 nor was it pleaded that the section was ultra vires the Constitution.
[356 E] Therefore the observation of the Court that it has "pondered over the issue in depth" would not be a precedent binding on the court.
The decision is an authority for the proposition that rule 15(1)(c) of order XXI of the Supreme Court Rules should be read down as indicated in that decision.
[356F]
|
ivil Appeal Nos. 129 and 512 of 1 97.
Appeals by Special Leave from the Judgment and order dated 19 6 1975 of the Bombay High Court in Gift Tax Application Nos. 1 and 2 of 1975.
AND CIVIL APPEAL Nos 755 756 OF 1976 Appeals by Special Leave from the Judgment and order dated 8 12 1975 of the Bombay High Court in W.T.A. No. 15/75.
AND 359 CIVlL APPEAL No. 1787 OF 1977 Appeal by Special Leave from the Judgment and order dated 18 12 1976 of the Bombay High Court in W.T.A. No. 24/76.
AND CIVIL APPEALS NOS.
1639 1645 OF 1977 Appeals by Special Leave from the Judgment and order dated 3 1976 of the Bombay High Court in Writ Petition Nos. 16, 1 and 21/76 and Judgment and order dated 4 11 1976 in W.T.A. Nos. 20 and 23/76.
S.T. Desai, section P. Nayar and Miss A. Subhashini for the Appellants.
N. A. Palkhiwala, section P. Mehta, H. P. Raina, Ravinder Narain, Mrs. A. K. Verma, Talat Ansari and A. N. Haksar for the Respondents.
The Judgment of the Court was delivered by BHAGWATI, J.
These appeals by special leave raise a short question as to whether a reference should have been called for by the High Court in each of these cases.
Some of these cases are under the Gift Tax Act while others under the Wealth Tax Act.
They all relate to the valuation of the ordinary shares of a private limited company called Mafatlal Gagalbhai Pvt. Ltd. which is admittedly an investment company.
The assessee in these cases claimed in the course of assessment to gift tax or wealth tax, as the case may be, that the value of the shares should be taken to be the figure arrived at by M/s. C. C. Chokay & Co., Chartered Accountants, by applying the profit earning method of valuation of shares without making any adjustment in the profits of the company.
It is not necessary for the purpose of these appeals to set out the different figures of valuation given in the report of M/s. C. C. Chokay & Co. and claimed by the assessees as representing the correct value of the shares on the material dates, because the question with which we are concerned is one of principle and the actual figures of valuation are not relevant.
The Gift Tax and the Wealth Tax officers did not accept the figures of valuation given by the assessees on the basis of the profit earning method and valued the shares at much higher figures by applying the break up method.
This naturally involved the assessees in higher tax liability and hence they preferred appeals to the Appellate Assistant Commissioner.
The Appellate Assistant Commissioner applied what has been described in 360 the record as 'rule of three and reduced the valuation of the shares but the figure determined by the Appellate Assistant Commissioner were still higher than those claimed by the assessees.
Since the valuation of the shares made by the Gift Tax and the Wealth Tax officers was reduced by the Appellate Assistant Commissioner, the Revenue was dissatisfied and it, therefore, preferred appeals against the orders of the Appellate Assistant Commissioner, to the Tribunal.
The assessees were also unhappy with the valuation made by the Appellate Assistant Commissioner since he did not accept the valuation put forward on their behalf and hence they too preferred cross objections in the appeals filed by the Revenue.
The appeals and the cross objections in the cases forming the subject matter of Civil Appeal No. 129/76 ere heard together by the Tribunal.
The only controversy before the Tribunal was as to which method should be followed for valuing the shares of the company.
The Revenue contended that in the case of an investment company like Mafatlal Gagalbhai Pvt Ltd., the proper method of valuation would be to take the mean of two values, one arrived at by applying the profit earning method and the other by applying the break up method, while the assessees pleaded for adopting only the profit earning method, since in their submission that was the only method which could be applied for valuation of shares of a going concern The Tribunal by a common judgment accepted the contention of the assessees and adopted the valuation of the shares made by M/s. C. C. Chokay and Co. by applying the profit earning method and in the result rejected the appeals of the Revenue and allowed the cross objections of the assessees.
We shall discuss in some detail the reasons which weighed with the Tribunal in coming to this decision when we deal with the arguments of the parties, but suffice it to state for the present that in taking this view, the Tribunal followed the recent decision of this Court in Commissioner of Wealth Tax vs Mahadeo Jalan & Ors.
Similar orders were passed by the Tribunal in the appeals and cross objections relating to the other assessees.
The Revenue was obviously aggrieved by the orders of the Tribunal and, therefore, it made applications to the Tribunal for referring to the High Court the following question of law, namely, "Whether the Tribunal is right in holding, that the shares of an investment company has to be valued only on the basis of the yield without taking into account the assets owned and reflected in the balance sheet 361 could be said to arise out of the orders of the Tribunal.
The applications for reference were rejected by the 'Tribunal on the ground that no referable question of law arose out of the orders of the Tribunal.
the Revenue thereupon made applications to the High Court for calling for a reference but those applications also met With the same fate.
Hence the Revenue preferred petitions for special leave to appeal in the case of all the assessees and special leave having been granted in some of the petitions, the present appeals have come up for hearing before us.
The sole question that arises for determination in these appeals is whether any question of law arises out of the orders of the Tribunal which needs to be referred to the High Court.
It is true that there must be a question of law arising out of the order of the Tribunal before a reference can be made, but it is not every question of law that is required to be referred by the Tribunal to the High Court.
Where the answer to the question of law is self evident or is concluded by a decision of this Court, it would be futile to make a reference and in such a case the Tribunal would be justified in refusing to refer the question to the High Court vide C.I.T. vs Chander Bhan; Mathura Prasad vs C.I.T. and C.I.T. vs Indian Mica Supply Co. Ltd. Now there can be no doubt that in the present case the question as to which method should bf ed for valuation of the shares of Mafatlal Gagalbhai Private Ltd., a private limited company which was an investment company and at all material times a going concern whether it should be the profit earning method or a combination of the break up method and the profit earning method is clearly a question of law.
But the argument of the assessees was that the determination of this question was completely covered by a recent decision of this Court in Commissioner of Wealth Tax vs Mahadeo Jalan & others in favour or the assessees and no useful purpose would be served by calling for a reference.
The Revenue conceded that the decision in Mahadeo Jalan 's case did lay down certain principles for valuation of shares in a limited company, but its contention was that these principles were no more than broad guidelines and they did not eliminate the necessity of finding out the appropriate method of valuation in each case which came before the taxing authority and hence it was necessary to ' make a reference so that the proper method for valuation of the shares of Mafatlal Gagalbhai Pvt. Co. Ltd. could be determined 362 by the High Court.
The controversy between the parties thus centered round the question is to what was decided by this Court in Mahadeo jalan 's case and whether it laid down what method should be applied for valuation of shares of a private limited company which is an t investment company carrying on business as a going concern.
If the method to be applied in such case could be found to have been judicially laid down by this Court in Mahadeo jalan 's case, all that would be necessary to be done for arriving at the valuation of the shares in Mafatlal Gagalbhai Company Private Limited would be to apply that method and it would be wholly unnecessary to call for a reference.
Let us, therefore, examine the decision in Madhadeo jalan 's case and see whether any principle of valuation of shares is laid down in it which would be applicable in case of a company like Mafatlal Gagalbhli Private Limited.
The decision in Mahadeo jalan 's case was rendered under.
the Wealth tax Act and the question was as to what was the appropriate method for valuation of shares of a private limited company for the purpose of wealth tax.
The Tribunal adopted the break up method and arrived at the valuation of the shares on that basis? but on a reference, the High Court took the view that in case of a company which is a going concern the only proper method of valuation of shares is the yield value method and n(lt the break up method.
The Revenue carried the matter in appeal to this Court and in a judgment delivered by Jaganmohan Reddy, J. this Court examined the question of valuation of shares in depth and after referring to various decisions of the English, Irish and Australian Courts, laid clown the following principles for valuation of shares in a limited company: "(1) Where the shares in a public limited company quoted on the stock exchange and there are dealings in them, the price prevailing on the valuation date is the value of the shares.
(2) Where the shares arc of a public limited company which are not quoted on a stock exchange or of a private limited company the value is determined by reference to the dividends if any, reflecting the profit earning capacity on a reasonable commercial basis.
But, where they do not, then the amount of yield on that basis will determine the value of the shares.
Tn other words, the profits which the company has 11 been making and should be making will ordinarily determine the value.
The dividend and earning method or yield method are not mutually exclusive; 363 both should help in ascertaining the profit earning capacity as indicated above.
If the results of the two methods differ, an intermediate figure may have to be computed by adjustment of unreasonable expenses and adopting a reasonable proportion of profits.
(3) In the case of a private limited company also where the expenses are incurred out of all proportion to the commercial venture, they will be added back to the profits of the company in computing the yield In such companies the restriction on share transfers will also be taken into consideration as earlier indicated in arriving at a valuation.
(4) Where the dividend yield and earning method break down by reason of the company 's inability to earn profits and declare dividends, if the set back is temporary then it is perhaps possible to take the estimate of the value of the shares before set back and discount it by a percentage corresponding to the proportionate fall in the price of quoted shares of companies which have suffered similar reverses.
(5) Where the company is ripe for winding up then the break up value method determines what would be realised by that process.
(6) As in Attorney General of Ceylon vs Mackie a valuation by reference to the assets would be justified where as in that case the fluctuations of profits and uncertainty of the conditions at the date of the valuation prevented any reasonable estimation of prospective profits and dividends." Since the company involved in this case was a private limited company which was a going concern, the Court following the above principles, negatived the applicability of the break up method for valuation of the shares and upheld the view taken by the High Court that the yield method was the proper method for arriving at the valuation of the shares.
It is clear from this decision that where the shares in a public limited company are quoted on the stock exchange and there are dealings in them, the price prevailing on the valuation date would represent the value of the shares.
But where the shares in a public 364 limited company are not quoted on the stock exchange or the shares are in a private limited company the proper method of valuation to be adopted would be the profit earning method.
This method may be applied by taking the dividends as reflecting the profit earning capacity of the company on reasonable commercial basis but if it is found that the dividends do not correctly reflect the profit earning capacity because only a small proportion of the profits is distributed by way of dividends and a large amount of profits is systematically accumulated in the form of reserves, the dividend method of valuation may be rejected and the valuation may be made by reference to the profits.
The profit earning method takes into account the profits which the company has been making and should be capable of making and the valuation, according to this method is based on the average maintainable profits.
Of course, for the purpose of such valuation, the taxing authority is not bound by the figure of profits shown in the profit and loss account because it is possible that the amount of profits may have suffered diminution on account of unreasonable expenditure or the directors having chosen to take away a part of the profits in the form of remuneration rather than dividends.
The figure of profits in such a case would have to be adjusted in order to arrive at the real profit earning capacity of the company.
It would, thus, be seen that in the case of a company which is a going concern and whose shares are not quoted on the stock exchange, the profits which the company has been making and should be capable of making or in other words, the profit earning capacity of the company would ordinarily determine the value of the shares.
That is why in Mahadeo Jalan 's case the Court quoted with approval the following observations of Williams, J. in McCathie vs Federal Commissioner of Taxation. ". the real value of shares which a deceased person holds in a company on the date of his death will depend more on the profits which the company has been making and should be capable of making,.
having regard to the nature of its business, than upon the amounts which the shares would be likely to realise upon a liquidation," and stated.
in no uncertain terms that "The general principle of valuation in a going concern is the yield on the basis of average maintainable profits subject t adjustment etc.
which the circumstances of any particular case may fall for".
The break up method would not be appropriate for valuation of shares of a company is a going concern, because as pointed out by the Court in Mahadeo Jalan 's case, "among the factors which govern the consideration of the buyer and the seller where the one desires to purchase and the other 365 wishes to sell, the factor or break up value of a share as on liquidation hardly enters into consideration where the shares are of a going concern".
It is only where a company is ripe for winding up or the situation is such that the fluctuations of profits and uncertainty of conditions at the date of valuation prevent any reasonable estimation of the profit earning capacity of the company, that the valuation by the break up method would be justified.
The Revenue leaned heavily on the observation in Mahadeo Jalan 's case that the factors likely to determine the valuation of a share include "in special cases such as investment companies, the asset backing" and urged on the strength of this observation that in the case of an investment company, the asset backing was a relevant consideration and the break up method could not, therefore, be considered as totally irrelevant.
This contention, we are afraid, is based on a wrong reading of the observation of the Court.
When the Court said that in case of an investment company, the asset backing is a relevant factor in determination of the value of he shares, what the Court meant was in order to determine the capacity of the company to maintain its profits the asset backing would be a relevant consideration.
The profit earning capacity of the company which would determine the valuation of the shares would naturally have to take.
into account not only the profits which the company is actually making but also the profits which the company should be capable of making and in order to arrive at a proper estimation of the latter, the asset backing would be a relevant factor in case of an investment company.
It would not be right to read the observation of the Court as suggesting that valuation of the assets would be a relevant factor in determining the valuation of shares.
The Revenue, of course, did not plead for exclusive adoption of the break up method and wanted the mean of the values arrived at by applying the break up method and the profit earning method to be taken as representing the valuation of the shares, but we do not see on what principle can a combination of the two methods be justified.
There is no authority either in any judicial decision or in any standard text book on valuation of shares which recognises the validity of a combination of the two methods, though it may sound acceptable as a compromise formula.
In fact, Adamson has criticised this combination of the two methods as unscientific in his book on "The Valuation of Company Shares and Businesses", (Fourth Edition) at page 55, where he has said: "The mere averaging of two results obtained by quite different basis of approach can hardly be said to represent any logical approach, whatever its merit as a compromise.
366 Despite its evident popularity in many quarters, it has not been given judicial recognition in decisions involving the fixation of a value by the Court.
" The combination of the two methods advocated on behalf of the Revenue has, thus, no sanction of any judicial or other authority and cannot be accepted as a valid principle of valuation of shares.
The Revenue than pointed out that the principles of valuation set out by the Court in Mahadeo Jalan 's case were merely broad guidelines and they did not obviate the necessity of considering each case on its own facts and circumstances and in support of this contention the Revenue relied on the observation made by the Court that in setting out these principles, the Court had not "tried to L., down any hard and fast rule because ultimately the facts and circumstances of each case, the nature of the business, the prospects of profitability and such other considerations will have to be taken into account as will be applicable to the facts of each case.
" Now it is true, as observed by the Court, that there cannot be any hard and fast rule in the matter of valuation of shares in a limited company and ultimately the valuation must depend upon the facts and circumstances of each case, but that does not mean that there are no well settled principles of valuation applicable in specific fact situations and whenever a question of valuation of shares arises, the taxing authority is in an uncharted sea and it has to innovate new methods of valuation according to the facts and circumstances of each case.
The principles of valuation as formulated by the Court are clear and well defined and it is only in deciding which particular principle must be applied in a given situation that the facts and circumstances of the case become material.
It is significant to note that immediately after making the above observation the Court hastened to make it clear, as if in answer to a possible argument which might be advanced on behalf of the Revenue on the basis of that observation that the yield method is the generally applicable cable method while the break up method is the one resorted to in exceptional circumstances or where the company is ripe for liquidation.
Here in the present case Mafatlal Gagalbhai & Co. Pvt. Ltd. was a private limited company which was a going concern and it was neither ripe for liquidation nor were there any exceptional circumstances which should attract the applicability of the break up method.
The profit earning method was, therefore, the only method which 367 could properly be applied for arriving at the valuation of the shares ill the company and the tribunal was right in accepting the figures of valuation in the Report of M/s. C. C. Choksy Co., based on the application of the profit earning method.
The answer to the question of law relating to the method to be adopted for valuation of shares in the company was clearly concluded by the decision in Mahadeo Jalan 's case and the High Court was, therefore, justified in refusing to call for a reference on this question.
It is true that in the present appeals, the question of valuation arises not only under the Wealth Tax Act but also under the Gift Tax Act, but since the provision for determining the value of an asset is the same in section 6 sub section (1) of the Gift Tax Act as it is in section 7 sub section (1) of the Wealth Tax Act, the principles of valuation laid down ill Mahadeo Jalan 's case must apply equally i relation to valuation of shares to be made for the purpose of the Gift Tax Act.
It was, however, contended on behalf OF the Revenue that there is a vital difference between section sub section (t) of the Gift Tax Act and section 7 sub section (1) of the Wealth Tax Act in aS much aS section S sub section ( 1 ) of the Gift Tax Act is subject inter alia to the provision of sub section (3) of that section and this latter sub section provides that where the value of any property cannot be estimated under sub section ( 1 ) because it is not saleable in the open market, the value shall be determined in the prescribe manner and Rule 10 sub rule (2) of the Gift Tax Rules prescribes the manner of valuation of shares in a private limited company where the Articles of Association contain restrictive provision as to the alienation of shares, by providing that in such a case, the value of the shares "if not ascertainable by reference to the value of the total assets of the company, shall be estimated to be what they would fetch if on the date of gift they could be sold in the open market on the terms of the purchaser being entitled to be registered as holder subject to the articles, but the fact that a special buyer would for his own special reasons give a higher price that the price in the open market shall be disregarded".
The argument of the Revenue was that Mafatlal Gagalbhai Pvt Ltd, was a private limited company and its Articles of Association admittedly contained restrictive provision as to the alienation of shares and, therefore, Rule 10 sub rule (2) was applicable and according to that sub rule, the value of the shares was required to be 1 ascertained by reference to the value of the total assets of the company and it was only if the value was not so ascertainable that 368 it could be determined in any other manner.
The break UP method was thus, according to this sub rule, the primary method to be applied for arriving at the valuation of the shares and in the circumstances the Tribunal was wrong ill determining the value of the shares by applying the profit earning method, atleast so far as the valuation under the Gift Ta Act was concerned.
Now it is difficult to see how the question whether the valuation of the shares should have been made on the basis of the break up method by reason of Rule 10 sub rule (2) of the Gift Tax Rules can be required to be referred by the Tribunal to the High Court.
It is well settled that no question can be referred to the High Court unless it arises out of the order of the Tribunal and, as pointed out by this Court in Commissioner of Income tax vs Scindia Steam Navigation Co. Ltd. a question of law can be said to arise out of the order of the Tribunal only if it is dealt with by the Tribunal or is raised before though not decided by the Tribunal and a question of law not raised before the tribunal and not dealt with by it in its order cannot be said to arise out of its order, even if on the facts of the case stated in the order the question fairly arises.
It is obvious that this question sought to be raised on behalf of the Revenue was neither raised before the Tribunal nor decided by it and the only argument advanced before the Tribunal was that the mean of the values arrived at on an application of the profit earning method and the break up method should be taken to be the value of the shares.
There was no argument addressed to the Tribunal that the breakup method should be adopted because that was the primary method prescribed by Rule 10 sub rule (2) and the Tribunal had, therefore, no occasion to deal with such argument.
This question obviously, therefore, does not arise out of the orders of the Tribunal and it cannot be required to be referred to the High Court.
These were the only contentions urged on behalf of the Revenue and since there is no substance in them, the appeals fail and are dismissed with costs, N.K.A. Appeals dismissed.
| IN-Abs | The Chartered Accountants of the assessee company, which was an investment company.
VL ed its shares by applying the profit earning method of valuation of shares without making any adjustment in the profits of the company.
The Gift Tax and Wealth Tax officers did not accept this method and valued The shares by applying the break up method.
The Appellate Assistant Commissioner applied a different method called "the rule of three" and reduced the valuation of the shares; but the figures determined by him were still higher than those claimed by the assessee.
The Revenue preferred an appeal against the order of the Appellate Assistant Commissioner because the valuation of the shares made by the Gift Tax and Wealth Tax officers was reduced by him: the assessee preferred an appeal against the order of the Appellate Assistant Commissioner because he did not accept the valuation put forward d by the assessee.
The Tribunal accepted the valuation made by the Chartered Accountants and rejected the Revenue s appeal.
The Department 's request for making reference to the High Court was rejected on the ground that no referable question of law arose out of the order of the Tribunal.
The High Court refused to call for a reference.
It was contended on behalf of the assessee before this Court that the determination of this question was completely covered by the decision of this Court in Commissioner of Wealth Tax vs Mahadeo Jalan and no useful purpose would be served by calling for reference.
On the other hand the Revenue contended that (1) the decision in Mahadeo Jalan 's case laid down no more than broad guidelines which did rot eliminate the necessity of finding out the appropriate method of valuation in each case and therefore it was necessary to make a reference so that the proper method of valuation of shares could be determined by the High Court.
(2) The break up method according to rule 10(2) of the Gift Tax Rules is the primary method to be applied for arriving at the valuation of the shares and since in this case the articles of association contained a restrictive provision as to the alienation of the shares, the Tribunal was wrong in determining the value of I i the shares by applying the profit earning method so far as the valuation under the Gift Tax Act was concerned.
358 Dismissing the appeals, ^ HELD: 1.
It is not every question of law that is require to referred by the Tribunal to he High Court.
Where the answer to the question of law is self evident or is concluded by a decision of this Court no reference would be justified [361 C D] The answer to the question of law relating to the method adopted for valuation of shares in the company was clearly concluded by the decision in Mahadeo Jalan 's case and the High Court was justified in refusing to call for a reference on this question.
[367A B] In the instant case the assessee was a private limited company which was a going concern.
lt was neither ripe for liquidation nor were there any exceptional circumstances which should attract the applicability or the break J up method.
The profit earning method was, therefore, the only method which could properly be applied for arriving at the valuation of the shares in the company and the Tribunal was right in accepting the figures of valuation in the report of the Chartered Accountants based on the application of the profit earning method.
[366G H, 367A] 2.
It is well settled that no question can be referred to the High Court unless it arises out of the order of the Tribunal.
A question of law can be said to arise out of the order of the Tribunal only if it is dealt with by the Tribunal or is raised before it, though not decided by the Tribunal.
A question of law not raise before the Tribunal and not dealt with by it in is order cannot be said to arise out of its order, even if on the facts of the case stated in the order, the question fairly arises.
[368C D] In the instant case the question sought to be raised by the Revenue was l ' neither raised before the Tribunal nor decided by it and the only argument t advanced before the Tribunal was that the mean of the values arrived at on an application of the profit earning method and the break up method should be taken to be the value of the shares.
No argument was addressed to the Tribunal that the break up method should be adopted because that was the primary method prescribed by rule 10(2) and the Tribunal had no occasion to deal with such argument.
The question did not arise out of the order of the Tribunal and it could not be required to be referred to the High Court.
3(i F]
|
Civil Appeal No. 1113 of 1976.
Appeal by Special Leave from the Judgment and Order dated 16 4 1976 of the Allahabad High Court in execution Second Appeal No. 2162 of 1974.
J. P. Goyal and section K. Jain for the Appellants.
P. G. Gokhale and B. R. Agarwala for the Respondents.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
Rattan Lal sold certain land to Sri Ram for Rs. 10,000/ under a registered sale deed dated 31 March, 1960.
On April 4, 1960 Sri Ram executed an agreement to reconvey the 471 property for a sum of Rs. 15,000/ if paid within a period of two years.
Rattan Lal filed suit No. 18 of 1961 in the Court of First Additional Civil Judge, Meerut for specific performance of the agreement to reconvey and obtained a decree on April 17, 1962.
The decree was confirmed in appeal by the High Court of Allahabad on September 5, 1963.
On April 25, 1963 Rattan Lal assigned the rights which he had under the decree in favour of the present appellants, Dhani Ram Gupta and another.
The appellants filed an application for execution of the decree under Order XXI, Rule 16 of the Code of Civil Procedure on December 10, 1963.
Notice of application was issued to Sri Ram, the judgment debtor as well as the original decree holder Rattan Lal.
Rattan Lal kept quiet but on March 7, 1964, the judgment debtor Sri Ram filed objections contending that the execution application was not maintainable.
The application was adjourned from time to time.
Meanwhile, on May 26, 1964, Rattan Lal the original decree holder and Sri Ram, the judgment debtor moved the Executing Court to record full satisfaction of the decree.
It was stated that the parties had entered into a compromise and that the decree was proposed to be satisfied by payment of a sum of Rs. 7,000/ in cash by the judgment debtor to the original decree holder.
The amount was paid in open Court and satisfaction of the decree was duly recorded on May 27, 1964 by the Executing Court, who, however, observed that the compromise would not have any effect whatsoever ' on the rights, if any, of Dhani Ram, who had already filed an execution application pursuant to the deed of assignment dated April 25, 1963.
Thereafter, the execution application filed by the appellants was taken up and was dismissed on October 9, 1964, on the ground that the assignee had no right to execute the decree after the judgment debtor had satisfied the original decree holder by entering into a compromise with him.
On appeal the learned Additional District Judge, Meerut held that the appellant assignees had the right to execute the decree and that their right could not be defeated by the collusive compromise entered into between the judgment debtor and the original decree holder subsequent to the date of assignment and with notice of assignment.
One of the contentions raised before the learned Additional District Judge was that the so called deed of assigned did not in fact have the effect of assigning the decree to the appellants.
That contention was also negatived by the learned District Judge.
On further appeal to the High Court by the Judgment debtor, it was held that the assignee of the decree had no right to execute the decree until the assignment was recognised by the Court.
Until that was done, it was held, it was open to the original decree holder to put the decree in execution; it was also open to the judgment debtor to satisfy the 472 decree fully by payment to the decree holder or by other adjustment.
The High Court however, did not express any opinion on the question whether the deed of assignment did assign the right of the decree holder to the appellants.
The assignees of the decree have preferred this appeal after obtaining special leave under Article 136 of the Constitution.
Even the bare statement of the facts is sufficient to show how the original decree holder and the judgment debtor have colluded to deprive the appellants of their rights under the deed of assignment and how the Executing Court tacitly gave its seal of approval by permitting satisfaction of the decree to be entered despite the fact that the decree had already been assigned to the knowledge of the judgment debtor.
The process of the Court cannot be reduced to a mockery and we do not think that the procedure prescribed by the Code of Civil Procedure permits this to be done notwithstanding the argument of Shri D. V. Patel and Shri Govind Dass, learned Counsel for the judgment debtor to the contrary, in support of the judgment under appeal.
Their submission was that the assignee of a decree had no rights until the assignment was recognised by the Court.
In substance, the submission of the learned Counsel was that the recognition by the Court it was that completed the assignment and gave the right to the assignee to execute the decree.
Let us examine if the provisions of the Code of Civil Procedure justify the submission of the learned counsel.
Section 2(3) defines "decree holder" as meaning "any person in whose favour a decree has been passed or an order capable of execution has been made".
Section 51 provides that the Court may, on the application of the decree holder order execution of the decree by various methods.
Section 146 provides that where any proceeding may be taken or application made by or against any person, then the proceeding may be taken or the application may be made by or against any person claiming under him.
Order XXI of the Code of Civil Procedure deals with execution of decrees and orders and Orders XXI r. 2 in particular provides for payment or adjustment out of Court and for the recording of satisfaction of the decree by the Court in whole or in part as the case may be.
Order XXI r. 16 with which we are primarily concerned is as follows: "16.
Where a decree or, if a decree has been passed jointly in favour of two or more persons, the interest of any decree holder in the decree is transferred by assignment in writing or by operation of law, the transferee may apply for 473 execution of the decree to the Court which passed it and the decree may be executed in the same manner and subject to the same conditions as if the application were made by such decree holder: Provided that, where the decree, or such interest as aforesaid, has been transferred by assignment, notice of such application shall be given to the transferred and the judgment debtor, and the decree shall not be executed until the Court has heard their objections (if any) to its execution: Provided also that, where a decree for the payment of money against two or more persons has been transferred to one of them, it shall not be executed against the others." "(Explanation omitted)".
We are unable to read Order XXI r. 16 as furnishing any foundation for the basic assumption of the learned counsel for the respondent that property in a decree does not pass to the transferee under the assignment until the transfer is recognised by the Court.
Property in a decree must pass to the transferee under a deed of assignment when the parties to the deed of assignment intend such property to pass.
It does not depend on the Court 's recognition of the transfer.
Order XXI r. 16 neither expressly nor by implication provided that assignment of a decree does not take effect until recognised by the Court.
It is true that while Order XXI r. 16 enables a transferee to apply for execution of the decree, the first proviso to Order XXI r. 16 enjoins that notice of such application shall be given to the transferor and the judgment debtor and that the decree shall not be executed until the Court has heard their objections, if any, to its execution.
It is one thing to say that the decree may not be executed by the transferor until the objections of the transferor and the judgment debtor are heard, it is an altogether different thing to say that the assignment is of no consequence until the objections are heard and decided.
The transfer as between the original decree holder and the transferee is effected by the deed of assignment.
If the judgment debtor has notice of the transfer, he cannot be permitted to defeat the rights of the transferee by entering into an adjustment with the transferor.
If the judgment debtor has no notice of the transfer and enters into an adjustment with the transferor before the transferee serves him with notice under Order XXI r. 16, the judgment debtor is protected.
This in our view is no more than plain good sense.
In Dwar Buksh Sirkar vs Fatik Jali, the decree holder represented to the Court that the 474 judgment debtor had satisfied the decree by payment and wanted his execution application to be disposed of accordingly.
Before satisfaction could be recorded a transferee of the decree from the original decree holder intervened and claimed that satisfaction could not be recorded as there was a valid transfer of the decree in his favour prior to the alleged payment by the judgment debtor to the original decree holder.
The argument before the High Court was that the assignee could not prevent the recording of the satisfaction of the decree as he had not filed an execution application and got the assignment in his favour recognised.
The High Court of Calcutta observed: "The only provision in the Code referring expressly to the assignment of a decree is contained in section 232, and that no doubt contemplates a case in which the assignee applies for execution.
In such a case the Court may, if it thinks fit, after notice to the decree holder and the judgment debtor, allow the decree to be executed by the assignee.
If, how ever, there is an assignment pending proceedings in execution taken by the decree holder, I see nothing in the Code which debars the Code from recognising the transferee as the person to go on with the execution.
The recognition of the Court is no doubt necessary before he can execute the decree, but it is the written assignment and not the recognition which makes him the transferee in law.
The omission of the transferee, if it was an omission, to make a formal application for execution, was merely an error of procedure and does not affect the merits of the. . . . . . . .
It is argued for the respondent that the transferee 's title was not complete as express notice of the transfer had not been given to the judgment debtor.
As already observed, the transfer, as between transferor and the transferee, is effected by the written assignment.
If the judgment debtor had no notice of the transfer and being otherwise unaware of it paid the money to the decree holder, the payment was, of course, a good payment, and he cannot again be held liable to the transferee".
We express our agreement with the observations made by the Calcutta High Court.
In one of the cases cited by the learned counsel for the respondent, namely Arvapalli Ramrao vs Kanumarlapudi Ranganayakulu and others, a Full Bench of the Andhra Pradesh High Court disagreeing with the observations made in Puthiandi Mammed vs Avalil 475 Moidin, and agreeing with the observations made in Sadagopa Chariar vs Raghunatha Chariar held that when a decree was transferred by an assignment in writing the property in the decree passed to the transferee at the time of assignment and that recognition of the Court was not necessary to complete the transaction of assignment but was required to enable the assignee decree holder to proceed with the execution.
We agree.
The learned counsel for the respondent relied upon Kadir Mira Sahib vs Peer Mohd., Ch.
Mohd. Ishrat Ali & Ors.
vs Molvi Sayed Raza and Duvvuru Balasubramanya Reddy vs Duvvruru Munuswami Reddy & Ors.
We do not think that it is necessary for us to refer in any detail to these cases.
The basic assumption in Ch.
Mohd. Ishrat Ali & Ors.
vs Molvi Sayed Raza and Duvvuru Balasubramanya Reddy vs Duvvuru Muniswami and Ors.
(supra) and was that the transfer was complete only on recognition by the Court.
We have pointed out that it is not so.
In Ch.
Mohd. Ishrat Ali & Ors.
vs Molvi Sayed Raza (supra) there are some observations which are helpful to the respondent but the question presently under consideration did not arise and we need say no more than that.
We are of the view that the High Court was wrong in holding that the adjustment of the decree between the judgment debtor and the transferor decree holder even after notice of the application under Order XXI, r. 16 had been served on the transferor and the judgment debtor barred execution of the decree by the transferee.
The question whether there was any transfer of the decree under the deed of assignment was not decided by the High Court and we, therefore, allow the appeal and remit the matter to the High Court for decision upon this question only.
The appeal is allowed with costs as indicated.
N.V.K. Appeal allowed.
| IN-Abs | The appellants who were the assignees of a decree for specific performance of an agreement to reconvey property, filed an application for execution of the decree under Order XXI, rule 16 of the Code of Civil Procedure.
Notice of the application was issued to the respondent judgment debtor as well as the original decree holder.
The judgment debtor filed objections contending that the execution application was not maintainable.
The application was adjourned from time to time.
In the meanwhile the original decree holder and the judgement debtor moved the executing court to record full satisfaction of the decree, stating that they had entered into a compromise and that the decree was proposed to be satisfied by payment of a fixed sum of money in cash.
The money was paid in cash by the judgment debtor to the original decree holder in open court and satisfaction of the decree was recorded by the Executing Court which also observed that the compromise would not have any effect whatsoever on the rights, if any, of the transferee decree holder who had already filed the execution application pursuant to the deed of assignment.
The execution application filed by the appellants was thereafter taken up and dismissed on the ground that the assignees had no right to execute the decree after the judgment debtor had satisfied the original decree holder by entering into a compromise with him.
In the appeal, the District Court held that the appellants had the right to execute the decree and that their right could not be defeated by the collusive compromise entered into between the judgment debtor and the original decree holder subsequent to the date of assignment and with notice of assignment.
In the further appeal to the High Court by the judgment debtor, it was held that the assignee of the decree had no right to execute the decree until the assignment was recognised by the Court and until that was done, it was open to the original decree holder to put the decree in execution and it was also open to the judgment debtor to satisfy the decree fully by payment to the decree holder or by other adjustment.
In the appeal to this Court by the assignees of the decree on the question whether the adjustment of the decree between the judgment debtor and the transferor decree holder barred execution of the decree by the transferee: ^ HELD: 1.
The High Court was wrong in holding that the adjustment between the judgment debtor and the transferor decree holder even after notice 470 of the application under Order XXI, rule 16 had been served on the transferor and the judgment debtor barred execution of the decree by the transferee.
[475 D] 2.
Property in a decree must pass to the transferee under a deed of assignment when the parties to the deed of assignment intend such property to pass.
It does not depend on the Court 's recognition of the transfer.
Order XXI rule 16 neither expressly nor by implication provides that assignment of a decree does not take effect until rcognized by the Court.
[473 D] 3.
While Order XXI rule 16 enables the transferee to apply for execution of the decree, the first proviso to Order XXI rule 16 enjoins that notice of such application shall be given to the transferor and the judgment debtor and that the decree shall not be executed until the court has heard their objections, if any, to its execution.
[473 E] 4.
The transfer as between the original decree holder and the transferee is effected by the deed of assignment.
If the judgment debtor has notice of the transfer, he cannot be permitted to defeat the rights of the transferee by entering into an adjustment with the transferor.
If the judgment debtor has no notice of the transfer and enters into an adjustment with the transferor before the transferee serves him with notice under Order XXI Rule 16 the judgment debtor is protected.
[473 G] In the instant case, the original decree holder and the judgment debtor had colluded to deprive the appellants of their rights under the deed of assignment and the Executing Court tacitly gave its seal of approval by permitting satisfaction of the decree to be entered despite the fact that the decree had already been assigned to the knowledge of the judgment debtor.
The process of the Court cannot be reduced to a mockery and the procedure prescribed by the Code of Civil Procedure does not permit this to be done.
[472 C] Dwar Buksh Sirkar vs Fatik Jali I.L.R. 26 Calcutta 250 @ 253, 254; Avrapalli Ramrao vs Kanumarlapudi Ranganayakulu and others AIR 1964 A.P. 1; Sadagopa Chariar vs Raghunatha Chariar ILR , approved.
Puthiandi Mammed vs Avalil Moidin ILR , disapproved.
|
Civil Appeal Nos.
2005 2006 of 1972.
From the Judgment and order dated 17 11 1971 and 16 11 71 of the Andhra Pradesh High Court in W.P. Nos. 54 of 1970 and 4059/ 69.
N. A. Palkhivala, Y. V. Anjaneyulu, A. Subba Rao, J. B. Dadachanji, Mrs. A. K. Verma, T. Ansari and A. H. Haskar for the Appellant.
319 V. section Desai, B. B. Ahuja and Miss A. Subhashini for the Respondent.
section P. Mehta, J. B. Dadachanji, R. Narain, Mrs. A. K. Verma, T. Ansari and A. H. Haskar for the Intervener.
The Judgment of the Court was delivered by TULZAPURKAR, J.
These two appeals by certificates granted by the High Court of Andhra Pradesh raise the question of legality and or validity of two notices issued by the Assistant Controller of Estate Duty, Hyderabad, one under section 59(a) and the other under section 61 of the (hereinafter called 'the Act ').
Two parcels of agricultural land (admeasuring 22 Acres 24 Guntas and 8 Acres 23 Guntas) situated in Moosapet village, belonging to one Rashid Shapoor Chenai were during his lifetime, acquired for the Synthetic Drugs Project Factory of the Indian Drugs and Pharmaceutical Ltd. by the Andhra Pradesh Government by Notifications issued on June 19, 1961 and January 18, 1962 under the Land Acquisition Act.
D Possession of the lands was taken in January 1963 and by two separate awards both made on January 31, 1963 the Special Deputy Collector of Land Acquisition awarded a total compensation of Rs. 20,000.
This compensation was received by Rashid himself during his lifetime.
Later two more parcels of agricultural land (admeasuring 131 Acres 10 Guntas and 224 Acres 22 Guntas) situated at Qutbillapur in Medchal Taluk belonging to Rashid where acquired for Hindustan Machine Tools, Units I and II by the Andhra Pradesh Government by Notifications issued on November 1, 1963 and February l, 1964 under the Land Acquisition Act.
Though the former notification was issued during his lifetime and the latter after death, possession of both the lands was taken after his death by the Government on December 4, 1963 and March 15, 1964 and by two separate awards made on March 12, 1965 and March 19, 1965, the Special Deputy Collector awarded a total compensation of Rs. 4,29,360.
This compensation was received in April ]965 by the heirs of Rashid, namely, his widow Mrs. Freny Chenai and son Shapoor Rashid Chenai on whom the estate of Rashid devolved in equal shares.
On the death of Rashid on November 4, 1963, Mrs. Freny Chenai (the appellant in C.A. No. 2206 of 1972) as his widow and the 'accountable person ' filed before the respondent on December 26, 1963 on account of the properties passing on the death of her husband under section 53(3) of the Act.
The estate duty assessment was completed by the respondent on March 29, 1966.
With regard to the lands acquired both during the lifetime of Rashid as well as after their values 320 were taken at the respective figures of compensation (Rs. 20,000 and Rs. 4,29,360) awarded for them by the Special Deputy Collector.
Unfortunately, within two years of his father 's death, Shapoor Rashid Chenai (the son) died on May 7, 1965.
As stated earlier he had one half share in the undivided estate of his late father Rashid.
As required by s.53 of the Act, (Mrs. Khorshed Chebai) (the appellant in C.A. No. 2205/1972) as his widow and the 'accountable person ' filed before the respondent on November 6, 1965 on account of the properties passing on the death of her husband and the Respondent completed the estate duty assessment on December 30, 1966.
In making this assessment also the respondent as in the case of estate duty assessment in respect of the properties passing on the death of Rashid, adopted the values of the lands acquired by the Government at figures awarded by the Special Deputy Collector for those lands.
It appears that the legal heirs of Rashid did not accept the awards made by the Special Deputy Collector in respect of the aforesaid lands and requested the Special Deputy Collector to refer the question of compensation to Civil Court under s.18 of the Land Acquisition Act.
References were, accordingly, made and the Civil Court by its order dated March 6, 1967 enhanced the compensation awarded by the Special Deputy Collector in respect of Moosapet land by Rs. 1,90,000 and by its order dated October 30, 1967 enhanced the compensation in respect of Qutbillapur lands by Rs. 20,45,000.
The Government did not accept the decisions of the Civil Court and filed appeals to the High Court challenging the enhancement, which appeals are still pending in the High Court.
On receipt of information that enhanced compensation was awarded by the Civil Court in respect of the above lands the respondent issued two notices both dated November 14, 1969, one addressed to Mrs. Khorshed Shapoor Chenai and the other to Mrs. Freny Rashid Chenai.
The former notice was issued under section 59(a) of the Act calling upon Mrs. Khorshed Chenai to show cause why the estate duty assessment made on December 30, ]966 should not be reopened and revised in view of the extra compensations awarded by the Civil Court in respect of the lands acquired by the Government, while the latter notice was issued under section 61 of the Act requiring Mrs. Freny Chenai to show cause why the mistake apparent from the record should not be rectified and the enhanced compensation included in the principal value of the estate.
These notices were challenged by the recepients by filing writ petitions in the High Court.
The notice under section 59(a) of the Act issued for the reopening of the assessment completed on December 30, 1966 was challenged in 321 writ petition No. 54 of 1970 on two grounds: (a) that after compensation had been awarded by the Special Deputy Collector under section 11 of the Land Acquisition Act the heirs of the deceased Rashid had merely exercised a right to sue for further compensation which was merely a hope or a chance that the compensation might be enhanced, that such hope or chance could not be elevated to the status of an assets or property and as such not asset or property chargeable to estate duty had escaped assessment and (b) that even assuming that any asset or property chargeable to estate duty had escaped assessment the notice was illegal and without jurisdiction because such escapement was not due to any omission or failure on the part of the. accountable person to disclose fully and truly material facts necessary for making the assessment.
As regards the first ground, the High Court took the view that the right to receive compensation equivalent to market value of the lands on the dates of notifications which sprang directly from the acquisition was "property", that no fresh or independent right "to receive extra compensation" accrued to the heirs of the deceased and that since compensation awarded by Special Deputy Collector had been enhanced by Rs. 1,90,000 for the lands acquired for the Synthetic Drugs Project and by Rs. 20,45,000 for the lands acquired for the Hindustan Machine Tools by the Civil Court, these facts, which came into existence subsequent to the making of the original assessment, easily led to the conclusion that the values adopted by the respondent for these lands were far below their real and true market value and as such property (meaning lands) chargeable to estate duty having been under valued had escaped assessment of the duty.
On the second aspect the High Court held that the fact that land References were filed against the awards of the Special Deputy Collector under section 18 of the land Acquisition Act and were pending in the Civil Court was not disclosed by the account.
able person, that the said fact was a primary and material fact and not an inferential fact and its non disclosure amounted to omission or failure which could lead the assessing authority to a reasonable belief that property chargeable to estate duty had escaped assessment and as such the respondent had jurisdiction to issue the notice.
In this view of the matter, the High Court upheld the notice issued under section 59(a) of the Act and dismissed the writ petition.
This decision of the High Court is being challenged before us in Civil Appeal No. 2205 of 1972.
The issuance of the notice under section 61 of the Act was challenged in Writ Petition No. 4059 of 1969 principally on three grounds: (i) that the accountable person had only a claim lo get an extra compensation which was an inchoate right which could not be called 'property ' and whether that claim amounted to a right to property capable of sale in open market was a highly debatable question and a mistake which had 322 to be discovered after lengthy discussion and debate could not be said ' to be a mistake apparent on the record, (ii) that land acquisition proceedings and land References in Civil Court not being part of the assessment record a mistake discovered by reference to such other record was not a mistake apparent from the record of the case and (iii) that the extra compensation received by the legal heirs of Rashid belonged to them and not to the deceased and hence it was not property that passed on the death of the deceased and, therefore, no property escaped assessment.
In other words, under the guise of rectification, the enhanced compensation could not be taken into account and, therefore, the impugned notice was illegal and without jurisdiction.
The High Court negatived the contentions and upheld the impugned notice.
This decision is challenged in Civil Appeal No. 2206 of 1972.
Dealing first with C.A. No. 2205 of 1972, wherein the notice issued under s.59(a) of the Act has been challenged, counsel for the appellant raised three contentions against the view taken by the High Court.
At the out set counsel pointed out that so far as the estate duty assessment in respect of the properties passing on the death of Shapoor was concerned, the respondent as well as the High Court had proceeded on the wrong assumption that the acquired lands formed part of the estate of the deceased and passed on his death, for, it was on such basis that the High Court held that having regard to the enhanced compensation granted by the Civil Court for the lands such property (meaning lands) had been undervalued in the original assessment and as such it had escaped assessment to duty.
According to him the lands no longer formed part of the estate of the deceased at the date of his death, namely, on May 7, 1965, inasmuch as long prior thereto they had vested in the Government, and, therefore, it was merely the right to receive compensation, which, if at all, could constitute property passing on the death of the deceased., but he contended that during the lifetime of the deceased the lands in question had not merely been acquired but even the compensation as determined under the awards made by the Special Deputy Collector was paid to and received by the deceased and hence at the time of the death the initial right to receive compensation had already merged in those awards and the only right which the deceased had was the right to agitate against the correctness of the awards and nothing more and this right to claim further compensation was a precarious right, being merely a right to litigate a chancy and dicey right, which could not be elevated to the status of any asset or property and as such there was no question of any property having escaped the assessment to duty.
It was urged that such a right to further compensation would become property only when the claim would be accepted ' 323 finally by the Court and till the enhanced compensation became payable by reason of final adjudication of the Court no property could be said tc have come into existence and certainly it was not in existence at the date of death.
It was pointed out that against the decrees passed by the City Civil Court appeals had been preferred by the Government to the High Court and even the High Court 's decision might be carried in further appeal to this Court and, therefore, till the claim was finally accepted by the highest Court no property (enhanced compensation) could be said to have come into existence.
Counsel urged that it would run counter to all principles of direct taxation to regard the amount decreed subsequently by the final Court as property having come into existence retrospectively on the relevant date (being date of death under Estate Duty Act and valuation date under the Wealth Tax Act) though, in fact, it did not exist on that date, and in this behalf reliance was placed upon the decision of the Andhra Pradesh High Court in Khan Bahadur Ahmed Alladin & Sons.
vs Commissioner of Income tax, two decisions of the Calcutta High Court, namely, Commissioner of Wealth Tax, West Bengal (II) vs U.C. Mahatab and Commissioner of Income Tax, West Bengal II vs Hindustan Housing and Land Development trust Ltd. two decisions of the Gujarat High Court, namely, Topandas Kundanmal vs Commissioner of Income tax and Addl.
Commissioner of Income Tax, Gujarat vs New Jehangir Vakil Mills Co. Ltd. and one decision of the Kerala High Court in M. Jairam vs Commissioner of Income Tax, Kerala.
Secondly, counsel contended that assigning that the right to receive compensation survived and it was that right which was being prosecuted by the heirs of Rashid in Civil Court, the impugned notice had not been issued on the ground that such right to compensation had been undervalued on the earlier occasion and required to be properly valued as at the date of the death but the basis on which it was issued was clearly unsustainable in law P inasmuch as the respondent had issued it on the assumption that there had been escapement of assessment to duty because the lands in the original assessment had been undervalued in view of the glaring enhanced compensation awarded by the Civil Court, and the High Court 's decision upholding the issuance of such notice on the wrong basis was liable to be set aside.
Thirdly, counsel contended that seeking References under the Land Acquisition Act and their pendency in Civil 324 Court could not be said to be primary facts, non disclosure of which could amount to an omission or failure on the part of the accountable person resulting in escapement of assessment to duty.
On the other hand counsel for the Revenue pressed for our acceptance the view taken by the High Court.
He fairly conceded that the lands in question could not be regarded as forming part of the estate of the deceased on the relevant date inasmuch as the lands had vested in the Government long prior to the death of the deceased, but he contended that upon such acquisition of lands, the right to receive compensation at market value on the dates of the relevant notifications accrued to the deceased and such right was unquestionably property which would pass on the death of the deceased.
He disputed that this right to receive compensation got merged in the awards made by the Special Deputy Collector or that thereafter such right ceased to exist.
According to him if the awards made by the Special Deputy Collector had been acquiesced in and accepted without any protest by the deceased or his heirs, such right would have merged in the said awards, but where, as in the case here, the awards made by the Special Deputy Collector, which in law are nothing but offers made by the Government to the claimant, are not accepted or are accepted under protest and the claimant seeks land References in Civil Courts, the right to compensation must be regarded as having survived or kept alive by the claimants and it is that property (right to compensation) which will have to be evaluated by the assessing authority as; on the date of death.
According to him obviously this asset or property had not been correctly valued in the original assessment proceedings inasmuch as glaring enhancement had been granted by the Civil Courts in the land References and, therefore, there was escapement of assessment to duty, and hence the notice under section 59(a) of the Act should be regarded as having been issued properly.
Counsel further contended that the High Court had rightly taken the view that seeking References under the Land Acquisition Act and their pendency in Civil Court were primary facts which had not been disclosed by the accountable person during the original assessment and such non disclosure led to the reasonable belief that there was escapement of assessment to duty.
The impugned notice according to him, therefore, was relied and justified.
As stated above, so far as the estate duty assessment in respect of the properties passing on the death of Shapoor was concerned, counsel for the Revenue fairly conceded that the lands which were the subject matter of acquisition proceedings could not be regarded as forming part of the estate of the deceased on the relevant date and could not pass on his death inasmuch as those lands had vested in the Government 325 long prior to his death but the right to receive compensation at market value on the dates of the relevant notifications unquestionably accrued to the deceased which was property and it would be such property that would pass on the death of the deceased.
That such right is property is well settled and if necessary reference may be made to a decision of this Court in Pandit Lakshmi Kant Jha vs Commissioner of Wealth Tax, Bihar and Orissa, a case under the where it has been clearly held that the right to receive compensation in respect of the Zamindari estate which was acquired by the Government h , under the Bihar Land Reforms Act, 1950, even though the date of payment was deferred, was property and constituted an asset for the purpose of that taxing statute.
In other words, since the lands were lost to the estate of the deceased before the relevant date, namely, the date of death, it would be the right to receive compensation under the Land Acquisition Act that will have to be evaluated under the Estate Duty Act.
Counsel for the appellant did not dispute this position but he contended that no sooner the Collector (the Special Deputy Collector here in) made his awards determining the amounts of compensation payable to the claimants under sec.
11 of the Land Acquisition Act, the right to receive compensation must be regarded as having merged in the awards, the determination having been made by a statutory public official and what the claimants would be left with thereafter was merely a right to agitate the correctness of such determination and this right to claim further compensation being merely a right to litigate was no asset or property and further that such right would become asset or property only after the Civil Court finally adjudicated upon such claim.
The High Court, while negativing this contention, has held that the "right to receive extra compensation" was not a separate or different right independent of "the right to receive compensation".
It has observed thus: "The right to receive compensation for the lands acquired by the Government, at their market value at the date of the acquisition is one and indivisible right.
There is no right to 'receive compensation ' and a separate right to receive 'extra compensation '.
The only right is to receive the compensation for the lands acquired by the Government, which is the fair market value on the date of acquisition.
The argument of learned counsel that the right to receive extra compensation accrued when the Civil Court passed the order and not before does not merit acceptance.
The 326 so called right to receive extra compensation cannot be torn from or considered separately from the right to receive the market value of the lands acquired by the Government.
That right accrues to the owner of the lands as soon as the lands are acquired by the Government.
It is, therefore, difficult to accept the argument of the learned counsel for the petitioner that a fresh and an independent right to 'receive extra compensation ' accrue to the heirs of the deceased and that it was owned and possessed by the heirs of the deceased." In our opinion the High Court was right in holding that there are no two separate rights one a right to receive compensation and other a right to receive extra or further compensation.
Upon acquisition of his lands under the Land Acquisition Act the claimant has only one right which is to receive compensation for the lands at their market value on the date of the relevant notification and it is this right which is quantified by the Collector under s.11 and by the Civil Court under s.26 of the Land Acquisition Act.
It is true that under s.11 the Collector after holding the necessary inquiry determines the quantum of compensation by fixing the market value of the land and in doing so is guided by the provisions contained in sections 23 and 24 of Act the very provisions by reference to which the Civil Court fixes the valuation.
It is also true that the Collector 's award is, under s.12, declared to be, except as otherwise provided, final and conclusive evidence as between him and the persons interested.
Even so, it is well settled that in law the Collector 's award under s.11 is nothing more than an offer of compensation made by the Government to the claimants whose property is acquired (vide Privy Council decisions in Ezra vs Secretary of State for India and this Court 's decision in Raja Harish Chandra vs Dy.
Land Requisition Officer and Dr. G. H. Grant vs State of Bihar.
If that be the true nature of the award made by the Collector then the question whether the right to receive compensation survives the award must depend upon whether the claimant acquiesces therein fully or not.
If the offer is acquiesced in by total acceptance the right to compensation will not survive but if the offer is not accepted or is accepted under protest and a land reference is sought by the claimant under s.18, the right to receive compensation must be regarded as having survived and kept alive which the claimant prosecutes in Civil Court.
It is impossible to accept the contention that no sooner the Collector has made his award under s.11 the right to compensation is destroyed or ceases to exist or is merged in the award, or what is left 327 with the claimant is a mere right to litigate the correctness of the award.
The claimant can litigate the correctness of the award because his right to compensation is not fully redeemed but remains alive which he prosecutes in Civil Court.
That is why when a claimant dies in a pending reference his heirs are brought on record and are permitted to prosecute the reference.
This, however, does not mean that the Civil Court 's evaluation of this right done subsequently would be its valuation as at the relevant date either under the Estate Duty Act or the Wealth Tax Act.
It will be the duty of the assessing authority under either of the enactments to evaluate this property (right to receive compensation at market value on the date of relevant notification) as oh the relevant date (being the date of death under the Estate Duty and valuation date under the Wealth Tax Act).
Under s.36 of the Estate Duty Act the assessing authority has to estimate the value of this property at the price which it would fetch if sold in the open market at the time of the deceased 's death.
In the case of the right to receive compensation, which is property, where the Collector 's award has been made but has not been accepted or has been accepted under protest and a reference is sought or is pending in Civil Court at the date of the deceased 's death, the estimated value can never be below the figure quantified by the Collector because under section 25(1) or the Land Acquisition Act, Civil Court cannot award any amount below that awarded by the Collector; the estimated value may be equal to the Collector 's award or more but can never be equal to the tall claim made by the claimant in the Reference nor equal to the claim actually awarded by the Civil Court inasmuch as the risk or hazard of litigation would be a detracting factor while arriving at a reasonable and proper value of this property as on the date of the deceased 's death.
The assessing authority will have to estimate the value having regard to the peculiar nature of the property, its marketability and the surrounding circumstances including the link or hazard of litigation looming large at the relevant date.
The first contention of counsel for the appellant, therefore, fails.
The second contention urged by the counsel for the appellant, however, appears to us to be well founded and the impugned notice issued under s.59(a) of the Act will have to be quashed on that ground.
As we have said, above, since in the instant case the wards made by the Special Deputy Collector were not accepted by the heirs of the deceased and Land References were sought by them and the same were pending in Civil Court at the relevant date (being the date of Shapoor 's death) the notice under s.59(a) would have been valid if the same had been issued on the basis that such right to compensation had been undervalued on the earlier occasion and required to be properly valued as on 328 the date of the death, but what we find is that the said notice was issued by the respondent on the wrong assumption that the acquired lands still formed part of the estate of the deceased and that having regard to the glaring enhanced compensation granted by the Civil Court for the lands, the said lands had been undervalued in the original assessment and as such the same had escaped assessment to duty.
In the notice issued to the appellant under s.59(a) of the Act a bald statement was made by the respondent to the effect that he had reason to believe that property chargeable to estate duty (a) had escaped assessment and (b) had been under assessed, and, therefore, the appellant was called upon to deliver a further statement of Account.
By her Chartered Accountant 's letter dated December 15, 1969 the respondent was called upon to give the basis for his aforesaid belief, to which the respondent re plied on January 1, 1970 thus: "The extra compensations received by you in O. P. No. 325/65, O.P. No. 364/65, O.P. No. 29/64 and O.P. No. 30/64 relating to the land acquired by the Government escaped assessment.
In view of your failure to disclose full particulars to Department regarding the land acquisition proceedings in the Account filed by you, reassessment proceeding have been initiated under s.59(a) of the Estate Duty Act.
" The aforesaid communication clearly brings out the fact in the respondent 's view the extra compensation (meaning the enhanced amounts) received by the appellant under the Civil Court decrees in Land References had escaped assessment in the earlier assessment proceedings and since such escapement was due to the appellant 's failure to disclose full particulars regarding the land acquisition proceedings, the reassessment proceedings were being initiated.
In other words, the assessment was being reopened for the purpose of including the enhanced amounts received by the appellant is the principal value of the property passing on the death and assessing the same to duty and not for the purpose of evaluating the right to compensation which had been undervalued on the earlier occasion.
Further, as regards the basis on which the impugned notice had been issued the High Court took the following view while upholding the issuance of the notice: "Then, the next question that arises is whether such non disclosure resulted in an under valuation of the properties included in the account, and consequently there was an escapement of the property chargeable to the estate duty from assessment ? The compensation awarded by the Special Deputy 329 Collector has been enhanced by Rs. 20,45,000 in the case of lands acquired for H.M.T. and by Rs. 1,90,000 for the land acquired for the Synthetic Drugs Project.
Those facts which came into existence subsequent to the making of the assessment, lead to the conclusion that the values adopted by the Asst.
Controller of Estate Duty for those lands were far below their real and true market value.
" x x x x x x x x x x x x x x x x x x "In the instant case, the enhancement by the City Civil Court of the compensation awarded by the Special Deputy Collector was so large that no reasonable person could say that the values adopted by the Asst.
Controller of Estate Duty of those lands on the basis, of the awards made by the Special .
Deputy Collector, represented their true and correct market values.
No attempt has ever been made by the Accountable person to show that the values adopted by the Asst.
Controller Estate Duty represented their true and correct market values.
In those circumstances, an inevitable conclusion flows that there was under valuation of the properties which were included in the account.
" The aforesaid observations of the High Court as well as the contents of the communication sent by the respondent to the appellants representative on January 9, 1970, clearly suggest that the impugned notice had been issued on the basis that the acquired lands still formed part of the state of the deceased which passed on his death, that the valuation for those lands adopted on the earlier occasion which was on the basis of compensation awarded by the Special Deputy Collector did not represent their correct market value which was clear from the glaring enhanced compensation that was awarded by the Civil Court under its decrees in Land References and, therefore, such property had escaped assessment to duty.
In other words, the reassessment was intended to be undertaken with a view to include the enhanced amounts received by the appellant in the principal value of the property passing on death and bringing the same to duty.
We were informed at the Bar by counsel for the appellant that in the reassessment which was made pursuant to the impugned notice, the quantum of extra compensation decreed by the Civil Court was included in the assessment and brought to duty.
obviously, the impugned notice which was issued on a wrong basis and with the aforesaid objective and the subsequent reassessment made in pursuance thereof would be clearly illegal and unsustainable inasmuch 330 as the extra compensation awarded by the Civil Court taken with the, original compensation awarded by the Special Deputy Collector cannot be regarded as proper evaluation of the right to receive compensation as on the date of the death of the deceased.
Proposed as well as actual inclusion of such extra compensation awarded by the Civil Court in the principal value of the estate passing on the death of the deceased would be manifestly wrong for more than one reason.
In the first place the said property, namely, the enhanced compensation was not in existence 1.
at the date of the death of the deceased.
Secondly, such extra compensation awarded by the City Civil Court was liable to variation in the appeals that were pending in the High Court.
Thirdly), as discussed above, such extra compensation together with the compensation awarded by the Special Deputy Collector could not be regarded as the proper valuation of the right to compensation as on the relevant date (the date of the deceased 's death).
In our view, therefore, the very issuance of the notice under s.59(a) which was done on a basis clearly unsustainable in law is liable to be quashed on this ground.
Consequently, reassessment which has been made by the Respondent, is also liable to be quashed.
In view of the aforesaid conclusion, it is unnecessary for us to deal with the last contention urged by the counsel for the appellant that seeking of land References and their pendency in Civil Court were not primary facts but inferential facts and non disclosure thereof would not amount to failure or omission on the part of the accountable person to disclose full particulars leading to escapement of assessment to duty.
In the result the appeal is allowed and the impugned notice issued under s.59(a) of the Act as also the subsequent reassessment made are quashed.
The Revenue will pay the costs of the appeal to the appellant Turning to Civil Appeal No. 2206 of 1972, counsel for the appellant challenged the impugned notice issued under s.61 of the Act on two grounds: (a) it was case of change of opinion as regards the valuation of lands acquired and not a case of mistake apparent from the record and as such the impugned notice was issued under s.61 with a view to get over the bar of limitation under s.73A, which would otherwise be applicable to a notice under s.59(a) of the Act and (b) that for purposes of section 61 the land acquisition proceedings and Land References in the Civil Court could not be regarded as part of the assessment record and he so called mistake discovered by reference to such other record was not a mistake apparent from the record of the case and as such the 331 impugned notice was liable to be quashed.
In our view, the first ground is sufficient to dispose of the appeal.
The impugned notice dated November 14, 1969 in terms recites that the assessment in this case was completed on March 29, 1966 on a net principal value of Rs. 23,53,064 (which included the value of the acquired lands at rates fixed by the Land Acquisition officer) with a duty worked out at Rs. 5,07,919.20, that it was then learnt that in respect of the acquired lands the Civil Court had enhanced the compensation fixed by the Land Acquisition officer and had ordered payment thereof with interest at 4% (particulars whereof were specified) and that, therefore, the respondent proposed "to rectify the assessment under section 61 as mistake apparent from the record and adopt the above enhanced compensation awarded by the Court".
It is thus clear that the rectification is being undertaken on the ground that the initial valuation adopted in respect of the acquired lands was based at rates fixed by the 'Land Acquisition.
Officer, that such valuation was obviously wrong in view of the enhanced compensation awarded by the , Civil Court and, therefore, the enhanced compensation was sought to be included in the principal value of the estate by undertaking the rectification proceedings.
In substance it cannot be said to be a case of rectification of any mistake apparent from the record but the respondent is really seeking to change his opinion about the valuation of the acquired lands because some other authority, namely the Civil Court has valued the same differently.
Now, for the purpose of enhancing the value of the acquired lands on the.
basis of their value. as determined by the Civil Court the respondent must resort to provisions of section 59 and proceed to make reassessment but such reassessment has to be done within the period of three years from the date of the original assessment under section 73 A of the Act.
It seems to us that in the instant case the respondent resorted to s.61 because the rectification of any mistake apparent from the record could be done at any time within five years from the date of the original assessment.
In Ethel Rodrigues vs Assistant Controller of Estate Duty, Estate Duty, Estate Duty cum Income tax Circle, Mangalore, on similar facts when the Assistant Controller of Estate Duty, Bangalore had issued a notice purporting to act under s.61 of the Act on the ground that the estate had been valued at an enhanced figure in the probate proceedings and had in proceedings undertaken pursuant to such notice enhanced the valuation of the estate in accordance with its valuation placed on the estate in the probate proceedings and consequently enhanced the estate duty, this Court quashed the order of rectification.
The principle enun 332 ciated by this Court in that case has been succinctly summarised in the head note thus: "Where the Controller has made his own valuation of the estate of a deceased person under section 36 of the , he has no jurisdiction to rectify the assessment under section 61 on the ground that the estate has been taken at an enhanced value in the probate proceedings.
taking the enhanced value put upon the estate in the probate proceedings he cannot be said to rectify any mistake apparent from the record of the estate duty assessment but he would be changing his opinion about the valuation of the valuation of cause some other authority has valued the estate differently.
For the purpose of section 61, the only record that the assessing authority can look into is the record relating to the assessment of estate duty and not any other record such as the be cord in the probate, proceedings which is not relevant.
For the purpose of enhancing the value an estate on the basis of the value taken in the probate proceedings the Controller has to.
invoke the Provisions of section 59 and proceed to reassess and for such a reassessment the bar provided in section 73 A will operate.
" In our view, the facts of the instant case clearly come within the ratio of the aforesaid decision.
The High Court has attempted to distinguish the above decision by stating that in the instant case the res respondent had merely accepted the value of the acquired lands as determined by the Special Deputy Collector in his award and the accountable person had no objection to this course and, therefore, the respondent himself did not estimate the market value of the lands on the date of death of Rashid and as such it was not a case of change of opinion on his part as regards the correct valuation of the lands.
It is difficult to accept this view.
It cannot be disputed that when the original assessment was made it was the duty of the respondent, after scrutinising the Account filed and examining the materials produced before him, to value the estate of the deceased properly under s.36 of the Act and when he accepted the compensation fixed by the Special Deputy Collector as the proper valuation he must be deemed to have adopted that evaluation as his own estimated value of the lands which he wanted to enhance by relying upon the valuation made by the another authority, namely, the City Civil Court.
To such a case s.59 is clearly attracted but obviously with a view to avoid the bar of section 73 A he purported to.
issue the impugned notice under s.61 and therefore the same is liable to be quashed.
The aforesaid decision seems to lend support to the 333 second ground urged by counsel for the appellant for quashing the impugned notice but we would like to base our decision on the first ground discussed above.
In this case also we are told that the rectification proceedings have been completed pursuant to the impugned notice, which also must be quashed.
In the result, the notice under s.61 of the Act and the rectification order passed in pursuance thereof are quashed.
The Revenue will pay the costs of the appeal to the appellant.
V.D.K. Appeals allowed.
| IN-Abs | The Andhra Pradesh Government acquired the lands belonging to one Rashid Shapoor Chenai and situate at Moosapet Village Hyderabad and Qutbillapur in Medchal district.
The special Deputy Collector of Land Acquisition awarded a total compensation of Rs. 20,000 and Rs. 4,29,360 respectively.
The compensation of Rs. 20,000 was paid during the life time of Rashid and the compensation of Rs. 4,29,360 was paid after Rashid 's death to his widow Mrs. Freny Chenai and son Shapoor Rashid Chenai on whom the estate of Rashid devolved in equal shares.
On the death of Rashid on November 4, 1963, Mrs. Freny Chenai (appellant in CA 2206/72) as his widow and 'accountable person ' filed before the Respondent on December 26, 1963 an account of the properties passing on the death of her husband under section 53(3) of the Act.
The estate duty assessment was completed by the respondent on March 29, 1966.
With regard to the lands acquired both during the lifetime of Rashid as well as after, their values were taken at the respective figures of compensation (Rs. 20,000 and Rs. 4,29,360) awarded for them by the special Deputy Collector.
Shapoor Rashid Chenai, who had one half share in the undivided estate of his late father Rashid died on May, 7, 1965.
As required by section 53 of the Act Mrs. Khorshed Chenai (appellant in CA 2205/72) as his widow and the 'accountable person 's filed before the respondent on November 6, 1965 an account of the properties passing on the death of her husband and the respondent completed the estate duty assessment on December 30, 1966.
Even here.
the respondent adopted the values of the lands acquired by the Government at figures awarded by the special Deputy Collector.
The legal heirs of late Rashid did not accept the awards by the special Deputy Collector in respect of the lands acquired by Government and a reference was made to Civil Court under section 18 of the Land Acquisition Act.
The Civil Court, by its orders dated March 6, 1967/Oct. 30, 1967 enhanced the compensation awarded by the special Deputy Collector by Rs. 1,90,000 in respect of Moosapet lands and by Rs. 20,45,000 in respect of Qutbillapur Lands.
The Government did not accept the decisions of the Civil Court and filed appeals to the High Court challenging the enhancement, which appeals are still pending in the High Court.
316 On receipt of information that enhanced compensation was awarded by the Civil Court in respect of the above lands the respondent issued two notices both dated November 14, 1969, one addressed to Mrs. Khorshed Shapoor Chenai and the other to Mrs. Freny Rashid Chenai.
The former notice was issued under section 59(a) of the Act calling upon Mrs. Khorshed to show cause why the Estate Duty assessment made on December 30, 1966 should not be reopened and revised in view of the extra compensations awarded by the Civil Court in respect of the lands acquired by the Government, while the latter notice was issued under section 61 of the Act requiring Mrs. Freny Chenai to show cause why the mistake apparent from the record should not be rectified and the enhanced compensation included in the principal value of the estate.
These notices were challenged by the recipients by filing writ petitions in the High Court.
The High Court negatived the contentions raised in both the writ petitions upheld the impugned notices and dismissed the writ petitions.
Hence the two appeals by certificates.
Allowing the appeals, the Court, ^ HELD: 1.
So far as the estate duty assessment in respect of the properties passing on the death of Shapoor was concerned, the lands which were the subject matter of acquisition proceedings could not be regarded as forming part of the estate of the deceased on the relevant date and could not pass on his death in as much as these lands had vested in the Government long prior to his death but the right to receive compensation at market value on the dates of the relevant notifications unquestionably accrued to the deceased which was property and it would be such property that would pass on the death of the deceased.
In other words, since the lands were lost to the estate of the deceased before the relevant date, namely, the date of death, it would be the right to receive compensation under the Land Acquisition Act that will have to be evaluated under the Estates Duty Act.
[324 G H, 325 A, C] Pandit Lakshmi Kant Jha vs Commissioner of Wealth Tax, Bihar and Orissa, , applied.
There are no two separate rights one a right to receive compensation and other a right to receive extra or further compensation.
Upon acquisition of his lands under the Land Acquisition Act the claimant has only one right which is to receive compensation for the lands at their market value on the date of the relevant notifications and it is this right which is quantified by the Collector under section 11 and by the Civil Court under section 26 of the Land Acquisition Act.
It is true that under section 11 the Collector after holding the necessary inquiry determines the quantum of compensation by fixing the market value of the land and in doing so is guided by the provisions contained in sections 23 and 24 of the Act the very provisions by references to which the Civil Court fixes the valuation.
It is also true that the Collector 's award is, under section 12, declared to be, except as otherwise provided, final and conclusive evidence as between him and the persons interested.
Even so, it is well settled that in law the Collector 's award under section 11 is nothing more than an offer of compensation made by the Government to the claimant whose property is acquired.
If that be the true nature of the award made by the Collector then the question whether the right to receive compensation survives the award must depend upon whether 317 the claimant acquiesces therein fully or not.
If the offer is acquiesced in by total acceptance the right to compensation will not survive but if the offer is not accepted or is accepted under protest and a land reference is sought by the claimant under section 18, the right to receive compensation must be regarded as having survived and kept alive which the claimant prosecutes in Civil Court.
[326 B G] Ezra vs Secretary of State for India ILR ; Raja Harish Chandra vs Dy.
Land Requisition Officer, and Dr. G. H. Grant vs State of Bihar ; , followed.
It is not correct that no sooner the Collector has made his award under section 11 the right to compensation is destroyed or ceases to exist or is merged in the award, or what is left with the claimant is a mere right to litigate the correctness of the award.
The claimant can litigate the correctness of the award because his right to compensation is not fully redeemed but remains alive which he prosecutes in Civil Court.
That is why when a claimant dies in a pending reference his heirs are brought on record and are permitted to prosecute the reference.
This, however, does not mean that the Civil Court 's evaluation of this right done subsequently would be its valuation as at the relevant date either under the Estate Duty Act or the Wealth Tax Act.
It will be the duty cf the assessing authority under either of the enactments to evaluate this property (right to receive compensation at market value on the date of relevant notification) as on the relevant date (being the date of death under the Estate Duty and Valuation date under the Wealth Tax Act).
Under section 36 of the Estate Duty Act the assessing authority has to estimate the value of this property at the price which it would fetch if sold in the open market at the time of the deceased 's death.
In the case of the right to receive compensation, which is property, where the Collector 's award has been made but has not been accepted or has been accepted under protest and a reference is sought or is pending in Civil Court at the date of the deceased 's death the estimated value can never be below the figure quantified by the Collector because under section 25(11 of the Land Acquisition Act.
Civil Court cannot award any amount below that awarded by the Collector; the estimated value may be equal to the Collector 's award of more but can never be equal to the tall claim made by the claimant in the Reference nor equal to the claim actually awarded by the Civil Court inasmuch as the risk or hazard of litigation would be detracting factor while arriving at a reasonable and proper value of this property as on the date the deceased 's death.
The assessing authority will have to estimate the value having regard to the peculiar nature of the property, its marketability and the surrounding circumstances including the risk or hazard of litigation looming large at the relevant date.
[326 H, 327 A F] 4.
The very issuance of the notice under section 59(a) was on a wrong basis; It was issued with the object to include the enhanced amounts received by the appellant in the principal value of the property passing on the death of Shapoor and bringing the same to duty; such notice and the subsequent reassessment made in pursuance thereof would be clearly illegal and unsustainable inasmuch as the extra compensation awarded by the Civil Court taken with the original compensation as on the date of the death of the deceased.
Proposed as well as actual inclusion of such extra compensation awarded by the Civil Court in the principal value of the estate passing on the death of the deceased would be manifestly wrong for more than one reason.
In the first place the said property.
namely, the enhanced compensation was not in existence at the 318 date of the death of the deceased.
Secondly, such extra compensation awarded by the City Civil Court was liable to variation in the appeals that were pending in the High Court.
Thirdly, such extra compensation together with the compensation awarded by the Special Deputy Collector could not be regarded is the proper valuation of the right to compensation as on the relevant date (the date of the deceased 's death).
[330 A D] 5.
The notice under section 61 of the Act and the rectification order passed in pursuance thereof if illegal and unsustainable.
[333 E] (i) The rectification is being undertaken on the ground that the initial valuation adopted in respect of the acquired lands was based at rates fixed by the Land Acquisition officer, that such valuation was obviously wrong in view of the enhanced compensation awarded by the Civil Court and, therefore, the enhanced compensation was sought to be included in the principal value of the estate by undertaking the rectification proceedings.
In substance it cannot be said to be a case of rectification of any mistake apparent from the record but the respondent is really seeking to change his opinion about the valuation of the acquired lands because some other authority, namely, the Civil Court has valued the same differently.
[331 C E] (ii) For the purpose of enhancing the value of the acquired lands on the basis of their value as determined by the Civil Court the respondent must resort to provisions of section 59 and proceed to make reassessment but such reassessment has to be done within the period of three year from the date of the original assessment under section 73A of the Act.
In the instant case the respondent resorted to section 61 because the rectification of any mistake apparent from the record could be done at any time within five years from the date of the original assessment.
[331 E.F] (iii) When the original assessment was made it was the duty of the respondent, after scrutinising the account filed and examining the materials produced before him, to value the estate of the deceased properly under section 36 of the Act and when he accepted the! compensation fixed by the special Deputy Collector as the proper valuation he must be deemed to have adopted that valuation as his own estimated value of the lands which he wanted to enhance by relying upon the valuation made by the another authority, namely, the City Civil Court.
To such a case section 59 is clearly attracted but obviously with a view to avoid the bar of section 73A he purported to issue the impugned notice under section 61.
[332 F H] Ethel Rodriques vs Assistant Controller of Estate Duly, Estate Duty cum Income Tax Circle, Mangalore, [1963] 49 I.T.R. (E.D.) 128, applied.
|
N: Criminal Appeal No. 406 of 1976.
Appeal by Special Leave from the Judgment and Order dated 1 9 1975 of the Madras High Court in Criminal Appeal No. 823/74.
493 A. N. Mulla, A. T. M. Sampath and P. N. Ramalingam for the Appellant.
A. V. Rangam for the Respondent.
The Judgment of the Court was delivered by KAILASAM, J.
This appeal is by Special Leave by accused 1 and 2 in S.C. 26 of 1974 on the file of Sessions Judge, South Arcot Division, against their conviction and sentence imposed by the High Court of Judicature at Madras in Criminal Appeal No. 823 of 1974 dated 1st September, 1975.
The two Appellants and Muthuthamizaharasan were accused Noc.
1 3 in the Sessions Court.
The first appellant was found guilty under section 302 I.P.C. and sentenced to imprisonment for life.
The second appellant and the third accused were found guilty of an offence under section 302 read with section 149 I.P.C. and sentenced to imprisonment for life.
On appeal by the two appellants and the third accused, the third accused was acquitted by the High Court and the appellants Nos. 1 and 2 are before us.
The deceased Rasayal is the sister of appellants and the third accused.
The first accused Dhanabal is the eldest and the second appellant and the third accused are his younger brothers.
The second appellant married Laxmi, the daughter of Rasayal.
Rasayal owned about 5 acres of land in Keelakkarai village.
She executed a general power of attorney Exh.
P. 15 on 31st August, 1970 in favour of the second appellant.
Rasayal, after she lost her husband, started leading an immoral life which was disliked by her brothers.
As a result, Rasayal began to cultivate her own land inspite of the power of attorney executed in favour of the second appellant.
There was misunderstanding between the parties and Rasayal had complained to the Police stating that her brothers had threatened to do away with her.
On the date of the occurrence at about 1.30 p.m. on 5th December, 1973, when Rasayal and her farm servant Parmasivam, P.W. 4 were working in her field removing weeds, the two appellants and the third accused converged to the place where Rasayal was working.
The first appellant was armed with Veecharuval, the second appellant was armed with a spade and the third was unarmed.
On seeing them, Rasayal ran towards the channel running adjacent to her fields.
The third accused instigated the first appellant to cut her saying that she was leading an immoral life and that she should not be left.
Thereupon, the first appellant cut Rasayal on the right side of her neck with the Veecharuval and she fell down in the channel, raising an alarm.
494 The second appellant stated that she should not be left at that and that her head should be severed from her body, she being an immoral woman.
Thereupon, the first appellant caught hold of her hair by the left hand and cut her neck with the Veecharuval, severing the head from the trunk.
The occurrence was witnessed by Ramalingam P.W. 1 and Ramakrishnan, P. W. 2 who were returning at that time after spraying insecticides in the fields of P.W. 1 Chelladurai, P.W. 3 who was coming to the field of Rasayal with food for P. W. 4 also saw the occurrence.
Nagappan P.W. 5 who was going towards the scene of occurrence to meet Ramakrishnan P.W. 2 for getting arrears of wages also saw the occurrence.
Soon after the occurrence, the first appellant left taking away the Veecharuval with him and second appellant leaving the spade near the feet of the deceased Rasayal.
P. W. 4 gave a report Ext.
P. 7 to the Sub Inspector of Police, Kamaratchi at 3 p.m. on the same day.
The Sub Inspector recorded the narration of P. W. 4, read it over to him and obtained his signatures.
After registering a case under section 302 I.P.C. he took up the investigation and proceeded to the scene of the occurrence and held the inquest.
The Doctor who conducted the post mortem was of the view that the deceased appeared to have died of severance of the head from the trunk.
During investigation, the Police had section 164 Cr.
P. C. Statements recorded from P.Ws. 1 to 5 before the Sub Magistrate, Chidambaram on 24 12 1973.
During the committal proceedings, P.W. 4 turned hostile but P.Ws. 1, 2, 3 and 5 gave evidence supporting the prosecution.
After committal, P.W. 1, 2, 3 and 5 resiled from the evidence they gave in the Committal Court.
They were treated as hostile by the Prosecution and their evidence before the Committing Court was admitted in evidence under section 288 of the Code of Criminal Procedure.
The High Court relying on the evidence of P.Ws. 1, 2, 3 and 5 which was marked under section 288 of the Criminal Procedure Code, found that it was satisfactorily established that the first appellant cut the deceased on the right side of the neck, that the second accused instigated the first accused to cut her saying that she was an immoral woman and the first appellant caught hold of her hair by the left hand and cut her neck with the Veechruval, severing the head from the trunk and left the place alongwith other accused.
The High Court acquitted the third accused on the ground that in the F.I.R. it was not mentioned that the third accused instigated the first accused to cut the neck of the deceased.
He was given the benefit of doubt and was acquitted.
Mr. Mulla, learned counsel for the appellants, submitted that the conviction of the two appellants based entirely on the retracted evi 495 dence of P.W. 1, 2, 3 and 5 marked in the Sessions Court under section 288 cannot be sustained.
Secondly, the Learned Counsel submitted that the High Court was in error in taking into account the statements recorded from the witnesses under section 164 of the Code of Criminal Procedure in coming to the conclusion that the evidence given in the Committal Court could be relied upon.
Lastly, the Learned Counsel submitted that in any event the case of the second appellant is similar to that of the third accused and that the second appellant ought to have been acquitted.
We have been taken through the relevant evidence of the witnesses, their statements under section 164 of the Code of Criminal Procedure and the evidence given by them in the Committal Court which was transposed to the record of the Sessions Court under section 288 of the Code of Criminal Procedure.
Before considering the questions of law raised by the Learned Counsel, we find that the plea of the learned counsel on behalf of the second appellant has to be accepted.
The case for the prosecution is that the two appellants and the third accused went to the scene of occurrence the first appellant armed with Veecharuval, the second appellant with a spade and the third accused unarmed converged on Rasayal and the first accused gave a cut which resulted in severance of her head.
We feel that when the three brothers went to the scene determined to do away with Rasayal, any instigation was most unlikely.
The first accused who actually caused injury is the eldest brother.
It is difficult for us to accept that before he actually caused the injury, he needed the instigation of the second appellant.
In the deposition of Ramalingam P. W. 1, which was marked under section 288, Code of Criminal Procedure, Ext.
P. 2, he stated that first accused came with Aruval, A 2 with a spade and alongwith A 3 went towards Rasayal Ammal.
A 1 with the Veecharuval cut Rasayal Ammal on her right neck.
The other persons were standing there.
Thus the instigation attributed by the prosecution to the second appellant is not found in the evidence of Ramalingam.
Taking into account the facts and the probabilities of the case, we feel it is most unlikely that the second appellant instigated the first accused as a result of which the first accused caused the fatal injury.
The second appellant is entitled to the benefit of doubt.
His appeal is allowed and his conviction and sentence are set aside.
He is directed to be set at liberty.
We will now take up the first contention of the learned counsel that the conviction based on statements marked under s 288 of 496 the Code of Criminal Procedure is not sustainable for consideration.
section 288 of the Code of Criminal Procedure runs as follows: "The evidence of a witness duly recorded in the presence of the accused under Chapter XVIII may, in the discretion of the Presiding Judge, if such witness is produced and examined be treated as evidence in the case for all purposes subject to the provisions of the ".
The plea of the Learned Counsel is that the evidence marked under section 288 is inadmissible as it was only read in full to the witnesses and had not been put to them passage by passage as required by section 145 of the Evidence Act.
The procedure that was adopted in the Sessions Court was that when the witnesses stated giving a version hostile to the prosecution, he was asked whether he was examined in the Committal Court.
The evidence marked as given by him in the Committal Court was read over to the witnesses by the Public Prosecutor.
The witness admitted that he had given evidence as found in the Exh.
and that he had signed it.
The evidence given in the Committal Court was transposed to the record of the Sessions Court under section 288 of the Code of Criminal Procedure.
The procedure adopted was challenged on the ground that section 288 contemplates that the evidence given during Committal proceedings can be treated as evidence in the case subject to the provisions of the , and, therefore, each and every passage on which the prosecution relies on should have been put to the witnesses before the passages can be marked and treated as substantive evidence.
section 145 of the Evidence Act, runs as follows: "A witness may be cross examined as to previous statements made by him in writing or reduced into writing, and relevant to matters in question, without such writing being shown to him, or being proved; but if it is intended to contradict him by the writing, his attention must, before the writing can be proved be called to those parts of it which are to be used for the purposes of contradicting him.
" Reliance was placed on the decision of this Court in Tara Singh vs State of Punjab, wherein it was held that the evidence in the Committal Court cannot be used in the Sessions Court unless the witness is confronted with his previous evidence as required under 497 section 145 of the Evidence Act.
The Court observed that if the prosecution wishes to use the previous testimony as substantive evidence then it must confront the witness with those parts of it which were to be used for the purpose of contradicting him and then only the matter can be brought in as substantive evidence under section 288.
On the facts of the case the Court found that all that happened was that the witnesses were asked something about their previous statements and they replied that they were made under coercion.
It does not appear that the entire previous statements of the witnesses were put to them and they were asked whether they, in fact, made the statements.
In Bhagwan Singh vs State of Punjab,, this Court distinguished the case of Tara Singh vs State of Punjab (supra) and observed that resort to section 145 of the Evidence Act is necessary only if a witness denies that he made the former statement.
When the witness admits the former statement, all that is necessary is to look to the former statement on which no further proof is necessary because of the admission that it was made.
Hidayatullah, C.J. in State of Rajasthan vs Kartar Singh, while dealing with the procedure to be adopted in treating the statement in the committal court as substantive evidence observed that the witnesses should be confronted with their statements in the Committal Court which are to be read over to them in extenso.
The Chief Justice pointed out that the witnesses in the case admitted that their statements were truly recorded in the Committal Court but denied that they were true statement because they were made to depose that way by the Police.
It would have been useless to point out the discrepancies between the two statements because the explanation would have been the same and in the circumstances, the requirements of section 145 of the were fully complied with.
It is thus clear from the authorities referred to above that the requirements of section 288 would be fully complied with if statements of the witnesses are read in extenso to them and they admit that they have made those statements in the committal Court.
The required procedure has been followed in this case and the attack made by the learned counsel has to fail.
The second legal contention raised by the Learned Counsel was that the High Court was in error in taking into account the statements recorded from the witnesses under section 164 of the Code of 498 Criminal Procedure in coming to the conclusion that the evidence given by them in the Committal Court could be relied upon.
The High Court stated "we are satisfied having regard to 164 statements of P.W. 1 to 3 and 5 that the statements given by those witnesses before the Committing Court are true and could be relied on" and proceeded to observe "that as there are more statements admitted in evidence under section 288 of the Code of Criminal Procedure than one, the evidence of one witness before the Committing Court is corroborated by that given by others".
Mr. Mulla, Learned Counsel, submitted that a statement recorded under section 164 of the Code of Criminal Procedure indicates that the Police thought that the witnesses could not be relied on as he was likely to change and, therefore, resorted to securing a statement under section 164 of the Code of Criminal Procedure.
The statement thus recorded, cannot be used to corroborate a statement made by witness in the Committal Court.
In support of this contention the learned counsel relied on certain observations of this Court in Ram Chandra and Ors.
vs State of U.P.
In that case, in a statement recorded from the witness under section 164 of the Code of Criminal Procedure, the Magistrate appended a certificate in the following terms: "Certified that the statement has been made voluntarily.
The deponent was warned that he is making the statement before the 1st Class Magistrate and can be used against him.
Recorded in my presence.
There is no Police here.
The witness did not go out until all the witnesses had given the statement.
" The Court observed that the endorsement made is not proper but declined to infer from the endorsement that any threat was given to those witnesses or that it necessarily makes the evidence given by the witness in Court suspect or less believable.
The view of the Patna High Court in Emperor vs Manu Chik, where the observations made by the Calcutta High Court in Queen Empress vs Jadub Das, that statements of the witnesses obtained under this Section always raises a suspicion that it has not been voluntarily made was referred to, was relied on by the Learned Counsel.
This Court did not agree with the view expressed in the Patna case but agreed with the view of Subba Rao, J. (as he then was) in Gopisetti Chinna 499 Venkata Subbiah, where he preferred the view expressed by Nagpur High Court in Parmanand vs Emperor, It was observed that the mere fact that the witnesses statement was previously recorded under section 164 will not be sufficient to discard it.
It was observed that the court ought to receive it with caution and if there are other circumstances on record which lend support to the truth of the evidence of such witnesses, it can be acted upon.
During the investigation the Police Officer, sometimes feels it expedient to have the statement of a witness recorded under section 164, Code of Criminal Procedure.
This happens when the witnesses to a crime are closely connected with the accused or where the accused are very influential which may, result in the witnesses being gained over.
The 164 statement that is recorded has the endorsement of the Magistrate that the statement had been made by the witness.
The mere fact that the Police had reasons to suspect that the witness might be gained over and that it was expedient to have their statements recorded by the Magistrate, would not make the statements of the witnesses thus recorded, tainted.
If the witness sticks to the statement given by him to the Magistrate under section 164, Code of Criminal Procedure, no problem arises.
If the witness resiles from the statement given by him under section 164 in the Committal Court, the witness can be cross examined on his earlier statement.
But if he sticks to the statement given by him under section 164 before committal enquiry and resiles from it in the Sessions Court, the procedure prescribed under section 288, Code of Criminal Procedure, will have to be observed.
It is for the Court to consider taking into account all the circumstances including the fact that the witness had resiled in coming to the conclusion as to whether the witness should be believed or not.
The fact that the Police had section 164 statement recorded by the Magistrate, would not by itself make his evidence tainted.
section 157 of the Evidence Act makes it clear that the statement recorded under section 164 of the Code of Criminal Procedure can be relied on for corroborating the statements made by the witnesses in the Committal Court.
This Court has expressed its view that though the statements made under section 164 of the Code of Criminal Procedure, is not evidence, it is corroborative of what has been stated earlier in the Committal Court vide The High Court was right in relying on the statement of the witnesses under section 164 as corroborating their subsequent evidence before the Committal Court.
Equally unsustainable is the plea of the Learned 500 Counsel that a statement recorded under section 288 of the Code of Criminal Procedure of one witness cannot corroborate the statement of another witness under section 288.
The statements are treated as substantive evidence in law and we do not see any flaw in treating the statement of one witness as corroborative of the other.
The result in the question of law raised by the Learned Counsel fail.
The appeal of the first appellant is rejected and his conviction and sentence confirmed.
The appeal of the second appellant is allowed and his conviction and sentence set aside.
He is directed to be set at liberty forthwith.
V.D.K. 1st Appellant 's Appeal dismissed.
2nd Appellant 's Appeal allowed.
| IN-Abs | The appellants and the third accused were brothers of the deceased Rasayal.
They were charged for the offence of committing the offence of murder and were found guilty and sentenced under section 302 read with section 149 I.P.C. to imprisonment for life by the Sessions Court.
In appeal the High Court, acquitted the third accused but confirmed the conviction and sentence of the appellants.
In appeal by special leave, three contentions were raised namely (i) the conviction of the two appellants based entirely on the retracted evidence of PWs.
1,2, 3 and 5 marked in the Sessions Court was wrong (ii) the evidence marked under section 288 was inadmissible as it was only read in full to the witnesses and had not been put to them passage by passage as required in section 145 of the Evidence Act and (iii) the case of the second appellant was similar to that of the third accused and ought to have been acquitted giving him the benefit of doubt.
Accepting the appeal of the 2nd appellant and dismissing the appeal of the first, the Court ^ HELD: 1.
Talking into account the facts and the probabilities of the case it is clear that it was the first appellant who caused the fatal injury and needed no instigation from the second appellant.
There was no evidence as to any overt act, except the presence of the second appellant along with the third accused.
It was most unlikely that the second appellant instigated the first accused as a result of which the first accused caused the fatal injury.
The second appellant is entitled to the benefit of doubt.
[495E G] 2.
The requirements of section 288 of the Criminal Procedure Code would be fully complied with if statements of the witnesses are read in extenso to them 492 and they admit that they have made those statements in the Committal Court.
The required procedure has been followed in this Case.
[497F G] Tara Singh vs State of Punjab, ; , Bhagwan Singh vs State of Punjab, ; State of Rajasthan vs Kartar Singh, ; referred to.
During the investigation the police officer, sometimes feels it expedient to have the statement of a witness recorded under section 164 Code of Criminal Procedure.
This happens when the witnesses to the crime are closely connected with the accused or where the accused are very influential which may result in the witnesses being gained over.
The 164 statement that is recorded has the endorsement of the Magistrate that the statement had been made by the witness.
[499 A C] 4.
The mere fact that the police had reasons to suspect that the witness might be gained over and that it was expedient to have their statements recorded by the Magistrate, would not make the statements of the witnesses thus recorded tainted.
If the witness sticks to the statement given by him to the Magistrate under section 164 Code of Criminal Procedure, no problem arises.
If the witness resiles from the statement given by him under section 164 in the committal court, the witness can be cross examined on his earlier statement.
But if he sticks to the statement given by him under section 164 before committal enquiry and resiles from it in the Sessions Court, the procedure prescribed under section 288, Code of Criminal Procedure will have to be observed.
It is for the Court to consider taking into account all the circumstances including the fact that the witness had resiled, in coming to the conclusion as to whether the witness should be believed or not.
The fact that the Police had section 164 statement recorded by the Magistrate would not by itself make his evidence tainted.
[499 C F] Ram Chandra & Ors.
vs State of U.P. ; explained and relied on.
Section 157 of the Evidence Act makes it clear that the statement recorded under section 164 of the Code of Criminal Procedure can be relied on for corroborating the statements made by the witnesses in the committal court.
Though the statements made under section 164 of the Code of Criminal Procedure, is not evidenced, it is corroborative of what has been stated earlier in the committal court.
[499 F G] State of Rajasthan vs Kartar Singh, ; followed.
A statement recorded under section 288 of the Code of Criminal Procedure of one witness can corroborate the statement of another witness under section 288.
The statements are treated as substantive evidence in law and there is no flaw in treating the statement of one witness as corroborative of the other.
[500 A B]
|
Civil Appeals Nos. 310 and 311 of 1955.
Appeals under Article 132 of the Constitution from the judgment and order dated the 6th April, 1955 of the Assam High Court in Title Suits Nos. 1 & 3 of 1955.
N. C. Chatterji, P. N. Mitter, D. N. Mukerji and R. R. Biswas, for the appellant in C. A. No. 310 of 1955.
P.K. Chatterji, for the appellant in C. A. No. 311 of 1955.
M.C. Setalvad, Attorney General for India, section M. Lahiri, Advocate General of Assam and Naunit Lal, for the respondent in both appeals.
306 1956.
April 11.
The Judgment of the Court was delivered by DAS C. J.
It is intended by this judgment to dispose of both the appeals mentioned above.
The appeals have come up before us in circumstances which may shortly be recounted.
On 6th December 1954 the appellant Raja Bhairabendra Narain Bhup of Bijni filed T. section No. 27 of 1954 in the Court of the Subordinate Judge of Lower Assam District at Dhubri praying, inter alia, for a declaration that the Assam State Acquisition of Zamindaris Act, 1951 (Assam Act XVIII of 1951) as amended by Assam Act VI of 1954 was not validly passed, was not law at all and was unconstitutional, ultra vires and void and for a declaration that the impugned Act was, at any rate, inapplicable to the plaintiff 's properties and the Notification purporting to be issued under section 3(1) of the impugned Act in respect of the plaintiff 's properties was illegal, ultra vires and void.
On the 23rd December, 1954 the appellant Sm.
Bedabala Debi wife of Sri Nripendra Narain Choudhury as the Trustee of Chapor Trust estate filed T. section No. 34 of 1954 in the Court of the Subordinate Judge of Lower Assam District at Dbubri challenging the constitutionality of the same Act.
In this suit there was no contention, as there was in the Raja 's suit, that the Act, if valid, did not apply to the estate of which she was the Trustee.
By two several orders made under article 228 by the Assam High Court on the 21st January 1955 and the 16th February 1955 respectively the said two suits were transferred to the High Court and renumbered as T. section No. 1 of 1955 and T. section No. 3 of 1955 respectively.
The State of Assam duly filed its written statements in both the suits controverting the contentions set forth in the respective plaints.
The High Court framed 11 issues in the Raja 's T.S. No. 1 of 1955.
The issues common to the two suits were as follows: (1)Whether the Assam State Acquisition of Zamindaris Act, 1951 (Assam Act XV111 of 1951) and its 307 amendments are within the competence of the State Legislature and whether they were enacted according to law? (2)Whether the Notification No. Rt./24/54/21 dated 19th July 1954 published in the Assam Gazette dated 21st July 1954 and issued under the Act aforesaid is valid? (3)Whether the said Act and its amendments infringe the fundamental rights of the plaintiff under article 31(2) and article 14 of the Constitution; or whether the legislation is protected under article 3 1 A and article 31(4) of the Constitution? (4)Whether the provisions of the Act and its amendments can be enforced against the properties in suit, even if the legislation is held to be valid? (5)To what relief, if any, is the plaintiff entitled? The parties through their respective counsel agreed that the issues of law which did not depend upon adjudication of disputed facts should be heard and decided first, leaving the other issues, if necessary, to be dealt with later.
The two cases were beard by a Full Bench of the Assam High Court.
The learned Judges answered issues 1 and 3 against the plaintiffs, although not for identical reasons.
They also answered issue 2 against the plaintiffs, subject, as to the Raja, the plaintiff in T.S. No. 1 of 1955, to the answer to issue 4.
On the last mentioned issue the Bench held that the Act and the Notification being valid they could be enforced against Sm.
Bedabala, the plaintiff in T. section No. 3 of 1955.
As regards the Raja, the plaintiff in T.S. No. 1 of 1955, the Bench held that as the question whether the properties of the Raja sought to have been notified were "estate" within the meaning of the impugned Act was one of fact, issue 4 could only be decided, as between the Raja and the defendant State, upon evidence led in the case.
In the result the Bench dismissed Sm.
Bedabala 's T.S. No. 3 of 1955 with costs and directed the records of the Raja 's T.S. No. 1 of 1955 to be sent down to the court below for trial and disposal on the determination of issue 4 and other issues.
In view of the importance of the ques 308 tion involved in the issues dealt with by the Bench they gave leave under article 132 to the plaintiffs in both the suits to appeal to this Court.
Hence the present appeals.
At the hearing before us arguments have proceeded on issues 1, 2 and 3.
It will be convenient, therefore, to deal with the issues seriatim.
Re issue 1: Issue 1, it will be observed, has two parts.
The first relates to the competence of the State Legislature in enacting the impugned law and the second part relates to the question whether the impugned Act was enacted according to law.
As a greater emphasis has been laid by learned counsel appearing in support of the appeals on the second part of this issue, we take up and deal with that part first. " The facts bearing on this part of the issue may now be summarised.
On the 11th August 1948 a Bill called Assam State Acquisition of Zamindaris Bill was published in the Assam Gazette.
On the 23rd September 1948 the Bill was introduced in the Legislative Assembly of Assam, which was its only Legislative Chamber.
The Bill was passed by the legislative Assembly on the 28th March 1949.
The Governor of Assam, acting under section 75 of the Government of India Act, 1935, reserved the Bill for the consideration of the Governor General.
In view of the then impending commencement of the Constitution, the Governor General on the 25th January 1950.
returned the Bill to the Governor of Assam with the remark that the Bill be reserved for the consideration of the President.
On the 26th of January 1950 the Constitution of India came into force.
Two days later, that is to say, on the 28th January 1950, the Governor of Assam actually received back the Bill.
The Governor of Assam then reserved the Bill for the consideration of the President and sent the Bill to the President.
In October 1950 the President returned the Bill to the Governor of Assam suggesting certain alterations.
The Bill, together with the suggested amendments, was placed before the Legis lative Assembly of Assam.
The Legislative Assembly 309 considered the suggested alterations and passed the Bill suitably amended.
The amended Bill thereupon was again forwarded to the President and on the 27th July 1951 it received the assent of the President and became Assam Act XVIII of 1951.
The Act was published in the Assam Gazette of the 8th August 1951.
On the 11th September 1951 the Legislative Assembly passed a Bill amending Assam Act XVIII of 1951 in certain particulars and this Bill, having been reserved by the Governor for the consideration of the President, received the assent of the President on the 25th March 1954 and became Assam Act VI of 1954.
The Acts were brought into force on the 15th April 1954 by a Notification issued by the Assam Government on the 9th June 1954.
On the 19th July 1954 a Notification was published in the Assam Gazette under section 3(1) of the impugned Act declaring that the properties therein mentioned, including the properties which, formed the subject matter of the two suits would vest in the State free from all encumbrances with effect from the 15th April 1955.
Two suits out of which the present appeals arise were then filed in December 1954.
The second part of issue raises the contention that the impugned Act was not enacted according to law.
The following reasons have been urged in support of this contention.
(a)The Bill was introduced in the Assembly without the sanction of the Governor which was required by section 299(3) of the Government of India Act.
(b) When the Bill was placed before the Governor General for his assent and he did not assent to it, the assent must be deemed to have been withheld.
His suggestion that it be reserved for the consideration of the President was void and of no effect.
(c)The Bill was not pending in the Legislature at the date of the commencement of the Constitution and it could not be reserved for the assent of the President.
(d)The Legislature functioning under the Constitution has no power to.
consider the amendments ' 310 suggested by the President or to pass the same.
(e)The Bill having been passed by the Legislative Assembly and thereafter having been reserved for the consideration of the Governor General under the Government of India Act, 1935 and the Governor General not having taken any constitutional action in respect of it, as prescribed/by that Act up to the time that Act was operating, ' the Bill lapsed on the repeal of the Government of India Act, 1935 and the promulgation of the Constitution.
(f)The subsequent acts of the Governor, the Legislative Assembly and the purported assent of the President are all unconstitutional and void.
The reason under beading above may be disposed of in a few words. 'The impugned Act undoubtedly provides for the compulsory acquisition of land and had, therefore, to comply with the requirements of section 299 of the Government of India Act, 1935, which was in force at the date of the introduction of the Bill in the Legislative Assembly of the province of Assam.
Sub section (3) of that section provided that no Bill making provision for the transference to public ownership of any land should be introduced in either Chamber of Federal Legislature without the previous sanction of the Governor General in his discretion or in a, Chamber of Provincial Legislature without the previous sanction of the Governor in his discretion.
It was alleged that the pre vious sanction of the Governor of Assam had not been obtained before the Bill, which eventually became the impugned Act, was introduced in the Legislative Assembly.
This allegation was controverted and the learned Advocate General of Assam produced before the High Court the minutes of the official proceedings in relation to the Bill.
The Revenue Department 's file No. RT 17/48 dated the 21st July 1948 shows that a note was put up before "H.E.", meaning obviously His Excellency the Governor, seeking, amongst other things, his sanction for the introduction of the Assam State Acquisition of Zamindaris Bill, 1948 under section 299(3) of the Government, of India Act, 1935.
At the foot of that note appear the 311 initials "A.H." over the date 21st July, 1948.
It is not disputed that the initials "A.H." stand for Akbar Hydari, who was then the Governor of Assam.
It is true that the words "sanction granted" were not endorsed on the note but there Can be no doubt that the initials were appended to the note by the Governor for no other purpose than for signifying his sanction to the introduction of the Bill in the Legislative Assembly.
Moreover under section 109 of that Act, if there were no other defect vitiating it, the impugned Act could not be challenged as invalid by reason only,, that previous sanction was not given by the Governor to the introduction of the Bill.
In our judgment the first reason urged in support of the contention that the impugned Act was not enacted according to law has no force and must be rejected.
The reasons (b) to (f) may conveniently be dealt with together.
It will be recalled that after the Bill had been passed by the Assam Legislative Assembly on the 28th March, 1949, it was presented to the Governor under section 75 of the Government of India Act, 1935.
Under that Act the Governor could do one of four things.
He could in his discretion declare that he assented in His Majesty 's name to the Bill or that he withheld assent therefrom or that he reserved the Bill for the consideration of the Governor General or he could in his discretion return the Bill together with a message requesting the Chamber or Chambers to reconsider the Bill or any specified provisions thereof.
In this case the Governor in his discretion reserved the Bill for the consideration of the Governor General and forwarded the Bill to him.
Under section 76 of that Act the Governor General could do one of four things, namely, that he could in his discretion declare that he assented in His Majesty 's name to the Bill or that he withheld assent therefrom or that he reserved the Bill for the signification of His Majesty 's pleasure thereon or he could, if in his discretion he thought fit, direct the Governor to return the Bill to the Chamber or Chambers of the Provincial Legislature together with such a message as was mentioned in the preceding section.
What happened in 41 312 this case is that, in view of the impending constitutional changes, the Governor General, on the 25th January 1950, returned the Bill to the Governor of Assam advising him to reserve the Bill for the consideration of the President.
While the Bill was in transit and before it was actually received by the Governor, which he did on the 28th January 1950, our Constitution came into force on the 26th January 1950.
Our attention is drawn to article 395 of the Constitution, whereby the Indian Independence Act, 1947 and the Government of India Act, 1935 together with all enactments, amending or supplementing the latter Act but not including the Abolition of Privy Council Jurisdiction Act, 1949, were repealed.
It is pointed out that there was no saving provision in that article and consequently it was a total repeal of the enact ments referred to therein.
Reference is made to the well known observations of Tindal, C. J. in Kay vs Godwin(1) and the dictum of Lord Tenterden, C. J. in Surtees vs Ellison(2) and to Craies ' Statute Law, 4th Edition, pp.
347 to 348 and Crawford on Statutory Construction, pp. 599 to 600, all referred to by Fazl Ali, J. in Keshavan Madhava Menon vs The State of Bombay(3) and it is contended that the effect of the repeal of the Government of India Act, 1935 was to obliterate that Act as completely as if it bad never been passed and as if it bad never existed except for the purpose of those actions commenced, prosecuted and concluded whilst it was an existing law.
The Bill in question not having become an Act before the 26th January 1950 the same, it is urged, must be regarded as having been wiped out of existence by reason of the repeal.
There might have been a good deal of force in this contention had there been no other provision in the Constitution keeping this Bill alive.
Article 389 of the Constitution provides that a Bill which immediately before the commencement of the Constitution was pending in the Legislature of the, (1) ; ; Bing.
(2)[1829] ; , 752; ; , 279.
(3) ; , 237 et seq.
313 Dominion of India or in the Legislature of any Province or Indian State may, subject to any provisions to the contrary which may be included in rules made by Parliament or the Legislature of the corresponding State under this Constitution, be continued in Parliament or the Legislature of the corresponding State, as the case may be, as if the proceedings taken with reference to the Bill in the Legislature of the Dominion of India or in the Legislature of the Province or Indian State had been taken in Parliament or in the Legislature of the corresponding State.
If, therefore, the Bill with which we are concerned was pending in the Legislature of Assam immediately before the commencement of the Constitution, then clearly it was quite properly continued in the Legislature of the corresponding State.
Two questions, therefore, arise, namely (1) whether at the commencement of the Constitution the Bill was pending at all and (2) if it was, whether it was pending in the Legislature of Assam.
As to (1) election 30 of the Government of India Act, 1935 made provision for the introduction of Bills in the Chambers of the Federal Legislature and section 73 provided for the introduction of Bills in the Chamber or Chambers of the Provincial Legislature.
Section 32 of the Act laid down provisions for presentation of the Bill passed by the Federal Legislative Chambers to the Governor General and section 75 for the presentation of the Bill passed by the Provincial Legislative Chamber or Chambers to the Governor.
Broadly speaking it may be said that a Bill begins to pend with its introduction in the Legislative Chamber and it ceases to pend (a) when it lapses under section 73(4) or (b) when the Governor declares that be assents in his Majesty 's name to the Bill in which case the Bill ripens into an Act or (c) when the Governor declares that he withholds his assent therefrom, in which case the Bill falls through or (d) when being reserved by the Governor for the consideration of the Governor General, the Governor General acting under section 76 declares that he assents in His Majesty 's name to the Bill, in which case also 314 the Bill becomes an Act or (e) when, having been so reserved by the Governor, the Governor General declares that he withholds his assent therefrom, in which case again the Bill falls through or (f) when the Bill having been reserved by the Governor General for the signification of His Majesty 's pleasure thereon under section 76(1), the Governor under section 76(2) makes known by public notification that His Majesty had assented thereto, in which case again the Bill becomes an Act and lastly (g) when no such notification is issued by the Governor within twelve months from the date on which it was presented to the Governor, in which event also the Bill comes to an end.
In short a Bill may be said to be pending as long as it does not lapse or it does not become an Act by.
receiving the assent by the appropriate authority or is not terminated by the withholding of assent by such appropriate authority.
The contention of the appellant is that when the Bill under consideration had been, under section 76, reserved by the Governor for the consideration of the Governor General and sent to the Governor General and the latter did not declare his assent in the name of His Majesty to the Bill but sent it back to the Governor, the Governor General must be deemed to have withheld his assent from the Bill.
As already stated, under section 76, the Governor General could have declared that he assented in the name of His Majesty to the Bill or that he withheld his assent therefrom, or that he reserved the Bill for the signification of His Majesty 's pleasure or he could have returned it to the Governor for being presented to the Chamber for reconsideration but he could not do anything else.
Therefore, his act of returning the Bill to the Governor with the suggestion to place it before the Presi dent was, it is urged, wholly unauthorised and amounted to his withholding his assent from the Bill.
We are unable to accept this argument as sound.
The Governor General knew that if he declared that he withheld his assent then the Bill would come to a termination and no further step could be taken in relation to that Bill.
Therefore, when the Governor 315 General returned the Bill to the Governor with the suggestion that the same Bill be reserved for the con sideration of the President, the Governor General quite clearly evinced an intention that the Bill should remain alive, for otherwise there could be no question of further reservation of the same Bill for the consideration of the President.
The very suggestion of the further reservation of the Bill for the consideration of the President makes it impossible for us to hold, inferentially or fictionally, as we are asked to do, that the Governor General had withheld his assent.
It is clear on the facts that the Governor General neither assented to, nor withheld his assent from, the Bill.
His action may have been unconstitutional, but it cannot be regarded as amounting to a declaration that he was withholding his assent from the Bill, for the assenting to, or the withholding of assent from a Bill postulates a conscious and positive declaration that the assent is so given or withheld.
The suggestion that the Bill be reserved for the consideration of the President clearly militates against the view that the Governor General had, positively or even tacitly, withheld his assent from the Bill.
The very suggestion indicates that the Governor General intended that the Bill should remain pending so that it could be reserved for the consideration of the President and receive his assent or dissent.
In the premises it cannot be held that the Bill ceased to be pending by reason of the assent of the Governor General having been withheld from it.
In our view, in the facts and circumstances of this case, the Bill was pending at the date when our Constitution came into force.
As to (2): Learned counsel for the appellant then contends that even if the Bill was pending, it was certainly not pending before the Legislature of Assam.
What, then, was the Legislature of the Province of Assam immediately before the commencement of our Constitution? This involves a consideration of the relevant provisions of the Government of India Act, 1935.
The Government of India Act, 1935 was a statute passed by the British Parliament.
The 316 Parliament of the United Kingdom of Great Britain and Northern Ireland consists of the Sovereign and the three Estates of the Realm, namely, the Lords Spiritual and the Lords Temporal, who sit together in the House of Lords and the elected representatives of the people, who sit in the House of Commons.
When a Bill is passed by both Houses of Parliament or is passed by the House of Commons in the manner provided by Parliament Act, 1911, it becomes ready to receive the Royal assent.
No Bill passed by both Houses of Parliament or in the last mentioned case by the House of Commons can become law and be entered in the Statute Book without the Royal assent.
It is thus clear that according to British Constitutional theory, the Sovereign is an integral part of Parliament.
This notion is reflected in sections 17, 55 and 56 of the British North America Act, with regard to the Canadian Parliament and sections 69, 71 and 90 of the same Act with regard to the Provincial Legislatures of that Dominion.
The same idea was adopted in the Government of India Act, 1935.
Section 18 of this Act, as it originally stood, provided for a Federal Legislature consisting of His Majesty represented by the Governor General and two Chambers to be known respectively as the Council of States and the House of Assembly.
Section 60 provided for a Legislature for every Province consisting of His Majesty represented by the Governor and in certain Provinces two Chambers and in other Provinces one Chamber.
As already stated the Province of Assam had only one Chamber, the Legislative Assembly.
The legislative procedure of the Chambers of the Federal Legislature was regulated by section 30 and of the Chamber or Chambers of the Provincial Legislatures by section 73 of the Government of India Act, 1935.
Procedure subsequent to the passing of the Bill by the Legislative Chamber or Chambers was governed by section 32 with regard to Bills passed by the Chambers of the Federal Legislature and by sections 75 and 76 with regard to those passed by the Chamber or Chambers of the Provincial Legislatures.
It is true that section 18 of the Government of 317 India Act, 1935 was adapted as contemplated by section 9 of the Indian Independence Act, 1947, but there was no adaptation of section 60 of the Government of India Act, 1935 which dealt with the Provincial Legislature.
From the language used in section 18, as it stood before its adaptation and in section 60, it is quite clear that it was His Majesty himself, who was really a constituent part of the Legislatures, Federal and Provincial, and that be was represented by the Governor General in relation to the Federal Legislature and by the Governor in the case of the Provincial Legislatures.
His Majesty being, thus, an integral part of the Legislature, Federal and Provincial, when a Bill passed by the Chambers of the Federal Legislature or by the Chamber or Chambers of Provincial Legislatures, was presented to the Governor General or the Governor under section 32 or sections 75 and 76 of that Act, the Legislative process went on and unless and until assent was given or withheld by the Governor General or the Governor in the name of His Majesty there could be no escape from the position that in law and in reality the Bill was pending before His Majesty, for the Governor General or the Governor was, under that Act, merely the agent representing His Majesty, who was an integral part of the Legislature.
This was made clear by the provision that when the Governor General or the Governor declared that be assented or that he withheld his assent, such declaration had to be made in the name of His Majesty.
Therefore, whether the Bill was in the hands of the Governor or in the hands of the Governor General or was in transit between the one and the other on either way, it must be taken to have been pending before His Majesty and, therefore, before the Legislature.
The declaration giving or withholding assent was undoubtedly a continuation of the legislative process and until such declaration was made by the appropriate agency in the name of His Majesty obviously the Bill was pending and where, in law and in reality, could it at that stage be pending except before His Majesty as an integral part of the Legislature? Such 318 being the position under article 389 read with the relevant provisions of the Government of India Act, as we apprehend it, this Bill could properly be continued in the Legislature of Assam after the commencement of our Constitution.
Under article 168 of our Constitution every State has a Legislature consisting of the Governor and in certain States two Houses and in other States, which include Assam, one House.
The Bill having been passed by the Legislative Assembly of Assam before the commencement of the Constitution, all that was required to be done under the Constitution was to continue the legislative process under article 200.
It was, therefore, competent for the Governor of Assam to reserve the Bill for the consideration of the President and it was in order for the President, under article 201, to direct the Governor to return the Bill to the Legislative Assembly of the State together with the requisite message and it was quite proper for the Legislative Assembly, when the Bill was so returned, to consider it accordingly.
It follows, therefore, that when the Bill was again passed by the Legislative Assembly of Assam, it was proper to represent the Bill to the President for his consideration and it was open to the President to give his assent to the amended Bill, as he, in fact, did.
Reliance is placed by learned counsel for the appellant on article 31(4) and to a passage in the Judgment of this court in Visweshwar Rao vs The State of Madhya Pradesh(1) and it is contended that the word "Legislature", which occurs both in article 31(4) and article 389 means only the Chamber or Chambers of the Legislature and not the Governor or the Gov ernor General.
We need not discuss the larger question as to the correct interpretation of the word "Legislature" as occurring in article 31(4) and suffice it to say that the very passage relied on by learned counsel makes it quite clear that the word "Legislature" is used in different senses in different articles and may be in different senses in different places in the same article and its meaning has to be ascertained (1) , 1034.
319 keeping in view the subject or the context.
In view of the provisions of sections 18, 30 and 32 and sections 60, 73, 75 and 76 of the Government of India Act, 1935 to which reference has been made, we are clearly of opinion that the word "Legislature" has been used in article 389 in the larger sense, namely, comprising all the units that were concerned in the entire legislative process and included His Majesty represented by the Governor General or the Governor, as the case might be.
We find no reason to think that our Constitution intended only to keep alive the Bills which were actually pending before the Legislative Chamber or Chambers but not those which having been passed by the Legislative Chamber or Chambers had been presented to the Governor General or the Governor and were undergoing the final legislative process and awaiting the assent of His Majesty represented by the Governor General or Governor, as the case might be.
We are, therefore, of opinion, although for different reasons, that the High Court properly answered the first part of issue (1).
Re. issue (2): The Act having been properly passed by the Legislature of Assam, the Government of Assam was well within their rights under section 3 of the Act to declare that the estates of the tenure holders specified in the Notification vested in the State free from all encumbrances.
There is no suggestion that the properties of Sm.
Beda Bala Devi, the plaintiff in T. section No. 3 of 1955, were not "estates" within the meaning of the Act and accordingly the High Court has correctly decided this issue in favour of the State, so far as that plaintiff is concerned.
The Raja, the plaintiff in T. section No. 1 of 1955, however, raised the contention that his properties were not "estates" as defined in the Act and that being the subject matter of issue (4), this aspect of issue (2) was also left open until the decision of issue (4).
As the High Court has sent down the suit to the court of Subordinate Judge for disposal and determination of other issues, the final answer to issue (2), as regards the Raja, will depend on the determination of issue (4) and must until then be kept open.
42 320 Re. issue (3): The Act and its amendments are challenged on the ground that they infringe the fundamental rights of the plaintiff under article 31(2) and article 14 of the Constitution.
If, however, the legislation is protected under article 31 A of the Constitution then the question of infringement of fundamental rights of the plaintiff under articles 31(2) and 14 will not arise.
Article 31(4) protects an Act falling within it only against the contravention of the provisions of clause (2) of that article but not of those of article 14.
Article 31 A, however, protects an Act falling within it even if it is inconsistent with or takes away or abridges any of the rights conferred by the provisions of Part III.
It is obvious, therefore, that article 31 A gives greater and wider protection than does article 31(4).
If, therefore, article 31 A applies no question can arise under article 31(2) or article 14 and in that case article 31(4) need not be invoked at all.
What is protected by article 31 A is a law providing for the acquisition by the State of any estate or of any rights therein or for the extinguishment or modification of any such rights.
There is no question that the impugned Act, having been reserved for the consideration of the President, has in fact received his assent and, therefore, the proviso to article 31 A does not come into play.
The only question then is is the impugned Act a law providing for the acquisition of an estate or any rights therein? The expression "estate" in relation to any local area, has been made by clause (2) (a) of this article, to have the same meaning as that expression or its local equivalent has in the existing law relating to land tenures in force in that area.
The preamble to the impugned Act recites the expediency of providing for the acquisition by the State of the interests of proprietors and tenure holders and certain other interests in the permanently settled areas and certain other estates in the districts of Goalpara, Garo Hills and Cachar in the State of Assam including their interests in forests, fisheries, hats, bazars and ferries, mines and minerals.
Section 321 3 of that Act authorizes the State Government to declare, from time to time, by Notifications that the estate or tenure of a proprietor or tenure holder specified in the Notification shall stand transferred to and vest in the State free from all encumbrances.
Section 4 lays down the consequences that are to follow.
It is thus clear that the Act purports to be a law for the acquisition by the State of estates or tenures.
The word "estate" as defined in section 2(k) means lands included under one entry in any of the general registers of revenue paving and revenue free lands prepared and maintained under the law for the time being in force by the Deputy Commissioner and includes revenue free lands not entered in any register.
Under the Assam Land and Revenue Regulation (Reg. 1 of 1886) the Deputy Commissioner of every district is, by section 48, enjoined to prepare and keep in the prescribed form and manner a general register of revenue paying estates, a general register of revenue free estates and such other registers as the Government may direct.
Section 49 provides that until such registers are prepared the Government may direct that the existing registers kept by or under the control of the Deputy Commissioner shall be deemed to be registers prepared under section 48.
It will be noticed that what are to be entered in the general registers are revenue paying or revenue free estates.
The word "estate" is defined by section 3(b) to include six kinds of lands described in the six clauses therein set out.
This definition does not purport to be an exhaustive definition of "estate" but only includes certain enumerated items within the meaning of that expression.
The word "estate" is defined in the Goalpara Tenancy Act (Assam Act 1 of 1929) exactly in the same way as it is defined in the impugned Act, namely, as meaning lands included under one entry in any of the General Registers of revenue paying or revenue free lands prepared and maintained by the Deputy Commissioner.
The properties of both the plaintiffs appellants are and have been in point of fact entered in the General Register.
An "estate" within the meaning of the 322 Assam Land and Revenue Regulation 1 of 1886 is also an "estate" within the meaning of the Goalpara Tenancy Act (Act 1 of 1929) and of the impugned Act.
The impugned Act, therefore, is a law providing for the acquisition by the State of an "estate" within the meaning of article 31 A and, that being so, its constitutionality or validity cannot be questioned on the ground of any contravention of any of the provisions of Part III of the Constitution dealing with fundamental rights.
There is no dispute that the lands comprised in the trust estate of Sm.
Beda Bala Devi, the plaintiff in T. section No. 3 of 1955 is an "estate" as defined in each of the aforesaid statutes including the impugned Act.
The question whether the amount paid by the Raja, the plaintiff in T. section No. 1 of 1955, is revenue or tribute, whether his properties have been from before 1886 entered properly in the General Register of revenue paying estate and whether such properties come within the operation of the impugned Act, are the subject matter of issue (4), but those questions have no bearing on the question whether the impugned Act is entitled to the protection of article 31 A.
If the plaintiff Raja 's properties are not "estate" as defined in the Assam Land and Revenue Regulation or the Goalpara Tenancy Act or the impugned Act, then the Notification under section 3 of the impugned Act will not affect him but that will be, not because the impugned Act is not a law providing for the State acquisition of an "estate" but, because the Raja 's properties are not "estates" within the purview of the impugned Act.
The fact that the definition of "estate" in the Assam Land and Revenue Regulation is only an inclusive and not an exhaustive definition, that the Raja 's properties have been in fact entered in the General Register of revenue paying lands and that the lands falling within any of the six categories enumerated in section 3 (b) of the Assam Land and Revenue Regulation will certainly fall within the wider ambit of the definition of "estate" given in the impugned Act cannot be overlooked.
The impugned Act is nonetheless a law providing for State acquisition of "estate" even if its 323 definition of "estate" comprises something more than what is comprised in the six categories included within that term in section 3(b) of the Assam Land and Revenue Regulation of 1886.
In our judgment the impugned Act is fully protected by article 31 A.
In the view we have taken on article 31 A) it is unnecessary to discuss the question of the applicability of article 31(4).
We have, however, to touch very briefly a few subsidiary points urged before us.
It has been said that the impugned Act constitutes a colourable exercise of legislative power, for while it purports to specify the principles on which and the manner in which the compensation is to be determined and given, it actually makes provisions which result in illusory compensation or no compensation at all.
The doctrine of colourable legislation is relevant only in connection with the question of legislative competency as explained by this Court in K. C. Gajapati Narain Deb vs State of Orissa(1).
Here there is no question of any legislative incompetency.
The gravamen of the present complaint is as to the quantum of compensation, which, in view of the article 31 A, cannot be raised.
Reference has been made to section 11 of the impugned Act according to which in the computation of the gross income is to be included the gross rent payable by the tenant immediately subordinate, for the agricultural years preceding the date of vesting.
It is argued that the Act is vague and indefinite, because of the use of the word "years" in plural.
The High Court has given cogent reasons, with which we agree, for holding that the word "years" in the plural has been retained in the Act by mistake or oversight and it should be read in the singular.
Moreover, the Act has since been amended retrospectively by section 4 of Assam Act V of 1956 and the question does not arise.
The Act is also impugned on the ground of discrimination, which offends article 14 of the Constitution.
This question again is not open to the appellant in view of our decision on article 31 A. Further (1) ; 324 article 14 does not really help the appellant.
It is said that the State can pick and choose the estate of one zamindar and leave out those of their favourite ones, as indeed they have since done by withdrawing the Notification with respect to Gouripore and Prabatjoar estates.
There is no force in this contention in view of the decisions of this court in Biswambhar Singh vs The State of Orissa and others(1) and Thakur Amar Singh vs State of Rajasthan(2).
It is said that the Act only applies to some Lakheraj estates, that is to say, Lakheraj estates within the boundaries of a permanently settled estate but not to other Lakheraj estates.
The acquisition of Lakheraj estates within the boundaries of permanently settled estates clearly facilitates the object of acquiring permanently settled areas and such Lakheraj estates within the boundaries of permanently settled estates constitute a class distinct from other Lakheraj estates not so situate and, therefore, the charge of discrimination cannot, in view of the principles laid down by this court, apply to the impugned Act.
Lastly it is said that there is discrimination because of different scales of compensation which have been prescribed for different estates.
It is not difficult to find a rational basis for such classification of proprietors of different income groups.
We need not, however, dilate on this point, for we have already held that the Act is not open to challenge on the ground of contravention of any of the provisions of Part III of the Constitution.
There was in the Raja 's T. section No. 1 of 1955, a prayer for injunction restraining the State from taking possession of his estate.
The High Court has rejected that prayer on grounds which appear to us to be quite cogent and convincing and as we see no substantial risk of irreparable loss to the Raja we do not consider it right to reverse even that order of the High Court.
For reasons stated above both these appeals are dismissed with costs.
As the two appeals were heard together there will be one set of costs of bearing to be apportioned equally between the two appellants.
(1) (1954] S.C.R. 842.
(2) ; , 316.
| IN-Abs | The appellants by two suits, which were heard by a Full Bench of the Assam High Court, challenged the Constitutional validity of the Assam State Acquisition of Zamindaries Act of 1951 as amended by the Assam Act VI of 1954.
The Assam Legislative Assembly had passed the Bill on March 28, 1949.
It was presented to the Governor and reserved by him for the consideration of the Governor General who, in view of the impending constitutional changes, on January 25, 1950, returned the Bill to the Governor suggesting that it might be reserved for the consideration of the President.
While the Bill was in transit and before it actually reached the Governor, the Constitution came into force.
The Governor reserved the Bill for the consideration of the President and sent it to him.
The President returned the Bill suggesting certain alterations.
The State Legislative Assembly considered them and passed the Bill suitably amended.
It received the President 's assent on July 27, 1951, and became an Act.
On September 11, 1951, the State Legislative Assembly passed an amending Bill which was assented to by the President.
The Act as amended was brought into force on April 15, 1954, and a Notification was issued by the State Government under the impugned Act declaring that the properties of the appellants, along with those of others, would vest in the State.
It was contended on behalf of the appellants that the impugned Act was not within the competence of the State Legislature, it was not enacted according to law and infringed the fundamental rights of the appellants under articles 31(2) and 14 of the Constitution.
The High Court repelled these contentions and they were reiterated in appeal.
Held, that the impugned Act was passed according to law, its 40 304 provisions were constitutionally valid and the decision of the High court must be affirmed.
That the repeal of the Government of India Act, 1935, by article 395 of the Constitution could not wipe out the Bill as it was, immediately before the commencement of the Constitution, pending before the Governor General and/or the Governor who represented His Majesty the King who was a part of the Provincial Legislature and was, therefore, pending before the Provincial Legislature and, consequently, the State Legislature of Assam was competent under article 389 to continue the same.
That although the Governor General might not have acted constitutionally under section 76 of the Government of India Act, 1935, in suggesting that the Bill might be reserved for the President 's consideration, his action, in the absence of a positive declaration to that effect, could not amount to a withholding of assent under that section and effect a termination of the bill, contrary to his express intention indicated by the suggestion itself that it should remain pending.
That under the Government of India Act, 1935, His Majesty the King was an integral part of the Legislature and when the Bill was presented to the Governor or the Governor General under section 75 or section 76 of the Act, in due course of legislation, and neither of them gave or withheld assent in the name of His Majesty, it remained pending, both in law and reality, before his Majesty and, therefore, before the Legislature and could properly be continued by the State Legislature after the commencement of the Constitution.
The Governor was, therefore, within his powers in reserving it for the President and the subsequent enactment of the Bill was in accordance with the Constitution.
That the word 'Legislature ' is not used in the same sense in different articles of the Constitution, or even in different parts of the same article, and its exact meaning has to be ascertained with reference to the subject matter on the context and in article 389 it is used in the larger sense so as to comprise the entire legislative machinery including His Majesty represented by the Governor General or the Governor and does not mean merely the Legislative Chamber or Chambers.
The Constitution intended to keep alive not merely Bills which were actually pending before the Legislative Chamber but also Bills, such as the present, that had reached the final stages of the legislative process and were awaiting assent of the Governor General or the Governor representing His Majesty.
Visweshwar Rao vs The State of Madhya Pradesh, [1952] S.C.R. 1020, referred to.
That the impugned Act was a law providing for the acquisition of estates by the State within the meaning of article 31 A of the Constitution and was, as such, fully protected by it, and its validity could not be questioned on the ground of any contravention of any 305 of the provisions of Part III of the Constitution dealing with fundamental rights.
That the Act could not, in the absence of any question as to legislative incompetency, be impugned as a colourable exercise of legislative power on account of the provisions it made for payment of compensation and any question relating to the quantum of compensation would be barred under article 31 A of the Constitution.
C.Gajapati Narain Deb vs State of Orissa, ([1954] S.C.R. 1), referred to.
That article 14 of the Constitution could not really help the appellants, it being no longer open to them to contend, in view of the decisions of this Court, that the State could pick and choose and thus discriminate between one estate and another.
Biswambhar Singh vs The State of Orissa, ([1954] S.C.R. 842) and Thakur Amar Singh vs The State of Rajasthan, ([1955] 2 S.C.R. 303), referred to.
That, in view of the decisions of this Court, the Act could not be said to discriminate by reason of its application being limited to such Lakheraj estates alone as fell within the boundaries of permanently settled estates and not extending to other Lakheraj estates as the former constituted a distinct class by themselves and acquisition of them facilitated the object of the Act.
Nor could the provision for different scales of compensation prescribed for different estates amount to discrimination as there is a rational basis for such classification of proprietors of different income groups.
|
N: Criminal Appeal No. 773 of 1979.
Appeal by Special Leave from the Judgment and Order dated 13 8 1979 of the Madhya Pradesh High Court in Misc.
Criminal Case No. 279/79.
Mrs. K. Hingorani for the Appellant.
The Judgment of the Court was delivered by KRISHNA IYER, J.
Sublime titles of cinematograph films may enchant or entice and only after entry into the theatre the intrinsic worth of the picture dawns on the viewer.
The experience may transform because the picture is great or the audience may lose lucre and culture in the bargain.
Mere titles may not, therefore, attest the noxious or noble content of the film.
Sometimes the same film may produce contrary impacts and what one regards as lecherous, another may consider elevating.
Be that as it may a well published film Satyam, Sivam, Sundaram became 514 the subject matter of a prosecution presumably a pro bono publico proceeding, by the respondent against the petitioner and others who are the producer, actor, photographer, exhibitor and distributor of that film.
The complaint alleged that the fascinating title was misleadingly foul and beguiled the guileless into degeneracy.
If the gravamen of this accusation were true, obscenity, indecency and vice are writ large on the picture, constituting an offence under section 292 I.P.C.
The Magistrate, after examining some witnesses, took cognizance of the offence and issued notice to the accused.
Thereupon, the producer, namely, the present petitioner, moved the High Court under section 482 Cr.
P.C. on the score that the criminal proceeding was an abuse of the judicial process and engineered by ulterior considerations and that no prosecution could be legally sustained in the circumstances of the case, the film having been duly certified for public show by the Board of Censors.
The High Court, however, dismissed the petition, ignoring the contention that the film had been given 'A ' certificate by the Central Board of Film Censors and finding in the prosecution nothing frivolous or vexatious nor any material to quash the proceedings.
The aggrieved film producer has arrived in this Court hopefully, and pressed before us one principal objection founded on section 79 I.P.C. to neutralise section 292 I.P.C. We do not find this contention apparent in the High Court 's judgment, but since the facts are admitted and the question of law is of some moment, we have chosen to hear the petitioner on the invalidatory plea that once a certificate sanctioning public exhibition of a film has been granted by the competent authority under the (for short, the Act), there is a justification for its display thereafter, and by virtue of the antidotal provisions in section 79 of the Penal Code, the public exhibition, circulation or distribution or the production of the film, even if it be obscene, lascivious or tending to deprave or corrupt public morals, cannot be an offence, section 292 I.P.C. notwithstanding.
The absolution is based upon the combined operation of section 5A of the Act and section 79 of the Penal Code.
The issue is of some importance since the cinema is one of the major mass media with millions of viewers and many millions in investment.
The respondent complainant, despite notice having been served on him, did not enter appearance.
We requested the Additional Solicitor General, Shri Banerjee, to help the court unravel the legal tangle and he responded promptly and eruditely rendered industrious assistance.
We record our appreciation of the services of Shri Banerjee.
The sole point for decision is the legal effect of the combined operation of section 5A of the Act and section 79 I.P.C.
But we will assume for purposes of argument that the facts stated in the complaint prima facie 515 attract the offence under section 292 I.P.C. Supposing such film has been certified by the Central Board of Film Censors, acting within their jurisdiction under the Act, thereby sanctioning the public exhibition of the film, does it furnish a justification in law in doing the act which, in the absence of such certification, may constitute an offence under section 292 I.P.C. ? Section 79 I.P.C. runs thus: 79.
Nothing is an offence which is done by any person who is justified by law, or who by reason of a mistake of fact and not by reason of a mistake of law in good faith, believes himself to be justified by law, in doing it.
The argument is irresistible that if the performance of the act which constitutes the offence is justified by law, i.e. by some other provision, then section 79 exonerates the doer because the act ceases to be an offence.
Likewise, if the act were done by one "who by reason of a mistake of fact in good faith believes himself to be justified by law in doing it" then also, the exception operates and the bona fide belief, although mistaken, eliminates the culpability.
The resolution of the problem raised in this case thus becomes simplified.
If the offender can irrefutably establish that he is actually justified by law in doing the act or, alternatively, that he entertained a mistake of fact and in good faith believed that he was justified by law in committing the act, then, the weapon of section 79 demolishes the prosecution.
Does a certificate issued under section 5A(1A) of the Act amount to justification in law for public exhibition of the film, be it obscene or not, or, at any rate, does it generate a belief induced by a mistake of fact, namely, the issuance of the certificate and its effect that the certificate holder is justified by law in exhibiting the film ? We are thrown back upon a study of the anatomy of the and the efficacy of a certificate under section 5A as a justification within the meaning of section 79 of I.P.C. "Justified" according to Black 's Legal Dictionary means: Done on adequate reasons sufficiently supported by credible evidence, when weighed by unprejudiced mind, guided by common sense and by correct rules of law.
The Shorter Oxford English Dictionary assigns this meaning for "justification".
The showing in court that one had sufficient reason for doing that which i.e. is called to answer; the ground for such a plea.
516 Lexically, the sense is clear.
An act is justified by law if it is warranted, validated and made blameless by law.
Is a legal sanction permitting a thing a legal justification for doing it ? Maybe, there is a fine semantic shade between mere legal sanction, which is passive, and clear legal justification which is active.
For the work a day world of meanings, between 'permissive ' and 'justificative ' 'thin partition do their bounds divide '.
It is an antinomy to say that under section 5A(1A) of the Act the Board certifies a film as suitable for public exhibition and for section 292 I.P.C. to punish such exhibition unless the ground covered by the two laws be different.
Although it may be plausible to say that what is merely certified as suitable for show by a law may not go the length of holding that it is justified by law.
Such niceties need not deter us once we grasp the sweep of the .
Indeed, the Penal Code is general, the is special.
The scheme of the latter is deliberately drawn up to meet the explosively expanding cinema menace if it were not strictly policed.
No doubt, the cinema is a great instrument for public good if geared to social ends and can be a public curse if directed to anti social objectives.
The freedom of expression, the right to be equally treated and the guarantee of fair hearing before heavy investments in films are destroyed belong to Indian citizens under the Constitution.
But all freedom is a promise, not a menace and, therefore, is subject to socially necessary restraints permitted by the Constitution.
Having regard to the instant appeal of the motion picture, its versatility, realism, and its coordination of the visual and aural senses.
what with the art of the cameraman with trick photography, vistavision and three dimensional representation, the celluloid art has greater capabilities of stirring up emotions and making powerful mental impact so much so the treatment of this form of art on a different footing with pre censorship may well be regarded as a valid classification, as was held in K. A. Abbas.
Maybe, art cannot be imprisoned by the bureaucrat and aesthetics can be robbed of the glory and grace and free expression of the human spirit if governmental palate is to prescribe the permit for exhibition of artistic production in any department, more so in cinema pictures.
So it is that a special legislation viz. the Act of 1952, sets up a Board of Censors of high calibre and expertise, provides hearings, appeals and ultimate judicial review, pre censorship and conditional exhibitions and wealth of other policing strategies.
In short, a special machinery and processual justice and a host of wholesome restrictions to protect State and society are woven into the fabric of the Act.
After 517 having elaborately enacted such a legislation can it be that a certificate granted under it by expert authority can be stultified by a simple prosecution of a shower of prosecutions for an offence under section 292 I.P.C., driving the producer to satisfy a 'lay ' magistrate that the certificate of the Board of Censors notwithstanding, the film was offensive ? The Board under section 5B has to consider, before certification, all the points section 292 I.P.C. prescribes.
Indeed, neither the Penal Code nor the can go beyonds the restrictions sanctioned by of the Constitution and once the special law polices the area it is pro tanto out of bounds for the general law.
At least as a matter of interpretation, section 79 I.P.C. resolves the apparent conflict between section 292 I.P.C. and Part II of the Act relating to certification of films.
If the Board blunders, the Act provides remedies.
We are sure the public spirited citizen may draw the attention of the agencies under the Act to protect public interest.
The general issues of art and the role of the State have already been referred to by us in an earlier appeal from the Delhi High Court relating to the same film.
There section 79 I.P.C. was not considered by us because the contention was not urged before us.
The present decision will bind the court that hears that case.
The position that emerges is this.
Jurisprudentially viewed, an act may be an offence, definitionally speaking but; a forbidden act may not spell inevitable guilt if the law itself declares that in certain special circumstances it is not to be regarded as an offence.
The chapter on General Exceptions operates in this province.
Section 79 makes an offence a non offence.
When ? Only when the offending act is actually justified by law or is bona fide believed by mistake of fact to be so justified.
If, as here, the Board of Censors, acting within their jurisdiction and on an application made and pursued in good faith, sanctions the public exhibition, the producer and connected agencies do enter the statutory harbour and are protected because section 79 exonerates them at least in view of their bona fide belief that the certificate is justificatory.
Thus the trial court when it hears the case may be appropriately apprised of the certificate under the Act and, in the light of our observations, it fills the bill under section 79 it is right for the court to discharge the accused as the charge is groundless.
In the present case, the prosecution is unsustainable because section 79 is exculpatory when read with section 5A of the Act and the certificate issued thereunder.
We quash the prosecution.
Two things deserve mention before we close.
Prosecutions like this one may well be symptomatic of public dissatisfaction with the Board of Censors not screening vicious films.
The ultimate censo 518 rious power over the censors belongs to the people and by indifference, laxity or abetment, pictures which pollute public morals are liberally certificated, the legislation, meant by Parliament to protect people 's good morals, may be sabotaged by statutory enemies within.
Corruption at that level must be stamped out.
And the Board, alive to its public duty, shall not play to the gallery; nor shall it restrain aesthetic expression and progressive art through obsolete norms and grandma inhibitions when the world is wheeling forward to glimpse the beauty of Creation in its myriad manifestations and liberal horizons.
A happy balance is to ". consider, on the one hand, the number of readers they believe would tend to be depraved and corrupted by the book, the strength of the tendency to deprave and corrupt, and the nature of the depravity or corruption; on the other hand, they should assess the strength of the literary, sociological and ethical merit which they consider the book to possess.
They should then weigh up all these factors and decide whether on balance the publication is proved to be justified as being for the public good.
" Going to the basics, freedom of expression is fundamental.
The censor is not the moral tailor setting his own fashions but a statutory gendarme policing films under article 19(2) from the angle of public order, decency or morality.
These concepts are themselves dynamic and cannot be whittled down to stifle expression nor licentiously enlarged to promote a riot of sensual display.
Anyway, the appeal must succeed and we extinguish the prosecution by the order.
N.V.K. Appeal allowed.
| IN-Abs | Section 79 I.P.C. provides that nothing is an offence which is done by any person who is justified by law in doing it, or, who by reason of a mistake of fact in good faith, believes himself to be justified by law, in doing it.
The respondent complainant alleged that the film Satyam Shivam Sundaram was by its fascinating title misleadingly foul and beguiled the guideless into degeneracy and that obscenity, indecency and vice were writ large on the picture, constituting an offence under section 292 I.P.C.
The Magistrate after examining some witnesses, took cognizance of the offence and issued notice to the appellant producer of the film.
Thereupon the appellant moved the High Court under section 482 Cr.
P.C. on the score that the criminal proceeding was an abuse of the judicial process and that no prosecution could be legally sustained as the film had been duly certified for public show by the Central Board of Film Censors.
The High Court, however dismissed the petition.
In the appeal to this Court it was contended on behalf of the appellant that once a certificate sanctioning public exhibition of a film had been granted by the competent authority under the , there was a justification for its display thereafter, and by virtue of the antidotal provisions in section 79 I.P.C., the public exhibition, circulation or distribution of the film, even if it be obscene, lascivious or tending to deprave or corrupt public morals, could not be an offence, section 292 I.P.C. notwithstanding.
Allowing the appeal, ^ HELD: 1.
The prosecution is unsustainable because section 79 I.P.C. is exculpatory when read with section 5 A of the and the certificate issued thereunder, and is therefore quashed.
[517 G] 2.
It is an antinomy to say that under section 5A(1A) of the Act, the Board certifies a film as suitable for public exhibition and for section 292 I.P.C. to punish such exhibition unless the ground covered by the two laws be different.
[516 B] 3.
The Penal Code is general, the is special.
The scheme of the latter is deliberately drawn up to meet the explosively expanding cinema menace if it were not strictly policed.
The cinema is a great instrument for public good if geared to social ends and can be a public curse if directed to 513 anti social objectives.
So the Act sets up a Board of Censors of high calibre and expertise, provides hearings, appeals and ultimate judicial review, the precensorship and conditional exhibitions and other policing strategies to protect state and society.
[516D; G H] 4.
Neither the Penal Code nor the can go beyond the restrictions sanctioned by of the Constitution and once the special law polices the area it is pro tanto out of bounds for the general law.
Section 79 I.P.C. resolves the apparent conflict between section 292 I.P.C. and part II of the Act relating to certification of films.
If the Board blunders, the Act provides remedies.
[517 B C] 5.
Jurisprudentially viewed, an act may be an offence, definitionally speaking; but a forbidden act may not spell inevitable guilt if the law itself declares that in certain special circumstances, it is not to be regarded as an offence.
The chapter on General Exceptions operates in this province.
Section 79 makes an offence, a non offence, only when the offending act is actually justified by law or is bona fide believed by mistake of fact to be so justified.
[517 E] 6.
Once the Board of Censors, acting within their jurisdiction and on an application made and pursued in good faith, sanctions the public exhibition of a film, the producer and connected agencies enter the statutory harbour and are protected because section 79 exonerates them in view of the bona fide belief that the certificate is justificatory.
[517 F] 7.
Freedom of expression is fundamental.
The Censor is not the moral tailor setting his own fashions but a statutory gendarme policing films under Article 19(2) from the angle of public order, decency or morality concepts themselves dynamic, and which cannot be whittled down to strifle expression nor licentiously enlarged to promote a riot of sexual display.
[518 E] K. A. Abbas vs The Union of India & Anr. ; ; referred to
|
Civil Appeal No. 358 of 1970.
From the Judgment and Order dated 14 10 1969 of the Gujarat High Court in L.P. Appeal No. 11/63.
R.P. Bhatt, K.J. John and D.N. Misra for the Appellant.
479 Y.S. Chitale, V.B. Joshi, P.C. Kapoor, Mrs. V.D. Khanna and Miss Geeta Sharma for Respondent No. 1.
I.N. Shroff for Respondent No. 2.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
The question which arises for consideration in this appeal by certificate is whether the plaintiff in the suit out of which this appeal arises i.e. Nadiad Borough Municipality Nadiad is an establishment which can claim the benefit of sub section (3) of section 22 A of the (Act No. 9 of 1910) (hereinafter referred to as 'the Act ').
The plaintiff instituted the said suit on August 12, 1960 against the defendant, Nadiad Electric Supply Co. Ltd., Nadiad on the file of the Civil Judge (Senior Division), Nadiad for a declaration that it was entitled to the supply of electrical energy from the defendant on the same terms and conditions as were specified in the agreement dated August 14, 1940 entered into between it and the defendant until the defendant received a notice in writing from the plaintiff requiring it to discontinue the supply and for an injunction restraining the defendant from discontinuing the supply till such notice was served on the defendant.
The facts set out in the plaint were briefly these: The plaintiff was a Municipality which was under an obligation to make reasonable and adequate provision for lighting of public streets, places and buildings situated within its limits and for that purpose, the plaintiff had entered into an agreement on August 14, 1940 with the defendant which was a licensee under the Act.
The period during which the supply of electrical energy was to be made under the agreement was 20 years from the date on which the agreement was executed.
On May 10, 1960, the defendant wrote a letter to the plaintiff that the suit agreement was to come to an end on the expiry of August 13, 1960 and the defendant was not under any obligation to continue to supply energy to the plaintiff as per rates, terms and conditions stated in the agreement after its expiry and that it was willing to supply energy thereafter provided the plaintiff was willing to pay the charges for the supply at the new rates demanded by it.
The defendant also informed the plaintiff that if the plaintiff was not willing to purchase energy at the revised rates, it would discontinue the supply on the expiry of the period of the agreement.
The plaintiff thereafter wrote a letter on August 6, 1960 requesting the defendant to renew the agreement on the same terms and conditions as were mentioned in the agreement dated August 14, 1940.
By its reply dated August 9, 1960, the defendant informed the plaintiff that it was not willing to supply electrical energy on the same terms and conditions men 480 tioned in the agreement after its expiry and insisted upon payment being made at the revised rates as stated in its letter dated May 10, 1960.
The plaintiff thereafter filed the above suit on August 12, 1960 for the reliefs referred to above principally relying upon the provisions of sub section (3) of section 22 A of the Act.
The defendant, in the course of its written statement, inter alia contended that the plaintiff was not entitled to the benefit of sub section (3) of section 22 A of the Act as it was not an establishment to which the said provision was applicable.
In the course of the trial, it was not disputed that the State Government had not issued any notification stating that in its opinion the plaintiff was an establishment used or intended to be used for maintaining supplies and services essential to the community as required by sub section (1) of section 22 A of the Act.
The trial court held that in the absence of such a notification, the plaintiff was not entitled to claim the benefit of sub section (3) of section 22 A of the Act and, therefore, no relief could be granted in the suit.
The suit was accordingly dismissed.
Aggrieved by the decree of the trial court, the plaintiff filed an appeal before the District Judge of Kaira at Naidad.
The said appeal was transferred to the file of the 2nd Extra Assistant Judge at Ahmedabad.
After hearing the parties, the 2nd Extra Assistant Judge dismissed the appeal.
Against the decree of the first appellate court, the plaintiff filed a second appeal before the High Court of Gujarat.
The second appeal was allowed in part by a single Judge of the High Court of Gujarat and a decree was passed granting a declaration in favour of the plaintiff declaring that the defendant was bound under sub section (3) of section 22 A of the Act to continue to supply electrical energy to the plaintiff at the same rates and on the same terms and conditions as were specified in the agreement dated August 14, 1940 so long as the plaintiff continued to be an establishment used or intended to be used for maintaining supplies and services essential to the community and until the defendant received a notice in writing from the plaintiff requiring the defendant to discontinue the supply, such obligation, however, being subject to the other provisions of the Act and the provisions of the , including sections 57 and 57A and the Sixth and Seventh Schedules to that Act.
The relief of permanent injunction prayed for in the suit was, however, refused on the ground that the defendant had never refused to supply electrical energy to the plaintiff at the same rates and on the same terms and conditions as were specified in the agreement dated August 14, 1940 if it was held either that there was a covenant for renewal contained in the agreement dated August 14, 1940 or that sub section (3) of section 22 A of the Act applied to the facts of the case.
481 Against the decree passed in the second appeal, the defendant filed Letters Patent Appeal No. 11 of 1963 on the file of the High Court.
That appeal was dismissed by a Division Bench of the High Court, Thereafter the Division Bench issued a certificate under Article 133(1) (c) of the Constitution certifying that the case was a fit one for appeal to this Court.
On the basis of the above certificate, the defendant has filed this appeal before this Court.
In the course of this appeal on an application made by the plaintiff, the Gujarat State Electricity Board has also been impleaded as a respondent.
We shall now make a brief survey of the relevant provisions of the Act.
Sub section (2) of section 21 of the Act provides that a licensee who is authorised to supply energy under Part II thereof may, with the previous sanction of the State Government given after consulting the local authority where the licensee is not the local authority, enter into an agreement with a person who is or intends to become a consumer, with conditions not inconsistent with the Act or with his licence or with any rules made under the Act and may, with the like sanction given after like consultation, add to or alter or amend any such condition; and that any conditions introduced in the agreement by the licensee without such sanction shall be null and void.
The State Government may also under sub section (3) of section 21 of the Act after like consultation add any new condition or cancel or amend any condition or part of a condition previously sanctioned after giving to the licensee not less than one month 's notice in writing of its intention so to do.
Section 22 of the Act provides that where energy is supplied by a licensee, every person within the area of supply shall, except in so far as is otherwise provided by the terms and conditions of the licence, be entitled, on application, to a supply on the same terms as those on which any other person in the same area is entitled in similar circumstances to a corresponding supply.
Section 23(1) of the Act prohibits a licensee from making any agreement for the supply of energy showing undue preference to any person.
Sub section (3) of section 23 of the Act provides that in the absence of an agreement to the contrary, a licensee may charge for energy supplied by him to any consumer by the actual amount of energy so supplied, or by the electrical quantity contained in the supply, or by such other methods as may be approved by the State Government, Section 24 of the Act authorises the licensee to discontinue the supply of energy to any consumer neglecting to pay the charges payable by him.
A combined reading of these provisions shows that it is open to a licensee to enter into an agreement with the previous sanction of the 482 State Government with any consumer to supply electrical energy at the agreed rate subject to the other provisions of the Act and that he cannot show undue preference to any person in the matter of supply of electrical energy.
The above provisions like the other provisions of the Act are subject to section 70 of the (Act No. 54 of 1948) which provides that no provision of the Act or of any rules made thereunder or of any instrument having effect by virtue of such law or rule shall, so far as it is inconsistent with any of the provisions of the , have any effect and that save as otherwise provided in that Act, the provisions of that Act shall be in addition to, and not in derogation of the Act.
Section 22A of the Act which arises for consideration in this case was inserted in the Act by the Electricity (Amendment) Act, 1959 (Act No. 32 of 1959).
It reads thus: "22 A. (1) The State Government may, if in its opinion it is necessary in the public interest so to do, direct any licensee to supply, in preference to any other consumer, energy required by any establishment which being in the opinion of the State Government an establishment used or intended to be used for maintaining supplies and services essential to the community, is notified by that Government in the Official Gazette in this behalf.
(2) Where any direction is issued under sub section (1) requiring a licensee to supply energy to any establishment and any difference or dispute arises as to the price or other terms and conditions relating to the supply of energy, the licensee shall not by reason only of such difference or dispute be entitled to refuse to supply energy but such difference or dispute shall be determined by arbitration.
(3) Where any agreement by a licensee, whether made before or after the commencement of the Indian Electricity (Amendment) Act, 1959, for the supply of energy with any establishment referred to in sub section (1) expires, the licensee shall continue to supply energy to such establishment on the same terms and conditions as are specified in the agreement until he receives a notice in writing from the establishment requiring him to discontinue the supply.
(4) Notwithstanding anything contained in this Act, or in the , or in his licence or in any agreement entered into by him for the supply of energy, a licensee shall be bound to comply with any direction given to him under sub section (1) and any action taken by him in 483 pursuance of any such direction shall not be deemed to be a contravention of section 23." Even though the licensee has no right to show undue preference to any person in the matter of supply of electrical energy and it is open to the licensee with the previous sanction of the Government to enter into an agreement with a consumer containing conditions including the stipulation regarding the charges payable by the consumer for a specified period subject to the other provision of the Act, section 22 A of the Act authorises the State Government to give directions to a licensee in regard to the supply of energy to an establishment referred to in sub section (1) in preference to any other consumer and it also provides that in the case of any establishment referred to in sub section (1) if an agreement has been entered into by a licensee whether made before or after the commencement of the Electricity (Amendment) Act, 1959 for the supply of energy, the licensee shall continue to supply energy to such establishment on the same terms and conditions as are specified in the agreement even after the expiry of the agreement until he receives a notice in writing from the establishment requiring him to discontinue the supply.
In order to understand the contentions urged by the parties, it is necessary to deal with the provisions of section 22 A of the Act in some detail.
Sub section (1) of section 22 A of the Act authorises the State Government to issue direction to a licensee to supply energy to an establishment in preference to any other consumer (i) If in its opinion it is necessary in the public interest to give such direction and (ii) if the establishment in question is in the opinion of the State Government an establishment used or intended to be used for maintaining supplies and services essential to the community and the decision of the State Government that in its opinion the establishment is used or intended to be used for maintaining supplies and services essential to the community is notified by that Government in the Official Gazette.
Sub section (1) of section 22 A of the Act speaks of the State Government forming two opinions one regarding the question whether it is necessary in the public interest to issue a direction to supply energy to an establishment in preference to any other consumer and the other regarding the character of the establishment i.e. regarding the question whether the establishment is one used or intended to be used for maintaining supplies and services essential to the community.
In other words, the decision on the question whether an establishment is used or intended to be used for maintaining supplies and services essential to the community has to be taken by the State Government either before or at the time of issuing a direction under section 22 A(1).
Sub sections (2) and (4) of section 22 A of the Act are ancillary to the 484 power of the State Government to issue a direction under sub section (1) thereof.
The material provision with which we are concerned in this appeal is sub section (3) of section 22 A of the Act which provides that where any agreement by a licensee, whether made before or after the commencement of the Electricity (Amendment) Act, 1959, for the supply of energy with any establishment referred to in sub section (1) expires, the licensee shall continue to supply energy to such establishment on the same terms and conditions as are specified in the agreement until he receives a notice in writing from the establishment requiring him to discontinue the supply.
The argument urged on behalf of the plaintiff which was rejected by the trial court and the first appellate court but was accepted by the learned Single Judge of the High Court in second appeal and by the Division Bench of the High Court in the Letters Patent Appeal was that the agreement entered into by it with the defendant on August 14, 1940 would continue to remain in operation by virtue of sub section (3) of section 22 A of the Act even after its expiry because the plaintiff was an establishment which was 'used or intended to be used for maintaining supplies and services essential to the community ' and that there was no necessity of the publication of a notification in the Official Gazette stating that the State Government was of the opinion that it was an establishment used or intended to be used for maintaining supplies and services essential to the community.
The contention urged on behalf of the plaintiff in regard the above proposition was that the words "any establishment referred to in subsection (1)" in sub section (3) of section 22 A of the Act meant 'an establishment used or intended to be used for maintaining supplies and services essential to the community ' and not any establishment which was notified by the State Government in the Official Gazette as an establishment which in the opinion of the State Government was being used or intended to be used for maintaining supplies and services essential to the community.
The very same contention is urged before us in this appeal on behalf of the plaintiff.
It is argued on behalf of the defendant that sub section (3) of section 22 A of the Act is applicable only in the case of an establishment which in the opinion of the State Government is an establishment used or intended to be used for maintaining supplies and services essential to the community in respect of which a direction is issued to the licensee under sub section (1) and a notification is issued by that Government in the Official Gazette in that behalf.
The judgment delivered in the Letters Patent Appeal, which is an affirming one, appears to be a summary of the judgment of the learned Single Judge of the High Court.
The learned Single Judge in his judgment to which our attention was drawn by the learned counsel for 485 the parties while dealing with sub section (1) of section 22 A of the Act observed: "Which is the establishment referred to in sub section (1) of section 22 A? ' and if that question is asked, it is obvious that the establishment referred to in sub section (1) of section 22 A is an establishment used or intended to be used for maintaining supplies and services essential to the community.
Of course, the determination of the question whether a particular establishment is an establishment used or intended to be used for maintaining supplies and services essential to the community, is as I have pointed out above left to the subjective satisfaction of the State Government; but the establishment referred to in sub section (1) of section 22 A is indubitably an establishment used or intended to be used for maintaining supplies and services essential to the community and it is only when a particular establishment is, in the opinion of the State Government, such an establishment that it can be notified by the State Government under sub section (1) of section 22 A.
The establishment in favour of which a direction can be given under sub section (1) of section 22 A must be an establishment used or intended to be used for maintaining supplies and services essential to the community but someone must have the power to determine whether a particular establishment is such an establishment.
That power is entrusted by the legislature to the State Government and the determination of the State Government in its subjective satisfaction is made final and conclusive; but it is clear that what the State Government has to find in its subjective satisfaction is the fact as to the establishment being used or intended to be used for maintaining supplies and services essential to the community and it is because a particular establishment is such an establishment as determined by the State Government, that the State Government can notify it for the purpose of giving it preferential treatment in the matter of supply of electrical energy.
It is, therefore, obvious that the establishment referred to in sub section (1) of section 22 A is an establishment used or intended to be used for maintaining supplies and services essential to the community and it is not the same thing as an establishment notified under subsection (1) of section 22 A." Having stated so, the learned Judge proceeded to observe that the words 'any establishment referred to in sub section (1) ' in sub section 486 (3) of section 22 A of the Act referred to any establishment used or intended to be used for maintaining supplies and services essential to the community and were not limited to an establishment which being in the opinion of the State Government an establishment used or intended to be used for maintaining supplies and services essential to the community was notified by the State Government in the Official Gazette, as required by sub section (1) of section 22 A of the Act.
One of the reasons given by the learned Judge in support of the above conclusion was as follows: "The provisions of sub section (3) of section 22 A become applicable only an agreement by a licensee, whether made before or after the commencement of the Indian Electricity (Amendment) Act, 1959, for the supply of electrical energy with any establishment referred to in sub section (1) of section 22 A expires after the coming into force of the Indian Electricity (Amendment) Act, 1959.
The agreement on the expiration of which the provisions of sub section (3) of section 22 A are attracted must therefore be an agreement made by a licensee with an establishment referred to in subsection (1) of section 22 A for the supply of electrical energy, whether before or after the commencement of the Indian Electricity (Amendment) Act, 1959.
The establishment with whom the agreement has been made by the licensee must, therefore, evidently be an establishment referred to in subsection (1) of section 22 A at the date when the agreement was made between the parties.
It is at the date of the agreement that the establishment must satisfy the description given in the words "any establishment referred to in sub section (1)" for it is only then that it can be said that the agreement was made by the licensee with an establishment referred to in sub section (1) of section 22 A." It is difficult to agree with the proposition set forth in the above extract of the judgment of the learned Single Judge because if the agreement referred to in sub section (3) of section 22 A of the Act is an agreement entered into by a licensee with an establishment which is, at the time of the agreement, an establishment referred to in sub section (1) of section 22 A of the Act, then the provision in sub section (3) making it applicable to agreements made before the commencement of the Electricity (Amendment) Act, 1959 by which section 22 A was introduced becomes meaningless because the formation of the two opinions of the State Government that an establishment is being used or intended to be used for maintaining supplies and services essential 487 to the community and that it is necessary to issue of direction in respect of it under sub section (1), can only be done after section 22 A of the Act was introduced in the Act and there would be no establishment satisfying the requirements of section 22 A(1) before section 22 A was introduced.
The next ground relied on by the learned Single Judge to hold that the establishment referred to in sub section (3) of section 22 A of the Act need not satisfy all the requirements of an establishment referred to in sub section (1) of section 22 A which again is untenable was that the object of enacting sub section (1) was different from the object of enacting sub section (3) and therefore, there was no need to treat an establishment referred to in sub section (1) on par with an establishment in sub section (3).
It may be that sub section (1) of section 22 A of the Act was enacted by the Parliament for the purpose of enabling the State Government to issue a direction and sub section (3) was enacted for the purpose of providing for the continuance of an agreement entered into by a licensee with an establishment referred to in sub section (1) of section 22 A, but what is, however, common to the two sub sections is that the establishment referred to in sub section (1) and an establishment referred to in sub section (3) of section 22 A should be of the same kind i.e. it should be an establishment which is in the opinion of the State Government used or intended to be used for maintaining supplies and services essential to the community and the fact of formation of such opinion is notified in the Official Gazette.
It should satisfy the tests laid down in section 22 A(1) of the Act.
The third reason given by the learned Single Judge for holding that the establishment referred to in sub section (3) of section 22 A of the Act could not be an establishment notified by the State Government as one which in its opinion was being used or intended to be used for maintaining supplies and services essential to the community was that the issue of a notification by the State Government under sub section (1) of section 22 A would be unjustified except when the Government was of opinion that a direction should be issued.
In other words, the learned Single Judge was of the view that when the State Government felt that there was no necessity to issue any direction, it could not issue any notification under that provision stating that an establishment was in its opinion an establishment which was being used or intended to be used for maintaining supplies and services essential to the community.
We do not think that the above observation of the learned Single Judge is correct since there is no impediment for the State Government issuing a notification under sub section (1) of section 22 A in order 488 that an establishment notified therein gets the benefit of sub section (3) of section 22 A of the Act.
The Division Bench in its judgment in the Letters Patent Appeal has adopted more or less the same reasoning adopted by the learned Single Judge in upholding the contention of the plaintiff.
The words 'referred to in sub section (1) ' appearing in sub section (3) of section 22 A of the Act are descriptive of and define the establishment to which sub section (3) of section 22 A applies and in order to identify such establishment we must have recourse to the latter part of sub section (1) which lays down the criteria which such establishment should satisfy. ' A statutory definition or abbreviation should be read subject to all the qualifications expressed in the statute and unless the context in which the word defined appears otherwise requires, it should be given the same meaning given by the words defining it. ' A fair reading of section 22 A of the Act suggests that the Parliament did not intend to empower the State Government to issue a direction under sub section (1) of section 22 A or to provide for the continuance of the agreement entered into by a licensee with an establishment in every case where the establishment was one which was being used or intended to be used for maintaining supplies and services essential to the community.
The intention of the Parliament appears to be that the State Government can issue a direction only in the case of an establishment which in its opinion satisfies the qualifications mentioned therein and that sub section (3) should be applicable only to an establishment which in the opinion of the State Government satisfies the said qualifications.
The determination of the question whether an establishment satisfies the objective test mentioned in section 22 A(1) of the Act is left to the State Government.
The law also prescribes that such determination should be made known to all concerned by a formal publication in the official Gazette.
Instead of providing separately in section 22 A of the Act that an establishment referred to in any of the sub sections of that section was an establishment which in the opinion of the State Government was one used or intended to be used for maintaining supplies and services essential to the community, the Parliament defined the establishment to which section 22 A was applicable in sub section (1) and instead of repeating the same definition in sub section (3) provided that an establishment to which sub section (3) thereof was applicable was an establishment referred to in sub section (1).
We are of the view that the power to issue a notification under section 22 A(1) of the Act involves an element of selection and that the said process of selection cannot be considered as an empty formality which can be dispensed with.
Nor can that power of selection which is 489 entrusted to the State Government by the Parliament be claimed by the courts.
It is for the State Government to notify the establishment which should be the beneficiary of a direction to be issued under section 22 A(1) or which is entitled under section 22 A(3) of the Act to the supply of electrical energy on the same terms and conditions as are specified in the agreement entered into by it with the licensee even after the expiry of the agreement until such establishment serves a notice in writing on the licensee asking the licensee to discontinue the supply.
Having regard to the context in which section 22 A of the Act appears and in particular to the language used in sub sections (1) and (3) of section 22 A, we are of the view that it is not possible to hold that section 22 A(3) is applicable to every establishment used or intended to be used for maintaining supplies and services essential to the community even though the State Government has not declared in a notification published in the Official Gazette that it is of the opinion that the establishment satisfied the qualification referred to in subsection (1).
We have to bear in mind that sub section (3) of section 22 A of the Act makes a serious inroad into the rights of the licensee flowing from a contract stipulating a specific period during which it should subsist and compels the licensee to supply energy to an establishment referred to therein on the same terms and conditions as are specified in the agreement already entered into even beyond the period of its expiry until a notice is issued in writing by the establishment requiring the licensee to discontinue the supply.
If a liberal construction is placed on the words "any establishment referred to in sub section (1)" appearing in sub section (3) of section 22 A as referring to every establishment which is being used or intended to be used for maintaining supplies and services essential to the community irrespective of the issue of a notification by the State Government that it is in its opinion such an establishment, it is bound to impose a greater restraint on the rights of the licensee than the restraint that will be imposed on it if it is held that the establishment referred to in sub section (3) of section 22 A is one notified by the State Government as required by sub section (1) of section 22 A.
If the State Government does not issue such a notification in the case of an establishment then such establishment would not be eligible to claim the benefit of section 22 A(3).
We may also observe here that any establishment whose interests are required to be protected by the extension of the benefit of section 22 A(3), the State Government can always issue a notification under sub section (1) stating that in its opinion the said establishment satisfies the qualification mentioned therein.
In the circumstances, we are constrained to say that the High Court was in error in ignoring the requirements which an establishment had 490 to satisfy before claiming the benefit of sub section (3) and in holding that if in the opinion of the Court, the establishment satisfied that it was being used or intended to be used for maintaining supplies and services essential to the community, it could claim the benefit of sub section (3) even though no notification had been issued by the State Government under sub section (1) of section 22 A of the Act.
In the result, we allow the appeal, set aside the judgments and decrees passed by the High Court in the second appeal and in the Letters Patent Appeal and restore the decree of the trial court as affirmed by the first appellate court dismissing the suit.
Having regard to the circumstances of the case, we direct the parties to bear their own costs throughout.
N.V.K. Appeal allowed.
| IN-Abs | Section 22 A of the was inserted in the Act by the Electricity (Amendment) Act, 1959 (32 of 1959).
Sub section 1 of section 22 A authorised the State Government to issue direction to a licensee to supply energy to an establishment in preference to any other consumer, if in its opinion it is necessary in the public interest to give such direction and (ii) if the establishment in question is in the opinion of the State Government as establishment used or intended to be used for maintaining supplies and services essential to the community and the decision of the State Government that in its opinion the establishment is used or intended to be used for maintaining supplies and services essential to the community is notified by that Government in the Official Gazette.
Sub section (3) of Section 22 A provides that where in any agreement by a licensee, whether made before or after the commencement of the Electricity (Amendment) Act, 1959 for the supply of energy with any establishment referred to in sub section (1) expires, the licensee shall continue to supply energy to such establishment on the same terms and conditions as are specified in the agreement until receipt of a notice in writing from the establishment requiring discontinuance of the supply.
The Respondent Municipality which was under an obligation to make reasonable and adequate provision for lighting of public streets, places and buildings situated within its limit, entered into an agreement on August 14, 1940 with the Appellant Company which was licensee under the Electricity Act, 1910.
The period during which the supply of electrical energy was to be made under the said agreement was 20 years from the date on which it was executed.
On May 10, 1960 the Company wrote a letter to the municipality that the said agreement was to come to an end and on its expiry, the Company was not under any obligation to continue to supply energy to the Municipality as per the rates, terms and conditions stated in the agreement.
The company also informed that if the municipality was not willing to purchase energy at the revised rates the supply would be discontinued on the expiry of the period of the agreement.
The municipality thereafter wrote a letter on August 6, 1960 requesting the Company to renew the agreement on the same terms and conditions.
The Company by its reply informed the municipality that it would not supply electrical energy on the same terms and conditions and insisted on payment being made at the revised rates as stated in its letter dated May 10, 1960.
The municipality thereafter filed a suit relying upon the provisions of sub section (3) of section 22 A 477 of the Act, for a declaration that it was entitled to the supply of electrical energy from the Company on the same terms and conditions as were specified in the agreement, until the Company received a notice in writing from the municipality requiring it to discontinue the supply.
The company contested the suit on the ground that the municipality was not entitled to the benefit of sub section (3) of section 22 A of the Act as it was not an establishment to which the said provision was applicable.
The Trial Court held that in the absence of a notification as required by sub section (1) of Section 22 A of the Act the municipality was not entitled to claim the benefit of the provision and therefore no relief could be granted in the suit and accordingly dismissed the suit.
The municipality 's appeal to the District Court was dismissed, but the second appeal was partly allowed by a Single Judge of the High Court, and a decree was passed granting relief in favour of the municipality declaring that the company was bound under sub section (3) of section 22 A of the Act to continue to supply electrical energy to the municipality at the same rates and on the same terms and conditions as were specified in the agreement, dated August 14, 1960.
The Letters Patent Appeal filed by the company was dismissed by the Division Bench of the High Court, which however certified the case as a fit one for appeal under Article 133(1)(c) of the Constitution.
In the appeal to this Court, on the question whether the municipality was an establishment which can claim the benefit of sub section (3) of section 22 A of the Act.
^ HELD: 1.
The High Court was in error in ignoring the requirements which an establishment had to satisfy before claiming the benefit of sub section (3) and in holding that if in the opinion of the Court, the establishment satisfied that it was being used or intended to be used for maintaining supplies and services essential to the community, it could claim the benefit of sub section (3) even though no notification had been issued by the State Government under sub section (1) of Section 22 A of the Act.
[489H 490B] 2.
If the agreement referred to in sub section (3) of section 22 A of the Act is an agreement entered into by a licensee with an establishment which is at the time of the agreement, an establishment referred to in sub section (1) of section 22 A of the Act, then the provision in sub section (3) making it applicable to agreements made before the commencement of the Electricity (Amendment) Act, 1959 by which section 22 A was introduced becomes meaningless because the formation of the two opinions of the State Government that an establishment is being used or intended to be used for maintaining supplies and services essential to the community and that it is necessary to issue a direction in respect of it under sub section (1) can only be done after section 22 A of the Act was introduced in the Act and there would be no establishment satisfying the requirements of section 22 A(1) before section 22 A(1) was introduced.
[486 G 487 A] 3.
Sub section (1) of section 22 A of the Act was enacted by the Parliament for the purpose of enabling the State Government to issue a direction and subsection (3) was enacted for the purpose of providing for the continuance of an agreement entered into by a licensee with an establishment referred to in sub section (1) of section 22 A. What, is however, common to the two sub sections is that the establishment referred to in sub section (1) and an establishment 478 referred to in sub section (3) of section 22 A should be of the same kind that is it should be an establishment which is in the opinion of the State Government used or intended to be used for maintaining supplies and services essential to the community and the fact of formation of such opinion is notified in the Official Gazette.
It should satisfy the test laid down in sub section 22 A(1) of the Act.
[487 C E] 4.
There is no impediment for the State Government issuing a notification under sub section (1) of section 22 A in order that an establishment notified therein gets the benefit of sub section (3) of section 22 A of the Act.
[487 H 488 A] 5.
The words 'referred to in sub section (1) appearing in sub section (1) of section 22 A of the Act are descriptive of and define the establishment to which sub section (3) of section 22 A applies and in order to identify such establishment, recourse should be had to the latter part of sub section (1) which lays down the criteria which such establishment should satisfy.
[488 B] 6.
A statutory definition or abbreviation should be read subject to all the qualifications expressed in the Statute and unless the context in which the word defined appears otherwise requires, it should be given the same meaning given by the words defining it.
[488 C] 7.
The power to issue a notification under section 22 A(1) of the Act involves an element of selection and the said process of selection cannot be construed as an empty formality which can be dispensed with.
Nor can that power of selection which is entrusted to the State Government by the Parliament be claimed by the Courts.
It is for the State Government to notify the establishment which should be the beneficiary of a direction to be issued under section 22 A(1) or which is entitled under section 22 A(3) of the Act to the supply of electrical energy on the same terms and conditions as are specified in the agreement entered into by it with the licensee even after the expiry of the agreement until such establishment serves a notice in writing on the licensee asking the licensee to discontinue the supply.
[488 H 489 B] 8.
Section 22 A of the Act, suggests that the intention of Parliament appears to be that the State Government can issue a direction only in the case of an establishment which in its opinion satisfies the qualifications mentioned therein and that sub section (3) should be applicable only to an establishment which in the opinion of the State Government satisfies the said qualifications.
[488 E] 9.
Sub section (3) of section 22 A of the Act makes a serious inroad into the rights of the licensee flowing from a contract stipulating a specific period during which it should subsist and compels the licensee to supply energy to the establishment even after the expiry of the agreement until a notice is issued in writing by the establishment requiring the licensee to discontinue the supply.
[489 D]
|
: Special Leave Petition (Criminal) No. 2636 of 1979.
From the Judgment and Order dated 25 4 1979 of the Bombay High Court in Criminal Appeal No. 822/77.
Pramod Swarup (Amicus Curiae) for the Petitioner.
H. R. Khanna and M. N. Shroff for the Respondent.
The Judgment of the Court was delivered by KRISHNA IYER, J.
Shri Pramod Swarup appearing as amicus curiae has presented the case of the accused as effectively as the record permits.
Indeed, he has gone to the extent of pressing into service points which do not appear to us to have any force.
Moreover, he has tried to persuade us to believe that a dying declaration made by the lady who was burnt to death by the husband accused that is the charge on which the trial court and the High Court have found the petitioner guilty is exonerative of the accused husband and does not implicate him as the Court has construed.
The declarant as she was dying was 1210 conscious enough to make a statement and in one of the several statements she made, it would appear, she said when her husband was being beaten up that even though she had been burnt, her husband should not be beaten.
This is a sentiment too touching for tears and stems from the values of the culture of the Indian womanhood.
A wife when she has been set fire to by her husband, true to her tradition, does not want her husband to be assaulted brutally.
It is this sentiment which prompted this dying tragic woman to say that even if she was dying having been burnt, her husband should not be beaten.
We are unable to appreciate how this statement can be converted into one exculpative of the accused.
Anyway, we are mentioning these facts only because Shri Pramod Swarup contended that they were weighty circumstances sufficient to cancel the conviction.
Wife burning tragedies are becoming too frequent for the country to be complacent.
Police sensitisation mechanisms which will prevent the commission of such crimes must be set up if these horrendous crimes are to be avoided.
Likewise, special provisions facilitating easier proof of such special class of murders on establishing certain basic facts must be provided for by appropriate legislation.
Law must rise to the challenge of shocking criminology, especially when helpless women are the victims and the crime is committed in the secrecy of the husband 's home.
We hope the State 's concern for the weaker sections of the community will be activised into appropriate machinery and procedure.
We dismiss the special leave petition.
S.R. Petition dismissed.
| IN-Abs | Dismissing the special leave petition, the Court ^ HELD: The statement by the dying tragic woman that her husband should not be beaten, even though she was dying having been burnt, cannot be converted into one exculpative of the accused.
This is a sentiment too touching for tears and stems from the values of the culture of the Indian womanhood.
[1210A B] Observation: Police sensitisation mechanisms which will prevent commission of crimes like wife burning must be set up if these horrendous crimes are to be avoided.
Likewise, special provisions facilitating easier proof of such special class of murders on establishing certain basic facts must be provided for by appropriate legislation.
Law must rise to the challenge of shocking criminology, especially when helpless women are the victims and the crime is committed in the secrecy of the husband 's home.
[1210C E]
|
Civil Appeal No. 174 of 1976.
Appeal by Special Leave from the Judgment and order dated 1 11 1974 of the Delhi High Court in L.P.A. No. 19/71.
P. P. Rao, A. K. Ganguli and R. Venkataramani for the Appellant.
T. A. Francis and Miss A. Subhashini for the Respondents.
Admittedly he was appointed by the Comptroller and Auditor General.
The only point that arises or, at any rate, we are concerned with is, as to whether the retirement order is in conformity with Rule 2(a) of the C.C.S. (C.C.A.) Rules 1965.
The appointing 555 authority according to Rule 56(j) is the competent authority.
Who then, is the appointing authority in the context of this case? The answer is to be sought under Rule 2(a) which reads thus: "In these rules, unless the context otherwise, requires 2 (a) appointing authority in relation to a Government servant means (i) the authority empowered to make appointments to the Service of which the Government servant is for the time being a member or to the grade of the Service in which the Government servant is for the time being included, or (ii) the authority, empowered to make appointments to the post which the Government servant for the time being holds, or (iii) the authority which appointed the Government servant to such Service, grade or post, as the case may be, or (iv) where the Government servant having been a permanent member of any other service of having substantively held any other permanent post, has been in continuous employment of the Government the authority which appointed him to that service or to any grade in that service or to that post.
whichever authority is the highest authority.
" The most significant part of the rule states, after setting out alternative authorities, that the appointing authority is one out of these four categories who is the highest.
This is emphatically brought out by the expression "whichever authority is the highest".
There is no doubt that among the four classes of authorities listed under Rule 2(a), the one falling under sub rule (iii) viz. Comptroller and Auditor general (in the present case) is the highest.
It evidently follows that the order of retirement to be legal, must be issued by the Comptroller and Auditor General, but actually the impugned order of retirement was issued by the Director of Commercial Audit.
In fact the order of retirement runs thus: "Whereas the Director of Commercial Audit is of the opinion that it is in the public interest to to do so. " Obviously the Director of Commercial Audit is a lesser official.
The conclusion is, therefore, inescapable that the compulsory retirement is contrary to law.
556 The High Court, in its extensive judgment, considered the scheme of the rules and, indeed, referred to the point mentioned above but after highlighting this question as one most emphasised by the appellant, has slurred over the point and proceeded to discussion of other issues.
We are concerned with the vital perhaps the fatal aspect of the order which has not received due attention at the hands of the High Court.
In this view, on account of the contravention of F.R. 56(j) read with Rule 2(a) of the (C.C.A.), we are constrained to come to the conclusion that the retirement is illegal.
The appellant has already become suparannuated and therefore, he will be eligible to his salary (by which we mean to include other allowances automatically admissible and going with salary) for the period between the date of compulsory retirement and the date of actual superannuation at the age of 58.
It is unfortunate that this legal flaw has proved fatal.
Administrative law is a course necessary for administrative officers at the highest levels so that such flaws may not vitiate orders they pass.
Eventually Government is put to considerable loss for no fault of it except that no proper legal training in this branch of the law for the concerned officers had been given by it.
With these observations we allow the appeal, but parties will bear their costs.
V.D.K. Appeal allowed.
| IN-Abs | Allowing the appeal by special leave, the Court, ^ HELD.
Rule 2(a) of the C.C.S. (C.C.A.) Rules, 1965 states, after setting out alternative authorities, that the appointing authority is one out of four categories who is the highest, by using the expression "whichever authority is the highest".
There is no doubt that of the four classes of authorities listed under Rule 2(a), the one falling under sub rule (iii) viz. Comptroller & Auditor General (in the present case) is the highest.
Therefore the order of the retirement to be legal must be issued by the Comptroller & Auditor General.
The impugned order of retirement issued by the Director of the Commercial Audit who is a lesser official is contrary to law.
On account of the contravention of F.R. 56(j) read with rule 2(a) of the C.C.S. (C.C.A.) Rules, 1965, the retirement is illegal.
[555 E G, 556 B] Observation: Administrative law is a course necessary for administrative officers at the highest levels so that such flaws may not vitiate orders they pass.
|
Civil Appeal Nos.
2007 2014 of 1972.
From the Judgment and Order dated 24 4 1970 of the Madras High Court in Tax Case No. 156/67 (Ref.
No. 54/67).
section T. Desai, section P. Nayar and Miss A. Subhashini for the Appellant.
T. A. Ramachandran (Amicus Curiae) for the Respondent.
The Judgment of the Court was delivered by TULZAPURKAR, J.
These appeals by certificates under section 66A(2) of the Indian Income Tax Act, 1922 (hereinafter referred to as 'the Act ') raise the question whether the respondent assessee was a resident in the taxable territories under section 4A(a)(ii) of the Act for the concerned assessment years? The facts giving rise to the aforesaid question are these: Subramania and Arumuga were two brothers; the former had three sons Ratnaswamy, the assessee, Ganpathi and Velayudham while the latter had only one son Ganesa.
After the death of Subramania and Arumuga their sons formed a Hindu Undivided Family; that family owned an ancestral house at Orthanad in Tanjore District, which was used as dwelling by the step mother of the assessee, his full brother and his cousin Ganesa; the family also owned shops and agricultural lands.
The family properties were managed by Ganesa and were maintained by him out of the agricultural and rental income.
Admittedly, the 522 assessee never enjoyed any portion of the family income.
Born and brought up in Ceylon, the assessee had his own business and properties in Ceylon.
He had eight children all born and educated in Ceylon.
It appears that he started constructing a theatre in Orthanad in 1953 which was completed in 1957 and during the said construction he paid occasional visits and stayed sometimes in the family house, sometimes in a chatram in Tanjore and at times in a hotel.
Thus, from 1 4 1952 to 31 3 1953 he stayed for 8 days in India, from 1 4 1953 to 31 3 1954 he did not come to India at all, from 1 4 1954 to 31 3 1955 he stayed for 28 days in India, from 1 4 1955 to 31 3 1956 he stayed for 47 days in India and from 1 4 1956 to 31 3 1957 he stayed for 23 days in India.
In July 1958 the assessee on the one hand and other members of the family on the other executed a mutual deed of release, relinquishing each party 's rights in favour of the other; inter alia, the assessee released all his rights, title and interest in the family properties in favour of his brothers, reciting therein that the family properties were never enjoyed by him but only by others.
There is no dispute and the Tribunal has also found that the deed of release was an instrument bona fide entered into between the parties.
In the above circumstances for the assessment year 1952 53, 1953 54, 1956 57 and 1957 58, the assesses filed returns, but for the first two years after proceedings were initiated under section 34(1)(a) of the Act and for the latter two years on his own offering his income in Ceylon for assessment.
The status declared in all the returns was that he was 'a resident and ordinarily resident person. ' The Income Tax Officer completed the assessments on the basis of the returns filed.
He also initiated penalty proceedings against the assessee under section 28(1)(a) for not filing the returns in time and levied penalties on him.
In the appeals preferred by the assessee, which were principally directed against the rejection of the claim made by him in respect of the double taxation relief, an additional ground was taken that the assessee should have been treated as a 'non resident ' in all the years.
The Appellate Assistant Commissioner upheld this additional ground taking the view that since during his sojourn in India the assessee was staying in the family house more as a guest, he neither maintained nor had maintained for him a dwelling place in the taxable territories and, therefore, section 4A (a) (ii) of the Act was inapplicable.
The Department carried the matter in further appeals to the Tribunal but the Tribunal called for a remand report from the Appellate Assistant Commissioner after a fuller examination as to the factual position whether the assessee did maintain a dwelling place in India or the same was maintained for him by others inasmuch as the Tribunal felt that the Department did not have an effective opportunity to meet the 523 aspect raised for the first time before the Appellate Assistant Commissioner.
In the remand proceedings oral evidence was recorded by examining the assessee and two others and the final report was forwarded to the Tribunal.
On the basis of the material collected and forwarded to it, the Tribunal took the view that the assessee was a natural born Ceylon citizen staying in Ceylon most of the time, that his visits to India in the aggregate were for 137 days in the period of 11 years (from 1 4 46 to 31 3 67), that the evidence supported the theory that he was more a guest in family house in India than an inhabitant of his own house or home, that there was nothing to show that the assessee enjoyed any of his family income or had any separate portion of the family house reserved for him during his sojourn to India and that there were no enough materials to say that there was a residence either run or maintained by the assessee in India.
In this view of the matter the Tribunal upheld the Appellate Assistant Commissioner 's order cancelling the assessment orders made against the assessee.
As a consequence, the Tribunal also cancelled the penalties that were levied on the assessee.
At the instance of the Revenue and on a direction from the High Court the Tribunal referred the following two questions to the High Court for its opinion: "1.
Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee was non resident? 2.
Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that there was no liability to penalty under section 28(1)(a) ?" The High Court answered both the questions in favour of the assessee and against the Revenue.
While dealing with the first question, which was the principal question raised in Reference, the High Court took the view that the answer to that question depended upon a bundle of facts and their cumulative effect and in its view the cumulative effect of the totality of facts found by the Tribunal did not lead to the inference that a dwelling place or dwelling house was maintained by the assessee or the same was maintained by others for him but on the other hand the evidence showed that the assessee was enjoying the hospitality of his kith and kin during his stay in the family house where he was treated as a guest.
The High Court further held that the mere fact that the assessee had a right in the family house at Orthanad in Tanjore District and that he was occasionally lodging 524 there did not mean that he was maintaining the same or had it maintained for him and that what the law required was the maintenance of a dwelling place which should be his domus mansionalis; in other words, if the dwelling place was not his second home or the real centre of his life then the assessee would be a non resident.
It is this view of the High Court that is being challenged before us in these appeals by the Revenue.
Since the question raised before us pertains to the proper construction of section 4A (a) (ii) of the Act and the requirements thereof, it will be desirable to set out the said provision.
It runs thus: "For the purposes of this Act (a) any individual is resident in the taxable territories in any year if he . (ii) maintains or has maintained for him a dwelling place in the taxable territories for a period or periods amounting in all to one hundred and eighty two days or more in that year, is in the taxable territories for any time in that year.
" Since the section is prefaced by the phrase "for the purposes of this Act", it is clear that it raises a statutory fiction; further the language of the provision makes it clear that it lays down a technical test of territorial connection amounting to residence applicable to all individuals foreigners as well as Indians, including Hindus, Christians, Muslims, Parsis and others irrespective of the personal law governing them.
On a reading of the provision it becomes clear that before any individual can be said to be a resident in the taxable territories in any previous year two conditions are required to be fulfilled: (a) there must be a dwelling place maintained in the taxable territories either by the assessee himself or by some one else for him for the requisite period and (b) the assessee must live in the taxable territories (though not necessarily therein) for some time, howsoever short, in the previous year.
In the instant case it was not disputed before us that the second condition was satisfied in regard to the assessee.
The question that we have to consider is whether on the facts found by the Tribunal it could be said that the assessee maintained or had maintained for him a dwelling place in the taxable territories for the requisite period.
It was not disputed that the assessee himself did not maintain the family house but it was maintained by Ganesa as the manager of the Hindu Undivided Family.
If the family house, which was maintained by Ganesa as the Karta, in which the assessee had a share or interest and stayed for short periods during the previous years 525 relevant to the assessment years in question could be considered to be a dwelling house or a dwelling place maintained for him or for his benefit, then no difficulty would arise with regard to the requisite period because undoubtedly that dwelling place was there during all the previous years relevant to the assessment years and the assessee will have to be regarded as a resident in the taxable territories for the concerned years.
Counsel for the Revenue contended that the expression "maintains a dwelling place" inter alia connotes the idea that an assessee owns a dwelling house which he can legally and as of right occupy if he is so minded during his visits to India while the expression "has maintained for him a dwelling place" would cover a case where the assessee has a right to occupy or live in a dwelling place during his stay in India though the expenses of maintaining such dwelling place are not met by him wholly or in part and since in the instant case it was a joint family dwelling house maintained by the Manager for the family wherein the assessee had a right of dwelling without any let or hindrance, it must be held that the assessee had maintained for him a dwelling house.
In support of these contentions strong reliance was placed by him upon two decisions one of the Madras High Court in section M. Zackariah Saheb vs C.I.T. Madras and the other of Gujarat High Court in Ramjibhai Hansjibhai Patel vs Income Tax Officer, Special Circle, Ahmedabad.
According to him the section merely speaks of a dwelling place of an assessee and does not require his actual residence in it nor does it require any establishment maintained by him or for him and it would be, therefore erroneous to introduce into the section the concept of 'attachment ' or 'permanence ' or 'home '.
On the other hand, counsel for the assessee contended that three aspects emerge from the phrase "he maintains or has maintained a dwelling place for him": (i) the volition of the assessee in maintaining the dwelling place or its maintenance being at his instance, behest or request, (ii) the expenses of maintenance must be met by the assessee and (iii) the house or a portion thereof must be set apart and kept fit for the dwelling of the assessee.
According to him what is contemplated by section 4A (a) (ii) is the de facto maintenance of a dwelling place for the assessee and not maintenance for him as one of a body of individuals; in other words, the section cannot apply to a case where a dwelling place is in possession of other members of the Hindu Undivided Family and the assessee has a right of common enjoyment.
Counsel contended that on the facts found in the case the 526 assessee had stayed in the family house as a guest and enjoyed the hospitality of his kith and kin and, therefore, though as a co parcener he had a right in the family house his occasional lodging there could not mean that he was maintaining the same or had it maintained for him.
In other words it was not his home.
Strong reliance was placed by him on the Bombay High Court decision in C.I.T. Bombay North, etc.
vs Falabhai Khodabhai Patel where the connotation of a "dwelling place" occurring in s.4A (a) (ii) was equated with a house which could be regarded by the assessee as his hime.
He urged that both the Tribunal and the High Court were right in coming to the conclusion that the family house had not been maintained for the benefit of the assessee as his abode or home away from Ceylon and, therefore, he was rightly regarded as a non resident.
At the outset it may be pointed out that the section uses the expression 'dwelling place ', a flexible expression, but the expression must be construed according to the object and intent of the particular legislation in which it has been used.
Primarily the expression means 'residence ', 'abode ' or 'home ' where an individual is supposed usually to live and sleep and since the expression has been used in a taxing statute in the context of a provision which lays dawn a technical test of territorial connection amounting to residence, the concept of an abode on home would be implicit in it.
In other words, it must be a house or a portion thereof which could be regarded as an abode or home of the assessee in the taxable territories.
In our view, this aspect of the matter has been rightly emphasized by the Bombay High Court in Phulabhai Khodabhai 's case (supra), where Chief Justice Chagla has observed thus: "When we look at the language used by the Legislature, it is clear that what is sought to be emphasized is that there must be not only a residence or a house for the assessee in the taxable territories, but there must be a home.
The connotation of a dwelling place is undoubtedly different from a mere residence or a mere house in which one finds oneself for a temporary or short period.
A dwelling place connotes a sense of permanency, a sense of attachment, a sense of surroundings, which would permit a person to say that this house is his home.
Undoubtedly a man may have more than one home; he may have a home at different places; but with regard to each one of these he 527 must be able to say that it is something more than a mere house or a mere residence.
" Similar view was expressed by Mr. Justice Rowlatt in Pickles vs Foulsham, where the question whether the assessee was a resident in England for the purpose of payment of Income tax had to be decided on general principles in the absence of any statutory provision in the English statute with regard to residence as we have in our taxing statute.
At page 275 of the report the learned Judge observed thus: "A man, I suppose, may keep a house for his wife and come there merely as a visitor; he may keep a house for his mother, and, when he can get away, always go there to see her; but it may be that it is his mother 's house, even if he is paying for it, and he is going there as a visitor.
He keeps the house for his wife and children; it may be that he is going there as going home; it may be that that is the centre really of his life, that he keeps many belongings there, and so on, and his time in Africa is really, in truth, a period of enforced absence from what is truly his residence.
Now it may be one, or it may be the other.
" In other words, the test which the learned Judge laid down was that when you go to a house you should be really going home, then you are going to a dwelling house whether maintained by you or by someone else, a nda house may be your home whether it belongs to you or belongs to someone else.
In other words, with regard to the house where he goes and lives, he must be able to say that it is his abode or home.
It is, therefore, not possible to accept the contention of learned counsel for the Revenue that it is erroneous to introduce the concept of home or abode into the section.
Secondly, the section uses two expressions: "he maintains a dwelling place" and "he has maintained for him a dwelling place.
" The latter expression, obviously, means he causes to be maintained for him a dwelling place.
This is clear from the fact that the relevant provision in the 1961 Act has now been altered and it says "he causes to be maintained for him" and in the Notes on Clauses to the concerned Bill it has been explained that the words "has maintained" in section 4A(a)(ii), have been replaced in the draft by the words "causes to be maintained", which express the intention better.
Now, in either of these expressions the volition on the part of the assessee in the maintenance of the dwelling place emerges very clearly; whether he maintains it or he causes 528 it to be maintained, the maintenance of the dwelling place must be at his instance, behest or request and when it is maintained by someone else other than the assessee, it must be for the assessee or for his benefit.
Therefore, the question that will have to be considered in the instant case is whether on the facts found by the Tribunal the family house which was maintained by Ganesa as the Karta could be regarded as an abode or home of the assessee maintained at the instance of the assessee and for his benefit? The facts found in the instant case are: (1) the assessee, born and brought up in Ceylon, had his own business and properties in Ceylon, (2) he had 8 Children all born and educated in Ceylon, (3) the H.U.F. (of which the assessee was a coparcener at the material time) owned an ancestral house at Orthanad, which had been and was being used as a dwelling by the assessee 's step mother, his full brothers and his cousin Ganesa, and the same was being maintained by Ganesa out of income of family properties, (4) during the previous years relevant to the assessment years in question while the construction of the assessee 's theatre in Orthanad was in progress, the assessee paid occasional visits and stayed sometimes in the family house, sometimes in chatram at Tanjore and at times in a hotel, (5) there was positive evidence on record that during his stay in the family house the assessee was considered only as a guest enjoying the hospitality of the family, (6) the assessee admittedly never enjoyed any portion of the family income nor was he connected with the management of the family properties, including the house and (7) in July 1958 by a deed of release the assessee relinquished all his right, title or interest in the family properties in favour of his brothers.
On these facts it becomes transparently clear that the assessee whenever he stayed in the family house during the relevant previous years was more a guest therein enjoying the hospitality of his kith and kin than an inhabitant of his own abode or home and further that the family house was maintained by Ganesa not at the instance of the assessee nor for his benefit but it was maintained by him for the rest of the family.
It is true that the house at Orthanad was at the material time a joint family house in which the assessee as a co parcener had a share and interest; it is also true that as a coparcener he had a right to occupy that house without any let or hindrance, but mere ownership of a fractional share or interest in the family house with the consequent right to occupy it without anything more would not be sufficient to satisfy the requirements of section 4A(a)(ii), for, the requirements thereof are: not only there must be a dwelling place in which the assessee has a right to live but he must maintain it as his home or he must have it maintained for him as his home.
The material on record shows that the family house in which he stayed was neither his abode or home nor 529 was it maintained by Ganesa at the instance of the assessee or for his benefit.
Turning to the two decisions one of the Madras High Court and the other of the Gujarat High Court on which reliance was placed by counsel for the Revenue, we may at once say that both the decisions are clearly distinguishable.
The decision of the Madras High Court in Zackriah Sahib 's case (supra) dealt with a case of an assessee who was a Muhammadan merchant.
He carried on business in Ceylon and resided there.
His parents lived in British India, as it then was, in a house owned by his mother.
The assessee 's wife also lived in British India sometimes with his parents and sometimes with her parents.
The assessee was remitting monies now and then to his parents for their maintenance.
He visited British India during the year of account and stayed in his mother 's house with his parents.
The Appellate Tribunal held that the assessee was resident in British India within the meaning of s 4A(a)(ii).
Reversing this decision, the Madras High Court held that the assessee did not maintain a dwelling place in British India and that his mother 's house was maintained for the parents of the assessee and not for the assessee himself.
Obviously, the house belonged to the mother of the assessee which he had no legal right to occupy and, therefore, it could not be said that the assessee maintained a dwelling place in British India.
Counsel, however, relied upon certain observations made by Vishwanatha Sastri, J., in that Judgment, which run thus: "The expression 'maintains a dwelling place ' connotes the idea that the assessee owns or has taken on rent or on a mortgage with possession a dwelling house which he can legally and as of right occupy, if he is so minded, during his visit to British India. .In our opinion, the expression 'has maintained for him ' would certainly cover a case where the assessee has a right to occupy or live in a dwelling place during his stay in British India though the expenses of maintaining the dwelling place are not met by him in whole or in part.
A member of an undivided Hindu family. .has a right to live in the family house when he goes there, though the house is maintained by the manager of the family and not by the assessee from his own funds.
In such cases it can be said that the assessee has a dwelling place maintained for him by the manager of the family for he has a right to occupy the house during his visits to British India.
" Relying on the aforesaid passage, counsel urged that in the instant case the house at Orthanad was maintained by Ganesa as a Karta of the family and since the assessee as a coparcener had a right to live in it 530 during his visits to India it must be held that the assessee had maintained for him a dwelling place in India.
It is not possible to accept this contention, for, in our view, the aforesaid passage, taken in its content, does not lay down as a proposition of law that mere ownership of a fractional share in a family house with a consequent right to occupy the same with nothing more would constitute it a dwelling house of such owner within the meaning of section 4A(a)(ii); for, it must further be shown that it was maintained by the manager at the instance of the assessee and for his benefit.
That is how the aforesaid passage has been partly explained and, in our view, rightly, by the Madras High Court in a subsequent decision in C.I.T. Madras vs Janab A. P. Mohamed Noohu & Ors.
The Gujarat decision in Ramjibhai Hansjibhai 's case (supra) was clearly a case where the joint family house was maintained as a dwelling place for the benefit of all members of the joint family, including the assessee.
The main contention urged on behalf of the assessee in that case was that the dwelling house was not maintained for the assessee as an individual but it was maintained not only for him but for other members of the joint family as well and, therefore, the requirements of the section were not satisfied.
The contention was negatived.
In other words, it was not disputed in the Gujarat case that a dwelling house was maintained by the manager of the family for the benefit of the assessee.
In the instant case on the facts it has been found that the family house was maintained by Ganesa not for the assessee, nor for his benefit but for the other family members.
Having regard to the above discussion it is clear that though the assessee could be said to have had a share in the joint family house with a consequent right to occupy the same it could not be said that the said family house was maintained by Ganesa as the Karta of the family as a dwelling place for the assessee or for his benefit nor was it maintained by him at the instance of the assessee.
Moreover, his stay in the family house has been found to be as a guest enjoying the hospitality of his kith and kin rather than as an inhabitant of his abode or home.
In this view of the matter the assessee, in our view, was rightly regarded as a non resident.
The appeals are therefore, dismissed.
S.R. Appeals dismissed.
| IN-Abs | The assessee one of the sons of Subramania was born and brought up in Ceylon and had his own business and properties in Ceylon.
After the death of his father and his paternal uncle Arumugha, the assessee 's two other brothers Ganapathi and Velayadham and his cousin Ganesa son of Arumugha formed a Hindu Undivided Family.
That family owned an ancestral house at Orthanad in Tanjore district, which was used as dwelling by the step mother of assessee, his full brothers and his cousin Ganesa.
The family also owned shops and agricultural lands.
The family properties were managed by Ganesa and were maintained by him out of the agricultural and rental income.
The assessee never enjoyed any portion of the family income.
In July 1958 the assessee on the one hand and other members of the family on the other executed a mutual deed of release relinquishing each party 's rights in favour of the other; inter alia the assessee released all his rights, title and interest in the family properties in favour of his brothers, reciting therein that the family properties were never enjoyed by him but only by others.
This deed or release was found to be an instrument bona fide entered into by the parties.
It appears that he started constructing a theatre in Orthanad in 1953 which was completed in 1957 and during the said construction he paid occasional visits and stayed sometime in the family house, sometimes in a chatram in Tanjore and at times in a hotel.
Thus from 1 4 52 to 31 3 53 he stayed for 8 days in India, from 1 4 53 to 31 3 54 he did not come to India at all; from 1 4 54 to 31 3 55 he stayed for 28 days in India; from 1 4 55 to 31 3 56 he stayed for 47 days in India and from 1 4 56 to 31 3 57 he stayed for 23 days in India.
In the above circumstances for the assessment years 1952 53, 1953 54, 1956 57 and 1957 58, the assessee filed returns, but for the first two years after proceedings were initiated under section 34(i)(a) of the Act and for the latter two years on his own offering his income in Ceylon for assessment.
The status declared in all the returns was "he was a resident and ordinarily resident person".
The Income Tax Officer completed the assessment on the basis of the returns filed.
He also initiated penalty proceedings against the assessee under section 28(1)(a) for not filing the returns in time and levied penalties against him.
In the appeals preferred by the assessee which were principally directed against the rejection of the claim made by him in respect of the double taxation relief, an additional ground was taken that the assessee should have been treated as a 'non resident ' in all the years.
The Appellate Assistant Commissioner upheld this additional ground taking the view that since during his sojourn in India.
520 the assessee was staying in the family house more as a guest, he neither maintained nor had maintained a dwelling place in the taxable territories and, therefore, section 4A(a)(ii) of the Act was inapplicable.
Having lost their appeals before the Tribunal and on references to the High Court, the Revenue came up in appeal by certificates to this Court.
Dismissing the appeals, the Court, ^ HELD: 1. Section 4A(a)(ii) of the Income Tax Act, 1922 raises a statutory fiction since it is prefaced by the phrase "for the purposes of this Act".
Further the language of the provision makes it clear that it lays down a technical test of territorial connection amounting to residence applicable to all individuals foreigners as well as Indians, including Hindus, Christians, Muslims, Parsis and others irrespective of the personal law governing them.
[524 D E] 2.
Section 4A(a)(ii) makes it clear that before any individual can be said to be a resident in the taxable territories in any previous year two conditions are required to be fulfilled; (a) there must be a dwelling place maintained in the taxable territories either by the assessee himself or by some one else for him for the requisite period and (b) the assessee must live in the taxable territories (though not necessarily therein) for sometime, however short, in the previous years.
In the instant case, the second condition was satisfied in regard to the assessee.
[524E G] 3.
Section 4(A)(a) uses the expression 'dwelling place ' a flexible expression which should be construed according to the object and intent of the particular legislation in which it has been used.
Primarily the expression means 'residence ', "abode", or "home" where an individual is supposed usually to live and sleep and since the expression has been used in a taxing statute, in the context of a provision which lays down a technical test of territorial connection amounting to residence, the concept of an abode or home would be implicit in it.
In other words, it must be a house or a portion thereof which could be regarded as an abode or home of the assessee in taxable territories.
In other words, when you go to a house you should be really going home, then you are going to a dwelling house whether maintained by you or by some one else and a house may be your home whether it belongs to you or belongs to some one else.
In other words, with regard to the house where he goes and lives, he must be able to say that it is his abode or home.
Therefore, there is no error in introducing the concept of home or abode into the section.
[526 C E, 527 E F] C.I.T. Bombay North etc.
vs Foolabhai Khodabhai Patel ; approved.
Pickles vs Foulsham, (1925) 9 Tax Cases 261; quoted with approval.
Section 4(A)(a) uses two expressions: "he maintains a dwelling place" and "he has maintained for him a dwelling place".
The latter expression, obviously means he causes to be maintained for him a dwelling place.
In either of these expressions the volition on the part of the assessee in the maintenance of the dwelling place emerges very clearly: whether he maintains it or he causes it to be maintained; the maintenance of the dwelling place must be at his instance behest or request and when it is maintained by someone else other than the assessee, it must be for the assessee or for his benefit.
[527 G H, 528 A] 521 Mere ownership of a fractional share or interest in the family house with the consequent right to occupy it without anything more would not be sufficient to satisfy the requirements of section 4A(a)(ii), for the requirements thereof are: not only there must be a dwelling place in which the assessee has a right to live but he must maintain it as his home or he must have it maintained for him as his home.
[530 A B; 528 H] In the instant case, (i) on the material on record, the family house in which the assessee stayed was neither his abode or home nor was it maintained by Ganesa at the instance of the assessee or for his benefit, even though it was true that the assessee as a coparcener had a share and interest in the family house and also a consequent right to occupy it without any let or hindrance.
[528 A, 529 A, 530 F] (ii) his stay in the family house was found to be as a guest enjoying the hospitality of his kith and kin, rather than as an inhabitant of his abode or home; and (iii) therefore, he was rightly regarded as non resident.
[530 F G] C.I.T., Madras vs Janab A. P. Mohamed Noohu and Ors., ; approved.
section M. Zackariah Sahib vs C.I.T., Madras Mad., Ramjibhai Hansibhai Patel vs Income Tax Officer, Special Circle, Ahmedabad, ; distinguished.
|
Civil Appeal Nos.
11431144/73 and 1201 (N) of 1973.
From the Judgment and order dated 16 11 1972 of the Delhi High Court in C.W. No. 580/71, LPA No. 58/72 and 54/72.
P. N. Lekhi and M. K. Garg for the Appellants in C.A. Nos.1143 44/73 and for Respondents in C.A. No. 1201/73.
F. section Nariman P. D. Singhania, Homi Ranina, Ravinder Narain and T. Ansari in C.A. No. 1143/73 for the Intervener.
section N. kaeker Sol.
General and A. V. Ramgam for the Respondent in C.A. No. 1144/73 and for the Appellant in C.A. No. 1201/73.
section N. Kaeker, Sol.General, B. P. Maheshwari, section Sethi, Bikramjit Nayyar and E. C. Sharma for Respondent No. 1 in C.A. Nos.
1143 44/73 S.T. Desai, section P. Nayyar and Miss A. Subhashini for the Intervener, C.I.T. Delhi.
611 The Judgment of the Court was delivered by BHAGWATI, J.
These appeals by certificate raise a common question of law relating to assessment of annual value for levy of house tax where the building is governed by the provisions of Rent Control legislation, but the standard rent has not yet been fixed.
One appeal relates to a case where the building is situate within the jurisdiction of the New Delhi Municipal Committee and is liable to be assessed to house tax under the Punjab Municipal Act, 1911 while the other two relate to cases where the building is situate within the limits of the Corporation of Delhi and is assessable to house tax under the Delhi Municipal Corporation Act, 1957.
The house tax under both statutes is levied with reference to the annual value of the building.
Section 3(1)(b) of the Punjab Municipal Act, 1911 defines "annual value" to mean, in the case of any house or building "the gross annual rent at which such house or building may reasonably be expected to let from year to year" subject to certain specified deductions, and the same definition of "annual value" is to be found in section 116 of the Delhi Municipal Corporation Act, 1957 with only this difference that there is a second proviso to section 116 which is absent in section 3(1)(b).
That proviso reads: "Provided further that in respect of any land or building the standard rent of which has been fixed under the Delhi and Ajmer Rent Control Act, 1952, the rateable value thereof shall not exceed the annual amount of standard rent so fixed.
" It was, however, common ground between the parties that this proviso is immaterial and, in fact, it was so held in Corporation of Calcutta vs Life Insurance Corporation(1).
We may, therefore, ignore the existence of this proviso and deal with both the categories of appeals on the basis of the same definition of "annual value". "Annual value" of a building, according to this definition, would be the gross annual rent at which the building may reasonably be expected to let from year to year (emphasis supplied).
It is obvious from this definition that unlike the English Law where the value of occupation by a tenant is the criterion for fixing annual value of the building for rating purposes, here it is the value of the property to the owner which is taken as the standard for making assessment of annual value.
The criterion is the rent realisable by the landlord and not the value of the holding in the hands the tenant.
The rent which the landlord might realise if the building were let is made the basis for fixing the annual value of the 612 building.
The word "reasonably" in the definition is very important.
What the landlord might reasonably expect to get from a hypothetical tenant, if the building were let from year to year, affords the statutory yardstick for determining the annual value.
Now, what is reasonable is a question of fact and it would depend on the facts and circumstances of a given situation.
Ordinarily, as pointed out by Subba Rao, J., speaking on behalf of the Court in Corporation of Calcutta vs Padma Devi(1); "a bargain between a willing lessor and a willing lessee uninfluenced by any extraneous circumstances may afford a guiding test of reasonableness.
An inflated or deflated rate of rent based upon fraud, emergency, relationship and such other considerations may take it out of the bounds of reasonableness".
The actual rent payable by a tenant to the landlord would in normal circumstances afford reliable evidence of what the landlord might reasonably expect to get from a hypothetical tenant, unless the rent is inflated or depressed by reason of extraneous considerations such as relationship, expectation of some other benefit etc.
There would ordinarily be in a free market close approximation between the actual rent received by the landlord and the rent which he might reasonably expect to receive from a hypothetical tenant.
But where the rent of the building is subject to rent control legislation, this approximation may and often does get displaced.
It is, therefore, necessary to consider the effect of rent control legislation on the determination of annual value This is fortunately not a virgin field.
There are at least three decisions of this Court which have spoken on this subject.
The first is the decision in Corporation of Calcutta vs Padma Devi (supra).
The question which arose in that case was whether the "annual value" of a building governed by the West Bengal Premises Rent Control (Temporary Provisions) Act, 1950 could be determined at a figure higher than the standard rent fixed under the provision of that Act.
The definition of "annual value" in section 127(a) of the Calcutta Municipal Act, 1923 under which the house tax was being levied was the same as in section 3(1)(b) of the Punjab Municipal Act, 1911 or section 116 of the Delhi Municipal Corporation Act, 1957 without the second proviso and hence in order to determine the "annual value" of the building it was necessary to find out what was the rent at which the building might reasonably be expected to let from year to year.
The Court speaking through Subba Rao, J. emphasized the use of the word "reasonably" in the definition and pointed out that since it was penal for the landlord to receive any rent in excess of 613 the standard rent fixed under the Act, the landlord could not reasonably expect to receive any higher rent in breach of the law.
It is the standard rent alone which the landlord could reasonably expect to receive from a hypothetical tenant, because to receive anything more would be contrary to law.
The learned Judge, after analysing the provisions of the Act, observed: "A combined reading of the said provisions leaves no room for doubt that a contract for a rent at a rate higher than the standard rent is not only not enforceable but also that the landlord would be committing an offence if he collected a rent above the rate of the standard rent.
One may legitimately say under those circumstances that a landlord cannot reasonably be expected to let a building for a rent higher than the standard rent.
A law of the land with its penal consequences cannot be ignored in ascertaining the reasonable expectations of a landlord in the matter of rent.
In this view, the law of the land must necessarily be taken as one of the circumstances obtaining in the open market placing an upper limit on the rate of rent for which a building can reasonably be expected to let".
It may be noted that in this case the standard rent of the building was fixed under the Act and since it was penal for the landlord to receive any rent higher than the standard rent fixed under the Act, it was held that the landlord could not reasonably expect to receive anything more than the standard rent from a hypothetical tenant and the annual value of the building could not exceed the standard rent.
The next decision to which we must refer in this connection is the decision of this Court in Corporation of Calcutta vs Life Insurance Corporation (supra).
This case also related to a building situate in Calcutta which was governed by the West Bengal Premises Rent Control (Temporary Provisions) Act, 1950.
Section 2(10) (b) of the Act defined "standard rent" to mean "where the rent has been fixed under section 9, the rent so fixed, or at which it would have been fixed if application were made under the said section".
Here, unlike Padma Devi 's case, the standard rent of the building had not been fixed under section 9 but it was common ground between the parties that Rs. 2,800 per month being the amount of the agreed rent represented the figure at which the standard rent would have been fixed if an application had been made for the purpose under section 9 and the standard rent of the building was therefore 614 Rs. 2,800 per month within the meaning of the second part of the definition of that term.
The question which arose for consideration was whether the annual value of the building was liable to be determined on the footing of this standard rent or it could be determined by taking into account the higher rent received by the tenant from its sub tenants.
The principle of the decision in Padma Devi 's case was invoked by the assessee for contending that the annual value of the building could not be determined at a figure higher than the standard rent and this contention was upheld by the Court, though there was no fixation of standard rent by the Controller under section 9 and the statutory prohibition was only against receipt of rent in excess of the standard rent fixed under the Act.
The Court pointed out that the standard rent stood defined by the latter part of section 2(10) (b) and by virtue of that provision it was statutorily determined at Rs. 2,800 per month though not fixed by the Controller under section 9 and proceeded to hold, by applying the principle of the decision in Padma Devi 's case, that the landlord could not reasonably expect to receive any rent higher than the standard rent from a hypothetical tenant and the annual value of the building could not, therefore, be fixed at a figure than the standard rent.
It will be seen that this decision marked a step forward from the decision in Padma Devi 's case because here the standard rent was not fixed by the Controller under section 9 and it was not penal for the landlord to receive any rent in excess of the statutorily determined standard rent of Rs. 2.800 per month and yet it was led by this Court that the standard rent determined the upper limit of the rent at which the landlord could reasonably expect to let the building to a hypothetical tenant.
It may be pointed out that an attempt was made on behalf of the Corporation to distinguish the decision in Padma Devi 's case by contending that that decision was based on the interpretation of section 127(a) of the Calcutta Municipal Corporation Act, 1923 while the provision which fell for interpretation in this case was section 168 of the Calcutta Municipal Corporation Act, 1951 which was different from section 127(a), in that it contained a proviso that "in respect of any land or building the standard rent of which has been fixed under section 9. the annual value thereof shall not exceed the annual amount of the standard rent so fixed" which was absent in section 127 (a).
The argument was that under the proviso the annual value was limited to the standard rent only in those cases where the standard rent was fixed under section 9 and since in the case before the Court the standard rent of the building was not fixed under section 9, the proviso has no application and the assessing authority was not bound to take into account the limi 615 tation of the standard rent.
This argument was negatived by the Court and it was held that the enactment of the proviso in section 168 of the Calcutta Municipal Corporation Act, 1951 did not alter the law and by the addition of the proviso, the meaning of the expression "gross rent at which the land or building might reasonably be expected to let" was not changed.
It was for this reason that we pointed out at the commencement of the judgment that the existence of the proviso in section 116 of the Delhi Municipal Corporation Act, 1957 is immaterial and we may proceed to deal with the appeals arising under that Act as if the definition of "annual value" did not contain that proviso.
That takes us to the third decision in Guntur Municipal Council vs Guntur Town Rate Payers ' Association(1) which extended still further the principle of the decision in Padma Devi 's case.
This was a case where the annual value was to be determined under the Madras District Municipalities Act, 1920 which applied in the city of Guntur.
Section 82 sub section (2) of the Act gave a definition of "annual value" practically in the same terms as section 3(1)(b) of the Punjab Municipal Act, 1911 and section 116 of the Delhi Municipal Corporation Act, 1957 without the second proviso.
There was also in force in the city of Guntur, the Andhra Pradesh Buildings (Lease Rent and Eviction) Control Act, 1960, which provided inter alia for fixation of fair rent of buildings.
It is necessary to refer to a material provisions of this Act.
Section 4, sub section (1) conferred power on the Controller, on application by the tenant or landlord of a building, to fix the fair rent for such building after holding such inquiry as he thought fit and sub section (2) to (5) of section 4 laid down the formulae for determination of fair rent in different classes of cases.
Sub section (1)(a) of section 7 gave teeth to the determination of fair rent by providing that where the Controller has fixed the fair rent of a building, the landlord shall not claim, receive or stipulate for the payment of anything in excess of such fair rent and sub section 2(a) of that section recognised that where the fair rent of a building has not been fixed by the Controller, the agreed rent could be lawfully paid by the tenant to the landord and it was only payment of a sum in addition to the agreed rent that was prohibited by that sub section.
Section 29 made it penal for any one to contravene the provisions of subsections 1(a) and 2(a) of section 7.
Now there could be no doubt that if the fair rent of a building were fixed under section 4, sub section (1), the decision in Padma Devi 's case would be clearly 616 applicable and the annual value would be limited to the fair rent so fixed.
But, would the same principle apply where the fair rent were not fixed ?
Would the annual value in such a case be liable to be assessed in the light of the provisions contained in the Rent Act ? That was the question which arose before the Court in the Guntur Municipal Council 's case.
The Guntur Municipal Council urged that the decision in Padma Devi 's case was not applicable and attempted to distinguish it by saying that under section 7, sub section (1) it was only after the fixation of fair rent of a building that the landlord was debarred from claiming or receiving payment of any rent in excess of such fair rent and since the fair rent of the building in that case had not been fixed, it was not penal for the landlord to receive any higher rent and the assessment of annual value was therefore, not "limited or governed by the measure provided by the provisions of the Act for determination of the fair rent.
" This attempt, however, did not find favour with the court and it was held that there was no distinction "between buildings the fair rent of which has been actually fixed by the Controller and those in respect of which no such rent has been fixed.
" The Court pointed out: "It is perfectly clear that the landlord cannot lawfully expect to get more rent than the fair rent which is payable in accordance with the principles laid down in the Act.
The assessment of valuation must take into account the measure of fair rent as determinable under the Act.
It may be that where the Controller has not fixed the fair rent, the municipal authorities will have to arrive at their own figure of fair rent but that can be done without any difficulty by keeping in view the principles laid down in section 4 of the Act for determination of fair rent.
" It will thus be seen that even though fair rent had not been fixed under the Act as in Padma Devi 's case, nor was it statutorily determined as in the Life Insurance Corporation 's case (there being no provision in the Andhra Pradesh Rent Act similar to the latter part of section 2(10)(b) of the West Bengal Rent Act) and it was clear from the provisions of the Rent Act that it was only after the fair rent of a building was fixed by the Controller that the prohibition against receipt of any amount in excess of fair rent became applicable and so long as the fair rent was not fixed by the Controller it was open to the landlord to receive the agreed rent even though it might be higher than the fair rent, yet it was held by the court that in view of the provisions in the Rent Act in regard to fair rent, the landlord could not reasonably expect to receive from a hypothetical tenant anything more than the fair rent payable in accordance with the principles laid down in the Rent Act and the annual value was liable to be determined on the 617 basis of fair rent as determinable under the Rent Act.
The Court observed that the assessing authority would have to arrive at its own figure of fair rent by applying the principles laid down in sub sections (2) to (5) of section 4 for determination of fair rent.
This decision clearly represented a further extension of the principle in Padma Devi 's case to a situation where no standard rent has been fixed by the Controller and in the absence of fixation of standard rent, there is no prohibition against receipt of higher rent by the landlord.
It is in the light of these decisions that we must consider whether in case if a building in respect of which no standard rent has been fixed by the Controller under the Delhi Rent Control Act, 1958 the annual value must be limited to the measure of standard rent determinable under that Act or it can be determined on the basis of the higher rent actually received by the landlord from the tenant.
But before we proceed to examine this question, we must refer to a recent decision of this Court in Municipal Corporation, Indore & Ors.vs Smt.Ratnaprabha & Ors.(1) which apparently seems to strike a different note.
That was a case relating to a building situated in Indore and subject to the provisions of the Madhya Pradesh Accommodation Control Act, 1961.
The building was self occupied and hence there was no occasion to have its standard rent fixed by the Controller.
The annual value of the building was sought to be assessed for rating purposes under the Madhya Pradesh Municipal Corporation Act, 1956 and section 138(b) of that Act provided that the annual value of any building shall, notwithstanding anything contained in any other law for the time being in force be deemed to be the gross annual rent at which such building might reasonably be expected to let from year to year, subject to certain specified deductions.
The argument of the assessee was that even though no standard rent in respect of the building was fixed by the Controller, the reasonable rent contemplated by section 138(b) could not exceed the standard rent determinable under the Act and it was incumbent on the Municipal Commissioner to determine the annual value of the building on the same basis on which its standard rent was required to be fixed under the Act.
This argument was sought to be supported by relying on the three decisions to which we have already made a reference.
Now it would appear that the decision in Guntur Municipal Council 's case was clearly applicable on the facts of this case and following that decision the Court ought to have held that the annual value of the building could not exceed 618 the standard rent determinable under section 7 of the Act and the assessing authority should have arrived at its own estimate of the standard rent by applying the principles laid down in that section and determine the annual value on the basis of such standard rent.
But the Court negatived the applicability of the decision in Guntur Municipal Council 's case and the earlier two cases by relying on the words "notwithstanding anything contained in any other law for the time being in force" in section 138(b).
The Court pointed out that while 'the requirement of the law is that the reasonable letting value should determine the annual value of the building, it has also been specifically provided that this would be so "notwithstanding anything contained in any other law for the time being in force" and observed that it would be a proper interpretation of these words "to hold that in a case where the standard rent of a building has been fixed under section 7 of the Madhya Pradesh Accommodation Control Act, and there is nothing to show that there has been fraud or collusion, that would be its reasonable letting value, but where this is not so, and the building has never been let out and is being used in a manner where the question of fixing its standard rent does not arise, it would be permissible to fix its reasonable rent without regard to the provisions of the Madhya Pradesh Accommodation Control Act, 1961.
This view will, in our opinion, give proper effect to the non obstante clause in clause (b), with due regard to its other provision that the letting value should be "reasonable".
The Court leaned heavily on the non obstante clause in section 138(b) and distinguished the decision in Guntur Municipal Council 's case and the earlier two cases on the ground that in none of the three Municipal Acts which came up for consideration before the Court in these cases, there was any such non obstante clause.
We are not at all sure whether this decision represents the correct interpretation of section 138(b) because it is rather difficult to see how the non obstante clause in that section can possibly affect the interpretation of the words "the annual value of any building shall. . . . be deemed to be the gross annual rent at which such building. might reasonably . . be expected to be let from year to year.
" The meaning of these words cannot be different in section 138(b) than what it is in section 127(a) of the Calcutta Municipal Corporation Act, 1923 and section 82(2) of the Madras District, Municipality Act, 1920 and the only effect of the non obstante clause would be that even if there is anything contrary in any other law for the time being in force that should not detract from full effect being given to these words according to their proper meaning.
But it is not 619 necessary for the purpose of the present appeals to probe further into the question of correctness of this decision, since there is no non obstante clause either in section 3(1)(b) of the Punjab Municipal Act, 1911 or in section 116 of the Delhi Municipal Corporation Act, 1957 and this decision has therefore, no application.
Now let us turn to the present appeals and see how far the trilogy of decisions referred to earlier throws light on the solution of the problem before us.
We may first refer to the relevant provisions of the Delhi Rent Control Act, 1958 for that was the law in force at the material time relating to restrictions of rent of buildings situate within the jurisdiction of the Delhi Municipal Corporation and the New Delhi Municipal Committee.
Section 2(k) defined 'standard rent ' in relation to any premises to mean "the standard rent referred to in section 6 or where the standard rent has been increased under section 7, such increased rent.
" Sub section (1) of section 4 provided that, subject to a single narrow exception which is not material for our purpose, "no tenant shall, notwithstanding any agreement to the contrary be liable to pay to his landlord for the occupation of any premises any amount in excess of the standard rent of the premises" and sub section (2) of section 4 declared that, subject to provision of sub section (1) "any agreement for the payment of rent in excess of the standard rent shall be construed as if it were an agreement for the payment of the standard rent only".
Section 5 sub section (1) enacted a prohibition injuncting that "no person shall claim or receive any rent in excess of the standard rent, notwithstanding any agreement to the contrary." Then, section 6 proceeded to set out different formulae for determination of standard rent in different classes of cases and each formula gave a precise and clear cut method of computation yielding a definite figure of standard rent in respect of building falling within its coverage.
Section 9 sub section (1) provided that the Controller shall, on an application made to him in this behalf either by the landlord or by the tenant, fix in respect of any premises the standard rent referred to in section 6 and sub section (2) of section 9 laid down that in fixing the standard rent of any premises, the Controller shall fix an amount which appears to him to be reasonable having regard to the provisions of section 6 and the circumstances of the case.
Sub section (4) of section 9 provided for determination of standard rent in a case where for any reason it was not possible to determine the standard rent on the principles set forth under section 6 and said that in such a case "the Controller may fix such rent as would be reasonable having regard to the situation, locality 620 and condition of the premises and the amenities provided therein and where there are similar or nearly similar premises in the locality, having regard also to the standard rent payable in respect of such premises".
Section 9 sub section (7) enjoined the Controller, while fixing the standard rent of any premises, to specify a date from which the standard rent so fixed shall be deemed to have effect and added a proviso that in no case the date so specified shall be earlier than one year prior to the date of the application for the fixation of the standard rent.
Lastly, section 12 laid down a period of limitation within which an application for fixation of the standard rent may be made by the landlord or the tenant by providing that such application must be made within 2 years from the date of commencement of the Act in case of premises let prior to such commencement and if the premises were let after such commencement, then within 2 years from the date on which the premises were let to the tenant.
The proviso to section 12 empowered the Controller to entertain the application after the expiry of the period of limitation if he was satisfied that the applicant was prevented by sufficient cause from filing the application in time.
These provisions of the Delhi Rent Control Act, 1958 came up for consideration before this Court in M. M. Chawla vs J. section Sethi(1) where the question was whether in answer to a suit for eviction filed by the landlord, the tenant was entitled by way of defence to ask the Controller to fix the standard rent of the premises and to resist eviction by paying or depositing the standard rent so fixed even though at the date of the filing of the defence, the period of limitation for making an application for fixation of the standard rent had expired.
The argument of the tenant was that by reason of the prohibition enacted in section 4 and sub section (1) of section 5, it was not competent to the landlord to claim or receive any amount in excess of the standard rent and even though the period of limitation prescribed for making an application for fixation of standard rent had expired, the tenant was entitled to ask the Controller by way of defence to fix the standard rent, since the period of limitation was applicable only where a substantive application was made for fixation of standard rent and it had no application where the fixation of standard rent was sought by way of defence.
This Court speaking through Shah, J. negatived the contention of the tenant and construing the scheme of the Act, pointed out: ". . . . . the prohibition in sections 4 and 5 operate only after the standard rent of 621 premises is determined and not till then.
So long as the standard rent is not determined by the Controller, the tenant must pay the contractual rent: after the standard rent is determined the landlord becomes disentitled to recover an amount in excess of the standard rent from the date on which the determination operates.
We are unable to agree that standard rent of a given tenement is by virtue of section 6 of the Act a fixed quantity, and the liability for payment of a tenant is circumscribed thereby even if the standard rent is not fixed by order of the Controller.
Under the scheme of the Act standard rent of a given tenement is that amount only which the Controller determines.
Until the standard rent is fixed by the Controller the contract between the landlord and the tenant determines the liability of the tenant to pay rent.
That is clear from the terms of section 9 of the Act.
That section clearly indicates that the Controller alone has the power to fix the standard rent, and it cannot be determined out of court.
An attempt by the parties to determine by agreement the standard rent out of court is not binding.
By section 12 in an application for fixation of standard rent of premises the Controller may give retrospective operation to his adjudication for a period not exceeding one year before the date of the application.
The scheme of the Act is entirely inconsistent with standard rent being determined otherwise than by order of the Controller.
In our view, the prohibition against recovery of rent in excess of the standard rent applies only from the date on which the standard rent is determined by order of the Controller and not before that date.
" it was, thus, held that the prohibition in section 4 and sub section (1) of section 5 against recovery by the landlord of any amount in excess of the standard rent was operative only after the standard rent was fixed by the Controller under section 9 and until the standard rent was so fixed, it was lawful for the landlord to receive the contractual rent from the tenant and if the period of limitation prescribed for making an application for fixation of the standard rent had expired, the tenant could not, thereafter, get the standard rent fixed by the Controller and would continue to be liable to pay the contractual rent to the landlord.
The Revenue relied heavily on this decision and contended that since in each of the present appeals the building was let out to the tenant, but its standard rent 622 was not fixed by the Controller under section 9 and the period of limitation for making an application for fixation of the standard rent had expired, the landlord was entitled to continue to receive the contractual rent from the tenant without any legal impediment and hence the annual value of the building was not limited to the standard rent determinable in accordance with the principles laid down in the Act, but was liable to be assessed by reference to the contractual rent recoverable by the landlord from the tenant.
The argument of the Revenue was that if it was not penal for the landlord to receive the contractual rent from the tenant, even if it be higher than the standard rent determinable under the provisions of the Act, it would not be incorrect to say that he landlord could reasonably expect to let the building at the contractual rent and the contractual rent therefore provided a correct measure for determination of the annual value of the building.
This argument, plausible though it may seem at first blush, is in our opinion not well founded and must be rejected.
Ordinarily we would have examined the validity of this argument first on principle and then turned to the authorities, but we propose to reverse this order because the decisions in the Life Insurance Corporation 's case and the Guntur Municipal Council 's case (supra) completely cover the present controversy and do not leave any scope for further argument.
Of course, the decision in Padma Devi 's case may be said to be distinguishable on the ground that in the present cases, unlike Padma Devi 's case, the standard rent of the building was not fixed by the Controller and hence it could not be said that it was unlawful or penal for the landlord to receive anything more than then the standard rent.
But so far as the decision in Life Insurance Corporation 's case is concerned, it is difficult to see how its applicability could be disputed, because there also, as in the present case, the standard rent of the building was not fixed by the Controller and in the absence of fixation of the standard rent, it was open to the landlord to receive rent in excess of the standard rent determinable under the Act.
The only distinction which could be urged on behalf of the Revenue was that under the West Bengal Premises Rent Control (Temporary Provisions) Act, 1950, which came up for consideration in the Life Insurance Corporation 's case, the standard rent was statutorily determinable on the application of a mathematical formula without any discretion being left in the Controller, while under the Delhi Rent Control Act, 1958, the standard rent was not a certain and definite figure to be arrived at mathematically by application of the formulae laid down in section 6 but it was left to the Controller under section 9 sub section (2) to 623 fix the standard rent at such amount as appeared to him to be reasonable having regard to the provisions of section 6 and the circumstances of the case and hence, until the standard rent was fixed by the Controller, it could not be said what would be the standard rent of the building.
Now undoubtedly there is some difference in the provisions of the two statutes but this difference is not of such a character as to affect the applicability of the decision in the Life Insurance Corporation 's case, because in that case too, the prohibition against the landlord to receive any rent in excess of the standard rent was operative only after the fixation of the standard rent by the Controller and so long as the standard rent was not fixed, it was not unlawful or penal for the landlord to receive any rent in excess of the standard rent.
If the standard rent though not fixed and hence not legally enforceable, could provide the measure for the reasonable expectation of the landlord to receive rent from a hypothetical tenant in the Life Insurance Corporation 's case, there is no reason, why it should not equally be held to provide such measure in the present cases; as in the one case so also in the other.
The upper limit of the standard rent, though yet to be fixed by the Controller, would enter into the determination of the reasonable rent.
Moreover, it is not correct to say that under section 9 sub section (2) of the Delhi Rent Control Act, 1958 it is left to the unfettered and unguided discretion of the Controller to fix any standard rent which he considers, reasonable.
He is required to fix the standard rent in accordance with the relevant formula laid down in section 6 and he cannot ignore that formula by saying that in the circumstances of the case, he considers it reasonable to do so.
The only discretion given to him is to make adjustments in the result arrived at on the application of the relevant formula, where it is necessary to do so by reason of the fact that the landlord might have made some addition, alteration or improvement in the building or circumstances might have transpired affecting the condition or utility of the building or some such circumstances of similar character.
The compulsive force of the formulae laid down in section 6 for the determination of the standard rent is not in any way whittled down by section 9 sub section (2) but a marginal discretion is given to the Controller to mitigate the rigour of the formulae where the circumstances of the case do require.
The amount calculated in accordance with the relevant formulae set out in section 6 would, therefore, ordinarily represent the standard rent of the building, unless the landlord or the tenant, as the case may be, can persuade the Controller that there are circumstances requiring adjustment in the amount so arrived at.
It would thus be seen that there is no material distinction between the West Bengal Premises 624 Rent Control (Temporary Provisions) Act, 1950 and the Delhi Rent Control Act, 1958 so far as the provisions regarding determinations of standard rent are concerned and the decision in the Life Insurance Corporation 's case must be held to be applicable in determination of that annual value in the present cases.
But more than the decision in the Life Insurance case decision, it is the Guntur Municipal Council 's case which is nearest to the present case and is almost indistinguishable.
In that case also, so in the present cases, the standard rent of the building was not fixed by the Controller and under the Andhra Pradesh Rent Act which applied in the town of Guntur, in the absence of fixation of the fair rent, it was lawfully competent to the landlord to recover rent in excess of the fair rent determinable under that Act.
Moreover, the Andhra Pradesh Rent Act did not prescribe any clear cut formula to be applied mechanically for statutorily determining the standard rent, but it was left to the Controller to fix the standard rent having regard to (a) the prevailing rates of rent in the locality for the same or similar accommodation in similar circumstances during the 12 months prior to 5th April, 1944; (b) the rental value entered in the property tax assessment book of the concerned local authority relating to the period mentioned in clause (a) and (c) the circumstances of the case, including any amount paid by the tenant by way of premium or any other like sum in addition to rent after 5th April 1944 with a provision for allowance of increase depending on the quantum of the rent so arrived at.
The discretion left to the Controller to fix the fair rent was thus much larger than that under the Delhi Rent Control Act, 1958 and yet it was held that, even though the fair rent was not fixed by the Controller, the annual value was limited by the measure of the fair rent determinable under the Act.
The view taken was that there was no material distinction between buildings fair rent of which has been actually fixed by the Controller and those in respect of which no such rent has been fixed and even if the fair rent has not been fixed by the Controller, the upper limit of the fair rent payable in accordance with the principles laid down in the Act is bound to enter into the determination of the rent which the landlord could reasonably expect to receive from a hypothetical tenant.
The principle of this decision applies wholly and completely in the present cases and following that principle, it must be held that the annual value of a building governed by the Delhi Rent Control Act 1958 must be limited by the measure of standard rent determinable under that Act.
The landlord cannot reasonably expect to get more rent than the standard rent payable in accordance with the principles laid down in the Delhi Rent 625 Control Act, 1958.
It is true that the standard rent of the building not having been fixed by the Controller, the assessing authority would have to arrive at its own figure of standard rent by applying the principles laid down in the Delhi Rent Control Act, 1958 for determination of standard rent, but that is a task which the assessing authority would have to perform as a part of the process of assessment and in the Guntur Municipal Council 's case, this Court has said that it is not a task foreign to the function of assessment and has to be carried out by the assessing authority.
When the assessing authority arrives at its own figure of standard rent by applying the principles laid down in the Act, it does not, in any way, usurp the functions of the Controller, because it does not fix the standard rent which would be binding on the landlord and the tenant, which can be done only by the Controller under the Act, but it merely arrives at its own estimate of standard rent for the purpose of determining the annual value of the building.
That is a perfectly legitimate function within the scope of the jurisdiction of the assessing authority.
Now it is true that in the present cases the period of limitation for making an application for fixation of the standard rent had expired long prior to the commencement of the assessment years and in such of the cases, the tenant was precluded by section 12 from making an application for fixation of the standard rent with the result that the landlord was lawfully entitled to continue to receive the contractual rent from the tenant without any let or hindrance.
But from this fact situation which prevailed in each of the cases, it does not follow that the landlord could, therefore, reasonably expect to receive the same amount of rent from a hypothetical tenant.
The existing tenant may be barred from making an application for fixation of the standard rent and may, therefore, be liable to pay the contractual rent to the landlord, but the hypothetical tenant to whom the building is hypothetically to be let would not suffer from this disability created by the bar of limitation and he would be entitled to make an application for fixation of the standard rent and may, therefore, be liable to pay the contractual rent to the landlord, but the hypothetical tenant to whom the building is hypothetically to be let would not suffer from this disability created by the bar of limitation and he would be entitled to make an application for fixation of the standard rent at any time within two years of the hypothetical letting and the limit of the standard rent determinable under the Act would, therefore, inevitably enter into the bargain and circumscribe the rate of rent at which the building could reasonably be expected to be let.
This position becomes absolutely clear if we take a situation where the tenant goes out and the building comes to be self occupied by the owner.
It is obvious that in case of a self occupied building, the annual value would be limited by the measure of standard rent determinable under the Act, for it can reasonably be presumed that no hypothetical tenant would ordinarily agree to pay 626 more rent than what he could be made liable to pay under the Act.
The anomalous situation which would thus arise on the contention of the Revenue would be that whilst the tenant is occupying the building the measure of the annual value would be the contractual rent, but if the tenant vacates and the building is self occupied, the annual value would be restricted to the standard rent determinable under the Act.
It is difficult to see how the annual value of the building could vary accordingly as it is tenanted or self occupied.
The circumstance that in each of the present cases the tenant was debarred by the period of limitation from making an application for fixation of the standard rent and the landlord was consequently entitled to continue to receive the contractual rent, cannot therefore affect the applicability of the decisions in the Life Insurance Corporation 's case and the Guntur Municipal Council 's case and it must be held that the annual value of the building in each of these cases was limited by the measure of the standard rent determinable under the Act.
The problem can also be looked at from a slightly different angle.
When the Rent Control Legislation provides for fixation of standard rent, which alone and nothing more than which the tenant shall be liable to pay to the landlord, it does so because it considers the measure of the standard rent prescribed by it to be reasonable.
It lays down the norm of reasonableness in regard to the rent payable by the tenant to the landlord.
Any rent which exceeds this norm of reasonableness is regarded by the legislature as unreasonable or excessive.
When the legislature has laid down this standard of reasonableness, would it be right for the Court to say that the landlord may reasonably expect to receive rent exceeding the measure provided by this standard? Would it be reasonable on the part of the landlord to expect to receive any rent in excess of the standard or norm of reasonableness laid down by the legislature and would such expectation be countenanced by the Court as reasonable? The legislature obviously regards recovery of rent in excess of the standard rent as exploitative of the tenant and would it be proper for the Court to say that it would be reasonable on the part of the landlord to expect to recover such exploitative rent from the tenant ?
We are, therefore, of the view that, even if the standard rent has not been fixed by the Controller, the landlord cannot reasonably expect to receive from a hypothetical tenant anything more than the standard rent determinable under the Act and this would be so equally whether the building has been let out to a tenant who has lost his right to apply for fixation of the standard rent or the building is self occupied by the owner.
The assessing authority would, in either case, have to arrive at its own figure of the standard rent by 627 applying principles laid down in the Delhi Rent Control Act, 1958 for determination of standard rent and determine the annual value of the building on the basis of such figure of standard rent.
It is, therefore, clear that in each of the present cases, the annual value of the building must be held to be limited by the measure of the standard rent determinable on the principles laid down in the Delhi Rent Control Act, 1958 and it cannot exceed such measure of standard rent.
We accordingly allow Appeals Nos. 1143 and 1144 of 1973 and declare in such of these two cases that the assessment of the Annual value of the building in excess of the standard rent determinable on the principles laid down in the Delhi Rent Control Act, 1958 was illegal and ultra vires.
So far as Appeal No. 1201(N) of 1973 preferred by the Municipal Corporation of Delhi is concerned, it relates to assessment of annual value of self occupied building and since we have held that in case of self occupied building also the annual value must be determined on the basis of the standard rent determinable under the provisions of the Delhi Rent Control Act, 1958 and there we have agreed with the judgment of the High Court, that appeal must be dismissed.
The assessee in each case will get his costs throughout.
N.K.A. C.A. Nos.1143 & 1144/73 allowed.
C.A. 1201 (N)/73 dismissed.
| IN-Abs | Section 3(1)(b) of the Punjab Municipal Act, 1911 defines "annual value" to mean, in the case of any house or building "the gross annual rent at which such house or building. may reasonably be expected to let from year to year" subject to certain specified deductions.
The same definition of "annual value" is to be found in section 116 of the Delhi Municipal Corporation Act, 1957 but with only difference that there is a, second proviso to section 116 which is absent in section 3(1)(b).
One appeal related to a case where the building is situated within the jurisdiction of the New Delhi Municipal Committee and is liable to be assessed to house tax under the Punjab Municipal Act, 1911 while the other two related to cases where the building is situated within the limits of the Corporation of Delhi and is assessable to house tax under the Delhi Municipal Corporation Act, 1957.
The house tax under both statutes was levied with reference to the "annual value" of the building.
The common question of law arising in the appeals related to the assessment of annual value for levy of house tax where the building is governed by the provisions of Rent Control Legislation but where the standard rent has not yet been fixed.
The argument of the Revenue was (i) that if it was not penal for the landlord to receive the contractual rent from the tenant, even if it be higher than the standard rent determinable under the provisions of the Act, it would not be incorrect to say that the landlord could reasonably expect to let the building at the contractual rent and the contractual rent therefore provided n correct measure for determination of the annual value of the building, and (ii) the period of limitation for making an application for fixation of tho standard rent had expired long prior to the commencement of the assessment years and in each of the cases, the tenant was precluded by section 12 of the Rent Control Act from making an application for fixation of the standard rent with the result that the landlord was lawfully entitled to continue to receive the contractual rent from the tenant without any let or hindrance.
Allowing the appeals, ^ HELD: 1.
Tho Court would have examined the validity of this argument first on principle and then turned to the authorities, hut it proposed to reverse this order because the decisions in the Life Insurance Corporation 's 608 case and the Guntur Municipal Council 's case (supra) completely covered the.
present controversy and did not leave any scope for further argument.
The decision in Padma Devi 's case may be said to be distinguishable on the ground that in the present cases, unlike Padma Devi 's case, the standard rent of the building was not fixed by the Controller and hence it could not be said that it was unlawful or penal for the landlord to receive anything more than the standard rent.
But so far as the decision in Life Insurance Corporations case is concerned, it is difficult to sec how its applicability could be disputed, because there also, as in the present case, the standard rent of the building was not fixed by the Controller and in the absence of the standard rent, it was open to the landlord to receive rent in excess of the standard rent determinable under the Act.
The only distinction was that under the West Bengal Premises Rent Control (Temporary Provisions) Act, 1950, which came up for consideration in the Life Insurance Corporation s case, the standard rent was statutorily determinable on the application of a mathematical formula without any discretion being left in the Controller, while under the Delhi Rent Control Act, 1958 the standard rent was not a certain and definite figure to be arrived at mathematically by application of the formula laid down in section 6 but it was left to the Controller under section 9 sub section (2) to fix the standard rent at such amount as appeared to him to be reasonable having regard to the provisions of section 6 and the circumstances of the case.
Hence, until the standard rent was fixed by the Controller, it could not be said what would be the standard rent of the building.
[622D H, 623A] 2.
Undoubtedly there is some difference in the provisions of the two statutes but this difference is not of such a character as to affect the applicapability of the decision in the Life Insurance Corporation 's case.
In that case too, the prohibition against the landlord to receive any rent in excess of the standard rent was operative only after the fixation of the standard rent by the Controller and so long as the standard rent was not fixed, it was not unlawful or penal for the landlord to receive any rent in excess of the standard rent.
If the standard rent though not fixed and hence not legally enforceable, could provide the measure for the reasonable expectation of the landlord to receive rent from a hypothetical tenant in the Life Insurance Corporation 's case, there is no reason why it should not equally be held to provide such measure in the present cases.
As in the one case so also in the other? the upper limit of the standard rent. though yet to be fixed by the Controller, would enter into the determination of the reasonable rent.
[623A D] 3.
It is not correct to say that under section 9 sub section (2) of the Delhi Rent Control Act, 1958, it is left to the unfettered and unguided discretion of the Controller to fix any standard rent which he considers reasonable.
He is required to fix the standard rent in accordance with the relevant formula laid down in section 6 and he cannot ignore that formula by saying that in the circumstances of the case, he considers it reasonable to do so.
The only discretion given to him is to make adjustments in the result arrived at on the application of the relevant formula, where it is necessary to do so by reason of the fact that the landlord might have made some addition, alteration or improvement in the building or circumstances might have transpired affecting the condition or utility of the building or some such circumstances of similar character.
The compulsive force of the formula laid down in section 6 for the determination of the standard rent 609 is not in any way whittled down by section 9 sub section (2) but a marginal discretion is given to the Controller to mitigate the rigour of the formula where the circumstances of the case so require.
The amount calculated in accordance with the relevant formula set out in section 6 would, therefore, ordinarily represent the standard rent of the building, unless the landlord of the tenant.
, as the case may be, can persuade the Controller that there are circumstances requiring adjustment in the amount so arrived at.
There is therefore no material distinction between the West Bengal Premises Rent Control (Temporary Provisions) Act, 1950 and the Delhi Rent Control Act, 1050 so far as the provisions regarding determination of standard rent are concerned and the decision in the Life insurance Corporations case must be held to be applicable in determination of the annual value in the present cases.
[623D H, 624A] 4.
In the Guntur Municipal Council 's case also, as in the present cases.
the standard rent of the building was not fixed by the Controller and under the Andhra Pradesh Rent Act which applied to the town of Guntur, in the Absence of fixation of the fair rent, it was lawfully competent to the landlord to recover rent hl excess of the fair rent.
determinable under that Act.
[624B C] 5.
The annual value of the building governed by the Delhi Rent Control Act, 1958 must be limited by the measure of standard rent determinable under that Act.
The landlord cannot reasonably expect to get more rent than the standard rent payable in accordance with the principles laid down in the Delhi Rent Control Act, 1958.
It is true that the standard rent of the building not having been fixed by the Controller, the assessing authority would have to arrive at its own figure of standard rent by applying the, principles laid down in the Delhi Rent Control Act, 1958 for determination of standard rent, but that is a task which the assessing authority would have to perform as a part OF the process of assessment and in the Guntur Municipal Council 's case, this Court has said that it is not a. task foreign to the function of assessment and has to be carried out by the assessing authority.
When the assessing authority arrives at its own figures of standard rent by applying the principles laid down in the Act, it does not, in any way, usurp the function of the Controller, because it does not fix the standard rent which would he binding on the landlord and the tenant, which can be done only by the Con F troller under the Act but it merely arrives at its own estimate of standard rent for the purpose of determining the annual value of the building.
That is a perfectly legitimate function within the scope of the jurisdiction of the assessing authority.
[624G H. 625A C] 6.
The existing tenant may be barred from making an application for fixation of the standard rent and may, therefore, be liable to pay contractual rent to the landlord but the hypothetical tenant to whom the building is hypothetically to be let, would not suffer from this disability created by the bar of limitation and he would be entitled to make an application for fixation of the standard rent at any time within two years of the hypothetical letting and the limit of the standard rent determinable under the Act.
would therefore, inevitably enter into the bargain and circumscribe the rate of rent at which the building could reasonably be expected to he let.
[625E G] 7.
It is difficult to sec how the annual value of the building could vary accordingly as it is tenanted or self occupied.
The circumstance that in each.
610 of the present cases, the tenant was debarred by the period of limitation from making an application for fixation of the standard rent and the landlord was consequently entitled to continue to receive the contractual rent.
cannot therefore, affect the applicability of the decision in the Life Insurance Corporation 's case and the Guntur Municipal Council 's case, and it must.
be held that the annual value of the building in each of these cases was limited by the measure of the standard rent determinable under the Act.
[626B C] 8.
Even if the standard rent has not been fixed by the Controller, the landlord cannot reasonably expect to receive from a hypothetical tenant anything more than the standard rent determinable under the Act and this would be so equally whether the building has been let out to a tenant who has lost his light to apply for fixation of ' the standard rent or the building is self occupied by the owner.
The assessing authority would.
in either case, have to arrive at its own figure of the standard rent by applying principles laid down in the Delhi Rent Control Act, 1958 for determination of standard rent and determine the annual value of the building on the basis of such figure of standard rent.
[626G H, 627A] 9.
It is clear therefore that in each of the present cases the annual value of the building must be held to be limited by the measure of the standard rent determinable on the principles laid down in the Delhi Rent Control Act, 1958 and it cannot exceed such measure of standard rent.
[627A B] Corporation of Calcutta vs Life Insurance Corporation ; ; Corporation of Calcutta vs Padma Devi ; ; Guntur Municipal Council vs Guntur Town Rate payers ' Association ; M. M. Chawla vs J. section Sethi referred to.
Municipal Corporation, Indore & Ors.
v, Smt.
Ratnaprabha & Ors. ; distinguished.
|
N: Criminal Appeal No. 259 of 1973.
From the Judgment and order dated 27 4 1973 of the Andhra Pradesh High Court in Criminal Revision Case No. 72/73.
R. B. Datar, M. N. Shroff and R. N. Sachthey for the Appellant.
P. Govindan Nair and A. Subba Rao for the respondent.
The Judgment of the Court was delivered by FAZAL ALI, J.
This appeal by certificate is directed against the judgment dated 27th April 1973 of the Andhra Pradesh High Court allowing the revisional application and quashing the proceeding 's taken against the respondent for offences committed under section 5(2) of the Prevention of Corruption Act.
In the view that we take in the case, it is not necessary to give the facts in detail.
IL appears that the respondent was a member of the Indian Air Force having entered the service on l 7th November 1941.
He retired from the service on the 15th June 1965 but was reemployed for a period of two years with effect from 16th June 1965.
O. 7th September 1966, the respondent was transferred to the Regular Air Force Reserve with effect from 16th July 1965 to 15th June 1970, i.e., for a period of five years.
In Other words, the respondent was transferred to the Auxiliary Reserve Air Force under the provisions of the Reserved and Auxiliary Air Force Act 1952 (hereinafter to be referred to as the 'Act ') and rules thereunder.
On 13th March 1968, the reemployment given to the respondent ceased and his services were terminated from 1st April 1968.
A chargesheet was submitted against the respondent for having committed offences under section 5(2) of the Prevention of Corruption Act during the period 27th March 1965 to 16th March 1967.
The 699 respondent filed a Petition before the Special Judge, Hyderabad for dropping the proceedings against him on the ground that the Judge could not take any cognizance of the offences in the absence of any valid sanction of the appointing authority of the respondent.
The Special Judge, however, rejected this application on the 20th of October 1972 on the ground that as the respondent was not a Commissioned officer in the Air Force at the time when the cognizance was taken, no sanction of the President was necessary.
Thereafter, the respondent moved the High Court in revision and succeeded before the High Court which held that as the respondent continued to be a public servant within the meaning of section 21 of the Indian Penal Code inasmuch as he remained a member of the Air Force Reserve, sanction was essential before prosecuting the respondent.
The High Court accordingly accepted the revision petition and quashed the proceedings against the respondent but granted a certificate to the appellant for leave to appeal to this Court.
Hence this appeal before us.
The only point that has been canvassed before us was whether the respondent having retired from the active service of the Indian Air Force continued to be a public servant even though he was transferred to Regular Air Force Reserve.
The counsel for the Union submitted that as the respondent had retired from the Indian Air Force and his reemployment was terminated w.e.f.
April 1, 1968, he ceased to be a public servant and, therefore, no sanction was necessary.
We have heard counsel for the parties and have also perused the judgment of the High Court and the Special Judge.
The facts, mentioned above, are not disputed and two questions fall for determination in this case.
In the first place, it has to be decided whether or not the respondent was a public servant during the period 27 3 65 to 16 3 67.
Secondly, what is the point of time when the sanction was necessary, viz., the time when the offences were actually committed or when the court took cognizance of the said offences.
We will take up the second point first.
An identical question came up for consideration before this Court in the case of section A. Venkataraman vs The State where the Court, speaking through Imam J., observed as follows .
"In our opinion, in giving effect to the ordinary meaning of the words used in section 6 of the Act, the conclusion is inevitable that at the time a court is asked to take cognizance 700 not only the offence must have been committed by a public servant but the person accused is still a public servant removable from his office by a competent authority before the provisions of section 6 can apply.
" This case was followed by a recent decision of this Court in the case of State of West Bengal Etc.
vs Manmal Bhutoria & Ors.
where the previous decision was followed.
In view of the decisions of this Court, referred to above, the matter is no longer res integra but is concluded by the decisions of this Court.
It fol lows, therefore, that the prosecution must prove that at the time when the cognizance of the offence was taken, the respondent ceased to be a public servant.
In the instant case, the Special Judge appears to have taken cognizance on June 19, 1969 at a time when the respondent continued to be a public servant having been reemployed and as referred to above his services were terminated only on 1 4 1968 but he continued to be a member of the Auxiliary Air Force upto 15 6 70 that is to say, a long time after the cognizance of the offence was taken.
The learned counsel for the Union, how ever, submitted that reemployment under the provisions of the Regular Air Force Reserve Act would not amount to an employment in the Regular Force of the Service and therefore even though the respondent may have been reemployed, he could not be said to hold the status cf a public servant.
In this connection, some of the Rules have been placed before us to show the nature of the employment held by the respondent after his retirement.
It is not disputed that even after reemployment, the respondent was transferred to the Air Force Auxiliary Reserve and continued to be a member of the Auxiliary Air Force Reserve.
Relevant sections of the Act are.
extracted below : "4.
Constitution of Regular Air Force Reserve The Central Government may raise and maintain in the manner hereafter in this Chapter provided an Air Force Reserve to be designated the Regular Air Force Reserve which shall consist solely of persons transferred or appointed to it under section 5.
Recruitment to the Regular Air Force Reserve (1) The competent authority may, by general or special order transfer to the regular Air Force Reserve (a) any officer or airman of the Air Force who under the terms and conditions of his service is liable to 701 serve in any Air Force Reserve if and when constituted; (b) any officer or airman of the Air Force whose com mission or engagement in the Air Force has been terminated before the commencement of this Act and who under the terms of his commission or engagement was liable to serve in any Air Force Reserve if and when constituted; (c) any officer or airman who has served in the Air Force and has retired therefrom; and any officer or airman so transferred shall be deemed to be a member of the said Reserve.
(2) The competent authority may, in such circumstances and subject to such conditions as may be prescribed, by special order, appoint to the Regular Air Force Reserve any member of the Air Defence Reserve or the Auxiliary Air Force raised and maintained under this Act, and where any such member is so appointed, he shall cease to be a member of the Air Defence Reserve or the Auxiliary Air Force, as the case may be, and shall as from the date of such appointment be deemed to be a member of the Regular Air Force Reserve.
(3) . . 6.
Classes of persons in the Regular Air Force Reserve Members of the Regular Air Force Reserve shall be divided into the following classes, namely: (a) general duties officers, and (b) ground duties officers, and (c) airmen, and every officer shall be entitled on transfer or appointment to the Reserve to hold the same rank as that which he last held in the Air Force or the Air Defence Reserve or the Auxiliary Air Force, as the case may be, before such transfer or appointment.
Period of service (1) Every member of the Regular Air Force Reserve shall he liable to serve in the Reserve (a) if he is transferred to the Reserve under sub section (1) of section 5, for the period of his Re serve liability; and 702 (b) if he is appointed to the Reserve under sub section (2) of section S, for the remainder of the period for which he was liable to serve in the Air Defence Reserve or the Auxiliary Air Force, as the case may be: Provided that the competent authority may require any such member to serve in the Reserve for such further period or periods not exceeding in the aggregate five years as it may think fit.
x x x x x 9.
Constitution of Air Defence Reserve The Central Government may raise and maintain in the manner here after in this Chapter provided an Air Force Reserve to be designated the Air Defence Reserve which shall consist of persons deemed under the provisions of section 16 to be enrolled therein.
Classes of persons in the Air Defence Reserve Members of the Air Defence Reserve shall be divided into the following classes, namely: (a) general duties officers; (b) ground duties officers; and (c) airmen.
x x x x x 12.
Liability to be called up for inquiry Every person to whom the provisions of section 11 are applicable shall be liable to be called up for inquiry under section 13 (a) if he belongs to any of the classes specified in clauses (a) to (f) of sub section (1) of section 11, until he has completed his thirty seventh year, and (b) if he belongs to any of the classes specified in clauses (g) and (h) of the said sub section, until he has completed his fiftieth year.
x x x x x 18.
Constitution of Auxiliary Air Force (1) The Central Government may raise and maintain in the manner hereafter in this Chapter provided an Air Force to be designated the Auxiliary Air Force.
(2) The Central Government may constitute such number of squadrons and units of the Auxiliary Air Force as it thinks fit and may disband or reconstitute any squadron or unit.
703 19.
Classes of persons in the Auxiliary Air Force Members of the Auxiliary Air Force shall be divided into the following classes, namely: (a) general duties officers; (b) ground duties officers; and (c) airmen.
Officers of the Auxiliary Air Force The President may grant to such person as he thinks fit a commission as an officer in the Auxiliary Air Force with the designation of rank corresponding to that of any commissioned officer in the Air Force. . 22.
Periods of service Every officer and every enrolled person shall, subject to any rules that may be made in this behalf under this Act, be required to serve in the Auxiliary Air Force for a period of five years from the date of his appointment or enrollment but may, after the completion of his period of service, volunteer to serve therein for further periods each of not more than five years ' duration.
Termination of Service The service of any officer or enrolled person in the Auxiliary Air Force may, at any time before the completion of his period of service, be terminated by such authority and under such conditions as may be prescribed." (Emphasis ours) A perusal of the provisions of these sections would clearly reveal that once the respondent was transferred to the Auxiliary Air Force he retained his character as a public servant because he was required to undergo training and to be called up for service as and when required.
It is true that these provisions do not expressly contain the nature of the emoluments that the respondent may receive but the general tenor and setting of the Act clearly show that a member of the Auxiliary Force is as much a public servant as an acting member of the Indian Air Force.
This is the view which the High Court appears to have taken and we find ourselves in complete agreement with the same.
It is not disputed in this case that no sanction was taken from the appointing authority before prosecuting the respondent.
For these reasons, therefore, we do not find any error of law in the judgment of the High Court and the appeal fails and is accordingly dismissed N.V.K. Appeal dismissed.
| IN-Abs | The respondent a member of the Indian Air Force, retired from service on June 15, 1965 but was reemployed for a period of two years with effect from June 16, 1965.
On September 7, 1966 the respondent was transferred to the Regular Air Force Reserve with effect from June 16, 1965 to June 15, 1970 i.e. for a period of five years.
On March 13 1968 the reemployment given to the respondent ceased and his services were terminated with effect from April 1, 1968.
A charge sheet was submitted against the respondent for having committed offences under section 5(2) of the Prevention of Corruption Act, 1947, during the period March 29, 1965 to March 16, 1967.
The respondent filed a petition before the Special Judge for dropping the proceedings against him on the ground that the Judge could not take any cognizance of the offences in the absence of any valid sanction of the appointing authority OF the respondent.
The application was rejected on the ground that as the respondent was not a Commissioned Officer in the Air Force at the time when the cognizance was taken, no sanction of the President was necessary.
The respondent moved the High Court in revision, which quashed the proceedings, holding that as the respondent continued to be a public servant within the meaning of section 21 of the Indian Penal Code inasmuch as he remained a member of Air Force Reserve, sanction was necessary before prosecuting the respondent.
In the appeal to this Court, it was contended on behalf of the appellant: (1) that as the respondent had retired from the Indian Air Force and his employment was terminated with effect from April 1, 1968 he ceased to be a public servant and therefore no sanction was necessary, and (2) that reemployment under the provisions of the Regular Air Force Reserve Act would not amount to an employment in the Regular Force of the Service and therefore even though the respondent may have been reemployed he could not be said to hold the status of a public servant.
Dismissing the appeal, ^ HELD: 1.
The prosecution must prove that at the time when cognizance of the offence was taken the respondent ceased to be a public servant.
[700 C] In the instant case, the Special Judge took cognizance on June 19.
1969 at a time when the respondent continued to be a public servant having been reemployed and though his services were terminated only on April 1, 1968 he 698 continued to be a member of the Auxiliary Air Force upto July 15, 1970, that is a long time after cognizance of the offence was taken.
[700 D] section A. Venkataraman vs The State ; State of West Bengal etc.
vs Manmal Bhutoria & Ors.
; referred to.
2(i) The Provisions of the Auxiliary Air Force Act do not expressly contain the nature of the emoluments that the respondent may receive but the general tenor and setting of the Act clearly show that a member of the Auxiliary Force is as much a public servant as an acting member of the Indian Air Force.
[703 G] (ii) Even after the respondent was transferred to the Auxiliary Air Force he retained his character as a public servant because he was required to undergo training and to be called up for service as and when required.
[703 F]
|
Civil Appeal No. 173 of 1969.
From the Judgment and order dated 2 4 1968 of the Allahabad High Court in First Appeal No. 5/62.
G. N. Dikshit and O. P. Rana for the Appellant.
H. K. Puri and Miss Madhu Mulchandani and V. K. Bahal for the Respondent.
The Judgment of A. C. Gupta and V. D. Tulzapurkar, JJ. was delivered by Gupta, J. E. section Venkataramish, J. gave a dissenting opinion.
GUPTA, J.
This appeal by certificate is from a judgment of the Allahabad High Court, Lucknow Bench, dismissing the suit instituted by the appellant, State of Uttar Pradesh, for recovery of a sum of Rs. 20,100 from the respondent.
The facts stated in the plaint on which the claim is based are these.
The annual 'excise auctions ' for the year ]951 52 for Faizabad district were held at Faizabad on February 22, 1951 "under the Excise Rules.
" The respondent offered the highest bid of Rs. 73,000 and Rs. 48,000 respectively as fees for two groups of country liquor shops but as he did not deposit l/6th of the aforesaid sum on conclusion of the sales as required under the Excise Rules, the two groups of shops had to be sold again on March 30, 1951.
The resale fetched respectively Rs. 65,700 and Rs. 35,200 for there two groups of country liquor shops.
According to the State of Uttar Pradesh it suffered a total loss of Rs. 20,100 which is the difference between what the respondent had offered and the sum for which the shops were later sold, and the respondent was liable to compensate 9 91SCI/80 728 the loss.
The suit was decreed by the trial court.
On appeal the High Court dismissed the suit on the view that there was no valid contract which could be enforced by the plaintiff as the requirements of Article 299(1) of the Constitution had not been complied with.
We are also of the view that the suit must be dismissed but for a slightly different reason; in our opinion there was no concluded contract between the parties, nor was there any statutory rule permitting recovery the deficiency on re sale from, the respondent.
The sale proclamation which is said to have contained the conditions of sale was not produced.
The Assistant Excise Commissioner (P.W. 1) in his testimony referred to rule 357 of the Excise Manual.
The relevant part of the rule is as follows: "The following conditions shall apply to all sales under the auction system, and will be inserted at the foot of the sale proclamation if such proclamation is issued by the Excise Commissioner: (1) The officer conducting the sales is not bound to accept the highest or any bid.
In any case when the highest or any bid is not proposed to be accepted, the next highest bid should also be reported to the Excise Commissioner.
(2) The final acceptance of any bid is subject to the sanction of the Excise Commissioner.
(3) Veery person bidding will be held to his bid, whether i it be the highest or not.
(4) . . . (5) A sum equal to one sixth of the annual fees shall be payable immediately on the conclusion of the sales for the day, and the balance by such instalments as are specified in the licence to be granted.
If default be made in the payment of the advance instalment, the shop on farm will be resold, and if the price finally bid at the re sale be less than that bid at the first sale, the difference will be recovered from the defaulter.
" I Section 77 of the U.P. Excise Act, 1910 states: "All rules made and notifications issued under the Act shall be published in the official gazette and shall have effect as if enacted in this Act from the date of such publication or from such other date as may be specified in that behalf." 729 The High Court found that the conditions mentioned in rule 357 had A never been published as required and they did not, therefore, have the force of law.
The High Court held that Part II of the Excise Manual which includes rule 357 contained provisions which where "commonly referred to as rules" but were not really statutory rules and that it was "a sort of book of guidance".
Before us it was claimed on behalf of the appellant that some of the conditions contained in rule 357 had been published in the official gazette, but the learned counsel for the appellant, State of Uttar Pradesh, was not in a position to dispute that at least the last part of the 5th condition providing that in case of default, if the price fetched at the re sale was less than the bid at the first sale the difference would be recovered from the defaulter, had not been published.
That being so it must be held that there was no law under which the respondent could be asked to make amends for the shortfall.
The question that remains to be answered is, even if there was no statutory provision, whether there was a concluded contract between the appellant and the respondent under which the respondent was liable to pay Rs. 20,100 which represents the difference between the highest bid at the first sale and the price fetched at the re sale.
The sale proclamation containing the conditions of sale has not been produced.
Assuming that the different clauses of rule 357 barring the last part of the 5th clause embody the conditions of sale, it is clear from the 2nd clause that in the absence of the final sanction of the Excise Commissioner, the bid cannot be said to have been finally accepted.
lt is not claimed by the appellant that the bid offered by the respondent was sanctioned by the Excise Commissioner.
There was thus no concluded contract between the parties to make the respondent liable for the alleged loss.
The point appears to have been decided by this Court in Union of India and another vs M/s. Bhimsen Walaiti Ram(1).
This was a case of an auction for the sale of licence for a country liquor shop in Delhi for the year 1949 50.
Clause 33 of the conditions of sale provided inter alia : "All final bids will be made subject to the confirmation by the Chief Commissioning who may reject any bid without assigning any reasons".
This condition is similar to clause 2 of rule 357 in the instant case.
Ramaswami J. speaking for the court in Bhimsen 's case observed: "It is, therefore, clear that the contract of sale was not complete till the bid was confirmed by the Chief Commissioner and till such confirmation the person whose bid has been provisionally accepted is entitled to withdraw his bid.
730 When the bid is so withdrawn before the confirmation of the Chief Commissioner the bidder will not be liable for damages on accurate of any breach of contract or for the shortfall on the resale.
An acceptance of an offer may be either absolute or conditional.
If the acceptance is conditional the, offer can be withdrawn at any moment until absolute acceptance has taken place.
" The appeal is dismissed but in the circumstances of the case we make no order as to costs.
VENKATARAMIAH, J. I have had the advantage of perusing the judgment prepared by my learned brother, Gupta, J.
I regret my inability to agree with the conclusion reached by him.
Since some of the facts which are necessary for the purpose of this case have not been set out in the judgment of my learned brother, I have to mention them at this stage.
The excise auctions for the year 1951 52 were held on February 22, 1951 under the provisions of the U.P. Excise Act, 1910 (hereinafter referred to as 'the Act ').
The respondent offered the highest bid of Rs. 73,000 for the chowk group shops and of Rs. 48,000 for Rakabganj group shops.
At that auction, the shops in question were knocked down for the above mentioned amounts in favour of the respondent who affixed his signatures to the respective bid sheets in token of his acceptance and also in the register of Settlement Record.
The respondent, however, did not deposit 1/6th of the above mentioned amounts on the aforesaid date but took time for its deposit later on.
In spite of repeated reminders, the respondent did not pay the advance deposits in both the cases.
The excise authorities resold the excise privileges in question and on such resale, the chowk group shops fetched Rs. 65,700 and the Rakabganj group shops fetched Rs. 35,200.
Consequently, the State Government the appellant herein suffered a loss of Rs. 20,100.
As the respondent did not pay the said amount of Rs. 20,100, a suit was instituted by the appellant against him for recovery thereof before the Civil Judge, Faizabad.
In the course of his written statement, the respondent, after a general denial of the allegations in the plaint, raised among others the following additional pleas: "1.
There was no completed contract between the plaintiff and defendant.
Consequently there had been no breach and no cause of action for the suit.
The entire auction proceedings having been against the rules and instructions of the Government were illegal, void and ineffective.
731 3.
The plaintiff himself having accepted the prayer of the defendant to be relieved from the bid made by him and subsequently re auctioning the shops or the groups of shops to others was now estopped from fixing any civil liability on the defendant.
" Four contentions were urged on behalf of the respondent in the 1 trial court viz. (1) since the offers of the respondent had not been accepted, no valid contracts had come into existence; (2) as the respondent had withdrawn the offers before their acceptance, there could be no enforceable contracts in existence; (3) the contracts, if any, were unenforceable as then did not satisfy the conditions mentioned in Article 299 of the Constitution and (4) that even though the respondent had committed the breach of the agreements he was not liable to pay any damages as the excise authorities had not taken any steps to mitigate the loss by granting the excise licences in question to the second highest bidder in each case.
The trial court after rejecting the contentions of the respondent made a decree for Rs. 20,100 with costs.
Aggrieved by the decree of the trial court, the respondent filed an appeal before the High Court of Allahabad.
In the course of the appeal, the High Court formulated four points for its consideration as can be seen from the following extract from its judgment: "The points now requiring consideration are (1) whether there came into existence a contract, (2) whether by reason of non deposit of one sixth of the bid money there was a breach of the contract on the part of the appellant; (3) whether this breach entitled the respondent to re auction the shops and to recover the loss on re auction from the appellant; and (4) whether the deficit of Rs. 20,100 represents the legal loss recoverable from the appellant." Before the High Court in so far as the first point was concerned, the respondent 's contention was three fold (i) since the bids were not accompanied by l/6th of the bid amount, there were no completed proposals and, therefore, there could be no acceptance thereof so as to bring into existence a contract; (ii) as the Excise Commissioner had not accorded his approval, there was no acceptance of the proposal and (iii) as no agreements in writing had been executed by the person competent to do so under Article 299 of the Constitution, no contracts had come into existence.
The High Court rejected the first two contentions by holding that the failure to deposit l/6th of the bid amount did not make the proposals incomplete and that the absence of the approval or the Excise Commissioner which was in the nature of 732 power vested in him to reverse the acceptance of a bid by the officer holding the auction did not in any way exonerate the respondent from the liability if he was otherwise liable.
It, however, held that since the requirements of Article 299 of the Constitution had not been fulfilled, the respondent was not liable to pay any damages on the ground that he had committed a breach of contract.
On the second point which was formulated by the High Court for its consideration, it observed as follows: "Coming to the second point of controversy, to wit, whether by reasons of non deposit of one sixth of the bid money there was a breach of the contract on the part of the appellant, the answer must be in the affirmative for the simple reason that the deposit of the money was one of the conditions of the contract.
This condition, as has been shown above, follows both from the statutory provision and the admission of the appellant himself that there was this deposit to be made.
" On the third point viz. whether the breach committed by the respondent in each of the two cases entitled the State Government to re auction the shops and to recover the loss on such re auction from him the High Court held that the right to re auction had not been proved to be founded on either any statutory rule or on any express terms of the contract but the said right was the 'natural outcome of the breach of an accepted term of contract ', when the respondent failed to deposit the amounts in terms of the agreement.
It further held that when the respondent had failed to deposit the amounts in terms of the agreement on which the bids were given and accepted the State Government was under an obligation for minimising the loss arising from the breach of the contract to re auction the shops and in case of any loss arising therefrom, to recover the same from the respondent.
On the last point of controversy viz. the quantum of damages, the High Court held that the extent of loss suffered by the State Government on account of breach on the part of the respondent was in the order of Rs. 20,100.
The High Court, however, allowed the appeal and set aside the decree of the trial court on the ground that there were no valid contracts which satisfied the requirements of Article 299 of the Constitution.
Dissatisfied with the judgment of the High Court, the State Government has come up in appeal to this Court.
In the instant case, the only question which arises for consideration is whether the respondent is not liable to pay the damage even though 733 no contract in writing had been executed in accordance with Article A 299 of the Constitution.
It was not the case of the respondent that the excise authorities had no right to re sell the excise licences.
after he had committed default in depositing l/6th of the bid amounts.
His principal pleas were (i) that there were no completed contracts between the State Government and himself and consequently there could be no breach of contract; (ii) that the entire auction proceedings, having been against the rules and instructions of the Government were illegal and void and (iii) that the State Government, having accepted his prayer to be relieved from the bids made by him and subsequently re auctioning the groups of shops to others was estopped from fixing any civil liability on him.
It is seen from what is stated above that no attempt was made; by the respondent to make good his plea regarding the legality of the auction proceedings and the plea of estoppel.
The only plea raised in the written statement which ultimately appealed to the High Court was that the respondent was not liable to pay any damages as there were no completed contracts which satisfied the requirements of Article 299 of the Constitution.
The other plea that the offers made by the respondent had not been approved be the Excise Commissioner was rejected by the High Court by observing that the power of the Excise Commissioner to accord his approval was only a power which had been vested in him to set aside the acceptance of the bid by the officer holding the auction.
Having regard to the pleadings and the evidence in this case, it has to be assumed that the respondent knew that he was under an obligation to deposit with the officer holding the auction l/6th of the bid amounts and that if he committed any default in doing so, the excise licences in question were to be resold and that he would be liable to pay any loss suffered by the State Government on such resale.
The contention that in the absence of the approval of the Excise Commissioner, he would not be liable to make good the loss has Loss to be rejected in view of condition No. 5 which according to the testimony of the Assistant Excise Commissioner (P.W. 1), which cannot be rejected, had been mentioned in the sale proclamation, which read thus: "5.
A sum equal to one sixth of the annual fees shall be payable immediately on the conclusion of the sale for the day, and the balance by such instalments as are specified in the licence to be granted.
If default be made in the payment of the advance instalment, the shop on farm will he resold, and if the price finally bid at the resale be less than that bid at the first sale, the difference will be recovered from the defaulter.
" 734 It is no doubt true that in Union of India & ors.
vs M/s. Bhimsen Walaiti Ram,( ') this Court held that the contract of sale was not complete till the bid was confirmed by the Chief Commissioner and till such confirmation the person whose bid had been provisionally accept ed was entitled to withdraw his bid and that when the bid was so withdrawn before the confirmation of the Chief Commissioner, the bidder was not liable for damages on account of any breach of contract or for the shortfall on the resale.
Those observations were made by this Court in that case in the context of the disapproval of the bid by the Chief Commissioner and this is borne out by the following observations of this Court at page 598: "It is not disputed that the Chief Commissioner had disapproved the bid offered by the respondent.
If the Chief Commissioner had granted sanction under cl. 33 of exhibit D 23 the auction sale in favour of the respondent would have been a completed transaction and he would have been liable for any shortfall on the resale.
As the essential pre requisites of a completed sale are missing in this case there is no liability imposed on the respondent for payment of the deficiency in the price.
" In the case before us there was no disapproval of the Excise Com missioner of the bids offered by the respondent.
On the other hand, the excise authorities requested the respondent to perform his part of the obligation under the sale proclamation.
It is also further been that this Court in the case of M/s. Bhimsen Walaiti Ram (supra) proceeded on the basis that the liability of the bidder could arise only as a consequence of the breach of a completed contract.
No attention appears to have been given in that case to the question whether the act of the offering of the highest bid which was accepted by the officer holding the auction and which resulted in the closure of the auction could by itself become a source of liability when the highest bidder failed to comply with the conditions stipulated in the sale proclamation.
It is necessary to refer briefly to some of the relevant provisions of law governing the disposal of the excise licence by auction system which were in force during the relevant time.
Section 21 of the Act prohibits sale of any intoxicant without a licence by the concerned excise authority.
Section 24 of the Act authorities the grant of exclusive privilege of selling by wholesale or by retail any intoxicant within any specified local area.
The right to sell any excisable article under a licence issued by the excise authority can be acquired only by paying 735 such fees or amount which may be equivalent to the highest bid offered at an auction when an auction is held.
Section 39 of the Act which deals with the recovery of excise revenue reads as follows: "39.
Recovery of excise revenue All excise revenue, including all amounts due to the Government by any person on account of any contract relating to the excise revenue, may be recovered from the person primarily liable to pay the same, or from his surety (if any) as an arrears of land revenue or in the manner provided for the recovery of public demands by any law for the time being in force.
In case of default made by a holder of a licence the Collector may take the grant for which the licence has been given under management at the risk of the defaulter, or may declare the grant forfeited and resell it at the risk and loss of the defaulter.
When a grant is under management under this section, the Collector may recover as excise revenue any moneys due to the defaulter by any lessee or assignee: Provided that no licence for an exclusive privilege granted under section 24 shall be forfeited or re sold without the sanction of the authority granting the licence.
" In the above section, the words "all excise revenue, including all amounts due to the Government by any person on account of any contract relating to the excise revenue, may be recovered from the person primarily liable to pay the same" show that the Government is entitled to recover from a person any amount due by him on account of any contract relating to the excise revenue.
The words "on account of any contract relating to the excise revenue" include within their scope not merely any compensation which a person may be liable to pay on account of the breach of a contract committed by him after the contract is completed but also any other amount that may become flue on account of a contract which would come into existence if all formalities are completed having regard to the scheme and manner in which the excise privilege is disposed of by the excise authorities.
The relevant rules governing the conduct of excise sales are found in a notification bearing No. B. O. No. 423/V 284 B dated September 26, 1910.
The rules require the publication of a sale proclamation announcing the dates of sale and the place where it will be held.
Before the sales for the day commence, the general conditions governing the sale which are set out in paragraph 373 of the U.P. Excise Manual (Vol.
I) shall be read out and explained to all present so that the competitors may clearly understand the conditions on which they bid.
The general conditions governing retail vend and the special 736 conditions governing each class of licence shall also be read out in public before the sales to which they apply.
Information should be freely given on all matters affecting the value of licence about to be sold.
The officer conducting the sales shall record the name of each person making a bid and the amount of bid.
Signature of the highest bidder and the next two lower bidders shall also be taken on the bid sheet, whether such persons have been accepted as auction purchasers or not.
At the time of the sale the person accepted as the auction purchaser shall be required to sign his name or affix his mark against the relevant entry of the licence in the Record G 14, it being explained at the time that the deposit paid in advance will be returned in the event of the licence being subsequently refused.
The final bid accepted shall invariably be recorded with his own hand by the officer conducting the sales.
The treasurer of the district, or one of his recognised assistants, shall be required to attend the sales to receive the advance fees paid by bidders provisionally accepted.
The amount that has to be paid as advance deposit is a sum equivalent to l/6th of the annual fees which shall be payable immediately on the conclusion of the sales.
for the day, and the balance by such instalments as are specified in the licence to be granted.
If default be made in the payment of the advance instalments, the shop or farm will be resold.
If the price finally offered at the resale be less than that at the first sale, the difference will be recovered from the defaulter through a civil suit If any person whose bid has been accepted at auction fails to make the advance deposit or if he withdraws from his bid, the excise authority may sell the contract immediately or on any subsequent date fixed by him.
It is not the case of the respondent in the instant case that he was not aware of the above conditions, which had been set out in the sale proclamation and also which must have been read out at the commencement of the sale, as required by the rules for the information of the intending purchasers.
The question for consideration is whether having offered the highest bid, it was open to the respondent to avoid the liability arising from his act of offering the highest bid merely because the Excise Commissioner who had the power to refuse to sanction the sale had not sanctioned it.
It is no doubt true that one of the conditions of the auction was that the acceptance of any bid by the officer conducting the sale was subject to the sanction of the Excise Commissioner.
It, however, did not mean that the acceptance of the bid would be complete only after the sanction was accorded by the Excise Commissioner because of the other conditions which read as under: "1.
The officer conducting the sales is not bound to accept the highest or any bid.
737 2.
The final acceptance of any bid is subject to the section of the Excise Commissioner.
" A reading of the two clauses referred to above shows that the officer holding the sale was empowered to accept the bid and that his acceptance was only subject to the sanction of the Excise Commissioner.
They meant that the power which had been reserved to the Excise Commissioner only enabled him to set aside the acceptance already made by the officer conducting the sale.
If it was not so set aside by him, the acceptance of the officer conducting the sale would be effective.
As mentioned earlier, in this case, the Excise Commissioner had not refused to sanction the acceptance of the highest bids offered by the respondent.
The liability of the highest bidder to deposit a sum equivalent to l/6th of the bid offered by him arises as a consequence of his offering the highest bid with the knowledge of the conditions referred to above immediately on the conclusion of the sale for the day in his favour and if he does not make such deposit, the officer holding the sale is entitled to put up the excise privilege for resale either immediately or on a subsequent day with liberty to recover from the defaulter any loss that may be occasioned to the Government on such resale.
In a case like this, no question of waiting till the contract either being completed on a formal document coming into existence in accordance with Article 299 of the Constitution can arise.
The completion of the contract or the execution of a contract in accordance with Article 299 of the Constitution arises only after the highest bidder has deposited l/6th of the bid offered by him on the conclusion of the sale which is a condition precedent for the completion of the contract or for execution of a formal document in accordance with Article 29 of the Constitution.
It is not, therefore, correct to determine the liability of a defaulting bidder on the basis of a completed contract or a formal document to be executed under Article 299.
If the contention urged on behalf of the respondent is accepted, it will make every public auction held by a Government a mockery.
A man without a pie in his pocket may offer the highest bid at an auction thus scaring away other bona fide bidders who have assembled at the auction to offer their bids and then claim that he is not liable to pay any damages only because a completed contract or an agreement in writing in accordance with Article 299 of the Constitution has not come into existence.
We should remember that, in the interest of public revenue excise privileges, privileges of cutting and removing timber from Government forests, occupancy rights over Government lands and building sites etc.
are disposed of in public auction by the Central Government, State Governments, statutory boards and local authorities and in almost every such auction, there is invariably a condition that the acceptance 738 of the highest bid at the auction is subject to the sanction of some superior officer or a statutory authority or the appropriate Government.
If the contention urged on behalf of the respondent is accepted then a person who offers the highest bid in any such auction can always absolve himself of all his liability flowing from his act of offering the highest bid by writing a letter immediately after the conclusion of sale to the concerned authority expressing his intention to withdraw from the bid or by resiling from it in any other manner.
The result will be that on the one hand the other bona fide bidders who have come to offer the bids would not be entitled to claim the privilege or property that is put up for sale and on the other the defaulting bidder would also be not liable to carry out his obligation flowing from his act or offering the highest bid.
If the liability of such a bidder is to be founded only on the basis of a completed contract then in the case of auctions held by or on behalf of the Central or State Governments, no liability can arise even if such sanction is accorded, unless it is followed up by a formal document executed under Article 299 of the Constitution which alone amounts to a completed contract where Government is a party.
Judged from the foregoing, I am of the view that the acceptance of the conclusion reached by my learned brother would lead to enormous public prejudice and instead of advancing the cause of justice would hamper it.
This case is an illustration of what prejudice is likely to be caused to the public revenue when default is committed by the highest bidder.
The documents produced before the Court in the present case show that the second highest bid in the case of chowk group shops offered by some other bidder was Rs. 72,500 and in the case of Rakabganj group shops was Rs. 47,000.
If the respondent had not offered his bids Government could have realised Rs. 1,19,50 from both the groups i.e. Only Rs. 1,500 less than what the respondent offered.
By the intervention of the respondent 's bids and the default committed by him, the.
Government could realise on resale only Rs. 1,00,900 thus resulting in a loss of Rs. 20,100.
Can it be said that in such a case where legal injury is sustained, there is no remedy available to the State Government ? In a somewhat similar but not identical situation, this Court in A. Damodaran & Anr.
vs State of Kerala Ors was called upon to decide whether the highest bidder at an excise auction was liable to be proceeded with for recovery of excise dues in the absence of an agreement executed in .
accordance with Article 299.
In that case, the appellants offered the highest bid at the auction sales held in respect of some toddy shops.
The conditions of the sales, notified in pursu 739 ance of the statutory provisions were: (1) that it was incumbent upon the bidder to pay immediately 10% of the amount due, (.2) that the successful bidder had to deposit 30% of the amount payable on demand by the Assistant Commissioner and to execute agreements before getting the necessary licences and (3) that if The contract could not be executed, the whole amount was to be forfeited and the shop itself was to be resold.
The appellants deposited the necessary amount on demand and were allowed to start business even before agreements were executed or licences were issued.
But the appellants failed to pay the balance due to the State.
The amounts were sought to be recovered under section 28 of the Kerala Abkari Act (Act No. l of 1967) which was more or less similar to section 39 of the Act.
The High Court of Kerala held that the amounts were recoverable from the appellants.
In the appeal before this Court, the appellants contended that as no agreement was executed between the appellants and the Government in the manner prescribed by Article 299 of the Constitution, they had not become the 'grantees ' of any privilege and hence were not liable to pay the amounts sought to be recovered.
Dismissing The appeal, the Court held that the absence of an agreement executed in accordance with the provisions of Article 299 of the Constitution could not be a bar for recovering the excise dues in view of section 28 of the Kerala Act.
The Court held that the liability was one which arose under the statute and therefore was enforceable.
In taking that view, this Court observed at pages 782 783 thus: "The appellants submit that they had not become "grantee" of any privilege without the execution of con tracts complying with the requirements of Article 299 of the Constitution.
The learned Judge of the Kerala High Court relied on Madhavan vs Assistant Excise Commissioner, Palghat (I.L.R. (1969) 2 Kerala 71), affirmed by a Division Bench in Damodaran vs State of Kerala (1969) Kerala Law Times 587.
It appears that, although the Division Bench did 'not specifically consider whether a bidder at an auction of the kind before us was the "grantee" of a privilege within the meaning of section 26 of the Act, yet, it held that the liability to satisfy the dues arising out of a bid was enforce able under section 28 of the Act quite apart from any contractual liability.
Reference was also made, in this connection, to the decision of this Court in Union of India vs A. L. Ralia Ram (A.I.R. 1963 S.C. 1685), for contending that the absence of formal contract is not fatal in all cases so as to make the whole transaction null and void ab initio.
740 Statutory duties and liabilities may be enforced in accordance with statutory provisions.
Equitable obligation may also arise and been forced by decrees of Courts quite apart from the requirements of article 299 of the Constitution.
Mulamchand vs State of Madhya Pradesh affords an instance where on a claim for compensation or restitution under section 70 of the Contract Act, this Court relied upon the principle stated in Nelson vs Harbolt (1948) 1 K.B. 30 as follows at p. 222: "It is no longer appropriate to draw a distinction between law and equity.
Principles have not to be stated in the light of their combined effect.
Nor is it necessary to canvass the. niceties of the old forms of action.
Remedies now depend on the substance of the right, not on whether they can be fitted into a particular framework.
The right here is not peculiar to equity or contract or tort, but falls naturally within the important category of cases where the Court orders restitution if the justice of the case so requires.
" In the case before us, we are concerned with the legality of proceedings under section 28 quoted above of the Act.
It is evident that these proceedings can be taken in respect of "all amounts due to the Government by any grantee of a privilege or by any farmer under this Act or by any person an account of any contract relating to the Abkari Revenue.
It is clear that dues may also be "recovered from the person primarily liable to pay the same or from his surety (if any) ".
It is not a condition precedent to recovery of an amount due and recoverable that it should be due under a formally drawn up and executed contract." In reaching the above conclusion, this Court approved the observation made by Mathew, J. in Madhavan vs Assistant Excise Commissioner, Palghat which ran as follows: "It was contended on behalf of the petitioners in some of these cases that no agreements were executed by them, and therefore, the Government are not entitled to recover any amount by way of rental.
Reliance was placed upon the decisions of the Supreme Court in H. P. Chowdhry vs State of M.P. (AIR and Mulamchand vs State of M.P. (1969(II) S.C.W.R. 397), for the proposition that unless there is an agreement executed in accordance 741 with the provisions of Article 299 of the Constitution, the petitioners in the case where no agreements have been executed, would not be liable to pay rental.
The argument was that the liability to pay rental arises only out of the agreement, and if there is no agreement, then there is no liability to be enforced As I have indicated the liability to pay the renal arises not only by virtue of the agreement but also by the provisions of section 28 of the Act.
The decision of the Supreme Court in H. P. Chowdhry vs State of M.P. would make it clear that if there are provisions in the Act, the liability to pay the rental can be enforced.
I think that even if no agreement has been executed, there was the liability under section 28 of the Act, and that the liability would be enforced under the provisions of the Revenue Recovery Act.
(See Sections 6 and 62 of the T.C. Act) ".
Chandrashekhar, J. (as he then was) has also taken more or less the same view in State of Mysore vs Dasappa Naidu.
In that case, the plaintiff who was a licensee for sale of ganja had executed a counterpart agreement as required by section 25 of the Mysore Excise Act but no formal deed was executed by both the plaintiff and the State Government as required by Article 299 of the Constitution.
When the period of contract expired, rental for four months was in arrears.
When the Government sought to bring the licensee 's properties to sale for recovery of the arrears, the plaintiff executed a mortgage in favour of the State to secure payment of the arrears undertaking to pay the arrears in monthly instalments.
As he defaulted in payment of the instalments, the Assistant Commissioner issued a sale proclamation for sale of the mortgaged properties.
In the suit he questioned the said sale proceeding on the ground that the counterpart of the agreement and the mortgage deed executed by him were void for nonfulfillment of the requirements of Article ', 299 of the Constitution.
The learned Judge held that the absence of a document conforming to Article 299 was not a bar in view of the statutory provisions contained in the Mysore Excise Act.
The Rajanagaram Village Co operative Society by its Secretary, .
Parthasarathi Pillai vs P. Veerasami Mudaly was a reverse case and the facts involved in it were these: The defendant Co operative Society put up a property belonging to it for sale at a public auction.
H 742 The auction was held by a sale officer.
One of the conditions of the auction sale was that the sale would be knocked down in favour of the highest bidder subject to the approval of the defendant Co operative Society and the Chittoor District Bank.
The plaintiff was the highest bidder at the auction and the sale was knocked down in his favour by the sale officer.
He deposited on the date of the sale with the sale officer the amount which he had to deposit under the conditions of the sale and also deposited the balance with t the defendant within the stipulated period.
The Chittoor District Bank took up the matter for consideration at its meeting held on a date subsequent to the date of the sale and approved the sale.
This resolution was, however, not communicated to the plaintiff and no sale deed was executed in favour of him.
The plaintiff by his notice called upon the defendant to execute a conveyance in his favour.
There upon the Bank cancelled its previous resolution and directed a re sale of the property.
The plaintiff thereafter instituted a suit for enforcing the sale on the basis that there was a concluded contract in his favour which was denied by the defendant in the written statement.
The main contention urged on behalf of the defendant was that the contract did not become final and complete as the approval of the Chittoor District Bank was not communicated to the plaintiff.
Under section 4 of the Contract Act, it was claimed, that even the approval should have been communicated like acceptance as according to the contention of the defendant that constituted a final acceptance of the contract.
The trial court accepted the contention of the defendant and dismissed the suit.
The first appellate court reversed the decision of the trial court and granted a decree for specific performance of the contract in favour of the plaintiff.
While affirming the Judgment of the first appellate court, the High Court observed in the above decision as follows: "The defendant appointed a sale officer who, under the terms of E. D. I was authorised to knock down in favour ' of the highest bidder the property subject of course to the approval of Mahasabha and the Chittoor District Central Bank.
No point was raised in the courts below, and indeed it could not be raised before me, that this sale officer had no authority to accept any bid on behalf of the defendant.
Further there was also no plea any where that there was no approval of the sale by the Mahasabha, that is the defendant.
The defendant should have known if there was no such approval and should have put that matter in the forefront of the case if really there is any substance in that contention 743 in the second appeal.
The matter, therefore, for consideration is whether the sale officer, in knocking down the bid subject to the approval of the Bank, had or had not accepted the offer of the plaintiff subject to the condition of approval.
Ever since the well known decision of payne vs Cave; , 100 E.R. 502, it has been established that the position of an auctioneer is that of an agent of the vendor and that until the bid is knocked down, there is no concluded contract in favour of the bidder and the bidder was at liberty to withdraw his offer before it was accepted.
To a similar effect is also the decision Cook vs oxley; , If there.
no further condition of an approval or confirmation, ordinarily if the bid is knocked down, the acceptance is communicated by the acceptance of the bid in the presence of the bidder and no further communication would be necessary.
If, however, the acceptance was conditional, the condition being that it is subject to the approval or confirmation by some other person, what is the position ? The acceptance in such circumstances, in my opinion, is conditional acceptance and that has to be communicated.
Nobody suggests that in order to make the contract enforceable, it is not necessary to have the approval of the person indicated in the conditions of the auction sale.
The question is whether the approval also in such circumstances, should be communicated to the bidder in order to conclude the contract.
In my opinion, the acceptance contemplated may be absolute or may be conditional and when once that conditional acceptance is communicated, there is no need or necessity for a further communication of the fulfillment of the condition when the acceptance is a conditional acceptance.
The communication of the acceptance twice is not needed".
The correctness of this decision is doubted elsewhere.
It is not necessary in this case to decide whether the view expressed by the High Court of Madras in the above case is correct or not for the situation in the instant case is anterior to the situation which obtained in the said case.
The officer who held the same in the present case had the power to accept the bids though it was subject to sanction by the Excise Commissioner.
The respondent who offered the bids after conclusion of the sale failed to make the initial deposit and thereby drove the Department to hold the resale.
It was high conduct which ultimately resulted in the loss suffered by the Department.
10 91SCI/80 744 The decision of this Court in K. P. Chowdhary vs State of Madhya Pradesh & Ors is not of much assistance to the respondent in this case, since in that case the officer who held the sale was not competent to accept the bids of the appellant therein as the bids offered were higher than what he could accept.
The appellant therein resiled from the offer made by him by raising a dispute as to the marking of the trees even before the Chief Conservator of Forests who was competent to accept the bids could accept them.
This Court no doubt upheld the plea of the appellant therein as there was no acceptance of the bid by the competent officer.
This case is one falling in the category of cases where the sale officer has no power to accept the bid and not one falling under the category of cases involving a conditional acceptance as observed in the case of the Rajanagaram Village Co operative Society by its Secretary, Parthasarati Pillai (supra).
It is not the case of the respondent in this appeal that the officer who held the excise auction was not competent to accept the bids.
It is further seen that the question whether the appellant in the above case was liable in any other manner also was not considered in that decision.
Hence no reliance can be placed on the above decision.
The respondent by his own conduct in not depositing the 1/6th of the bids offered by him made it impassible, for the excise authorities to conclude the contract.
The question may have been different if the respondent had done all that he had to do under the conditions of the auction but the excise authorities had not intimated him that he could exploit the excise privileges in accordance with law.
The documents produced before the Court show that on February 24, 1951, the Deputy Commissioner, Faizabad wrote a letter (Exh.
S) 11 ' calling upon the respondent to make the initial deposit which he had to make at the conclusion of the sale at the fall of the hammer on the date of the sale within three days of the receipt of that letter and intimating that in the absence of compliance with the said demand, the shops would be re auctioned and the amount of deficiency resulting on such re auction would be recovered from him.
That letter was received by the respondent on March 8, 1951.
As the respondent did not comply with the demand, the excise authority concerned decided to conduct a resale of the excise privileges on March 21, 1951, and also to prosecute the respondent for an offence punishable under section 185 of the Indian Penal Code.
Thereafter the respondent gave a representation (Exh. 7) on March 30, 1951 stating that I any action other than prosecuting him may be taken.
He stated in that representation that his sole object in offering the bids was to 745 help the Government and to help himself but when he calculated whether he would make any profit he felt that he would not do so.
According to the said representation, that was the reason for not depositing 1/6th of the bid amount at the fall of the hammer.
He, however, did not question the authority of the excise authorities to put up the excise privileges for resale and to claim the loss occasioned by such resale from him.
In these circumstances I am of the view that it is not possible to hold that the respondent was not in law liable for the claim made by the State Government even though no contracts were formally entered into between the respondent and the State Government.
The liability of the respondent in the instant case arises under the statute and it also arises as the result of a civil wrong or a tort committed by him, in offering the highest bid with open eyes and in not fulfilling the obligations arising therefrom.
The latter source of liability in this case may appear to be novel but if justice requires, the Court should not hesitate to impose it on the person who has committed the wrong and secure justice for the innocent injured party.
The following observation of Denning L.J. (as he then was) in Candler vs Crane, Chrismas & Co.(1) at page 178, though in minority, are apposite: "This argument about the novelty of the action does not appeal to me in the least.
It has been put forward in all the great cases which have been milestones of progress in our law, and it has always, or nearly always, been rejected.
If you read the great cases of Ashby vs White ; , Pasley vs Freeman (1789) 3 Term Rep. 51 and Donoghue vs Stevenson (1932) A.C. 562, you will find that in each of them the judges were divided in opinion.
On the one side there were the timorous souls who were fearful of allowing a new cause of action.
On the other side, there were the bold spirits who were ready to allow it if justice so required.
It was fortunate for the common law that the progressive view prevailed.
" Considering the facts and circumstances of the instant case, I am of the view that the respondent should be made liable for the sum claimed in the suit and the decree made by the trial court should be restored.
ORDER In view of the majority judgment, the appeal is dismissed with no order as to costs.
| IN-Abs | The respondent who was a bidder at the annual excise auction offered the highest bid for two groups of country liquor shops, and which were knocked down in his favour.
He affixed his signature to the respective bid sheets in token of his acceptance and also in the register of Settlement Record.
He, however, did not deposit l/6th of the bid amounts on conclusion of the sales as required under the Excise Rules but took time for deposit.
In spite of repeated reminders he did not pay the advance deposits.
The Excise Authorities resold the excise privileges in respect of the two groups of shops and in the re auction the shops fetched a lesser amount than what the respondent had offered.
The State Government, appellant directed the respondent to make good the loss.
Since he failed, a suit for recovery was instituted by the appellant.
The suit was contested, the respondent pleading (1) that there were no completed contracts between the State Government and himself and consequently there could be no breach of contracts; (2) that the entire auction proceedings, having been against the rules and instructions of the Government were illegal and void; (3) the contracts, if any, were unenforceable as they did not satisfy the conditions mentioned in Article 299 of the Constitution; and (4) that the State Government having accepted his prayer to be relieved from the bids made by him and subsequently re auctioning the groups of shops to others was estopped from fixing any civil liability on him.
The trial court decreed the suit.
On appeal, the High Court dismissed the suit on the view that there was no valid contract which could be enforced by the appellant as the requirements of Article 299(1) of the Constitution had not been complied with.
It, however, held that the failure to deposit 1/6 of the bid amount did not make the proposal incomplete and that the absence of the approval of the Excise Commissioner which was in the nature of a power vested in him to reverse the acceptance of a bid made by the officer holding the auction did not in any way exonerate the respondent from the liability if he was otherwise liable.
In the appeal to this Court on the question whether the respondent would not be liable to make good the loss even though no contract in writing had been executed in accordance with Article 299 of the Constitution.
725 ^ HELD :[Per Gupta and Tulzapurkar, JJ.] 1.
The suit must be dismissed as there was no concluded contract between the parties, nor was there any statutory rule permitting recovery of the deficiency on re sale from the respondent.
[728 B] 2.
The last part of 5th clause to Rule 357 providing that in case of default, if the price fetched at the re sale was less tan the bid at the first sale the defaulter had not been published.
[729 C] 3.
Assuming that different clauses of Rule 357 barring the last part of the 5th clause embody the condition of sale, it is clear from the 2nd clause that in the absence of the final sanction of the Excise Commissioner the bid cannot be said to have been finally accepted.
In the instant case it is not claimed that the bid offered by the respondent was sanctioned by the Excise Commissioner.
[729 E] There was thus no concluded contract between the parties to make the respondent liable for the alleged loss.
[729 E] Union of India and others vs M/s. Bhimsen Walaiti Ram ; referred to.
(Per Venkataramiah J. dissenting) 1.
The respondent should be made liable for the sum claimed in the suit and the decree made by the trial court should be restored.
[745 G] 2.
The respondent was liable for the sum claimed made by the State Government even though no contracts were formally entered into between the respondent and the State Government,[745 B] In the instant case on the pleading and evidence it has to be assumed that the respondent knew that he was under an obligation to deposit with the officer holding the auction 1/6th of the bid amount and that if he committed any default in doing so, the excise licences in question were to be resold and that he would be liable to pay any loss suffered by the Sate Government on such re sale.
[733 E] 3.
Condition No. 5 in the sale proclamation which provides that if the price at the re sale be less than that at the first sale, the difference will be recovered from the defaulter negatives the contention of the respondent that in the absence of the approval of the Excise Commissioner, he would bot be liable to make good the loss.
[73 H, F] 4.
There was no disapproval of the Excise Commissioner of the bids offered by the respondent.
On the other hand, the excise authorities requested the respondent to perform his part of the obligation under the sale proclamation.
[734 E] 5.
In Union of India & Ors.
vs M/s. Bhimsen Walaiti Ram, ; , this Court proceeded on the basis that the liability of the bidder could arise only as a consequence of the breach of a completed contract.
No attention appears to have been given in the case to the question whether the act of the offering of the highest bid which was accepted by the officer holding the auction and which resulted in the closure of the auction could by itself become a source of liability when the highest bidder failed to comply with the conditions stipulated in the sale proclamation.
In section 39, the words "all excise revenue, including all amounts due to the Government by any person on account of any contract relating to the excise revenue, may be recovered from the persons primarily liable to pay the same" by him on account of any contract relating to the excise revenue.
The words "on account relating to the excise revenue" include within their scope not merely any compensation which a person may be liable to pay on account of the breach of contract committed by him after the contract is completed but also any other amount that may become due on account of a contract which would come into existence if all the formalities are completed, having regard to the scheme and manner in which the excise privilege is disposed of by the excise authorities.
[735 E F] 7.
A reading of clauses 1 and 2 of Rule 357 of the Excise Manula show that the officer holding the sale was empowered to accept the bid and that his acceptance was only subject to the sanction of the Excise Commissioner.
They mean that the power which had been reserved to the Excise Commissioner, only enabled him to set aside the acceptance already made by the officer conducting the sale.
If it was not set aside by him, the acceptance of the officer conducting the sale would be effective.
[737 B] In the instant case the Excise Commissioner had not refused to sanction the acceptance of the highest bids offered by the respondent.
The liability of the highest bidder to deposit a sum equivalent to 1/6th of the bid offered by him arises as a consequence of his offering the highest bed with the knowledge of the conditions of the auction, immediately on the conclusion of the sale for the day in his favour and if he does not make such deposit, the officer holding the same is entitled to put the excise privilege for re sale either immediately of on a subsequent day with liberty to recover from the defaulter any loss that may be occasioned to the Government by such re sale.
[737 C D] 8.
The completion of the contract or the execution of a contract in accordance with Article 299 of the Constitution arises only after the highest bidder has deposited 1/6th of the bid offered by him on the conclusion of the sale which is a condition precedent for the completion of the contract or for execution of a formal document in accordance with Article 299 of the Constitution.
It is not, therefore, correct to determine the liability of a defaulting bidder on the basis of a completed contract or a formal document to be executed under Article 299.
[737 E F] 9.
In the interest of public revenuer, excise privileges, privileges of cutting and removing timber from Government forests, occupancy right over Government lands and building sites etc.
are disposed of in public auction by the Central Government, State Governments, statutory boards and local authorities and in almost every such auction, there is invariably boards a condition that the acceptance of the highest bid at the auction is subject to the sanction of some superior officer or statutory or the appropriate Government.
If the liability of such a bidder is to be funded only on the basis of a completed contract them in then in the case of auctions held by or on behalf of the Central or State Governments, no liability can arise even it such sanction is accorded, unless it is followed up by a formal document executed under Article 299 of the Constitution which alone amounts to a completed contract where Government is a party.
[737 H 738 A, 738 D] 727 In the instant case the respondent by his own conduct in not depositing 1/6th A of the bids offered by him made it impossible for the excise authorities to conclude the contract. 'the question may have been different if the respondent had done all that he had to do under the condition of the auction but the excise authorities had not intimated him that he could exploit the excise privileges in accordance with law.
[744 E] 10.
The liability of the respondent arises under the statute and it also arises as the result of a civil wrong or a tort committed by him, in offering the highest bid with open eyes and in not fulfilling the obligations arising therefrom.
The latter source of liability may appear to be novel but if justice requires, the Court should not hesitate to impose it on the person who has committed the wrong to secure justice for the innocent injured party.
[745 Cl A. Damodaran & Anr.
vs State of Kerala & ors.
; ; Candlar vs Crane Christmas & Co. [1951] 2 K.B. 164 at p. 178 referred to.
K. P. Chowdhary vs Stare of Madhya Pradesh & Ors. ; distinguished.
|
thority has made a huge profit by levy of surcharge is without merits.
On the contrary it appears that the overall working of the Authority is deficit ridden.
[723 A B] & ORIGINAL JURISDICTION: Writ Petitions Nos.4660/78 & 562/79 (Under Article 32 of the Constitution).
Y. section Chitale and R. B. Datar for the Petitioner in W.P. No. 4660/78.
L. M. Singhvi, Sardar Bahadur Sahariya, Vishnu Bahadur Sahariya and L. K. Pandey for the Respondent No. 1 in both the Writ Petitions.
F. section Nariman and B. Datta and K. K. Manchanda for the Petitioner in W.P. No. 562/79.
The Judgment of the Court was delivered by DESAI, J.
Allottees of flats, constructed by the Delhi Development Authority ( 'Authority ' for short), located at Rajouri, Garden, 708 Prasad Nagar and Lawrence Road comprised in Middle Income Group scheme, question the decision of first respondent (Delhi Development Authority) to collect surcharge as part of the sale price of each flat from each of them as unauthorized and discriminatory i character, in there two petitions under Article 32 of tho Constitution.
Both the petitions raise identical contentions and i was said that Writ Petition No. 562 of 1979 is more comprehensive in character and, therefore, the facts alleged therein may be taken as representative character.
They may be briefly stated.
Delhi Development Authority was set up under the Delhi Development Act, 1957.
The Act was enacted to provide for the development of Delhi according to plan and for matters ancillary thereto and for carrying out the objects underlying the Act, the Authority has prepared Master and Zonal development plans for Delhi.
With a view to easing the acute housing problems in the capital city the Authority undertakes construction of dwelling units for people belonging to different income groups styled as Middle Income Group ( 'MIG ' for short), Low Income Group ( 'LIG ' for short), Janta and Community Personnel Service ( 'CPS ' for short).
In 1971 the Authority commenced registration of intending applicants desirous of having n dwelling unit in different income groups.
Some of the petitioners got themselves registered with the authority in accordance with the terms and conditions laid down by it and made the initial deposits as required by the terms and conditions.
Petitioners had applied and got themselves registered for allotment of flats in MIG scheme situated at Lawrence Road.
As the number of available flats in this scheme were less than the number of allottees registered, lots were drawn and the petitioners were informed that they have been allotted flats and that each of them should deposit the amount mentioned in the letter of allotment.
It appears that the petitioners paid the amount they were called upon to pay and a flat was allotted to each of them and they have entered into possession.
Petitioners now contend that the Authority being a statutory body formed with an object of working on 'no profit no loss ' basis and having prescribed a formula for working out the cost price of flats has levied and collected a surcharge from each of the petitioner.
According to the petitioners the cost price worked out in accordance with the formula prescribed by the Authority cost of each flat would be between Rs. 51,800 and Rs. 55,600 depending upon the area, extra balcony etc.
However, each one of them had to pay between Rs. 56,000 to Rs. 60,000 and that according to the petitioners a surcharge varying from Rs. 3,400 to Rs. 6,000 for a flat has been illegally and unlawfully collected by way of premium or profit.
It is further alleged that the 709 Authority has not levied and collected such surcharge from other A allottees of flats in some other MIG Schemes and that this action of levying and collecting surcharge is violative of article 14 inasmuch as persons belonging to the same class, namely, allottees of flats in MIG Scheme have been unequally treated.
It is also alleged that there was no valid or understandable justification of levying and collecting surcharge as price of flats comprised in MIG Schemes, between 1976 and 1977, and that from May 10, 1978, this unauthorised surcharge has been abolished.
Petitioners also contend that the assertion of the Authority that this surcharge was levied and collected with a view to financing housing projects for lower income groups, Janta and CPS dwelling units so as to provide these weaker sections of the society, houses at a price lower than cost price with a view to making them affordable by such members of the weaker sections of the society, is belied by facts undisputed and that the whole attempt of the Authority, in violation of its avowed policy, was to make profit by levying such illegal surcharge.
The petitioners, therefore, prayed for issue of a writ or order or direction declaring the levy of surcharge as illegal and unconstitutional and for a direction for refund thereof together with the interest at the rate of 12% per annum from the date of levy and collection till the date of refund.
In the cognate petition the petitioners are allottees of flats situated at Prasad Nagar and Rajouri Garden under MIG scheme and they complain that in their case surcharge varies from Rs. 19,200 to 22,600.
Respondents to the petition are Delhi Development Authority, No. 1 and Chairman and Vice Chairman of the Authoring, Nos. 2 and 3 respectively.
In Writ Petition No. 4660/78 the Authority is respondent 1 and Union of India, respondent 2.
Petitions were mainly contested by and on behalf of the Authority.
The Delhi Development Act, 1957 ( 'Act ' for short), was enacted as its long title shows with the a view to providing for the development of Delhi according to the plan and for arresting haphazard growth and for matters ancillary thereto.
It envisages the setting up of an Authority to be styled as Delhi Development Authority which would be a body corporate by the name aforesaid having perpetual succession and a common seal with power 'o acquire, hold and dispose of property, both movable and immovable, and to contract and shall by the said name, sue and be sued.
The composition of the Authority is set out in sub section (iii) of section 3.
Amongst others, Administrator of Union Territory of Delhi would be an ex officio Chairman and a Vice Chairman to be appointed by the Central Government.
The 710 Vice Chairman may be either a whole time or part time officer as the Central Government may think fit.
Section S contemplates the constitution of an Advisory Council for the purpose of advising, the Authority on the preparation of the master plan and on such matters relating to the planning of development or arising out of or in connection with the administration of the Act.
Section 5A which was added by amending Act 56 of 1963 confers power on the Authority to constitute as many committees consisting wholly of members or wholly of other persons or partly of members and partly of other persons and for such purpose or purposes as it may think fit.
Chapter Ill A which was inserted by the Amending Act of 1963 confers power for modification of the master plain once prepared.
Chapter IV provides for development of lands.
Chapter V confers power on the Central Government to acquire land for the purposes of development or for any other purpose under the Act under the provisions to the Land Acquisition Act, 1894, and further authorises the Central Government to transfer the land so acquired to he Authority.
Chapter VI provides for finances and audit of the accounts of the Authority Chapter VII provides for supplemental and miscellaneous provisions.
Section 52 confers power on the Authority to delegate any power exercisable by it under the Act, except the power to make regulations, on such officer or local authority or committee constitued under section 5A as may be mentioned, by a notification to be published in the Official Gazette in such cases and subject to such conditions, if any, as may be specified therein.
One more section of which notice should be taken is section 57 which confers power on the Authority with the previous approval of the Central Government by notification in the official Gazette to make regulations consistent; with the Act and the rules made thereunder to carry out the purposes of this Act.
Sub section provides that until the Authority is established under the Act any regulation which may be made under sub section may be made by the Central Government and any regulation so made may be altered or rescinded by the Authority in exercise of its powers under sub section
Section 58 makes it obligatory to lay every rule and regulation made under this Act before each House of Parliament in session for a period of 30 days and subject to any alteration or modification therein the rule or regulation shall after expiry of the prescribed period mentioned have effect only in such modified form or be of no effect as the case may be, so however that any such modification or annulment shall be without prejudice to the validity of anything previously done under the rule or regulation.
Petitioners belong to MIG, each of whom registered himself as an intending applicant for a flat in MIG scheme and each of whom has 711 been allotted a flat either in Rajouri Garden, Prasad Nagar or Lawrence Road.
Number of persons desirous of having a flat registered with the Authority far outnumbered the available flats with the result that lots had to be drawn and the lucky ones got a letter of allotment to pay the price set out in the brochure in respect of each scheme and to obtain a flat.
Each petitioner had paid the price and has entered into possession of the allotted flat.
All the petitioners now contend that the Authority has levied and collected a surcharge as part o: purchase price of flat arbitrarily and without the authority of law and has collected the same from them in violation of its object of functioning on 'no profit no loss ' basis and thereby made a huge profit.
They further contend that they have been subjected to discriminatory treatment in contravention of article 14 of the Constitution inasmuch as no surcharge has been collected from allottees of flats in MIG schemes prior to November 1976 and subsequent to January 1977 except these three schemes and one Wazirpur MIG scheme.
Further, no other MIG scheme flats have been subjected to such unauthorised levy of surcharge.
It is pointed out that the levy of surcharge has been scrapped in 1978.
The petitioners contend that levy of surcharge has no nexus to the object for which the Authority was set up namely, providing housing accommodation at reasonable price by the Authority whose declared policy is 'no profit no loss '.
It was said on behalf of the petitioners that even if the Authority was set up for providing housing accommodation to the people in different income groups (keeping in view their financial capacity/affordability) yet a statutory body like the Authority operating on 'no profit no, loss ' basis must have a scientifically prescribed formula for working out its price structure and that must be uniformly applied to all those who apply for flats and to whom they are allotted and such a statutory Authority cannot discriminate in working out the disposal price of the flats by including surcharge in respect of some MIG schemes within a certain specified period, a surcharge not authorised by law and not sanctioned by the Authority as a component of price and unknown to pricing of flats, while others similarly situated and similarly circumstanced and belonging to the same income group enjoyed the benefit cf getting flats at cost price and, therefore, petitioners have been accorded discriminatory treatment in the matter of price of flats allotted to them.
Petitioners, therefore, contend that even if they applied for flats anc got registered and were offered flats and accepted the same at the price stated in the brochure and even if it has resulted in a concluded contract yet the Court should not turn a blind eye to such gross discrimination by a statutory authority charged with a duty to provide housing accommodation acting on the declared policy of 'no profit no 712 loss '.
It was simultaneously contended that the Vice Chairman of the Authority authorised to determine the prices of flats in each income group has not made any order or has not given any direction for levy of surcharge and that the levy of surcharge was wholly unauthorised.
A preliminary objection was raised by the Authority that the petitions are not maintainable under article 32 of the Constitution inasmuch as The petitioners have not come to the Court for enforcement of a t fundamental right conferred upon the petitioners under Part III of the Constitution but the petitioners have invoked jurisdiction of this Court for a relief of re opening concluded contracts.
It was also submitted that if the Court accepts the contention of the petitioners they would derive an unfair advantage over others who may not have applied for flats because of the price set out in the brochure and if surcharge is excluded they may have applied for flats at a lower price and, there fore, also the Court should not entertain the petitions.
Though we are not inclined to reject the petitions on this preliminary objection as we have heard them on merits it is undeniable that camouflage of article 14 cannot conceal the real purpose motivating these petitions, namely, to get back a part of the purchase price of flats paid by the petitioners with wide open eyes after flats have been securely obtained and petition to this Court under article 32 is not a proper remedy nor is this Court a proper forum for re opening the concluded contracts with a view to getting back a part of the purchase price paid and the benefit taken.
The undisputed facts are that petitioners offered themselves for registration for allotment of flats that may be constructed by the, Authority for MIG scheme.
After the registration and when the flats were constructed and ready for occupation brochures were issued by the Authority.
One such brochure for ', allotment of MIG flats in Lawrence Road residential scheme is Annexure R 1.
This brochure specifies the terms and conditions including price on which flat will be offered.
It also reserved the right to surrender or cancel the registration, the mode and method of paying the price and handing over the possession.
There is an application form annexed to the brochure.
Annexure 'A ' to the brochure sets out the price of flat on the ground floor, first floor and second floor respectively.
It sets out the premium amount payable for land as also the total cost in respect of the flats on the ground floor, first floor and second floor.
The statement also shows the earnest money deposited at the time of the registration and the balance payable.
It is on the basis of these brochures that the applicants applied for the flats in Lawrence Road and other MIG schemes.
They knew and are presumed to know the contents of the brochure and particularly the price 713 payable.
They offered to purchase the flats at the price on which the Authority offered to sell the same.
After the lots were drawn and they were lucky enough to be found eligible for allotment of flats, each one of them paid the price set out in the brochure and took possession of the flat, and thus sale became complete.
There is no suggestion that there was a mis statement or incorrect statement or any fraudulent concealment in the information supplied in the brochure published by the Authority on the strength of which they applied and obtained flats.
How the seller works out his price is a matter of his own choice unless it is subject to statutory control.
Price of property is in the realm of contract between a seller and buyer.
There is no obligation on the purchaser to purchase the flat at the price offered.
Even afar registration the registered applicants may opt for other schemes.
His light to enter into other scheme opting out of present offer is not thereby jeopardised or negatived and applicants so outnumbered the available flats that lots had to be drawn.
With this background the petitioners now contend that the Authority has collected surcharge as component of price which the Authority was not authorised or entitled to collect.
Even if there may be any merit in this contention, though there is none, such a relief of refund cannot be the subject matter of a petition under article 32.
And article 14 cannot camouflage the real bone of contention.
Conceding for this submission that the Authority has the trappings of a State or would be comprehended in 'other authority ' for the purpose of article 12, while determining price of flats constructed by it, it acts purely in its executive capacity and "is bound by the obligations which dealings of the State with the individual citizens import into every transacting entered into the exercise of its constitutional powers But after the State or its agents have entered into the field of ordinary contract, the relations are no longer governed by the Constitutional provisions but by the legally valid contract which determines rights and obligations of the parties inter se.
No question arises of violation of article 14 or of any other constitutional provision when the State or its agents, purporting to act within this field, perform any act.
In this sphere, they can only claim rights conferred upon them by contract and are bound by the terms of the contract only unless some statute steps in and confers some special statutory power or obligation on the State in the contractual field which is apart from contract" (see Radhakrishna Agarwal & Ors.vs State of Bihar & Ors.)
Petitioners were under no obligation to seek allotment of flats even after they had registered themselves.
They looked at the price and flats and applied for the flats.
This they did voluntarily.
They were advised by the brochures to look at the flats before going 714 in for the same.
They were lucky enough to get allotment when the lots were drawn.
Each one of them was allotted a flat and he paid the price voluntarily.
They are now trying to wriggle out by an invidious method so as to get back a part of the purchase price not offering to return the benefit under the contract, namely, surrender of flat.
I The Authority in its affidavit in reply in terms stated that it is willing to take back the fiats and to repay them the full price.
The transaction is complete, viz., possession of the flat is taken and price is paid.
At a later stage when they are secure in possession with title, petitioners are trying to get back a part of the purchase price and thus trying to re open and wriggle out of a concluded contract only partially.
In a similar and identical situation a Constitution Bench of this Court in Har Shankar & ors.vs The Dy.Excise & Taxation Commr.& ors.has observed that those who contract with open eyes must accept the burdens of the contract along with its benefits.
Reciprocal rights and obligations arising out of contract do not depend for their enforceability upon whether a contracting party finds it prudent to abide by the terms of the contract.
By such a test no contract would ever have a binding force.
The jurisdiction of this Court under article 32 of the Constitution is not intended to facilitate avoidance of obligations voluntarily incurred.
It would thus appear that petitions ought not to have been entertained.
However, as the petitions were heard on merits, the contentions canvassed on behalf of the petitioners may as well be examined The principal contention canvassed on behalf of the petitioners is that the treatment meted to them by the Authority is discriminatory inasmuch as no surcharge was levied on flats in MIG scheme constructed and allotted prior to November 1976 and after January 1977.
MIG flats involved in these petitions were constructed and were available for allotment in November 1976 and the lots were drawn in January 1977.
There is one more MIG scheme at Munirka where the allotment took place at or about the same time but in which case no surcharge was levied.
The contention is that once for the purpose of eligibility to acquire a flat, the criterion is grounded in income brackets, MIG, LIG, et .
those in the same income bracket form one class even for the purpose of determining disposal price of flat allotable to them irrespective of situation, location or other relevant determinants which enter into price calculation and therefore, in the same income group there cannot be differentiation by levying of surcharge in some cases and charging only the cost price in other cases and that the discrimination is thus writ large on the face of the record 715 because by levying surcharge in case of petitioners they have been treated unequally and with an evil eye.
It is difficult to appreciate how article 14 can be attracted in the circumstances hereinabove mentioned.
Cost price of a property offered for sale is determined according to the volition of the owner who has constructed the property unless it is shown that he is under any statutory obligation to determine cost price according to certain statutory formula.
Except the submission that the Authority has a proclaimed policy of constructing and offering flats on 'no profit no loss ' basis which according to Mr. Nariman has a statutory flavour in the regulations enacted under the Act, the Authority is under no statutory obligation about its pricing policy of the flats constructed by it.
When the flats were offered to the petitioners the price in round figure in respect of each flat was mentioned and surcharge was not separately set out and this price has been accepted by the petitioners.
The obligation that regulations are binding on the Authority and have provided for a statutory price fixation formula on 'no profit no loss ' basis will be presently examined but save this the Authority is under no obligation to fix price of different flats in differed schemes albeit in the same income group at the same level or by any particular statutory or binding formula.
The Authority having the trappings of a State might be covered by the expression 'other authority ' in article 12 and would certainly be precluded from according discriminatory treatment to persons offering to purchase flats in the same scheme.
Those who opt to take flats in a particular income wise area wise scheme in which all flats came up together as one project, may form a class and any discriminatory treatment in the same class may attract article 14.
But to say that throughout its course of existence the Authority would be bound to offer flats income groupwise according to the same price formula is to expect the Authority to ignore time, situation, location and other relevant factors which all enter the price structure.
In price fixation executive has a wide discretion and is only answerable provided there is any statutory control over its policy of price fixation and it is not the function of the Court to sit in judgment over such matters of economic policy as must be necessarily left to the Government of the day to decide.
The experts alone can work out the mechanics of price determination; Court can certainly not be expected to decide without ' the assistance of the experts (See Prag Ice & oil Mills and Anr.vs Union of India) In the leading judgment it has been observed that mechanics of price fixation have necessarily to be left to the executive and unless it is patent that there is hostile discrimination against a class the processual basis of price fixation has to be accepted in the generality of cases as valid.
716 This Court in Avinder Singh vs State of Punjab,(l) approved the following dictum of Willis on Constitutional Law, page 587: "The 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.
What is forbidden by article 14 is discrimination amongst persons of the same class and for the purposes of allotment of flats scheme wise, allottees of flats in the same scheme, not different schemes in the same income bracket, will have to be treated as a class and unless in each such class there is unequal treatment or unreasonable or arbitrary treatment, the complaint that article 14 is violated cannot be entertained.
Therefore, in the State of Gujarat & Another vs Shri Ambica Mills Ltd., Ahmedabad, etc., Mathew, J., speaking for the Court observed as under: "A reasonable classification is one which includes all who are similarly situated and none who are not.
The question then is what does the phrase 'similarly situated ' mean ?
The answer to the question is that we must look beyond the classification to the purpose of the law.
A reasonable classification is one which includes all persons who are similarly situated with respect to the purpose of the law.
The purpose of a law may be either the elimination of a public mischief or the achievement of some positive public good."
" Is the classification income wise scheme wise violative of article 14 in any manner ? The Authority formulates income wise area wise schemes for constructing flats.
Petitioners contend that there should be only income wise classification wholly ignoring area and time factor for classification.
They say that allottees of flats in all MIG schemes irrespective of area and location and irrespective of when the flats were constructed form one class for determining price of flats.
There is no merit in this contenting.
What are price determinants ?
Price of land, building material, labour charges and cost of transport, quality and availability of land, supervision and management charges are all variable factors that enter into price fixation.
Their cost varies time wise, place wise, availability wise.
All these uncertain factors cannot 717 be overlooked for the purpose of classification.
Therefore, it is not possible to hold that allottees of flats in MIG scheme at any place and executed at any time will form one class for the purpose of pricing policy only valid basis for classification would be income wise, area wise, time wise, scheme wise, meaning all flats constructed at or about the same time in same area in one project for particular income group will form a class.
And there is no discrimination amongst them.
Pricing policy is an executive policy.
If the Authority was set up for making available dwelling units at reasonable price to persons belonging to different income groups it would not be precluded from devising its own price formula for different income groups.
If in so doing it uniformally collects something more than cost price from those with cushion to benefit those who are less fortunate it cannot be accused of discrimination.
In this country where weaker and poorer sections are unable to enjoy the basic necessities, namely, food, shelter and clothing, a body like the Authority undertaking a comprehensive policy of providing shelter to those who cannot afford to have the same in the competitive albeit harsh market of demand and supply or can afford it on their own meagre emoluments or income, a little more from those who can afford for the benefit of those who need succour, can by no stretch of imagination attract article 14.
People in, the MIG can be charged more than the actual cost price so as to give benefit to allottees of flats in LIG, Janata and CPS.
And yet record shows that those better off got flats comparatively cheaper to such flats in open market.
It is a well recognised policy underlying tax law that the State has wide discretion in selecting the persons or objects it will tax and that the 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 this cannot be justified on the basis of a valid classification, that there would be a violation of article 14, (see East India Tobacco Co. vs State of Andhra Pradesh).
Can it be said that classification, income wise cum scheme wise is unreasonable ?
The answer is a firm No.
Even the petitioners could not point out unequal treatment in same class.
However, a feeble attempt was made to urge that allottees of flats in MIG scheme at Munirka which project came up at or about the same time were not subjected to surcharge.
This will be presently examined but aside from that, contention is that why within a particular period, namely, November 1976 to January 1977 the policy of levying surcharge was resorted to and t hat in MIG schemes pertaining to period prior to November 1976 and later April 1977 no surcharge was levied.
718 If a certain pricing policy was adopted for a certain period and was uniformly applied to projects coming up during that period, it cannot be the foundation for a submission why such policy was not adopted earlier or abandoned later.
It was, however, said that levying of surcharge runs counter to object for which the Authority was set up, namely, to make available housing accommodation on 'no profit no loss ' basis.
The argument proceeds on the assumption that the principle of 'no profit no loss ' implies that in respect of each flat the cost of its construction must be worked out and that alone can be the disposal price of each flat.
Principle of 'no profit no loss ' has been explained by the respondents.
It IS said that in the over all working, planning and execution of projects which the Authority undertakes as part of development of Delhi, the integral part of it being construction of flats for different income groups the motives and working of it would not be profit oriented but would work on 'no profit no loss ' economic doctrine.
This would not for a moment suggest that the principle of 'no profit no loss ' should apply either to every flat or to every scheme or to every piece of land developed by the Authority.
It would be impossible for the Authority to function on such fragmented basis and such a policy statement has not been made by the Authority.
Of course, some public statement appears to have been made that the overall working of the Authority is on "no profit no loss ' basis.
Respondent 1 has been able to point out that the Authority 's housing scheme, as a whole has been running in a heavy deficit because flats including such as those of the petitioners actually cost much more than the initially determined estimates and by the time flats are ready for occupation initial estimates founded on prevalent market prices of materials and labour escalate and revised estimates have to be made.
It is also shown that till Municipal authority takes over municipal services the Authority spends for the same and incurs cost.
Apart from that petitioners have not been able to show that the Authority is actuated by commercial profit oriented approach in its overall working.
It is, however, necessary to examine the contention whether this 'no profit no loss ' policy statement has any statutory flavour as contended by Mr Nariman.
The regulations styled as the Delhi Development Authority (Management and Disposal of Housing Estates) Regulations, 1968, ( 'Regulations ' for short) are framed in exercise of the powers conferred by section 57 and were laid before the Houses of Parliament as required by section 58.
Disposal price has been defined in Regulation 2(13) to mean in relation to a property such price as may be fixed by the Authority for such property.
There is not the slightest or even a remote reference to 'no profit no loss ' formula for 719 determining the cost price.
A quick survey of the Regulations do A not spell out any formula for price determination on the basis of 'no profit no loss '.
Whether the power to determine disposal price is in the Housing Committee will be presently examined.
Regulations, however, on the contrary indicate that the power to determine the disposal price is vested in the Authority and as price has been fixed by the delegate of the Authority even if it is inclusive of surcharge it cannot be said that it runs counter to the declared policy of the Authority.
It is at this stage necessary to examine the contention that in the case of Wazirpur and Munirka LIG schemes which came up during this very period no surcharge was levied and, therefore, there is invidious discrimination amongst members of the same class.
Again the argument proceeds that income wise classification alone is valid.
Here time wise (November 1976 to January 1977) classification is relied upon.
It is an admitted position that no surcharge is levied on MIG flats at Munirka.
The affidavit in reply shows that the land on which flats are constructed in Munirka MIG scheme turned out to be very rocky with the result that the construction cost in respect of flats at Munirka MIG scheme worked out at Rs. 456 per plinth area per metre whereas in respect of Lawrence Road it came to Rs. 401.54 p. Only.
The Authority, therefore, thought that if surcharge is levied on flats under MIG scheme in Munirka area the disposal price would be very high and would be beyond the reach of MIG.
It is in this background of the special facts that 'no surcharge was levied in respect of any flat in MIG in Munirka area.
Project wise price fixation cannot be dubbed as arbitrary or discriminatory in comparison with other projects at different places.
It was, however, pointed out that 132 flats in Rajouri Garden MIG scheme were disposed of without levying surcharge as component of sale price.
It is pointed out in affidavit in reply that those flats were handed over to the Government of India for meeting their needs for staff quarters and that was done in the year 1978.
It is also pointed out that the Government charged half the price of the land in respect of these 132 flats and, therefore, surcharge was not levied.
There is two fold fallacy in this submission.
Government ordinarily is in a class by itself and its needs of staff quarters deserve to be met in large public interest.
Government has not got any undeserved benefit at the cost and risk of petitioners.
Hence their complaint in this behalf is without merits.
It was next contended that surcharge is arbitrary inasmuch as how the surcharge is worked out in each case does not answer any 720 rational, tangible, scientific cr understandable formula.
How the figure of surcharge has been worked out has been explained in detail in affidavit in reply.
Briefly recapitulating the same, it may be mentioned that initial estimates for 304 MIG flats in Prasad Nagar area were prepared in or about 1971 and the estimated cost was Rs. 1,17,83,200 and that on March 21, 1972, an estimate of Rs 1,09,97,100 was sanctioned.
After the work commenced and the actual cost started coming in the revised estimate for 304 flats was of the order of Rs. 2,07,33,000 which was approved by the Vice Chairman on September 18, 1976.
According to the revised estimate the approximate disposal cost for each flat came to Rs. 68,202 and the cost of land per dwelling unit was Rs. 7,008.
Extracts of original notes of Financial Adviser (Housing) and the approval of the same by the Vice Chairman have been set out in the affidavit in reply.
The subsequent revised estimates show that disposal price of each flat would be Rs. 75,200.
In the meantime the Income Tax Department wanted to acquire 40 MIG flats in Prasad Nagar area and the same were offered at the price of Rs. 75,000, per flat.
Commissioner of Income Tax accepted the price.
This became the starting point for working out the disposal price in that period.
The difference between the cost price and the disposal price of Rs. 75,000 per flat was treated as surcharge and the purpose was to use the extra money for extending cost reduction benefit to the allottees of flats in LIG, Janata and CPS schemes.
Affidavit in reply of the Secretary of Respondent 1 provides further information which show that the cost price would be Rs. 78,000.
Therefore, at best the component of surcharge would be between Rs. 1700 to Rs. 2200 in Rajouri Garden MIG flats.
Similarly, with regard to MIG flats at Lawrence Road the actual cost price would be in close proximity of the disposal price would be in close proximity of the disposal price charged from the petitioners.
It is, therefore, difficult to entertain the contention that even if surcharge could be justified its actual computation is arbitrary and irrational.
The next contention is that Vice Chairman had no authority to levy surcharge and that even if he has authorised the same it runs counter to the principle of fixing disposal price incorporated in Resolution No. 209 dated November 26, 1974.
The Vice Chairman is to be appointed by the Central Government as per section 3(3)(b) of the Act.
It appears that this Vice Chairman is whole time officer and will be the Chief Executive of the Authority.
This becomes clear from regulation 3 of the Regulations which provides as under: "3.These regulations shall be administered by the Vice Chairman, subject to general guidance and resolutions of the 721 Authority, who may delegate his powers to any officer of the Authority".
Thus the Vice Chairman, subject to general guidance and resolutions cf the Authority, shall administer the regulations.
He can delegate the functions to any officer of the Authority.
Regulation 59 is important which reads as under: "59.The Authority may delegate all or any of its powers under these regulations to the Vice Chairman or to a whole time member".
Armed with this power of delegation the Authority adopted Resolution No. 60 dated February 21, 1970 which reads as under: "Resolved that the recommendations of the Committee be approved and all the powers of Delhi Development Authority be exercised by the Housing Committee and the Chairman, Delhi Development Authority be authorised to constitute the said committee, determine the organisational set up and take (sic) all efforts for implementing the housing and allied schemes".
Serious exception was taken to this gross abdication of its powers and functions by the Authority.
The composition of the Authority as set out in section 3 would include such persons as Finance and Accounts Member, Engineering Member, representatives of Municipal Corporations of Delhi and representatives of Metropolitan Council as and when set up.
Three other persons were to be nominated by Central Government of whom one shall be person with experience of planning.
It is a high power body.
Yet it completely abdicated its power and authority in favour of Housing Committee.
The Housing Committee will practically supplant the Authority.
But the more objectionable part of Resolution No. 60 is that such Housing Committee which is to enjoy all powers and functions of the Authority was to be constituted by the Chairman at his sole discretion because he was authorised not only to constitute the Housing Committee but to determine organisational set up and then make all efforts for implementing the housing and allied schemes.
It is really difficult to appreciate such whole sale abdication or delegation of powers by a statutory authority in favour of a Committee whose composition would be determined by one man, the Chairman.
By a process of elimination the Housing Committee could supplant the Authority and the Chairman could constitute Housing Committee.
Therefore, the Chairman enjoyed 722 a very wide discretionary power.
Though Mr. Nariman did challenge the validity of Resolution No. 60, Mr. Chitaley in cognate petition refrained from doing so.
Once the power to delegate is given by the Regulations the challenge to validity on the ground of delegation must fail It is, however, necessary to examine the submission whether Vice Chairman could have permitted levy of surcharge as a component of the price of flats in MIG schemes.
In this connection it would be advantageous to refer to Resolution No. 20 dated June 18, 1968.
Of the Authority by which the recommendations of the Standing Committee, inter alia, empowering the Vice Chairman to approve forms of application as well as to fix the disposal and hire purchase price were accepted.
Resolution No. 209 is the one adopted by the Housing Committee.
It takes note of the delegation of powers to fix disposal and hire purchase price of flats to the Vice Chairman and further provides that if there is a marginal saving in any scheme the amount is always diverted to subsidies cost of Janata and CPS houses.
It seems the Resolution is for information of the Housing Committee and the Housing Committee has merely resolved that the information be noted.
The Resolution No. 200 of the Authority with Resolution No. 209 of the Housing Committee sets out clearly that the power to fix the disposal price was delegated to the Vice Chairman and ordinarily such excessive delegation to one man may be galling to a judicial body yet the scheme of regulations and the provisions contained in Regulation 3 read with section 59 clearly envisages such delegation of powers.
It is, therefore, idle to contend that the Vice Chairman had no authority to levy the surcharge as component of disposal price of flats.
It was next contended that even if Vice Chairman had such power there is nothing to show that he has exercised this power and that, therefore, somewhere without any authority someone has added the surcharge to the disposal price and that, therefore, the levy of surcharge is unauthorised.
The submission seems to be factually incorrect.
The note of Accounts officer (Housing) dated September 8, 1976, submitted to the Financial Advisor (Housing) shows that the flats have been offered at the rate of Rs. 75,000 to the Commissioner of Income Tax for the Income Tax Department and that should be the disposal price This note was approved by the Financial Advisor (Housing) and ultimately countersigned by the Vice Chairman.
There fore, the price of Rs. 75,000 as the disposal price is approved by the Vice Chairman.
Even if it includes surcharge it cannot be said with confidence that the Vice Chairman has not approved the surcharge as a component of disposal price.
723 The last contention is that the Authority has made a huge profit by levy of surcharge.
In this connection statistical table was annexed to the petition and there was serious controversy about the facts and figures set out therein, by the other side.
Having gone through the detailed affidavit in reply it transpires that the contention is without merits.
Therefore, there is no substance in the contention that the Authority has made a huge profit.
On the contrary it appears that the overall working of the Authority is deficit ridden.
These were all the contentions in these petitions and as there is no Merit in any of them the petitions are dismissed.
There will be no order as to cost.
N.K.A Petitions dismissed.
| IN-Abs | The Delhi Development Authority Act was enacted to provide for the development of Delhi through Master and Zonal Plans.
The authority undertakes constructions of dwelling units for people belonging to different income groups styled as Middle Income, Low Income, Janata and Community Personnel Service.
In 1971, the authority commenced registration of intending applicants desirous of having dwelling units in different Income Groups.
Some of the petitioners got themselves registered with the authority in accordance with the terms and conditions laid down by it, for allotment of flats in deposits as required by the terms and conditions for MIG Scheme at Lawrence Road, Prasad Nagar and Rajouri Garden and made the initial deposit.
The number of available flats being less in each scheme compared to the number of applicants registered, lots were drawn and the petitioners were informed that each of them should deposit the amount mentioned in the letter of allotment.
The Petitioners paid the amount as intimated and consequently a flat was allotted to each of them and they entered into possession.
In their writ petitions under Article 32, the petitioners assailed the levy and collection of surcharge in addition to the cost price of the flats.
It was con tended on their behalf that; (i) The treatment meted by the Authority is discriminatory inasmuch as no surcharge was levied on flats in MIG schemes constructed and allotted prior to November, 1976 and after January, 1977; (ii) As the authority formulates income wise, area wise schemes for constructing flats, there should be only income wise classification wholly ignoring area and time factor for classification; (iii) Levying of surcharge runs counter to the object for which the authority was set up namely to make available housing accommodation on "no profit no loss" basis; (iv) Surcharge is arbitrary inasmuch as how the surcharge is worked out in each case does not conform to any rational, tangible, scientific or understandable formula; (v) The Vice Chairman had no authority to levy surcharge and that even if he has authorised the same, it runs counter to the principle of fixing disposal price incorporated in resolution No. 209 dated November 26, 1974; (vi) Even if the Vice Chairman had such power there is nothing to show that he has exercised this power and given direction for adding the surcharge to the disposal price and that therefore, the levy of surcharge is unauthorised; and (vii) that the authority has made a, huge profit by levy of surcharge.
The respondents raised a preliminary objection that the petitions were not maintainable under Article 32 of the Constitution inasmuch as the petitioners have not come to the Court.
fol enforcement of a fundamental right conferred upon.
705 them under Part III of the Constitution but that the petitioners have invoked the jurisdiction of the Court for the relief of reopening concluded contracts, and that if the court accepts the contentions, the petitioners would derive an unfair advantage over others who may not have applied for flats because of the price set out in the brochure and if surcharge is excluded they may have applied for Flats at a lower price.
The Court should not therefore entertain the petitions.
Dismissing the petitions, ^ HELD: 1.
As the Court has heard the petitions on merits it is not inclined to reject them on the preliminary objections.
It is undeniable that camouflage of article 14 cannot conceal the real purpose motivating the petitions, namely to get back a part of the purchase price of flats paid by the petitioners with wide open eyes after flats have been securely obtained.
Petition to this Court under article 32 is not a proper remedy nor is the Supreme Court a proper forum for re opening concluded contracts with a view to getting back a part of the purchase price paid after the benefit is taken.
[712 D E] In the instant case it is difficult to appreciate how article 14 can be attracted.
Cost price of a property offered for Sale is determined according to the volition of the owner who has constructed the property unless it is shown that he is under any statutory obligation to determine cost price according to certain statutory formula.
The authority is under no obligation to fix price of different flats in different schemes albeit in the same income group at the same level or by any particular statutory or binding formula.
Those who opt to take flats in a particular income wise, area wise scheme in which all flats came up together as one project, may form a class and any discriminatory treatment In the same class may attract article 14.
But to say that the Authority would be bound to offer flats income group wise according to the same price formula is to expect the Authority to ignore time, situation, location and other relevant factors which all enter the price structure.
[713 E, 715 A F] Radhakrishna Agarwal & Ors.
vs State of Bihar & Ors. ; at 255; Har Shankar & Ors. etc.
vs The Dy.
Excise & Taxation Commr.
& Ors. ; , referred to.
In price fixation executive has a wide discretion and is only answerable provided there is any statutory control over its policy of price fixation and it is not the function of the Court to sit in judgment over such matters of economic policy as must be necessarily left to the Government of the day to decide.
The experts alone can work out the mechanics of price determination, Court can certainly not be expected to decide without the assistance of the experts.
[715 F G] Prag Ice & Oil Mills and Anr. etc.
vs Union of India; , at 330; Avinder Singh vs State of Punjab ; ; State of Gujarat & another vs Shri Ambica Mills Ltd. Ahmedabad, etc.
[974] 3 S.C.R 760 at 782; referred to.
Price of land, building, material, labour charges and cost of transport, quality and availability of land, supervision and management charges are all variable factors that enter into price fixation.
Their cost varies time wise, place wise and availability wise.
All these uncertain factors cannot be overlooked for the purpose of classification.
It is not possible therefore to hold that allottees of 706 flats in MIG scheme at any place and executed at any time will form one class for the purpose of pricing policy.
The only valid basis for classification would be income wise, area wise, time wise, scheme wise, meaning all flats constructed at or about the same time in same area in one project for particular income group will form a class, and there is no discrimination amongst them.
[716 G H. 717 A B] 4.
Pricing policy is an executive policy.
If the Authority was set up for making available dwelling units at reasonable prices to persons belonging to different groups it would not be precluded from devising its own price formula for different income groups.
If in so doing it uniformally collects something more than cost price from those with cushion to benefit those who are less fortunate it cannot be accused of discrimination.
In this country where weaker and poorer sections are unable to enjoy the basic necessities, namely, food, shelter and clothing, a body like the Authority undertaking, a comprehensive policy of providing shelter to those who cannot afford to have the same in the competitive albeit harsh market of demand and supply nor can afford on their own meagre emoluments or income, a little more from those who can afford for the benefit of those who need succour, can by no stretch of imagination attract article 14.
[717 B D] 5.
It is a well recognised policy underlying tax law that the State has a wide discretion in selecting the persons or objects it will tax and that the 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 this cannot be justified on the basis of a valid classification, that there would be a. violation of article 14.
[717 E F] East India Tobacco Co. vs State of Andhra Pradesh, ; 6.
The principle of "no profit no loss" cannot apply either to every flat or to every scheme or to every piece of land developed by the Authority.
It would be impossible for the Authority lo function on such fragmented basis and such a policy statement has not been made by the Authority.
[718 D E] 7.
There is not the slightest or even a remote reference to "no profit no loss" formula for determining the cost price.
A survey of the Regulations do not spell out any formula for price determination on the basis of "no profit no loss".
Project wise price fixation cannot be dubbed as arbitrary or discriminatory by comparing it with other projects at different places or at different times.
[719 A B In the instant case after the work commenced and the actual cost estimate started coming in the revised estimate for 304 flats was of the order of Rs. 2,07,33,000/ which was approved by the Vice Chairman on September 18, 1976.
According to the revised estimate the approximate disposal cost for each flat.
came tc Rs. 68.202/ and the cost of land per dwelling; unit was Rs. 7008/ .
The revised estimate showed the disposal price of each flat as Rs. 75.200/ .
The Commissioner of Income Tax who wanted to acquire 40 MIG flats in Prasad Nagar area offered the price of Rs. 75,000/ per flat which price was accepted.
The difference between the cost price and the disposal price of Rs. 75,000/ per flat was treated as surcharge and the purpose was to use the extra money for extending price reduction benefit to The allottees of flats in LIG, Janata and CPS schemes.
It is therefore difficult to entertain the contention that even if surcharge could be justified its actual computation is arbitrary and irrational.
[720 B E, E F] 707 8 .
The Vice Chairman is appointed by the Central Government as per Section.
3(3)(b) of the Act.
He is a whole time officer and the Chief Executive of the Authority.
The composition of the Authority as set out in section 3 would include such persons as Finance and Accounts Member, Engineering Member, representatives of Municipal Corporation of Delhi and representatives of Metropolitan Council.
Three other persons, were to be nominated by Central Government of whom one shall be person with experience of planning.
It is a high power body.
Yet it completely abdicated its power and authority in favour of Housing Committee.
The Housing Committee will practically supplant the Authority.
By a process of elimination the Housing Committee would supplant the Authority and the Chairman could constitute the Housing Committee.
Therefore, the Chairman enjoyed a very wide discretionary power.
However once the power to delegate is given by the Regulations, the challenge to validity on the ground of delegation must fail.
[720 G H; 721 E H, 722 A] 9.
Resolution No. 209 is the one adopted by the Housing Committee.
It takes note of the delegation of powers to fix disposal and hire purchase price of flats to the Vice Chairman and further provides that if there is a marginal saving in any scheme the amount be diverted to subsidies cost of Janata and CPS houses.
The Resolution No. 200 of the Authority read with Resolution No. 709 of the Housing Committee sets out clearly that the power to fix the disposal price was delegated to the Vice Chairman and ordinarily such excessive delegation to one man may be galling to a judicial body yet the scheme of regulations and the provisions contained in Regulation 3 read with Section 59 clearly envisages such delegation of powers.
[722 C E] 10.
The note of Accounts Officer (Housing) dated September 8, 1976, submitted to the Financial Advisor (Housing) shows that the flats have been offered at the rate of Rs. 75,000/ to the Commissioner of Income Tax for the Income Tax Department and that should be the disposal price.
This note was approved by the Financial Advisor (Housing) and ultimately countersigned by the Vice Chairman Even if it includes surcharge it cannot be said with confidence that the Vice Chairman has not approved has not approved the surcharge as a component of disposal price.
[722 G H]
|
Civil Appeal No. 854, of 1977.
Appeal by Special Leave from the Judgment and order dated 2 8 1976 of the Madhya Pradesh High Court in S.A. No. 440/71.
section section Khanduja and Lalit Kumar Gupta for the Appellant.
T. P. Naik and section K. Gambhir for the Respondent.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
The respondent landlord sought eviction of the appellant tenant from the suit premises an two grounds: (i) failure to pay arrears of rent of Rs. 158.25 despite service of notice of demand and (ii) bonafide requirement of premises for landlord 's personal occupation.
The second ground was rejected by all the sub ordinate courts and we are no longer concerned with that ground.
In regard to the first ground, the trial Court found that the tenant was 336 in arrears of payment of rent but that the tenant was entitled to the Protection of section 12(3) of the Madhya Pradesh Accommodation Control Act, 1961, as the tenant had deposited the arrears of rent within the time allowed by the Court on his application.
When the appeal preferred by the landlord was pending before the Additional District Judge, Satna, the tenant filed an application for condonation of delay R in depositing the rent, month by month, which had become payable after the filing of the suit, as stipulated by section 13(1) of the Act.
It appears that, on several occasions, when the suit and the appeal were pending before the trial court and the appellate court respectively, the tenant had deposited the monthly rent a day or two or three, beyond the prescribed date.
The amount had been received by the court and drawn out by the landlord, apparently without any protest.
Taking advantage of the filing of the tenant 's application for condonation of delay, the landlord contended that the court had no power to extend the time for deposit of the monthly rent and that he was entitled to a decree for eviction consequent on the non compliance with the provisions of section 13 ( 1 ) of the Madhya Pradesh Accommodation Control Act.
The appellate court negatived the landlord 's contention and dismissed the appeal.
The landlord preferred a Second Appeal to the High Court of Madhya Pradesh.
The High Court, holding that the court had no power to extend time, decreed the suit for eviction.
The tenant, having obtained special leave, has appealed to this Court.
Shri Khanduja, learned counsel for the appellant, raised two contentions before us.
The first contention was that the High Court was wrong in holding that the Court had no power to condone the delay in depositing the monthly rent falling due after the filing of the suit for eviction.
The second contention was that, in the circumstances of the case.
the respondent must be considered to have waived or abandoned the right to insist on dis entitling the tenant of the protection to which he was otherwise entitled.
Shri Naik, learned counsel for the respondent, contended to the contrary on both the questions.
The Madhya Pradesh Accommodation Control Act, 1961, was enacted, as recited in the statement of objects and reasons, "for the purpose of controlling, letting of and rents of residential and nonresidential accommodation and giving adequate protection to tenants of such accommodation in areas where there is dearth of accommodation".
Section 12(1) of the Act provides that no suit shall be filed ill any civil court against a tenant for his eviction from any accommodation except on one or more of the grounds specified therein.
Several grounds are specified, such as, failure to pay the arrears of rent after the service of notice of demand, unlawful sub letting of the whole or 337 part of the accommodation, creation of a nuisance, bonafide requirement of the accommodation by the landlord for his own occupation, causing of substantial damage to the accommodation etc.
The ground with which we are concerned is that mentioned in section 12(1) (a) and it is: "that the tenant has neither paid nor tendered the whole of the arrears of rent legally recoverable from him within two months of the date on which a notice of demand for the arrears of rent has been served on him by the landlord in the prescribed manner".
Thus, where a tenant is in arrears of rent, a landlord is obliged, before instituting a suit for eviction on that ground, to serve a notice of demand calling upon the tenant to pay or tender the whole of the arrears of rent within two months of the date of service of the notice.
section 12(3) provides that an order for the eviction of a tenant shall not be made on the ground specified in section 12(1) (a), if the tenant makes payment or deposit as required by section 13.
section 13,sub sections
(1), (5) and (6) which are relevant for the present purpose are as follows: "13.
(1) on a suit or proceeding being instituted by the landlord on any of the grounds referred to in section 12, the tenant shall, within one month of the service of the writ of summons on him or within such further time as the Court may, on an application made to it, allow in this behalf, deposit in the Court or pay to the landlord an amount calculated at the rate of rent at which it was paid, for the period for which the tenant may have made default including the period subsequent thereto up to the end of the month previous to that in which the deposit or payment is made and shall thereafter continue to deposit or pay, month by month, by the 15th of each succeeding month a sum equivalent to the rent at that rate.
xx xx xx xx xx (5) If a tenant makes deposit or payment as required by sub section (1) or sub section (2), no decree or order shall be made by the Court for the recovery of possession of the accommodation on the ground of default in the payment of rent by the tenant, but the Court may allow such cost as it may deem fit to the landlord.
(6) If a tenant fails to deposit or pay any amount as required by this section, the Court may order the defence against eviction to be struck out and shall proceed with the hearing of the suit.
" 338 It is true that in order to entitle a tenant to claim the protection of section 12(3), the tenant has to make a payment or deposit as required by section 13, that is to say, the arrears of rent should be paid or deposited within one month of the service of the writ of summons on the tenant or within such further time as may be allowed by the court, and should further deposit or pay every month by the 15th, a sum equivalent to the rent.
It does not, however, follow that failure to pay or deposit a sum equivalent to the rent by the 15th of every month, subsequent to the filing of the suit for eviction, will entitle the landlord, straight away, to a decree for eviction.
The consequences of the deposit or payment and non payment or non deposit are prescribed by sub sections
(5) and (6) of section 13.
Since there is a statutory provision expressly prescribing the consequence of non deposit or non payment of the rent, we must look to and be guided by that provision only to deter mine what shall follow.
section 13 (6) does not clothe the landlord with an automatic right to a decree for eviction; nor does it visit the tenant with the penalty of a decree for eviction being straightaway passed against him.
section 13(6) vests, in the court, the discretion to order the striking out of the defence against eviction.
In other words, the Court, having regard to all the circumstances of the case, may or may not strike out the defence.
If section 13 were to be construed as mandatory and not as vesting a discretion in the Court, it might result in the situation that a tenant who has deposited the arrears of rent within the time stipulated by section 13(1) but who fails to deposit thereafter the monthly rent on a single occasion for a cause beyond his control may have his defence struck out and be liable to summary eviction.
We think that section 13 quite clearly confers a discretion, on the court, to strike out or not to strike out the defence, if default is made in deposit or payment of rent as required by section 13(1).
If the court has the discretion not to strike out the defence of a tenant committing default in payment or deposit as required by section 13(1), the court surely has the further discretion to condone the default and extend the time for payment or deposit.
Such a discretion is a necessary implication of the discretion not to strike out the defence.
Another construction may lead, in some cases, to a perversion of the object of the Act namely, 'the adequate protection of the tenant '.
section 12(3) entitles a tenant to claim protection against eviction on the ground specified in section 12(1) (a) if the tenant makes payment or deposit as required by section 13.
On our construction of section 13 that the Court has the power to extend the time for payment or deposit, it must follow that payment or deposit within the extended time will entitle the tenant to claim the protection.
of section 12(3).
One of the arguments advanced before us was that there was no express provision for extension of time for deposit or payment.
339 of monthly rent subsequent to the filing of the suit whereas there was such express provision for payment or deposit of arrears of rent that had accrued before the filing of the suit.
Obviously, express provision for extension of time for deposit or payment of rent falling due after the filing of the suit was not made in section 13(1) as the consequence of non payment was proposed to be dealt with by a separate sub section.
namely section 13(6).
Express provision had to be made for extension of time for deposit or payment of rent that had accrued prior to the filing of the suit, since that would ordinarily be at a very early stage of the suit when a written statement might not be filed and there would.
therefore, be no question of striking out the defence and, so, there would be no question of section 13(6) covering the situation.
In Jagdish Kapoor vs New Education Society, a full bench of the Madhya Pradesh High Court held that section 13((6) of the Madhya Pradesh Accommodation Control Act did not make it obligatory for the court to strike out the defence but vested in the court a discretion to strike out or not to strike out the defence.
Having so held, the full bench stopped short of giving full effect to their conclusion by holding D. that the Court could condone the default and refuse to strike out the defence but it could not give the benefit of section 12(3) or 13(5) to the tenant.
We do not see any justification for adopting this narrow construction of sections 12 and 13.
In our view the discretion given to the court under section 13(6) must be held to imply a discretion to condone the delay and extend the time in making deposit or payment under section 13(1).
In B. C. Kame vs Nem Chand Jain, a tenant had committed default both in payment of arrears as well as in payment of the monthly rent which became payable after the filing of the suit.
This Court took the view that on an application made by the tenant time for deposit or payment could be extended.
Though the observations made by the Court read as if they were made with reference to the default in payment.
Of arrears, a reference to the facts of the case as set out in the very judgment shows that there was default both in payment of the arrears of rent that had accrued before the filing of the suit and in payment of the monthly rent that fall due after the filing of the suit.
We are accordingly of the opinion that the Court has the jurisdiction to extend time for deposit or payment of monthly rent falling due after the filing of the suit.
In that view it is not necessary to express our opinion on the question of waiver or abandonment.
The appeal is allowed with costs and the suit for eviction is dismissed.
N.V.K. Appeal allowed.
| IN-Abs | The respondent landlord sought eviction of the appellant tenant from the suit premises for failure to pay arrears of rent, despite service of notice of demand.
The trial court found that the tenant was in arrears o. payment of rent, but the tenant having deposited the arrears of rent within the time allowed by the court on his application the tenant was entitled to avail the protection of section 12(3) of the Madhya Pradesh Accommodation Control Act.
and dismissed the suit for eviction.
The landlord preferred an appeal and while the same was pending? the tenant filed an application under section 13(1) of the Act for condonation of delay in depositing,, the rent, month by month.
which had become payable after the filing of the suit.
On several occasions, when the suit and the appeal were pending before the trial court and the appellate court respectively, the tenant had deposited the monthly rent a day or two or three beyond the prescribed date, and the same had been received by the court and drawn out by the landlord, without any protest.
The landlord, taking advantage of the filing of the tenant s application for condonation of delay, contended that the court had no power to extend the time for deposit of the monthly rent and that he was entitled to a decree for eviction consequent on the non compliance with the provisions of section 13(1) of the Act.
The appellate court negatived this contention and dismissed the appeal.
In the second appeal preferred by the landlord, the High Court held that the Court had no power to extend time and decreed the Suit for eviction.
In the tenant 's appeal to this Court on the question whether the Court ha(l.
the power to condone the delay in depositing the monthly rent falling due after the filling of the suit for eviction.
^ HELD :1.
The court had the jurisdiction to extend time for deposit or payment of monthly rent falling due after the filing of the suit.
[338 G] 2.
In order to entitle a tenant to claim the protection of section 12(3).
the tenant had to make payment or deposit as required by section 13.
The arrears of rent should be paid or deposited within one month of the service of the writ of summons on the tenant or within such further time as may he allowed by the court, and should further deposit or pay every month by the 15th.
a sum equivalent to the rent.
[338 A B].
335 3.
Failure to pay or deposit a sum equivalent to the rent by the 15th of every month, subsequent to the filing of the suit for eviction will not entitle the landlord, straightaway, to a decree for eviction.
The consequences of the deposit or payment and non payment or non deposit are prescribed by subsection and (6) of section 13.
[338 B] 4.
A discretion is vested in the court under section 13(6) to order the striking out of the, defence against eviction.
[338 D] 5.
If the court has the discretion not to strike out the defence or a tenant committing default in payment or deposit of rent as required by section 13(1), the court surely has the further discretion to condone the default and extend the time for payment or deposit.
Such a discretion is a necessary implication of the discretion not to strike out the defence.
Any other construction may lead, to a perversion of the object of the Act.
namely, 'the adequate protection of the tenant. ' [338 F G] 6.
Section 12(3) entitles a tenant to claim protection against eviction on the ground specified in section 12(1)(a) if he makes payment or deposit as required by section 13.
As the court has under section 13, the power to extent: the time for payment or deposit, payment or deposit, within the extended time will entitle the tenant to claim the protection of section 12(3).
[338 H] 1 7.
Express provision for extension of time for deposit or payment or rent falling due after the filing of the suit was not made in section 13(1! as the consequence of non payment was dealt with by a separate sub section, section 13(6).
The discretion given to the court under section 13(6) must imply a discretion to condone the delay and extend the time in making deposit or payment under section 13(1).
[339A, E] Jagdish Kapoor vs New Education Society disapproved.
B. C. Kame vs Nem Chand Jain, A.I.R. 1970 S.C. 981.
referred to.
|
Civil Appeal No. 1130 of 1976.
Appeal by Special Leave from the Judgment and Order dated 24 3 1972 of the Allahabad High Court in Misc.
Writ No. 8069/72.
AND CIVIL APPEAL NOS 2248/78, 2191 2198/78 AND 2284/78.
Appeals by Special Leave from the Judgment and Order dated 6 10 1978 of the Allahabad High Court in Special Appeal Nos. 356, 352 355, 357 359/75.
533 AND CIVIL APPEAL NO. 245 of 1979.
Appeal by Special Leave from the Judgment and Order dated 17 10 1978 of the Allahabad High Court in Civil Misc.
Writ No. 11702/77.
AND CIVIL APPEAL NO.
626 of 1979.
Appeal by Special Leave from the Judgment and Order dated 17 10 1978 of the High Court of Judicature of Allahabad in Civil Misc.
Writ (Tax) No. 824/75.
AND WRIT PETITION NOS.
4663 4664 of 1978 & 4501 of 1978.
Under Article 32 of the Constitution.
AND SPECIAL LEAVE PETITION (CIVIL) NOS.
6526 28/78, 125 126, 201 and 2533 of 1979.
From the Judgment and Order dated 6 11 1978 and 17 10 78 and 16 11 1978 and 17 10 78 of the Allahabad High Court in Civil Misc.
Writ Nos.
89/77, 3822/73, 540/75 and 4129 30 of 1976 and C.W. No. 703/76 and C. Misc.
Writ No. 41/76.
Rishi Ram, Advocate General for the State of U.P., G. N. Dikshit, O.P. Verma, section C. Verma and Mrs. Sadhna Ramchandran, for the Appellant in CA No. 1130/76 and respondents in all the matters.
F. section Nariman, Dr. L. M. Singhvi, B. G. Murdeshwar, P. C. Murdeshwar, P. C. Bhartari, section P. Nayar, L. K. Pandeya, N. R. Khairan, Praveen Kumar, Miss Beena Gupta, Anip Satchthey and Mrs. Baby Krishnan for the Appellants and Petitioners in all other matters and respondents in CA 1130/76.
F. section Nariman, Talat Ansari, R. Narain and section P. Nayar for the Interveners (M/s J.
K. Synthetics and Agarwal Spirit Supply Co.) The Judgment of the Court was delivered by KAILASAM, J.
These batches of Civil Appeals, Writ Petitions and Special Leave Petitions raise the same question and can be disposed of by a common judgment.
C.A. No. 1130/76 is by the State.
The other Appeals, Writ Petitions and Special Leave Petitions are by the aggrieved parties.
534 For the sake of convenience appellants in Civil Appeals by Special Leave except the State would be referred as the appellants in this judgment.
Similarly the petitioners in Writ Petitions and Special Leave Petitions will be referred to as petitioners.
The appellants in Civil Appeals by Special Leave filed writ petitions before the High Court of Allahabad praying for quashing the Excise Commissioner 's order dated 18th September, 1974 whereby it was provided that the vend fee be continued to be charged for the wholesale licence dealer of denatured spirit.
They also prayed for a direction to the Excise Commissioner to refund the vend fee actually paid by the appellants for a period of three years prior to the institution of the writ petitions.
The appellants have licenses for the wholesale vend of denatured spirit.
It was contended that the State was providing no service to the trade of the denatured spirit and, therefore, the levy of fee is not justified.
The State, it was submitted, was not competent to authorise a levy of excise duty or tax as it was within the jurisdiction of the Parliament.
On behalf of the State it was contended that in law the State had exclusive privilege to deal with intoxicating liquor which included denatured spirit and the levy of a licence fee and vend fee constituted consideration for permitting the appellants to carry on wholesale trade of the denatured spirit.
The main point that was considered by the High Court was whether the imposition of vend fee on denatured spirit for grant of license for wholesale vend of denatured spirit is within the competence of State Government.
This Court in Nashirwar vs State of Madhya Pradesh and Har Shankar vs The Deputy Excise and Taxation Commissioner, held that the State has exclusive privilege to deal in intoxicating liquor and, therefore, the State can auction the right to vend by retail or wholesale foreign liquor.
It also found that intoxicating liquor included denatured spirit and the validity of the levy of the vend fee by the State cannot be questioned.
Following this view the High Court dismissed the Writ Petitions.
Against the decision, the appeals have been preferred by special leave.
A batch of Writ Petitions have been filed in this Court under article 32 of the Constitution of India challenging the validity of the levy of vend fee.
Apart from the grounds taken in the Civil Appeals, the Constitutional validity of U.P. Excise (Amendment) Act 5 of 1976 has been challenged as unconstitutional and beyond the legislative competence of the State.
It is further pleaded that the provisions of the 535 Industries (Development and Regulation) Act, 1951 has taken control of fermentation industry and as such a right to legislate by the State with regard to denatured spirit and industrial alcohol is beyond the competence of the State Legislature.
U.P. Excise Act was enacted in the year 1910.
It empowers the State to prohibit the import and export, transport manufacture sale and possession of liquor and all intoxicating drugs in the United Provinces.
The vend fee was first imposed by the Government of U.P. on 18 3 1937 on denatured spirit.
In 1972 the State Legislature enacted the U.P. Excise Amendment Act 13 of 1972.
By a notification dt. 3 11 72 the Government was authorised to sell by auction the right of retail or wholesale vend of foreign liquor.
New Rules were framed, the effect of which was that a vend fee of Rs. 1.10 p. per bulk litre was imposed payable in advance on denatured spirit issued for industrial purposes.
The legality of the levy was challenged in the High Court of Allahabad and a Bench of that Court on 24th March, 1973 held the notification was ultra vires.
After the decision of the Allahabad High Court holding that the levy was illegal, this Court in two decisions Nashirwar vs State of Madhya Pradesh (supra) and Har Shankar vs The Deputy Excise and Taxation Commissioner, (supra) held that the State under its regulatory powers can prohibit every form of activity in relation to intoxicants, its manufacture, storage, export, import and sale.
The State 's power to auction the right to vend by retail or wholesale foreign liquor was upheld.
Relying on the two decisions of this Court, the U.P. State Legislature repealed and re enacted the U.P. Excise (Amendment) Act No. 30 of 1972 by the U.P. Excise (Amendment) (Re enactment and Validation) Act, 1976.
The validity of the amendment Act 1976 was again challenged in the Allahabad High Court in V. P. Anand and Sons vs State of U.P. A Full Bench of the Court held that the State has exclusive privilege of auctioning the right of wholesale or retail vend of intoxicating liquor and upheld the validity of the Act.
Mr. Nariman learned counsel raised several contentions.
The first main contention of the learned counsel was that the levy of vend fee (under rule 17 para 680 of the Excise Manual page 200 201) on the denatured spirit is without legislative competence as it does not fall within Entry 8 of List II of the Seventh Schedule.
Even if it is held that the exclusive right of the State to grant privilege for the manufacture and sale of intoxicating liquor, it was submitted that the right did 536 not extend to denatured spirit used for industrial purposes as it is confined only to potable liquor.
The second important contention raised by the learned counsel was that after the enactment of Industries (Development and Regulation) Act, 1951 under Entry 52 of List 1 by Parliament, the Union had taken under its control in public interest the industries including the fermentation of industrial alcohol and as such the Central Government alone is empowered to provide for regulating by licence/permit or otherwise the distribution, transport, disposal, acquisition, possession, use or consumption of any article relatable to a schedule industry as for example denatured spirit or industrial alcohol.
In State of Bombay and Anr.
vs F. N. Balsara & Ors.
the Constitutional validity of the Bombay Prohibition Act (XXV of 1949) in so far as it restricted the possession and sale of foreign liquor was impugned on the ground that it was an encroachment on the field assigned to the Dominion Legislature under Entry 19 of List I. Under Entry 31, List II to the Seventh Schedule of the Government of India Act, 1935, the Provincial Legislature had the power to make laws in respect of intoxicating liquor that is to say the production, manufacture, possession, transport, purchase and sale of intoxicating liquors.
The corresponding entry in the Constitution of India is List II Entry 8 which is in identical terms.
The plea that was taken was that List I, Entry 19 conferred the power on the Dominion Legislature to make laws with respect to import, export across customs frontiers and as such the State Law restricting possession and sale of foreign liquor encroached upon the field of Dominion Legislature.
This Court held that the words 'possession and sale ' occurring in Entry 31 List II must be read without any qualification.
In considering the meaning of the words 'intoxicating liquor ' set out in entry 31 of List II, Gwyer C.J., in Bhola Prasad vs The King Emperor, stated as follows: "A power to legislate with respect to intoxicating liquors could not well be expressed in wider terms." Again the Learned Chief Justice observed: "It is difficult to conceive of legislation with respect to intoxicating liquors and narcotic drugs which did not deal in some way or other with their production, manufacture, possession, transport, purchase or sale; and these words seem apt to cover the whole field of possible legislation on the subject.
" 537 The above observations were affirmed by this Court in Balsara 's case (supra).
Dealing with the meaning of word 'liquor ', the Court referred to the various Abkari cases in several provinces and found that all the Provincial Acts of this country have consistently included liquor containing alcohol in the definition of 'liquor ' and 'intoxicating liquor ' and, therefore, the framers of the Government of India Act, 1935, could not have been entirely ignorant of the accepted sense in which the word 'liquor ' has been used in the various excise Acts of this country and concluded that the word 'liquor ' covers not only those alcoholic liquids which are generally used for beverage purposes and produce intoxication, but also all liquids containing alcohol.
By adopting another method of approach, the Court observed that the object of the Prohibition Act was not merely to levy excise duties but also to prohibit the use, consumption, possession and sale of intoxicating liquor and to enforce the prohibition effectively, the wider definition of the word 'liquor ' would have to be adopted so as to include all alcoholic liquids which may be used as substitution of intoxicating drinks to the detriment of the health.
In Nashirwar vs The State of Madhya Pradesh (supra), Chief Justice Ray held that the State Legislature is authorised to make a provision for public auction by reason of power contained in Entry B of List II of the Constitution.
The decision negatived the concept of inherent right of citizen to do business in liquor.
This Court gave three principal reasons to hold that there is no fundamental right of citizen to carry on trade or to do business in liquor.
First, there is the police power of the State to enforce public morality to prohibit trades in noxious or dangerous goods.
Second, there is power of the State to enforce an absolute prohibition of manufacture or sale of intoxicating liquor.
Article 47 states that the State shall endeavour to bring about prohibition of the consumption except for medicinal purpose of intoxicating drinks and of drugs which are injurious to health.
Third, the history of excise laws shows that the State has the exclusive right or privilege of manufacture or sale of liquor.
After pointing out the three principal reasons, the Court followed the decision in State of Bombay and Anr.
vs F. N. Balsara holding that absolute prohibition of manufacture or sale of liquor is permissible and the only exception can be for medicinal preparations.
In the context it is clear that the decisions proceeded on the basis that the word 'intoxicating liquor ' is not confined to potable liquor alone but would include all liquor which contain alcohol.
Mr. Nariman, the learned counsel, submitted that the two cases Balsara 's case (supra) and the Nashirwar 's case (supra) cannot be 538 read as to include alcohol manufactured for the purpose of industries such as industrial alcohol.
It was submitted that in both the cases the Court was concerned only with legislation relating to prohibition and the decisions should be restricted to liquor which may contain alcohol which is likely to be misused as potable liquor.
In support of his contention, the learned counsel referred to two decisions A. Nageshwara Rao vs State of Madras and Malitlal Chandra vs Emperor and submitted that if the State can exercise any control over intoxicating liquor, it can only be restricted for the purpose of preventing subversion of its use for defeating the prohibition policy.
We are unable to accept this contention for in Balsara 's case after explicitly approving of the definition of word 'liquor ' in various Abkari Acts in the Provinces of India, the Court held that liquor would not only cover alcoholic liquor which is generally used for beverage purposes and produce intoxication but would also include liquids containing alcohol.
We will now briefly refer to the decisions of the Supreme Court which the learned counsel submitted were confined only to potable liquor.
Cooverjee B. Bharucha vs The Excise Commissioner and Chief Commissioner, Ajmer & Anr.
related to an auction sale of liquor shop under the Excise Regulation Act, 1915.
In Bharucha 's case it was held that licence may be restricted, that the restriction must be in regard to the sale of liquor and that there may be absolute prohibition of the sale of liquor.
The Court also took into account the public expediency and public morality and police power of State to regulate business and mitigate evils.
In M/s. Guruswamy & Co. etc.
vs State of Mysore & Ors.
the auction related to exclusive privilege of selling toddy from certain shops.
The Court held that the auction enabled the licensee to sell the toddy and the licensee paid what he considered to be the equivalent value of the right.
State of Orissa & Ors.
vs Harinarayan Jaiswal & Ors.
related to sale by public auction of the exclusive privilege of selling country liquor in retail shops.
Amar Chandra Chakraborty vs Collector of Excise, Government of Tripura and Ors, also related to the cancellation of the licence by the Excise Collector 539 to establish warehouse for the storage in bond and wholesale vend of country spirit by import and for supply to the excise vendors in the territory of Tripura.
The next case that was referred to by the learned counsel was Har Shankar & Ors.
vs The Dy.
Excise & Taxation Commissioner & Ors.
Chandrachud, J. as he then was, speaking for the Court stated: "In our opinion the true position governing dealings in intoxicants is as stated and reflected in the Constitution Bench decision of this Court in the state of Bombay and Anr.
vs F. N. Balsara [1951] SCR. 682, Cooverjee B. Bharucha vs The Excise Commissioner and the Chief Commissioner, Ajmer and Ors. [1954] SCR. 875, State of Assam vs A. M. Kidwai, Commissioner of Hills Division and Appeals, Shillong [1957] SCR. 295, Nagendra Nath Bora and Anr.
vs The Commissioner of Hills Division and Appeals, Assam and Ors. [1958] SCR. 1240, Amar Chandra Chakraborty vs Collector of Excise, Government of Tripura & Ors. [1973] 1 S.C.R. 633 and State of Bombay vs R.M.D. Chamarbaugwala [1957] SCR. 874 as interpreted in State of Orissa and Ors.
vs Harinarayan Jaiswal and Ors [1972] 3 SCR. 784 and Nashirwar Etc.
vs State of Madhya Pradesh and Ors.
Civil Appeals Nos. 1711 1721 and 1723 of 1974 decided on November 27, 1974.
There is no fundamental right to do trade or business in intoxicants.
The State under its regulatory powers, has the right to prohibit absolutely every form of activity in relation to intoxicants its manufacture, storage, export, import, sale and possession".
Though most of the cases dealt with the right of the State Government as regard auction of country liquor, in Balsara 's case, Nashirwar 's case and Har Shankar 's case, the Court was concerned with the right of the State Government over foreign liquor.
After considering all the decisions of five Constitutional Benches, Chandrachud, J. as he then was summed up the position at page 274 as follows: "These unanimous decisions of five Constitutional Benches uniformly emphasised after a careful consideration of the problem involved that the State has the power to prohibit trades which are injurious to the health and welfare of the public is inherent in the nature of liquor business, 540 that no person has an absolute right to deal in liquor and that all forms of dealings in liquor have, from their inherent nature, been treated as a class by themselves by all civilised communities." Har Shankar 's case related to licensing of retail sale of foreign liquor for consumption on the premises of the licensees.
The grant of license for sale of country spirit, foreign liquor, beer were subject to the provisions of the Punjab Act 1 of 1914.
The demand by the Government for payment of large sums of money from hoteliers or barkeepers who supply foreign liquor for consumption were challenged as arbitrary, without authority and illegal.
The provisions in the Act which provided for a levy on retail vend of foreign liquor was held to be valid.
The decisions referred to above make it clear that the power to legislate under List II Entry 8 relating to intoxicating Liquor comprises of liquor which contains alcohol whether it is potable or not.
The plea of the State is that the levy is for parting with the exclusive right of the State with regard to intoxicating liquor and the levy was for the purpose of conferring a right on the licensees.
That the State has the exclusive right of manufacture or sale of intoxicating liquor which includes liquor containing alcohol has been recognised.
The second most important contention raised by Mr. Nariman is that after passing of the Industries (Development and Regulation) Act, 1951, the claim by the State to monopoly with regard to production and manufacture and the sale of the denatured spirit or industrial alcohol is unsustainable.
In order to appreciate this contention it is necessary to refer to the relevant entries in Lists I and II of the Seventh Schedule of the Constitution.
List I Entry 52 runs as follows: "Industries, the control of which by the Union is declared by Parliament by law to be expedient in the public interest".
In List II the entry relating to industries is Entry 24 which is as follows: "Industries subject to the provisions of (entries 7 and 52 of List 1)".
Entry 7 in List I relates to industries to be declared by Parliament by law to be necessary for the purpose of defence or for the prosecution of war.
In this case we are not concerned with Entry 7.
A reading of Entry 52 in List I and Entry 24 in List II makes it clear 541 that the Parliament will have exclusive jurisdiction to legislate regarding industries, the control of which by the Union is declared by Parliament by law to be expedient in the public interest.
Connected with these two entries is entry 33 in List III Concurrent List which provides: "Trade and commerce in, and the production, supply and distribution of (a) the products of any industry where the control or such industry by the Union is declared by Parliament by law to be expedient in the public interest, and imported goods of the same kind as such products: (b) x x x (c) x x x (d) x x x (e) x x x" The subject of trade and commerce in, and the production supply and distribution of the products of any industry which has been declared by Parliament under Item 1 Entry 52 is in the Concurrent List on which both Parliament and State can legislate.
The Industries (Development and Regulation) Act, 1951 was enacted by Parliament to provide for development and regulation of certain industries.
Section 2 declares that it is expedient in the public interest that the Union shall take in its control industries specified in First Schedule.
Item 26 in the First Schedule is fermentation industries (i) Alcohol (ii) other products and fermentation industries.
Chapter II of the Act provides for establishment of Central Advisory Council and Development Council.
Chapter III deals with regulation of scheduled industries.
Section 10 requires registration of existing industrial undertakings.
Section 11 deals with the licensing of new industrial undertakings.
Section 12 deals with revocation and amendment of licenses in certain cases.
Section 14 deals with the procedure for the grant of license or permission.
Section 15 confers power of investigation to be made into scheduled industries and industrial undertakings.
Section 18(b) confers power on the Central Government to control, supply, distribution, price, etc.
of certain articles.
As considerable reliance was placed on Section 18(G) for the contention that the Central Government has the exclusive power with regard to notified industries to control supply distribution, fixation of price etc.
it is necessary to set out the material part of the Section in full.
Section 18 (G) (1) runs as follows: "The Central Government, so far as it appears to it to be necessary or expedient for securing the equitable distri 542 bution and availability at fair prices of any article or class of articles relatable to any scheduled industry, may, notwithstanding anything contained in any other provision of this Act, by notified order, provide for regulating the supply and distribution thereof and trade and commerce therein.
" Sub section 2 of Section 18(G) confers certain powers without prejudice to the generality of the powers conferred by sub section (1) by a notified order to provide for matters enumerated in it (a) to (h) of the sub section.
These powers include amongst others the right to control the price.
The powers conferred under section 18(G)(1) is exercisable by the Central Government in so far as it considers it to be necessary or expedient.
The plea of the learned counsel is that the notification made by the Central Government excludes the power of the State Government to fix the price of denatured spirit and rectified spirit as it has been placed beyond the powers of the State to regulate the distribution of licences, permits etc.
The notification that is relied on is the Ethyl Alcohol (Price Control) Amendment Order, 1975 dated 31st October, 1975.
The order reads as follows: "In exercise of the powers conferred by section 18(G) of the Industries (Development and Regulation) Act, 1951 (65 of 1951), the Central Government hereby makes the following order further to amend the Ethyl Alcohol (Price Control) order, 1971 namely: 1.
(1) This order may be called the Ethyl Alcohol (Price Control) Amendment order, 1975.
(2) It shall come into force on the date of its publication in the official gazette.
In the Ethyl Alcohol (Price Control) order, 1971 (hereinafter referred to as the said order), in clause 2, for the Table the following Table shall be substituted, namely: ____________________________________________________________ (1) (2) ____________________________________________________________ 1 Absolute Alcohol Conforming to ISI Six hundred and Standard No. 321 1952.
, names for sixty eight equivalent volume at 100 per cent rupees and v/v strength; forty one paise per kilo litre.
2 Rectified spirit conforming to ISI Six hundred standard No. 323 1959 named for and twenty equivalent volume at 100 per cent two rupees v/v strength.
and twenty paise for kilo litre.
3 Rectified spirit conforming to ISI Five hundred standard No. 323 1959 named for and eighty nine 94.68 per cent v/v strength.
rupees and ten paise per kilo litre.
____________________________________________________________ 543 The table prescribes the price of various types of alcohol and rectified spirit.
The price of ethyl alcohol is fixed under the powers conferred on the Central Government under section 18(G) (1) for securing the equitable distribution and availability at fair price.
The Ethyl Alcohol (Price Control) order, 1961 which was made by the Central Government in exercise of the powers conferred on it under section 18(G) of the Industries (Development and Regulation) Act, 1951 fixed the maximum ex distillery price for industrial alcohol and rectified spirit under cl. 1 and 2 of the Order.
3 permitted certain additional charges in certain cases of alcohol supplied after denaturation with general or special denaturants, the cost of such denaturation being allowed to be charged.
Ethyl Alcohol (Price Control) order, 1964 while fixing the maximum ex distillery price of ethyl alcohol under cl. 3 permitted additional charges to be levied in certain cases such as for covering costs incurred for transport of molasses to the distillery and any octroi duty paid or payable on molasses and when alcohol is supplied after denaturation, to include actual cost of such denaturants plus some octroi charges as specified in the clauses.
3(a) empowered the Excise Commissioner of the State to determine the additional charges leviable under cl. 3 in case of any doubt or distillery price of ethyl alcohol provided for fixation of the price after taking into account various factors enumerated in cl.
2(2) (a to h).
Reading various Ethyl Alcohol (Price Control) orders passed by the Government from time to time, it is clear that the order permitted the adding of the expenses incurred for transportation, payment of octroi duty etc.
to the price fixed.
We are unable to read the Ethyl Alcohol (Price Control) orders as explicitly or impliedly taking away the power of the State to regulate the distribution of intoxicating liquor by collecting a levy for parting with its exclusive rights.
If the powers of Parliament and the State Legislature were confined to entry 52 in List I and entry 24 in List II, Parliament would have had exclusive power to legislate in respect of industries notified by Parliament.
The power of the State under Entry 24, List II is subject to the provisions of Entry 52 in List I.
But we have to take into account Entry 26 in List II and Entry 33 in List III for determining the scope of legislative power of the Parliament and the State.
Entry 26 in List II is as follows: "Trade and Commerce within the State subject to the provisions of entry 33 of List III.
" Under Entry 33 List III the Parliament and the State have concurrent powers to legislate regarding the production, supply and 544 distribution of the products of industries notified by the Parliament.
Furthermore it has to be noted that the exclusive power of the State to provide for manufacture, distribution, sale and possession etc.
of intoxicating liquor is vested with the State.
The power of the State Government to levy a fee for parting with its exclusive right regarding intoxicating liquor has also been recognised as is seen from the various State Acts regulating manufacture, sale.
of intoxicating liquor.
A fair scrutiny of the relevant entries makes it clear that the power to regulate the notified industries is not exclusively within the jurisdiction of Parliament as List II Entry 33 in the concurrent list enables a law to be made regarding production, supply, distribution of products of a notified industry.
In Ch.
Tika Ramji and ors.
vs The State of Uttar Pradesh and Ors.
a question arose whether Sugarcane regulation, supply and purchase Act passed by the State Legislature and the notification issued therein by the State Government were repugnant to the notifications made under the Industries (Development and Regulation) Act of 1951.
Two notifications were issued by the State Government under the U.P. Sugarcane Regulations, supply and purchase Act 1953 prohibiting the occupier of the factory to which area is assigned from entering into an agreement to purchase cane except through a cane growers Cooperative Society under certain circumstances and assigning different sugarcane factories specified to certain purchase centre for supply to them sugarcane for the crushing season were challenged as ultravires.
The plea was that the subject matter of the legislation fell within the exclusive jurisdiction of Parliament and the impugned notifications were repugnant to the notifications made under the Industries (Development and Regulation) Act, 1951.
On 31st October, 1951, Parliament enacted the Industries (Development and Regulation) Act, 1951 to provide for development and regulation of certain industries.
By section 2 of the Act it was declared that it was expedient in public interest that the Union should take in its control the industries specified in the First Schedule which included in Item 8 thereof, the industries engaged in the manufacture or production of sugarcane.
Industries (Development and Regulation) Act, 1951 was amended by Act 26 of 1953 by adding Chapter IIIA entrusting Central Government with power so far as it appears necessary or expedient for securing the equitable distribution and availability at fair price of any article relatable to scheduled industry to provide by notified order for regulation, supply and distribution and trade and commerce thereof.
The impugned notification which required the factories to purchase 545 their sugarcane from the cooperative societies and assigned certain areas as cane purchasing centre for the factories was stated to be ultra vires as they were beyond the State 's competence and covered by the notification under the Industries (Development and Regulation) Act.
Justice Bhagwati observed at page 411: "When, however, it came to the products of the controlled industries comprised in Entry 52 of List I, trade and commerce in, and production, supply and distribution of, these goods became the subject matter of Entry 33 of List III and both Parliament and the State Legislatures had jurisdiction to legislate in regard thereto.
" The learned Judge proceeded to observe: "That sugarcane being goods which fell directly under entry 27 of List II was within the exclusive jurisdiction of the State Legislature and it was competent to legislate with regard to it and as such the impugned Act was intra vires of the state Legislature.
The power to legislate regarding production, supply and distribution of goods is subject to provisions entry 33 List III which deals with products and industries notified by Parliament.
Entry 33 being in the concurrent List, legislative power of the State regarding production, supply and distribution of goods cannot be denied.
" The Court on the facts of the case found that even assuming that sugarcane was an article or class of articles relating to the notified industries within the meaning of Section 18(G) of Act 65 of 1951, no order was issued by the Central Government in exercise of its powers vested in it and, therefore, no question of repugnancy arose.
In the case before us it cannot be discerned from the Ethyl Alcohol Control order that the power of the State Government to prescribe a levy for parting with its exclusive rights relating to intoxicating liquor had been taken away.
In Baijnath Kedvai vs State of Bihar & Ors.
a question arose as to whether the Bihar Legislature had jurisdiction to enact the second proviso to section 10(2) of the Bihar Land Reforms Act, 1950 by which the terms and conditions of the lease of mines and minerals could be substituted for the terms and conditions laid down in the Bihar Mines and Minerals Concession Rules.
On the strength of the amended section 10(2) of the Reforms Act and amended Rules 20 the Bihar Government demanded from the appellant rent contrary to 546 the terms of his lease.
It was held that Entry 54 in Union List speaks of requirements of mines and minerals development and Entry 23 in List II is subject to entry 54.
Once a declaration was made under entry 54 specifying the extent of vesting the competency was only with Parliament.
The attempt of the learned counsel to trace the power to enact the second proviso to section 10 of the Act to Entry 18 of List II was rejected.
The plea of the learned counsel was that the modification of the existing lease was a separate topic and not covered by section 15 of Act 67 of 1957.
The Court rejected the plea on the ground that the entire legislative field in relation to mines and minerals had been withdrawn from the State Legislature.
The decision does not help the appellants for on the facts it is clear that the entire field relating to mines and minerals had been occupied and taken away from the Legislature and as such it was beyond the competence of the State to legislate on mines and minerals.
In the case before us the position is different because the power of the State Legislature to legislate in respect of the intoxicating liquor and its exclusive right regarding intoxicating liquor cannot be questioned.
The third contention of Mr. Nariman, is that the vend fee levied by the State is not and was never treated by the State as charge or rental as the consideration for granting exclusive privilege.
On the other hand the levy is excise duty or a fee which the State is not entitled to collect.
The submission of the learned counsel was that even though it is found that the State is entitled to make laws regarding intoxicating liquor under List II, Entry 8, it has no power to impose any tax.
The power to tax by the State is confined only to Entry 51, List II which empowers the State to levy duty on alcoholic liquors for human consumption and as denatured spirit is not alcoholic liquor for human consumption, a levy of excise duty is not permissible by the State.
It was contended that the levy of a fee was also not permissible unless it had some relation to the expenses incurred for that purpose.
According to the Solicitor General, Mr. Kakkar, the levy was not a tax or a fee but a levy for parting with the exclusive right of the State in respect of intoxicating liquor.
In view of the stand taken by the State, it is unnecessary for us to go into the question as to whether the levy is a tax or a fee.
For dealing with the contention of Mr. Nariman that the levy was never collected in lieu of the State parting with its rights, it is necessary to refer to the relevant provisions of the Act.
The United Provinces Excise Act, 1910 (Act 4 of 1910) was passed in 1910.
Subsequently, it was adapted and modified by the Government of India (Adaptation 547 of Indian Laws) order, 1927 and Adaptation of Laws order, 1950 Chapter IV of the Act deals with manufacture, possession and sale while Chapter V deals with duties and fees.
The Act refers to Excise Revenue, Duty, fee, tax, fine and payment as condition for the grant of licence for any exclusive privilege.
section 3(1) defines Excise Revenue as meaning revenue derived or derivable from any duty, fee, tax, fine or confiscation imposed or ordered under the Provisions of the Act or of any law in force relating to alcohol or intoxicating drug.
Excise Duty, and Countervailing duty is defined under section 3 and 3(a) as meaning such excise duty or countervailing duty, as the case may be, as mentioned in entry 51 of List II of the Seventh Schedule of the Constitution.
Chapter II relates to establishment and control of the Excise Department.
Chapter III prohibits import of intoxicants.
Intoxicant means any liquor which in turn includes any liquids containing alcohol.
section 12 prohibits import unless permission is obtained and conditions imposed by the State Government are satisfied and any duty imposed under section 28 is paid.
section 28 refers to duties and fee and provides that an excise duty or countervailing duty, as the case may be, directed by the State Government may be imposed on any exciseable article.
Under this section, a duty on import, export, transport, manufacture is levied in accordance with the provisions of section 12(1), 13, 17 and 18.
The stand taken by the State before us is that the levy which is being collected, is not in the nature of an excise duty or counter veiling duty.
Though a duty under section 28, Proviso II on denatured spirit was levied after Proviso II to section 28 was omitted by the Government (Adaptation of Indian Law) order, 1937, no excise duty on denatured spirit was levied.
Apart from the duty that is leviable, the Excise Commissioner is empowered under section 30 instead of or in addition to any duty to accept payment of a sum in consideration of the grant of licence of any exclusive privilege under section 24.
Section 24 provides that subject to the provisions of section 31, the Excise Commissioner may grant any person a licence for exclusive privilege of manufacturing or supplying or selling wholesale or retail, any country liquor or intoxicating drug within any local area.
Reading section 30 and 24 together, it is clear that the Excise Commissioner may accept payment in consideration for the grant of the licence for any exclusive privilege.
The exclusive privilege under section 24 was confined only to country liquor within a local area.
Before examining the impact of amended section 24A by U.P. Act 30 of 1972, it may be mentioned that Chapter VI empowers the collection of fees for licence or permits granted under the Act.
A licence fee was only collected under notification dated 22 5 1930 for licence for wholesale vend of denatured spirit.
The Excise Department on 23 1 1937 548 introduced rule 17(2) under section 40(2)(d) imposing vend fee of Annas 7 per bulk gallon for the issue from the distillery.
This fee was not collected regarding denatured spirit issued to industries engaged in the manufacture of synthetic rubber.
By notification dated 3rd November, 1972 the U.P. Government amended the Excise Rules and substituted rule 17(2).
The rule is purported to have been issued under section 40(2) (d) in exercise of the powers conferred on the Government under section 40(1).
By the notification on the issue of denatured spirit from a distillery a vend fee of Rs. 1.10p.
per litre was made payable in advance except regarding the issue to institutions exempted under the rule.
The Learned Counsel strenuously contended that this levy does not purport to be in consideration of the grant of licence for any exclusive privilege.
On the other hand, the learned Counsel pointed out that section 40(2)(d) refers to the rule making power of the Government for regulating the import, export, transport or possession of the intoxicants.
The power, if any, is conferred on the Excise Commissioner under section 41 enabling him to make rules prescribing the scale of fees in respect of licence, permits or pass or storing any intoxicants.
In 1972 U.P. Act 30/1972 added section 24A which provides that subject to provisions of section 31, the Excise Commissioner may grant to any person a licence or licences for the exclusive privilege of selling by retail at shops (for consumption both on and off the licensed premises, or for consumption off the licensed premises only) any foreign liquor in any locality.
After the introduction of section 24A, the Excise Commissioner is empowered to grant any person a licence for the exclusive privilege of selling foreign liquor.
Before the amendment, section 24 was restricted to country liquor or intoxicating drug.
By the amended Sec.
24A the Excise Commissioner may accept payment of a sum in consideration for the grant of the licence for any exclusive privilege for selling foreign liquor.
section 31 to which section 24A is subject, relates to grant of licences and it does not in any way restrict the power thus conferred by section 24A.
The plea put forward by the learned counsel is that the word 'foreign liquor ' cannot be understood as including denatured spirit as the Section would itself indicate that the licence is for selling for consumption which would indicate that foreign liquor is meant for human consumption.
We are unable to give the words 'foreign liquor ' such a restricted meaning for the word consumption cannot be confined to consumption of beverage alone.
When liquor is put to any use such as manufacture of other articles, the liquor is all the same consumed.
Further, section 4(2) provides that the State may declare what shall be deemed to be country liquor or foreign liquor.
The State had under 549 rule 12 issued notification dated 30th December, 1960 defining foreign liquor as meaning all rectified, perfumed, medicated and denatured spirit, wherever made.
The plea that the Excise Commissioner had no right to accept payment in consideration for the grant of the licence for the exclusive privilege for selling wholesale or retail foreign liquor which includes denatured spirit, cannot, therefore be accepted.
Rule 17(2) no doubt purports to have been issued under the rule making powers conferred on the Government under section 40(2)(d) which enables the Government to make rules for regulating the import, export, transport for possession of any intoxicants.
It may be noted that when the amended rule 17(2) was introduced on 3 11 1972, section 24A had been amended by U.P. Act, 30/1972 and the power of the Excise Commissioner to accept payment for grant of licence for exclusive privilege cannot be denied.
The validity of Act 30/1972 which authorised the Excise Commissioner to collect a vend fee for the retail or wholesale vend of foreign liquor was challenged.
The Allahabad High Court upheld the challenge holding that the State did not have the exclusive privilege to collect the vend fee.
This view was not accepted by the Supreme Court in Nashirwar 's case (supra) and Harishankar 's case (supra) which held that under the regulatory power, the State had power to auction the right to vend by retail or wholesale foreign liquor.
As Act 30 of 1972 was struck down by the Allahabad High Court the State came forward to validate Act 30 of 1972 as it stood when it was passed by introducing the U.P. Excise (Amendment) (Reenactment and Validation) Act, 1976 (U.P. Act 5 of 1976).
The preamble refers to the passing of U.P. Amendment Act, it being struck down by the Allahabad High Court and the subsequent decision of the Supreme Court in Nashirwar 's case, and states that it had become necessary to enact the (Amendment) (Re enactment and Validation) Act.
In the main Act, after section 1, sub section
(2) was introduced providing that it shall be deemed to have been in force ever since the commencement of the United Provinces Excise Act, 1910.
After section 24 of the principal Act, section 24A was introduced.
section 24A(1) re enacts section 24A(1) added by U.P. Act 30 of 1972.
section 24B was introduced for removal of doubts which declared (1) that the State Government has exclusive privilege for manufacture and sale of country and foreign liquor; (2) that the amount described as licence fee in cl.
(c) of section 41 is in its essence rental or consideration for the grant of such right or privilege by the State Government and (3) that the Excise Commissioner as the head of the Excise Department of the State shall be deemed while determining or realising such fee, to act for and on 550 behalf of the State Government.
section 30 was substituted which specifically mentioned that the Excise Commissioner may accept payment of a sum in consideration of the grant of privilege for any exclusive or other privilege under section 24A. section 24A was not specifically mentioned in section 30 as it stood before the re enactment.
After the introduction of section 24A, the Excise Commissioner had a right to grant the privilege of selling of foreign liquor.
The fact that section 30 did not specifically mention section 24A might not have made any difference.
But in order to remove all doubts, the new Section 30 had been introduced.
section 41, cl.
(3) was re enacted to enable the fixation of fee payable for the grant of exclusive or other privilege under section 24 and 24A. section 40 was also amended so as to give retrospective effect.
section 4 of the Act 5 of 1976 also provides that the U.P. Excise (Amendment) Act, 1972 shall be deemed to be and always to have been as valid as if the provisions of this Act were in force at all material times.
In short the purpose of introduction of Act 5 of 1976 was to make it clear that U.P. Excise (Amendment) Act, 1972 shall be deemed to and always to have been valid.
In view of our findings that U.P. Excise (Amendment) Act, 1972 was valid, the effect of U.P. Act 5 of 1976 is to remove all doubts and to give retrospective effect.
It was next contended that foreign liquor which is defined under rule 12, as including denatured spirit, cannot apply to specially denatured spirit.
Foreign liquor was defined as including specially denatured spirit.
By a notification the Excise Commissioner of U.P. on 3 5 1976 framed U.P. Licences for the possession of denatured spirit and specially denatured spirit Rules, 1976.
In the preamble to the rules, it is stated that the Excise Commissioner with the previous sanction of the State Government was making the rules relating to licence for possession of denatured spirit including specially denatured spirit for industrial purposes.
Rule 1 (iii) provides that specially denatured spirit means rendered unfit for human consumption in such manner as may be prescribed by the Excise Commissioner by notification in this behalf and does not include ordinary denatured spirit for general use.
Rule 2 provides that licences for the possession of the denatured spirit including specially denatured spirit for industrial purpose shall be of three kinds.
The learned counsel contended that though foreign liquor is defined as including denatured spirit, it cannot be held to include specially denatured spirit.
Denatured spirit mentioned in the rules is treated as including specially denatured spirit for industrial purpose.
Denatured spirit has ethyl alcohol as one of its constituents.
The specially denatured spirit for industrial purpose is different from denatured spirit only because of the difference in the 551 quantity and quality of the denaturants.
Specially denatured spirit and ordinary denatured spirit are classified according to their use and denaturants used.
We are unable to accept the contention of the learned counsel that specially denatured spirit for industrial purpose is different from the ordinary denatured spirit.
The definition of alcohol under rule 12 includes both ordinary as well as specially denatured spirit.
It was next contended that if the levy of Re. 1.10p per bulk gallon of denatured spirit as vend fee, is upheld it would result in violating the appellants/petitioners fundamental right to carry on their trade and business under article 19(1)(g) of the Constitution.
According to the learned counsel, the price fixed per gallon of ethyl alcohol under the Ethyl Alcohol (Price Control) order is 59 paise, per gallon.
If the levy is not considered as a tax and could not be passed on to the consumer as price fixed under the Ethyl Alcohol Amendment order, is only 59 p., it would be confiscatory in nature.
It is seen that the right of the State Government to accept payment of a sum for the grant of its exclusive privilege cannot be questioned.
The price fixed for ethyl alcohol is ex distillery price and we see no impediment for the addition of Re. 1.10 as vend fee by the State Government Dr. L. N. Singhvi, who appeared as intervener in Civil Appeal Nos.
2191 to 2198 of 1978 for the appellants and for petitioners in Special Leave Petitions Nos. 125 to 126/79 while adopting the contentions of Mr. Nariman submitted that the stand taken by the U.P. Government in earlier proceedings in the High Court was that the levy was in the nature of Excise Duty or a fee while the present stand is that it is neither a duty nor fee but only a levy for the conferment of the exclusive privilege.
It is true that the stand taken by the Government in the earlier proceedings was different but that would not make any difference so long as the Government had a right to impose the levy.
It has been found that after the addition of section 24A by Act 30 of 1972, the Commissioner was entitled to accept payment for conferring the privilege which the State owned exclusively.
The learned counsel submitted that so far as his clients M/s. Rallis Chemicals, Kanpur and M/s. Rallis India, petitioners in Special Leave Petitions Nos. 125 to 126 of 1979 are concerned they are only holders of licences for possession and are not licencees under F.L. 16.
In the same class fall the appellants in Civil Appeal No. 2248 of 1978, M/s. Synthetic and Chemicals who are only purchasers of denatured spirit.
It was submitted that for this class of persons if the vend fee is 552 for the grant of exclusive privilege of the State for sale of liquor, it cannot be recovered from the purchasers.
Rule 17(1) relates to vend of denatured spirit.
It empowers the Collector (1) to grant to a distiller a licence for manufacture of denatured spirit (2) to grant to approved dealers of denatured spirit a licence in form F.L. 16 for the wholesale vend of denatured spirit.
Scale of fee is given in the rule which prescribes that for sales not exceeding 10,000 litres per annum a fee will be of Rs. 100/ and for sales exceeding 10,000 litres, the fee shall be increased by Rs. 500/ for every 5000 litres or fraction thereof.
Subrule (2) provides that in case of issue from a distillery, a vend fee of rupee one and ten paise per bulk gallon will be payable before the spirit is issued.
The fee charged is very different from the one in Rule 17(1) which provides that the distillery or an approved dealer for wholesale vend of denatured spirit may be given a licence in Form F.L. 16.
The distiller and the approved dealer is to pay a licence fee for the sales at the rate prescribed.
But rule (2) speaks of levy of vend fee in case of issued from the distillery which is payable in advance before the spirit is issued.
It is admitted that the petitioners and the appellants who claim as purchasers do not have a licence under F.L. 16.
Therefore, sub section
(1) has no application.
The levy on persons who are purchasers is for the possession of denatured spirit in excess of the prescribed limit.
The permission granted in their favour and the allotment orders of the specially denatured spirit prescribes the terms and conditions under which the allotment is made.
The licences are granted to them under form F.L. 39 and they have to abide by those conditions.
The notification of the Excise Commissioner of U.P. dated 3 5 1976 provides that the licence for the possession of denatured spirit including the specially denatured spirit of industrial purpose shall be of three kinds.
We are concerned with the licences for the possession for use in industries in which alcohol is destroyed or converted chemically in the process into other products and the product does not contain alcohol such as, Ethel, Styrene, Butadiene, Acetone and Polythene etc.
The licence granted for this purpose is in form F.L. 39.
Rule 3(a) provides that the fee for the licence in Form F.L. 39 shall be at a rate prescribed for industry to industry by the Excise Commissioner per litre, payable on the quantity of specially denatured spirit obtained from any distillery in Uttar Pradesh and that fee shall be realised by the Excise Inspector incharge Distillery from the licensee before issue of the specially denatured spirit from the distillery.
The conditions relating to grant of a licence for issue of denatured spirit for industrial purpose are laid down in rule 4.
Special conditions regarding licence in form F.L. 39, 40 and 41 are prescribed in rule 5.
The appellants/petitioners having applied 553 for and obtained licences in form F.L. 39 are bound to comply with the conditions.
Lastly, it was contended that the provisions of Uttar Pradesh Excise (Amendment) (Re enactment and Validation) Act, 1976 is invalid and confiscatory as its retrospective operation imposes an unbearable burden on the appellants/petitioners.
It was stated that the licence under F.L. 39 was issued only in the year 1979 and no levy could be made regarding denatured spirit that was supplied before that date.
The answer of the State is that the levy was imposed for permission granted in their favour and allotment orders of denatured spirit issued to them from the various distilleries.
The parties after having paid the fee had taken possession of the denatured spirit from the distillery.
Act 5 of 1976 has been given retrospective effect as the levy imposed under Act 30 of 1972 was found to be illegal and unsustainable by the Allahabad High Court which was reversed by this Court by giving retrospective effect, the State has only restored the status quo enabling the collection of the levy validly made by Act 30 of 1972.
Reliance was placed on the decision of this Court in A. B. Abdul Kadir & ors etc.
vs State of Kerala for the contention that retrospective operation of an Act when it harshly operates is liable to be held as invalid.
At page 706 this Court observed that the power to make a valid law ' would enable providing for prospective and retrospective operation of the provisions.
It was observed that in judging the reasonableness of the retrospective operation of law, the test of length of time covered by the retrospective operation could not by itself be treated as decisive.
On the facts of the case there could be no complaint because what is sought to be collected is levy which was legally made.
The result is, all the contentions raised by the learned counsel for the appellants/petitioners fail and appeals and the petitions are dismissed with costs one set of hearing fee.
The State Appeal C.A. No. 1130/76 is allowed but there will be no order as to costs.
P.B.R. State appeals allowed.
| IN-Abs | The respondents who were licensees for the whole sale vend of denatured spirit in their writ petitions before the High Court contended that levy of fees on denatured spirit was not justified because (i) the State was not providing any service to the trade and (ii) since it is the Parliament which has the power to levy excise duty or tax on denatured spirit, the State was incompetent to levy the fees.
Rejecting the contentions, the High Court held that the State had exclusive privilege to deal with any intoxicating liquor which included denatured spirit, that it had the right to vend liquor either in retail or wholesale and that therefore its power to levy fees cannot be questioned.
In appeal to this Court it was contended on behalf of the licensees that (1) levy of vend fee on denatured spirit by the State was without legislative competence (2) with the enactment of Industrial (Development and Regulation) Act, 1951 the Union had taken under its control industries including fermentation of industrial alcohol and, therefore, it is only the Union which could levy the fees on denatured spirit or industrial alcohol.
Allowing the State 's appeal, ^ HELD: The levy of vend fee is for parting with the exclusive right of the State with regard to intoxicating liquors and for conferring a right on the licensees to sell such liquors.
A conspectus of the decisions of this Court establishes (i) that there is no fundamental right of a citizen to carry on trade or to do business in liquor because under its police power, the State can enforce public morality, prohibit trade in noxious or dangerous goods (ii) the State has power to enforce an absolute prohibition on manufacture or sale of intoxicating liquors pursuant to Article 47 of the Constitution and (iii) the history of excise laws in the country shows that the State has the exclusive right or privilege to manufacture or sell liquors.
[549 F H] State of Bombay and Anr.
vs F. N. Balsara [1951] S.C.R. 682 referred to.
(iv) The terms "intoxicating liquor" is not confined to potable liquor alone but would include alliquors which contain alcohol.
[537 G] Nashirwar vs State of Madhya Pradesh [1975] 2 S.C.R. 861; Har Shankar vs The Deputy Excise and Taxation Commissioner ; ; State of Bombay and Anr.
vs F. N. Balsara & Ors. ; ; Bhola Prasad vs The King Emperor at p. 25 referred to.
(v) The term "liquor" used in Abkari Acts not only covers alcoholic liquor which is generally used for beverage purposes and which produces intoxication but would also include liquids containing alcohols.
[537 B C] 532 Cooverjee B. Bharucha vs The Excise Commissioner and Chief Commissioner, Ajmer & Anr. ; ; M/s. Guruswamy & Co. etc.
vs State of Mysore & Ors.
; State of Orissa & Ors.
vs Harinarayan Jaiswal & Ors.
; ; Amar Chandra Chakraborty vs Collector of Excise, Government of Tripura and Ors. ; ; Har Shankar & Ors.
vs The Dy.
Excise & Taxation Commissioner & Ors. ; referred to. 2(a) The power to regulate the notified industries is not exclusively within the jurisdiction of Parliament as Entry 33 in the Concurrent List enables a law to be made regarding production, supply and distribution of products of notified industries.
The exclusive power of the State to provide for manufacture, distribution, sale and possession of intoxicating liquors is vested in the State.
The power of the State Government to levy a fee for parting with its exclusive right regarding intoxicating liquors has been recognized as could be seen from the various State Acts regulating the manufacture, sale, etc.
of intoxicating liquors.
[544 C, A B] Ch.
Tika Ramji and Ors.
vs The State of Uttar Pradesh and Ors. ; ; Baijnath Kedai vs State of Bihar & Ors.
; distinguished.
(b) The term "foreign liquor" cannot be given a restricted meaning because the word consumption cannot be confined to consumption of beverages only.
When liquor is put to any use such as manufacture of other articles, the liquor is all the same consumed.
The State is empowered to declare what shall be deemed to be country liquor or foreign liquor.
"Foreign liquor" is defined as meaning all rectified, perfumed, medicated and denatured spirit wherever made.
Therefore, the plea that the Excise Commissioner had no right to accept payment in consideration for the grant of licence for the exclusive privilege for selling in wholesale or retail, foreign liquor which includes denatured spirit cannot be accepted.
[548 H, 549 A B] (c) The definition of "alcohol" includes both ordinary as well as specially denatured spirit.
The specially denatured spirit for industrial purposes is different from denatured spirit only because of the difference in the quantity and quality of the denaturants.
Specially denatured spirit and ordinary denatured spirit are classified according to their use and denaturants used.
Therefore, the contention that specially denatured spirit for industrial purposes is different from the ordinary denatured spirit has no force.
[551 B, 550 H 551 A]
|
ivil Appeal Nos.
537 539 of 1970.
Appeals by Special Leave from the Judgment and Order dated 20 8 1968 of the Madhya Pradesh High Court in Misc.
Petition Nos. 282, 283 and 293 of 1968.
section K. Gambhir for the Appellant.
section section Khanduja for the Respondents.
787 The Judgment of the Court was delivered by UNTWALIA, J.
These three appeals by special leave are from the common judgment of the Madhya Pradesh High Court allowing the Writ Petitions filed by the six respondents and quashing the orders of their transfer made by the State Government in exercise of their power under section 94(7) of the Madhya Pradesh Municipalities Act, 1961, hereinafter called the Act.
The respondents were employees of the Municipal Council, Sagar.
They were employed as lecturers and teachers in the various Municipal Higher Secondary Schools run and managed by the said Municipal Council.
Three orders were issued by the State Government on various dates in June, 1968 transferring certain lecturers and teachers serving under a particular Municipal Council to the schools run and managed by another Municipal Council.
The six respondents were transferred by the said orders to various places.
They challenged the order of transfer in the High Court on the ground that the State Government had no power to transfer them under section 94(7) of the Act.
The High Court has accepted their contention and hence these appeals.
We shall quote the relevant provisions of section 94 of the Act as they stood at the relevant time from the judgment of the High Court.
There have been some amendments in the year 1973 with which we are not concerned.
They read as follows: "94.
Appointment of staff: (1) Every Council having an annual income of five lakhs of rupees or more shall, subject to rules framed under section 95, appoint a Revenue Officer and an Accounts Officer and may appoint such other officers and servants as may be necessary and proper for the efficient discharge of its duties.
(2) Every Council not falling under sub section (1) shall, subject to rules framed under section 95, appoint a Sanitary Inspector, an Overseer, a Revenue Inspector, and an Accountant and may appoint such other officers and servants as may be necessary and proper for the efficient discharge of its duties: . . . . . . . . (7) The State Government may transfer any officer or servant of a council mentioned in sub sections (1) & (2) and in receipt of total emoluments exceeding one hundred rupees to any other Council.
" 788 The High Court has taken the view that the words "any officer or servant of a Council mentioned in sub sections (1) and (2)" occurring in sub section
(7) mean "any officer or servant as enumerated or specified in sub sections
(1) and (2): that is to say, the officers who can be transferred under sub section
(7) are only Revenue Officer, Accounts Officer, Sanitary Inspector and an Overseer, a Revenue Inspector or an Accountant.
No other officer or servant can be transferred.
We do not think that the High Court is right in putting this restricted interpretation to sub section
(7) of section 94.
Other officers and servants who can be appointed by the Municipal Councils either under sub section
(1) or under sub section
(2) are also the officers and servants mentioned in these sub sections for the purposes of sub section
Theoretically, therefore, the power does exist in the State Government to transfer them.
We must, however, hasten to add that in case of employees getting small emoluments the power seems to be meant to be sparingly exercised under some compelling exigencies of a particular situation and not as a matter of routine.
If it were to be liberally exercised, it will create tremendous problems and difficulties in the way of Municipal employees getting small salaries.
There may be hardly an employee serving under any Municipal Council who cannot be theoretically and literally covered by sub sections
(1) and (2) and subjected to the exercise of power of transfer under sub section
The High Court in support of its view has referred to sub section
(4) of section 94 wherein only the officers enumerated in sub sections
(1) and (2) are specified.
Obviously the said sub section does not cover the cases of other officers and servants as mentioned in sub sections
(1) and (2).
The language of sub sec.
(7) is in contrast to that of sub section
(4) and, instead of lending support to the view of the High Court, goes against it.
It was argued for the respondents that they are employees of the Schools run and managed by the Municipal Councils but not of the Councils themselves.
We do not think that this argument has got any substance.
Education department is one of the departments of a Municipal Council.
Duties of the Council are enumerated in sub section
(1) of section 123, clause (v) which provides for "establishing and maintaining primary schools".
Under section 124 "a Council may, at its discretion, provide, either wholly or partly out of the Municipal property and fund, for all or any of the following matters, namely (c) furthering educational objects." Thus establishment and running of Higher Secondary Schools by Municipal Councils are envisaged under the Act and the lecturers and teachers appointed in the various schools 789 are undoubtedly the officers and servants of the Municipal Councils.
For the reasons stated above we hold that the State Government had the power to transfer the respondents.
But it is not clear why the power was exercised in the case of the respondents.
In any event, learned counsel for the appellant assured us that the State is more anxious for the correct interpretation of the law engrafted in section 94(7) of the Act than to enforce the order of transfer against the respondents.
In the result while clarifying the position of law, we dismiss the appeals but make no order as to costs.
N.K.A. Appeals dismissed.
| IN-Abs | The respondents were employed as lecturers and teachers in the various Municipal Higher Secondary Schools run and managed by a Municipal Council in the State.
The State Government transferred certain lecturers and teachers serving under a particular Municipal Council to the Schools run and managed by another Municipal Council.
The respondents writ petition challenging the order of their transfers was allowed by the High Court on the ground that no officer other than those mentioned in section 94(7) namely Revenue Officer, Accounts Officer etc.
could be transferred.
In the State 's appeal the respondents contended that they were employees of schools run and managed by Municipal Councils but not of the Councils.
^ HELD: 1.
The High Court was not right in putting a restricted interpretation on section 94(7) of the Act.
The other officers and servants who can be appointed by the Municipal Councils under sub section (1) or sub section (2) of Section 97 are also officers and servants mentioned in these sub sections for the purposes of sub section (7).
Theoretically, therefore, the power does exist in the State Government to transfer them.
[788 B C] 2.
The argument that the respondents are the employees of schools run and managed by the Municipal Councils but not of the councils themselves has no substance.
Education department is one of the departments of a Municipal Council.
Section 124 envisages the establishment and running of Higher Secondary Schools by Municipal Councils and therefore the lecturers and teachers appointed in the various schools are officers and servants of the Municipal Councils.
[788 G H, 789 A] 3.
In case of employees getting small emoluments the power to transfer should be sparingly exercised under some compelling exigencies of a particular situation and not as a matter of routine.
[788 C D]
|
ition No. 1009 of 1979.
Under Article 32 of the Constitution.
Dr. Y. section Chitale and Mukul Mudgal for the Petitioner.
Soli 1.
Sorabjee, Solicitor General of India, and R. N. Sachthey for the Respondent.
562 The Judgment of V. R. Krishna Iyer and O. Chinnappa Reddy, JJ. was delivered by Krishna Iyer, J. R. section Pathak, J. gave a separate opinion.
KRISHNA IYER, J. This, writ petition originated, epistolary fashion in a letter by a prisoner, Batra, to a Judge of this ' Court (one of us), complaining of a brutal assault by a Head Warder on another prisoner, Prem Chand.
Forms were forsaken since freedom was at stake and the letter was posted on the Bench to be metamorphosed into a habeas proceeding and was judicially navigated with electric creativity, thanks to the humanist scholarship of Dr. Y. section Chitale as amicus Curiae and the erudite passion for affirmative court action of Shri Soli Sorabjee, the learned Solicitor General.
Where the prison process is dehumanized, forensic help, undeflected by the negative crudities of the adversary system, makes us dare where we might have daunted.
The finest hour of justice comes when court and counsel constructively collaborate to fashion a relief in the individual case and fathom deeper to cure the institutional pathology which breeds wrongs and defies rights.
Here, the individual is a prisoner whose anus was allegedly pierced with a warder 's baton and the institution is the Tihar Prison, right in the capital of the country and under the nose of the Home Ministry.
The Perspective This case is revelatory of several sins in this central penitentiary. 'Something is rotten in the State of Denmark ! ' The constitutionaI imperative which informs our perspective in this habeas corpus proceeding must first be set out.
The rule of law meets with its Waterloo when the State 's minions become law breakers and so the court, as the sentinel of the nation and the voice of the Constitution, runs down the violators with its writ and secures compliance with human rights even behind iron bars and by prison warders.
This case is at once a symptom, a symbol and a signpost vis a vis human rights in prison situations.
When prison trauma prevails, prison justice must invigilate and hence we broaden our 'habeas ' jurisdiction.
Jurisprudence cannot slumber when the very campuses of punitive justice witness torture.
The petitioner does not seek the release of the prisoner because a life sentence keeps him in confinement.
But the dynamic role of judicial remedies, after Batra 's case, imparts to the habeas corpus writ a versatile vitality and operational utility that makes the healing presence of the law live up to its reputation as bastion of liberty even within the secrecy of the hidden cell.
Blackstone called it 'the 563 great and efficacious writ in all manner of illegal confinement ' and Lord Deman proclaimed in 1839 that it had been 'for ages effectual to an extent never known in any other country '.
So long as Batra remains good law, judicial policing of Bastille practices will broaden to embrace the wider range of prison vices.
Dr. Chitale drew our attention to American legal literature disclosing the trend while Shri Soli Sorabjee for the Union of India, cited Corwin.
Corwin 's remarks on American constitutional law, referred to with approval in Batra, has our assent: Federal 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 institution overcrowding, understaffing unsanitary facilities, brutality, constant fear of violence, lack of adequate medical and mental health care, poor food service, intrusive correspondence restrictions, inhumane isolation, segregation, inadequate or non existent rehabilitative and/or educational programs, deficient recreational opportunities violate the Eighth Amendment ban on "cruel and unusual punishments.
" The essence of the matter is that in our era of human rights consciousness the habeas writ has functional plurality and the constitutional regard for human decency and dignity is tested by this capability.
We ideologically accept the words of Will Durant(a).
"It is time for all good men to come to the aid of their party, whose name is civilization." Likewise, we endorse, as part of our constitutional thought, what the British Government 's White Paper, titled 'People in Prison ', stated with telling effect: A society that believes in the worth of individual beings can have the quality of its belief judges, at least in part, by the quality of its prison and probate services and of the resources made available to them.
The learned Solicitor General brought this key note thought to our notice in the matchless diction of Sir Winston Churchill and briefly referred to in Batra in a speech seventy years ago: The mood and temper of the public in regard to the treatment of crime and criminals is one of the most unfailing tests of the civilisation of any country.
A calm dispassionate 564 recognition of the rights of the accused, and even of the convicted criminal, against the State a constant heart searching by all charged with the duty of punishment a desire and eagerness to rehabilitate in the world of industry those who have paid their due in the hard coinage of punishment: tireless efforts towards the discovery of curative and regenerative processes: unfailing faith that there is a treasure, if you can only find it in the heart of every man.
These are the symbols, which, in the treatment of crime and criminal, mark and measure the stored up strength of a nation, and are sign and proof of the living virtue in it.
Truly, this is a perspective setter and this is also the import of the Preamble and Art 21 as we will presently see.
We are satisfied that protection of the prisoner within his rights is part of the office of article `Prisons are built with stones of law ' and so it behoves the court to insist that, in the eye of law, prisoners are persons, not animals, and punish the deviant 'guardians ' of the prison system where they go berserk and defile the dignity of the human inmate.
Prison houses are part of Indian earth and the Indian Constitution cannot be held at bay by jail officials 'dressed ill a little, brief authority ', when Part III is invoked by a convict.
For when a prisoner is traumatized, the Constitution suffers a shock.
And when the Court takes cognizance of such violence and violation, it does, like the.
Hound of Heaven, 'But with unhurrying chase, And unperturbed pace, Deliberate speed, and Majestic instancy ' follow the official offender and frown down the outlaw adventure.
The Facts What are the facts which have triggered off this judicial action ? The resume of facts, foul on its face, reveals the legal issues raised, brings into focus the basics of prisoner 's rights and helps the court forge remedial directives so as to harmonize the expending habeas jurisprudence with dawning horizons of human rights and enlightened measures of prison discipline.
Batra, a convict under death sentence lodged in the Tihar Central Jail, came to know of a crime of torture practised upon another prisoner, Prem Chand, allegedly by a jail warder, Maggar Singh, as a means to extract money from the victim through his visiting relations.
Batra braved the consequences of Jail indignation 565 and brought the incident to the ken of the Court, resulting in these proceedings which, though not strictly traditional, are clearly in the nature of habeas corpus writs and therefore, within the wider sweep of article 32.
The court issued notice to the State and the concerned officials, appointed Dr. Y. section Chitale and Shri Mukul Mudgal as amicus, authorised them to visit the prison, meet the prisoner and see relevant documents and interview necessary witnesses so as to enable them to inform themselves about the surrounding circumstances and the cruel scenario of events.
Counsel on both sides have sensitized the issue of prison justice admirably and catalysed the cause of jail reforms effectively.
The democratic hope of the procession is its 'people 's orientation, not its lucrative potential nor its intellectual intricacies.
And service in the field of the handicapped human sectors, like prisoners, is a social justice contribution.
The enthusiastic work done in the case by the young lawyer, Shri Mudgal, assisting Dr. Chitale, deserves our commendation, even as the unreserved support rendered to the Court by Shri Sachthey is in the good tradition of the Bar.
Back to the facts.
One Central episode round which the skein of further facts is wound is beyond doubt, viz. that Prem Chand, the prisoner, sustained serious anal injury on or about August 26, 1979, because a rod was driven into that sore aperture to inflict inhuman torture.
The contemporaneous entry in the Jail Hospital register reads: One prisoner Prem Chand s/o Pyara Lal has developed tear of anus due to forced insertion of stick by someone,.
He require surgical repair and his bleeding has not stopped.
He is to go to Irwin Hospital casualty immediately.
Remarks of Superintendent.
Noted 27 August, 79 sd D.S. 1.2.35 p.m.
Sd/ (DR. KAPOOR) 2.00 p.m.
The prisoner 's later narration to the doctor in the Irwin Hospital corroborates the case.
The unsuccessful and unworthy attempts, presumably by overawing the prisoner and even the doctor, and other dubious devices.
which we do not now scan, to do away with this G. primary incriminating factor by offering incredible alternatives like rupture of the anus by a fall or self infliction or due to piles and sillier stories, only show how the subtle torture of the officials could extract falsehoods from the victim and even medical officers, exclupatory of the, official criminal whoever he be.
There are some traces of attempts to hush up tho crime where the higher officers have not been that innocent.
We are taken aback that the tardy police investigation, 566 with its lethargic pace and collusive ways, has hardly done credit to the Police Department 's integrity, a fact that the Government will take note of, without institutional sheltering of police delinquents.
Imagine a police investigator, hunting for contradictions obviously to absolve the head warder by interrogating Dr. Kapoor who had made an entry in the hospital register and told Dr. Chitale that the prisoner had an anal rupture which could not be self inflicted or caused by a fall and was so serious as to require immediate removal to Irwin Hospital, and making him say, long afterwards on 2 10 1979 by delaying the laying of the chargesheet thus: "A prisoner named Prem Chand s/o Prehlad was produced before me for treatment on the afternoon of Sunday 26th August, 1979.
He was brought by some warder.
He was complaining of bleeding from boils on the buttocks.
This was also told by the warder who brought him.
He was given the required treatment as he was kept under observation on his request.
Next day during the ward rounds when I examined him, he was having tears of anus and bleeding.
On inquiring he told that this has happened due to forced insertion of as stick into his anus.
Then he was referred to Irwin Hospital for further treatment.
V. K Kapoor 2 10 79" Can human nature be such rubber ? More than the probity of the investigation and the veracity of the doctor are at stake hope in human integrity without which human dignity will be the first casualty.
These observations are not impressionistic but we leave it at that since our primary purpose is to protect the person of the prisoner, not to prosecute the offender.
We do nat wish to prejudice that process.
Regrettably, the 'hearsay ' affidavit of the Under Secretary (Home), Delhi Administration, Shri Nathu Ram, blinks at the jail vices and merely dresses up the official version without so much as an inquisitorial audit of the lurid happenings in a premier correctional institution of the nation.
We deplore the indifferent affiants omnibus approval of every official conduct, whereas we should, instead have expected Government, which sincerely swears by human rights and whose political echelons in succession, over the decades, are not strangers to the actualities in these detention campuses to have put 567 aside the tendency to white wash every action with an official flavour.
A Where human rights are at stake prestige has no place.
After the prisoner was subjected to brutal hurt he was removed to the jail hospital and later to the Irwin Hospital but on his re transfer he was neglected; but we do not pursue the identity of the culprit or the crime or the treatment since a police investigation is under way.
Nevertheless, we cannot but remark that whatever damage might have been done upto now, . second investigation by a C.B.I. Officer is justified, if truth has been suppressed.
Dr. Chitale pointed out certain poignant facts such as the prisoner himself having been pressured into statements contrary to the case of anal infliction.
We do not make comments on them although we are unhappy at the way the business of investigation has been done.
Indeed, the potential for oblique mutual help between the police and the prison staff makes Jail offences by jail officials undetectable; and so, to obviate this possibility, the C.B.I. may well be entrusted, as a regular practice, with such cases The prisoner being a person, we cannot write him off.
The alleged offender, Warder Maggar Singh, may be left aside for a while.
There are other aspects of the torture which demand deeper probe and panacea.
The prisoner 's explanation for the anal rupture is stated to be an unfulfilled demand for money, allegedly a general practice.
this shows, if true, that bribery, at the point of barbarity, is a flourishing trade within the house of punishment itself.
How stern should the sentence be for such official criminals and how diligent should the State be to stamp out this wicked temptation ! If you want to end prison delinquencies you must abolish the motivations and opportunities.
The counter case, if we may so call it, of the Warder as disclosed in the Superintendents report, is equally disturbing, if true: On 25 8 79 evening life prisoner Prem Chand S/o Sh.
Prahlad was produced before the Deputy Superintendent for talking Mandrix tablets.
As he was in state of intoxication because of taking Mandrix tablets which he admitted before the Deputy Superintendent, he was kept in a cell pending orders of the Superintendent.
Central Jail.
He was taken to the jail hospital the next day i.e. On 26 8 79 on a report from the above said prisoner as he had pain in his anus and was bleeding.
The prisoner remained admitted into the jail hospital upto 27 8 79, 2 p.m. when the Dr. V. K. Kapoor, Medical officer, recommended for the shifting of this prisoner to the Irwin Hospital with the report mentioned in the petition.
568 The prisoner Prem Chand was shifted accordingly by Shri Bachan Singh, Assistant Superintendent on duty on 27 8 79.
The undersigned was informed that a case u/s 385 IPC had been registered against warder Maggar Singh in charge of the ward No. 11 i.e. 40 cells with the police station Janak puri and investigation had started in this case.
The result of the investigation is still awaited.
The prisoner was, however, received back in the jail on 29 8 79 on being discharged from the Irwin Hospital.
The prisoner, Prem Chand, was kept in a 'punishment cell ' which, according to counsel for the Administration, was not as bad as a solitary cell, although Dr. Chitale says that this was similar to the type of insulated confinement condemned as unconstitutional be this Court in Sunil Batra 's case (supra).
Coming to the competing version put for ward by the prison officials through the counter affidavit of the Under Secretary, the story, even if true, is strongly suggestive of a mafia culture prevasive in the Tihar prison.
A background of the ethos of the campus may be gleaned from portions of the report of the Superintendent, Central Jail, Tihar, made by him with reference to the alleged torture which is the subject matter of this case.
A number of prisoners in the Tihar Jail are habitual offenders, professional criminals who have been inmates of the jail from time to time.
A number of the said prisoners are rarely visited by their relatives due to the fact that they do not want to associate with such persons.
It has been seen that such prisoners are mainly visited by other professionals or habitual offenders in the field with whom they have had former associations.
It has been noticed these types of prisoners have been able to develop a certain report with some of the lower staff in the jail namely Head Warders, Warders etc.
and obtain certain facilities illegally including smuggling of numbers of items, i.e. drugs etc.
for their use.
It may also be submitted that to check smuggling of narcotic drugs against prisoners who indulge in such activities 30 cases of narcotic offences were get registered against the prisoners with the Janakpuri Police Station during this year.
That 95 prisoners were transferred from the jail to Haryana due to administrative reasons which include indiscipline and violation of jail regulations by them and otherwise derogatory behaviour during the last year.
This year also about 22 case have been recommended by Superintendent, Jail for transfer .
In para 568(b) and the note thereunder of the 569 Jail Manual, the habituals are required to be kept separate from the casual prisoners but due to non availability, of any other jail in Delhi they are being kept in Tihar Jail, which requires a lot or vigilance on the part of the jail officers.
(b) It may also be mentioned that due to paucity of accommodation, the said jail is occupied by double the number of prisoners than it is otherwise authorised.
To aggravate the malady, we have the fact that a substantial number of the prisoners are under trials who have to face their case in court and are presumably innocent until convicted.
By being sent to Tihar Jail they are, by contamination, made criminals a custodial perversity which violates the test of reasonableness in article 19 and of fairness in article 21.
How cruel would it be if one went to a hospital for a checkup and by being kept along with contagious cases came home with a new disease ! We sound the tocsin that prison reform is not a constitutional compulsion and its neglect may lead to drastic court action.
It would appear that around 300 persons are taken in and out daily between the prison and the courts.
And when there arc political agitations.
and consequent police arrests and remand to custody, the under trial strength swells in numbers.
Since many officers busy themselves with production of prisoners in court, the case of the Superintendent is that the other prisoners "try to do mischief, make thefts of other prisoners who go on work, smuggle things and even resort to assaults.
" To sum up, the Tihar prison is an arena of tension ,trauma, tantrums and crimes of violence, vulgarity and corruption.
And to cap it all, there occurs the contamination of pre trial accused with habituals and "injurious prisoners of international gang.
" The crowning piece is that the jail officials themselves are allegedly in league with the criminals in the cells.
That is, there is a large network of criminals, officials and non officials in the house of correction ! Drug racket, alcoholism, smuggling, violence, theft, unconstitutional punishment by way of solitary cellular life and transfers to other jails are not uncommon.
The Administration, if it does not immediately have the horrendous situation examined by an impartial, authoritative body, and sanitize the campus, complacent affidavits of Under Secretaries and glittering entries from dignitaries on their casual visits, cannot help.
While the Establishment sought to produce before the Court extracts from the Visitors ' Book to show that many impartial and distinguished persons had complimented the jail authorities on the way managed the prison, Dr. Chitale placed before us some internal evidence 570 from the materials on record, supplemented strongly by personal observations recorded while he was an internee in this very prison by Shri Kuldip Nayar, a responsible journalist with no apparent motive for mendacity nor inclination for subjectivity, in his book "In Jail".
There was nothing in the author 's view which money could not buy within the recesses of the prison campus.
Giving a factual narrative, Shri Nayar wrote:. . . . . . ' . . one could get as much money as one wanted from outside again at a price.
There was a money order and mail service that perhaps was more dependable than what the postal department could offer.
For instance, when a prisoner in my ward wanted two hundred rupees, he sent a note through a warder to his people in old Delhi and in less than twenty four hours he had the money.
He paid sixty six rupees as collecting charges thirty three per cent was the prescribed "money order charge." .
Dharma Teja, the shipping magnate who served his sentence in Tihar, for instance, has thousands of rupees delivered to him, we were told.
And if one could pay the jail functionaries one could have all the comforts one sought.
Teja had all the comforts he had an air cooler in his cell a radio cum record player set and even the facility of of using the phone.
Haridas Mundhra, a businessman who was convicted of fraud, was another rich man who spent some time in Tihar.
Not only did he have all.
the facilities, but he could also go out of the jail whenever he liked; at times he would be out for several days and travel even upto Calcutta.
All this of course, cost a lot of money.
An even richer prisoner was Ram Kishan Dalmia, he spent most of his jail term in hospital.
He was known for his generosity to jail authorities, and one doctor received a car as a gift.
But more than businessmen it was the smugglers jailed in Tihar who were lavish spenders.
Their food came from Moti Mahal and their whisky from Connaught Place.
They had not only wine but also women "Babuji, not tarts but real society girls," one warder said.
The women would be brought in when "the Sahiblog" went home for lunch, and their empty offices became "recreation rooms.
" Corruption in jail was so well organised and so systematic that everything, went like clockwork once the price had been paid.
Jail employees at almost all levels were involved, and everyone 's share was fixed.
There was never a dispute; there has to be the proverbial honour among thieves. ' 571 One wonders whether such an indictment made by an established A writer had inclined the Government at least to appoint an Inquiry Commission to acquaint itself with the criminal life style of correctional institutions.
The higher officials also have their finger in the pie, if Nayar were veracious: 'Perhaps the way almost everyone had his cut was most evident in our milk supply.
It came in bulk to the main gate (phatak) there, enough milk for the top officials was taken out of the cans, which were then topped up with water.
And as the cans moved to the wards, all those who handled hem appropriated their share, again topping up with water.
Even more shocking than the corruption was the ingenious "slave system" we found in the jail.
The slaves were buys between ten and eighteen employed as 'helpers", and there were scores of them.
They cooked, washed utensils, cleaned rooms, fetched water and did much back breaking labour to "help" the men who were paid to do these chores.
They would be woken up before 6 a.m. to prepare the morning tea and would be allowed to sleep around 10 p.m. after scrubbing the pots and pans they were herded into a ward which had no fan and no proper sanitary facilities, but was always well lit, with many bulbs on all night, to enable a sleepy warder to check at a glance that they were all there.
These boys were undertrial prisoners, many had been there for eight months and at least one had been there for two years.
They were taken from one court to another to be tried under one charge or another and kept in jail all the while.
The aim was to keep them in as long as possible, for without them the people employed to do the menial duties would have no time to relax.
one morning I was woken up by the sobbing of a boy, and found some other "helpers" trying to console him while a warder stood by quite unmoved.
I went up to him; his curly hair reminded me of Raju, my younger son.
The boy had been picked up the previous evening from Defence Colony in New Delhi, kept in a police lock up for the night and brought to jail in the morning. ' The crime of punishment is a new crime which the rule of law must reach at, but what is touching beyond tears, even if there be but a title of truth in the statement "In Jail," is about children being lapped 572 up and locked up for use as bonded labour in punitive houses of justice.
The modus operandi is sensitively set down by Kuldip Nayar: The warder explained that whenever the number of prisoners in jail went up, the police were asked to bring in boys to help with the chores.
For the past several days, the warder said, jail authorities had been pestering the police to get more helpers as the number of detenus had gone up.
The evening before, when the boy was buying paan (betel leaf) from a Defence Colony shop, the police had hauled him up as a vagabond; they were responding to the jail authorities ' appeal to book more helpers.
"This is nothing new, it has always been like this," the warder explained.
Several undertrial boys later related to me their tales of woe, how they were arrested on trumped up charges and how they were being held in detention on one pretext or another.
We may, at this stage, go in greater detail into the functional expansion of habeas corpus writs in the current milieu especially because counsel on both sides have compellingly contended for an authoritative pronouncement by this court in favour of a broader jurisdiction.
We have earlier noticed that this valuable writ is capable of multiple uses as developed in the American Jurisdiction.
Such is the view expressed by many legal writers.
In Harvard Civil Rights and Civil Liberties Law Review, the view has been expressed that beyond the conventional blinkers, courts have been to examine the manner in which an inmate is held or treated during the currency of his sentence.
Similar is the thinking expressed by other writers, R. J. Sherpa in "The Law of Habeas Corpus" (1976) Edn.
Juvenal, Satires in (1963).
In American Jurisprudence there is a pregnant observation: The writ is not and never has been a static, narrow formalistic remedy.
Its scope has grown to achieve its purpose the protection of individuals against erosion of the right to be free from wrongful restraints on their liberty.
573 Corpus Juris, 2d, Vol.
39, page 274, para 7 strikes a similar note, away from the traditional strain.
The courts in America have, through the decisional process, brought the rule of law into the prison system pushing back, protanto, the hands off doctrine.
In the leading case of Coffin vs Richard the Court of Appeal observed, delineating the ambit and uses of the writ of habeas corpus: The Government has the absolute right to hold prisoners for offences against it but it also has the correlative duty to protect them against assault or injury from any quarter .
while so held.
A prisoner is entitled to the writ of habeas corpus, when, though lawfully in custody, he is deprived of some right to which he is lawfully entitled even in his confinement, the deprivation of which serves to make his imprisonment more burdensome than the law allows or curtails his liberty to a greater extent than the law permits.
When a man possesses a substantial right, the court will be diligent in finding a way to protect it.
The fact that a person is legally in prison does not prevent the use of habeas corpus to protect his other inherent rights.
The judge is not limited to a simple remand or discharge of the prisoner 's civil rights be respected.
It is significant that the United State Supreme Court has even considered as suitable for habeas relief, censorship of prisoners ' mail and the ban on the use of law students to conduct interviews with prison inmates in matters of legal relief.
In Procunier vs Martinez these two questions fell for decision and the court exercised jurisdiction even in such an internal matter.
In Johnson vs Avery a disciplinary action was challenged by a prisoner through a writ of habeas corpus.
This indicates the extension of the nature of the writ in the American jurisdiction.
Incidentally and interestingly, there is reference to some States in the United States experimenting with programmes of allowing senior law students to service the penitentiaries.
At a later stage, when we concretise definite directives, we may have occasion to refer to the use of senior law students for rendering legal aid to prisoners; and so it is worthwhile extracting a passage from Johnson vs Avery (supra) with reference to the Kansas Law School Programme in Prisons at Leavenworth: The experience at Leavenworth has shown that there have been very few attacks upon the (prison) administra : 574 tion; that prospective frivolous litigation has been screened out and that where the law school felt the prisoner had a good cause of action relief was granted in a great percentage of cases.
A large part of the activity was disposing of long outstanding detainers lodged against the inmates.
In addition, the programme handles civil matters such as domestic relations problems and compensation claims.
Even where there has been no tangible success, the fact that the inmate had someone on the outside listen to him and analyse his problems had a most beneficial effect.
We think that these programmes have been beneficial not only to the inmates but to the students, the staff and the courts.
Incidentally, the presence of law students at the elbow of the prisoner has a preventive effect on ward and warden.
The content of our constitutional liberties being no less, the dynamics of habeas writs they developed help the judicial process here.
Indeed.
the full potential of articles 21, 19, 14, after Maneka Gandhi (supra), has been unfolded by this Court in Hoskot and Batra.
Today, human rights jurisprudence in India has a constitutional status and sweep, thanks to article 21 so that this Magna Carta may well toll the knell of human bondage beyond civilised limits.
The supplementary statement of the Superintendent of the Central Jail (partly quoted earlier) hair raising when we find that far from rehabilitation, intensification of criminality is happening there and the officials are part of this sub culture.
We, certainly do not wish to generalise but do mean to highlight the facts of life behind the high walls as demanding constitutional and administrative attention.
Homage to human rights, if it springs from the heart, calls for action.
Prisons, prison staff and prisoners all three are in need of reformation.
And this milieu apparently is not unique to Tihar but common to many penal institutions.
It is refreshing and heartening that the learned Solicitor General widened our vista and argued that this court, having been seized of the problem of prisoners ' fundamental freedoms and their traumatic abridgement, should give guide lines in this uncharted area, design procedures and device mechanisms which will go into effective action when the restricted yet real rights of prisoners are overtly or covertly invaded.
The jurisdiction of this court to remedy the violations of prisoners ' residuary rights was discussed at the bar, as also the package of plausible measures which may appropriately be issued to ensure the functional success of justice when rights are infringed by officials or fellow prisoners.
Both sides appreciated the gravity of the jail situation, the sensitivity of security considerations, the virginity of this 575 field of law and the necessity for normative rules and operative monitoring within the framework of judicial remedies.
This constructive stance of counsel unusual in litigative negativity, facilitated our resolution of the problems of jail justice, despite the touch of jurisprudential novelty and call to judicial creativity.
We must formulate the points argued before we proceed to state our reasoning and record our conclusions.
Has the court jurisdiction to consider prisoners ' grievance, not demanding release but, within the incarceratory circumstances, complaining of ill treatment and curtailment short of illegal detention? Yes.
We have answered it.
What are the broad contours of the fundamental rights, especially articles 14, 19 and 21 which belong to a detainee sentenced by Court? Here too, the ground has been covered.
What judicial remedies can be granted to prevent and punish their breach and to provide access to prison justice? 4.
What practicable prescriptions and proscriptions bearing on prison practices can be drawn up by the court consistently with the existing provisions of the and Rules bent to shape to con form to ? 5.
What prison reform perspectives and strategies should be adopted to strengthen, in the long run, the constitutional mandates and human rights imperatives? The canvas was spread wide by counsel and court and we deal with the arguments within the larger spread out of the case.
Rulings of this court have highlighted the fact that the framers of our Constitution have freed the powers under article 32 from the rigid restraints of the traditional English writs.
Flexible directives, even affirmative action moulded to grant relief may realistically be issued and fall within its fertile width.
The jurisdictional dimension is lucently laid down by Subba Rao, J. in Dwarkanath case: This article is couched in comprehensive phraseology and it ex facie confers a wide power on the High Courts to reach injustice wherever it is found.
The Constitution designedly used a wide language in describing the nature of the power, the purpose for which and the person or authority against whom it can be exercised.
It can issue writs in the nature of prerogative writs as understood in England; but the scope of those writs also is widened by the use of the 576 expression "nature" for the said expression does not equate the writs that can be issued in India with those in England, but only draws an analogy from them.
That apart, High Courts can also issue directions, orders or writs other than the prerogative writs.
It enables the High Courts to mould the reliefs to meet the peculiar and complicated requirements of this country.
Any attempt to equate the scope of the power of the High Court under article 226 of the Constitution with that of the English Courts to issue prerogative writs is to introduce the unnecessary procedural restrictions grown over the years in a comparatively small country like England with a unitary form of government into a vast country like India functioning under a federal structure.
Such a construction defeats the purpose of the article itself.
Where injustice, verging on inhumanity, emerges from hacking human rights guaranteed in Part III and the victim beseeches the Court to intervene and relieve, this court will be a functional futility as a constitutional instrumentality if its guns do not go into action until the wrong is righted.
The court is not a distant abstraction omnipotent in the books but an activist institution which is the cynosure of public hope.
We hold that the court can issue writs to meet the new challenges.
Lord Scarman 's similar admonition, in his English Law The New Dimensions, is an encouraging omen.
The objection, if any, is absolute because in a prison situation, a Constitution Bench of this Court (Batra and Sobraj) did imprison the powers of prison officials to put an under trial under iron fetters or confine in solitary cells convicts with death sentences under appeal.
Once jurisdiction is granted and we affirm in unmistakable terms that the court has, under article 32 and so too under article 226, a clear power and, therefore, a public duty to give relief to sentences in prison settings the next question is the jurisprudential backing for the play of that jurisdiction.
Here again, Batra has blazed the trial, and it binds.
Are prisoners persons? Yes, of course.
To answer in the negative is to convict the nation and the Constitution of dehumanization and to repudiate the world legal order, which now recognises rights of prisoners in the International Covenant of Prisoners ' Rights to which our country has signed assent.
In Batra 's case, this Court has rejected the hands off doctrine and it has been ruled that fundamental n lights do not flee the person as he enters the prison although they may suffer shrinkage necessitated by incarceration.
Our constitutional 577 culture has now crystalized in favour of prison justice and judicial jurisdiction.
The jurisdictional reach and range of this court 's writ to hold prison caprice and cruelty in constitutional leash is in contentable, but teasing intrusion into administrative discretion is legal anathema absent breaches of constitutional rights or prescribed procedures.
The U.S. Supreme Court, in like situations, has spoken firmly and 'humanistically, and these observations have the tacit approval of our Court in Batra 's case.
Justice Douglas put it thus.
Prisoners are still 'persons ' entitled to all constitutional rights unless their liberty has been constitutionally curtailed by procedures that satisfy all the requirements of due process.
Justice Marshal strongly seconded the view: I have previously stated my view that a prisoner does not shed his basic constitutional rights at the prison gate, and I fully support the court 's holding that the interest of inmates in freedom from imposition of serious discipline is a 'liberty ' entitled to due process protection.
We, therefore, affirm that where the rights of a prisoner, either under the Constitution or under other law, are violated the writ power of the court can and should run to his rescue.
There is a warrant for this vigil.
The court process casts the convict into the prison system and the deprivation of his freedom is not a blind penitentiary affliction but a belighted institutionalisation geared to a social good.
The court has a continuing responsibility to ensure that the constitutional purpose of the deprivation is not defeated by the prison administration.
In a few cases, this validation of judicial invigilation of prisoners ' condition has been voiced by this court and finally reinforced by the Constitution Bench in Batra (supra).
The Court need not adopt a "hands off" attitude in regard to the problem of prison administration.
It is all the more so because a convict is in prison under the order and direction of the court.
" Under the caption "Retention of Authority over Prisoner by Sentencing Judge" Krantz notes 578 As noted by Judge Lay in a Judicial Mandate, Trial Magazine (Nov Dec. 1971) at p. 15: It should be the responsibility of the court in imposing the sentence to set forth as it would in any equitable decree, the end to be achieved and the specifics necessary to achieve that purpose.
If then, we are to have accountability in the execution of the sentence, courts must make clear what is intended in the imposition of the sentence.
Every sentence should be couched in terms similar to a mandatory injunction.
In this manner, the penology system is to be held to account if the government does not faithfully execute the order.
In other words, the sentencing court should be required to retain jurisdiction to ensure that the prison system res ponds to the purposes of the sentence.
If it does not, the sentencing court could arguably have the authority to demand compliance with the sentence or even order the prisoner released for non compliance.
Whether inside prison or outside, a person shall not be deprived of his guaranteed freedom save by methods 'right, just and fair '.
Bhagwati J. in Maneka Gandhi observed.
The principle of reasonableness, which legally as well as philosophically, is an essential element of equality or non arbitrariness 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.
Hoskot applied the rule in Maneka Gandhi (supra) to a prison setting and held that "one component of fair procedure is natural justice".
Thus it is now clear law that a prisoner wears the armour of basic freedom even behind bars and that on breach thereof by lawless officials the law will respond to his distress signals through 'writ ' aid.
The Indian human has a constant companion the court armed with the Constitution.
The weapon is 'habeas ', the power is Part III and the projectile is Batra, 579 No iron curtain can be drawn between the prisoner and the Constitution.
It is, therefore, the court 's concern, implicit in the power to deprive the sentences of his personal liberty, to ensure that no more and no less than is warranted by the sentence happens.
If the prisoner breaks down because of mental torture, psychic pressure or physical R; infliction beyond the licit limits of lawful imprisonment the Prison Administration shall be liable for the excess.
On the contrary, if an influential convict is able to buy advantages and liberties to avoid or water down the deprivation implied in the.
sentence the Prison Establishment will be called to order For such adulteration or dilution of Court sentences by executive palliation, if unwarranted by law.
One of us, in Batra observed: Suffice it to say that, so long as judges are invigilators and enforcers of constitutionality and performance auditors of legality, and convicts serve terms in that grim microcosm called prison by the mandate of the courts, a continuing institutional responsibility vests in the system to monitor in the incarceratory process and prevent security 'excesses ' Jailors are bound by the rule of law and cannot inflict supplementary sentence under disguises or defeat the primary purposes of imprisonment.
The upshot of this discussion is but this.
The Court has power and responsibility to intervene and protect the prisoner against mayhem, crude or subtle, and may use habeas corpus for enforcing imprison humanism and forbiddance of harsher restraints and heavier severities than the sentence carries.
We hold these propositions to be self evident in our constitutional order and is supported by authority, if need be.
Therefore, we issue the writ to the Lt. Governor and the Superintendent of the Central Jail that the prisoner, Prem Chand, shall not be subjected to physical manhandling by any jail official, that the shameful and painful torture to which he has been subjected a blot on Government 's claim to protect human rights shall be ended and the wound on his person given proper medical care and treatment.
The Central Government will, we are sure, direct its Jail staff not show too pachydermic a disposition for a democratic government.
For example, specific guidelines before punishing a prisoner had been given in Batra 's case and yet the prisoner Prem Chand has been lodged in the punishment cell, which is almost the same as a solitary cell, with cavalier disregard for procedural safeguards.
Merely to plead that many prisoners are 'habituals ' is no ground for habitual 580 violation of law by officials.
We direct that Prem Chand be released from the punishment cell and shall not be subjected to such severity until fair procedure is complied with.
The chronic callousness of the Prison System to the humane demands of the Constitution, despite the fact that many ministers over many decades in many States have known the unbroken tradition of prison sub culture and despite prison diaries of national figures from Jawaharlal Nehru to Jay Prakash Narain, has made court and counsel benignly turn the judicial focus on the future so that further mischief may not be suffered in incarceration.
There is little doubt that barbarities like bar betters and hand cuffs were recklessly being practised either on account of ignorant unconscionableness or willful viciousness in several detention camps.
Many of the victims are poor, mute, illiterate, desperate and destitute and too distant from the law to be aware of their rights or ask for access to justice, especially when the running tension of the prison and the grisly potential for zoological reprisals stare them in the face.
So it is for the court to harken when humanity calls, without waiting for particular petitions.
Like class action, class remedies have pro bono value.
The court the learned Solicitor General underscored this constructive approach must not wait for a stray petition from some weeping inmate and give the little person a little relief in the little case but give the nation, its governments, prison establishments and correctional departments, needed guidance and also fill with hope the hearts of those who cherish human rights that the courts are, after all, sentinels on the qui vive.
Law is what law does and court, if anything, are constitutional in action.
Dr. Chitale, naturally, joined this moving demand.
We do think that there are many, drawn from the class of penury, who suffer more privations than their sentences justify.
Ralph Ellison 's picture of the American Black has relevance for the prisoner here: I am an invisible man.
I am a man of substance, of flesh and bone, fibre an liquids and I might even be said to possess a mind.
I am invisible, understand, simply because people refuse to see me .
When they approach me they see only my surroundings, themselves, or figments of their imagination indeed, everything and anything except me.
The invisibility to which I refer occurs because of a peculiar disposition of the eyes of those with whom I come in contact.
A matter of construction of their inner eyes, 581 those eyes with which they look through their physical eyes . 4 upon reality.
You wonder whether you are not simply a phantom in other people 's minds.
You ache with the need to convince yourself that you do exist in the real world, that you 're a part of all the sound and anguish, and you strike out with your fists, you curse and you swear to make them recognise you.
And, alas, it is seldom successful.
In a culture of Antyodaya, the court must rescue the weakest by preemptive guidance without driving parties to post facto litigation.
In law as in medicine, prevention is better than cure, a rule jurisprudents have not sufficiently developed, and so we accede to the request of counsel and proceed to discuss the normative side of prison justice.
C Before we begin this chapter we might as well set down what the learned Solicitor General stressed viz. that the detailed guidelines set out in the separate opinion in Batra 's case (page 488 to 493) are the same as are implicit in the judgment of Desai J. speaking for the other Judges and this position should be re emphasised by this court here so as to avoid misconception.
Desai J. has stated Justice Krishna Iyer has delivered an elaborate judgment which deals with important issues raised before us at great length and with great care and concern.
We have given a separate opinion, not because we differ with him on fundamentals, but because we thought it necessary to express our views on certain aspects of the questions canvassed before us Likewise, in the separate judgment, a similar statement is made: I am aware that a splendid condensation of the answers to the core questions has been presented by my learned brother Desai, J and I endorse the conclusion.
A close perusal shows that both the judgments in Batra 's case lay down the same rule and the elaborate guidelines in the first opinion are a necessary proliferation of the law expounded in the second judgment in the case.
We hold, agreeing with both counsel, that the detailed prescriptions in the separate opinion in sunil Batra (p. 488 to 493) is correct law and binds the penal institutions in the country.
We agree with these guidelines and express ourselves to that effect since the core question raised in the present case and the cardinal principles we have accepted lead to the same conclusions.
At the outset, we notice the widespread prevalence of legal illiteracy even among lawyers about the rights of prisoners.
Access to law postulates awareness of law and activist awareness of legal rights 582 in the condition for seeking court justice.
So the first need in the Juristic twilight is for the State to produce and update a handbook on Prison Justice, lucid, legible for the lay, accurate, comprehensive and, above all, practical in meeting the felt necessities and daily problems of prison life.
The Indian Bar has, as part of its judicare tryst as a special responsibility to assist the State in this behalf.
A useful handbook prepared by the American Civil Liberties Union was handed upto us by Dr. Chitale titled "The Rights of Prisoners".
Law in the books and in the courts is of no help unless it reaches the prisoner in under standable language and available form.
We, therefore, draw the .
attention of the State to the need to get ready Prisoner 's Handbook in the regional language and make them freely available to the in mates.
To know the law is the first step to be free from fear of unlaw.
Prisoners are peculiarly and doubly handicapped.
For one thing, most prisoners belong to the weaker segment, in poverty, literacy, social station and the like.
Secondly, the prison house is a walled off world which is incommunicado for the human world, with the result that the bonded inmates are invisible, their voices inaudible, their injustices unheeded.
So it is imperative, as implicit in article 21 that life or liberty shall not be kept in suspended animation or congealed into animal existence without the freshing flow of air, procedure. 'The meaning of 'life ' given by Field J., approved in Kharak Singh ' and Maneka Gandhi bears exception: Something more than mere animal existence.
The inhibition against its deprivation extended 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 Therefore, inside prisons are persons and their personhood, if crippled by law keepers turning law breakers, shall be forbidden by the Writ of this Court from such wrong doing.
Fair procedure, in dealing with prisoners, therefor, calls for another dimensions of access to law provision, within easy reach, of the law which limits liberty to persons who are prevented from moving out of prison gates.
A handbook meets the logistics of the law in field.
Of course, the prison staff also suffer from the pathology of misinformation or non education about rights and limitations and this ignoratia juris 583 situation leads to insensitivity to human rights and a test in the hand book of prison law must be a minimum for recruitment.
The peril to prison rights is from the uninstructed personnel, apart from the anticultural ethos which permeates.
It behoves Government to insist on the professional requirement, for warders and wardens, of a hearty familiarity with the basics of Prison Law.
Rights jurisprudence is important but becomes an abstraction in the absence of remedial jurisprudence.
Law is not an omnipotence in the sky but a loaded gun which, when triggered by trained men with ballistic skill, strikes the offending bull 's eye.
We have made it clear . ' that no prisoner can be personally subjected to deprivations not necessitated by the fact of incarceration and the sentence of court.
All other freedoms belong to him to read and write, to exercise and recreation, to meditation and chant, to creative comforts like protection from extreme cold and heat, to freedom from indignities like compulsory nudity, forced sodomy and other unbearable vulgarity, to movement within the prison campus subject to requirements of discipline and security, to the minimal joys of self expression, to acquire skills and techniques and all other fundamental rights tailored to the limitations of imprisonment.
Chandrachud J, long ago, spelt out the position and we affirm it: "Convicts are not, by mere reason of the conviction, denuded of all the fundamental rights which they otherwise possess.
A compulsion under the authority of law, following upon a conviction, to live in a prison house entails by its own force the deprivation of fundamental freedoms like the right to move freely throughout the territory of India 11 or the right to 'practise ' a profession.
A man of profession would thus stand stripped of his right to hold consultations while serving out his sentence.
But the Constitution guarantees other freedoms like the right to acquire, hold and dispose of property for the exercise of which incarceration .
can be no impediment.
Likewise, even a convict is entitled G to the precious right guaranteed by Article 21 of the Constitution that he shall not be deprived of his life or personal liberty except according to procedure established by law.
" We think it proper to suggest that in our country of past colonial subjection and consequent trepidation in life, publicity officially is 584 necessary for rights to be appreciated even by the beneficiaries.
Therefore, large notice boards displaying the rights and responsibilities on prisoners may be hung up in prominent places within the prison in the language of the people.
We are dealing with the mechanics of bringing the law within the wakeful ken of the affected persons.
61 of the , simplied imaginatively leads to the same result.
That section reads: "Copies of rules, under sections 59 and 60 so far as they affect the government of prisons, shall be exhibited, both in English and in the Vernacular, in some place to which all persons employed within a prison have access.
" We think it right to hold that copies of the Prison Manual shall be kept within ready reach of prisoners.
Darkness never does anyone any good and light never any harm.
Perhaps, the most important right of a prisoner is to the integrity of his physical person and mental personality.
This Court in Batra 's case has referred to the international wave of torture of prisoners found in an article entitled 'Minds Behind Bars '.
That heightens our anxiety to solve the issue of prisoners ' protection.
The problem of law, when it is called upon to defend persons hidden by the law, is to evolve a positive culture and higher consciousness and preventive mechanisms, sensitized strategies and humanist agencies which will bring healing balm to bleeding hearts.
Indeed, counsel on both sides carefully endeavoured to help the Court to evolve remedial processes and personnel within the framework of the and the parameters of the Constitution.
Inflictions may take many protean forms, apart from physical assaults.
Pushing the prisoner into a solitary cell, denial of a necessary amenity, and, more dreadful sometimes, transfer to a distant prison where visits or society of friends or relations may be snapped, allotment of degrading labour, assigning him to a desperate or tough gang and the like, may be punitive ineffect.
Every such affliction or abridgment is an infraction of liberty or life in its wider sense and cannot be sustained unless article 21 is satisfied.
There must be a corrective legal procedure, fair and reasonable and effective.
Such infraction will be arbitrary, under Article 14, if it is dependent on unguided discretion, unreasonable, under article 19 if it is irremediable and unappealable and unfair, under article 21 if it violates natural justice.
The string of guidelines in Batra set out in the first judgment, which we adopt, provides for a hearing at some stages, a review by a superior, and early judicial consideration so that the proceedings may not 585 hop from Caesar to Caesar.
We direct strict compliance with those A norms and institutional provisions for that purpose.
Likewise, no personal harm, whether by way of punishment or otherwise, shall be suffered by a prisoner without affording a preventive, or in special cases, post facto remedy before a impartial, competent, available agency.
R The Court is always ready to correct injustice but it is no practical proposition to drive every victim to move the court for a writ, knowing the actual hurdles and the prison realities.
True, technicalities and legal niceties are no impediment to the court entertaining even an informal communication as a proceeding for habeas corpus if the basic facts are found; still, the awe and distance of courts, the legalese and mystique, keep the institution unapproachable.
More realistic is to devise a method of taking the healing law to the injured victim.
That system is best where the remedy will rush to the injury on the slightest summons.
So, within the existing, dated legislation, new meanings must be read.
Of course, new legislation is the best solution, but when lawmakers take for too long for social patience to suffer, as in this very case of prison reform, courts have to make do with interpretation and carve on wood and sculpt on stone ready at hand and not wait for far away marble architecture.
Counsel rivetted their attention on this pragmatic engineering and jointly helped the court to constitutionalise the prescriptions.
By this legal energetics they desired the court to read into vintage provisions legal remedies.
Primari1y, the prison authority has the duty to given effect to the court sentence.
(See for e.g. SS. 15 and 16 of the Prisoners Act, 1900).
To give effect to the sentence means that it is illegal to exceed it and so it follows that a prison official who goes beyond more imprisonment or deprivation of locomotion and assaults or otherwise compels the doing of things not covered by the sentence acts in violation of article 19.
Punishments of rigorous imprisonment oblige the inmates to do hard labour, not harsh labour and so a, vindictive officer victimising a prisoner by forcing on him particularly harsh and degrading jobs, violates the law 's mandate.
For example, a prisoner, if forced to carry night soil, may seek a habeas writ. 'Hard labour ' in section 53 has to receive a humane meaning.
A girl student or a male weakling sentenced to rigorous imprisonment may not be forced to break stones for nine hours a day.
The prisoner cannot demand soft jobs but may reasonably be assigned congenial jobs.
Sense and sympathy are not enemies of penal asylum.
586 Section 27 (2) and (3) of the states: 27.
The requisitings of this Act with respect to the separations of prisoners are as follows: (1) xx xx (2) in a prison where male prisoners under the are of twenty one arc confined, means shall be provided for separating them altogether from the other prisoners and for separating those of them who have arrived at the age of puberty from those who have not.
(3) unconvicted criminal prisoners shall be kept apart from convicted criminal prisoners; and The materials we have referred to earlier indicate slurring over this rule and its violation must be visited with judicial correction and punishment of the jail staff.
Sex excesses and exploitative labour are the vices adolescents are subjected to by adults.
The young inmates must be separated and freed from exploitation by adults.
If Kuldip Nayar is right this rule is in cold storage.
lt is inhuman and unreasonable to throw young boys to the sex starved adult prisoners or to run menial jobs for the affluent or tough prisoners.
article 19 then intervenes and shields.
Section 29 and connected rules relating to solitary confinement have been covered by Batra 's case.
But Prem Chand, in this very case, has been sent to a 'solitary ' or 'punishment ' cell without heeding the rule in Batra 's regarding impost of punitive solitary confinement.
We cannot agree that the cell is not 'solitary ' and wonder what sadistic delight is derived by the warders and wardens by SUCH cruelty.
Any harsh isolation from society by long, lonely, cellular detention is penal and so must be inflicted only consistently with fair procedure.
The learned Solicitor General mentioned that some prisoners, for their own safety, may desire segregation.
In such cases, written consent and immediate report to higher authority are the least, if abuse is to be tabooed.
Visit to prisoners by family and friends are a solace in insulation; and only a dehumanised system can derive vicarious delight in depriving prison inmates of this humane amenity.
Subject, of course, to search and discipline and other security criteria, the right to society of fellow men, parents and other family members cannot be denied in the light of article 19 and its sweep.
Moreover the whole habilitative purpose of sentencing is to soften, not to harden, and this will be promo 587 ted by more such meetings.
A sullen, forlorn prisoner is a dangerous criminal in the making and the prison is the factory! Sheldon Krantz rightly remarks: In 1973, the National Advisory Commission argued that prisoners should have a "right" to visitation.
Task Force Report, Corrections (1973) at 66.
It also argued that ' correctional officials should not merely tolerate visiting but should encourage it, particularly by families.
Although the Commission recognised that regulations were necessary to contend with space problems and with security concerns, it proposed that priority be given to making visiting areas pleasant and unobtrusive.
It also urged that corrections officials should not eavesdrop on conversations or otherwise interfere with the participants ' privacy.
Thus, although there may be current limitations on the possible use of the Constitution on visitation by family and friends, public policy should dictate substantial improvements in this area, in any event.
We see no reason why the right to be visited under reasonable restrictions, should not claim current constitutional status.
We hold, t subject to considerations of security and discipline, that liberal visits by family members, close friends and legitimate callers, are part of the r prisoners ' kit of rights and shall be respected.
Parole, again, is a subject which is as yet unsatisfactory and arbitrary but we are not called upon to explore that constitutional area and defer it.
Likewise, to fetter prisoners in iron is an inhumanity unjustified save where safe custody is otherwise impossible.
The routine resort to handcuffs and irons bespeaks a barbarity hostile to our goal of human dignity and social justice.
And yet this unconstitutionally is heartlessly popular in many penitentiaries so much so a penitent law must proscribe its use in any but the gravest situation.
These rights and safeguards need a machinery.
The far internal invigilation and independent oversight cannot be overemphasised.
Prisoners ' rights and prison wrongs are a challenge to remedial creativity.
Krantz, in his book, (supra) notes: To respond to the need for effective grievance procedures will probably require both the ceation of internal pro 588 grams (formal complaint procedures) and programs involving "outsiders" (ombudsmen, citizens investigative committees, mediators, etc).
So, apart from judicial review for prisoners ' rights and conditions of confinement, we have to fabricate instant administrative grievance procedures.
Indeed, a new chapter of offences carrying severe punishments when prison officials become delinquents is an urgent item on the agenda of prison reform; and lodging of complaints of such offences together with investigation and trial by independent agencies must also find a place in such a scheme.
We are dealing with a morbid world where sun and light are banished and crime has neurotic dimensions.
Special situations need special solutions.
We reach the most critical phase of counsel 's submissions viz., the legal fabrication and engineering of a remedial machinery within the fearless reach of the weakest of victims and worked with independence, accessibility and power to review and punish.
Prison power, absent judicial watch tower, may tend towards torture.
The and Rules need revision if a constitutionally and culturally congruous code is to be fashioned.
The model jail manual, we are unhappy to say and concur in this view with the learned Solicitor General, is far from a model and is, perhaps, a product of prison officials insufficiently instructed in the imperatives of the Constitution and unawakened to the new hues of human rights.
We accept, for the nonce, the suggestion of the Solicitor General that within the existing statutory framework the requirements of constitutionalism nay be read.
He heavily relies on the need for a judicial agency whose presence, direct or by delegate, within the prison walls will deal with grievances.
For this purpose, he relies on the Board of Visitors, their powers and duties, as a functional substitute for a Prison ombudsman.
A controllerate is the desideratum for in situ reception and redressal or grievances.
After all, the daily happenings, when they hurt harshly, have to be arrested forthwith, especially when it is the prison guards and the head warders who brush with the prison inmates.
Their behaviour often causes friction and fear but when their doings are impeached, the institutional defence mechanism tends to protect them from top to bottom.
So much so, injustice escapes punishment.
In this context it is apt to quote David Rudovsky: 589 The present system puts absolute discretion and day to day power over every aspect of a prisoner 's life in their hands.
It is this part of prison life which causes the deepest resentment among prisoners for, to a large extent, the manner in which an inmate is treated by the guards determines the severity of conditions he will have to endure.
It is a doub1e irony that the lower the level of authority in prison (from warden on down to guard) the greater tho discretion that is vested in the prison official and the less willing the courts are to review their decisions. 'Thus, whether it be a request for medical treatment, the right to go to the yard of prison library, or the potentially more serious matter of prison discipline and punishment, the guard of the block holds ultimate power over the prisoner.
Complete discretion in the context of prison life where no remedies exist to correct it, can be catastrophic, Judge Sobeloff has put it bluntly: In fact, prison guards may be more vulnerable to the corrupting influence of unchecked authority than most people.
It is well known that prisons are operated on minimum budgets and that poor salaries and working conditions make it difficult to attract high calibre personnel.
Moreover, the "training" of the officers in dealing with obstreperous prisoners is but a euphemism in most states.
George A. Ellis quotes a prisoner 's letter: You cannot rehabilitate a man through brutality and disrespect.
If you treat a man like an animal, then you must expect him to act like one.
For every action, there is a reaction.
And in order for an inmate, to act like a human being you must trust him as such.
You can 't spit in his face and expect him to smile and say thank you.
The institution and composition of the Board of Visitors comes in handy and has statutory sanction.
The visitatiorial power is wide the panel of visitors includes judicial officers and such situation can be pressed into service legally to fulfil the constitutional needs.
Para 47 read with para 53 A sets out the structure of the Board Para 47(b) to (d) includes District & Sessions Judges, District Magistrates and Sub Divisional Magistrates among the members.
The functions of visitors are enumerated in para 53, and 53 B and they include (a) 590 inspect the barracks, cells, wards workshed and other buildings of the jail generally and the cooked food; (b) ascertain whether considerations of health, cleanliness, and security are.
attended to, whether proper management and discipline are maintained in every respect, and whether any prisoner is illegally detained, or is detained for an undue length of time, while awaiting trial; (c) examine jail registers and records; (d) hear, attend to all representations and petitions made, by or on behalf of prisoners; and (e) direct, if deemed advisable, that any such representation or petitions be forwarded to Government.
In the sensitive area of prison justice, the judicial members have special responsibilities and they must act as wholly independent overseers and not as ceremonial panelists.
The judges are guardians of prisoners ' rights because they have a duty to secure the execution of the sentences without excesses and to sustain the personal liberties of prisoners without violence on or violation of the inmates ' personality.
Moreover, when a wrong is done inside jail the judicial visitor is virtually a peripatetic tribunal and sentinel, at once intramural and extra mural, observer, receiver and adjudicator of grievance.
What then.
are prisoner Prem Chands ' rights, in the specific set t ng of this case, where the complaint is that a jail warder, for pernicious purposes, inflicted physical torture ? The Punjab Prison Manual clearly lays down the duties of District Magistrates with reference to Central Jails.
Para 41 (l) and (3) read thus: 41.
(l) It shall be the duty of the Magistrate of the district from time to time to visit and inspect jails situate within the limits of his district and to satisfy himself that the provisions of the , and of all rules, regulations, directions and orders made or issued thereunder applicable to such jail, are duly observed and enforced.
xx xx xx (3) A record of the result of each visit and inspection made, shall be entered in a register to be maintained by the Superintendent for the purpose.
Para 42 is also relevant: 42.
In the absence of the Magistrate of the district from headquarters, or in the event of that officer being at any time unable from any cause to visit the jail in the manner in these rules prescribed in that behalf, he shall depute a Magistrate 591 subordinate to him who is available for the duty, to visit and A inspect the jail on his behalf.
Any officer so deputed may, subject to the control of the Magistrate of the district.
exercise all or any of the powers by the , or these rules, conferred upon the Magistrate of the district.
Paragraph 44 clothes the District Magistrate with powers and makes his orders liable to be obeyed.
(1) The orders passed under sub section (2) of section l of the , should, except in emergent cases in which immediate action is, in the opinion of such Magistrate necessary, be so expressed that the Superintendent may have time to refer (if he thinks necessary) to the Inspector General before taking action thereon.
(2) All orders issued by the Magistrate of the district shall, if expressed in terms requiring immediate compliance, be forthwith obeyed and a report made, as prescribed in the said sub section, to the Inspector General.
D We understand these provision to cover the ground of reception of grievance from prisoners and issuance of orders thereon after prompt enquiry.
The District Magistrate must remember that in this capacity he is a judicial officer and not an executive head and must function as such independently of the prison executive.
To make prisoners ' rights in correctional institutions viable, we direct the District Magistrate concerned to inspect the jails in his district once every week receive complaints from individual prisoners and enquire into them immediately.
If he is too preoccupied with urgent work, para graph 42 enables him to depute a magistrate subordinate to him to visit and inspect the jail.
What is important is that he should meet the prisoners separately if they have grievances.
The presence of warders or officials will be inhibitive and must be avoided.
He must ensure that, his enquiry is confidential although subject to natural justice and does not lead to reprisals by jail officials.
The rule speaks of the record of the result of each visit and inspection.
This empowers him to enquire and pass orders.
All orders issued by him shall be immediately complied with since obedience is obligated by para 44(2).
In the event of non compliance he should immediately inform Government about such disobedience and advise the prisoner to forward his complaint to the High Court under article 226 together with a copy of his own report to help the High Court exercise its habeas corpus power.
Indeed, it will be practical, as suggested by the learned Solicitor General, if the District Magistrate keeps a grievance box in each 592 ward to which free access shall be afforded to every inmate.
It should be kept locked and sealed by him and on his periodical visit, he alone, or his surrogate, should open the box, find out the grievances, investigate their merits and take remedial action, it justified.
Chapter V of the Manual deals with visitors who arc an important component of jail management.
Para 47 specially mentions District & Sessions Judges, District Magistrates, Sub Divisional Magistrates and Superintendent of Police as members of the Board of Visitors.
In fact, Sessions Judges arc required to visit the jails periodically the District Magistrates and Sub Divisional Magistrates and magistrates subordinate to them and others appointed by them in this behalf are to visit jails in their jurisdiction once a week under the existing Rule.
We direct, in implementation of the constitutional obligation we have already discussed at length to safeguard prisoners ' fundamental rights, that the Sessions Judges and District Magistrates or other subordinates nominated by them shall visit jails once a week in their visitorial functions.
Para 49 has strategic significance and may be reproduced: 49.
(1) Any official visitor may examine all or any of the books, papers and records of any department of, and may interview any prisoner confined in the jail.
(2) It shall be the duty of every official visitor to satisfy himself that the provisions of the , and of the rules, regulations, orders and directions made or issued J thereunder, are duly observed, and to hear and bring to notice any complaint or representation made to him by any prisoner.
We understand this provision to mean that the Sessions Judge, District Magistrate or their nominees shall hear complaints, examine all documents, take evidence, interview prisoners and check to see if there is deviance, disobedience, delinquency or the like which infringes upon the rights of prisoners.
They have a duty "to hear and bring to notice any complaint or representation made to him by any prisoner".
Nothing clearer is needed to empower these judicial officers to investigate and adjudicate upon grievances.
We direct the Sessions Judges concerned, under his lock and seal, to keep a requisite number of grievance boxes in the prison and give necessary directions to The Superintendent to see that free access is afforded to put in complaints of encroachments, injuries or torture by any prisoner, where he needs remedial action.
Such boxes shall hot be tampered with by any one 593 and shall be opened only under the authority of the Sessions Judge.
We need hardly emphasise the utmost vigilance and authority that the Sessions Judge must sensitively exercise in this situation since prisoner 's personal liberty depends, in this undetectable campus upon his awareness, activism, adjudication and enforcement.
Constitutional rights shall not be emasculated by the insouciance of judicial officers.
The prison authorities shall not, in any manner, obstruct or noncooperate with reception or enquiry into the complaints otherwise, prompt punitive action must follow the High Court or the Supreme Court must be apprised of the grievance so that habeas corpus may issue after due hearing.
Para 53 is important in this context and we reproduce it below: 53.
All visitors shall be afforded every facility for observing the state of the jail, and the management thereof, and shall be allowed access under proper regulations, to all parts of the jail and to every prisoner confined therein.
Every visitor should have the power to call for and inspects any book or other record in the jail unless the Superintendent, for reasons to be recorded in writing, declines on the ground that its production is undesirable.
Similarly, every visitor should have the right to see any prisoner and to put any questions to him out of the hearing of any jail officer.
E There should be one visitor 's book for both classes of visitors, their remarks should in both cases be forwarded to the Inspector General who should pass such orders as he thinks necessary, and a copy of the Inspector General 's order should be sent to the visitor concerned.
Paras 53 B and 53 D are not only supplementary but procedurally vital, being protective provisions from the stand point of prisoners.
We except them here for double emphasis although adverted to earlier: 53 B.
All visitors, official and non official, at every visit, shall (a) inspect the barracks, cells, wards, workshed and other buildings of the jail generally and cooked food; (b) ascertain whether considerations of health, cleanliness, and security are attended to, whether proper management and discipline are maintained in every respect, and whether any prisoner is illegally detrained, 594 Or is detained for an undue length of time, while awaiting trial; (c) examine jail registers and records; (d) hear, attend to all representations and petitions made, by or on behalf of prisoners; and (e) direct, if deemed advisable, that any such representations or petitions be forwarded to Government.
53 D. No prisoner shall be punished for any statement made by him to a visitor unless an enquiry made by a Magistrate results in a finding that it is false.
We hope indeed, we direct the judicial and other official visitors to live upto the expectations of these two rules and strictly implement their mandate.
Para 54 is also part of this package of visitatorial provisions with invigilatory relevance.
We expect compliance with these provisions and if the situation demands it, report to the High Court for action in the case of any violation of any fundamental right of a prisoner.
The long journey through jail law territory proves that a big void exists in legal remedies for prisoner injustices and so constitutional mandates can become living companions of banished humans only if non traditional procedures, duly oriented personnel and realistic reliefs meet the functional challenge.
Broadly speaking, habeas corpus powers and administrative measures are the pillars of prisoners ' rights.
The former is invaluable and inviolable, but for an illiterate, timorous, indigent inmate community judicial remedies remain frozen.
Even so, this constitutional power must discard formalities, dispense with full particulars and demand of the detainer all facts to decide if humane and fair treatment prevails, constitutionally sufficient and comporting with the minimum international standards for treatment of prisoners.
Publicity within the prison community of court rulings in this area will go a long way to restore the morale of inmates and, hopefully, of the warders.
So we direct the Delhi Administration to reach, in Hindi, the essentials of this ruling to the ken of the jail people.
The stress that we lay is on the need of the Court to be dynamic and diversified in meeting out remedies to prisoners.
Not merely the contempt power but also the power to create ad hoc, and use the services of, officers of justice must be brought into play.
In this very case, Dr. Chitale, as amicus curiae, was so authorised, with satisfactory results.
American juristic thought has considered similar action: by courts using 595 Masters Primarily factfinders for the court; Receivers Primarily hold, manage, or liquidate property; "Special" Masters responsible for multiple functions such as fashioning a plan and assisting in its implementation; Monitors responsible for observing the implementation process and reporting to the court; and Ombudsmen responsible for hearing inmate complaints and grievances, conducting investigations and making recommendations to the court.
Courts which have utilised some of these special officers including; Hamilton v Schiro, 388 F. Supp.
1016 (E.D.La. 1970); and, Jackson vs Hendrick 1974) (Special Masters); Wayne County Bd.
Of Comm 'rs., Civ.
Action 173271 (Cir.
Of Wayne City.
, Nich., 1972) (Monitor); and, Morales vs Turman, 364 F. Suppl.
166 E.D. Tex 1973) (ombudsmen).
The use of special judicial officers, like the use of the contempt power, holds considerable promise for assisting courts in enforcing judicial orders.
Hopefully, their use will be expanded and refined over time.
These measures are needed since the condition is escalating.
The situation in Tihar Jail is a reflection of crime explosion, judicial slow motion and mechanical police action coupled with unscientific negativity and expensive futility of the Prison Administration.
The Superintendent wails in court that the conditions are almost unmanageable: (i) Huge overcrowding in the jail.
Normal population of the jail remains between 2300 2500 against 1273 sanctioned accommodation.
(ii) No accommodation for proper classification for undertrials, females, habituals, casuals, juveniles, political prisoners etc.
(iii) Untrained staff of the Assistant Superintendents.
Assistant Superintendents are posted from other various departments of Delhi Admn.
viz. Sales Tax, Employment, Revenue, Civil Supplies etc., etc.
(iv) Untrained mostly the warders guard and their being non transferable.
596 (v) A long distance from the courts of the jail and production of a large number of undertrial prisoners roughly between 250 300 daily and their receiving back into the jail in the evening.
(vi) The population of the jail having a large number of drugs addicts, habitual pickpockets having regular gangs outside to lookafter their interests legal and illegal both from outside.
Other jails may compete with Tihar to bear the palm in bad treatment and so the problem is pan Indian.
That is why we have been persuaded by the learned Solicitor General to adventure into this undiscovered territory.
The Indian Bar, and may be, the Bar Council of India and the academic community, must aid the court and country in this operation Prison Justice.
In a democracy, a wrong to some one is a wrong to every one and an unpunished criminal makes society vicariously guilty.
This larger perspective validates our decisional range.
Before we crystalise the directions we issue one paramount thought must be expressed.
The goal of imprisonment is not only punitive but restorative, to make an offender a non offender.
In Batra 's case this desideratum was stated and it is our constitutional law, now implicit in article 19 itself.
Rehabilitation is a prized purpose of prison 'hospitalization '.
A criminal must be cured and cruelty is not curative even as poking a bleeding wound is not healing.
Social justice and social defence the sanction behind prison deprivation ask for enlightened habilitative procedures.
A learned writer has said: The only way that we will ever have prisons that operate with a substantial degree of justice and fairness is when all concerned with that prison staff and prisoners alike share in a meaningful way the decision making process, share the making of rule and their enforcement.
This should not mean three "snitches" appointed by the warden to be an "inmate advisory committee".
However, if we are to instill in people a respect for the democratic process, which is now the free world attempts to live, we are not achieving that by forcing people to live in the most etalitarian institution that we have in our society.
Thus, ways must be developed to involve prisoners in the process of making decision that affect every aspect of their life in the prison.
The Standard Minimum Rules, put out by United Nations agencies also accent on socialisation of prisoners and social defense: 597 57.
Imprisonment and other measures which result in cutting off an offender from the outside world are afflictive by the very fact of taking from the person the right of self determination by depriving him of his liberty.
Therefore the prison system shall not except as incidental to justifiable segregation or the maintenance of discipline, aggravate the suffering inherent in such a situation.
The purpose of justification of a sentence of imprisonment or a similar measure deprivative of liberty is ultimately to protect society against crime.
This end can only be achieved if the period of imprisonment is used to ensure, so far as possible, that upon his return to society the offender is not only willing but able to lead a law abiding and self supporting life.
To this end, the institution should utilize all the remedial, educational, moral, spiritual and other forces and forms of assistance which are appropriate and available, and should seek to apply them according to the individual treatment needs of the prisoners.
Prison processed rehabilitation has been singularly unsuccessful in the West and the recidivism rate in our country also bears similar testimony: To get tough, to create more tension, to inflict, more cruel E; punishment, is to promote more stress, more criminality, more desperate beastliness and is self defeating though soothing to sadists.
Hallock, a professor at the University of Wisconsin says: The stresses that lead to mental illness are often the same stresses that lead to crime.
Mental illness always has a maladaptive quality, and criminality usually has a maladaptive quality.
The final panacea for prison injustice is, therefore, more dynamic, far more positive, strategies by going back to man, the inner man The ward warden relationship needs holistic repair if prisons are, in Gandhian terms, to become hospitals, if penology, as modern criminologists claim, is to turn therapeutic.
The hope of society from investment in the penitentiary actualises only when the inner man within each man, doing the penance of prison life, transforms his outer values and harmonises the environmental realities with the infinite potential of his imprisoned being.
Meditative experiments, follow up researches and welcome results in many countries lend optimism to 598 techniques of broadening awareness, deepening consciousness and quietening the psychic being.
It is of seminal importance to note that the Tamil Nadu Prison Reforms Commission (1978 79) headed by a retired Chief Justice of the High Court of Patna, working with a team of experts.
has referred with approval to successful experiments in Transcendental Meditation in the Madurai Central Prison: Success has been claimed for this programme.
It is re ported that there is "reduction of anxiety and fear symptoms, greater flexibility in dealing with frustration, increased desire to care for others, and ability to interact in group situations viz. rational rather than purely aggressive means.
Some in mates reported spontaneous reduction in clandestine use of alcohol and ganja; and even cigarette smoking was less.
Prison authorities informed us that they noticed personality changes in some of these prisoners, and that they now had the calm and pleasant exchanges with these inmates.
Their behaviour towards others in the prison and relationship with prison authorities also changed considerably".
There is a proposal to extend this treatment to short term prisoners also.
This treatment may also be tried in other prisons where facilities exist.
A copy of the report of the Director of the Madurai Institute of Social Work is in Appendix XI.
The time for prison reform has come when Indian methodology on these lines is given a chance.
We do no more than indicate the sign post to Freedom From Crime and Freedom Behind Bars as a burgeoning branch of therapeutic jurisprudence.
All this gains meaning where we recognise that mainstreaming prisoners into community life as willing members of a law abiding society is the target.
Rule 61 of the Standard Minimum Rules stresses this factor: 61.
The treatment of prisoners should emphasize not their exclusion from the community, but their continuing part in it.
Community agencies should, therefore, be enlisted wherever possible to assist the staff of the institution in the task of social rehabilitation of the prisoners.
There should be in connection with every institution social workers charged with the duty of maintaining and improving all desirable relations of a prisoner with his family and with valuable social 599 agencies.
Steps should be taken to safeguard, to the minimum extent compatible with the law and the sentence, the rights relating to civil interests, social security rights and other social benefits of prisoners.
It follows that social resources, helpful to humane treatment and mainstreaming, should be ploughed in, senior law students screened by the Dean of reputed Law Schools may usefully be deputed to interview prisoners, subject to security and discipline.
The grievances so gathered can be fed back into the procedural mechanism viz. the District Magistrate or Sessions Judge.
The Delhi Law School, we indicate, should be allowed to send selected students under the leadership of a teacher not only for their own clinical education but as prisoner grievance gathering agency.
Other service organisation, with good credentials, should be encouraged, after due checking for security, to play a role in the same direction.
The does provide for rule making and issuance of instructions which can take care of this suggestion.
Omega The omega of our judgment must take the shape of clear directives to the State and prison staff by epitomising the lengthy discussion.
To clinch the issue and to spell out the precise directions is the next step.
We hold that Prem Chand, the prisoner, has been tortured illegally and the Superintendent cannot absolve himself from responsibility even though he may not be directly a party.
Lack of vigilance is limited guilt.
We do not fix the primary guilt because a criminal case is pending or in the offing.
The State shall take action against the investigating police for the apparently collusive dilatoriness and deviousness we have earlier indicated.
Policing the police is becoming a new ombudsmanic task of the rule of law.
We direct the Superintendent to ensure that no corporal punishment or personal violence on Prem Chand shall be inflicted.
No irons shall be forced on the person of Prem Chand in vindictive spirit.
In those rare cases of 'dangerousness ' the rule of hearing and reasons set out by this Court in Batra 's case and elaborated earlier shall be complied with.
600 3.
Lawyers nominated by the District Magistrate, Sessions Judge, High Court and the Supreme Court will be given all facilities for inter views, visits and confidential communication with prisoners subject to discipline and security considerations.
This has roots in the visitatorial and supervisory judicial role.
The lawyers so designated shall be bound to make periodical visits and record and report to the concerned court results which have relevance to legal grievances.
Within the next three months, Grievance Deposit Boxes shall be maintained by or under the orders of the District Magistrate and the Sessions Judge which will be opened as frequently as is deem d fit and suitable action taken on complaints made.
Access to such boxes shall be accorded to all prisoners.
District Magistrates and Sessions Judges shall, personally or through surrogates, visit prisons in their jurisdiction and afford effective opportunities for ventilating legal grievances, shall make expeditious enquiries there into and take suitable remedial action.
In appropriate cases reports shall be made to the High Court for the latter to initiate, if found necessary, habeas action.
It is significant to note the Tamil Nadu Prison Reforms Commission 's observations: 38.16.
Grievance Procedure : This is a very important right of a prisoner which does not appear to have been properly considered.
The rules regulating the appointment and duties of non official visitors and official visitors to the prisons have been in force for a long time and their primary functions is "to visit all parts of the jail and to see all prisoners and to hear and enquire into any complaint that any prisoner hear make".
In practice, these rules have not been very effective in providing a forum for the prisoners to redress their grievances.
There are a few non official visitors who take up their duties conscientiously and listen to the grievances of the prisoners.
But most of them take this appointment solely as Fl a post of honour and are somewhat reluctant to record hl the visitors ' book any grievance of a prisoner which might cause embarrassment to the prison staff.
The judicial officers, viz., 601 the Sessions Judge and the Magistrates who are also ex officio visitors do not discharge their duties effectively.
We insist that the judicial officers referred to by us shall carry out their duties and responsibilities and serve as an effective grievance Mechanism.
No solitary or punitive cell, no hard labour or dietary change as painful additive, no other punishment or denial of privileges and amenities, no transfer to other prisons with penal consequences, shall be imposed without judicial appraisal of the Sessions Judge and where such intimation, on account of emergency, is difficult, such information shall be given within two days of the action.
Conclusion What we have stated and directed constitute the mandatory part of the judgment and shall be complied with by the State.
But implicit in the discussion and conclusions are certain directives for which we do not fix any specific time limit except to indicate the urgency of their implementation.
We may spell out four such quasi mandates.
The State shall take early steps to prepare in Hindi, a Prisoner 's Handbook and circulate copies to bring legal awareness home to the k inmates.
Periodical jail bulletins stating how improvements and habilitative programmes are brought into the prison may create a fellow ship which Will ease tensions.
A prisoners ' wall paper, which will freely ventilate grievances will also reduce stress.
All these are implementary of section 61 of the . 2.
The Slate shall take steps to keep up to the Standard Minimum Rules for Treatment of Prisoners recommended by the United Nations, especially those relating to work and wages, treatment with dignity community contact and correctional strategies.
In this latter aspect, the observations we have made of holistic development of personality shall be kept in view.
The needs rehabilitation and the Prison Manual total overhaul, even the Model Manual being out of focus with healing goals.
A correctional cum orientation course is necessitous for the prison staff inculcating the constitutional values, therapeutic approaches and tension free management.
602 4.
The prisoners ' rights shall be protected by the court by its writ jurisdiction plus contempt power.
To make this jurisdiction viable, free legal services to the prisoner programmes shall be promoted by professional organisations recognised by the Court such as for e.g. Free Legal Aid (Supreme Court) Society.
The District Bar shall, we re commend, keep a cell for prisoner relief In this connection, it is heartening to note that the Delhi University, Faculty of Law, has a scheme of free legal assistance even to prisoners.
The Declaration on the Protection of All Persons from Torture and other cruel, Inhuman or Degrading Treatment or Punishment adopted by U. N. General Assembly (Resolution 3452 of 9 December 1975) has relevance to our decision.
In particular Article 8.
Any person who alleges that he has been subjected to torture or other cruel, inhuman or degrading treatment or punishment by or at the instigation of a public official shall have the right to complain to, and to have his case impartially examined by, the competent authorities of the State concerned.
Article 9.
Wherever there is reasonable ground to believe that an act of torture as defined in article I has been committed, the competent authorities of the State concerned shall promptly proceed to an impartial investigation even if there has been no formal complaint.
Dr. Chitale has handed up to us an American Civil Liberties Union Hand book on the Rights of Prisoners.
It rightly sets the sights of prison justice thus : As an institution, our penal and "correctional" system is an abject failure.
The conditions in America 's jails and prisons virtually ensure psychological impairment and physical deterioration for thousands of men and women each year.
Reformation and rehabilitation is the rhetoric; systematic dehumanization is the reality.
Public attention is directed 603 only sporadically toward the subhuman conditions that prevail in these institutions, and usually only because the prisoners themselves have risked many more years in confinement, and in some cases even their lives, to dramatize their situation by protest.
The 'central evil ' of prison life, according to this handbook, is "the unreviewed administrative discretion granted to the poorly trained personnel who deal directly with prisoners.
Moreover, even those rights which are now guaranteed by the courts are often illusory for many prisoners.
Implementation and enforcement of these rights rest primarily in the hands of prison officials.
Litigation is costly and time consuming, and few lawyers have volunteered their service in this area.
Thus even those minimal rights which appear on paper are often in reality denied.
" We conclude with the hope that the State, though preoccupied with many pressing problems, will discharge its constitutional obligation to the invisible mortals incarcerated by it and legislatively and administratively re make a Prison Code adhering to the high values of the Preamble.
Over a hundred years ago (1870) " . some American prison administrators assembled to discuss their common problems and founded what is now the American Correctional Association.
At the very first meeting, these remarkable men set down a justly famous 'Statement of Twenty two Principles.
" Among the twenty two were these: "Reformation, not vindictive suffering, should be the purpose of the penal treatment of prisoners.
The prisoner should be made to realize that his destiny is in his own hands: Prison discipline should be such as to gain the will of the prisoner and conserve his self respect: The aim of the prison should be to make industrious free men rather than orderly and obedient prisoners.
This quote from the well known work "The Crime of Punishment" extracted by George Ellis in his book "Inside Folsom Prison: Trans 604 cendental mediation and TM Sidhi Program" is notable as a practicable project which will reduce the number of prisoners by raising the nature of prisoners.
In the package of benign changes needed in our prisons with a view to reduce tensions and raise the pace of rehabilitation, we have referred to acclimatization of the community life and elimination of sex vice vis a vis prisoner we have also referred to the unscientific mixing up in practice of under trials, young offenders and long term convicts.
This point deserves serious attention.
A recent book "Rape in Prison" states : "One of the most horrendous aspects of a jail sentence is the fact that not only are the young housed with the older offenders, but those awaiting trial share the same quarters as convicted inmates.
The latter individuals have little to lose in seeking sexual gratification through assault, for they have to serve their time any way .
As matters now stand, sex is unquestionable the most pertinent issue to the inmates ' life behind bars.
There is a great need to utilize the furlough system in corrections.
Men with record showing good behaviour should be released for week ends at home with their Families and relatives.
Farewell to this case is not final so far as the jailor and the police investigator are concerned.
The former will stand his trial and shall receive justice.
We say no more here.
The investigator invites our displeasure and the Assistant Public Prosecutor, whom he consulted, makes us unhappy since we have had a perusal of the case diary.
The crime alleged is simple, the material relied on is short and yet, despite repeated observations from the Bench the investigator has delayed dawdily the completion of the collection of evidence and the laying of the charge sheet.
The prisoner who is the victim has been repeatedly questioned under different surroundings and divergent statements are recorded.
We do not wish to state what we consider to be the obvious inference, but we are taken aback when the Assistant Public Prosecutor has given an opinion which, if we make presumption in his favour, 605 shows indifferences and, if we make contrary inferences, makes us suspect.
When offences are alleged to have taken place within the prison, there should be no tinge or trace of departmental collusion or league between the police and the prison staff.
We make these minimal observations so that the State may be alerted for appropriate action.
Surely, The conduct of the prosecution cannot be entrusted to one who has condemned it in advance.
B We allow the petition and direct a writ to issue, including the six mandates and further order that a copy of it be sent for suitable action to the Ministry of Home Affairs and to all the State Governments since Prison Justice has pervasive relevance.
C PATHAK, J.
I have read the judgment prepared by my learned brother.
For my part, I think it sufficient to endorse the following finding and direction detailed towards the end of the judgment: (1) The prisoner, Prem Chand, has been tortured while in custody in the Tihar Jail.
As a criminal case is in the offing or may be pending, it is not necessary in this proceeding to decide who is the person responsible for inflicting the torture.
(2) The Superintendent of the Jail is directed to ensure that no punishment or personal violence is inflicted on Prem Chand by reason of the complaint made in regard to the torture visited on him.
Besides this, I am in general agreement with my learned brother on the pressing need for prison reform and the expeditious provision for adequate facilities enabling the prisoners, not only to be acquainted with their legal rights, but also to enable them to record their complaints and grievances, and to have confidential interviews periodically with lawyers nominated for the purpose by the District Magistrate or the Court having jurisdiction subject, of course, to considerations of prison discipline and security.
It is imperative that District Magistrate,, and Sessions Judges should visit the prisons in their jurisdiction and afford effective opportunity to the prisoners for ventilating their grievances and, where the matter lies within their powers, to make expeditious enquiry therein and take suitable remedial action.
It is also necessary 606 that the Sessions Judge should be informed by the jail authorities of any punitive action taken against a prisoner within two days of such action.
A statement by the Sessions Judge in regard to his visits, enquiries made and action taken thereon shall be submitted periodically to the High Court to acquaint it with the conditions prevailing in the prisons within the jurisdiction of the High Court.
| IN-Abs | The petitioner, a convict under death sentence, through a letter to one of the Judges of this Court alleged that torture was practised upon another prisoner by a jail warder, to extract money from the victim through his visiting relations.
The letter was converted into a habeas corpus proceeding.
The Court issued notice to the State and the concerned officials.
It also appointed amicus curiae and authorised them to visit the prison, meet the prisoner, see relevant documents and interview necessary witnesses so as to enable them to inform them selves about the surrounding circumstances and the scenario of events.
The amicus curiae after visiting the jail and examining witnesses reported that the prisoner sustained serious anal injury because a rod was driven into that aperture to inflict inhuman torture and that as the bleeding had not stopped, he was removed to the jail hospital and later to the Irvin Hospital.
It was also reported that the prisoner 's explanation for the anal rupture was an unfulfilled demand of the warder for money, and that attempts were made by the departmental officers to hush up the crime by overawing the prisoner and the jail doctor and offering a story that the injury was either due to a fall of self inflication or due to piles.
Allowing the writ petition. ^ HELD:(Per Krishna Iyer and Chinnappa Reddy, JJ.) 1.
(a) Prem Chand the prisoner, has been tortured illegally and the Superintendent cannot absolve himself from responsibility even though he may not be directly a party.
Lack of vigilance is limited guilt.
The primary guilt cannot be fixed because a criminal case is pending or is in the offing.
The State shall take action against the investigating police for collusive dilatoriness and deviousness.[599 F] 558 (b) The Superintendent is directed to ensure that no corporal punishment or personal violence on Prem Chand shall be inflicted.
No irons shall be forced on the person in vindictive spirit.
[599 H] (c) Lawyers nominated by the District Magistrate, Sessions Judge, High Court or the Supreme Court will be given all facilities for interviews, visits and confidential communication with prisoners subject to discipline and security considerations.
The lawyers so designated shall be bound to make periodical visits and record and report to the concerned courts, results which have relevance to legal grievances.
[600 A B] (d) Within the next three months, Grievance Deposit Boxes shall be maintained by or under the orders of the District Magistrate and the Sessions Judge which will be opened as frequently as is deemed fit and suitable action taken on complaints made.
Access to such boxes shall be afforded to all prisoners.
[600 C] (e) District Magistrates and Sessions Judges shall, personally or through surrogates, visit prisons in their jurisdiction and afford effective opportunities for ventilating legal grievances, shall make expeditious enquiries there into and take suitable remedial action.
In appropriate cases reports shall be made to the High Court for the latter to initiate, if found necessary, habeas action.
[600 D] (f) No solitary or punitive cell, no hard labour or dietary change as painful additive, no other punishment or denial of privileges and amenities, no transfer to other prisons with penal consequences, shall be imposed without judicial appraisal of the Sessions Judge and where such intimation, an account of emergency is difficult such information shall be given within two days of the action.
[601 B C] 2.
In our era of human rights ' consciousness the habeas writ has functional plurality and the constitutional regard for human decency and dignity is tested by this capability.
[563 E] 3.
Protection of the prisoner within his rights is part of the office of Article 32.
[564 C] 4.
It behoves the court to insist that, in the eye of law, prisoners are persons not animals, and to punish the deviant 'guardians ' of the prison system where they go berserk and defile the dignity of the human inmate.
Prison houses are part of Indian earth and the Indian Constitution cannot be held at bay by jail officials 'dressed in a little, brief authority '.
when Part III is invoked by a convict.
When a prisoner is traumatized, the Constitution suffers a shock.
[564 D E] 5.
The courts in America have, through the decisional process, brought the rule of law into the prison system pushing back, pro tanto, the 'hands off ' doctrine.
The content of our constitutional liberties being no less, the dynamics of habeas writs there developed help the judicial process here.
The full potential of articles 21, 19 & 14 after Maneka Gandhi has been unfolded by this Court in Hoskot and Batra.
Today, human rights jurisprudence in India has a constitutional status and sweep.
[573 A, 574 D] 6.
Rulings of this Court have highlighted the fact that the framers of the Constitution have freed the powers under article 32 from the rigid restraints of 559 the traditional English writs.
Flexible directives, even affirmative action moulded to grant relief, may realistically be issued and fall within its fertile width.
[575 F] Dwarkanath vs income Tax officer ; referred to.
Where injustice, verging on inhumanity, emerges from hacking human rights guaranteed in Part III and the victim beseeches the Court to intervene and relieve, the Court will be a functional futility as a constitutional instrumentality if it does not go into action until the wrong is righted.
The Court is not a distant abstraction omnipotent in the books but an activist institution which is the cynosure of public hope.
The court can issue writs to meet the new challenges.
[576 D] 8.
Affirmed in unmistakables terms that the court has jurisdiction under article 32 and so too under article 226, a clear power and, therefore, a public duty to give relief to sentence in prison setting.
[576 F] 9.
In Sunil Batra vs Delhi Administration this Court rejected the 'hands off ' doctrine and ruled that fundamental rights do not flee the person as he enters the prison although they may suffer shrinkage necessitated by incarceration.
Our Constitutional culture has now crystallised in favour of prison justice and judicial jurisdiction.
[576 H 577 A] 10.
Where the rights of a prisoner, either under the Constitution or under other law, are violated the writ power of the court can and should run to his rescue.
There is a warrant for this vigil.
The court process casts the convict into the prison system and the deprivation of his freedom is not a blind penitentiary affliction but a belighted institutionalisation geared to a social good.
The court has a continuing responsibility to ensure that the constitutional purpose of the deprivation is not defeated by the prison administration.
[577 E F] 11.
Whether inside prison or outside, a person shall not be deprived of his guaranteed freedom save by methods 'right, just and fair '.
[578 E] 12.
A prisoner wears the armour of basic freedom even behind bars and that on breach thereof by lawless officials the law will respond to his distress signals through 'writ ' aid.
The Indian human has a constant companion the court armed with the Constitution.
[578 H] Maneka Gandhi vs Union of India ; N. H. Hoskot vs Maharashtra, ; , referred to. 13.
Implicit in the power to deprive the sentence of his personal liberty, the Court has to ensure that no more and no less than is warranted by the sentence happens.
If the prisoner breaks down because of mental torture, psychic pressure or physical infliction beyond the licit limits of lawful imprisonment the Prison Administration shall be liable for the excess.
On the contrary, if an influential convict is able to buy advantages and liberties to avoid or water down the deprivation implied in the sentence the Prison Establishment will be called to order for such adulteration or dilution of court sentences by executive palliation, if unwarranted by law.
[579 B C] 14.
The court has power and responsibility to intervene and protect the prisoner against mayhem, crude or subtle, and may use habeas corpus for 560 enforcing in prison humanism and forbiddance of harsher restraints and heavier severities than the sentence carries.
[579 E] 15.
Law in the books and in the courts is of no help unless it reaches the prisoner in understandable language and available form.
There is therefore need to get ready a Prisoners ' Handbook in the regional language and make them freely available to the inmates.
To know the law is the first step to be free from fear of unlaw.
[582 C] 16(i) The most important right of a prisoner is to integrity of his physical person and mental personality.
No prisoner can be personally subjected to deprivations not necessitated by the fact of incarceration and the sentence of court.
[584 D, 583 C] (ii) Inflictions may take many protean forms, apart from physical assaults.
Pushing the prisoner into a solitary cell, denial of a necessary amenity, and more dreadful sometimes, transfer to a distant prison where visits or society of friends or relatives may be snapped, allotment of degrading labour, assignment to a desperate or tough gang and the like, may be punitive in effect.
Every such affliction or abridgement is an infraction of liberty or life in its wider sense and cannot be sustained unless article 21 is satisfied.
There must be a corrective legal procedure, fair and reasonable and effective.
Such infraction will be arbitrary under Article 14, if it is dependent on unguided discretion, unreasonable under article 19 if it is irremediable and unappealable and unfair under article 21 if it violates natural justice.
Some prisoners, for their own safety, may desire segregation.
In such cases, written consent and immediate report to higher authority are the least, if abuse is to be tabooed.
[584 F H, 586 G] (iii) Visit to prisoners by family and friends are a solace in insulation: and only a dehumanised system can derive vicarious delight in depriving prison inmates of this humane amenity.
Subject, of course, to search and discipline and other security criteria, the right to society of fellow men, parents and other family members cannot be denied in the light of article 19 and its sweep.
, [586 H] 17.
Prison power, absent judicial watch tower, may tend towards torture.
The judges are guardians of prisoners ' rights because they have a duty to secure the execution of the sentences without excesses and to sustain the personal liberties of prisoners without violence on or violation of the inmates ' personality.
[588 D, 590 C] 18.
In a democracy, a wrong to some one is a wrong to every one and an unpunished criminal makes society vicariously guilty.
[596 D] 19.
When offences are alleged to have taken place within the prison, there should be no tinge or trace of departmental collusion or league between the police and the prison staff.
[605 A] [Directives for which no specific time limit fixed except the urgency of their implementation: 1(i) The State shall take early steps to prepare in Hindi, a Prisoner 's Handbook and circulate copies to bring legal awareness home to the inmates.
Periodical jail bulletins stating how improvements and habilitative programmes are brought into the prison may create a fellowship which will ease tensions.
561 A prisoners ' wall paper, which will freely ventilate grievances will also reduce stress.
All these are implementary of section 61 of the .
[601 D,E] (ii) The State shall take steps to keep up to the Standard Minimum Rules for Treatment of Prisoners recommended by the United Nations, especially those relating to work and wages, treatment with dignity, community contact and correctional strategies.
[601 F] (iii) The needs rehabilitation and the Prison Manual total over haul.
A correctional cum orientation course is necessitous for the prison staff inculcating the constitutional values, therapeutic approaches and tension free management.
[601 H] (iv) The prisoners ' rights shall be protected by the court by its writ jurisdiction plus contempt power.
To make this jurisdiction viable, free legal services to the prisoner programmes shall be promoted by professional organisations recognised by the court such as for e.g. Free Legal Aid (Supreme Court) Society.
The District Bar shall, we recommend, keep 2 cell for prisoner relief.
[602 A] (Per Pathak J. concurring) 1.
The prisoner Prem Chand has been tortured while in custody in the Tihar Jail.
[605 D] 2.
The Superintendent of the jail to ensure that no punishment or personal violence is inflicted on Prem Chand by reason of the complaint made in regard to the torture.
[605 F] 3.
Pressing need for prison reform and provision for adequate facilities to prisoners, to enable them not only to be acquainted with their legal riots but also to record their complaints and grievances and to have confidential interviews periodically with lawyers nominated for the purpose by the District Magistrate or the court having jurisdiction.
[605 G] 4.
Imperative that District Magistrates and Sessions Judges should visit the prisons in their jurisdiction and afford effective opportunity to the prisoners for ventilating their grievances and where the matter lies within their powers, make expeditious enquiry and take suitable remedial action.
[605 H] 5.
Sessions Judge should be informed by the jail authorities of any punitive action taken against a prisoner within two days of such action.
[606 A] 6.
A statement by the Sessions Judge in regard to his visits, enquiries made and action then thereon shall be submitted periodically to the High Court to acquaint it with the conditions prevailing in the prisons within its jurisdiction.
[606 B]
|
Civil Appeal No. 2009 of 1978.
Appeal by Special Leave from the Judgment and Order dated 8/12th May, 1978 of the Calcutta High Court in Appeal from Original Order No. 884/76.
Devi Pal.
P. K. Pal, J. B. Dadachanji and K. J. John for the Appellant.
The appellant is a banking company incorporated in the United Kingdom with its registered office at London.
It carries on banking business in India, and is assessed under the Income tax Act, 1961.
The appellant filed a return of its income for the assessment year 1972 73.
During the assessment proceeding, the Income tax Officer issued a notice under section 142(1) of the Income tax Act requiring the appellant to produce certain account books and documents.
The appellant applied against the notice to the High Court at Calcutta under Articles 226 of the Constitution.
A learned Single Judge of the High Court did not accept the wide construction which the appellant sought to put upon the impugned notice, and construing it in specific limited terms he directed the appellant to comply with it.
The appellant preferred an appeal in the High Court.
Meanwhile, pursuant to the direction by the learned Single Judge, the Income tax Officer made an assessment order on March 31, 1977.
Thereafter, the appeal was allowed by a Division Bench of the High Court by its judgment dated May 8 and 12, 1978, and the impugned notice under section 142(1) and the 768 consequent assessment order were quashed.
But while doing so, the Division Bench also directed the Income tax Officer to make a fresh assessment.
Aggrieved by that direction, the appellant applied for, and obtained, special leave to appeal, to this Court.
The sole question before us is whether the High Court erred in directing a fresh assessment.
The appellant contends that the High Court was in error in making the direction because the assessment had already become barred by limitation and thereby a valuable right not to be assessed had accrued to the appellant, and the High Court was not competent to deprive the appellant of that accrued right.
It is necessary first to examine whether the bar of limitation had come into play at any time before the High Court passed the impugned order.
The assessment year under consideration is the year 1972 73.
By virtue of section 153(1) (a) (iii) of the Income tax Act, no assessment order in respect of that assessment year could be made after two years from the end of that assessment year.
The end of the assessment year is March 31, 1975.
However, the appellant filed the writ petition on March 17, 1975, fourteen days before the end of the period for making the assessment order.
On the same date, March 17, 1975, the learned Single Judge granted an interim injunction restraining the Income tax Officer from proceeding with the assessment, and on March 25, 1975 the injunction was made operative for the pendency of the writ petition.
The writ petition was disposed of by the learned single judge by his judgment dated August 31, 1976.
It is apparent that the assessment proceedings remained stayed throughout the period from March 17, 1975 to August 31, 1976 by virtue of the orders of the court.
As has been mentioned, the learned Single Judge disposed of the writ petition on August 31, 1976.
In his judgment, besides directing the appellant to comply with the notice under section 142(1) as construed by him, he also included a direction to the Income tax Officer to complete the assessment by March 31, 1977.
On September 22, 1976, he amended his judgment inasmuch as it now required that "the assessment for the relevant year must be completed on the 31st of March, 1977 but must not be completed before 31st March 1977.
" In other words, while the Income tax Officer could continue with the assessment proceedings he was restrained by the Court from making the assessment order before, and in fact could make it only on, March 31, 1977.
Now it is important to note that when the amendment was made by the learned Single Judge in his judgment, it was an amendment made by him to a judgment disposing of the writ petition and having regard especially to the nature and the terms of the amend 769 ment, it must be deemed to have taken effect as from August 31, 1976, the date of the original judgment.
In the appeal filed thereafter by the appellant, no interim order was made suspending the operation of the direction that the assessment order be made on March 31, 1977 only.
A stay order was made against the enforcement of the notice of demand alone.
Adhering to the directions of the learned Single Judge, the Income tax Officer made an assessment order on March 31, 1977.
In the result, the assessment proceeding remained pending during the entire period from March 17, 1975 to March 31, 1977 by successive orders of the Court.
If regard be had to clause (ii) of Explanation 1 to section 153, which provides that in computing the period of limitation for the purposes of section 153, the period during which the assessment is stayed by an order or injunction of any court shall be excluded, it is abundantly clear that the assessment order dated March 31, 1977 is not barred by limitation.
In computing the period for making the assessment, the Income tax Officer would be entitled to exclude the entire period from March 17, 1975, on which date there were fourteen days still left within the normal operation of the rule of limitation.
The assessment order was made on the very first day after the period of stay expired; it could not be faulted on the ground of limitation.
There is, therefore, no force in the submission of the appellant that the limitation for making the assessment had expired and a valuable right not to be assessed had thereby accrued to it, and that consequently the High Court was not competent to make the order directing a fresh assessment.
The next point is whether the High court possessed any power to make the order directing a fresh assessment.
The principal relief sought in the writ petition was the quashing of the notice under section 142(1) of the Income tax Act, and inasmuch as the assessment order dated March 31, 1977 was made during the pendency of the proceeding consequent upon a purported non compliance with that notice, it became necessary to obtain the quashing of the assessment order also.
The character of an assessment proceeding, of which the impugned notice and the assessment order formed part, being quasi judicial, the "certiorari" jurisdiction of the High court under Article 226 was attracted.
Ordinarily, where the High court exercises such jurisdiction it merely quashes the offending order and the consequential legal effect is that but for the offending order the remaining part of the proceeding stands automatically revived before the inferior court or tribunal with the need for fresh consideration and disposal by a fresh order.
Ordinarily, the High Court does not substitute its own order for the order quashed by it.
It is, of course, a different case where the adjudication by the High Court establishes a complete want of jurisdic 770 tion in the inferior court or tribunal to entertain or to take the proceeding at all.
In that event on the quashing of the proceeding by the High Court there is no revival at all.
But although in the former kind of case the High court, after quashing the offending order, does not substitute its own order it has power nonetheless to pass such further orders as the justice of the case requires.
When passing such orders the High court draws on its inherent power to make all such orders as are necessary for doing complete justice between the parties.
The interests of justice require that any undeserved or unfair advantage gained by a party invoking the jurisdiction of the court, by the mere circumstance that it has initiated a proceeding in the court, must be neutralised.
The simple fact of the institution of litigation by itself should not be permitted to confer an advantage on the party responsible for it.
The present case goes further.
The appellant would not have enjoyed the advantage of the bar of limitation if, notwithstanding his immediate grievance against the notice under section 142(1) of the Income tax Act, he had permitted the assessment proceeding to go on after registering his protest before the Income tax Officer, and allowed an assessment order to be made in the normal course.
In an application under section 146 against the assessment order, it would have been open to him to urge that the notice was unreasonable and invalid and he was prevented by sufficient cause from complying with it and therefore the assessment order should be cancelled.
In that event, the fresh assessment made under section 146 would not be fettered by the bar of limitation.
Section 153(3)(i) removes the bar.
But the appellant preferred the constitutional jurisdiction of the High Court under Article 226.
If no order was made by the High Court directing a fresh assessment, he could contend as is the contention now before us, that a fresh assessment proceeding is barred by limitation.
That is an advantage which the appellant seeks to derive by the mere circumstance of his filing a writ petition.
It will be noted that the defect complained of by the appellant in the notice was a procedural lapse at best and one that could be readily corrected by serving an appropriate notice.
It was not a defect effecting the fundamental jurisdiction of the Income tax Officer to make the assessment.
In our opinion, the High Court was plainly right in making the direction which it did.
The observations of this court in Director of Inspection of Income tax (Investigation), New Delhi and Another vs Pooran Mall & Sons and another(1) are relevant.
It said: "The court in exercising its powers under article 226 has to mould the remedy to suit the facts of a case.
If in a particular case a court takes the view that the Income tax 771 Officer, while passing an order under section 132(5), did not give an adequate opportunity to the party concerned it should not be left with the only option of quashing it and putting the party at an advantage even though it may be satisfied that on the material before him the conclusion arrived at by the Income tax Officer was correct or dismissing the petition because otherwise the party would get an unfair advantage.
The power to quash an order under Article 226 can be exercised not merely when the order sought to be quashed is one made without jurisdiction in which case there can be no room for the same authority to be directed to deal with it.
But, in the circumstances of a case, the court might take the view that another authority has the jurisdiction to deal with the matter and may direct that authority to deal with it or where the order of the authority which has the jurisdiction is vitiated by circumstances like failure to observe the principles of natural justice, the court may quash the order and direct the authority to dispose of the matter afresh after giving the aggrieved party a reasonable opportunity of putting forward its case.
Otherwise, it would mean that where a court quashes an order because the principles of natural justice have not been complied with, it should not while passing that order permit the tribunal or the authority to deal with it again irrespective of the merits of the case.
" The point was considered by the Calcutta High court in Cachar plywood Ltd. vs Income Tax Officer, "A" Ward, Karimganj, Dist., Cachar & Another(1) and the High court, after considering the provisions of section 153 of the Income Tax Act, considered it appropriate, while disposing of the writ petition, to issue a direction to the Income tax Officer to complete the assessment which, but for the direction of the High court, would have been barred by limitation.
Our attention has been drawn to a recent decision of this Court in Rajinder Nath etc.
vs The Commissioner of Income tax, Delhi(2) (by a Bench of this Court of which one of us was a member).
In that case, the Court considered the provisions of section 153(3) (ii) of the Income tax Act and laid down that the word "direction" in that subsection refers to a direction necessary for the disposal of the case and which the court has power to make while deciding the case.
In the view taken by us that the order made by the High Court directing a fresh assessment is necessary for properly and completely disposing of 772 the writ petition, the appellant can obtain no assistance from Rajinder Nath (supra).
Mr. A. P. Mohanti, who appeared for the intervener, supported the contention that the High Court was not entitled to make an order directing a fresh assessment, and has referred us to three cases, Pickles vs Falsham,(1), Anisminic Ltd. vs The Foreign Compensation Commission and Another(2), and Bath and West Countries Property Trust Ltd. vs Thomas (Inspector of Taxes)(3).
We are of the opinion that the cases are distinguishable.
In Pickles (supra), Cave L.C. declined to remand the case to the Special Commissioners because the time for making the requisite assessment had expired.
In Anisminic Ltd. (supra) the decision of the Commissioner considered by the House of Lords was a nullity.
The present case is one of a mere procedural lapse, an imperfect notice which is replaceable by a proper notice.
The third case, Bath and West Countries Property Trust Ltd. (supra) was again a case where it was too late for the Inspector to make a fresh assessment.
In the case before us a direction by the High court is sufficient to raise the bar of limitation, a power absent in the aforesaid cases.
In our Judgment, the order made by the High Court directing the Income tax Officer to make a fresh assessment was necessary in order to do complete justice between the parties.
The High Court had jurisdiction to make the order, and it acted in the sound exercise of its judicial discretion in making it.
The appeal is dismissed with costs.
V.D.K. Appeal dismissed.
| IN-Abs | The appellant, a banking company incorporated in the United Kingdom, carries on banking business in India and is assessed under the Income Tax Act, 1961.
The appellant filed a return of its income for the assessment year 1972 73.
During the assessment proceedings the Income Tax Officer issued a notice under section 142(1) of the Income Tax Act requiring the appellant to produce certain account books and documents.
The appellant applied against the notice to the High Court of Calcutta under Article 226 of the Constitution.
The High Court construing the notice in specifically limited terms directed the appellant to comply with it.
The appellant preferred an appeal in the High Court.
Meanwhile, pursuant to the direction by the learned single judge, the Income Tax Officer made an assessment order on March 31, 1977.
Thereafter the appeal was allowed by a Division Bench of the High Court by its judgment dated May 8 and 12, 1978, and the impugned notice under section 142(1) and the consequent assessment order were quashed.
But while doing so, the Division Bench also directed the Income Tax Officer to make a fresh assessment.
Aggrieved by that direction, the appellant applied for, and obtained special leave to appeal to this Court.
Dismissing the appeal, the Court ^ HELD: 1.
The High Court was competent to make the order directing a fresh assessment since the limitation for making the assessment had not expired and no valuable right to be assessed had thereby accrued to the appellant.
[769 D E] The facts of the case make it clear that the assessment proceedings remained pending during the entire period from March 17, 1975 to March 31, 1977 by virtue of successive stay orders of the Court.
If regard be had to clause (ii) of Explanation 1 to section 153 which provides that in computing the period of limitation for the purposes of section 153 the period during which the assessment is stayed by an order or injunction of any court shall be excluded, it is abundantly clear that the assessment order dated March 31, 1977 is not barred by limitation.
In computing the period for making the assessment, the Income Tax Officer would be entitled to exclude the entire period from March 17, 1975, on which date there were fourteen days still left within the normal 766 operation of the rule of limitation.
The assessment order was made on the very first day after the period of stay expired; it could not be faulted on the ground of limitation.
[769 B D] 2.
The character of an assessment proceeding of which the impugned notice and the assessment order formed part, being quasi judicial, the "certiorari" jurisdiction of the High Court under Article 226 was attracted.
Ordinarily, where the High Court exercises such jurisdiction it merely quashes the offending order, and the consequential legal effect is that but for the offending order the remaining part of the proceeding stands automatically reviewed before the inferior court or tribunal with the need for fresh consideration and disposal by a fresh order.
Ordinarily the High Court does not substitute its own order for the order quashed by it.
It is, of course, a different case where the adjudication by the High Court establishes a complete want of jurisdiction in the inferior court or tribunal to entertain or to take the proceeding at all.
In that event on the quashing of the proceeding by the High Court there is no revival at all.
But although in the former kind of case the High Court, after quashing the offending order, does not substitute its own order it has power nonetheless to pass such further orders as the justice of the case requires.
[769 F H, 770 A] 3.
When passing such orders the High Court draws on its inherent power to make all such orders as are necessary for doing complete justice between the parties.
The interests of justice require that any undeserved or unfair advantage gained by a party invoking the jurisdiction of the court, by the mere circumstance that it has initiated a proceeding in the court, must be neutralised.
The simple fact of the institution of litigation by itself should not be permitted to confer an advantage on the party responsible for it.
[770 A C] In the present case, the appellant would not have enjoyed the advantage of the bar of limitation if, notwithstanding his immediate grievance against the notice under section 142(1) of the Income Tax Act, he had permitted the assessment proceeding to go on after registering his protest before the Income Tax Officer, and allowed an assessment order to be made in the normal course.
In an application under section 146 against the assessment order, it would have been open to him to urge that the notice was unreasonable and invalid and he was prevented by sufficient cause from complying with it and therefore the assessment order should be cancelled.
In that event, the fresh assessment made under section 146 would not be fettered by the bar of limitation.
Section 153(3)(i) removes the bar.
But the appellant preferred the constitutional jurisdiction of the High Court under Article 226.
If no order was made by the High Court directing a fresh assessment, he could contend that a fresh assessment proceeding is barred by limitation.
That is an advantage which the appellant seeks to derive by the mere circumstance of his filing a writ petition.
It will be noted that the defect complained of by the appellant in the notice was a procedural lapse at best and one that could be readily corrected by serving an appropriate notice.
It was not a defect affecting the fundamental jurisdiction of the Income Tax Officer to make the assessment.
The High Court was plainly right in making the direction which it did.
[770 C G] Director of Inspection of Income Tax (Investigation) New Delhi and Anr.
vs Pooran Mall and Sons and Anr.
@ 395; followed.
767 Cachar Plywood Ltd. vs Income Tax Officer, 'A ' Ward, Karimganj Dist.
Cachar and Anr., (1978) 114 ITR (Cal.); approved.
Rajinder Nath etc.
vs The Commissioner of Income Tax, Delhi, ; distinguished.
Pickles vs Falsham, 9 Tax Cases, 261, 288; Anisminic Ltd. vs The Foreign Compensation Commission & Anr.
[1969] 1 All E.L.R. 208; Bath and West Countries Property Trust Ltd. vs Thomas (Inspector of Taxes) ; distinguished.
|
: Criminal Appeal No. 53 of 1974.
From the Judgment and Order dated 2 11 1973 of the Orissa High Court in Govt.
Appeal No. 10/1971.
Y. section Chitle, and U. P. Singh for the Appellant.
D. Mookherjee and B. P. Parthasarthi for the Respondent.
The Judgment of the Court was delivered by FAZAL ALI J.
This appeal under section 2(a) of the is directed against the judgment of the High Court of Orissa dated 2 11 1973 convicting the appellants section 302/149 of Indian Penal Code and sentencing them to imprisonment for life.
The appellants along with other accused person were tried before the Sessions Judge under section 302/149 for causing murder of two persons namely Ghansham and his brother Antarjami.
The Trial Court after considering the evidence acquitted all the accused of the charges framed against them.
Thereafter the State of Orissa filed an appeal before the High Court against the order of acquittal passed by the Sessions Judge and in the said appeal the High Court reversed the judgment of the Sessions Judge so far as the appellants were concerned and convicted and sentenced them as indicated above.
Hence this appeal before us.
The facts of the case are detailed in the judgment of the High Court and it is not necessary for us to repeat them.
It appears that shortly before the date of occurrence, there was a partition suit between the parties in respect of certain properties enjoyed by accused Banshi and Ghana.
On 2 12 1968, according to the prosecution, the accused persons armed with lathis, Bhusas and valies came to the house of the deceased Ghansham and called him out.
When Ghansham opened the door, the accused Banshi stabbed Ghansham on the chest as a result of which Ghansham fell down and died.
On hearing the alarm, the other deceased Antarjami who was brother of Ghansham went to the spot and he was also assaulted by the accused persons.
This occurrence had taken place near about 7.00 a.m. F. I. R. was sent to Bramhagiri Police Station where it was lodged and a case was registered.
After the usual investigation, police submitted charge sheet against all the accused persons who were tried by the Sessions Judge with the result mentioned above.
It appears that the Trial Court after considering the evidence of the eye witness examined before it came to a clear finding that none 804 of the eye witnesses were reliable and hence the accused could not be convicted on the basis of their testimony.
One of the main considerations which swayed with the trial Court in coming to this conclusion was that in view of the dying declaration exhibit 9 made by Antarjami, the evidence of the eye witnesses becomes improbable, and is in fact falsified.
The learned Sessions Judge also disbelieved the dying declaration as it was inconsistent with the oral evidence.
We might mention here that the Sessions Judge committed an error of law in rejecting the dying declaration because if the evidence of the eye witnesses was to be rejected on the ground that it was inconsistent with the dying declaration then it would in the circumstances not necessarily follow that the dying declaration was also unreliable and unworthy of credence.
The High Court while endorsing the findings of the Trial Court that no reliance could be placed on the eye witnesses appears to have founded the conviction of the appellants mainly on the basis of the dying declaration exhibit 9 recorded by Dr. Mohanty on 3 12 1968 at the hospital.
The High Court has given cogent reasons for holding that the dying declaration is absolutely true and reliable and was sufficient to establish the prosecution case against the appellants.
We have also gone through the entire dying declaration exhibit 9 very carefully and we find that the statement made by Antarjami is straight forward, rational, consistent and absolutely coherent.
There appears to be a ring of truth in the statement made by Antarjami.
Counsel for the appellant has fairly conceded that there is no evidence whatsoever to indicate that there was any possibility of prompting the deceased to make a tainted statement.
The dying declaration was attacked by the counsel for the appellant on three grounds.
In the first place, it was submitted that as the deceased Antarjami was in a state of shock, it was unsafe to rely on the dying declaration; secondly it was contended that as the dying declaration was incomplete, it should not be acted upon and thirdly it was pointed out that Antarjami had implicated some persons other than the accused also in the assault on him and his brother, therefore the dying declaration could not be said to be true.
So far as the first contention is concerned; namely whether the deceased was in a state of shock, it is true that the doctor who had recorded the dying declaration had stated that the deceased was in a state of shock because he had received a serious injury in the abdomen which has to be stitched.
The doctor was however not cross examined as to the fact whether or not despite the shock, the deceased had retained his mental faculties.
On the other hand; a 805 bare perusal of the dying declaration and the coherent and consistent statement made by Antarjami clearly reveals the fact that the deceased was fully conscious and was not suffering from any confusion or hallucination.
The deceased has clearly stated the motive for the occurrence namely dispute about the partition.
He has also named the four appellants and stated that he and his brother were assaulted by valies and lathis and it is not disputed by the prosecution that the appellants were armed with these weapons.
It is true that while naming the appellants, the deceased has also named some other persons but the mere fact that those persons were not challaned does not detract from the value of the dying declaration because it may well be that what the deceased was saying was true and the persons who were left out from the category of accused in the F.I.R. or the challan may be due to ulterior motives.
Dr. Chitale however relied on a passage in Taylor 's 'Principles and Practice of Medical Jurisprudence ' Twelfth Edition particularly on the following passage: 'Assess very carefully the mental condition of the patient.
When shock ensues upon violence, especially when severe loss of blood or some grievous head injury is leading to death, the intellect of the dying person becomes confused.
If the doctor observes any wandering or want of clearness in the mind of the patient, he must mention it in connection with his evidence; but this does not absolve him from his duty, although it should make him particularly careful when interpreting his notes.
" We are unable to place any reliance on these observations in absence of any question put to the doctor by the accused in his cross examination regarding the view expressed by the author regarding the state of mind of the deceased.
It has been held by this Court in several cases that whenever a particular view taken by authors of medical jurisprudence is adumbrated, the same must be put to the doctor to assess how far the view taken by the experts apply to the facts of the particular case.
On the other hand, the last certificate given by the doctor towards the end of the dying declaration that the patient became semi unconscious clearly shows that the deceased was, fully conscious when he started making the dying declaration before the doctor.
For these reasons therefore, the first ground taken by the appellant fails and is not tenable.
As to the second ground, namely that the dying declaration was incomplete, we are unable to accept this contention because we find that the deceased 806 Antarjami could not answer the last question which was "what more you want to say" because he became semi unconscious and was unable to answer any further question.
A perusal of the entire dying declaration would clearly show that the doctor had asked all the necessary questions that could be asked from the deceased and the last question was merely in the nature of a formality.
It is obvious that having narrated the full story there was nothing more that the deceased could add.
We are therefore unable to hold that the present dying declaration is an incomplete one.
Reliance was placed by the counsel for the appellant in the case of Cyril Waugh vs The King,(1)wherein it was held that no reliance could be placed where a dying declaration was incomplete.
Reference to the facts of the case would show that the statement made by the deceased was really incomplete in as much as the deceased was unable to complete the main sentence where he was trying to describe the genesis and motive of the occurrence.
The deceased in that case stated as "when he fired the short, he missed the other man.
The man has an old grudge for me simply because. ".
It is clear from the statement of the deceased in that case that the deceased wanted to give the motive for the occurrence and other relevant facts which he could not say before the dying declaration was closed.
This case therefore would have no application to the facts of the case.
As regards the last contention that the deceased had implicated some other persons also show that it was not true, we have already pointed out that merely because some other persons were named and not challaned would not by itself prove the falsity of the dying declaration.
Finally on the question of law, it was argued that a dying declaration unless corroborated should not be acted upon.
Reliance was placed on a decision of this Court in Ram Nath Madhoprasad & Ors.
vs State of M.P.(2).
This decision, no doubt, supports the contention of the appellant but since then this Court has departed from the view taken in the case referred to above and has held that if the dying declaration is believed, it can be relied upon for convicting the accused even if there is no corroboration.
In Khushal Rao vs The State of Bombay,(3) it was pointed out that section 32(1) of the Evidence Act attaches special sanctity to a dying declaration and unless such a dying declaration can be shown to be unreliable, it will not affect its admissibility.
It was further 807 held that although a dying declaration has to be closely scrutinised, once the Court comes to the conclusion that it is true, no question of corroboration arises.
In this connection, the Court made the following observations: "The Legislature in its wisdom has enacted in section 32(1) of the Evidence Act that "When the statement is made by a person as to the cause of his death, or as to any of the circumstances of the transaction which resulted in his death, in cases in which the cause of that person 's death comes into question", such a statement written or verbal made by a person who is dead (omitting the unnecessary words) it self a relevant fact.
This provision has been made by the Legislature, advisedly, as a matter of sheer necessity by way of an exception to the general rule that hearsay is no evidence and that evidence, which has not been tested by cross examination, is not admissible.
The purpose of cross examination is to test the veracity of the statements made by a witness.
In the view of the Legislature, that test is supplied by the solemn occasion when it was made, namely, at a time when the person making the statement was in danger of losing his life.
At such a serious and solemn moment, that person is not expected to tell lies and secondly, the test of cross examination would not be available.
In such a case, the necessity of oath also has been dispensed with for the same reasons.
Thus, a statement made by a dying person as to the cause of death has been accorded by the Legislature a special sanctity which should, on first principles, be respected. . .
But in our opinion, there is no absolute rule of law, or even a rule of prudence which has ripened into a rule of law, that a dying declaration unless corroborated by other independent evidence, is not fit to be acted upon, and made the basis of a conviction.
" In this case this Court did not approve of the law laid down in the earlier decision which is reported in A.I.R. 1953, p. 420.
To the same effect is a later decision of this Court in the case of Tarachand Damu Sutar vs The State of Maharashtra(1) which is a decision rendered by five Judges of this Court which has also taken the view that once a dying declaration is found to be true, it can be 808 acted upon without any corroboration.
Thus, the view taken by this Court by the three judges in A.I.R. 1953, p. 420 stands overruled by this decision.
Same view was taken by this Court in the case of Mannu Raja & Anr.
vs State of M.P.(1) which has been relied upon by Mr. D. Mookherjee, counsel for the State.
There are a number of later decision of this Court also to the same effect but it is unnecessary to multiply authorities.
It is thus manifest that a person on the verge of death is most unlikely to make an untrue statement unless prompted or tutored by his friends or relatives.
In fact the shadow of immediate death is the best guarantee of the truth of the statement made by a dying person regarding the causes or circumstances leading to his death which are absolutely fresh in his mind and is untainted or discoloured by any other consideration except speaking the truth.
It is for these reasons that the Statute (The Evidence Act) attaches a special sanctity to a dying declaration.
Thus, if the statement of a dying person passes the test of careful scrutiny applied by the Courts, it becomes a most reliable piece of evidence which does not require any corroboration.
Suffice it to say that it is now well established by a long course of decisions of this Court that although a dying declaration should be carefully scrutinised but if after perusal of the same, the Court is satisfied that the dying declaration is true and is free from any effort to prompt the deceased to make a statement and is coherent and consistent, there is no legal impediment in founding the conviction on such a dying declaration even if there is no corroboration.
For these reasons, therefore, we find ourselves in complete agreement with the opinion of the High Court that even excluding the evidence of the eye witnesses, the dying declaration is true and reliable and sufficient to found the conviction of the appellant.
For these reasons therefore the appeal fails and is accordingly dismissed.
N.V.K. Appeal dismissed.
| IN-Abs | The appellants along with other accused persons were tried under section 302/149 I.P.C. for causing murder of two persons.
While one of the deceased died on the spot the other who was removed to hospital, gave a dying declaration to the doctor before dying.
The Sessions Judge finding that none of the eye witnesses examined was reliable and as the accused could not be convicted on the basis of their testimony acquitted all the accused.
He further held that the evidence of the eye witnesses was rendered improbable and was in fact falsified by the dying declaration exhibit 9.
On appeal by the State, the High Court held that the dying declaration exhibit 9 was absolutely true and reliable and was sufficient to establish the prosecution case.
It accordingly convicted and sentenced the appellants to imprisonment for life.
In the appeal to this Court, it was contended on behalf of the appellants that (1) as the deceased was in a state of shock, it was unsafe to rely on the dying declaration, (2) as the dying declaration was incomplete it could not be acted upon, and (3) as the deceased had implicated some persons other than the accused, the dying declaration could not be said to be true.
Dismissing the appeal, ^ HELD: 1.
The High Court was right in holding that even excluding the evidence of the eye witnesses the dying declaration is true and reliable and sufficient to found the conviction of the appellants.
[808 F] 2.
The Sessions Judge committed an error in law in rejecting the dying declaration because if the evidence of the eye witnesses was to be rejected on the ground that it was inconsistent with the dying declaration, it would not necessarily follow that the dying declaration was also unreliable and unworthy of credence.
[804 C] 802 3.
(a) This Court has held that whenever a particular view taken by authors of Medical Jurisprudence, is adumbrated, the same must be put to the doctor to assess how far the view taken by the experts apply to the facts of the particular case.
[805 G] In the instant case though the doctor who had recorded the dying declaration had stated that the deceased was in a state of shock because he had received a serious injury in the abdomen which had to be stitched, he was however not crossed examined as to the fact whether or not despite the shock, the deceased had retained his mental faculties.
On the other hand, the last certificate given by the doctor towards the end of the dying declaration that the patient became semi conscious clearly shows that the deceased was fully conscious when he started making the dying declaration before the doctor.
[804 H, 805 G] (b) A perusal of the entire dying declaration clearly shows that the doctor had asked all the necessary questions that could be asked from the deceased and the last question "what more you want to say" was merely in the nature of a formality.
Having narrated the full story, there was nothing more that the deceased could add.
The dying declaration was therefore not incomplete one.
[806 B] Cyril Waugh vs The King, , distinguished.
(c) Merely because some other persons named in the dying declaration were not challaned would not by itself prove the falsity of the dying declaration.
It may be that these, persons were left out from the category of accused in the F.I.R. or the challan due to ulterior motives.
[806 E, 805 C] 4.
A person on the verge of death is most unlikely to make an untrue statement unless prompted or tutored by his friends or relatives.
The shadow of immediate death is the best guarantee of the truth of the statement by a dying person regarding the causes or circumstances leading to his death which are absolutely fresh in his mind and is untainted or discoloured by any other consideration except speaking the truth.
It is for these reasons that the Statute (The Evidence Act) attaches a special sanctity to a dying declaration.
[808 B C] 5.
It is well established that although a dying declaration should be carefully scrutinised if after perusal the Court is satisfied that the dying declaration is true and is free from any effort to prompt the deceased to make a statement and is coherent and consistent, there is no legal impediment in founding the conviction on such a dying declaration even if there is no corroboration.
[808 D E] Khushal Rao vs The State of Bombay ; ,; Tarachand Damu Sutar vs The State of Maharashtra ; ; Mannu Raja & Anr.
vs State of M.P. ; referred to.
Ram Nath Madhoprasad & Ors.
vs State of M.P. AIR 1953 SC 420, overruled.
|
Civil Appeal No. 2113 of 1972.
Appeal by Special Leave from the Judgment and Order dated 10 2 1972 of the Madhya Pradesh High Court in Second Appeal No. 310 of 1960.
Shiv Dayal and J. section Sinha for the Appellant.
M. C. Bhandare, Mrs. Urmila Kapoor and Shobha Dixit for the Respondent.
The Judgment of the Court was delivered by SHINGHAL, J.
This appeal of one of the plaintiffs, by special leave, is directed against the judgment of the Madhya Pradesh High Court dated February 10, 1972, by which the suit for possession of the lands, which the plaintiffs had mortgaged, has been dismissed even though the trial court 's decree for redemption has been maintained.
As the matter has come up to this Court for the second time, at the instance of the plaintiffs it is not necessary to state all the facts for they have been mentioned in this Court 's earlier decision is Meharbansingh and others vs Nareshsingh and others.(1) It will be sufficient to refer to those facts which bear on the present controversy.
The suit lands belonged to Samle Singh, father of appellant Meharban Singh, and Jomdar Singh who executed a registered deed of mortgage in favour of Munshi Singh on May 20, 1939, for Rs. 2242/14/ .
It is not disputed before us that it was a usufructuary mortgage of land within the area of the former Gwalior State.
The mortgagors gave a notice to the mortgagee on May 15, 1943, for redemption of the lands but he refused to accept.
The mortgagors filed the suit for redemption on June 15, 1943.
As some other persons were alleged to be in possession of the suit lands, they were also impleaded 793 as defendants.
The Madhya Bharat Zamindari Abolition Act, 1951 (Samvat 2008), hereinafter referred to as the Act, came into force on October 2, 1951, and leave was granted to the plaintiffs to amend the plaint suitably.
The trial court decreed the suit on October 10, 1958, but disallowed the relief for the grant of mesne profits.
Three appeals were preferred against that judgment and decree of the trial court.
The appellate court dismissed the appeals of the defendants.
It held that the suit lands were the khud kasht lands of the mortgagors, and allowed the appeal of the plaintiffs for mesne profits from the date of the deposit of the mortgage money.
The defendants went in second appeal to the High Court; and the plaintiffs also preferred an appeal for refusal of mesne profits from the date of the cause of action.
The High Court partly allowed the defendants ' appeal by its judgment dated September 27, 1962.
It relied on this Court 's decision in Haji Sk.
Subhan vs Madhorao(1) and held that the plaintiffs were not entitled to possession.
It dismissed the appeal of plaintiff Meharbansingh.
He applied to this Court for special leave, and that led to this Court 's decision in Meherbansingh 's case (Supra) mentioned above.
This Court allowed the appeal and, after considering the relevant provisions of the Act, remitted the case to the High Court for fresh decision after notice to the state on the point whether the suit land were Khud kasht of the plaintiffs and they were entitled to remain in possession under section 4 of the Act.
The State was therefore allowed to be impleaded as a party and to file a written statement.
Certain additional issues were framed by the High Court and the case was remitted to the trial court for its findings.
When it came to the High Court again, with those findings it once again took the view that the plaintiffs were not entitled to possession of the suit lands although they were entitled to a decree for redemption.
It is against that judgment of the High Court dated February 10, 1973, that plaintiffs Meherbansingh has come up to this Court by way of the present appeal.
The facts of this case are thus quite simple, and its fate depends upon the answer to the question whether the plaintiffs were entitled to possession of the suit lands under sub section (2) of section 4 of the Act.
The Act made provision for the abolition and acquisition of the rights of proprietors in villages, "muhals", "chaks" or blocks settled on the zamindari system.
If therefore a person was a "proprietor" within the meaning of clause (a) of section 2, all his proprietary rights vested in the State free of all encumbrances by virtue of sub section (1) of section 3 of the Act from the date specified for the 794 purpose in the notification issued by the State Government.
It is not disputed that the specified date for purposes of the present case was October 2, 1951.
The consequences of the vesting of an estate under section 3 have been stated in section 4.
We are not concerned with sub section (3) of that section, and it will be sufficient to refer to clauses (a) and (f) of sub section (1) and sub section (2) of Section 4.
Clause (a) of sub section (1) of section 4 provides that save as otherwise provided in the Act, the following consequences shall ensue notwithstanding anything contained in any contract, grant or document or in any other law for the time being in force, "(a) all rights, title and interest of the proprietor in such area, including land (cultivable, barren or Bir), forest, trees, fisheries, wells (other than private wells), tanks, ponds, water channels, ferries, pathways, village sites, hats, and bazars and mela grounds and in all sub soil, including rights, if any, in mines and minerals, whether being worked or not, shall cease and be vested in the State free from all encumbrances;" This provision therefore had the effect of terminating the proprietary rights of a proprietor in his estate and in vesting them in the State free from all encumbrances.
The legislature has taken care to deal with the fate of mortgages, in clause (f) of sub section (1) of section 4, which reads as follows, "(f) every mortgage with possession existing on the property so vesting or part thereof on the date immediately preceding the date of vesting shall, to the extent of the amount secured on such property or part thereof be deemed without prejudice to the rights of the State under section 3, to have been substituted by a simple mortgage." So a mortgage with possession, which existed on the date immediately preceding the date of vesting of the property, was deemed to have been substituted by a simple mortgage.
That was to be so without prejudice to the rights of the State under section 3.
A mortgagee who was in possession of lands under a deed of mortgage, e.g. a usufructuary mortgagee, this lost possession of the lands by operation of the law, and his mortgage became nothing more than a simple mortgage from the date of the vesting of the lands in the State.
In other words, he lost possession of the lands which were once mortgaged with him with possession, and was left only with the normal right of a simple mortgagee to realise the mortgage money.
795 While that was the fate of the mortgagee under the Act, the fate of the mortgagor, who was once the proprietor of the lands, was even worse, for he lost his proprietary rights in the lands because of their vesting in the State under section 3 as aforesaid and had, nonetheless, to fulfil his obligation as a mortgagor to the extent of the amount secured under the mortgage.
It appears that the legislature therefore thought of alleviating the lot of those of such proprietors whose cases fell under sub section (2) of section 4 of the Act.
The subsection reads as follows, "(2) Notwithstanding anything contained in sub section (1), the proprietor shall continue to remain in possession of his khud kasht land, so recorded in the annual village papers before the date of vesting." So only those proprietors were permitted to continue to remain in possession of their lands who had khud kasht lands and the lands were recorded as khud kasht in the annual village papers before the date of vesting.
The expression khud kasht has been defined in clause (c) of section 2 of the Act to means inter alia, land cultivated by the zamindar himself or through employees or hired labourers.
Clause (c) of section 2 of the Act states that words and expressions used in the Act, but not defined in it, shall have the same meaning as assigned to them in Qanoon Mal, Gwalior State, Samvat 1983.
The expression "zamindar" has been defined in clause (13) of section 2 of the Qanoon Mal to mean a person who has the rights mentioned in it.
It is not disputed before us that the plaintiffs were zamindars under that definition, and were proprietors of their lands.
It is also not disputed before us that if a person was a zamindar and cultivated the land himself or through employees or hired labourers, that would be his khud kasht cultivation within the meaning of clause (c) of section 2 of the Act.
It would follow that if, in a given case, it was shown that a proprietor had khud kasht land which was so recorded in the annual village papers before the date of vesting of the lands in the State, he was entitled to continue to remain in possession of those lands.
This concession to the proprietor was by way of a rider to the rigorous provisions of section 3 of the Act regarding the vesting of his estate in the State, and if a proprietor was able to establish that he was entitled to its benefit, there could be no reason why it should not be allowed to him.
It may be that the provision for the vesting of the estate in the State under section 3 and, in particular, that relating to the loss of possession of the mortgagee under clause (f) of section 4, operated harshly on a mortgagee with possession, and he had to content himself with the other provisions in the Act for the satisfaction of the debt owed to him by the 796 proprietor, but the law allowed him nothing more after the date of the vesting of the estate in the State.
The lot of the mortgagor proprietor was in fact far worse, for while the Act divested him of the proprietary interest in the lands held by him and vested those rights in the State, it held him liable as if his mortgage was a simple mortgage and left him only with the remedy of claiming compensation, which was itself overridden with his liability to his creditors.
In the plight in which he was placed by the land reforms legislation which was the subject matter of the Act, it was quite reasonable for the legislature to allow him, notwithstanding anything contained in sub section (1) of section 4 which enumerates consequences of the vesting of the estate in the State, the benefit of what sub section (2) of that section provided, and that also on his satisfying the rigorous conditions of the sub section mentioned above.
Reference in this connection may also be made to section 37 of the Act, sub section (1) of which provides that every proprietor who is divested of his proprietary rights shall be "a pacca tenant of the khud kasht land in his possession and the land revenue payable by him shall be determined at the rates fixed by the current settlement for the same kind of land.
" In fact, when this Court examined the matter on the earlier occasion, it took notice of the above provisions of the Act and observed as follows, "The proprietor however, notwithstanding other consequences of the vesting in a State, is entitled to continue to remain in possession of his khud kasht land which is so recorded in the annual village papers before the date of vesting.
Now it was clearly open to the plaintiffs to show that the land in question was khud kasht and, therefore, in accordance with section 4 they were entitled to remain in possession thereof.
" In other words, this Court took the view that while the mortgagors (appellants) fulfilled the other requirements of the law, their claim to possession of the khud kasht lands under sub section (2) of section 4 of the Act had to be decided on the basis of the facts, and it was open to them to show that the lands were khud kasht and they were entitled to remain in possession in terms of sub section (2) of section 4.
That was the purpose why the case was remanded to the High Court and an opportunity was given to the State to appear and contest the claim of the plaintiffs on that basis.
As has been stated, the case went back to the High Court which in its turn, impleaded the State as a party to the suit, permitted it to file a written statement, added certain issues and sent the case to 797 the trial court for submitting its findings after giving the parties an opportunity to adduce further evidence.
And when it went back to the High Court with the findings of the trial court, the High Court stated as follows in its judgment under appeal, "After impleading the State as a party, the following issue, inter alia was remitted to the lower court for recording a finding after giving both the parties an opportunity to adduce evidence: "Whether the land in suit was recorded as khud kasht immediately before the date of vesting.
" The parties filed certain documents but did not adduce any oral evidence on the point.
The trial court has answered the issue in the affirmative.
It was not disputed before me that the land was recorded as Khud kasht in the names of the plaintiffs at the time of vesting,. " There can be no doubt, therefore, that the trial court recorded the finding, on the basis of the evidence before it, that the suit lands were recorded as the khud kasht lands of the plaintiffs before the date of the vesting of the estate.
That was in fact not disputed in the High Court.
All that the High Court had then to do was to decide whether the appellant was entitled to the benefit of sub section (2) of section 4 of the Act, for that was the clear direction of this Court in the earlier judgment.
It is not disputed before us that the plaintiffs were the proprietors of the suit lands, and it cannot be disputed that as they mortgaged them with possession with defendant Munshi Singh, they were themselves in possession upto the date of the mortgage, and as it has been found as a fact that the lands were recorded as khud kasht lands of the mortgagors in the annual village papers before the date of vesting, they were clearly entitled to a decree for possession in terms of sub section (2) of section 4 and there was no occasion for the High Court to examine the consequence of their losing the possession of the lands after the mortgage.
It has to be appreciated that possession is always lost by the mortgagor in the case of a mortgage with possession.
But when clause (f) of sub section (1) of section 4 gave the mortgagor the benefit of sub section (2) of that section to claim the right to remain in possession of his khud kasht land which was in his possession upto the date of mortgage, if the strict requirement of sub section (2) was shown to exist, there could be no reason why it should be denied to the plaintiffs.
It may be mentioned in this connection that when the case came up in first appeal before the Second Additional District Judge of Bhind, 798 he examined the statements of Himachal Singh DW 1, Ram Krishan DW 2 and Hanumant Singh DW 3.
Himachal Singh was a cousin of mortgagee Munshi Singh, Ram Krishan DW 2 was a nephew of Munshi Singh and Hanumant Singh DW 3 was himself a defendant.
On a consideration of their statements, the court of first appeal reached the conclusion that the mortgagors were themselves cultivating the land and thereafter the mortgagee got it cultivated through his relatives.
But even if it were assumed that the mortgagee really inducted tenants in the lands during the period of the mortgage, their tenure was bound to end on the redemption of the mortgage according to the ordinary law of redemption unless, of course, they could lay claim to protection under any other law.
Reference in this connection may be made to the decision of this Court in Mahabir Gope and others vs Harbans Narain Singh and others(1) where the law has been laid down as follows, "The general rule is that a person cannot by transfer or otherwise confer a better title on another than he himself has.
A mortgagee cannot, therefore, create an interest in the mortgaged property which will inure beyond the termination of his interest as mortgagee.
Further, the mortgagee, who takes possession of the mortgaged property, must manage it as a person of ordinary prudence would manage it if it were his own; and he must not commit any act which is destructive or permanently injurious to the property; see section 76, sub clauses (a) & (e) of the Transfer of Property Act.
It follows that he may grant leases not extending beyond the period of the mortgage; any leases granted by him must come to an end at redemption.
" Care was taken to state further in that case that if during the permissible settlement by a mortgagee in possession with a tenant in the course of prudent management, any right sprang up in the tenant by conferral or creation by statute, that would be a "different matter altogether", for that would then be an "exception to the general rule." The decision in Mahabir Gope 's case (Supra) was applied or was followed in Harihar Prasad Singh and another vs Mst.
of Munshi Nath Prasad and others(2) where it was held as follows, "As the mortgagees are neither proprietors nor tenure holders as defined in the Act, the tenants holding under 799 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.
" That decision was again followed in Asa Ram and another vs Mst.
Ram Kali and another(1) also, and was held as follows, "But where there is no such prohibition, the only consequence is that the parties will be thrown back on their rights under the Transfer of Property Act, and the lessees must still establish that the lease is blinding on the mortgagors under s.76(a) of that Act.
" Reference may also be made to Prabhu vs Ramdev and others(2) where again reference was made to the decision in Mahabir Gope (supra) and the legal position was reiterated as follows, "Having made these observations, however, this Court has taken the precaution to point out that even in regard to tenants inducted into the land by a mortgagee cases may arise where the said tenants may acquire rights of special character by virtue of statutory provisions which may, in the meanwhile, come into operation.
A permissible settlement by a mortgagee in possession with a tenant in the course of prudent management and the springing up of rights in the tenant conferred or created by statute based on the nature of the land and possession for the requisite period, it was observed, was a different matter altogether.
Such a case is clearly an exception to the general rule prescribed by the Transfer of Property Act.
It will thus be seen that while dealing with the normal position under the Transfer of Property Act, this Court specifically pointed out that the rights of the tenants inducted by the mortgagee may conceivably be improved by virtue of statutory provisions which may meanwhile come into operation.
That is precisely what has happened in the present case.
During the continuance of the mortgage section 15 of the Act came into operation and that made the respondents Khatadars who are entitled to claim the benefit of section 161 of the Act.
" It is therefore well settled that the normal law of mortgage would apply and tenants inducted by the mortgagee would go out of the lands on redemption of the mortgage, if, in the meanwhile, law has 800 not been shown to intervene for their protection.
As, in the instant case, the law expressly gave the benefit of sub section (2) of section 4 to a proprietor like the appellant, the tenants inducted by the mortgagee will have no statutory right of possession.
A vain attempt was made to invoke section 41 of the Act for the protection of the tenancy rights of the mortgagees, but their learned Counsel was unable to show how they could claim the benefit of that section in face of the clear provision of sub section (2) of section 4 of the Act.
In fact all that Mr. Bhandare was able to contend on behalf of the respondents was that their case was covered by this Court 's decision in Haji Sk.
Subhan 's case (supra).
That decision formed the basis of the earlier decision of the High Court dated September 27, 1962, but this Court clearly pointed out in its earlier decision that the High Court was "in error in allowing the appeal before it and in dismissing the plaintiff appellants ' suit for possession on the authority of this Court 's decision in the case of Haji Sk.
Subhan" (supra).
It is therefore not necessary for us to say, once again, why that decision cannot govern the present dispute.
In the result, we allow the appeal and restore the decree of the court of first appeal with costs.
P.B.R. Appeal allowed.
| IN-Abs | By virtue of section 3(1) of the Madhya Bharat Zamindari Abolition Act, 1951, rights of proprietors in villages, Muhalas and Chaks or blocks settled on the zamindari system vested in the State free from all encumbrances.
In so far as the mortgages were concerned a mortgage with possession which existed on the date immediately preceding the date of vesting of the property was deemed to have been substituted by a simple mortgage.
The mortgagee who was in possession of lands under a deed of mortgage, for example a usufructuary mortgage, lost possession of the lands by operation of law and his mortgage became a simple mortgage from the date of vesting of the lands in the State.
On the other hand a mortgagor who was once the proprietor of the lands, though lost his proprietary right in the lands because of their vesting in the State, had to fulfil his obligation as a mortgagor to the extent of the amount secured under the mortgage.
To alleviate the lot of such proprietors section 4(2) of the Act provided that notwithstanding anything contained in sub section (1) a proprietor shall continue to remain in possession of his khud kasht land so recorded in the annual village papers before the date of vesting.
The expression khud kasht is defined to mean "land cultivated by the Zamindar himself or through employees or hired labourers".
If a person was a zamindar and cultivated the land himself or through employees or hired labourers that would be his khud kasht cultivation within the meaning of section 2(c) of the Act, that is, in a given case if it was shown that a proprietor had khud kasht land which was so recorded in the annual village papers before the date of vesting of the lands in the State, he was entitled to continue to remain in possession of those lands.
Section 37(1) provides that every proprietor who is divested of his proprietary rights shall be a pacca tenant of the khud kasht land in his possession and the land revenue payable by him shall be determined at the rates fixed by the current settlement for the same kind of land.
In the present case, the plaintiff 's suit for redemption of the mortgage which was an usufructuary mortgage, was decreed by the trial court in respect of the relief of redemption but the claim in regard to the mesne profits was disallowed.
Against that decree three appeals were filed before the District Court, one of them being the appeal by the plaintiffs challenging the refusal by the trial court to grant mesne profits.
The plaintiff 's appeal was partly allowed granting mesne profits from the date of deposit of the mortgage money in court.
The other two appeals were dismissed.
The matter was taken in appeal to the High Court by the defendants in second appeal.
The plaintiffs also preferred a second appeal claiming full relief in so far as mesne profits were concerned.
The High Court partly allowed the defendants ' appeal holding that the plaintiffs were entitled to redeem the mortgage by paying the 791 mortgage money but were not entitled to get possession of the mortgaged land, since according to the High Court, the proprietary rights including the right to get possession had become vested in the State under the aforesaid Act.
It further held that the plaintiffs were only entitled to claim compensation from the Government in lieu of their proprietary rights after redeeming the mortgage by making payment of the mortgage money.
Against the decree of the High Court, the plaintiffs filed an appeal before this Court in Meharban Singh & Ors.
vs Naresh Singh & Ors.
[1970] 3 SCR 18.
This Court set aside the decree of the High Court and remitted the case back to the High Court for a fresh decision on the question whether the lands in dispute were khud kasht lands and to pass a decree for possession if they were found to be so in view of sections 4(1)(f) and 4(2) of the Act.
After the case went back to the High Court, the State Government was impleaded as a party to the suit and was permitted to file a written statement.
Certain additional issues were raised by the High Court on the basis of the new pleadings.
The High Court sent the case to the trial court for recording its finding on the issue 'whether the land in dispute was recorded as khud kasht land immediately before the date of vesting? ' after giving the parties an opportunity to adduce further evidence on the said additional issue and to resubmit the record to it.
The trial court held that the suit land was khud kasht land in possession of the plaintiffs before the date of vesting of the estate and submitted the said finding to the High Court.
The said finding was not in fact disputed before the High Court.
All that the High Court was to decide was whether the plaintiffs were entitled to the benefit of sub section (2) of section 4 of the Act but the High Court once again took the view that the plaintiffs were not entitled to get possession of the suit lands although they were entitled to a decree for redemption.
It is against the judgment of the High Court, the above appeal has been filed.
Allowing the appeal and restoring the decree of the Court of first appeal, ^ HELD: When the case went back to the High Court all that the High Court was to decide was whether the appellant was entitled to the benefit of section 4(2) of the Act in terms of the directions given by this Court.
Since the plaintiffs were the proprietors of the suit lands there can be no dispute that till the time of mortgage the suit lands were in their possession.
Secondly since the lands were recorded as khud kasht lands of the mortgagors in the annual village papers before the date of vesting, they were clearly entitled to a decree for possession in terms of section 4(2) and there was no occasion for the High Court to examine the consequences of their losing the possession of the lands after the mortgage.
When section 4(1) (f) read with section 4(2) gave the mortgagor the benefit of the right to remain in possession of his khud kasht, which was in his possession upto the date of mortgage, there could be no reason why it should be denied to the plaintiffs.
It was found on evidence by the first court of appeal that the mortgagors were themselves cultivating the lands and thereafter the mortgagee got them cultivated through his relatives.
Assuming that the mortgagee really inducted tenants in the lands during the period of mortgage their tenure was bound to end on the redemption of the mortgage according to the ordinary law of redemption unless they could lay claim to protection under any other law.
[797 E H] It is well settled that the normal law of mortgage would apply and tenants inducted by the mortgagee would go out of the lands on redemption of the 792 mortgage if in the meanwhile the law has not been shown to intervene for their protection.
In the instant case the law expressly gave the benefit of section 4(2) to a proprietor like the plaintiffs.
The tenants inducted by the mortgagee would have no statutory right to possession.[800 A B] Mahabir Gope and others vs Harbans Narain Singh and others ; ; Narihar Prasad Singh and Another vs Mst. of Munshi Nath Prasad and others ; ; Asa Ram and another vs Mst.
Ram Kali and another ; Prabhu vs Ramdev and others ; , referred to.
Section 41 which deals with protection of tenancy rights of the mortgagees cannot be invoked by the mortgagees in the case of section 4(2).
[800 B C]
|
Civil Appeal No. 2098 of 1972 From the Judgment and Order dated 5 8 1971 of the Calcutta High Court in Income Tax Reference No. 109/65.
D.V. Patel, J. Ramamurthy and Miss A Subhashini for the Appellant.
section R. Banerjee, Mrs. Indu Goswamy and Arvind Minocha for the Respondent.
The Judgment of the Court was delivered by PATHAK, J.
: This appeal by certificate granted by the High Court at Calcutta under section 66A(2) of the Indian Income tax Act, 1922 is directed against the judgment dated August 5, 1971 of that High Court disposing of an income tax reference.
The respondent assessee is a registered firm and owns several collieries in West Bengal and Bihar.
One of the collieries is known as the South Samla Colliery.
The South Samla colliery was under military occupation from 1942 and was released in 1955.
During the period of military occupation the assessee incurred expenditure on account of minimum royalty payable in respect of the colliery, the surface rent and salaries for the watch and ward employees.
The expenditure was allowed in income tax proceedings as a business expenditure.
After the colliery was released by the military, the assessee incurred a further expenditure amounting to Rs. 1,61,742 on the colliery with a view to resuming mining operations.
The expenditure was incurred during the previous year beginning October 24, 1957 and ending November 11, 1958 relevant to the assessment year 1959 60.
In the assessment proceedings for that assessment year the assessee claimed a deduction of the amount of Rs. 1,61,742 under section 10(2) (xv) of the Indian Income Tax Act, but the deduction was disallowed by the Income tax Officer on the ground that the expenditure was capital in nature.
On appeal, the Appellate Assistant Commissioner affirmed that the expenditure was in the nature of capital expenditure.
The assessee proceeded in second appeal, but the Income Tax Appellate Tribunal, without giving any reasons of its own, merely recorded its agreement with the income tax authorities.
The assessee obtained 761 a reference to the High Court at Calcutta for its opinion on the following question: "Whether on the facts and circumstances of the case, the Income tax appellate Tribunal was justified in holding that the expenditure clammed on the South Samla Colliery at Rs. 1,61,742 was capital in nature.
" The High Court noted the following facts: The assessee carried on business in coal as the owner of various collieries.
The South Samla Colliery, which was one of them, was occupied by the military from 1942 until it was derequisitioned in 1955.
During that period the assessee did not, because he could not, work the colliery.
He continued, however, carrying on his business in coal and working other collieries during that period.
While the South Samla Colliery remained under military occupation the assessee incurred expenditure on payment of surface rent and minimum royalty in respect of that colliery and also on account of salary for the watch and ward staff.
The expenditure had been claimed and allowed as business expenditure of the assessee.
After the colliery was handed over to the assessee upon derequisition, the assessee incurred, during the relevant period, an expenditure of Rs. 1,61,742 in renovating the building, reconditioning the machinery and clearing the land of debris accumulated over a number of years.
The expenditure of Rs. 1,61,742 consisted of Rs. 66,937 spent on the staff and labour force by way of salaries, wages and other benefits and an amount of Rs. 94,805 spent on the purchase of various stores, machinery repairs, dhowrah repairs etc.
This expenditure had to be incurred by the assessee for the purpose of putting the machinery in working order and bringing the colliery to a state where the mining operations could be resumed.
The colliery had not started working and mining operations had not been resumed during the relevant year.
The High Court observed that the assessee was carrying on its business throughout and the circumstance that one of the collieries was not being worked did not affect the carrying on of that business.
The business of the assessee, the High Court said, had to be considered as a whole and not on the basis of its different sources of supply or units of production.
The High Court held that on the facts admitted and found it could not be said that any fresh asset had been acquired by the assessee by spending Rs. 1,61,742.
The expenditure, it observed, was incurred by the assessee for the purpose of carrying on an existing concern and not for acquiring any concern not in existence.
Ac 762 cordingly, it held that the expenditure was in the nature of revenue expenditure and, therefore, answered the question in favour of the assessee.
In this appeal the first contention raised by the Revenue is that the High Court had no jurisdiction to re appraise the facts and therefore its finding on the nature of the expenditure is vitiated.
The contention is without substance.
The facts on which the High Court has relied are admitted between the parties or are facts found by the income tax authorities.
We have no hesitation in rejecting the first contention.
The second contention is that the claim of the assessee must be considered with reference to section 10(2)(v) and not section 10(2)(xv) of the Act.
It is urged that if s.10(2) (v) is the relevant clause, being the specific provision in respect of expenditure on current repairs to buildings and machinery, there is no justification for relying on s.10(2) (xv).
section 10(2) (xv) is a residuary clause, and deals with expenditure not being an allowance of the nature described in any of the preceding clauses of s.10(2).
The submission is that where repairs are effected to buildings and machinery a deduction under s.10(2) is permissible only in respect of current repairs, and repairs which are not "current repairs" are not intended to be the subject of relief.
The Act, it is contended, limits the repairs to "current" repairs.
The repairs made by the assessee, it is said, cannot be described as "current repairs" Now, this contention rests on the principle that if a special provision covers the case, resort cannot be had to a general provision.
It seems to us that if the renovation of the building, the reconditioning of machinery and the removal of debris cannot be described as "current repairs" and we assume that to be so the case would be entitled to consideration under s.10(2)(xv).
Section 10(2)(v) deals with current repairs only.
The subject matter of s.10(2) (v) is "current repairs" and it appears difficult to agree that repairs which are not "current repairs" should not be considered for deduction on general principles or under s.10(2) (xv).
There must be very strong evidence that in the case of such repairs, the Legislature intended a departure from the principle that an expenditure, laid out or expended wholly and exclusively for the purposes of the business, and which expenditure is not capital in nature, should not be allowed in computing the income from business.
There is nothing in the language of s.10(2) (v) which declares or necessarily implies that repairs, other than, current repairs, will not qualify for the benefit of that principle.
We must remember that on accepted commercial practice and trading principles an item of business expenditure must be deducted in order 763 to arrive at the true figure of profits and gains for tax purposes.
The rule was held by the Privy Council in C.I.T. vs Chitnis(1) to be applicable in the case of losses, and it has been applied by the courts in India to business expenditure incurred by an assessee.
Motipur Sugar Factory Ltd. vs C.I.T., Bihar and Orissa(2) and Devi Films Ltd. vs C.I.T. Madras(3).
The principle found favour with this Court in Badridas Daga vs C.I.T.(4) and Calcutta Co. Ltd. vs C.I.T. West Bengal(5).
the contents of that rule be true on general principle, there is good reason why the scope of s.10(2) (xv) should be construed liberally.
In our opinion, even if the expenditure made by the assessee in the present case cannot be described as "current repairs", he is entitled to invoke the benefit of section 10(2) (xv).
We may mention that in The Law Shipping Co. Ltd. vs Commissioners of Inland Revenue(6) it has been held that accumulated arrears for repairs are none the less repairs necessary to earn profits, although they have been allowed to accumulate.
The question then is whether section 10(2) (xv) is attracted.
There can be little doubt that the expenditure incurred is incidental to the business of the assessee.
It was involved in renovating the buildings, reconditioning the machinery and clearing the debris, from the land.
All the work done was for the purpose of resuming the operation of the colliery.
The expenditure was laid out wholly and exclusively for the purposes of the business.
We do not think there can be any dispute as to that.
But the more serious question is whether the expenditure can be regarded as capital in nature, for if that be so the benefit of section 10(2) (xv), on its plain terms, must be denied.
Now, whether an expenditure can be described as capital or revenue falls to be decided by several tests, each one of which approaches the question from one perspective or another, conditioned by the particular facts of each case.
We need not refer to all of them.
On the facts of the present case, it seems sufficient to mention the tests laid down by this Court in Assam Bengal Cement Co. Ltd. vs C.I.T. West Bengal(7).
The business of the assessee in the present case was coal mining, and it was carried on by the operation of a network of collieries.
Hach colliery was a unit of production.
While the several units of production continued to be 764 employed and the business continued to be carried on, one alone of the units, the South Samla Colliery was compelled to suspend production.
The suspension was expected to be of temporary duration, because the property was merely requisitioned for military use, it was not acquired.
As soon as the property was de requisitioned, the assessee took measures to resume production of coal.
It was necessary to remove the impediments which had come in the way by reason of the temporary suspension of work.
The buildings were removated, the machinery reconditioned and the accumulated debris removed from the land.
The colliery was, in a word, reinstated to the condition necessary for ensuring production.
No new asset was brought into existence; no advantage for the enduring benefit of the business was acquired.
An activity which was continuously in operation but had been temporarily suspended was to be resumed.
It is immaterial that during the year under consideration there was no mining activity.
That the colliery was regarded as an asset of a continuing business all along, even during the period of military occupation, is evidenced by the fact that expenditure incurred by the assessee during that period in respect of the colliery was allowed as a permissible deduction in its income tax assessments.
The expenditure of Rs. 1,61,742 under consideration in the present case was also expenditure laid out as part of the process of profit earning.
The nature of the expenditure is clearly revenue in character.
The High Court is right in holding that the expenditure is not of a capital nature.
The appeal is dismissed with costs.
N.V.K. Appeal dismissed.
| IN-Abs | The respondent assessee carried on business in coal as the owner of various collieries.
One of the collieries, was occupied by the military from 1942 until it was derequisitioned in 1955.
During that period the assessee did not work the said colliery: although the business in coal and working of the other collieries were carried on.
While the colliery remained under military occupation the assessee incurred expenditure in respect of the colliery on account of payment of surface rent, minimum royalty and salary for the watch and ward staff, which expenditure was claimed and allowed as business expenditure of the assessee.
After the colliery was handed over to the assessee upon derequisition the assessee incurred an expenditure of about Rs. 1.6 lakhs in renovating the building, reconditioning the machinery and clearing the land of all debris accumulated over a number of years.
In the assessment proceedings for the assessment year 1959 60 the assessee claimed deduction of the aforesaid amount under section 10(2)(xv) of the Indian Income Tax Act.
The deduction was disallowed by the Income Tax officer on the ground that the expenditure was capital in nature.
The appeals by the assessee to the Appellate Assistant Commissioner and the Income Tax Appellate Tribunal were dismissed.
In the reference to the High Court at the instance of the assessee the High Court observed that the business of the assessee had to be considered as a whole and not on the basis of its different sources of supply or units of production, and held that on the facts admitted and found it could not be said that any fresh asset had been acquired by the assessee by spending Rs. 1.6 lakhs and that the expenditure was incurred by the assessee for the purpose of carrying on an existing concern.
The expenditure was, therefore, in the nature of a revenue expenditure.
In the appeal by the Revenue to this Court, it was contended: (a) where repairs are effected to buildings and machinery a deduction under section 10(2) is permissible only in respect of "current repairs" and repairs which are not "current repairs" are not intended to be the subject of relief, (b) the repairs made by the assessee cannot be described as "current repairs", and (c) if section 10(2) (v) is the relevant clause, being the specific provision in respect of expendi 759 ture on "current repairs" to buildings and machinery, there is no justification for relying on section 10(2)(xv) a residuary clause.
Dismissing the appeal, ^ HELD: 1.
The High Court was right in holding that the expenditure was not of a capital nature.
[764 E] 2.
The expenditure of Rs. 1.6 lakhs was expenditure laid out as part of the process of profit earning.
The nature of the expenditure was clearly revenue in character.
[764 D] 3.
There can be little doubt that the expenditure incurred was incidental to the business of the assessee.
It was involved in renovating the buildings, reconditioning the machinery and clearing the debris, from the land, for the purpose of resuming the operation of the colliery.
The expenditure was laid out wholly for the purpose of the business.
[763 D] 4.
There must be strong evidence that in the case of repairs which are not "current repairs", the Legislature intended a departure from the principle that an expenditure laid out or expended wholly and exclusively for the purposes of the business, and which expenditure is not capital in nature, should not be allowed in computing the income from business.
There is nothing in the language of section 10(2) (v) which declares or necessarily implies that repairs, other than, "current repairs", will not qualify for the benefit of that principle.
On accepted commercial practice and trading principles an item of business expenditure must be deducted in order to arrive at the true figure of profits and gains for tax purposes.
[762 G 763 A] C.I.T. vs Chitnis 50 I.A. 292; Motipur Sugar Factory Ltd. vs C.I.T. Bihar and Orissa, ; Devi Films Ltd. vs C.I.T. Madras, ; Badridas Daga vs C.I.T. , 15; Calcutta Co. Ltd. vs C.I.T. West Bengal, , 9; the Law Shipping Co. Ltd. vs Commissioners of Inland Revenue 12 Tax Cases 621,625 referred to.
The scope of Section 10(2)(xv) should be construed liberally.
[763 B] In the instant case even if the expenditure made by the assessee cannot be described as "current repairs" he is entitled to invoke the benefit of section 10(2)(xv).
[763 C] 5.
Whether an expenditure can be described as capital or revenue falls to be decided by serial tests, each one of which approaches the question from one perspective or another, conditioned by the particular facts of each case.
[763 F] Assam Bengal Cement Co. Ltd. vs C.I.T. West Bengal referred to.
In the instant case the business of the assessee was coal mining and it was carried on by the operation of a network of collieries.
Each colliery was a unit of production.
While the several units of production continued to be employed and the business continued to be carried on, one alone of all the units, was compelled to suspend production.
The suspension was due to the property being requisitioned for military use.
As soon as it was derequisitioned the assessee 760 took measures to resume production of coal.
The buildings were renovated, the machinery reconditioned and the accumulated debris removed from the land No new asset was brought into existence, no advantage for the enduring benefit of the business was acquired.
The activity which was continuously in operation but had been temporary suspended was resumed.
[763 G 764 C]
|
Civil Appeal No. 2691 of 1979.
Appeal by Special Leave from the Judgment and order dated 7 8 1979 of the Delhi High Court in Civil Revision No. 49/1979.
Yogesh Kumar jain and Mukul Rohtagi for the Appeal.
B. P. Bhandari, R. C. Bhatia and P. C. Kapoor for the Respondent.
The Judgment of the Court was delivered by KOSHAL, J.
This appeal by special leave is directed against the judgment dated August 7, 1979, of a Single Judge of the High Court of Delhi accepting a petition made by the landlady for revision of the order of an Additional Rent Controller (hereinafter called the Controller) of Delhi refusing to direct eviction of the tenant.
The landlady had sought eviction of the tenant from the premises in dispute on the ground covered by clause (e) of the proviso to sub section (1) of section 14 of the Delhi Rent Control Act, 1958 (hereinafter referred to as the Act), namely, that she required them bona fide for occupation as a residence for herself.
Her application being triable in accordance with the procedure laid down in section 25B of the Act, the tenant sought the Controller 's leave to contest it on grounds which were stated in his affidavit.
The leave was granted and thereafter the tenant filed a written statement contesting his eviction which was ultimately disallowed.
The learned Controller held that although the landlady had proved that she required the premises bona fide for her own occupation, she was disentitled to the relief claimed by her for two reasons which were (1) that she had not proved service on the tenant of a notice under section 106 of the Transfer of Property Act, and, (2) that her application claimed eviction only in respect of a part of the premises let out which was not legally permissible.
The landlady went up in revision to the High Court and the learned Single Judge reversed both the findings which had been decided by the Controller against her.
Two other points were raised before the High Court on behalf of the tenant.
It was contended, firstly, that the petition for revision was incompetent in view of the provisions of sub section (8) of section 25B of the Act and that only an appeal as contemplated by section 38 thereof should have been instituted before the Rent Control Tribunal (hereinafter called the Tribunal).
The contention was negatived with the observation that a petition for revision as envisaged by sub section (8) above mentioned lay against an order accepting or rejecting an eviction appli 749 cation, and against such an order alone, as laid down in Devi Singh vs Chaman Lal(1), R. K. Parikh vs Uma Verma(2), Bhagwati Pershad vs Om Perkash(3) and Mahavir Singh vs Kamala Narain(4).
The second contention was that the lease deed on which the landlady relied in support of the alleged tenancy was unstamped and therefore inadmissible in evidence.
This contention was repelled for the reason that although the said deed was taken on the file subject to the objection made on behalf of the tenant, the objection was never pressed at the time of argument before the Controller.
It was also observed by the learned Single Judge that the contention was practically meaningless as the tenant had never denied the tenancy in question.
In the result the learned Single Judge passed the impugned order directing the eviction of the tenant and, as already stated, that is the order impugned before us.
It has been vehemently contended before us on behalf of the tenant appellant that the opinion of the High Court about the maintainability of the petition for revision of the order of the Controller is erroneous and that the only remedy open to the landlady against that order was by way of appeal to the Tribunal under section 38 of the Act.
In order to determine the acceptability of the contention it is necessary to undertake a somewhat detailed examination of some of the provisions of the Act, especially those which were introduced by a 1976 amendment with effect from 1st of December, 1975.
The Act as originally framed provided for the control of rents and of eviction of tenants.
Various safeguards were created by it to ensure security of tenure to tenants residing in the urban area of Delhi and the right of the landlord to evict his tenant was restricted in ambit so as to be available only if the existence of certain specified grounds was proved.
Those grounds are enumerated in clauses (a) to (1) of the proviso to sub section (1) of section 14 of the Act.
The ground contained in clause (e) runs thus: "(e) that the premises let for residential purposes are required bona fide by the landlord for occupation as a residence for himself or for any member of his family dependent upon him, if he is the owner thereof, or for any person 750 for whose benefit the premises are held and that the landlord or such person has no other reasonably suitable residential accommodation;" The jurisdiction to decide disputes arising under the Act was vested in Controllers and civil courts were divested thereof.
Chapter VI of the Act made provision for appointment of Controllers, their powers and functions and appeals from their orders.
Out of the sections appearing in that Chapter there are three with which we are here concerned.
They are sections 37, 38 and 39.
Section 37 lays down the procedure to be followed by the Controller and subsection (2) thereof states: "Subject to any rules that may be made under this Act, the Controller shall, while holding an inquiry in any proceeding before him, follow as far as may be the practice and procedure of a Court of Small Causes, including the recording of evidence.
" Section 38 lays down that from every order of the Controller made under the Act an appeal shall lie to the Tribunal who shall have all the powers of a court under the Code of Civil Procedure when hearing an appeal.
Section 39 provides for an appeal to the High Court against an appellate order passed by the Tribunal but, makes it clear that such a second appeal shall lie only if it involves some substantial question of law.
On the 9th of September, 1975, the Central Government took a decision that Government employees owning houses within the Union Territory of Delhi shall be required to vacate accommodation allotted to them by the Government within a period of three months beginning with the 1st of October, 1975, and that in case they failed to vacate such accommodation before the 1st of January 1976, they would have to pay therefor licence fee equivalent to rent at the market rate.
In view of that decision it became necessary to make special provision for enabling such Government employees to evict their respective tenants and to shift to their own houses.
It was also felt that procedural delays required to be cut down in the case of disputes between the landlord and the tenant when the landlord bona fide required the demised premises for his own occupation.
The Act was therefore amended by Ordinance No. 24 of 1975 which was eventually replaced by the Delhi Rent Control (Amendment) Act (being Act No. 18 of 1976 and hereinafter referred to as the Amending Act).
The Amending Act introduced in Chapter III of the Act section 14A which provided for a right to a person in occupation of any residential premises allotted to him by the Central Government 751 or any local authority to recover immediate possession of premises let out by him in case he was required by the Government or the authority to vacate the residential premises allotted to him.
The only other change effected by the Amending Act was to add a new chapter, viz, Chapter IIIA, to the Act.
The chapter is headed "Summary Trial Of Certain Applications" and consists of three sections, viz., sections 25A, 25B and 25C, the first two of which may be reproduced in extenso: "25A. The provisions of this Chapter or any rule made thereunder shall have effect notwithstanding anything inconsistent therewith contained elsewhere in this Act or in any other law for the time being in force." "25B. (1) Every application by a landlord for the recovery of possession of any premises on the ground specified in clause (e) of the proviso to sub section (1) of section 14, or under section 14A, shall be dealt with in accordance with the procedure specified in this section. "(2) The Controller shall issue summons, in relation to every application referred to in sub section (1), in the form specified in the Third Schedule. "(3) (a) the Controller shall, in addition to, and simultaneously with, the issue of summons for service on the tenant, also direct the summons to be served by registered post, acknowledgment due, addressed to the tenant or his agent empowered to accept the service at the place where the tenant or his agent actually and voluntarily resides or carries on business or personally works for gain and may, if the circumstances of the case so require, also direct the publication of the summons in a newspaper circulating in the locality in which the tenant is last known to have resided or carried on business or personally worked for gain.
(b) When an acknowledgment purporting to be signed by the tenant or his agent is received by the Controller or the registered article containing the summons is received back with an endorsement purporting to have been made by a postal employee to the effect that the tenant or his agent had refused to take delivery of the registered article, the Controller may declare that there has been a valid service of summons.
752 "(4) The tenant on whom the summons is duly served (whether in the ordinary way or by registered post) in the form specified in the Third Schedule shall not contest the prayer for eviction from the premises unless he files and affidavit stating the ground on which he seeks to contest the application for eviction and obtains leave from the Controller as hereinafter provided; and in default of his appearance in pursuance of the summons or his obtaining such leave, the statement made by the landlord in the application for eviction shall be deemed to be admitted by the tenant and the applicant shall be entitled to an order for eviction on the ground aforesaid. "(5) The Controller shall give to the tenant leave to contest the application if the affidavit filed by the tenant discloses such facts as would disentitle the landlord from obtaining an order for the recovery of possession of the premises on the ground specified in clause (e) of the proviso to sub section (1) of section 14, or under section 14A. "(6) Where leave is granted to the tenant to contest the application, the Controller shall commence the hearing of the application as early as practicable. "(7) Notwithstanding anything contained in sub section (2) of section 37, the Controller shall, while holding an inquiry in a proceeding to which this Chapter applies, follow the practice and procedure of a Court of Small Causes, including the recording of evidence. "(8) No appeal or second appeal shall lie against an order for the recovery of possession of any premises made by the Controller in accordance with the procedure specified in this section: Provided that the High Court may, for the purpose of satisfying itself that an order made by the Controller under this section is according to law, call for the records of the case and pass such order in respect thereto as it thinks fit. "(9) Where no application has been made to the High Court on revision, the Controller may exercise, the powers of review in accordance with the provisions of Order XLVII of the Fist Schedule to the Code of Civil Procedure, 1908.
753 "(10) Save as otherwise provided in this Chapter, the procedure for the disposal of an application for eviction on the ground specified in clause (e) of the proviso to sub section (1) of section 14, or under section 14A, shall be the same as the procedure for the disposal of applications by Controllers.
The non obstante clause occurring in section 25A makes it quite clear that whenever there is a conflict between the provisions of Chapter IIIA on the one hand and those of the rest of the Act or of any other law for the time being in force on the other, the former shall prevail.
Section 25B provides a special procedure for the determination of an application by a landlord claiming recovery of possession from his tenant of the premises let out to the latter on either of two grounds, viz., those specified in clause (e) of the proviso to sub section (1) of section 14 and in section 14A.
Thus if such an application is based on the ground that the landlord requires the demised premises bona fide for his own occupation as a residential accommodation it has to be dealt with in accordance with the procedure specified in section 25B and not under the provisions contained in chapters other than Chapter IIIA, in so far as the latter are inconsistent with the former.
This follows directly from the provisions of section 25A read with those of sub section (1) of Section 25B.
That procedure envisages a short cut to the conclusion of the proceedings before the Controller and for that purpose makes the right of the tenant to contest the application of the landlord subject to the Controller 's leave obtained on grounds specified in an affidavit.
If no such affidavit is filed, the question of leave does not arise nor that of a contest by the tenant.
Furthermore, if the affidavit is filed but leave is refused, a contest by the defendant is again barred.
In either case the proceedings immediately come to a termination by the passage of an order of eviction of the tenant.
In case, however, the required affidavit is filed and leave to contest is granted, the Controller has to embark on the usual inquiry but the same has again to be conducted in conformity with the practice and procedure of a Court of Small Causes, including the recording of evidence.
This is the mandate of sub section (7) of section 25B, which makes a slight departure in the matter of practice and procedure from that to be followed in other applications under the Act as laid down in sub section (2) of section 37.
Sub section (8) of section 25B makes another variation in the procedure and states that when an order for the recovery of possession of any premises has been made by the Controller on an appli 754 cation covered by sub section (1) no appeal or second appeal shall lie therefrom.
In the case of such an order therefore the provisions of sections 38 and 39 are specifically made inapplicable.
The subsection further provides however for the remedy of revision by the High Court of any order made by the Controller under section 25B, a remedy which is not available to a party in a dispute not covered by Chapter IIIA.
Reference may also be made here to sub section (10) of section 25B pointedly.
That sub section makes it clear that even in the case of applications falling under sub section (1) of that section the procedure for their disposal by Controllers shall be the same as in the case of other applications, except as is provided in Chapter IIIA.
The combined effect of section 25A and sub section (1) and (10) of section 25B is that in whatever respect section 25B makes a departure from the procedure prescribed in other chapters of the Act, the provisions of Chapter IIIA shall prevail but that where that Chapter does not provide for a variation, applications covered by subsection (1) of section 25B shall be treated at par with all other applications for the purposes of procedure.
It is in the above background that the question as to whether an appeal to the Tribunal or a revision to the High Court was competent against the order passed in the instant case by the Controller has to be decided, and that brings us directly to the meaning of subsection (8) of section 25B. The proviso to that sub section gives power to the High Court to revise "an order made by the Controller under this section" which expression is no doubt capable of being construed as any order of whatsoever, nature passed by the Controller while acting in accordance with the procedure laid down in section 25B. The proviso, however, has to be read as a legislative measure carved out of the sub section to which it is appended and the order mentioned therein has to be regarded as an order of the type which the sub section speaks of, i.e. "an order for the recovery of possession of any premises made by the Controller in accordance with the procedure specified in this section.
" Thus, the order covered by sub section (8) (and therefore, by the proviso also) would be a final order disposing of an application on a conclusion of the proceedings under sub section (4) or sub section (7) of section 25B. This line of reasoning does not present any difficulty.
Learned counsel for the tenant however argued that for an order to be covered by sub section (8) of section 25B it must be an order for the recovery of possession of any premises made by the Controller.
According to him, if an order does not direct recovery 755 of possession by the landlord from the tenant, it is not an order which sub section (8) would embrace.
This contention, though not wholly implausible, runs counter to the decision in Devi Singh vs Chaman Lal (supra) which was followed in Bhagwati Prasad vs Om Prakash (supra) and Mahavir Singh vs Kamal Narain (supra) and does not find favour with us.
Sub section(8) no doubt in terms speaks only of an order "for the recovery of possession of any premises" and does not mention one which refuses the relief of eviction to the landlord; but then it appears to us that the expression "order for the recovery of possession of any premises" has to be construed, in the context in which it appears, as an order deciding application for the recovery of the possession of any premises.
Our reasons in this behalf are two fold.
Firstly, if an order in favour of the landlord alone was meant to be covered by sub section (8), an order refusing such relief would be liable to be called in question by way of an appeal or second appeal under section 38 so that there would be two procedures for the end product of the Controller 's proceedings being called in question; one when the same is in favour of the landlord, and another when it goes against him, which would obviously entail discrimination and make the sub section suffer from a constitutional invalidity.
It is an accepted rule of interpretation that if a provision can be construed in a manner which upholds its legal or constitutional validity it should if possible be so construed rather than the other way round.
We do feel that the language used is not happy but then it would not be doing violence to it if it is construed as just above stated.
Secondly, the scheme of the Act and the object of the introduction of section 14A and Chapter IIIA into it by the Amending Act make us form the opinion that sub section (8) of section 25B is exhaustive of the rights of appeal and revision in relation to the proceedings held under that Chapter.
Before the enforcement of the Amending Act, all disputes between a landlord and his tenant were liable to be dealt with according to a uniform procedure before the Controller as also in appeal and second appeal.
No distinction was made between one kind of dispute and another.
When it was felt that the procedure prescribed in the Act defeated, by reason of the delay involved, the very purpose of an application made under clause (e) of the proviso to sub section (1) of section 14, especially in the case of landlords who themselves held accommodation allotted by the Government or a local authority which they were required to vacate, section 14A and Chapter IIIA were introduced by the Amending Act so as to cut down the time factor drastically, so much 756 so that a tenant was required to obtain leave from the Controller for contesting an application for his eviction before he could put up his defence, and the Controller was given the power to refuse leave and straightway pass an order of eviction if he found that the grounds disclosed by the tenant in support of his right to dispute the landlord 's claim were not such as would disentitle the landlord from obtaining an order of eviction.
Sub section (7) further simplified the procedure on contest being allowed, even though sub section (2) of section 37 itself provided for a procedure far simpler than ordinarily obtains in proceedings before a civil court.
Then there is sub section (8) which provides for the abolition of the right of appeal and second appeal and replaces it by a power in the High Court to revise an order passed by the Controller.
That provision, as a part of the overall picture painted, must necessarily be construed as laying down procedure exclusive of that provided in sections 38 and 39, and we hold that the four cases relied upon by the High Court in rejecting the contention raised on behalf of the tenant were correctly decided.
In the way of the above interpretation of sub section (8) of section 25B, the provisions of sub section (10) thereof do not pose a hurdle.
All that sub section (10) states is that the procedure for the disposal of an application for eviction covered by sub section (1) shall be the same as the procedure for disposal of other applications by Controllers, except as provided in Chapter IIIA.
Sub section (8) as interpreted by us governs an application covered by sub section (1) of section 25B and expressly takes away the right of appeal or second appeal, while providing the remedy of revision instead.
As we have held the provisions of sub section (8) to be exhaustive of the remedies available to a person aggrieved by an order passed by the Controller in applications triable under Chapter IIIA.
such applications fall outside the category of those which can be disposed of like other applications under sub section (10) read with the provisions contained in other chapters of the Act.
As a result of the above discussion we hold that the remedy of the landlady against the order of the Controller in the present case was by way of revision (and revision only) of that order by the High Court as laid down in the proviso to sub section (8) of section 25B, even though it was an order not directing, but refusing recovery of possession of the premises in dispute.
Another contention raised on behalf of the tenant was that the order passed by the High Court while revising that of the Controller was illegal inasmuch as it did not specifically contain a direc 757 tion that the landlady would not be entitled to obtain possession of the premises in dispute before the expiration of a period of six months from the date of the order.
The contention seeks support from the provisions of sub section (7) of section 14 of the Act which states: : "Where an order for the recovery of possession of any premises is made on the ground specified in clause (e) of the proviso to sub section (1), the landlord shall not be entitled to obtain possession thereof before the expiration of a period of six months from the date of the order.
" Now this sub section does not at all require that an order for the recovery of possession of any premises should contain a direction of the type above mentioned.
On the other hand, the sub section itself declares that such an order would not be executable before a certain period has expired.
The declaration is part of the law of the land and would be operative as such so that the landlady would not be entitled to execute the order made by the High Court in her favour before the expiry of six months from the date thereof notwithstanding the fact that the terms of sub section (7) have not been made a part of that order.
The only other ground urged in support of the appeal was that the landlady had prayed for the tenant 's eviction from only a part of the premises and that such eviction could not legally be granted to her.
The contention embraces a question of fact which has been decided against the tenant by the High Court and for reconsidering which we do not find any reason.
In the result the appeal fails and is dismissed but with no order as to costs.
P.B.R. Appeal dismissed.
| IN-Abs | Clause (e) of the proviso to section 14(1) of the Delhi Rent Control Act provides that a landlord can evict a tenant of premises let for residential purposes on the ground that the same were required by him bona fide for occupation as a residence for himself and that he has no other reasonably suitable residential accommodation.
An appeal from the order of the Controller lies to the tribunal and a further appeal to the High Court.
In September, 1975, the Government of India took a decision that Government employees owning houses in Delhi shall be required to vacate accommodation allotted to them by the Government within a period of three months from 1st October, 1975.
To avoid procedural delays in the matter of eviction of tenants from houses let out by Government servants who were required to shift to their own houses, Chapter III A was introduced by an Amending Act.
Section 14A which was added in Chapter III provided a right to a person in occupation of any residential premises allotted to him by the Central Government to recover immediate possession of the premises let out by him in case he was required by the Government to vacate the residential premises allotted to him.
The non obstante clause contained in section 25A provides that "the provisions of this Chapter or any rule made thereunder shall have effect notwithstanding anything inconsistent therewith contained elsewhere in this Act or any other law for the time being in force.
" Section 25B(8) provides that when "an order for the recovery of possession of any premises" has been made by the Controller on an application covered by section 25B no appeal or second appeal shall lie therefrom.
The respondent 's application under clause (e) of the proviso to section 14(1) of the Act was rejected by the Rent Controller on the ground that it was not legally permissible for her to obtain possession of the premises under the section because she had sought eviction only in respect of a part of the premises.
In the respondent 's revision petition before the High Court the tenant contended that the petition was incompetent because in view of the provisions of section 25b(8) the only remedy available to the respondent was by way of appeal under section 38.
Rejecting this contention the High Court held that a, petition for revision as envisaged by section 25B(8) lay against the order accepting or rejecting an eviction application and against such an order alone.
Dismissing the tenant 's appeal.
^ HELD: The remedy of the land lady against the order of the Controller in the present case was by way of revision (and revision only) of that order by the High Court under the proviso to section 25B(8), even though it was 747 an order not directing but by refusing recovery of possession of the premises in dispute.
[756 G H] The non obstante clause in section 25A provides that whenever there is a conflict between the provisions of Chapter IIIA and those of the rest of the Act or of any other law in force the former shall prevail.
If an application is made under clause (e) of the proviso to section 14(1) it has to be dealt with in accordance with the procedure specified in section 25B and not under the provisions contained in Chapters other than Chapter IIIA.
Therefore, the procedure laid down in section 25A read with section 25B(1) envisages a shortcut to the conclusion of the proceedings before the Controller.
Section 25B(8) further provides that when an order for the recovery of possession of any premises has been made no appeal under section 38 or second appeal under section 39 shall lie.
The combined effect of section 25A and section 25B(1) and (10) is that in whatever respect section 25B makes a departure from the procedure prescribed in other chapters of the Act, the provisions of Chapter IIIA shall prevail.
[753 B D; 754 D] The expression "order for the recovery of possession of any premises" has to be construed, in the context in which it appears, as an order deciding an application for the recovery of possession of any premises; because, firstly, if an order in favour of the landlord alone was meant to be covered by sub section (8) an order refusing such relief would be liable to be called in question by way of an appeal or second appeal under section 38 so that there would be two procedures for the end product of the Controller 's proceedings being called in question, one when the same is in favour of the landlord and another when it goes against him, which would obviously entail discrimination and make the sub section invalid.
But if a provision can be construed in a manner which upholds its legal or constitutional validity it should, if possible, be so construed rather than the other way round.
[755 B E] All that sub section (10) of section 25B states is that the procedure for the disposal of an application for eviction covered by sub section (1) shall be the same as the procedure for disposal of other applications by Controllers except as provided in Chapter IIIA.
Sub section (8) expressly takes away the right of appeal or second appeal while providing the remedy of revision instead.
[747 E F] Section 14(7) does not require that an order for the recovery of possession of any premises should contain a direction that the landlord would not be entitled to obtain possession of the premises in dispute before the expiry of a period of six months from the date of the order.
The sub section itself declares that such an order would not be executable before a certain period has expired.
The declaration is part of the law of the land and would be operative as such so that the landlady would not be entitled to execute the order before the expiry of six months from the date thereof notwithstanding the fact that the terms of sub section (7) have not been made part of the order.
[757 C D] Devi Singh vs Chaman Lal (1977) Rajdhani Law Reporter 566; R. K. Parikh vs Uma Verma I.L.R. (1978) II Delhi 78; Bhagwati Pershad vs Om Perkhash (1979) Rajdhani Law Reporter 26; Mahavir Singh vs Kamal Narain (1979) Rajdhani Law Reporter 159 approved.
|
rit Petition No. 1220 of 1979.
(Under Article 32 of the Constitution) P. Govindan Nair and N. Sudhakaran for the Petitioner. M. M. Khader and V. J. Francis for the Respondent.
The Judgment of the Court was delivered by KRISHNA IYER, J.
The petitioner, an aspirant for admission to the M.B.B.S. course in one or other of the medical college in Kerala, has failed to qualify for selection from the Kerala university pool, not having secured high enough marks, and has failed to fall within the Calicut University pool, not having been a student of that University.
What is urged, as a claim for inclusion, is that had she been treated as a Calicut University student her marks would have been sufficient to gain admission and since she belongs to the Malabar region, which 830 is broadly served by the Calicut University, she should be given the benefit of Calicut University students and consequential admission a mixture of district wise backwardness and university wise preference to reach the desired advantage.
We cannot agree.
Under the existing scheme, the classification for purpose of quota is university wise, not territory wise.
Belonging to backward Calicut District is not the same as being an alumnus of the Calicut University.
Maybe, the State could have classified candidates university wise, backward region wise or otherwise, separately or in any constitutionally permissible combination.
We are not here concerned with the prospects of the petitioner under any different admission scheme or reservation project.
Mystic maybes are beyond judicial conjecture.
Once we hold that the university wise allocation of seats is valid the misfortune of the petitioner is damnum sine injuria, if we may use that expression in this context.
Every adversity is not an injury.
Judicial remedy cannot heal every wound or cure every sore since the discipline of the law keeps courts within its bounds.
We do not preclude the State from taking any other pragmatic formula or evolving any selection calculus, constitutionally permissible, so as to promote equality against the backdrop of social justice.
Indeed, we have by our Judgment in Dr. Jagadish Saran & Ors.
vs Union of India & Ors.(1), explained the parameters, the criteria and the correct measures which must be initiated to marry equality to excellence, solemnised constitutionally.
Too long has the state been seeking ad hoc solutions and improvising remedies where comprehensive studies and enduring recipes are the desideratum.
To keep the education situation uncertain across the nation and the fate of students of higher education tense or in suspense with annual challenge in court or agitational exercises in the streets is dangerous procrastination fraught with negative results where a creative undertaking of responsibility to find an enduring answer to a chronic problem is the minimum that the country expects of the concerned State instrumentality.
We dismiss this petition subject to the observations we have made above, leaving it to the Kerala State and its Universities not to contribute to the litigative nursery of medical candidates but to face the task of shaping a firm policy governed by constitutional guidelines, not other pressures.
S.R. Petition dismissed.
| IN-Abs | Dismissing the Writ Petition, the Court ^ HELD: The University wise allocation of seats is valid.
Under the existing scheme, the classification for purposes of quota is university wise, not territory wise.
Belonging to backward Calicut District is not the same as being an alumnus of the Calicut University.
May be, the State could have classified candidates University wise, backward region wise or otherwise, separately or in any constitutionally permissible combination.
Mystic maybes are beyond judicial conjecture.
The misfortune of the petitioner is damnum sine injuria.
Every adversity is not an injury.
Judicial remedy cannot heal every wound or cure every sore since the discipline of the law keeps courts within its bounds.
[830 A D] Dr. Jagdish Saran & Ors.
vs Union of India & Ors.
; relied on Observation: [Too long has the State been seeking ad hoc solutions and improvising remedies where comprehensive studies and enduring recipes are the desideratum.
To keep the education situation uncertain across the national and the fate of students of higher education tense or in suspense with annual challenges in court or agitational exercises in the streets is dangerous procrastination fraught with negative results where a creative undertaking of responsibility to find an enduring answer to a chronic problem is the minimum that the country expects of the concerned State instrumentality.] [830 E G]
|
N: Criminal Appeal Nos.
66 67 of 1980.
Appeals by Special Leave from the Judgment and order dated 30/8/1979 of the Delhi High Court in Criminal Revision Nos.
65 66 of 1979.
N. section Das Bahl for the Appellant.
M. N. Shroff for the Respondent.
The Judgment of the Court was delivered by KRISHNA IYER, J.
The common appellant in both these appeals is a teen aged student turned criminal adventurer in the elitist area of car lifting and scooter poaching current in our fashionable cities, including Delhi.
While he was a college student and but 19 years old, the appellant tried his hand at stealing a scooter way back in 1971.
He was arrested but bailed out and while on bail was accused of committing a car theft.
Both these cases were tried and he was found guilty.
The 864 scooter offence resulted in a sentence of two years ' imprisonment and a fine of Rs. 2,000.
The car theft case got converted into an offence under Section 411 I.P.C. and, consequently, a reduced sentence of imprisonment for six months and a fine of Rs. 500.
The convictions being concurrent and no substantial infirmity being present, we have confined leave to appeal to the question of sentence only.
But sentencing the cutting edge of the judicial process is the crucial strategy of the criminal law in achieving social defence and delinquent rehabilitation.
So we have to consider the totality of factors bearing on the offence and the offender and fix a punishment which will promote effectively the punitive objective of the law deterrence and habilitation.
We do not deem it necessary to set out elaborately all the socio legal facts which have been discussed at the bar.
All that we need say is that the offence took place in 1971 and we are now in 1980.
A long protracted litigation is some deterrent for a young man in his twenties.
The accused was nineteen when the offences were committed and his youthful age is a factor which deserves consideration.
A long period of incarceration in the present condition of prisons may brutalise the boy and blunt his finer sensibilities so that the end product may perhaps be more criminal than the one at the point of entry.
Not that all prison terms are not deterrent but some cases prove to be counter productive especially when the delinquent is young.
It may be interesting to recall Lord Soper 's observations in the House of Lords in a debate on British Prisons, where he said: "Now as to reform.
I was a prison chaplain for 30 years.
I cannot remember a single man who was reformed by being in prison not one.
I can remember those who, serving very short sentences, were for a time, perhaps, brought to recognise something of the gravity of what they had been doing; but I am completely convinced that the longer a man stays in prison, the longer he stays in that kind of incarceration, the less is the prospect of reform and the more certain is the process of decay.
That is why I have consistently tried to say that any man who is imprisoned in one particular set of circumstances for more than five years is probably dead for life.
It is highly unlikely that those who have endured that kind of monotonous deadening will be able to recover in the real world what they have lost in the artificial element and environment of prison life.
There has been, I think, in my time, a considerable increase 865 in the amelioration of conditions in prison; but, to refer again for a moment to the artificiality of it, the longer a man stays in prison the less capable he will be of recovering his place and establishing his position back in the real world to which he is increasingly made alien by the very processes which he undergoes." Moreover, the appellant has already suffered nearly six months ' imprisonment and it is a well known fact for criminologists that the initial few months of jail life are the most painful and, therefore, the most deterrent.
In the present case the offender having served a term of nearly six months must well have realised that the game of crime does not pay.
The fines of Rs. 2,000 and Rs. 500 imposed on the appellant should remain without interference.
Payment of fine brings home the sense for responsibility in a surer fashion than even short terms of imprisonment in some cases.
We, therefore, decline to reduce the fine and reject counsel 's plea in this behalf.
More important than these circumstances is the social urgency of making this student offender a non offender.
There are two circumstances which weigh in our mind.
The young man has married and has three children.
This is a measure of assurance that he will not play recklessly with his freedom.
Family life is ordinarily an insurance against a career of crime.
We have also insisted on the uncle of the appellant undertaking to assure the good behaviour of the nephew who is the delinquent in question.
The uncle Shri Kohli has filed an affidavit dated 10 12 1979 in this Court making the necessary undertaking to guarantee the good behaviour of his nephew.
Thoughtless parents and guardians leaving a free hand for their wards account for flippant criminality of the type we come across in middle class society.
The undertaking given by the uncle has, therefore, considerable relevance.
We make a breach of the conditions in the affidavit actionable on the motion of the State.
It is a tragic reflection that affluent criminality should become so pervasive among the student community.
It is uncomplimentary to the character building component of the system of education in the prestigious institutions of our cities.
We hope the State will take better care to instil a sense of values in the college campuses than it does now.
We allow the appeals to the extent of reducing the sentence of the appellant to the period undergone, but maintain the sentences of fine and the alternative period of imprisonment in case of default.
P.B.R. Appeals allowed.
| IN-Abs | The appellant was convicted and sentenced to two years ' imprisonment and fine of Rs. 2,000 and imprisonment for six months and fine of Rs. 500 for car lifting and scooter poaching.
On the question of sentence.
Allowing the appeals, ^ HELD : (a) The sentence of imprisonment is reduced to the extent of the period already undergone; but the sentences of fine and the alternative period of imprisonment in case of default are maintained.
[865 H] (b) The long protracted litigation from 1971 onwards is some deterrent for a young man in his 20s.
The youthful age of the offender is a factor which deserve consideration.
A long period of incarceration may brutalise a boy and blunt his finer sensibilities so that the incarceration may perhaps be more criminal than the one at the point of entry.
The offender having served a term of nearly six months must have realised that the game of crime does not pay.
[864 D, 865 C] (c) Payment of fine brings home the sense of responsibility in a surer fashion than even short terms of imprisonment in some cases.
[865 C]
|
ION: Criminal Appeal No. 49 of 1955.
Appeal by special leave from the order dated the 9th July, 1954 of the Punjab High Court at Simla in Criminal Revision No. 778 of 1954 arising out of the judgment and order dated the 30th June 1954 of the Court of Additional Sessions Judge, ' Amritsar in Criminal Appeal No. 409 of 1954.
477 Ram Das and Raghu Nath Pandit, for the appellants.
Jindralal and P. G. Gokhale, for the respondent.
April 26.
The Judgment of the Court was delivered by BHAGWATI J.
This appeal with special leave involves the interpretation of section 9 of the Punjab Security of the State Act, 1953 (Punjab Act XII of 1953), hereinafter called "the Act".
The appellants were members of the Amritsar District Motor Union which took out a procession on 23rd March, 1954 to protest against the policy of the Punjab Government to nationalise motor transport.
The procession started from Gul Park and was taken on lorries and jeeps.
It stopped near Chitra Talkies and then started on foot.
When it reached near Prabhat Studio, the appellants raised slogans "Jaggu mama hai hai (Jaggu, maternal uncle be dead)" and "Khachar Khota hai hai (mule cum donkey be dead)".
The first slogan was alleged to have been directed against the Hon 'ble Shri Jagat Narain, Transport Minister, Punjab State and the second slogan against the Hon 'ble Shri Bhim Sen Sachar, Chief Minister, Punjab State.
The uttering of these slogans was considered objectionable and the appellants were charged in the Court of the Magistrate, First Class, Amritsar: "that you, on or about the 23rd day of March 1954 at Amritsar, while being members of a procession, raised slogans "Jaggu mama hai hai" "Khachar Khota hai hai" which besides being indecent amounted to defamation and was pre judicial to the security of the State and the maintenance of public order and thereby committed an offence punishable under section 9 of the Security of the State Act".
The appellants pleaded not guilty and claimed to be tried.
They also led evidence in defence.
The learned Magistrate, however, disbelieved the defence and, accepting the prosecution evidence, found that the appellants did raise these slogans.
In the opinion 478 of the learned Magistrate, the slogans were in fact abuses hurled at the Transport Minister and the Chief Minister of the Punjab Government which besides being indecent amounted to defamation and were prejudicial to the maintenance of public order.
The appeal taken by the appellants before the Court of Additional Sessions Judge, Amritsar, was unsuccessful.
The learned Additional Sessions Judge also found against the appellants and observed that the slogans were highly objectionable and they fell within the ambit of section 9 of the said Act, that by raising those slogans the appellants undermined the public order as well as decency and they also amounted to defamation.
He, therefore, maintained the conviction of the appellants and the sentences of 3 months ' rigorous imprisonment which had been imposed by the learned Magistrate upon them.
The appellants filed a Revision Application before the High Court of Judicature for the State of Punjab at Simla but the same was summarily dismissed by the learned Chief Justice.
The appellants thereafter applied for and obtained from this Court Special Leave to appeal and the appeal has accordingly come on for hearing and final disposal before us.
On the evidence on record, there is no doubt that the appellants were members of the procession and did utter those slogans against the Transport Minister and the Chief Minister of the Punjab Government,.
The question, however, remains whether, in uttering these slogans, they committed an offence under section 9 of the Act.
Section 9 of the Act reads as follows "9.
Whoever (a) makes any speech, or (b) by words, whether spoken or written, or by signs or by visible or audible representations or otherwise publishes any statement, rumour or report, shall, if such speech, statement, rumour or report undermines the security of the State, friendly relations with foreign States, public order, decency or morality, or amounts to contempt of Court, defama 479 tion or incitement to an offence prejudicial to the security of the State or the maintenance of public order, or tends to overthrow the State, be punishable with imprisonment which may extend to three years or with fine or with both".
It cannot be denied that the appellants by words spoken published statements in relation to the Transport Minister and the Chief Minister of the Punjab Government.
A futile argument was advanced before us by the advocate of the appellants that this condition was not satisfied but we need not pause to consider the same.
The sole question for our determination is whether such statements (1) undermined the security of the State, friendly relations with foreign States, public order, decency or morality or (2) amounted to contempt of Court, defamation or incitement to an offence prejudicial to the security of the State or maintenance of public order, or (3) tended to overthrow the State.
The appellants were no doubt affected by the policy of the Punjab Government to nationalise motor transport and the Transport Minister and the Chief Minister were really responsible for sponsoring that policy.
Their tirade, therefore, was against both these individuals and, in the demonstration which the appellants held against that policy, they gave vent to violent expressions of opinion against them and, in the slogans which they uttered, used expres sions which were certainly objectionable.
The slogan "Jaggu mama hai hai" could be translated as "Jaggu, whose sister is my father 's wife is dead, woe betide him" and was in that sense a vulgar abuse burled against the Transport Minister.
The slogan "Khachar khota hai hai" could be translated as "mulecum donkey is dead, woe betide him" and it was directed against the Hon 'ble Shri Bhim Sen Sachar, Chief Minister, Punjab Government, whose name Sachar was caricatured into khachar being mule and was also combined with khota, a donkey.
This was again a vulgar abuse burled against the Chief Minister, Punjab Government.
The appellants ' conduct in this behalf could not at 480 all be justified.
Whatever their grievances against the Transport Minister and the Chief Minister of the Punjab Government were, they were entitled to ventilate them in a decent and dignified manner and they were certainly not justified in hurling such vulgar abuses against these individuals howsoever prejudicial to the interest of the appellants the policy of nationalised motor transport sponsored by them might have been.
No decent citizen should have uttered such slogans and the State authorities were well within their rights in proceeding against the appellants.
The difficulty, however, in the way of the State authorities is that they misconceived their remedy.
Howsoever provocative and indecent or unbefitting a responsible citizen of the State the conduct of the appellants was, the charge which was levelled against the appellants was one under section 9 of the Act and before the prosecution could succeed they bad not only to prove that what the appellants did was against decency and was defamatory of these indi viduals but also was such that it undermined public order, decency or morality or was tantamount to an incitement to an offence prejudicial to the maintenance of public order.
The learned counsel for the State very rightly conceded that the statements could not be said to undermine the security of the State or friendly relations with foreign States nor did they amount to contempt of Court or defamation prejudicial to the security of the State nor did they tend to overthrow the State.
Howsoever reprehensible these slogans were, they certainly would not have that effect.
The only way in which he sought to bring these slogans uttered by the appellants within the mischief of section 9 of the Act was by urging before us that the statements undermined public order, decency or morality and that they were tantamount to an incitement to an offence prejudicial to the maintenance of public order.
In support of this contention be referred us to the evidence of Ram Rakha, P.W. 2, Sub Inspector, C.I.D., who had accompanied the procession: "There was a sufficient, number of public men 481 there and they felt annoyed over these slogans.
The police had sufficient arrangements and had there been no arrangement there might have been a dispute".
There was also the evidence of Gurdit Singh, P. W. 3: "There were many other persons of the public with the procession.
People took these slogans ill" and Sunder Singh, P.W. 4: "There were many other persons of the public.
The slogans had a bad effect on the public".
It is significant to observe that, in the initial report made by the Sub Inspector Ram Rakha as also the Diary Report prepared by him, no mention had been made by him of the members of the public having felt annoyed over these slogans.
The two other witnesses Gurdit Singh, P.W. 3 and Sunder Singh, P.W. 4, were shown in their cross examination to have been the associates of the police in the investiga tions which they used to carry on and were not at all worthy of credence.
These statements, therefore, in regard to the members of the public having felt annoyed over these slogans uttered by the appellants, were liable to be discredited.
Even assuming that some members of the public who had congregated near the Prabhat Studio felt annoyed at these slogans and took them ill it is a far cry from that annoyance to undermining of the public order, decency or morality or incitement to an offence prejudicial to the maintenance of public order.
The only offence prejudicial to the maintenance of public order which could be thought of in this context was that of rioting and there is not the slightest evidence on record to justify an inference that the effect of the utterance of these slogans by the appellants against the Transport Minister and the Chief Minister would, but for the police arrangements, have led to the undermining of the public order or would have led to rioting which would be certainly prejudicial to the mainten ance of public order.
Indecent and vulgar though these slogans were as directed against the Transport Minister and the Chief Minister of the Punjab Government, the utterance thereof by the appellants who were the members of the procession protesting against 482 the scheme of nationalised motor transport was hardly calculated to undermine decency or morality the strata of society from which the appellants came being habituated to indulge freely in such vulgar abuses without any the slightest effect on the persons hearing the same.
These slogans were certainly defamatory of the Transport Minister and the Chief Minister of the Punjab Government but the redress of that grievance was personal to these individuals and the State authorities could not take the cudgels on their behalf by having recourse to section 9 of the Act unless and until the defamation of these individuals was prejudicial to the security of the State or the mainten ance of public order.
So far as these individuals were concerned, they did not take any notice of these vulgar abuses and appeared to have considered the whole thing as beneath their notice.
Their conduct in this behalf was consistent with the best traditions of democracy.
"Those who fill a public position must not be too thin skinned in reference to comments made upon them.
It would often happen that observations would be made upon public 'men which they know from the bottom of their hearts were undeserved and unjust; yet they must bear with them and submit to be misunderstood for a time" (Per Cockburn, C.J. in Seymour vs Butterworth(1) and gee the dicta of the Judges in R. vs Sir R. Carden(2).
"Whoever fills a public position renders himself open thereto.
He must accept an attack as a necessary, though unpleasant, appendage to his office" (Per Bramwell, B., in Kelley vs Sherlock(3)).
Public men in such positions may as well think it worth their while to ignore such vulgar criticisms and abuses hurled against them rather than give importance to the same by prosecuting the persons responsible for the same.
While commending thus the conduct of the Transport Minister and the Chief Minister of the Punjab Government, we cannot help observing that the step (1) [ ; , 376, 377; ; , 168, 169.
(2) (3) , 689.
483 which the State authorities took against the appellants in prosecuting them under section 9 of the Act was unjustified as the slogans uttered by the appellants did not under the circumstances set out Above fall within the mischief of that section.
Deprecating as we do the conduct of the appellants in uttering these slogans, we cannot help feeling that the prosecution has failed to establish that the appellants were guilty of the offence with which they had been charged with the result that the appeal of the appellants will be allowed, their convictions and sentences passed upon them will be set aside and they will be set at liberty forthwith.
We only hope that the observations made by us here will be an eyeopener to the appellants and they will behave them selves better in the future.
| IN-Abs | The appellants were members of a procession taken out to protest against the policy of the Punjab Government to nationalise motor transport and raised the slogans "Jaggu mama hai hai (Jaggu, maternal uncle be dead)" and "Khachar Khota hai hai (mule cumdonkey be dead)".
The words were directed against the Transport Minister and the Chief Minister respectively and were defamatory.
The appellants were prosecuted and convicted under section 9 of the Punjab Security of the State Act, 1953.
Held that the statements could not be said to undermine the security of the State or friendly relations with foreign States nor did they amount to contempt of Court or defamation prejudicial to the security of the State nor did they tend to overthrow the State and that the prosecution had failed to establish that the act of the appellants undermined public order, decency or morality or was tant amount to an incitement to an offence prejudicial to the maintenance of public order and consequently the prosecution under section 9 was not justified.
Public men may as well think it worth their while to ignore such vulgar criticisms and abuses hurled against them, rather than give importance to the same by prosecuting the person responsible for the same.
Seymour vs Butterworth ([1862] ; , 376, 377), B. vs Sir B. Carden ([1879] , Kelly vs Sherlock ([1866] L.R. 1 Q.B. 686, 689; referred to.
|
ON: Writ Petition (Criminal) No. 1376 of 1979.
(Under Article 32 of the Constitution).
A. K. Sen and Harjinder Singh for the Petitioner.
U. R. Lalit and M. N. Shroff for the Respondent.
The Judgment of the Court was delivered by FAZAL ALI, J.
This Writ Petition has been filed with a prayer that an order of detention passed against the petitioner on the 7th 870 September, 1979, under section 3(1) of the be quashed.
After the order was served on the detenu he made a representation on the 27th September, 1979 to the Govt.
who received it on the 28th September, 1979.
In support of the Rule Mr. A. K. Sen has raised a number of points, but in view of one of them which is to the effect that there has been an inordinate and unexplained delay on the part of the detaining authority in deciding the representation and that the detention is therefore vitiated, we need not go into the other points.
On the question of delay the petitioner had expressly taken a plea in para 11 of the petition but in their reply the respondents have not at all explained or detailed any reason why there was inordinate delay in disposing of the representation submitted by the detenu to the detaining authority.
The admitted position is that the representation was received by the Government on the 28th September, 1979 and it was rejected on 3rd November, 1979, that is to say, after about one month and five days of the receipt.
It is now well settled that any unexplained delay in deciding the representation filed by the detenu amounts to a clear violation of article 22(5) of the Constitution of India and is sufficient to vitiate the detention.
Our attention was drawn by the counsel for the petitioner to a recent decision of this Court in Narendra Purushotam Umrao etc.
vs B. B. Gujral & Ors.
where this Court while relying on an earlier decision of this Court in Pankaj Kumar Chakraborty & Ors.
vs State of West Bengal pointed out that under Clauses 4 and 5 of article 22 of the Constitution the detenu has a dual right, viz., 1. to have the representation, irrespective of the length of detention, considered by the appropriate Government, and 2.
to have the representation considered by the Board duly constituted under the concerned Act.
We might further mention that the constitutional right to file a representation to the Government carries with it impliedly a right that the representation must be disposed of as quickly as possible and any unexplained delay would amount to a violation of the constitutional guarantee contained in article 22 (5).
This Court has also pointed out that the obligation of the appropriate detaining authority to take a decision on the representation filed by the detenu is quite apart 871 and distinct from its obligation to constitute a Board and to send the representation to it.
The detaining authority is not entitled to wait for the opinion of the Board but has to take its decision without the least possible delay.
In Writ Petition No. 246 of 1969 decided on September 10, 1969 this Court observed as follows: "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 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, 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 observations extracted above clearly show that the representation must be considered by the Government as expeditiously as possible.
Mr. Lalit submitted that the delay in deciding the representation was due to the fact that the representation had to pass through various channels and departments before the Government was in a position to decide it.
In the first place no such facts have been pleaded in the reply filed by the respondents and, therefore, we cannot entertain the grounds now urged by the counsel for the Union for the first time in the arguments before us.
Even so it appears that at the most the detaining authority had forwarded the representation to the Revenue Intelligence whose comments were received on 16 10 79.
Thereafter there was absolutely no justification for any delay in taking a decision on the merit of the representation.
Even if we assume that there was some reasonable explanation for the delay from 28th September, 1979 to 16th Octo 872 ber, 1979, there appears to be no good explanation whatsoever for the delay from 16th October, 1979 to 2nd November, 1979 when the representation was rejected by the Government.
It is manifest that the Government was not obliged to wait for the decision of the Board because it had to consider the representation independently of what the Board might say.
In this view of the matter, we are satisfied that there has been unreasonable delay in deciding the representation filed by the detenu and that by itself is sufficient to render the detention void.
For these reasons we allow this petition, set aside the order of detention and direct that the detenu be released forthwith.
V.D.K. Petition allowed.
| IN-Abs | Allowing the Writ Petition, the Court ^ HELD: Under clauses 4 and 5 of Article 22 of the Constitution the detenu has a dual right viz. (i) to have the representation, irrespective of the length of detention, considered by the appropriate Government; and (ii) to have the representation considered by the Board duly constituted under the concerned Act.
[870 E F] Further, the constitutional right to file a representation to the Government carries with it impliedly a right that the representation must be disposed of as quickly as possible and any unexplained delay would amount to a violation of constitutional guarantee contained in Article 22(5).
[870 F G] The obligation of the appropriate detaining authority to take a decision on the representation filed by the detenu is quite apart and distinct from its obligation to constitute a Board and to send the representation to it.
The detaining authority is not entitled to wait for the opinion of the Board but has to take its decision without the least possible delay.
[870 G H, 871 A] Pankaj Kumar Chakraborty & Ors.
vs State of West Bengal ; and Narendra Purushotam Umrao etc.
vs B. B. Gujral and Ors., ; relied on.
|
Special Leave Petition (Civil) Nos.
6698 6700 of 1979.
867 From the Judgment and Order dated 25 10 1978 of the Rajasthan High Court in D. B. Civil Misc.
Appeal Nos. 195, 196 and 197 of 1978.
Soli J. Sorabjee Soli.
and Sobhagmal Jain for the Petitioner.
M. N. Shroff for the Respondent.
The Order of the Court was delivered by KRISHNA IYER, J.
These three petitions for special leave relate to a road tragedy where many lost their limbs while travelling in a bus belonging to the nationalised transport system of Rajasthan.
A flimsy plea was put forward by the operator to escape liability for compensation that the lights of the bus accidentally failed and thus the unfortunate episode occurred.
Other embellishments were also set up for the purpose of exoneration.
The Accidents Tribunal was not taken in and, having disbelieved the evidence, awarded compensation in sums far lower than were claimed by the victims.
Two contentions were raised and rightly over ruled and they have been repeated in the Petition for special leave and we similarly reject them.
The nature of the accident and the surrounding circumstances are such that the doctrine res ipsa loquitur was rightly invoked by the court.
Indeed, the terrible accidents attributable to reckless driving and escalating year after year make our high ways great hazards.
One should have thought that nationalisation of road transport would have produced a better sense of social responsibility on the part of the management and the drivers.
In fact, one of the major purposes of socialisation of transport is to inject a sense of safety, accountability and operational responsibility which may be absent in the case of private undertakings, whose motivation is profit making regardless of risk to life; but common experience on Indian high ways discloses callousness and blunted consciousness on the part of public corporations which acquire a monopoly under the in plying buses.
It is a thousand pities that our State Road Transport vehicles should become mobile menaces, and we should impress upon them the need to have greater reverence for human life representing, as they do, the value set of the State itself.
In the present case, the State Corporation put forward a false plea and contested the application of the principle of res ipsa loquitur to avoid liability.
It would have been more humane and just if, instead of indulging in wasteful litigation, the Corporation had hastened compassionately to settle the claims so that goodwill and public credibility could be improved.
After all, the State has a paramount duty, apart 868 from liability for tort, to make effective provision for disablement in cases of undeserved want Aritcle 41 of the Constitution states so.
It was improper of the Corporation to have tenaciously resisted the claim.
It was right on the part of the Tribunal to have raised a rebuttable presumption on the strength of the doctrine of res ipsa loquitur.
The State Corporation has contested even the quantum of the claim.
Indian life and limb cannot be treated as cheap, at least by State instrumentalities.
The heads of claim have been correctly appreciated by the Tribunal and the awards have been moderate.
Here again, the State Corporation should have sympathised with the victims of the tragic accident and generously adjusted the claims within a short period.
What is needed is not callous litigation but greater attention to the efficiency of service, including insistence on competent, cautious and responsible driving.
We have had the advantage of Shri Soli J. Sorabjee, who represented the Corporation with a characteristic sense of fairness, but we are unable to desist from making the above observations which are induced by the hope that nationalised transport service will eventually establish their superiority over the private system and sensitively respond to the comforts of and avoid injury to the travelling public and the pedestrian users of our highways.
We dismiss the Special Leave Petitions.
N.V.K. Petitions dismissed.
| IN-Abs | The respondents lost their limbs in a road accident while travelling in a bus belonging to the petitioner, a nationalised transport system.
The plea by the operator to escape the liability for compensation was that the lights of the bus accidentally failed, which resulted in the accident.
The Accidents Claims Tribunal negatived the plea and awarded compensation in sums far lower than were claimed by the respondents.
In the special leave petitions to this Court, the petitioner contested the application of the principle of res ipsa loquitur and the quantum of the claim.
Dismissing the petitions, ^ HELD: 1.
(i) It was improper of the Corporation to have tenaciously resisted the claim.
[868 A] (ii) It was right on the part of the Tribunal to have raised a rebuttable presumption on the strength of the doctrine of res ipsa loquitur.
[868 B] 2.
The heads of claim have been correctly appreciated by the Tribunal and the awards have been moderate.
[868 C] 3.
Instead of indulging in wasteful litigation, it would have been more humane and just, if the Corporation had hastened compassionately to settle the claims so that goodwill and public credibility could be improved.
[867 H] 4.
The State has a paramount duty, apart from liability for tort, to make effective provision for disablement in cases of undeserved want Article 41 of the Constitution states so.
[868 A] 5.
Nationalisation of road transport should have produced a better sense of social responsibility on the part of the management and drivers.
One of the major purposes of socialisation of transport is to inject a sense of safety, accountability and operational responsibility which may be absent in the case of private undertakings whose motivation is profit making regardless of risk to life.
[867 E F] 6.
Common experience on Indian high ways disclose callousness and blunted consciousness on the part of public corporations which acquire a monopoly under the in plying buses.
It is a pity that State Road Transport vehicles should become mobile menaces.
[867 G]
|
Civil Appeal No. 1991 of 1979.
Appeal by special leave from the Judgment and Order dated 9 7 1979 of the Kerala High Court in C.R.P. No. 1741 of 1979.
M. M. Abdul Khader and K. M. K. Nair for the Appellants.
K. M. Iyer and V.J. Francis for the Respondent.
J. This litigation has secured special leave from us because it involves a profound issue of constitutional and international law and offers a challenge to the nascent champions of human rights in India whose politicised pre occupation has forsaken the civil debtor whose personal liberty is imperilled by the judicial process itself, thanks to section 51 (Proviso) and O. 21, r. 37, Civil Procedure Code.
Here is an appeal by judgement debtors the appellants whose personal freedom is in peril because a court warrant for arrest and detention in the civil prison is chasing them for non payment of an amount due to a bank the respondent, which has ripened into a decree and has not yet been discharged.
Is such deprivation of liberty illegal? From the perspective of international law the question posed is whether it is right to enforce a contractual liability by imprisoning 915 a debtor in the teeth of article 11 of the International Covenant on Civil and Political Rights.
The Article reads: No one shall be imprisoned merely on the ground of inability to fulfil a contractual obligation.
(Emphasis added) An apercu of article 21 of the Constitution suggests the question whether it is fair procedure to deprive a person of his personal liberty merely because he has not discharged his contractual liability in the face of the constitutional protection of life and liberty as expanded by a chain of ruling of this Court beginning with Maneka Gandhi 's case.
Article 21 reads: 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.
A third, though humdrum, question is as to whether, in this case, section 51 has been complied with in its enlightened signification.
This turns on the humane meaning of the provision.
Some minimal facts may bear a brief narration sufficient to bring the two problems we have indicated, although we must candidly state that the Special Leave Petition is innocent of these two issues and the arguments at the bar have avoided virgin adventures.
Even so, the points have been raised and counsel have helped with their submissions.
We therefore, proceed to decide.
The facts.
The judgment debtors (appellants) suffered a decree against them in O.S. No. 57 of 1972 in a sum of Rs. 2.5 lakhs, the respondent bank being the decree holder.
There are two other money decrees against the appellants (in O.S. 92 of 1972 and 94 of 1974), the total sum payable by them being over Rs. 7 lakhs.
In execution of the decree in question (O.S. 57 of 1972) a warrant for arrest and detention in the civil prison was issued to the appellants under section 51 and o.21, r. 37 of the Civil Procedure Code on 22 6 1979.
Earlier, there had been a similar warrant for arrest in execution of the same decree.
Besides this process, the decree holders had proceeded against the properties of the judgment debtors and in consequence, all these immovable properties had been attached for the purpose of sale in discharge of the decree debts.
It is averred that the execution court has also appointed a Receiver for the management of the properties under attachment.
In short, 916 the enjoyment or even the power to alienate the properties by the judgment debtors has been forbidden by the court direction keeping them under attachment and appointing a Receiver to manage them.
Nevertheless, the court has issued a warrant for arrest because, on an earlier occasion, a similar warrant had been already issued.
The High Court, in a short order, has summarily dismissed the revision filed by the judgment debtors against the order of arrest.
We see no investigation having been made by the executing court regarding the current ability of the judgment debtors to clear off the debts or their mala fide refusal, if any, to discharge the debts.
The question is whether under such circumstances the personal freedom of the judgment debtors can be held in ransom until repayment of the debt, and if section 51 read with O. 21, r. 37, C.P.C. does warrant such a step, whether the provision of law is constitutional.
tested on the touchstone of fair procedure under article 21 and in conformity with the inherent dignity of the human person in the light of article 11 of the International Covenant on Civil and Political Rights.
A modern Shylock is shacked by law 's humane hand cuffs.
At this stage, we may notice the two provisions.
Section 51 runs thus: 51.
Subject to such conditions and limitations as may be prescribed, the Court may, on the application of the decree holder, order execution of the decree (a) by delivery of any property specifically decreed; (b) by attachment and sale or by sale without attachment of any property; (c) by arrest and detention in prison; (d) by appointing a receiver; or (e) in such other manner as the nature of the relief granted may require.
Provided that, where the decree is for the payment of money, execution by detention in prison shall not be ordered unless, after giving the judgment debtor an opportunity of showing cause why he should not be committed to prison, the Court, for reasons recorded in writing, is satisfied (a) that the judgment debtor, with the object or effect of obstructing or delaying the execution of the decree (i) is likely to abscond or leave the local limits of the jurisdiction of the Court, or 917 (ii) has, after the institution of the suit in which the decree was passed, dishonestly transferred, concealed, or removed any part of his property, or committed any other act of bad faith in relation to his property, or (b) that the judgment debtor has, or has had sine the date of the decree, the means to pay the amount of the decree or some substantial part thereof and refuses or neglects or has refused or neglected to pay the same, or (c) that the decree is for a sum for which the judgment debtor was bound in a fiduciary capacity to account.
Explanation.
In the calculation of the means of the judgment debtor for the purposes of clause (b), there shall be left out of account any property which, by or under any law or custom having the force of law for the time being in force, is exempt from attachment in execution of the decree.
(Emphasis added) We may here read also order 21 Rule 37: 37.
(1) Notwithstanding anything in these rules, where an application is for the execution of a decree for the payment of money by the arrest and detention in the civil prison of a judgment debtor who is liable to be arrested in pursuance of the application, the Court shall, instead of issuing a warrant for his arrest, issue a notice calling upon him to appear before the Court on a day to be specified in the notice and show cause why he should not be committed to the civil prison: Provided that such notice shall not be necessary if the Court is satisfied, by affidavit, or otherwise, that, with the object or effect of delaying the execution of the decree, the judgment debtor is likely to abscond or leave the local limits of the jurisdiction of the Court.
(2) Where appearance is not made in obedience to the notice, the Court shall, if the decree holder so requires, issue a warrant for the arrest of the judgment debtor.
Right at the beginning, we may take up the bearing of article 11 on the law that is to be applied by an Indian Court when there is a specific provision in the Civil Procedure Code, authorising detention 918 for non payment of a decree debt.
The Covenant bans imprisonment merely for not discharging a decree debt.
Unless there be some other vice or mens rea apart from failure to foot the decree, international law frowns on holding the debtor 's person in civil prison, as hostage by the court.
India is now a signatory to this Covenant and article 51 (c) of the Constitution obligates the State to "foster respect for international law and treaty obligations in the dealings of organised peoples with one another".
Even so, until the municipal law is changed to accommodate the Covenant what binds the court is the former, not the latter.
A. H. Robertson in "Human Rights in National and International Law" rightly points out that international conventional law must go through the process of transformation into the municipal law before the international treaty can become an internal law.
From the national point of view the national rules alone count.
With regard to interpretation, however, it is a principle generally recognised in national legal system that, in the event of doubt, the national rule is to be interpreted in accordance with the State 's international obligations.
The position has been spelt out correctly in a Kerala ruling on the same point.
In that case, a judgment debtor was sought to be detained under O. 21, r. 37 C.P.C. although he was seventy and had spent away on his illness the means he once had to pay off the decree.
The observations there made are apposite and may bear exception: The last argument which consumed most of the time of the long arguments of learned counsel for the appellant is that the International Covenants on Civil and Political Rights are part of the law of the land and have to be respected by the Municipal Courts.
Article 11, which I have extracted earlier, grants immunity from imprisonment to indigent but honest judgment debtors.
The march of civilization has been a story of progressive subordination of property rights to personal freedom; and a by product of this subordination finds noble expression in the declaration that "No one shall be imprisoned merely on the ground of inability to fulfil a contractual obligation." This revolutionary change in the regard for the human person is spanned by the possible shock that a resuscitated Shylock would suffer if a modern Daniel were to come to judgment 919 when the former asks the pound of flesh from Antonio 's bosom according to the tenor of the bond, by flatly refusing the mayhem on the debtor, because the inability of an impecunious oblige shall not imperil his liberty or person under the new dispensation proclaimed by the Universal Declaration of Human Rights.
Viewed in this progressive perspective we may examine whether there is any conflict between section 51 CPC and Article 11 of the International Covenants quoted above.
As already indicated by me, this latter provision only interdicts imprisonment if that is sought solely on the ground of inability to fulfil the obligation.
Section 51 also declares that if the debtor has no means to pay he cannot be arrested and detained.
If he has and still refuses or neglects to honour his obligation or if he commits acts of bad faith, he incurs the liability to imprisonment under section 51 of the Code, but this does not violate the mandate of Article 11.
However, if he once had the means but now has not or if he has money now on which there are other pressing claims, it is violative of the spirit of Article 11 to arrest and confine him in jail so as to coerce him into payment. .
The judgment dealt with the effect of international law and the enforceability of such law at the instance of individuals within the State, and observed: The remedy for breaches of International Law in general is not to be found in the law courts of the State because International Law per se or proprio vigore has not the force or authority of civil law, till under its inspirational impact actual legislation is undertaken.
I agree that the Declaration of Human Rights merely sets a common standard of achievement for all peoples and all nations but cannot create a binding set of rules.
Member States may seek, through appropriate agencies, to initiate action when these basic rights are violated; but individual citizens cannot complain about their breach in the municipal courts even if the country concerned has adopted the covenants and ratified the operational protocol.
The individual cannot come to Court but may complain to the Human Rights Committee, which, in turn, will set in motion other procedures.
In short, the basic human rights enshrined in the International Covenants above referred to, may at best inform judicial institutions and inspire legislative action within member States; but apart from such deep reverence, remedial action 920 at the instance of an aggrieved individual is beyond the area of judicial authority.
While considering the international impact of international covenants on municipal law, the decision concluded: Indeed the construction I have adopted of section 51, CPC has the flavour of Article 11 of the Human Rights Covenants.
Counsel for the appellant insisted that law and justice must be on speaking terms by justice he meant, in the present case that a debtor unable to pay must not be detained in civil prison.
But my interpretation does put law and justice on speaking terms.
Counsel for the respondent did argue that International Law is the vanishing point of jurisprudence is itself vanishing in a world where humanity is moving steadily, though slowly, towards a world order, led by that intensely active, although yet ineffectual body, the United Nations Organisation.
Its resolutions and covenants mirror the conscience of mankind and insominate, within the member States, progressive legislation; but till this last step of actual enactment of law takes place, the citizen in a world of sovereign States, has only inchoate rights in the domestic Courts under these international covenants.
While dealing with the impact of the Dicean rule of law on positive law, Hood Phillips wrote and this is all that the Covenant means now for Indian courts administering municipal law The significance of this kind of doctrine for the English lawyer is that it finds expression in three ways.
First, it influences legislators.
The substantive law at any given time may approximate to the "rule of law", but this only at the will of Parliament.
Secondly, its principles provide canons of interpretation which express the individualistic attitude of English courts and of those courts which have followed the English tradition.
They give an indication of how the law will be applied and legislation interpreted.
English courts lean in favour of the liberty of the citizen, especially of his person: they interpret strictly statutes which purport to diminish that liberty, and presume that Parliament does not intend to restrict private rights in the absence of clear words to the contrary.
921 The positive commitment of the States Parties ignites legislative action at home but does not automatically make the Covenant an enforceable part of the corpus juris of India.
Indeed, the Central Law Commission, in its Fifty Fourth Report, did cognise the Covenant, while dealing with section 51 C.P.C.: The question to be considered is, whether this mode of execution should be retained on the statute book, particularly in view of the provision in the International Covenant on Civil and Political Rights prohibiting imprisonment for a mere non performance of contract.
The Law Commission, in its unanimous report, quoted the key passages from the Kerala ruling referred to above and endorsed its ratio. 'We agree with this view ' said the Law Commission and adopting that meaning as the correct one did not recommend further change on this facet of the Section.
It is important to notice that, interpretationally speaking, the Law Commission accepted the dynamics of the changed circumstances of the debtor : However, if he once had the means but now has not, or if he has money now on which there are other pressing claims, it is violative of the spirit of Article 11 to arrest and confine him in jail so as to coerce him into payment.
This is reiterated by the Commission: Imprisonment is not to be ordered merely because, like Shylock, the creditor says: "I crave the law, the penalty and forfeit of my bond.
" The law does recognise the principle that "Mercy is reasonable in the time of affliction, as clouds of rain in the time of drought.
" We concur with the Law Commission in its construction of section 51 C.P.C. It follows that quondom affluence and current indigence without intervening dishonesty or bad faith in liquidating his liability can be consistent with article 11 of the Covenant, because then no detention is permissible under section 51, C.P.C. Equally meaningful is the import of article 21 of the Constitution in the context of imprisonment for non payment of debts.
The high 922 value of human dignity and the worth of the human person enshrined in article 21, read with articles 14 and 19, obligates the State not to incarcerate except under law which is fair, just and reasonable in its procedural essence.
Maneka Gandhi 's case as developed further in Sunil Batra vs Delhi Administration, Sita Ram & Ors.
vs State of U.P. and Sunil Batra vs Delhi Administration lays down the proposition.
It is too obvious to need elaboration that to cast a person in prison because of his poverty and consequent inability to meet his contractual liability is appalling.
To be poor, in this land of daridra Narayana, is no crime and to 'recover ' debts by the procedure of putting one in prison is too flagrantly violative of article 21 unless there is proof of the minimal fairness of his wilful failure to pay in spite of his sufficient means and absence of more terribly pressing claims on his means such as medical bills to treat cancer or other grave illness.
Unreasonableness and unfairness in such a procedure is inferable from article 11 of the Covenant.
But this is precisely the interpretation we have put on the Proviso to section 51 C.P.C. and the lethal blow of article 21 cannot strike down the provision, as now interpreted.
The words which hurt are "or has had since the date of the decree, the means to pay the amount of the decree".
This implies, superficially read, that if at any time after the passing of an old decree the judgment debtor had come by some resources and had not discharged the decree, he could be detained in prison even though at that later point of time he was found to be penniless.
This is not a sound position apart from being inhuman going by the standards of article 11 (of the Covenant) and article 21 (of the Constitution).
The simple default to discharge is not enough.
There must be some element of bad faith beyond mere indifference to pay, some deliberate or recusant disposition in the past or, alternatively, current means to pay the decree or a substantial part of it.
The provision emphasises the need to establish not mere omission to pay but an attitude of refusal on demand verging on dishonest disowning of the obligation under the decree.
Here considerations of the debtor 's other pressing needs and straitened circumstances will play prominently.
We would have, by this construction, sauced law with justice, harmonised section 51 with the Covenant and the Constitution.
The question may squarely arise some day as to whether the Proviso to section 51 read with O. 21, r. 37 is in excess of the Constitutional 923 mandate in article 21 and bad in part.
In the present case since we are remitting the matter for reconsideration, the stage has not yet arisen for us to go into the vires, that is why we are desisting from that essay.
In the present case the debtors are in distress because of the blanket distraint of their properties.
Whatever might have been their means once, that finding has become obsolete in view of later happenings; Sri Krishnamurthi Iyer for the respondent fairly agreed that the law being what we have stated, it is necessary to direct the executing court to re adjudicate on the present means of the debtors vis a vis the present pressures of their indebtedness, or alternatively whether they have had the ability to pay but have improperly evaded or postponed doing so or otherwise dishonestly committed acts of bad faith respecting their assets.
The court will take note of other honest and urgent pressures on their assets, since that is the exercise expected of the court under the proviso to section 51.
An earlier adjudication will bind if relevant circumstances have not materially changed.
We set aside the judgment under appeal and direct the executing court to decide de novo the means of the judgment debtors to discharge the decree in the light of the interpretation we have given.
P.B.R. Appeal allowed.
| IN-Abs | The appellants were the judgment debtors while the respondent bank was the decree holder.
In execution of the decree a warrant for arrest and detention in civil prison was issued to the appellants under section 51 and order 21, rule 37 of the Code of Civil Procedure.
On an earlier occasion there had been a similar warrant for arrest in execution of the same decree.
The decree holders also proceeded against the properties of the judgment debtors and in consequence all their immovable properties had been attached for the purpose of sale in discharge of the decree debts.
A receiver was appointed by the execution court to manage the properties under attachment.
Even so, the court had issued a warrant for the arrest of the judgment debtors because on an earlier occasion a similar warrant had already been issued without any investigation as regards the current ability of the judgment debtors to clear off the debts or their mala fide refusal, if any, to discharge the debts.
On the question whether under such circumstances personal freedom of the judgment debtors can be held to ransom until repayment of the debt.
Allowing the appeal, ^ HELD: 1.
The words in section 51 which hurt are "or has had since the date of the decree the means to pay the amount of the decree.
" Superficially read this implies that if at any time after the passing of an old decree the judgment debtor had come by some resources and had not discharged the decree he could be detained in prison even though at that later point of time he was found to be penniless.
This is not a sound position, apart from being inhuman going by the standards of Article 11 of the International Covenant on Civil and Political Rights and Article 21.
A simple default to discharge is not enough.
There must be some element of bad faith beyond mere indifference to pay, some deliberate or recusant disposition in the past or alternatively current means to pay the decree or a substantial part of it.
The provision emphasises the need to establish not mere omission to pay but an attitude of refusal on demand verging on dishonest disowning of the obligation under the decree.
Considerations of the debtor 's other pressing needs and straitened circumstances will play prominently.
[922E G] 2.
Unless there be some other vice or mens rea apart from failure to foot the decree, international law frowns on holding the debtor 's person in civil prison, as hostage by the court.
India is now a signatory to this Covenant and Article 51(c) of the Constitution obligates the State to "foster respect for 914 international law and treaty obligations in the dealings of organised peoples with one another".
Even so, until the Municipal Law is changed to accommodate the Covenant what binds the courts is the former not the latter.
[918A B] 3.
Quondom affluence and current indigence without intervening dishonesty or bad faith in liquidating his liability can be consistent with Article 11 of the Covenant because then no detention is permissible under section 51 of the Code of Civil Procedure.
[921G] 4.
The high value of human dignity and the worth of the human person enshrined in Article 21, read with Articles 14 and 19, obligates the State not to incarcerate except under law which is fair, just and reasonable in its procedural essence.
To cast a person in prison because of his poverty and consequent inability to meet his contractual liability is appalling.
To be poor is no crime and to "recover" debts by the procedure of putting one in prison is flagrantly violative of Article 21 unless there is proof of the minimal fairness of his wilful failure to pay in spite of his sufficient means and absence of more terribly pressing claims on his means such as medical bills to treat cancer or other grave illness.
Unreasonableness and unfairness in such a procedure is inferable from Article 11 of the Covenant.
But this is precisely the interpretation put on the proviso to section 51 C.P.C. and the lethal blow of Article 21 cannot strike down the provision as interpreted.
[922A D]
|
ition No. 355 of 1979.
(Under Article 32 of the Constitution) P. R. Mridul, K. Jayaram, K. Ram Kumar and Aruneshwar Gupta for the Petitioner.
Soli J. Sorabjee, Solicitor General, R. N. Sachthey, E. C. Agarwala and Miss A. Subhashini for Respondent No. 1.
The Judgment of V. R. Krishna Iyer, section Murtaza Fazal Ali, and D. A. Desai, JJ. was delivered by Krishna Iyer, J. and concurring opinion of R. section Pathak and A. D. Koshal, JJ. was delivered by Pathak, J. KRISHNA IYER, J. Is it constitutionally valid or desirable on principle to permit a private citizen, who has but loose nexus with the victim of a crime, to invoke the special power under article 136 of the Constitution for leave to appeal against an acquittal of the alleged criminal thereby putting in peril his life or liberty in the absence of any legislative provision arming such officious outsider with the right to appeal? This issue, profound on its face but unsound on reflection, falls for decision in this writ petition under article 32 of the Constitution.
The facts, compressed into a single sentence, are that the peti 877 tioner was acquitted of a murder charge by the High Court in appeal but the brother of the deceased not the State nor even the first informant moved this Court under article 136, got leave and had his appeal heard which resulted in the petitioner (accused) being convicted and sentenced to the life term under section 302 I.P.C.
The present contention urged to upset that conviction, is that the leave to appeal and the subsequent proceedings were unconstitutional as violative of article 21 the procedural magna carta protective of life and liberty and, therefore, the sentence must fail.
This plea, faintly presented before this Court when the appeal was heard, was briefly considered and rightly rejected.
This second battle, doomed to fail like the first, demands of us a condensed ratiocination in negation of the contention hopefully urged by Sri Mridul, counsel for the petitioner.
Two inter laced issues arise and they turn on (a) the content and character of article 136 vis a vis article 21, and (b) the locus standi of a Good Samaritan, if we may use that expression to refer to a public spirited citizen seeking to trigger the legal process to see that justice is done to his neighbour.
Article 21, in its sublime brevity, guardians human liberty by insisting on the prescription of procedure established by law, not fiat as sine qua non for deprivation of personal freedom.
And those procedures so established must be fair, not fanciful, nor formal nor flimsy, as laid down in Maneka Gandhi 's case.
So, it is axiomatic that our constitutional jurisprudence mandates the State not to deprive a person of his personal liberty without adherence to fair procedure laid down by law.
The question is whether there is any procedure, fair or otherwise, which enables a kindly neighbour who is not a complainant or first informant, to appeal to the Supreme Court against an allegedly erroneous acquittal by the High Court.
The corpus juris contains no black letter law arming any such purely compassionate soul to approach this Court, argues Sri Mridul; and so, his client 's liberty has been deprived by a proceeding initiated by someone without any procedure established by law.
We see the dexterity in the advocacy but reject its efficacy.
Nor are we impressed with the submission that the brother of the deceased in the case, or any other high minded citizen, is an officious meddler who has no business nor grievance when the commission of grievous crime is going unpunished.
There is a spiritual sensitivity for our criminal justice system which approves of the view that a wrong done to anyone is a wrong done to oneself, although for pragmatic considerations the law leashes the right to initiate proceedings in some situations.
Again, 'justice is functionally outraged not only when an 878 innocent person is punished but also when a guilty criminal gets away with it stultifying the legal system.
The deep concern of the law is to track down, try and punish the culprit, and if found not guilty, to acquit the accused.
It is imperative under article 21 that there should be some civilised procedure for holding a man guilty and depriving him of his liberty.
Undoubtedly, this Court, if it grants leave under article 136 and eventually finds him guilty, deprives him of his liberty; and so the crucial question that falls for decision is as to whether there is any procedure as predicated by article 21 independent of or implicit in article 136.
It is apparent that there is no statutory provision which creates a right of appeal in favour of a stranger enabling him to challenge an acquittal by the High Court.
The Criminal Procedure Code does not create such a right of appeal and, speaking generally, a right of appeal is the creature of statute.
So it is submitted that before the court may grant special leave under article 136 there must be an antecedent right of appeal, absent which the question of leave by the court does not arise.
The argument is ingenious but inference is fallacious.
An insightful understanding of the sweep, scope and character of article 136 will easily dispel the dichotomy between an antecedent right of appeal and a subsequent grant of leave, which is the corner stone of the contention of the petitioner.
The jural reach and plural range of the judicial process to remove injustice in a given society is a sure index of the versatile genius of law in action as a delivery system of social justice.
By this standard, our constitutional order vests in the summit court a jurisdiction to do justice, at once omnipresent and omnipotent but controlled and guided by that refined yet flexible censor called judicial discretion.
This nidus of power and process, which master minds the broad observance throughout the Republic of justice according to law, is article 136.
Specificity being essential to legality, let us see if the broad spectrum spread out of article 136 fills the bill from the point of view of "procedure established by law".
In express terms, article 136 does not confer a right of appeal on a party as such but it confers a wide discretionary power on the Supreme Court to interfere in suitable cases.
The discretionary dimension is considerable but that relates to the power of the court.
The question is whether it spells by implication, a fair procedure as contemplated by article 21.
In our view, it does.
Article 136 is a special jurisdiction.
It is residuary power; it is extra ordinary in its amplitude, its limit, when it chases injustice, in the sky itself.
This Court functionally fulfils itself by reaching out to injustice 879 wherever it is and this power is largely derived in the common run of cases from article 136.
Is it merely a power in the Court to be exercised in any manner it fancies? Is there no procedural limitation in the manner of exercise and the occasion for exercise ? Is there no duty to Act fairly while hearing a case under article 136, either in the matter of grant of leave or, after such grant, in the final disposal of the appeal ? We have hardly any doubt that there is a procedure necessarily implicit in the power vested in the summit court.
It must be remembered that article 136 confers jurisdiction on the highest court.
The founding fathers unarguably intended in the very terms of article 136 that it shall be exercised by the highest judges of the land with scrupulous adherence to judicial principles well established by precedents in our jurisprudence.
Judicial discretion is canalised authority not arbitrary eccentricity.
Cardozo, with elegant accuracy, has observed : The judge, even when he is free, is still not wholly free.
He is not to innovate at pleasure.
He is not a knighterrant roaming at will in pursuit of his own ideal of beauty or of goodness.
He is to draw his inspiration from consecrated principles.
He is not to yield to spasmodic sentiment, to vague and unregulated benevolence.
He is to exercise a discretion informed by tradition, methodized by analogy, disciplined by system, and subordinated to 'the primordial necessity of order in the social life.
Wide enough in all conscience is the field of discretion that remains.
" It is manifest that article 136 is of composite structure, is power cum procedure power in that it vests jurisdiction in the Supreme Court, and procedure in that it spells a mode of hearing.
It obligates the exercise of judicial discretion and the mode of hearing so characteristic of the court process.
In short, there is an in built prescription of power and procedure in terms of article 136 which meets the demand of Art.21.
We may eye the issue slightly differently.
If article 21 is telescoped into article 136, the conclusion follows that fair procedure is imprinted on the special leave that the court may grant or refuse.
When a motion is made for leave to appeal against an acquittal, this Court appreciates the gravity of the peril to personal liberty involved in that proceeding.
It is fair to assume that while considering the petition under article 136 the court will pay attention to the question of liberty, the person who seeks such leave from the court, his motive and his locus standi and the weighty factors which persuade the court to grant special leave.
When this conspectus of processual circumstances and 880 criteria play upon the jurisdiction of the court under article 136, it is reasonable to conclude that the desideratum of fair procedure implied in article 21 is adequately answered.
Once we hold that article 136 is a composite provision which vests a wide jurisdiction and, by the very fact of entrusting this unique jurisdiction in the Supreme Court, postulates, inarticulately though, the methodology of exercising that power, nothing more remains in the objection of the petitioner.
It is open to the Court to grant special leave and the subsequent process of hearing are well established.
Thus, there is an integral provision of power cum procedure which answers with the desideratum of article 21 justifying deprivation of life and liberty.
The wider the discretionary power the more sparing its exercise.
Times out of number this Court has stressed that though parties promiscuously 'provoke ' this jurisdiction, the Court parsimoniously invokes the power.
Moreover, the Court may not, save in special situations, grant leave to one who is not eo nomine a party on the record.
Thus, procedural limitations exist and are governed by well worn rules of guidance.
Sri Mridul urged that every inquisitive benefactor or offensive adventurer cannot 'rush in ' and upset a verdict of acquittal by resort to article 136.
This is really a matter for exercise of judicial discretion and the Court can be trusted to bear in mind time honoured practices and the values of article 21.
But no dogmatic proscription of leave under article 136 to a non party applicant can be laid down inflexibly.
For access to justice is not a cloistered virtue.
It is true that the strictest vigilance over abuse of the process of the court, especially at the expensively exalted level of the Supreme Court, should be maintained and ordinarily meddlesome bystanders should not be granted 'visa '.
It is also true that in the criminal jurisdiction this strictness applies a fortiori since an adverse verdict from this Court may result in irretrievable injury to life or liberty.
Having said this, we must emphasise that we are living in times when many societal pollutants create new problems of unredressed grievance when the State becomes the sole repository for initiation of criminal action.
Sometimes, pachydermic indifference of bureaucratic officials, at other times politicisation of higher functionaries may result in refusal to take a case to this Court under article 136 even though the justice of the lis may well justify it.
While "the criminal law should not be used as a weapon in personal vendettas between private individuals", as Lord Shawcross once wrote, in the absence of an indepen 881 dent prosecution authority easily accessible to every citizen, a wider connotation of the expression 'standing ' is necessary for article 136 to further its mission.
There are jurisdictions in which private individuals not the State alone may institute criminal proceedings.
The Law Reform Commission (Australia) in its Discussion Paper No. 4 on "Access to Courts I Standing: Public Interest Suits" wrote: The general rule, at the present time, is that anyone may commence proceedings and prosecute in the magistrate 's court.
The argument for retention of that right arises at either end of the spectrum the great cases and the frequent petty cases.
The great cases are those touching government itself a Watergate or a Poulson.
However independent they may legally be any public official, police or prosecuting authority, must be subject to some government supervision and be dependent on government funds; its officers will inevitably have personal links with government.
They will be part of the "establishment".
There may be cases where a decision not to prosecute a case having political ramifications will be seen, rightly or wrongly, as politically motivated.
Accepting the possibility of occasional abuse the Commission sees merit in retaining some right of a citizen to ventilate such a matter in the courts.
Even the English System, as pointed by the Discussion paper, permits a private citizen to file an indictment.
In our view, the narrow limits set, in vintage English law, into the concept of 'person aggrieved ' and 'standing ' needs liberalisation in our democratic situation.
In Dabholkar 's case this court imparted such a wider meaning.
The American Supreme Court relaxed the restrictive attitude towards 'standing ' in the famous case of Baker vs Carr.
Lord Denning, in the notable case of the Attorney General of the Gambia vs Pierra Sarr N ' Jie, spoke thus: . the words 'person aggrieved ' are of wide import and should not be subjected to a restrictive interpretation.
They do not include, of course, a mere busybody who is interfering in things which do not concern him; Prof. section A. de Smith takes the same view : All developed legal systems have had to face the problem of adjusting conflicts between two aspects of the public 882 interest the desirability of encouraging individual citizens to participate actively in the enforcement of the law, and the undesirability of encouraging the professional litigant and the meddlesome interloper to invoke the jurisdiction of the courts in matters that do not concern him.
Prof. H.W.R. Wade strikes a similar note : In other words, certiorari is not confined by a narrow conception of locus standi.
It contains an element of the actio popularis.
This is because it looks beyond the personal rights of the applicant; it is designed to keep the machinery of justice in proper working order by preventing inferior tribunals and public authorities from abusing their powers.
In Dabholkar 's case, one of us wrote in his separate opinion : The possible apprehension that widening legal standing with a public connotation may unloose a food of litigation which may overwhelm the judges is misplaced because public resort to court to suppress public mischief is a tribute to the justice system.
This view is echoed by the Australian Law Reforms Commission.
The crucial significance of access jurisprudence has been best expressed by Cappelletti: The right of effective access to justice has emerged with the new social rights.
Indeed, it is of paramount importance among these new rights since, clearly, the enjoyment of traditional as well as new social rights presupposes mechanisms for their effective protection.
Such protection, moreover, is best assured by a workable remedy within the framework of the judicial system.
Effective access to justice can thus be seen as the most basic requirement the most basic 'human right ' of a system which purports to guarantee legal rights.
We are thus satisfied that the bogey of busybodies blackmailing adversaries through frivolous invocation of Art.136 is chimerical.
Access to Justice to every bona fide seeker is a democratic dimension of remedial jurisprudence even as public interest litigation, class action.
883 pro bono proceedings, are.
We cannot dwell in the home of processual obsolescence when our Constitution highlights social justice as a goal.
We hold that there is no merit in the contentions of the Writ petitioner and dismiss the petition.
PATHAK, J: The High Court of Madras in its appellate jurisdiction acquitted the petitioner, Sadhanantham, of charges under section 302 and section 148, I.P.C. Arunachalam, a brother of the deceased, petitioned to this Court under Article 136 of the Constitution for special leave to appeal against the acquittal.
The court granted special leave, and ultimately allowed the appeal, Arunachalam vs P.S.R. Sadhanantham, and setting aside the judgment of the High Court restored the conviction and sentence imposed by the trial court under section 302, I.P.C. The petitioner has filed this writ petition contending that the judgment and order of this Court is a nullity and should be set aside.
The principal contention is that Article 136 did not empower this Court to grant special leave to Arunachalam (the third respondent) and the grant of special leave by the Court and its entertaining the appeal violates Article 21 of the Constitution.
The maintainability of the appeal on the ground that Arunachalam was not entitled to petition under Article 136 of the Constitution for special leave was challenged before the Bench hearing the appeal, but the Bench over ruled the objection holding that it had ample power under Article 136 to entertain the special leave petition.
The learned Judges laid down that the Court had jurisdiction to entertain appeals against judgments of acquittal by the High Court at the instance of private parties.
We have read the judgment of our learned brother V. R. Krishna Iyer, but because of the importance of the question we consider it necessary to set down our own view.
The expense of the appellate jurisdiction of the Supreme Court flows from an entire code of provisions contained in the Constitution.
It includes an appeal on certificate by the High Court under Article 132 that the case involves a substantial question of law as to the interpretation of the Constitution in a civil, criminal or other proceeding disposed of by a judgment, decree or final order of a High Court, and an appeal on certificate under Article 133 that the case involves a substantial question of law of general importance which calls for decision by the Supreme Court.
In a criminal proceeding, disposed of by a judgment or final order or sentence of a High Court, besides cases where the High Court has convicted the accused and sentenced him to death either on reversing in appeal an order of acquittal by 884 the trial court or on the case being withdrawn from the subordinate court to itself for trial, an appeal lies to the Supreme Court where the High Court "certifies that the case is fit one for appeal to the Supreme Court".
Article 135 confers jurisdiction and power on the Supreme Court with respect to any matter to which Article 133 or Article 134 does not apply if such jurisdiction and power were exercisable by the Federal Court immediately before the commencement of the constitution.
Article 136 declares: "136.
(1) Notwithstanding anything in this Chapter, the Supreme Court may, in its discretion, grant special leave to appeal from any judgment, decree, determination, sentence or order in any cause or matter passed or made by any court or tribunal in the territory of India." Then follow other provisions to which we need not refer.
Plainly, the jurisdiction conferred by Article 136 seeks to confer on this Court the widest conceivable range of judicial power, making it perhaps among the most powerful courts in the world.
The judicial power reaches out to every judgment, decree, determination, sentence or order effecting the rights and obligations of persons in civil matters, of life and liberty in criminal matters as well as matters touching the Revenues of the State.
It is an attempt to ensure that the foundations of the Indian Republic, which have been laid on the bed rock of justice, are not undermined by injustice anywhere in the land; Bharat Bank Ltd. vs Employees of the Bharat Bank Ltd.
As the Court observed in Durga Shankar Mehta vs Thakur Raghuraj Singh and Others.
Article 136 vests in the Supreme Court a plenary jurisdiction in the matter of entertaining and hearing appeals by grant of special leave.
Nonetheless, there is a limitation which, in our opinion, is of immediate relevance.
It is a limitation inbuilt into the jurisdiction of the Court and flows from the nature and character of the case intended to be brought before the Court.
It is a limitation which requires compliance despite the apparent plenitude of power vested in the Court.
When a petition is presented to the Court under Article 136, the Court will have due regard to the nature and character of the cause sought to be brought before it when entertaining and disposing of the petition.
The question is: Does the brother of a deceased person, who has been murdered, possess the right to petition under Article 136 of the 885 Constitution for special leave to appeal against an acquittal of the accused ? It is a question which touches directly on the nature of a crime and of a criminal proceeding.
Several different definitions of a crime have been attempted (and there are some jurists who say that it is impossible of definition), but there is broad agreement on one attribute of its nature, that it is an illegal act which amounts to a wrong against the public welfare.
Mogul Steamship Co. vs Cm Greger Gew & Co. As a concept, crime has been defined as "any conduct which a sufficiently powerful section of any given community feels to be destructive of its own interests, as endangering its safety, stability or comfort," which "it usually regards as especially heinous and seeks to repress with corresponding severity; if possible it secured that the forces which the sovereign power in the State can command shall be utilised to prevent the mischief or to punish anyone who is guilty of it.
" Crimes were defined by Blackstone as "the breach and violation of public rights and duties which affect the whole community." A crime, therefore, is an act deemed by law to be harmful to society in general even though its immediate victim is an individual.
Murder injures primarily the particular victim, but its blatant disregard of human life puts it beyond a matter of mere compensation between the murderer and the victim 's family.
Those who commit such acts are proceeded against by the State in order that, if convicted, they may be punished.
The notion of crime as a threat to the whole community, is the material counterpart of the formal rule that the State alone is master of a criminal prosecution.
In a criminal proceeding the State stands forward as prosecutor on public grounds.
No private person has a direct interest in a criminal proceeding, although exception may be made by the statute in certain cases.
It is common knowledge that a criminal prosecution is not intended for the private satisfaction of a personal vendetta or revenge.
In India also, the criminal law envisages the State as the prosecutor.
Under the Code of Criminal Procedure, the machinery of the 886 State is set in motion on information received by the police or on a complaint filed by a private person before a Magistrate.
If the case proceeds to trial and the accused is acquitted, the right to appeal against the acquittal is closely circumscribed.
Under the Code of Criminal Procedure, 1895 the State was entitled to appeal to the High Court, and the complainant could do so only if granted special leave to appeal by the High Court.
The right of appeal was not given to other interested persons.
Under the Code of Criminal Procedure 1973, the right of appeal vested in the State has now been made subject to leave being granted to the State by the High Court.
The complainant continues to be subject to the pre requisite condition that he must obtain special leave to appeal.
The fetters so imposed on the right to appeal are prompted by the reluctance to expose a person, who has been acquitted by a competent court of a criminal charge, to the anxiety and tension of a further examination of the case, even though it is held by a superior court.
The Law Commission of India gave anxious thought to this matter, and while noting that the Code recognised a few exceptions by way of permitting a person aggrieved to initiate proceedings in certain cases and permitting the complainant to appeal against an acquittal with special leave of the High Court, expressed itself against the general desirability to encourage appeals against acquittal.
It referred to the common law jurisprudence obtaining in England and other countries where a limited right of appeal against acquittal was vested in the State and where the emphasis rested on the need to decide a point of law of general importance in the interests of the general administration and proper development of the criminal law.
But simultaneously the Law Commission also noted that if the right to appeal against acquittal was retained and extended to a complainant the law should logically cover also cases not instituted on complaint.
It observed: "Extreme cases of manifest injustice, where the Government fails to act, and the party aggrieved has a strong feeling that the matter requires further consideration, should not, in our view, be left to the mercy of the Government.
To inspire and maintain confidence in the administration of justice, that limited right of appeal with leave given to a private party should be retained, and should embrace cases initiated on private complaint or otherwise at the instance of an aggrieved person.
" 887 However, when the Criminal Procedure Code, 1973 was enacted the statute, as we have seen, confined the right to appeal, in the case of private parties to a complainant.
This is, as it were, a material indication of the policy of the law.
Having regard to the fundamental nature of a criminal proceeding to which reference has been made, it is now appropriate to examine the considerations which the Court should keep in mind when entertaining a petition for special leave to appeal by a private party against an order of acquittal.
From what has been said, it is plain that 'access to the jurisdiction under Article 136 cannot be permitted to a private party who seeks to employ the judicial process for the satisfaction of private revenge or personal vendetta.
Nor can it be permitted as an instrument of coercion where a civil action would lie.
In every case, the Court is bound to consider what is the interest which brings the petitioner to court and whether the interest of the public community will benefit by the grant of special leave. 'In a jurisprudence which elevates the right to life and liberty to a fundamental priority, it is incumbent upon the court to closely scrutinise the motives and urges of those who seek to employ its process against the life or liberty of another. ' In this enquiry, the Court would perhaps prefer to be satisfied whether or not the State has good reason for not coming forward itself to petition for special leave.
We think that the Court should entertain a special leave petition filed by a private party, other than the complainant, in those cases only where it is convinced that the public interest justifies an appeal against the acquittal and that the State has refrained from petitioning for special leave for reasons which do not bear on the public interest but are prompted by private influence want of bona fide and other extraneous considerations.
We would restrict accordingly the right of a private party, other than the complainant, to petition for special leave against an order of acquittal.
It is perhaps desirable to keep in mind that what follows from the grant of special leave is an appeal, and the jurisdiction must, therefore, be invoked by a petitioner possessing a locus standi recognised in law.
In regard to the question whether the procedure followed by this Court in disposing of a petition for special leave under Article 136 is consistent with the procedure contemplated by Article 21, we have no hesitation in holding that the principle is inbuilt within the terms of Article 136 itself that the Court in exercising its jurisdiction will do so as a court of law following the well known norms of procedure which have been recognised for long as governing and informing the 888 proceedings of all courts.
We have no hesitation in holding that Article 21 is not violated.
The petitioner has failed to establish that there is a case for interfering with the judgment of this Court allowing the appeal.
The writ petition is dismissed, but in the circumstances there is no order as to costs.
N.V.K. Petition dismissed.
| IN-Abs | The petitioner was acquitted by the High Court in appeal, of charges under sections 302 and 148 I.P.C., but the brother of the deceased not the State nor even the first informant, petitioned this Court under Article 136 of the Constitution for special leave to appeal against acquittal, got leave, had his appeal heard, which was ultimately allowed the court setting aside the judgment of the High Court, and restoring the conviction and sentence imposed by the trial court under section 302 I.P.C. (Arunachalam vs section R. Sadhananthan ; The petitioner filed the writ petition under Article 32 of the Constitution, contending: (1) that Article 136 did not empower the grant of special leave to the brother of the deceased and the grant of special leave by the Court and its entertaining the appeal violated Article 21 of the Constitution, and (2) before the Court may grant special leave under Article 136 there must be an antecedent right of appeal absent which the question of leave by the Court does not arise.
Dismissing the petition, ^ HELD: (per Krishna Iyer, Murtaza Fazal Ali and Desai, JJ).
Justice is functionally outraged not only when an innocent person is punished but also when a guilty criminal gets away with it stultifying the legal system.
[877H, 878A] 2.
An insightful understanding of the sweep, scope and character of article 136 will easily dispel the dichotomy between an antecedent right of appeal and a subsequent grant of leave.
[878D] 3.
The jural reach and plural range of the judicial process to remove injustice in a given society is a sure index of the versatile genius of law in action as a delivery system of social justice.
Our constitutional order vests in the summit court a jurisdiction to do justice, at once omnipresent and omnipotent but controlled and guided by that refined yet flexible censor called judicial discretion.
This nidus of power and process, which master minds the broad observance throughout the Republic of justice according to law, is article 136.
[878E F] 874 4.
In express terms, article 136 does not confer a right of appeal on a party as such but it confers a wide discretionary power on the Supreme Court to interfere in suitable cases.
Article 136 is a special jurisdiction.
It is residuary power; it is extra ordinary in its amplitude, its limit, when it chases injustice, is the sky itself.
This Court functionally fulfils itself by reaching out to injustice wherever it is and this power is largely derived in the common run of cases from article 136.
[878G H, 879A] 5.
There is a procedure necessarily implicit in the power vested in the summit court.
It must be remembered that article 136 confers jurisdiction on the highest court.
The founding fathers unarguably intended in the very terms of article 136 that it shall be exercised by the highest judges of the land with scrupulous adherence to judicial principles well established by precedents in our jurisprudence.
Judicial discretion is canalised authority, not arbitrary eccentricity.
[879A C] 6.
It is manifest that article 136 is of composite structure, is power cum procedure power in that it vests jurisdiction in the Supreme Court, and procedure in that it spells a mode of hearing.
It obligates the exercise of judicial discretion and the mode of hearing so characteristic of the court process.
In short, there is an in built prescription of power and procedure in terms of article 136 which meets the demand of article 21.
[879E F] 7.
If article 21 is telescoped into article 136, it follows that fair procedure is imprinted on the special leave that the court may grant or refuse.
With a motion is made for leave to appeal against an acquittal, this Court appreciates the gravity of the peril to personal liberty involved in that proceeding.
While considering the petition under article 136 the court will pay attention to the question of liberty, the person who seeks such leave from the court, his motive and his locus standi and the weighty factors which persuade the court to grant special leave.
[879F G] 8. 'The wider the discretionary power the more sparing its exercise.
The Court may not, save in special situations, grant leave to one who is not eo nomine a party on the record.
[880C D] 9.
Sometimes indifference of bureaucratic officials, at other times politicisation of higher functionaries may result in refusal to take a case to this Court under article 136 even though the justice of the lis may well justify it.
In the absence of an independent prosecution authority easily accessible to every citizen, a wider connotation of the expression 'standing ' is necessary for article 136 to further its mission.
There are jurisdictions in which private individuals not the State alone may institute criminal proceedings.
[880G H, 881A] 10.
The narrow limits set, into the concept of 'person aggrieved ' and 'standing ' needs liberalisation.
[881E] Baker vs Carr ; , Attorney General of the Gambia vs Pierra Sarr N 'Jie, , Bar Council of Maharashtra vs M. V. Dabholkar, [1975] 2 SCC 702 referred to.
(Per Pathak and Koshal, JJ concurring).
Article 136 seeks to confer on the Supreme Court the widest conceivable range of judicial power, making it perhaps among the most powerful courts in the world.
The judicial power reaches out to every judgment, decree, determi 875 nation, sentence or order affecting the rights and obligations of persons in civil matters, of life and liberty in criminal matters as well as matters touching the Revenues of the State.
It is an attempt to ensure that the foundations of the Indian Republic, which have been laid on the bed rock of justice, are not undermined by justice anywhere in the land.
[884CE] Bharat Bank Ltd. vs Employees of the Bharat Bank Ltd. ; , 474, Durga Shankar Mehta vs Thakur Raghuraj Singh and Others, [1955] 1 S.C.R. 267, 272, referred to.
Article 136 vests in the Supreme Court, a plenary jurisdiction in the matter of entertaining and hearing appeals by grant of special leave.
However, a limitation is inbuilt into the jurisdiction of the Court and it flows from the nature and character of the case intended to be brought before the Court, and it requires compliance despite the apparent plenitude of power vested in the Court.
When a petition is presented to the Court under Article 136, the Court will have due regard to the nature and character of the cause sought to be brought before it when entertaining and disposing of the petition.
[884E G] 3.
A crime is an act deemed by law to be harmful to society in general, even though its immediate victim is an individual.
Murder injures primarily the particular victim, but its blatant disregard of human life puts it beyond a matter of mere compensation between the murderer and the victim 's family.
Those who commit such acts are proceeded against by the State in order that, if convicted, they may be punished.
No private person has a direct interest in a criminal proceeding although exception may be made by the Statute in certain cases.
[885C F] Kenny 's Outlines of Criminal Law, 16th Edn., p. 2 para 3 Blackstones Commentaries, III p. 2, Mogul Steamship Co. vs Mc Greger Gew & Co. ; referred to.
The notion of crime as a threat to the whole community is the material counter part of the formal rule that the State alone is master of a criminal prosecution.
In a criminal proceeding, the State stands forward as prosecutor on public grounds.
No private person has a direct interest in a criminal proceeding, although exception may be made by the statute in certain cases.
A criminal prosecution is not intended for the private satisfaction of a personal vendetta or revenge.
In India, the criminal law envisages the State as the prosecutor.
[885E F] Salmond on Jurisprudence, 12th Edn.
p. 92 para 14 and Current Legal Problems, 1955; Glanville Williams, "The Definition of Crime", p. 107 at p. 122; referred to.
Under the Code of Criminal Procedure 1973, section 378, the right of appeal vested in the State has now been made subject to leave being granted to the State by the High Court.
The complainant continues to be subject to the prerequisite condition that he must obtain special leave to appeal.
The fetters so imposed on the right to appeal are prompted by the reluctance to expose a person, who has been acquitted by a competent court of a criminal charge, to the anxiety and tension of a further examination of the case, even though it is held by a superior court.
[886B C] 876 Law Commission of India 48th Report 1972 pp.
17 21 referred to.
What follows from the grant of special leave is an appeal, and the jurisdiction must, therefore, be invoked by a petitioner possessing a locus standi recognised in law.
[887F G] 7.
Access to the jurisdiction under Article 136 cannot be permitted to a private party who seeks to employ the judicial process for the satisfaction of private revenge or personal vendetta.
Nor can it be permitted as an instrument of coercion where a civil action would lie.
In every case, the Court is bound to consider what is the interest which brings the petitioner to court and whether the interest of the public community will benefit by the grant of special leave.
[887B C] 8.
The Court should entertain a special leave petition filed by a private party, other than the complainant, in those cases only where it is convinced that the public interest justifies an appeal against the acquittal and that the State has refrained from petitioning for special leave for reasons which do not bear on the public interest but are prompted by private influence, want of bona fide and other extraneous considerations.
[887E F] 9.
The procedure followed by this Court in disposing of a petition under Article 136 is consistent with the procedure contemplated by Article 21 for the Court in exercising its jurisdiction will do so as a court of law following the well known norms of procedure which have been recognised for long as governing and informing the proceedings of all courts.
Article 21 is, therefore, not violated.
[887G H, 888A]
|
tition Nos. 151, 187, 238, 458, 1038, 1069 and 1277 of 1979.
(Under Article 32 of the Constitution) R.K. Garg, section Balakrishnan and M.K.D. Namboodiri for the Petitioner, in W.P. No. 151/79.
Soli J. Sorabjee Sol.
General, E.C. Agarwala, R.N. Sachthey and Miss A. Subhashini for the Respondent, in W.P. No. 151/1979.
Petitioner in person in W.P. No. 1038/79.
P.R. Mridul and H.K. Puri for the Petitioner, in W.P. No. 187/79.
A.K. Gupta, Vivek Seth, Miss Madhu Moolchandani and O.P. Rana for the Respondent No. 1, in W.P. 187/79.
Soli J. Sorabjee, Sol.
E.C. Agarwala, R.N. Sachthey and Miss A. Subhashini for the Respondent No. 2 in W.P. No. 187/79.
A.K. Ganguli and D.P. Mukherjee for the Petitioner in W.P. 238/79.
A.K. Ganguli and O.P. Rana for the petitioner in W.P. No. 458/79.
Soli J. Sorabjee, Sol.
General, R.N. Sachthey and Miss A. Subhashini for the Respondent in W.P. Nos. 458 & 238/79.
G.L. Sanghi and Miss Lily Thomas for the Petitioners in W.P. Nos.
1069 & 1277/79.
Dr. L.M. Singhvi and Sardar Bahadur Saharya for the intervener.
The Judgment of V.R. Krishna Iyer, section Murtaza Fazal Ali and D.A. Desai, JJ. was delivered by Krishna Iyer, J., R.S. Pathak, J. gave a separate Opinion on behalf of A.D. Koshal, J. and himself.
KRISHNA IYER, J. Tersely expressed, this bunch of cases challenges the vires of a recent amendment made by the Supreme Court under article 145 in the matter of review petitions whereby the judges will decide in circulation, without the aid of oral submissions, whether there is merit in the motion and, in their discretion, choose to hear further arguments in court.
892 Is orality in advocacy that genius of Indo Anglian Justice an inalienable and ubiquitous presence in the court process, or does it admit of abbreviated appearance and more pertinent to the point here discretionary eclipse, at least when it has been preceded by a sufficient oral session ? Secondly is hearing on Bench in public, in contrast to considering the matter in conferential circulation, the only hall mark of judicial justice, absent which the proceeding always violates the norms of equality implicit in article 14 the limits of "reasonableness" bedrocked in article 19, the procedural fairness rooted in article 21 ? And, finally, by resort to operational secrecy, does rationing or burking of oral hearing travesty the values of our Justice System ? These basic problems of the forensic process, of pervasive impact and seminal import, fall for consideration in these writ petitions under article 32 of the Constitution.
The charge is that the novel expedient of substitution of oral arguments by written submissions and orders in circulation dispensing with public sitting, save where and that may be rare the judges in their discretion choose to hear arguments in court, is a dangerous deviance from the fundamentals of the Judicial Process.
Apprehending maybe, the futuristic repercussions of a decision on these questions, even though now restricted to review petitions, in other fields of 'hearing ' at a later time, the Supreme Court Bar Association has intervened and argued to impugn the amended rule through its President, Dr. L. M. Singhvi, in supplementation of parties ' submissions.
We have allowed even other advocates to make brief contributions, because, when this Court considers issues of moment and pronounces thereon, the law so declared binds all: and it is ensouled in democratic propriety that the voice of reason and instruction be received from every permissible source in the nation, if processed according to cursus curiae.
This participative principle lends people 's legitimation to the judicial process and strengthens the credentials of the rule of law.
The composite question, which settles the fate of these petitions, emerges this way.
article 137 provides for review of judgments or orders of this Court, subject to the provisions of any law made by Parliament or any rule made under article 145.
We are here concerned with a rule made by this Court.
The rule making power under article 145 is geared to 'regulating generally the practice and procedure of the Court '.
In particular, article 145(1) (b) and (e) authorise such 'judicial ' legislation in the shape of rules as to "the procedure for hearing appeals and other matters pertaining to appeals" and also "as to the conditions subject to which any judgment pronounced or order made by the Court may be reviewed and the procedure for such review".
Such rules, like any other law, are subject to the imperatives of Part III 893 and become non est if violative of the proscriptions and prescriptions of the Constitution vide Premchand Garg 's case.
Even the Supreme Court, in the scheme of our Republic, is no imperium in imperio.
The substantive power of review and the procedure for its exercise are essential for any judicial system if unwitting injustice is to be obviated to the extent pragmatically possible, without being blinded by any claim to impervious infallibility in the first judgment.
Even judges, more than other mortals, to correct injustice if the error is discovered within working limits.
Thus, the root principle of judicial review is profound.
Judge Learned Hand commended to the judges the great rule of humility contained in the oft repeated words of Cromwell: "I beseech ye in the bowels of Christ, think that ye may be mistaken" said Oliver Cromwell just before the battle of Dunbar.
These words Judge Hand said he would like to have written "over the portals of every church, every court house and at every cross road in the nation." (emphasis added) Such is the high minded tolerance with which this Court re examines its own orders to eliminate the happenstance of injustice unhampered by judicial hubris.
This Court had framed rules for review, right from the start, but a certain amendment, recently made, has curtailed oral hearing in court as a matter of course and this measure of discretionary truncation is attacked as fundamentally offensive to judicial justice of which this Court is the highest custodian.
"If the salt hath lost his savour, where with shall it be salted ?" Surely, this Court 's procedure should be the paradigm, nothing short of it.
So, the question is whether it is so heathen to make oral hearing discretionary at the review stage and at the Supreme Court level that the rule can be condemned as constitutionally apostate ? Another fatal infirmity was also pointed out as the arguments proceeded, viz., that a hostile discrimination had been made by r. 2(1) against litigants who moved for review in criminal proceedings as against those in the civil jurisdiction.
He will relegate it for consideration to a later stage.
The relevant original rules ran thus: 2.
(1) An application for review shall be by a petition, and shall be filed within thirty days from the date of the 894 judgment or order sought to be reviewed.
It shall set out clearly the grounds for review and shall, unless otherwise ordered by the Court, be accompanied by a certificate from the Advocate who appeared at the hearing of the case for the party seeking review, or where the party appeared in person, from any advocate of this Court, that it is supported by proper grounds.
The certificate shall be in the form of a reasoned opinion.
(2) No application for review in a civil proceeding shall be entertained unless the party seeking review furnishes to the Registrar of this Court at the time of filing the petition for review, cash security to the extent of two thousand rupees for the costs of the opposite party.
An application for review shall be posted before the Court for preliminary hearing and order as to the issue of notice to the opposite party.
Upon such hearing, the Court may either dismiss the petition or direct a notice to the opposite party and adjourn the hearing for such party to be heard.
A petition for review shall as far as practicable be posted before the same Judge or Bench of Judges that delivered the judgment or order sought to be reviewed.
Where on application for review the Court reverses or modifies its former decision in the case on the ground of mistake of law or fact, the Court may, if it thinks fit in the interests of justice to do so, direct the refund to the petitioner of the court fee paid on the application in whole or in part, as it may think fit.
The corresponding amended rules read thus: 2.
(1) An application for review shall be by a petition, and shall be filed within thirty days from the date of the judgment or order sought to be reviewed.
It shall set out clearly the grounds for review.
(2) No change.
[Unless otherwise ordered by the Court] an application for review shall be disposed of by circulation without any oral arguments, but the petitioner may supplement his petition by additional written arguments.
The Court may either dismiss the petition or direct notice to the oppo 895 site party.
An application for review shall as far as practicable be circulated to the same Judge or Bench of Judges that delivered the judgment or order sought to be reviewed.
No change.
Where an application for review of any judgment or order has been made and disposed of, no further application for review shall be entertained in the same matter.
(newly inserted) The vital difference, vis a vis the first point, is that now oral hearing is no longer a right of the petitioner but facultative with the Bench and the 'circulatory ' system replaces the public hearing method.
A brief study of the anatomy of the rules will highlight the points urged.
Dissecting the rules and comparing their directives we find that unchecked review has never been the rule.
It must be supported by proper grounds.
Otherwise, every disappointed litigant may avenge his defeat by a routine review adventure and thus obstruct the disposal of the 'virgin ' dockets waiting in the long queue for preliminary screening or careful final hearing.
It is perfectly reasonable to insist that the existence of proper grounds for review should be responsibly vouched for before the further time of the court is taken.
So, the original rule required a certificate to that effect by the advocate who earlier had appeared in the case.
Here, counsel functioned as an officer of the court and, under the mandate of the old r. 2(1) the Court granted or refused a certificate of review worthiness.
If it was so certified, then a preliminary oral hearing followed.
After such oral argument, the court issued notice to the other side or dismissed the petition.
The system was fair enough if the certification process worked well and real errors and apparent mistakes marring the original judgment were the restricted grounds for review.
But as it turned out, laxity in certification and promiscuity in filing review applications crowded the court with 'unwanted review babies '.
The docket crisis which quaked the calendar deepened, to the detriment of litigative justice to the deserving who awaited their turn for hearing.
Even otherwise, frivolous motions for review would ignite the 'gambling ' element in litigation with the finality of judgments even by the highest court, being left in suspense.
If, every vanquished party has a fling at 'review ' lucky dip and if, perchance, notice were issued in some cases to the opponent the latter and, of course, the former, would be put to great expense and anxiety.
The very solemnity of finality, so crucial to judicial justice, would be frustrated if such a game were to become popular.
And it did become popular, as 896 experience showed.
The inflow of meritless review petitions, which were heard and dismissed, interrupted the stream of public justice.
This Court in Sow Chandra Kanta and Anr.
vs Sheikh Habib was faced with this problem and, while dismissing the review petition, observed how the opportunity for correction of grave errors was being perverted into the purchase of a fresh appeal to the same court against its own appellate or other judgment on the same grounds which were earlier rejected.
This Court said: A review of a judgment is a serious step and reluctant resort to it is proper only where a glaring omission or patent mistake or like grave error has crept in earlier by judicial fallibility.
A mere repetition, through different counsel, of old and over ruled arguments, a second trip over ineffectually covered ground or minor mistakes of inconsequential import are obviously insufficient.
The very strict need for compliance with these factors is the rationale behind the insistence of counsel 's certificate which should not be a routine affair or a habitual step.
It is neither fairness to the court which decided nor awareness of the precious public time lost what with a huge backlog of dockets waiting in the queue for disposal, for counsel to issue easy certificates for entertainment of review and fight over again the same battle which has been fought and lost.
The Bench and the Bar, we are sure, are jointly concerned in the conservation of judicial time for maximum use.
We regret to say that this case is typical of the unfortunate but frequent phenomenon of repeat performance with the review label as passport.
Nothing which we did not hear them has been heard now except a couple of rulings on points earlier put forward.
Maybe, as counsel now urges and then pressed, our order refusing special leave was capable of a different course.
The present stage is not a virgin ground but review of an earlier order which has the normal feature of finality.
These observations were symptomatic of the 'review syndrome ' which, therefore, demanded remedying.
And the amended rule purposefully incarnated under such auspices to remove the evil of reckless reviews by the introduction of preliminary judicial screening in circulation, replacing counsel 's certification with court 's scanning exercise an added but necessitous judicial burden.
If the review petition and written submissions (for which provision was made) convinced the Court, 897 prima facie, that material error had marred the justice or legality of the earlier judgment or order the case would be posted for oral hearing in court.
Otherwise, not. 'Certworthiness ' an American judicial shorthand for 'certificate worthiness ' was, by this amendment, shifted from counsel to court.
This, in pith and substance, is the rationale of the amended rule.
Counsel, at one stage, asked whether there was back up empirical research to warrant the assumptions in the amendment, whether facts and figures about the number and nature of wasted 'review ' time of court and a host of other related aspects were available.
No such material is before us now.
It is fair to confess that the scientific method of undertaking research and study into public problems as prelude to legislation is a 'consummation devoutly to be wished ' and lamentably lacking in our country; and court management, with special reference to maximisation of judicial time a matter of great national moment is a problem the very existence of which is currently beyond the keen of juristic research.
Where 'awareness ' is absent, ad hocism is inevitable.
But here the experiential evidence of the judges who considered and decided on the amendment and the inference available from the decisions on review petitions make good the proposition or makes do for empirical research.
Be that as it may, we are satisfied that enough justification exists in the daily experience of this Court to warrant the change the way it has been done.
Even so, constitutional canons cannot be contravened even by pragmatic compulsions.
Paramountcy is paramountcy and exigency must bow before it.
What, then, are the paramount principles of constitutionality violated by the amended rule ? Absence of public hearing and oral presentation are the vices identified in counsel 's arguments.
Two major submissions were made to invalidate r. 2(1) .
The scuttling of oral presentation and open hearing is subversive of the basic creed that public justice shall be rendered from the public seat, not in secret conclave, that hearing becomes 'deaf ' if oral impressiveness is inhibited by the circulation process, more congenial to the seclusion of bureaucratic cells, fed on files, than to the audio visual argumentation heard in the halls of court, which is the insignia of judicial justice.
Secrecy and circulation are the negation of judicial procedure.
A review is a judicial proceeding and its hearing, to fill the bill, must not run away from the essentials of processual jurisprudence, however allergic some judges may be to the 'sound system ' which is the heart of our forensics.
With allotropic modifications, counsel 's arguments stressed this recurrent theme.
898 We must make it perfectly plain, right at the outset, that audi alterem partem is a basic value of our judicial system.
Hearing the party affected is too deeply embedded in the consciousness of our constitutional order.
The question is about the quality, content and character of 'hearing ' in the special 'review ' situation.
Incidentally, we may deal with oral hearing and its importance in the court process, the possibilities of its miniaturisation and, in certain categories its substitution by written submissions.
We agree that public hearing is of paramount significance.
Justice, in the Indian Republic, is public; and if judges shun the halls of court, read papers at home confer in private and issue final fiats without listening to the bar as the representative of the seekers of justice, the rule of law could well darken into an arcane trick and back door diktats issued from 'robed ' adjudicators strain the escutcheon of justice.
We also agree that oral advocacy has a non fungible importance in the forensic process which the most brilliant brief cannot match and the most alert judge cannot go without.
The intellectual jallywork of intricate legal reasoning and impassioned sculpture of delicate factual emphasis may often be beyond the craftsmanship of pen and paper.
There is no controversy that disposal by circulation, Secretariat fashion, cannot become a general judicial technique nor silent notings replace Bench Bar dialogues.
We must clarify one point. 'Circulation ', in the judicial context, merely means, not in court through oral arguments but by discussion at judicial conference.
Judges, even under the amended rule, must meet, collectively cerebrate and reach conclusions.
Movement of files with notings cannot make do.
Otherwise, mutual persuasion, reasoned dissent and joint judgment will be defeated and machinisation of opinion and assertions of views in absentia will deprive judicial notices of that mental cross fertilisation essential for a Bench decision.
The learned Solicitor General strongly urged that he was at one with counsel opposite on this point.
We agree.
The key question is different.
Does it mean that by receiving written arguments as provided in the new rule, and reading and discussing at the conference table, as distinguished from the 'robed ' appearance on the Bench and hearing oral submissions, what is perpetrated is so arbitrary, unfair and unreasonable a 'Pantomini ' as to crescendo into unconstitutionality ? This phantasmagoric distortion must be dismissed as too morbid to be regarded seriously in the matter of review petitions at the Supreme Court level.
Let us look at the actuality without being scary.
The rule under challenge does not implicate or attract an original hearing at all.
It 899 relates to 'review ' situations.
Ex hypothesi, an antecedent judicial hearing and judicial order exist.
Indeed, if a full oral hearing on the Bench has already taken place the dangerousness of secret disposals dies out.
What is asked for is a review or second look at the first order.
Should this second consideration be plenary ? Never.
The focus must be limited to obvious, serious errors in the first order.
Indiscriminate second consideration cannot be purchased by more payment of court fee.
We reject the strange plea one of the advocates put forward that since the petitioner had paid court fee for review he had the right to the full panoply of oral hearing ad libitem covering the whole range.
Review must be restricted if the hard pressed judicial process is not to be a wasting disease.
There are many ways of limiting its scope, content and modality.
The confinement to certain special grounds, as in Order 47 Rule 1, C.P.C., is one way.
The requirement of counsel 's reasoned certificate of fitness (Certworthiness) for review is another.
Judicial screening to discover the presence, prima facie, of good grounds to hear counsel in oral submission is a third.
The first is good and continues.
The second was tried and found ineffective and the third is being tried.
Legislative policy is experimental as life itself is a trial and error adventure.
What is shocking about this third alternative ? Judges scrutinise the same judges who have once heard oral arguments and are familiar with the case and, if they do not play truant, direct a hearing in court if they find good grounds.
If there is ground, oral hearing follows.
It is not as if all oral advocacy is altogether shut out.
Only if preliminary judicial scrutiny is not able to discern any reason to review is oral exercise inhibited.
The court process is not a circus or opera where the audience can clamour for encore.
When the system is under the severe stress of escalating case load, management of Justice Business justifies forbiddance of frivolous reviews by scrutiny in limine on the written brief.
Justicing too is in need of engineering.
In many jurisdictions oral submissions and public hearings are disallowed in like circumstances.
In England and America where orality in advocacy has been apotheosised, certain extended stages of 'hearing ' in the superior courts have been slimmed or removed.
Even disposal of petitions for leave in judicial conference, without a Bench hearing, has been in vogue.
This Court, as Sri Garg rightly emphasised, has assigned special value to public hearing, and courts are not caves nor cloisters but shrines of justice accessible for public prayer to all the people.
Rulings need not be cited for this basic proposition.
But every judicial exercise need 900 not be a public show.
When judges meet in conference to discuss it need not be televised on the nation 's network.
The right to be heard is of the essence but hearing does not mean more than fair opportunity to present one 's point on a dispute, followed by a fair consideration thereof by fair minded judges.
Let us not romanticise this process nor stretch it to snap it.
Presentation can be written or oral, depending on the justice of the situation.
Where oral persuasiveness is necessary it is unfair to exclude it and therefore, arbitrary too.
But where oral presentation is not that essential, its exclusion is not obnoxious.
What is crucial in the guarantee of the application of an instructed, intelligent, impartial and open mind to the points presented.
A blank judge wearied by oral aggression is prone to slumber while an alert mind probing the 'papered ' argument may land on vital aspects.
To swear by orality or to swear at manuscript advocacy is as wrong as judicial allergy to arguments in court.
Oftentimes, it is the judge who will ask for oral argument as it aids him much.
To be left helpless among ponderous paper books without the oral highlights of counsel, is counter productive.
Extremism fails in law and life.
We agree that the normal rule of the judicial process is oral hearing and its elimination an unusual exception.
We are now on the vires of a rule relating to review in the highest court.
A full dress hearing, to the abundant accompaniment of public presence and oral submission, is over.
It is a second probe.
Here written arguments are given.
The entire papers are with the judges.
The judges themselves are the same persons who have heard oral presentation earlier.
Moreover, it is a plurality of judges, not only one.
Above all, if prima facie grounds are made out a further oral hearing is directed.
Granting basic bona fides in the judges of the highest court it is impossible to argue that partial foreclosure of oral arguments in court is either unfair or unreasonable or so vicious an invasion of natural justice as to be ostracised from our constitutional jurisprudence.
It must be remembered that review is not a second dose of the same arguments once considered and rejected.
The rejection might have been wrong but that cannot be helped.
Dissenting minorities regard the dominant majorities wrong in their judgments but there is no helping it.
It may not be inept to refer to the critical distinction, even where review of fundamental rights proceeding is sought, between an original or virgin hearing and a second look at or review of the order already passed after a full hearing.
In Lala Ram 's case this Court accented on the essential distinction between an original application for the 901 enforcement of fundamental rights and an application to review the order made therein.
It was there observed: The main purpose of a review petition is not to enforce a fundamental right, but to reopen an order vitiated by an error on the face of the record or for such other reasons.
But it is said that the effect of reopening of the earlier order would be to restore his application to enforce the fundamental right and, therefore, in effect and substance, an application to review such an order is also an application to enforce the fundamental right.
It may be that this is a consequence of reopening an order, but the application itself, as we have said, is not to enforce the fundamental right.
Is there any nexus between the elimination of oral advocacy and the goal of dispensation of justice ? Counsel urge there is none.
We cannot agree.
The goal to be attained is maximisation of judicial time and celerity of disposal of review petitions.
And, despite the heavier burden thrown on the judges during the hours outside court sittings by agreeing to read through and discuss the review papers for themselves, there is obvious acceleration of disposal of review petitions without intrusion into court time.
Equally clearly, the benches are able to spare more time for hearing cases.
To sum up, the advantages of the circulation system linked up with the objects of saving judge time in court and prompter despatch of review petitions are obvious.
To organize review Benches of the same judges who first heard the case only to last for a few minutes or a little longer, then to disperse and re arrange regular Benches, especially when most of the review petitions are repeat performances in futility, is a judicial circus the court can ill afford.
The rule is rational, the injury is marginal.
The magic of the spoken word, the power of the Socratic process and the instant clarity of the bar bench dialogue are too precious to be parted with although a bad advocate can successfully spoil a good case if the judges rely only on oral arguments for weaving their decision.
The written brief, before careful judges, can be a surer process of deeper communication than the 'vanishing cream ' of speaking submissions.
And a new skill preparation of an effective brief, truly brief, highly telling and tersely instructive is an art of the pen worth the acquisition especially when, in practice, there are many gifted lawyers who go with Goldsmith who 'wrote like an angel and talked like poor Paul '.
India is neither England nor America and our forensic technology must be fashioned by our needs and resources.
902 Indeed, in this Court, counsel have begun to rely heavily, with good reason, on written submissions and oral 'sweeteners '.
The Bench can never go it alone.
The bar must collaborate and catalyse.
Nor is there any attempt, in this circulation rule, to run away from the open.
Secret sittings, exclusion of the public and cabals in conclave are bete noire for the judicial process.
A review implies an earlier full hearing and, if warranted, a future further hearing.
Every measure has to be viewed in perspective, not out of focus.
The consternation that the court, by hidden procedures, may undo the 'open ' heritage is a chimerical fear or a disingenuous dread.
In other jurisdictions which our jurists hold in anglophilic esteem, this practice is current coin.
The balancing of oral advocacy and written presentation is as much a matter of principle as of pragmatism.
The compulsions of realities, without compromise on basics, offer the sound solution in a given situation.
There are no absolutes in a universe of relativity.
The pressure of the case load on the judges ' limited time, the serious responsibility to bestow the best thought on the great issues of the country projected on the court 's agenda, the deep study and large research which must lend wisdom to the pronouncements of the Supreme Court which enjoy awesome finality and the unconscionable backlog of chronic litigation which converts the expensive end product through sheer protraction into sour injustice all these emphasise the urgency of rationalising and streamlining court management with a view to saving court time for the most number of cases with the least sacrifice of quality and turnover.
If without much injury, a certain class of cases can be disposed of without oral hearing, there is no good reason for not making such an experiment.
If, on a close perusal of the paper book, the judges find that there is no merit or statable case, there is no special virtue in sanctifying the dismissal by an oral ritual.
The problem really is to find out which class of cases may, without risk of injustice, be disposed of without oral presentation.
This is the final court of provisional infallibility, the summit court, which not merely disposes of cases beyond challenge, but is also the judicial institution entrusted with the constitutional responsibility of authoritatively declaring the law of the land.
Therefore, if oral hearing will perfect the process it should not be dispensed with.
Even so, where issues of national moment which the Supreme Court alone can adequately tackle are not involved, and if a considerable oral hearing and considered order have already been rendered, a review petition may not be so demanding upon the judge 's 'Bench ' attention, especially if, on the face of it, there is nothing new, nothing grave at stake.
Even here, if there is some case calling for examination or suggestive 903 of an earlier error, the court may well post the case for an oral hearing.
(Disposal by circulation is a calculated risk where no problem or peril is visible.) Oral argument has been restricted at several stages in the judicial process in many countries.
In the United States the problem of a large number of frivolous petitions for re hearing (in our diction, review) filed by counsel provoked the court into framing restrictive rules of hearing.
One of the rules prescribes: A petition for rehearing is not subject to oral argument, and will not be granted, unless a justice who concurred in the judgment or decision desires it, and a majority of the court so determines.
In England, leave to appeal to the House of Lords is a pattern of proceedings where obligatory oral hearing does not always exist.
The recent practice direction may be usefully referred to here: As from October 1, 1976 Petitions for leave to appeal to the House of Lords will be referred to an Appeal Committee consisting of three Lords of Appeal, who will consider whether the petition appears to be competent to be received by the House and, if so, whether it should be referred for an oral hearing.
Where a petition is not considered fit for an oral hearing, the Clerk of the Parliaments will notify the parties that the petition is dismissed.
Justice John M. Harlan of the U.S. Supreme Court wrote, while explaining the need for controlling court work within manageable proportions, . it would be short sighted and unwise not to recognise that preserving the certiorari system in good health, and in proper balance with the other work of the Court, are matters that will increasingly demand thoughtful and imaginative attention.
As I have tried to show, the essence of the problem as things stand today is to guard against wasteful encroachments upon the Court 's time by preventing an increase in, if not reducing, the volume of improvident applications for certiorari.
(emphasis added) 904 It is significant that in the U. section Supreme Court leave to appeal is decided in conference, not in court and even in regular hearing the maximum time for argument is often restricted in the highest court.
Under r. 28 it is one hour for each side.
The mechanics of controlling argument time is interesting and instructive.
Counsel arguing should keep track of his own time when he started and how much he has left.
There is large clock in front of him.
A note on the counsel table admonished counsel not to ask the Chief Justice what time remains.
When counsel has only five minutes left, a white light on the lectern immediately in front of him goes on.
When time has expired, a red light goes on.
The Chief Justice is likely to stop counsel immediately, seldom allowing him to do more than to finish his sentence.
The red light also marks the time to recess for lunch at two o 'clock, and the end of the day 's session at 4.30 p.m.
The rationale of reducing oral submissions without danger to efficacy or advocacy is explained by George Rossman, Associate Justice of the Supreme Court of Oregon: Crowded dockets have forced appellate courts to curtail the time allotted for oral argument, with the result that some members of the profession wonder whether courts care for oral argument.
The practice of today shows that advocacy can be effective even though the period of delivery is short.
Some attorneys can be effective even though the period of delivery is short.
Some attorneys can do wonders in thirty minutes when nothing more is available.
The English practice, of course, is different.
Delmar Karlan has correctly set out the situation: In the United States, oral arguments are secondary in importance to the briefs, and are rigidly limited in duration.
In the United States Supreme Court, one hour is allowed to each side, but in many appellate courts, less time that is permitted, frequently no more than fifteen minutes Or a half hour for each side.
Reading by counsel is frowned upon.
The judges do not wish to hear what they can read for themselves.
They expect to get all the information they need 905 about the judgment below, the evidence and the authorities relied upon from studying the briefs and record on appeal.
They do not even encourage counsel to discuss in detail the precedents claimed to govern the decision, preferring to do that job by themselves in the relative privacy of their chambers, with or without the assistance of law clerks.
In England, where there are no written briefs, oral arguments are all important.
They are never arbitrarily limited in duration.
While some last for only a few minutes, others go on for many days, even weeks.
The only control ordinarily exercised over the time of oral argument are informal, ad hoc suggestions from the judges.
The methods of the Marble Palace in Washington D.C. have some relevance though certainly not compulsiveness for us.
John Frank writes: As the docket of the Court became more crowded, necessarily the time allowed for argument had to shrink.
Under today 's system the time is either a half hour or an hour for each side, depending on the complexities of the case.
This obviously precludes long introductions or eloquent perorations.
Time is usually rigidly controlled; the legend is that Chief Justice Hughes once cut off an attorney in the middle of the word "if".
If there are not too many interruptions, the hour is sufficient; lawyers must learn to be brief.
We assume that judges will be up to the additional strain.
We have stated enough to establish that judicial justice is not sabotaged by the eclipse of oral argument in a small sector of the forensic process.
That is all that has been done by the amendment.
A brief comparison between the earlier and the current position will bring this out.
In the earlier rule a certificate by the lawyer was a condition precedent for entertainment of the review proceeding.
In the revised rule, no certificate by counsel but certification by the Bench that, prima facie an infirmity of the kind mentioned in the rule vitiates, the judgment takes its place.
Thereafter in both cases oral advocacy follows.
Thus the only difference is not, as is some times assumed, that oral arguments are for the first time and finally cut out.
Even now, oral hearing may be given and is given, not routinely but if ground is made out to the satisfaction of the judges who first heard the case (ignoring exceptional situations for the present).
We have stated enough to repel 906 the attack on the vires of the rule.
Nothing arbitrary, nothing arcane, nothing obnoxious, given a sober appraisal.
The possible impression that we are debunking the value of oral advocacy in open court must be erased.
Experience has shown that, at all levels, the bar, through the spoken word and the written brief, has aided the process of judicial justice.
Justicing is an art even as advocacy is an article Happy interaction between the two makes for the functional fulfilment of the court system.
No judicial 'emergency ' can jettison the vital breath of spoken advocacy in an open forum.
Indeed, there is no judicial cry for extinguishment of oral argument altogether.
But the time has come for a proper evaluation of the role of oral argument at the appellate level in the decisional process.
Justice Harlan has insisted that oral argument should play a leading part.
It is not "a traditionally tolerated part of the appellate process" but a decisively effective instrument of appellate advocacy.
He rightly stresses that there are many judges "who are more receptive to the spoken than the written word".
He hits the nail on the head when he states: For my part, there is no substitute, even within the time limits afforded by the busy calendars of modern appellate courts, for the Socratic method of procedure in getting at the real heart of an issue and in finding out where the truth lies.
We wholly endorse the conclusion of that experienced Judge of the United States Supreme Court when he concludes his thesis on oral arguments: Oral argument is exciting and will return rich dividends if it is done well.
And I think it will be a sorry day for the American bar if the place of the oral argument in our appellate courts is depreciated and oral advocacy becomes looked upon as a proforma exercise which, because of tradition or because of the insistence of his client, a lawyer has to go through.
The importance of oral advocacy has been the subject of many articles by learned writers.
As Frederick Bernays Wiener writes in the Harvard Law Review: Appellate judges, virtually without exception, say that a case should never be submitted without oral argument.
A good many are on record in print to the same effect, and 907 add that they feel a sense of genuine regret whenever the clerk announces that a case is being submitted on briefs alone.
These expressions reflect the fact the task of judgment is infinitely harder when counsel is not present to be questioned regarding his exact position or the limits of a principle he has argued in the brief.
We concur with the view expressed by American Judges on oral advocacy In the Supreme Court, flexibility is especially essential Chief Justice Hughes in 1928 characterised the argument before the Supreme Court as "oral discussions".
The then Professor Frankfurter stated in 1933, "The atmosphere of the Court is uncongenial to oratory and the restrictions imposed on counsel tend to deflate rhetoric.
But true argument the exploration of issues, particularly through sharp questioning from the bench continues to be one of the liveliest traditions of the Court." Thus, among the methods of persuasion, the power of the spoken word cannot be sacrificed without paying too high a price in the quality of justice especially in the Supreme Court litigation.
Maybe, that the brief is valuable; indeed, a well prepared brief gives the detailed story of the case; the oral argument gives the high spots.
The supreme success of oral argument and the grave risk of jettisoning it from the repertoire of persuasive arts in the judicial process consists in George Rossman 's observation: The oral argument can portray the case as a human experience which engulfed the parties but which they could not solve.
Thus, the oral argument can help to keep the law human and adapted to the needs of life.
It typifies the Bar at its best.
We may sum up that the value of oral submissions need not be under rated nor of written briefs over rated.
A blend of both is the best.
It is apt to repeat the words of Judge Brian Mckenna.
The fault is that the rules of our procedure which by their discouragement of written argument make possible extensively protracted bearings in open court.
Those responsible might think more of changing them.
In civil cases a written argument supplemented by a short oral discussion, would sometimes save a great deal of time.
908 The judicial process is in crisis not because there is a flood of cases flowing into the courts.
In a developing country with an awakened people and democratic rights, it is inevitable that the litigative Ganga may swell in its stream, but as justice Warren Burger wrote: In the final third of the century we are still trying to operate the courts with fundamentally the same basic methods, the same procedures and the same machinery, Roscoe Pound said were not good enough in 1906.
In the super market age we are trying to operate the courts with cracker barrel corner grocer methods and equipment vintage 1900.
We have to introduce management techniques and sensitive skills in the administration of justice if its present pathological conditions are to receive therapeutic attention.
The Rule regarding the disposal of review petitions by circulatory conference, supplemented by oral hearing in appropriate cases, is one small step in the right direction.
Indeed, by modernising our procedure we are furthering social justice for which the litigant community is waiting.
We have set out the parameters of judicial procedure vis a vis original hearings and review hearings having due regard to the realities of forensic life.
In the dynamics of hearing orality does play a role at the first round, but at the second round in the same court is partly expendable.
After all, romance with oral hearing must terminate at some point.
Nor can it be made a "sacred cow" of the judicial process.
Comparative law lends confidence and from that angle we may refer to Halsbury (Vol. 10, para 761) where disposal, without oral hearing, of petitions to leave to appeal to the House of Lords is mentioned.
Likewise, American Jurisprudence (Vol. 5 para 979 especially footnote 13) endorses a similar procedure.
Sri Mridul pressed upon us that this judge made legislation at the highest level was so plainly violative of article 14 an objection not spelt out in any writ petition before us that, without seeking refuge under the rule of practice that a point not raised in the writ petition may not be allowed to be urged, the judges must invalidate their own handiwork.
Surely, Justice and Truth are never afraid of exposure nor bothered about prestige.
Certainly, drafting legislation is not an easy art and judges are not artists beyond their orbit.
Even otherwise, Homer nods.
Therefore, if we find our rules void we must declare so and we will.
The omission of the ground of discrimination in the pleadings may often forbid the argument because the other side may be prejudiced or the necessary facts may not be on record.
But here 909 no such disability exists.
A technical objection should not throw out a suitor from the plea for justice.
After all, the courts belong to the people, as Jerome Frank once said.
And litigants are legal patients suffering from injustices seeking healing for their wounds.
Would you tell a sufferer in hospital that because he disclosed a certain symptom very late therefore he would be discharged without treatment for the sin of delayed disclosure ? Humanism, which, at bottom sustains justice, cannot refuse relief unless, by entertaining the plea, another may sustain injury.
We have permitted the contention and proceed to consider it.
The rule, on its face, affords a wider set of grounds for review for orders in civil proceedings, but limits the ground vis a vis criminal proceedings to 'errors apparent on the face of the record '.
If at all, the concern of the law to avoid judicial error should be heightened when life or liberty is in peril since civil penalties are often less traumatic.
So, it is reasonable to assume that the framers of the rules could not have intended a restrictive review over criminal orders or judgments.
It is likely to be the other way about.
Supposing an accused is sentenced to death by the Supreme Court and the 'deceased ' shows up in court and the court discovers the tragic treachery of the recorded testimony.
Is the Court helpless to review and set aside the sentence of hanging? We think not.
The power to review is in article 137 and it is equally wide in all proceedings.
The rule merely canalises the flow from the reservoir of power.
The stream cannot stifle the source.
Moreover, the dynamics of interpretation depend on the demand of the context and the lexical limits of the text.
Here 'record ' means any material which is already on record or may, with the permission of the court, be brought on record.
If justice summons the judges to allow a vital material in, it becomes part of the record, and if apparent error is there, correction becomes necessitous.
The purpose is plain; the language is elastic and interpretation of a necessary power must naturally be expansive.
The substantive power is derived from article 137 and is as wide for criminal as for civil proceedings.
Even the difference in phraseology in the rule (Order 40 Rule 2) must, therefore, be read to encompass the same area and not to engraft an artificial divergence productive of anomaly.
If the expression 'record ' is read to mean, in its semantic sweep, any material even later brought on record, with the leave of the court, it will embrace subsequent events, new light and other grounds which we find in Order 47 Rule 1 C. P. C.
We see no insuperable difficulty in equating the area in civil and criminal proceedings when review power is invoked from the same source.
910 True, the review power vis a vis criminal matters was raised only in the course of the debate at the Bar.
But when the whole case is before us we must surely deal comprehensively with every aspect argued and not piecemeal with truncated parts.
That will be avoidance of our obligation.
We have, therefore, cleared the ground as the question is of moment, of frequent occurrence and was mooted in the course of the hearing.
This pronouncement on review jurisdiction in criminal proceedings sets at rest a possible controversy and is as much binding on this Court itself (unless over ruled) as on litigants.
That is the discipline of the law of precedents and the import of article 141.
As we conclude, we wish to set the sights aright vis a vis oral hearings in judicial proceedings.
To put superstitious faith in oral submissions or unlimited argumentation as the sole means of presentation and persuasion and to debunk the potency of well drawn up manuscript representations may be condemned as absurd.
True, our judicial culture nourishes oral advocacy and public hearing since secret cerebrations and cabal deliberations are ordinarily anathema.
Speaking generally, oral advocacy is a decisive art in promoting justice.
The Bench cannot dispense with the Bar.
In our system advocacy becomes functional when present viva voce and is enfeebled if presented in muted print.
We do not claim that orality can be given a permanent holiday.
Such an attitude is an over reaction to argumentum ad nauseum.
But we must importantly underscore that while lawyer 's advocacy cannot be made to judicial measure especially if judges are impatient, there is a strong case for processing argumentation by rationalisation, streamlining, abbreviation and in, special situations, elimination.
Review proceedings in the Supreme Court belongs to the last category.
There is no rigidity about forensic strategies and the court must retain a flexible power in regard to limiting the time of oral arguments or, in exceptional cases, eliminating orality altogether, the paramount principle being fair justice.
Therefore, it is quite on the cards that where no injury to justice will be all, orality may suffer partial eclipse in the shape of time limitation or substitution by written submission even in categories other than review proceedings.
All that we mean to indicate is that the mode of 'hearing ', whether it should be oral or written or both, whether it should be full length or rationed, must depend on myriad factors and future developments.
Judges of the Supreme Court must be trusted in this regard and the Bar will ordinarily be associated when decisions affecting processual justice are taken.
We thus see no disparity given flexibility in decoding the meaning of meanings.
We see no force in the challenges and do hope that the Bar will make its contribution to making experiments in modernization and humanization of the Justice System and court culture.
911 PATHAK, J. We are in general agreement with our brother V. R. Krishna Iyer on the points directly in controversy in this writ petition, but we consider it desirable to say a few words on certain aspects concerning the scope of Rule 3 of Order XL of the Supreme Court Rules, 1966.
At the outset, we may state that as we are considering the question of the need for an oral hearing in relation to a review application only, we refrain from expressing any opinion on the point whether an oral hearing is an imperative requirement in the disposal of other kinds of cases brought before the Court.
That is a point to which, we think, we should address ourselves only when it directly arises.
In regard to a review application we are clear that an oral hearing is not an essential requirement if on a preliminary examination the review application is found to be devoid of substance.
A review application is an attempt to obtain a reconsideration of the judgment of the court disposing of the substantive proceeding.
It attempts nothing more.
The merits of the controversy have already been examined by the Court and, in view of the ordinary scope of the power of review, the re examination sought cannot proceed beyond the controversy already disposed of.
It is substantially the same ground traversed again, either entirely or in part.
However, the Rule takes care to provide for oral arguments should the Court consider that necessary.
That necessity may arise in either of two cases.
On the review application being placed before the judges, they will consider it together with any additional written arguments filed by the petitioner in supplementation of the review application.
If the judges hold on that screening of the review application that there is no case what ever for review, they will reject the review application.
On the contrary, they may find that a good prima facie case for review has been made out, and so they will direct notice to issue to the respondent, and upon that an oral hearing will take place in the presence of the parties.
That is one occasion on which an oral hearing is necessary.
If the judges are not convinced that a prima facie case has been made out by the review application, but are also not satisfied that there is no merit whatever in it, and are of opinion that in order to come to a definite opinion prima facie on the merits of the review application it is desirable to hear the applicant orally they will notify him accordingly and afford an opportunity of oral hearing.
On such oral hearing, the judges may dismiss the review application if finally satisfied that there is no prima facie case for review, but in the event of a prima facie case being made out they will issues notice to the respondent and an oral hearing will follow in the presence of the parties.
It is apparent that the denial of oral argument is confined to the preliminary stage 912 only, when the review application is placed before the judges and, as it were, they screen it for the purpose of determining whether there is reason to proceed further in the matter or whether it merits outright rejection.
It is not possible to hold on principle that at that preliminary stage also, the applicant for review is entitled to be heard orally.
The merit of an oral hearing lies in this that counsel addressing the court are able to discern what are the aspects of the controversy on which more light is needed.
The Court likewise can utilise an oral hearing in order to express its doubts on a point and seek clarification thereon from counsel.
But if there is on doubt whatever that the review application is totally without substance, an oral hearing becomes a superfluity and, at best, a mere formality.
A written submission is capable of careful drafting and explicit expression, and is amenable to such arrangement in its written content that it pointedly brings to the notice of the reader the true scope and merit of the submission.
We do not believe that a written submission in a review application cannot do adequate justice in the matter of setting forth the case of the litigant.
If there is need for an oral hearing it is for the reason mentioned earlier, that counsel come to know of the doubts in the mind of the Court and the court has an opportunity of having its doubts resolved.
It is this feature of an oral hearing which gives to it its primary value and relevance.
But that an oral hearing is mandatory in all classes of cases and at every stage of every case is a proposition to which we find ourselves unable to accede.
The writ petition is dismissed, but without any order as to costs.
P.B.R. Petitions dismissed.
| IN-Abs | Order XL, rule 2(1) of the Supreme Court Rules (as amended) provides that an application for review shall be by a petition and shall be filed within thirty days from the date of the judgment or order sought to be reviewed.
It shall set out clearly the grounds for review.
Sub rule (3) provides that "unless otherwise ordered by the Court an application for review shall be disposed of by circulation without any oral arguments but the petitioner may supplement his petition by additional written arguments".
In a petition under Article 32 of the Constitution the petitioners contended that scuttling of oral presentation and open hearing is subversive of the basic creed that public justice shall be rendered from the public seat and that secrecy and circulation are negation of judicial justice.
Dismissing the petitions, ^ HELD: per Krishna Iyer, section Murtaza Fazal Ali and Desai, JJ (Pathak and Koshal JJ concurring).
Unchecked review has never been the rule.
A review petition must be supported by proper grounds because otherwise every disappointed litigant may avenge his defeat by a routine review petition.
[895D] The original rule required a certificate by the advocate to the effect that the petition was review worthy.
If it was so certified then a preliminary oral hearing followed.
After such oral argument the court issued notice to the other side or dismissed the petition.
But as it turned out, laxity in certification and promiscuity in filing review applications crowded the court with unwanted review petitions and the very solemnity of finality would be frustrated if such a game were to become popular.
[895E H] The amended rule is designed to remove the evil of reckless reviews by the introduction of preliminary judicial screening in circulation replacing counsel 's certification.
If the review petition and written submissions convinced the court prima facie that material error had marred the justice or legality of the earlier judgment or order, the case would be posted for oral hearing in court.
Now 'certworthiness ' is shifted from counsel to court.
[896H] Circulation in the judicial context merely means not in court through oral arguments but by discussion at judicial conference.
Judges, even under the amended rule, must meet, collectively cerebrate and reach conclusions.
In a review petition the same judges who have once heard oral arguments and are familiar with 890 the case direct a hearing in court if they find good grounds.
It is not as if all oral advocacy is altogether shut out.
Where oral presentation is not that essential its exclusion is not obnoxious.
What is crucial is the guarantee of the application of an impartial and open mind to the points presented.
If without much injury a certain class of cases can be disposed of without oral hearing, there is no good reason for not making such an experiment.
If on a close perusal of the paper book the judges find that there is no merit or statable case, there is no special virtue in sanctifying the dismissal by an oral ritual.
[898E, 899E, 900C] The rule on its face affords a wider set of grounds for review for orders in civil proceedings but limits the grounds vis a vis criminal proceedings to errors apparent on the face of the record.
Here "record" means any material which is already on record or may with the permission of the court be brought on record.
[909C] The substantive power is derived from Article 137 and is as wide for criminal as for civil proceedings.
Even the difference in phraseology in the rule (r.2) must be read to encompass the same area and not to engraft the artificial divergence productive of anomaly.
If the expression "record" is read to mean any material even later brought on record, with the leave of the court, it will embrace subsequent events, new light and other grounds which are found in O. 47, r. 1, C.P.C. [909G H] Sow Chandra Kanta and Anr.
vs Sheikh Habib ; ; Lala Ram vs Supreme Court of India & Ors referred to.
Per Pathak and Koshal JJ (concurring).
Oral hearing is not an essential requirement if on a preliminary examination a review application is found to be devoid of substance.
A review application attempts nothing more than to obtain a reconsideration of the judgment of the court disposing of the substantive proceeding.
The merits of the controversy having already been examined the re examination sought cannot proceed beyond the controversy already disposed of.
[911C D] If the judges, on screening the review application, hold that there is no case whatever for review they will reject it.
If on the other hand they find that a good prima facie case for review has been made out, they will give an oral hearing in the presence of the parties.
There may also be cases where even after they are satisfied that no prima facie case has been made out they consider it desirable to hear an applicant orally they will afford him an opportunity of oral hearing and in the event of a prima facie case being made out they will issue notice to the respondent and oral hearing will follow, in the presence of the parties.
In short the denial of oral hearing is confined to the preliminary stage only.
It is not possible to hold that at that preliminary stage also the applicant for review is entitled to be heard orally.
The merit of the oral hearing lies in the fact that counsel addressing the court are able to discern what are the aspects of the controversy on which more light is needed.
The court can utilise an oral hearing in order to express its doubts on a point and seek clarification thereon from counsel.
If there is no doubt whatever oral hearing becomes a superfluity and at best a mere formality.
[911F H] A written submission is capable of careful drafting and explicit expression, and is amenable to such arrangement in its written content that it pointedly brings to the notice of the reader the true scope and merit of the submission.
891 It is not correct to say that oral hearing is mandatory in all classes of cases and at every stage of every case.
[912D] [The question under consideration being the need for an oral hearing in relation to review applications only, there is no need to express any opinion on whether an oral hearing is an imperative requirement in the disposal of other kinds of cases brought before the Court.]
|
ition No. 214 of 1979.
(Under Article 32 of the Constitution) section Balakrishnan and M. K. D. Namboodiri for the Petitioners.
Lal Narain Sinha Attorney General and Miss A. Subhashini for Respondent No. 1.
Shanti Bhushan, Jitendra Sharma, V. P. Choudhry and R. L. Gupta for the Respondents Nos. 3, 4 & 5.
The Judgment of Krishna Iyer, and O. Chinnappa Reddy, JJ was delivered by Iyer, J., R. section Pathak, J. gave a separate concurring Opinion.
KRISHNA IYER, J. Many a case in this Court is the dramatisation.
on the forensic stage, of social stress or community conflict which seeks resolution or release through the litigative process.
This Writ Petition turns the focus on one such tense issue and ventilates a widespread grievance which deserves constitutional examination.
The petitioner, Dr. Ramesh, is a medical graduate from the Madras University.
His father, an officer under the Central Government, was transferred to Delhi and the son, desirous of taking a post graduate degree in Dermatology, applied for admissions to the University of Delhi which offers that course.
He took the common entrance test and secured enough marks to qualify for admission but was turned down because of a rule reserving 70% of the seats, at the post graduate level, to Delhi graduates (if we may use that abbreviation for describing student applicants who have taken their M.B.B.S. degree from the University of Delhi).
The remaining 30% was open to all, including 836 graduates of Delhi.
This rule was made in April 1978 in modification of the earlier reservation of 48%.
Had this inflation (from 48% to 70% plus) not been made, the petitioner admittedly would have been granted admission.
So what blocked his right to post graduate entry was this rule of institutional quota of 70% which accorded a disproportionate premium in favour of Delhi graduates.
The other petitioners are no longer in the race having secured lesser marks at the entrance test, and so the judicial lens must be fixed on the validity of such a considerable reservation or virtual monopoly for the Delhi graduates.
The petitioner challenges its vires as violative of articles 14 to 16 and seeks the court 's writ to direct the respondent University to admit him to the M.D. course (Dermatology).
While litigating for his right to a seat in the postgraduate degree course in dermatology, he is now doing his diploma course in the same subject in the same University, which is inferior to his aspiration and entitlement if the right to equality is fatal to the quota policy.
We are not investigating the plea based on article 16 because it is not clear whether the stipend paid to a post graduate student makes the course an employment and, apart from that, the meat of the matter is whether there is discrimination.
If there is, articles 14 and 15 are lethal enough, without resort to article 16.
The University of Delhi (we may use the shorthand form 'Delhi University ' hereafter) refutes this challenge and justifies the reservation in the concrete educational plight of Delhi graduates as an inevitable evil, if it be evil because of the exclusivism practised by every other university.
An institutional quota is not invariably a constitutional anathema and, in the present case, the Delhi University offers an explanation for this recourse to higher institutional reservation.
Many universities now adopt the exclusionary or segregative device of de facto monopoly of seats for higher medical courses to its own alumni, Indians from other Indian Universities being treated as aliens.
This xenophobic trend has forced the Delhi University to reciprocate with high reservation.
If reservation of seats, as a strategy of admission to technical colleges, is void there may be a wider impact on a number of the institutions and individuals than on the parties here.
The law laid down by this Court binds other institutions because article 141 is imperative.
Sri Shanti Bhushan, appearing for the University, assertively suggested to the contrary remembering only the rule of res judicata, but later realised the obvious error and recanted.
He agreed that if 837 this Court invalidated reservation, as such, many universities would be upset in their admission processes, although they were not party a weakness of the adversary system which needs remedying.
So, we invited the learned Attorney General also to help the Court, which he did and we record our gratitude.
Unfortunately, the petitioner has not been able to present, the social facts, the educational milieu, the statistical materials and other vital data bearing on the constitutional vice of the rule of excessive reservation, and the respondent University, despite our repeated suggestions to its counsel, has not enriched its brief with sufficient facts which enlighten the court, although some additional information has been brought in.
On the other hand, counsel 's submissions were scary, if we may say so with respect, to the effect that when students went on a fast unto death, Government had to intervene and save the situation and provide larger reservation.
As the Attorney General agreed, hunger strikes cannot amend the Constitution, and Government, if impressed with the grievance which has led to the protest fast, must set in motion changes in the basic law, as was done in the first constitutional amendment and later for States Reorganisation.
When this flaw was pointed out to the respondent, some more materials were placed before the court in justification of the increase in the reservation quota from a constitutional angle, and we will deal with them.
In the adversary system, advocacy in the superior courts, which, their decisions, declare the law for all must broaden beyond the particular lis into a conspectus of sociological facts, economic factors and educational conditions so that other persons aggrieved who will potentially be bound by the decision, do not suffer by not being co nominee parties.
Surely, on the available material, counsel have done their best.
This preliminary narration leads upto the constitutional problem that confronts the court in this petition under article 32 and stresses how it deserves, for its solution, serious and sensitive judicial and administrative statesmanship enlivened by legal fundamentals, since the crucial issue springs from the pervasive and protective tendency for institutional reservation of post graduate seats, which, if left uncanalised and indulged in excess, may well imperil the integrated status of higher national education and make a mockery of equal opportunity.
Basically, great constitutional issues cannot be divorced, even while being viewed from a legal perspective, from their national overtones and individual impact, since passionate provincialisation and addiction to institutional xenophobia, even in higher education, have a suicidal fascination beyond myopic political perception.
And, on the contrary, elitist exaggeration of 'national ' considerations and personal merit, where local protection is essential for the humbler people 's interests, has a depressing repercussion if pushed beyond a point an aspect which expert policy makers 838 sometimes overlook in unwitting promotion of their group interest.
The problem is complex and thorny, charged with practical difficulties and fraught with explosive possibilities.
A short cut, in such situations may well prove a wrong cut and so we are circumspect in our assessment and tentative in our conclusions, especially because counsel, in our adversary system, often do not travel beyond the narrow needs of the case and, despite our prodding, we have not received the social statistical wealth of material to help us take a comprehensive overview of the issue.
Law, constitutional law, is not an omnipotent abstraction or distant idealisation but a principled, yet pragmatic, value laden and result oriented, set of propositions applicable to and conditioned by a concrete stage of social development of the nation and aspirational imperatives of the people.
India To day that is the inarticulate major premise of our constitutional law and life.
We highlight these basics because Shri Shanti Bhushan, for the University, pleaded for a practical appreciation of the lot of the Delhi graduates excluded from everywhere else while Shri Balakrishnan for the petitioner, pressed for a national approach to high grade talent vis a vis courses in specialities.
A synthesis of both is where the truth lies.
The key to this case, if we may anticipate ourselves, is in harmoniously blending developmental necessities of backward regions via institutional reservations and national considerations of everybody 's equal opportunity for higher education being ensured regardless of geographical, institutional or other inhibition.
We must never forget two values synthesised in our constitutional culture, as set out in the Preamble unity and integrity of the nation and equality of opportunity of weaker sections.
Without the latter becoming a sure reality the former may be mere rhetoric ! An epitome of the social background leading upto the controversy will give a hang of the case and elaboration may await a later stage.
Post Independence India has many universities with facilities for higher learning.
Most of them give institutional preferences in the allocation of seats for technical courses and this tendency sometimes reaches the morbid point of total cornering of seats at post graduate level, especially in the coveted and competitive branches like medicine.
The Delhi University which has M.B.B.S. and post graduate medical courses, exercises academic jurisdiction over the affiliated colleges in the capital of the country, enjoys great prestige for its schools of learning and excellence in teaching and is founded by the Central Government.
It has at once a territorial limitation and national complexion and it caters to a population, by and large, drawn from all over the country because of the vast official, political, parliamentary judicial, educational, commercial and other gravitational pulls which the capital of the 839 country inevitably exerts.
This population is fluid because of movements, transfers and a host of other factors.
The indigenous denizens of Delhi are perhaps over run by these super imposed layers and the student community of the Delhi University is not made up so much by the 'sons of the soil ' as in universities in other places but is accounted for by the inflow of groups drawn from all over the country.
In a limited sense, it is a microcosm if India is a macrocosm.
This national demographic composition is relevant to the examination of the 'reservation ' problem.
The capital city is not just a part of India.
It is miniaturised India, a fact often forgotten by the administration in the field of culture and education, especially vis a vis regional minorities.
It is magapolitan and people from all parts flock to this outsized city.
But we cannot exaggerate this factor, for the presence of the farther regions like the South and the North East, population wise, is minimal and precarious.
Shri Balakrishnan insisted that the University was sustained by Central Government finances, collected from the whole country, and the benefits must likewise belong to all qualified students from everywhere.
These are valuable aspects to shape policy but the court must test constitutionality and no more.
To that extent alone we will weigh these factors in moulding our verdict.
We will now identify the issues emerging from the matrix of facts.
Since Shri Shanti Bhushan laid stress on these factors, viz. the satyagraha crisis created by the students, the obdurate, may be, even obscurantist, exclusiveness of other Universities forbidding Delhi graduates from getting admission in their colleges and the reasonableness of institutional continuity in educational pursuits for students who enter a university for higher studies, we must dilate on the foundational facts more fully.
Since Sri Balakrishnan emphasised the pathetic plight of meritorious students if 'apartheid ' policies were practised by universities, contrary to the cultural unity and constitutional mandates of our nation, we must weave into the legal fabric of 'admission ' regulations strands of national integration and equal opportunity for higher education.
These rival contentions justify, albeit a little repetitively, the recapitulation of recent events, parochial realities and institutional behaviour, bearin on admissions to colleges in the Delhi University, with some comparative glance at others in the country.
We are concerned with three medical colleges, two being affiliated to, and one being maintained, by the Delhi University.
Together they turn out annually around 400 medical graduates.
These graduates get house jobs in the local hospitals and qualify themselves for 840 post graduate courses.
The University has many post graduate degrees and diploma courses but all of them put together come to only 250 seats.
Naturally, the graduates from the Delhi University cannot be accommodated fully or even in part for the post graduate degree courses.
If, out of the available seats for the post graduate courses, a large slice is thrown up for open competition and students from all over the country swarm to take the entrance examination, the Delhi graduates ' prospects become bleaker.
The further case of the University is that there is a harsh handicap for these graduates in that they are not considered for admission in other universities on account of various regional hurdles such as prescription of domicile, graduation in that very university, registration with the State Medical Council, service in the State Medical Service and the like.
The necessary consequence of these road blocks in the way of getting into post graduate courses is dissatisfaction frustration, fury and pressure for exclusive earmarking of all seats at the post graduate level in the Delhi University for the Delhi graduates.
Reservation elsewhere breeds reservation here.
Good and evil become contagious and indivisible and eventually over powering.
The chain reaction had led to the principle of reservation being accepted by the Delhi University, first in moderate measure and next immoderately, maybe, because the pressure of militant Delhi graduates forced the University 's hands or because Government, which virtually forced this solution of 70% plus reservation, acted on the easy guidelines : Nothing succeeds like excess.
Reservation begins as a mild remedy but becomes, unless leashed, a Frankensteins monster.
The rule for selection of candidates until April 1978 was as follows : (a) For the first 52% seats of the total number of seats available, the selection was to be made on the basis of combined merit of Delhi University and other Universities medical graduates.
(b) The selection of the remaining 48% seats was to be made from the Delhi University graduates only.
By this method, approximately half the number of seats were reserved for the Delhi graduates.
But having regard to the figures of seats and turn out of graduates earlier mentioned, this did not meet the requirements of the aspirants for post graduate degrees from Delhi.
It must be remembered that Delhi is the seat of the elite, of high officials, of prosperous professionals, of rich businessmen, of important politicians and echelons of consequence and other men of money power.
841 Their sons and daughters, already fed on superior facilities and coached in special schools beyond the reach of most other students in the rest of the country, have an appetite and opportunity for excellence in education ahead of others and wish to lap up all the post graduate seats, if possible.
The cream must belong to the cream, generation to generation, may be a cynical social scientists 'comment, ' Inevitably, a larger number of Delhi medical graduates, relatively speaking, must be ambitiously wanting to continue their studies in post graduate medical courses which are prized for their career potential.
It is significant that these courses are not easily available elsewhere and the standards and prestige of these degrees in the Delhi University are high.
Taking a post graduate medical degree thus opens up further vistas for studies abroad or employment at home.
When we remember these factors and the reduced chance for bright Delhi graduates to gain admission into the Delhi post graduate courses in the face of All India competition, we can mildly appreciate the mood and demand of the student community for enlargement of their quota.
But all grievances are not constitutional.
Also, by remedying one group 's misfortune other groups may be hurt.
The Court can only view rights and wrongs, through the constitutional prism.
The various universities show concern for their backward regions and alumni in the name of equal opportunity.
But the Indian Medical Council, apprehensive of fall of standards lays stress on academic merit.
This dilemma of the law between equality of opportunity and excellence of performance leads us to a demand for full facts, but, of course, we are left to speculate on many aspects of the problem because even the Delhi University and the Union of India have left us in the lurch.
Litigation, on a socio legal issue of critical constitutional moment, should not end with general assertions, affidavits of formal denials and minimal materials but, as stated earlier, needs feeding the court with nutritive facts which build the flesh and blood of the administrative or legislative action under challenge and all other surrounding and comparative data which legitimate the 'reservation ' or other procedure under attack from the constitutional angle. 'Reservation ' jurisprudence is a tangled knot carefully to be developed and counsel cannot invite judges to make hunches as a cover up for party 's failure.
And ingenious or imaginative orality in court can never be a substitute for well researched, down to earth factuality in the brief.
Many a case is lost or won because counsel and court engage in the game of blind man 's buff since investigative undertakings and presentation of constitutionally vital data do not find a place in the brief and our forensic process inhibits travels beyond the 842 paper books in court ! Nevertheless, for the nonce, we have to make do with the record.
Let us go back to the basics.
The Indian Constitution is wedded to equal protection and non discrimination.
articles 14, 15 and 16 are inviolable and article 29(2) strikes a similar note though it does not refer to regional restrictions or reservations.
article 15 saves the State 's power to make special provisions for women and children or for advancement of socially and educationally backward classes.
Reservations under article 15(4) exist and are applied.
There is no dispute about that and the whole debate has left that pattern and policy of 'reservation ' out of controversy.
We zero in only university wise quotas, reservations and preferences from the constitutional stand point.
The primary imperative of articles 14 and 15 is equal opportunity for all across the nation to attain excellence and this has burning relevance to our times when the country is gradually being 'broken up into fragments by narrow domestic walls ' in politics, economics and education, undoing the founding faith of an undivided integrated India by surrender to lesser appeals and grosser passions.
What is fundamental, as an enduring value of our polity, is guarantee to each of equal opportunity to unfold the full potential of his personalities.
Anyone anywhere, humble or high, agrestic or urban, man or woman, and whatever his religion or irreligion, shall be afforded equal chance for admission to any secular educational course or school for cultural growth, training facility, speciality or employment.
Each according to his ability, is of pervasive validity, and it is a latent, though radical, fundamental that, given propitious environments, talent is more or less evenly distributed and everyone has a prospect of rising to the peak.
Environmental inhibitions mostly 'freeze the genial current of the soul ' of many a humble human whose failure is 'inflicted ', not innate.
Be it from the secular perspective of human equality or the spiritual insight of divinity in everyone, the inherent superiority cult with a herrenvolk tint, is contrary to our axiom of equality.
That is why 'equal protection of the laws ' for full growth is guaranteed, apart from 'equality before the law '.
Even so, in our imperfect society, some objective standards like common admission tests are prescribed to measure merit, without subjective manipulation or university wise invidiousness.
In one sense, it is a false dilemma to think that there is rivalry between equality and excellence, although superficially they are competing values.
In the long run, when every member of the society has equal opportunity, genetically and environmentally, to develop his potential, each will be able, in his own way, 843 to manifest his faculty fully.
The philosophy and pragmatism of universal excellence through universal equal opportunity is part of our culture and constitutional creed.
This norm of non discrimination, however, admits of just exceptions geared to equality and does not forbid those basic measures needed to abolish the gaping realities of current inequality afflicting socially and educationally backward classes ' and 'the Scheduled Castes and the Scheduled Tribes '.
Such measures are rightly being taken by the State and are perfectly constitutional as the State of Kerala vs N. M. Thomas(1) has explained.
Equality and steps towards equalisation are not idle incantation but actuality, not mere ideal but real, life.
But can a university, acting within the constitutional parameters, create a new kind of discrimination viz., reservation for students of a particular university? The literal terms of article 14 do not tolerate it, the text of article 15 does not sanction it.
Can we carve out a fresh ground of preference? Delhi University students, as such, are not an educationally backward class and, indeed, institution wise segregation or reservation has no place in the scheme of article 15, although social and educational destitution may be endemic in some parts of the country where a college or university may be started to remedy this glaring imbalance and reservation for those alumi for higher studies may be permissible.
We will explain this further but, speaking generally, unless there is vital nexus with equal opportunity, broad validation of university based reservation cannot be built on the vague ground that all other universities are practising it a fact not fully proved before us either.
Universality of illegality, even if the artists of discrimination are universities, cannot convert such praxis into constitutionality.
Nor, indeed, can the painful circumstance that a batch of medical graduates demonstratively fasted in front of the Health Minister 's house, ipso facto, legalise reservation of seats in their favour.
Shri Shanti Bhushan vividly described his role as Law Minister in meeting the student satyagrahis who were honestly hungry for post graduate seats and the crisis which stampeded government to intervene and make the University revise its reservation upward to save the lives of the 'fasters '.
We have sympathy for students, especially for those who sacrifice their comforts to claim an opportunity to take post graduate medical degrees.
We even feel that the student community often resorts to direct action of the satyagraha model when the pachydermic disposition of authorities drives them to such drastic heroics.
But what if non Delhi students 844 start a rival starvation exercise ? That will lead to testing the rule of law on the immolative or masochist capabilities of affected groups and not on the Articles of the Constitutional or provisions of the legislation.
Protest fasting, a versatile weapon in our cultural armoury, is meant to sensitize or conscientize the soul of the Administration when it is too paper logged or callous to look at human problems from the angle of human justice.
Beyond that, this great Gandhian technique cannot be blunted by promiscuous use, so long as democratic mechanisms are alive and not impervious to legitimate grievances and can be sparked into action not merely by sensational, though sincere, tactics like fasting unto death.
While recognising, even reverencing, the role of soul force in quickening the callous conscience of authorities to grave injury and need for urgent remedy, we cannot uphold the Delhi University 's 'reservation ' strategy merely because Government was faced with student 'fasts ' and ministers desired a compromise formula and the University bodies simply said 'Amen '.
The constitutionality of institutional reservation must be founded on facts of educational life and the social dynamics of equal opportunity Political panic does not ipso facto, make constitutional logic.
Prima facie, equal marks must have equal chance for medical admissions, as urged by the practitioner.
And neither university based favoured treatment nor satyagraha induced quota policy can survive the egalitarian attack.
To repulse the charge, equality oriented grounds must be made out.
Constitutional equality itself is dynamic, flexible, and moulded by the variables of life.
For instance, if a region is educationally backward or woefully deficient in medical services, there occurs serious educational and health service disparity for that human religion which must be redressed by an equality and service minded Welfare State.
The purpose of such a policy is to remove the existing inequality and to promote welfare based equality for the denizens of the backward regions.
The specific strategy to ameliorate the unequal societal condition is left to the State, provided it is geared to producing equality in the quality of life of that handicapped area subject, of course, to basic recognition of individual quality and criteria of efficiency.
If the State, for example, seeks to remove the absence of opportunity for medical education of adivasis or islanders who have no inclination or wherewithal to go to far off cities and join medical colleges, by starting a regional university and medical college in the heart of such backward region and reserves a high percentage of seats there to 'locals ' i.e. students from that university, it cannot be 845 castigated as discriminatory.
What is directly intended to abolish existing disparity cannot be accused of discrimination.
Again, if the State finds that only students from the backward regions, when given medical graduation, will care to serve in that area, drawn towards it by a sense of belonging, and those from out side will, on graduation, leave for the cities or their own regions, it may evolve a policy of preference or reservation for students of that University.
That strategy ensures the probability of their serving the backward people for whose benefit the medical courses were opened.
Such measures which make for equality of opportunity for medical education and medical service for backward human sectors may be constitutionalised even by articles 14 and 15.
But it must be remembered that exceptions cannot over rule the rule itself by running riot or by making reservations as a matter of course, in every university and every course.
For instance, you cannot wholly exclude meritorious candidates as that will promote sub standard candidates and bring about a fall in medical competence, injurious, in the long run, to the very region.
It is no blessing to inflict quacks and medical midgets on people by wholesale sacrifice of talent at the threshold.
Nor can the very best be rejected from admission because that will be a national loss and the interests of no region can be higher than those of the nation.
So, within these limitations, without going into excesses, there is room for play of the State 's policy choices.
Before moving to the next aspect we may touch upon a slightly different angle which opens up a new point of view.
What is merit or excellence ? If potential for rural service or aptitude for rendering medical attention among backward people is a criterion of merit and it, undoubtedly, is in a land of sickness and misery, neglect and penury, wails and tears then, surely, belonging to a university catering to a deprived region is a plus point of merit.
Excellence is composite and the heart and its sensitivity are as precious in the scale of educational values as the head and its creativity and social medicine for the common people is more relevant than peak performance in freak cases.
Marks on this basis will take us to the same preference as reservations for in university candidates.
Here we are not preferring one with less marks, but adopting a holistic manner of marking linked up with backward settings, institution oriented and like considerations has some meaning.
A caveat or two may be sounded even in this approach lest exception should consume the rule.
The first caution is that reservation must be kept in check by the demands of competence.
You cannot extend the shelter of reservation where minimum qualifications are 846 absent.
Similarly, all the best talent cannot be completely excluded by wholesale reservation.
So, a certain percentage, which may be available, must be kept open for meritorious performance regardless of university, State and the like.
Complete exclusion of the rest of the country for the sake of a province, wholesale banishment of proven ability to open up, hopefully, some dalit talent, total sacrifice of excellence at the altar of equalisation when the Constitution mandates for every one equality before and equal protection of the law may be fatal folly, self defeating educational technology and antinational if made a routine rule of State policy.
A fair preference, a reasonable reservation, a just adjustment of the prior needs and real potential of the weak with the partial recognition of the presence of competitive merit such as the dynamics of social justice which animates the three egalitarian articles of the Constitution.
Flowing from the same stream of equalism is another limitation.
The basic medical needs of a region or the preferential push justified for a handicapped group cannot prevail in the same measure at the highest scale of speciality where the best skill or talent, must be handpicked by selecting according to capability.
At the level of Ph.D., M.D., or levels of higher proficiency, where international measure of talent is made, where losing one great scientist or technologist in the making is a national loss the considerations we have expanded upon as important lose their potency.
Here equality, measured by matching excellence, has more meaning and cannot be diluted much without grave risk.
The Indian Medical Council has rightly emphasised that playing with merit for pampering local feeling will boomerang.
Midgetry, where summitry is the desideratum, is a dangerous article We may here extract the Indian Medical Council 's recommendation, which may not be the last word in social wisdom but is worthy of consideration: Student for post graduate training should be selected strictly on merit judged on the basis of academic record in the undergraduate course.
All selection for post graduate studies should be conducted by the Universities.
Another casuistry needs to be exposed before we proceed.
Backward regions and universities in consequence are miles away from forward cities with sophisticated institutions.
The former, for a equalisation, need crutches and extra facilities to overcome injustices.
The latter already enjoy all the advantages of the elite and deserve no fresh props.
That will be double injury to claims of equality of the capable candidates coming from less propitiously circumstanced universities and societies.
Law is no absolute logic but the handmaid of current social facts of life.
847 We hasten to keep aloof from reservations for backward classes and Scheduled Castes and Tribes because the Constitution has assigned a special place for that factor and they mirror problems of inherited injustices demanding social surgery which if applied thoughtlessly in other situations may be a remedy which accentuates the malady.
At this stage it is appropriate to refer to one ruling of this Court which relates partly to university wise reservation in the context of backward areas.
Support from precedents for the propositions implicit in the above discussion can be derived, but we need not cover many rulings and may confine ourselves to one or two which have closer bearing than the rest.
In Chanchala 's case(1) university wise reservation was challenged as unconstitutional.
There was reference to earlier decisions such as Rajendran vs Madras(2) and Periakaruppan vs Tamil Nadu(3) and their ratio was distinguished to reach the conclusion that under certain circumstances university wise classification and reservation was constitutionally permissible.
In Rajendran 's case (supra) district wise quota for medical college admissions was struck down notwithstanding the argument that "if selection was made districtwise, those selected from a district were likely to settle down as practitioners in that district, so that the districts were likely to benefit from their training".(4) The Court did not consider this to be intrinsically irrelevant but negatived the contention.
"On the ground that it was neither pleaded in the counter affidavit of the State, nor had the State placed any facts or figures justifying the plea that students selected district wise would settle down as medical practitioners in the respective district where they resided.
" The emphasis in both the cases (Rajendran and Periakaruppan) was on the reasonable nexus with the object of the rules of selection, namely, to get the most meritorious among the candidates for imparting medical education.
In Chanchala 's case the basis of classification was different: "in that it is neither district wise nor unit wise, but is university wise.
"(5) The justification for university wise reservation was the educational need and paucity of medical service in the area where the university was set up.
Certain regions poorly served with medical facilities and with few doctors needed to produce more medical men 848 who would settle down there.
Likewise, in those backward regions the absence of medical colleges effectively inhibited the needs of medical education of the local student community.
The question was whether these grounds would suffice for providing reservation institution wise.
In this setting, the Court observed: "Since the universities are set up for satisfying the educational needs of different areas where they are set up and medical colleges are established in those areas, it can safely be presumed that they also were so set up to satisfy the needs of medical training of those attached to those universities.
In our view there is nothing undesirable in ensuring that those attached to such universities have their ambitions to have training in specialised subjects, like medicine, satisfied through colleges affiliated to their own universities.
Such a basis for selection has not the disadvantage of district wise or unit wise selection as any student from any part of the state can pass the qualifying examination in any of the three universities irrespective of the place of his birth or residence, Further, the rules confer a discretion on the selection committee to admit outsiders upto 20% of the total available seats in any one of these colleges, i.e. those who have passed the equivalent examination held by any other university not only in the State but also elsewhere in India.
"(1) In the course of the Judgment, Shelat, J. speaking for the Court, was inclined to broaden the principle of equalisation implied in article 15(4).(2) "Once the power to lay down classifications or categories of persons from whom admission is to be given is granted, the only question which would remain for consideration would be whether such categorisation has an intelligible criteria and whether it has a reasonable relation with the object for which the Rules for admission are made.
Rules for admission are inevitable so long as the demand of every candidate seeking admission cannot be complied with in view of the paucity of institutions imparting training in such subjects as medicine.
The definition of a 'political sufferer ' being a detailed one and in certain terms, it would be easily possible to distinguish children of such political sufferers from the rest as possessing the criteria laid down by the definition.
The object of the rules for admission can obviously 849 be to secure a fair and equitable distribution of seats amongst those seeking admission and who are eligible under the University Regulations.
Such distribution can be on the principle that admission should be available to the best and the most meritorious.
But an equally fair and equitable principle would also be that which secures admission in a just proportion to those who are handicapped and who, but for the preferential treatment given to them, would not stand a chance against those who are not so handicapped and are, therefore, in a superior position.
The principle underlying article 15(4) is that a preferential treatment can validly be given because the socially and educationally backward classes need it, so that in course of time they stand in equal position with the more advanced sections of the society.
It would not in any way be improper if that principle were also to be applied to those who are handicapped but do not fall under article 15(4).
" Another observation by Dua, J. in his separate opinion also has pregnant meaning (1): "The object of selection for admission to the Medical Colleges, considered in the background of the directive principles of State policy contained in our Constitution, appears to be to select the best material from amongst the candidates in order not only to provide them with adequate means of livelihood, but also to provide the much needed medical aid to the people and to improve public health generally." (emphasis added) The conclusion that we reach from this ruling which adverts to earlier procedents on the point is that university wise preferential treatment may still be consistent with the rule of equality of opportunity where it is calculated to correct an imbalance or handicap and permit equality in the larger sense.
This extensive excursion is necessitated by the subtle tendency of advantage groups to exploit propositions applicable to disabled categories to good account.
Now, let us look at the raw realities of the Delhi University medical graduates and their claim for larger reservation for M.D. and M.S. Facts, and only facts, must be the guide, of course, within the framework of Part III, and this Court has to play the role not only of the sentinel on the qui vive but also 850 of the 'hound of heaven ', not merely watch but chase, to set things right if any constitutional wrong has been committed.
So we must enquire whether 70% reservation for Delhi graduates which is prima facie discriminatory can be extricated by any amelioratory constitutional logic or ethic implicit in articles 14 and 15.
We have set out the parameters within which alone reservation is permissible.
We must go to the roots of the creed of equality and here the case of State of Kerala vs N. M. Thomas(1) has critical relevance.
That decision dealt with the Scheduled Castes and article 16 and certain facilities other than reservation.
But the core reasoning has crucial significance in all cases of protective discrimination.
The process of equalisation and benign discrimination are integral, and not antagonistic, to the principle of equality.
In a hierarchical society with an indelible feudal stamp and incurable actual inequality, it is sophistry to argue that progressive measures to eliminate group disabilities and promote collective equality are anathema on the score that every individual has entitlement on pure merit of marks.
This narrow 'unsocial ' pedantry subverts the seminal essence of equal opportunity even for those who are humble and handicapped.
Meritocracy cannot displace equality when the utterly backward masses labour under group disabilities.
So we may weave those special facilities into the web of equality which, in an equitable setting, provide for the weak and promote their levelling up so that, in the long run, the community at large may enjoy a general measure of real equal opportunity.
So we hold, even apart from article 15(3) and (4), that equality is not negated or neglected where special provisions are geared to the larger goal of the disabled getting over their disablement consistently with the general good and individual merit.
Indeed, article 14 implies all this, in its wider connotation, and has to inform the interpretation of article 15.
Mathew J. in Thomas 's case (supra) quoted from the Moynihan Report and continued with some insightful comments which we may excerpt: (2) "Here a point of semantics must be grasped.
The demand for equality of opportunity has been generally perceived by White Americans as a demand for liberty, a demand not to be excluded from the competition of life at the polling place, in the scholarship examinations, at the 851 personnel office, on the housing market.
Liberty does, of course, demand that everyone be free to try his luck, or test his skill in such matters.
But these opportunities do not necessarily produce equality.
On the contrary, to the extent that winners imply losers, equality of opportunity almost insures inequality of results.
The point of semantics is that equality of opportunity now has a different meaning for Negroes than it has for Whites.
It is not (or at least no longer) a demand for liberty alone, but also for equality in terms of group results.
In Barard Rustin 's terms, 'It is now concerned not merely with removing the barriers to full opportunity but with achieving the fact of equality. ' By equality Rustin means a distribution of achievements among Negroes roughly comparable to that among Whites.(1) Beginning most notably with the Supreme Court 's condemnation of school segregation in 1954, the United States has finally begun to correct the discrepancy between its ideals and its treatment of the black man.
The first steps, are reflected in the decisions of the courts and the civil rights laws of Congress, merely removed the legal and quasi legal forms of racial discrimination.
These actions while not producing true equality, or even equality of opportunity, logically dictated the next steps: positive use of government power to create the possibility of a real equality.
In the words of Professor Lipset: "Perhaps the most important fact to recognise about the current situation of the American Negro is that (legal) equality is not enough to insure his movement into larger society.
"(2) (emphasis added) We agree with this approach and feel quite clearly that the State 's duty is to produce real equality, rather egalitarian justice in actual life.
If university wise classification for post graduate medical education is shown to be relevant and reasonable and the differential has a nexus to the larger goal of equalisation of educational opportunities the vice of discrimination may not invalidate the rule.
852 Even so, what is fundamental is equality, not classification.
What is basic is equal opportunity, for each according to his ability, not artificial compartmentalisation and institutional apartheidisation, using the mask of handicaps.
We cannot contemplate as consistent with article 14 a clanish exclusivism based upon a particular university, without more.
Alive to these major premises let us examine the merits of the charge of 'admission ' discrimination in the present case, Justice Brennan, in a different social milieu, but with a spiritual secular meaning which may not be lost on us, stated:(1) "Lincon said this Nation was 'conceived in liberty and dedicated to the proposition that all men are created equal '.
The Founders ' dream of a society where all men are free and equal has not been easy to realize.
The degree of liberty and equality that exists today has been the product of unceasing struggle and sacrifice.
Much remains to be done so much that the very institutions of our society have come under challenge.
Hence, today, as in Lincoln 's time, a man may ask 'whether (this) nation or any nation so conceived and so dedicated can long endure '.
It cannot endure if the Nation falls short on the guarantees of liberty, justice, and equality embodied in our founding documents.
But it also cannot endure if our precious heritage of ordered liberty be allowed to be ripped apart amid the sound and fury of our time.
It cannot endure if in individual cases the claims of social peace and order on the one side and of personal liberty on the other cannot be mutually resolved in the forum designated by the Constitution.
If that resolution cannot be reached by judicial trial in a court of law, it will be reached elsewhere and by other means, and there will be grave danger that liberty, equality, and the order essential to both will be lost." Another national risk we run was sounded in words of caution in Khosa 's case by Chandrachud, J. (as he then was):(2) ". .let us not evolve, through imperceptible extensions, a theory of classification which may subvert, perhaps submerge, the precious guarantee of equality.
The eminent spirit of an ideal society is equality and so we must not be left to ask in wonderment: what after all is the operation residue of equality and equal opportunity?" 853 Thus the constitutional principles and limitations are clear and the norms are belighted by the precedents but their application to the specific situation is an exacting task.
The burden, when protective discrimination promotional of equalisation is pleaded, is on the party who seeks to justify the ex facie deviation from equality.
What has the Delhi University stated here? The learned Attorney General frankly admitted that student agitation, without more, could not validate 'reservation ' and that excessive reservation was an obvious inequality.
Nor, indeed, is it a good plea that illegal reservation is being practised by other universities and the Delhi University is forced to act illegally in self defence.
Lawlessness, under our system, is corrected by the law, not by counter lawlessness.
So it is strange for the Delhi University to say our disorderly behaviour is orderly because other universities behave similarly.
Once these misguided defences of direct action by students or reprisals against other universities are brushed aside, we come to grips with the real issues.
Is there circumstantial justification for constitutionalising the rservation strategy, especially of 70% plus? The case for reservation argues itself once we establish an operational relationship between the benign basis of such classified quota or like preference and the object to be achieved viz. promotion of better opportunities to the deprived categories of students or better supply of medical service to neglected regions of our land.
But the Delhi University, city or students, do not fit into the criteria.
When a university or other institution may usefully be made the instrument for promotion of facilities for equal educational opportunity for a class or a region, the State may legitimately resort to institutionally classified reservation but Delhi fails to quality.
Again, the integral yoga of equality and excellence at the service of society as already stated, has another rider.
In the higher scales of specialised knowledge, be it art, science or technology, superior performance must be accorded recognition, for a variety of consideration.
Who but humanity suffers if a rare genius, with a greater flair for or mastery of a key branch of natural or social science, is forced to wither away by a rule of total reservation for its own alumni and proscription of outsiders, by a house of higher learning ? Can 'unapproachability ', a cultural anathema now in India, attain respectability by being labelled as 'reservation ? No.
Therefore, a blanket ban which is the indirect result of a wholesale reservation is constitutional heresy.
There must be substantial social justice as raison d 'etre for a high percentage of alumni reservation 854 The argument urged in answer is that the doors for admission to post graduate medical courses are almost completely closed for Delhi graduates by all other universities.
So, protective reservation becomes necessary as the only hope of Delhi students for post graduate studies.
Those real life factors which show that Delhi graduates are denied de facto equality on a national scale by the exclusionism of other universities and that, therefore, they deserve sheltered equal opportunity in actuality by barriers of reservation of a high percentage of seats such being the University 's defence must be made out and not merely asserted.
This contention deserves close examination, not summary rejection.
The mechanics of merit measurement is simple.
All applicants, whichever the University from where they have taken M.B.B.S. degree, must apply for a common entrance test.
The yard stick of merit is the marks obtained.
Thereafter 70% of the seats is allotted to Delhi graduates and the balance 30% is selected from out of all the remaining applicants, Delhi graduates included.
So much so, Delhi graduates get much more than 70% of the total seats.
Although the stage of application of reservation may bear upon the effective quantum of advantage, the principal question is as to whether a minimum of 70% for the Delhi graduate alone is not far too excessive, based on extraneous agitational factors and essentially contradicting articles 14 and 15? If equality of opportunity for every person in the country is the constitutional guarantee, a candidate who gets more marks than another is entitled to preference for admission.
Merit must be the test when choosing the best, according to this rule of equal chance for equal marks.
This proposition has greater importance when we reach the higher levels of education like post graduate courses.
After all, top technological expertise in any vital field like medicine is nation 's human asset without which its advance and development will be stunted.
The role of high grade skill or special talent may be less at the lesser levels of education, jobs and disciplines of social inconsequence, but more at the higher levels of sophisticated skills and strategic employment.
To devalue merit at the summit is to temporise with the country 's development in the vital areas of professional expertise.
In science and technology and other specialised fields of developmental significance, to relax lazily or easily in regard to exacting standards of performance may be running a grave national risk because in advanced medicine and other critical departments of higher knowledge, crucial to material progress, the people of India should not be denied the best the nation 's talent lying latent can produce.
If the best potential in these fields is cold shouldered 855 for populist considerations garbed as reservations, the victims, in the long run, may be the people themselves.
Of course, this unrelenting strictness in selecting the best may not be so imperative at other levels where a broad measure of efficiency may be good enough and what is needed is merely to weed out the worthless.
Coming to brasstacks, deviation from equal marks will meet with approval only if the essential conditions set out above are fulfilled.
The class which enjoys reservation must be educationally handicapped.
The reservation must be geared to getting over the handicap.
The rationale of reservation must be in the case of medical students, removal of regional or class inadequacy or like disadvantage.
The quantum of reservation should not be excessive or societally injurious measured by the over all competency of the end product, viz. degree holders.
A host of variables influence the quantification of the reservation.
But one factor deserves great emphasis.
The higher the level of the speciality the lesser the role of reservation.
Such being the pragmatics and dynamics of social justice and equal rights, let us apply the tests to the case on hand.
We are aware that measurement of merit is difficult and the methods now in vogue leave so much to be desired, that swearing by marks as measure of merit may even be stark superstition.
But for want of surer techniques, we have to make do with entrance tests, and at any rate, save in clear cases of perversity or irrationality, this is ordinarily out of bounds for courts.
M.B.B.S. is a basic medical degree and insistence on the highest talent may be relaxed by promotion of backward groups, institutionwise chosen, without injury to public welfare.
It produces equal opportunity on a broader basis and gives hope to neglected geographical or human areas of getting a chance to rise.
Moreover, the better chances of candidates from institutions in neglected regions setting down for practice in these very regions also warrants institutional preference because that policy helps the supply of medical services to these backward areas.
After all, it is quite on the cards that some out of these candidates with lesser marks may prove their real mettle and blossom into great doctors.
Again, merit is not measured by marks alone but by human sympathies.
The heart is as much a factor as the head in assessing the social value of a member of the profession.
Dr. Samuel Johnson put this thought with telling effect when he said : "Want of tenderness is want of parts, and is no less a proof of stupidity than of depravity".
856 We have no doubt that where the human region from which the alumni of an institution are largely drawn is backward, either from the angle of opportunities for technical education or availability of medical services for the people, the provision of a high ratio of reservation hardly militates against the equality mandate viewed in the perspective of social justice.
We have two weighty differentiating factors here.
Delhi is in no sense an educationally or economically backward human region, measured against the rest of our country.
The students of Delhi, who are likely to seek admission to medical colleges, belong to classes higher in the scale than in most parts of India.
As explained earlier the presence of huge central administrative establishments and higher echelons of the public services, members in numbers of the political aristocracy, thanks to Delhi being the seat of Parliament, countless executives clustering around big business and industrial houses and offices and many educational, research and other institutions, professional organisations, the Supreme Court, the High Court, and their natural human concomitants in the upper socio educational scale, make Delhi and the Delhi University the cynosure of the privileged species in a land of under privilegd penury.
Of course, like in any megalopolis of a developing country, slums and other symptoms of deprivation show up and the desperately poor denizens below the visibility line unbiquitously abound.
But they are not the potential candidates for medical admission or service and cannot be used as `alibi ' for reservation.
In what sense, regard being had to over all Indian conditions, can it be said that Delhi or the Delhi University, is backward or serves, through the medical colleges of its University, the students who will settle down to alleviate suffering in that region, Secondly, and more importantly, it is difficult to denounce or renounce the merit criterion when the selection is for post graduate or post doctoral courses in specialised subjects.
There is no substitute for sheer flair, for creative talent, for fine tuned performance at the difficult heights of some disciplines where the best alone is likely to blossom as the best.
To sympathise mawkishly with the weaker sections by selecting sub standard candidates, is to punish society as a whole by denying the prospect of excellence say in hospital service.
Even the poorest, when stricken by critical illness, needs the attention of super skilled specialists, not humdrum second rates.
So it is that relaxation on merit, by over ruling equality and quality altogether, is a social risk where the stage is post graduate or post doctoral.
Of course, we should not exaggerate this factor.
Post graduate studies are not all that great and demanding as to invite only geniuses.
857 We cannot be scared by glorifying merit nor be hypnotised by the cult of talent, seeing as we do, crowds of M.Ds, M.Ss and their foreign analogues.
Nor, indeed, are the entrance tests any but the feeblest yardsticks to measure innate capabilities.
Is it not the wildest hostage to fortune to swear by marks alone which are so freakish and determined by a chancy variety of variables ? We find different modes of examining faculties in different universities, commissions and countries and may, on closer scrutiny, pick holes in the scientific basis of our entrance tests themselves.
We repeat all this only to stress the limitations on the current system of selection so that we may not be swept off our feet by the elitist feeling that something sacred or scientific is being jettisoned for the sake of accommodating nitwits of backward regions institutions or classes when marks are slightly slurred over.
Even so, being realists, we go by existing methodology until better modes are devised.
In the light of this discussion about the know how and know why of reservations, what are the conclusions that emerge vis a vis the Delhi graduates ? Neither Delhi nor the Delhi University medical colleges can be designated as categories which warrant reservation.
But there is one weighty circumstance which must be in our remembrance.
Reservation for Delhi graduates is not that invidious because, as stated in the beginning, the students are from families drawn from all over India.
Not `sons of the soil ' but sons and daughters of persons who are willy nilly pulled into the capital city for reasons beyond their control.
This reservation is, therefore, qualitatively different.
There is another pathological condition affecting `medical admissions ' which is at the back of the desperate `satyagraha ' of the students and this factor tilts the scale a great deal.
Counsel for the University, supported by fragmentary material pointing to a pan Indian tendency, argued that all the country round every university bangs, bars and bolts the doors of medical admission to outsiders and if Delhi alone were to keep its doors hospitably ajar where are the Delhi graduates to go for higher studies if squeezed out by All India competition ? If reservation is evil, the embargo everywhere must be lifted, lest evil should beget evil.
So long as other universities are out of bounds for Delhi graduates, exposure to all India competition becomes intense and prejudices their chances.
This indirect, real yet heavy handicap creates an under current of discrimination and cannot be wished away and needs to be antidoted by some percentage of reservation or other legitimate device.
Another consideration which justifies some measure of reservation is the desire of students for institutional continuity in education.
858 Parents, pupils and teachers will usually prefer such continuity and it has its own value.
We recognise that institution wise reservation is constitutionally circumscribed and may become ultra vires if recklessly resorted to.
But even such rules until revised by competent authority or struck down judicially, will rule the roost.
That is why we have to concede that until the signpost of `no admission for outsiders ' is removed from other universities and some fair percentage of seats in other universities is left for open competition the Delhi students cannot be made martyrs of the Constitution.
Even so, `reservation ' must be administered in moderation, if it is to be constitutional.
Some central technical institutions like the All India Institute of Medical Sciences, Delhi and Chandigarh and the Pondicherry Medical College have a much smaller fraction.
Their circumstances may be different and we do not have the full facts, neither side having furnished more than fragments.
Judicial surmise is too weak to be of decisional certainty.
For reasons we have assigned 70% plus is too high at the post graduate level in the half proved circumstances.
But we stop short of invalidating the rule because the facts are imperfect, the course has already started and the court must act only on sure ground, especially when matters of policy, socio educational investigation and expert evaluation of variables are involved.
Judges should not rush in where specialists fear to tread.
We spare the impugned regulation even though we are, prima facie, sceptical about the vires thereof.
To doubt is not enough to demolish.
When fuller facts are placed, the court will go into this question more confidently.
While reluctantly repelling the challenge of the petitioner we think two directions must be made in this case.
If 70% reservation is on the high side and the petitioner is hopefully near `admission ' going by marks and reservation, it is but just that he is given a chance to do his post graduate course.
Indeed, his coming to Delhi itself was a compulsion beyond his control, as we have noted earlier.
The petitioner, going by marks, deserves admission to the postgraduate degree course although he is now in the post graduate diploma course.
So we direct him to be admitted to the degree course this year, if the rules of attendance etc., do not stand in the way and the Medical Council makes an exception by agreeing to addition of one seat as a special case for this year.
More importantly, we direct the University forthwith not later than two months from to day to appoint a time bound committee to 859 investigate in depth the justification for and the quantum of reservation at the post graduate level from the angle of equality of opportunity for every Indian but taking into consideration other constitutionally relevant criteria we have indicated in this judgment.
That committee will study facts and figures and the reservation realities of other universities and make recommendations on the question of university based reservations and allied aspects as well as the modus operandi for implementation.
The Committee will be richer if it has a constitutional expert and a representative of the Indian Medical Council on it.
Its report shall be considered by the University as soon as may be, so that, if possible, the admissions for next year may be governed by the revised decisions of the concerned organs informed by the report.
We are disturbed by the tendency to wall of each university as an insulated island of education, mindless of the integrated unity and equal opportunity which are an inalienable part of our constitutional value system.
There is good reason for reservation in many cases but the promiscuous, even profligate application of an exception as a rule of educational life by forward cities and universities will boomerang on the nation in the long run.
The Union of India has a special responsibility to ensure that in higher education provincialism does not erode the integrity of India.
Who lives if India dies, is a poignant interrogation with cultural projections in many dimensions which our administrators are not, we hope, innocent off : Mutations in reservations in other universities need not await litigation but can be undertaken before the court process is set in motion.
The dialectic of constitutional protection in the dynamic context of equality in a developing country has been presented by us at some repetitive length so that the voyage of re thinking may not suffer from navigational errors.
The Indian Medical Council is the statutory body at the national level whose functional obligations include setting standards for as well as regulation and coordination of medical education.
What with a growing number of universities with divergent settings, standards and goals and a motley crowd of students with diverse academic and social backgrounds and ambitions, the prescription and invigilation of flexible yet principled norms regulating the entrance into medical courses and training of medical graduates at various levels of specialization are a demanding and dynamic task.
The I.M.A. cannot be a silent spectator or a static instrument but must initiate, activist fashion, steps to make Indian medical education a meaning asset to the nation 's healing and hospital resources and a discipline with broad uniformity and assured standard.
The Central Government, witness to a deteriorating situation, cannot but act to negate the confusing trend of fall in quality and conflict among universities.
860 We may wind up by articulating the core thought that vitalises our approach.
Anyone who lives inside India can never be considered an `outsider ' in Delhi.
The people in the States are caught in a happy network of mutuality, woven into a lovely garment of humanity, whose warp and woof is India.
This is the underlying fundamental of the preambular resolve registered in our National Parchment.
So we insist that blind and bigoted local patriotism in xenophobic exclusivism is destructive of our Freedom and only if compelling considerations of gross injustice, desperate backwardness and glaring inequality desiderate such a purposeful course can protective discrimination gain entrance into the portals of college campuses.
The Administration has a constitutional responsibility not to be a mere thermometer where mercury rises with populist pressure but to be a thermostat that transforms the mores of groups to stay in the conscience of the nation, viz. the Constitution.
We dispose of the petition with these twin directions leaving the parties to suffer their costs.
PATHAK, J. I have had the benefit of reading the judgment prepared by my learned brother V. R. Krishna Iyer and while I agree with him that the writ petition should be dismissed, I propose to state my own reasons.
The validity of a reservation of 70% of the seats in the post graduate classes by the Delhi University in favour of its own medical graduates is assailed in this writ petition.
The basis of the reservation is the consideration that the candidate for admission to the post graduate classes is a medical graduate of the same University.
No question of backward classes, scheduled castes and scheduled tribes, is involved.
Criteria pertinent to reservation concerning them are, it seems to me, not relevant at all.
Nor strictly is the test requiring a territorial nexus the University does not insist that the candidate should hail from any particular region or State for the purpose of the 70% reservation.
The relationship is entirely institutional those who have graduated from the medical colleges run by the Delhi University are favoured for admission to the post graduate classes.
In my opinion, there is sufficient validity in that consideration.
It is not beyond reason that a student who enters a medical college for his graduate studies and pursues them for the requisite period of years should prefer on graduation to continue in the same institution for his post graduate studies.
There is the strong argument of convenience, of stability and familiarity with an educational environment which in different parts of the country is subject to varying economic and psychological pressures.
But much more 861 than convenience is involved.
There are all the advantages of a continuing frame of educational experience in the same educational institution.
It must be remembered that it is not an entirely different course of studies which is contemplated; it is a specialised and deeper experience in what has gone before.
The student has become familiar with the teaching techniques and standards of scholarship, and has adjusted his responses and reactions according.
The continuity of studies ensures a higher degree of competence in the assimilation of knowledge and experience.
Not infrequently some of the same staff of Professors and Readers may lecture to the post graduate classes also.
Over the under graduate years the teacher has come to understand the particular needs of the student, where he excels and where he needs an especial encouragement in the removal of deficiencies.
In my judgment, there is good reason in an educational institution extending a certain degree of preference to its graduate for admission to its post graduate classes.
The preference is based on a reasonable classification and bears a just relationship to the object of the education provided in the postgraduate classes.
The concept of equality codified in our constitutional system is not violated.
It has been said sometimes that classification contradicts equality.
To my mind, classification is a feature of the very core of equality.
It is a vital concept in ensuring equality, for those who are similarly situated alone form a class between themselves, and the classification is not vulnerable to challenge if its constituent basis is reasonably related to achieving the object of the concerned law.
An institutional preference of the kind considered here does not offend the constitutional guarantee of equality.
But the question really is : Is the degree of reservation excessive ? Is 70% too much ? Too excessive a reservation could result in preference to graduate candidates of severely limited aptitude and competence over meritorious candidates from other institutions whose exclusion could result in aborting a part of our national talent.
The determining factor, it appears to me, is the measure of reciprocity prevailing between the different educational institutions in India regarding the availability of admission to graduates of other institutions.
It can hardly be supposed that if the medical graduates of the Delhi University are shut out from adequate consideration for admission to the post graduate courses of other institutions merely because they did not graduate from those institutions they should not think it unjust that the hospitality of their own University to outside medical graduates leaves insufficient provision for them.
Not to be able to take post graduate studies at all implies the termination of their medical studies.
This is a problem which can be tackled only on a national level, with all Universities 862 and other medical institutions coming together around a common table with the object of fashioning out a mutual reasonable quota reservation.
A wise and far sighted exercise, eschewing narrow parochial considerations, is called for.
It is only by a joining of hands across the entire nation that a suitable and enduring solution can be evolved and the turbulence which disturbs the student body set at rest.
My learned brother has referred to the considerable attraction which an educational institution in New Delhi exerts over students from other parts of the country.
I confess I do not share the view entirely.
So much, I think, depends on the choice of a particular subject or course of studies by the candidate.
And medical course are not all necessarily to be found only in New Delhi.
They are located in other parts of India and some of those well known centres of medical education have at least an equal reputation in certain fields of specialised study.
I am reluctant to accept the proposition that because New Delhi is the political, legislative and judicial capital of India, an education of quality is not to be found in other cities.
Merely because New Delhi is the new Capital of Delhi does not justify a disproportionate treatment of the claim to equality on a national level made by its medical graduates.
The question remains : Is a reservation of 70% excessive ? We have travelled through the record, and I agree with my learned brother that the material is so scanty, fragmentary and unsatisfactory that we are prevented from expressing any definite decision on the point.
Although we gave sufficient opportunity to the parties, the requisite material has not been forthcoming.
Whether or not a reservation of 70% was called for has not been established conclusively.
Indeed, there is hardly anything to show that the authorities applied their mind to a cool dispassionate judgment of the problem facing them.
Popular agitation serves at best to arouse and provoke complacent or slumbering authority; the judgment and decision of the authority must be evolved from strictly concrete and unemotional material relevant to the issue before it.
Unfortunately, there is little evidence of that in this case.
For that reason, I join my learned brother in the directions proposed by him.
The petitioners have raised other contentions also, principally resting on the allegation that the University of Delhi is a centrally administered institution, but I see no force in those submissions.
Accordingly, subject to the two directions proposed by my learned brother the writ petition is dismissed and the parties shall bear their own costs.
N.V.K. Petition dismissed.
| IN-Abs | The University of Delhi has many post graduate and diploma courses in the faculty of medicine but all of them put together provide 250 seats.
The three medical colleges in Delhi turn out annually 400 medical graduates who get 'house ' jobs in the local hospitals and qualify themselves for post graduate courses.
As the graduates from the Delhi University could not be accommodated fully or even in part for the post graduate courses in medicine and as these graduates were not considered for admission into other universities on account of various regional hurdles such as prescription of domicile, graduation in that very university, registration with the State Medical Council, service in the State Medical service etc., the Delhi University had earmarked some seats at the post graduate level in medicine for the medical graduates of Delhi University.
Until April 1978, the rule for selection of candidates for admission into the post graduate classes in medicine provided that selection for 52% of the total number of seats was to be made on the basis of combined merit of Delhi University and other university medical graduates, and 48 per cent from the Delhi University graduates only.
The rule was amended, reserving 70% of the seats at the post graduate level to Delhi graduates and 30% being open to all, including graduates of Delhi.
The petitioner who was a medical graduate from the Madras University applied for the post graduate degree in Dermatology in the University of Delhi.
He passed the common entrance test for admission, but his admission was turned down because of the rule of the University reserving 70% of the seats at the post graduate level to Delhi University graduates.
The petitioner in his writ petition under Article 32 challenged the rule as violative of Articles 14 and 16 of the Constitution and sought the court 's writ to direct the University to admit him to the M.D. Course in Dermatology.
It was contended that the University was sustained by Central Government finances, collected from the whole country and the benefits must likewise belong to all qualified students from everywhere.
The University justified the reservation on the ground of exclusivism practised by every other University by forbidding Delhi University graduates from getting admission in their colleges and also on account of the reasonableness of institutional continuity in educational pursuits for students who enter a university for higher studies.
832 Dismissing the writ petition.
^ HELD: (per Krishna Iyer & Chinnappa Reddy, JJ.) 1.
Reservation of 70% is too high at the post graduate level.
But the rule is not invalidated because the facts are imperfect, the course has already started and the court must act only on sure ground, especially when matters of policy, socio educational, investigation and expert evaluation of variables are involved.
When fuller facts are placed, the court will go into this question more confidently.
[858 D E] 2.
If 70% reservation is on the high side and the petitioner is hopefully near 'admission ' going by marks it is but just that he is given a chance to do his post graduate course.
His coming to Delhi itself was a compulsion beyond his control.
[858 F] 3.
Petitioner directed to be admitted to the degree course this year, if the rules of attendance etc., do not stand in the way and the Medical Council makes an exception by agreeing to addition of one seat as a special case for this year.
[858 G] 4.
(i) The University forthwith not later than two months from today to appoint a time bound committee to investigate in depth the justification for and the quantum of reservation at the post graduate level from the angle of equality of opportunity for every Indian.
That committee will study facts and figures and the reservation realities of other universities and make recommendations on the question of university based reservations and allied aspects as well as modus operandi for implementation.
The Committee will benefit if it has a constitutional expert and a representative of the Indian Medical Council on it.
Its report shall be considered by the University as soon as may be, so that, if possible, the admissions for the next year may be governed by the revised decisions of the concerned organs informed by the report.
[858 H 859 C] (ii) The Union of India has a special responsibility to ensure that in higher education provincialism does not erode the integrity of India.
Anyone who lives in India can never be considered an 'outsider ' in Delhi.
Blind and bigoted local patriotism in xenophobic exclusivism is destructive of freedom and only if compelling considerations of gross injustice, desperate backwardness and glaring inequality desiderate such a course can protective discrimination gain entrance into the portals of college campuses.
[859 D, 860 A, B] 5.
The philosophy and pragmatism of universal excellence through universal equal opportunity is part of our culture and constitutional creed.
[843 A] 6.
The Indian Constitution is wedded to equal protection and non discrimination.
articles 14, 15 and 16 are inviolable and article 29(2) strikes a similar note though it does not refer to regional restrictions or reservations.
article 15 saves the State 's power to make special provisions for women and children or for advancement of socially and educationally backward classes.
[842 B] 7.
University wise preferential treatment may still be consistent with the rule of equality of opportunity where it is calculated to correct and imbalance or handicap and permit equality in the larger sense.
What is fundamental is equality, not classification.
What is basic is equal opportunity, for each according to his ability, not artificial compartmentalization and institutional apartheidisation, using the mask of handicaps.
A clanish exclusivism based upon a particular university cannot be contemplated as consistent with Article 14.
[852 A] 9.
A blanket ban which is the indirect result of a wholesale reservation is constitutional heresy.
There must be substantial social justice as raison d 'etre for a high percentage of alumni reservation.
[853 H] 10.
If equality of opportunity for every person in the country is the constitutional guarantee, a candidate who gets more marks than another is entitled to preference for admission.
Merit must be the test when choosing the best, according to this rule of equal chance for equal marks.
This proposition has greater importance when we reach the higher levels of education like postgraduate courses.
The role of high grade skill or special talent may be less at the lesser levels of education jobs and disciplines of social inconsequence, but more at the higher levels of sophisticated skills and strategic employment.
To devalue merit at the summit is to temporise with the country 's development in the vital areas of professional expertise.
[854 E G] 11.
The class which enjoys reservation must be educationally handicapped.
The reservation must be geared to getting over the handicap.
The rationale of reservation must be in the case of medical students, removal of regional or class inadequacy or like disadvantage.
The quantum of reservation should not be excessive or societally injurious, measured by the over all competency of the end product, viz. degree holders.
A host of variables influence the quantification of the reservation.
[855 B C] 12.
The higher the level of the speciality the lesser the role of reservation.
M.B.B.S. is a basic medical degree and insistance on the highest talent may be relaxed by promotion of backward groups, institution wise chosen, without injury to public welfare.
It produces equal opportunity on a broader basis and gives hope to neglected geographical or human areas of getting a chance to rise.
Moreover, the better chances of candidates from institutions in neglected regions getting down for practice in these very regions also warrants institutional preference because that policy helps the supply of medical services to these backward areas.
[855 D, F] 13.
It is difficult to denounce or renounce the merit criterion where the selection is for post graduate or post doctoral courses in specialised subjects.
There is no substitute for sheer flair, for creative talent, for fine tuned performance at the difficult heights of some disciplines where the best alone is likely to blossom as the best.
[856 F G] 14.
Neither Delhi nor the Delhi University medical colleges can be designated as categories which warrant reservation.
Reservation for Delhi graduates is not that invidious, because the students are from families drawn from all over India.
Not sons of the soil ' but sons and daughters of persons who are pulled into the capital city for reasons beyond their control.
This reservation, is, therefore, qualitatively different.
[857 D E] 15.
Institution wise reservation is constitutionally circumscribed and may become ultra vires if recklessly resorted to.
But even such rules, until revised 834 by competent authority or struck down judicially, will rule the roost.
Until the signpost of 'no admission for outsiders ' is removed from other universities and some fair percentage of seats in other universities is left for open competition, the Delhi students cannot be made martyrs of the Constitution.
Reservation must be administered in moderation, if it is to be constitutional.
[858 B C] 16.
Litigation, on a socio legal issue of critical constitutional moment, should not end with general assertions, affidavits of formal denials and minimal materials, but needs feeding the court with nutritive facts which build the flesh and blood of the administrative or legislative action under challenge and all other surrounding and comparative data which legitimate the 'reservation ' or other procedure under attack from the constitutional angle.
Ingenious or imaginative orality in court can never be a substitute for well researched down to earth factuality in the brief.
In the adversary system, advocacy in the superior courts which by their decisions, declare the law for all must broaden beyond the particular lis into a conspectus of sociological facts, economic factors and educational conditions so that other persons aggrieved who will potentially be bound by the decision, do not suffer by not being eo nomine parties.
[841 F G, H 837 E] (Per Pathak J.) 1.
Classification is a feature of the very core of equality.
It is a vital concept in ensuring equality, for those who are similarly situated form a class between themselves, and the classification is not vulnerable to challenge if its constituent basis is reasonably related to achieving the object of the concerned law.
An institutional preference as in the instant case does not offend the constitutional guarantee of equality.
[861 D E] 2.
The basis of the reservation is that the candidate for admission to the post graduate classes is a medical graduate of the same university.
The relation ship is institutional.
There is sufficient validity in that criterion as a basis of classification under Article 14.
[860 F, G] It is not beyond reason that a student who enters a medical college for his graduate studies and pursues them for the requisite period of years should prefer on graduation to continue in the same institution for his post graduate studies.
There is the strong argument of convenience, of stability and familiarity with an educational environment which in different parts of the country is subject to varying economic and psychological pressures.
But much more than convenience is involved.
There are all the advantages of a continuing frame of educational experience in the same educational institution.
In the post graduate class, it is not an entirely different course of studies which is contemplated; it is a specialised and deeper experience in what has gone before.
The student has become familiar with the teaching techniques and standards of scholarship, and has adjusted his responses and reactions accordingly.
The continuity of studies ensures a higher degree of competence in the assimilation of knowledge and experience.
Not infrequently some of the same staff of Professors and Readers may lecture to the post graduate classes also.
Over the under graduate years the teacher has come to understand the particular needs of the student, where he excels and where he needs an especial encouragement in the removal of deficiencies.
There is good reason in an educational institution extending a certain degree of preference to its graduates for admission to its post graduate classes.
[860 C] 835 3.
Medical courses are not all necessarily to be found only in New Delhi.
They are located in other parts of India and some are well known centres of medical education.
The proposition that because New Delhi is the political, legislative and judicial capital of India, an education of quality is not to be found in other cities is not acceptable.
Merely because New Delhi is the new Capital of Delhi does not justify a disproportionate treatment of the claim to equality on a national level made by its medical graduates.
[862 C D] 4.
But too excessive a reservation could result in preference to graduate candidates of severely limited aptitude and competence over meritorious candidates from other institutions whose exclusion could result in aborting a part of the national talent.
[861 F] 5.
Whether or not a reservation of 70% was called for has not been established conclusively.
There is hardly anything to show that the authorities applied their mind to a cool dispassionate judgment of the problem facing them.
The judgment and decision of the authority must be evolved from strictly concrete and unemotional material relevant to the issue before it.
[862 F]
|
Civil Appeal No. 1802 of 1971.
Appeal by Special Leave from the Judgment and Order dated 2 11 1971 of the Allahabad High Court in S.A. No. 768 of 1964.
Y. section Chitale, Lalji Sahai Srivastava, B. P. Singh and Mukul Mudgal for the Appellant.
R. K. Garg, section P. Singh and Sudama Ojha for Respondent No. 1.
section T. Desai and Uma Datta for Respondent No. 3. section C. Patil for Respondent No. 2 M. Veerappa for Respondent No. 4.
The Judgment of the Court was delivered by SEN J.
This is an appeal by special leave from a judgment and decree of the Allahabad High Court dated November 2, 1971 in a suit for declaration of title to, and possession of house No. C 27/33 situate in Mohalla Jagatganj, Varanasi for arrears of rent and mesne profits in respect thereof.
The principal point in controversy between the parties in this appeal is, whether the plaintiff, Mathura Ahir, being a Sudra could not be ordained to a religious Order and become a Sanyasi or Yati and, therefore, installed as a Mahant of the Garwaghat Math according to the tenets of the 'Sant Mat ' Sampradaya.
A subsidiary question arises as to whether in the absence of proof of the performance of Atma Sradh and the recitation of Pravesh Mantra neither the plaintiff nor his two predecessors Swami Sarupanand and Swami Atmavivekanand could be regarded as Hindu sanyasis.
It also raises a further question namely whether the first respondent, Harsewanand, the original plaintiff having died during the pendency of the appeal, the appeal abates in its entirety.
The facts of the case are set forth with utmost particularity in the judgment of the High Court.
It will, therefore, not be inconvenient to deal with them as briefly as possible.
The history of the Garwhaghat Math is as follows: In 1925, Swami Sarupanand Paramhans, disciple of Swami Advaitanand, a Hindu ascetic belonging to the 'Sant Mat ' sect, came from the North Western Provinces, and took his abode at Garwaghat, Mouza Ramna Malhija, in the vicinity of Varanasi City.
He was a religious preceptor of great learning and from his hermitage preached the tenets and precepts of the 'Sant Mat ' and soon had a large following.
He was treated with great veneration and some of his devotees by a registered gift deed dated March 666 18, 1935 endowed the land and building, which he named as 'Bangla Kuti '.
Subsequently the said Bangla Kuti and other lands and buildings appurtenant and adjacent thereto came to be known as the Garwaghat Math of which Swami Sarupanand was initially the mahant.
He paid a visit to village Khuruhja for a couple of days and Baikunth Singh, father of defendant No. 5, Sri Krishna Singh, the appellant, was greatly influenced by his preachings and left for Varanasi for good.
In due course, Baikunth Singh was initiated as chela by Swami Sarupanand who named him as Atmavivekanand.
Swami Atmavivekanand Paramhans was the chief disciple of Swami Sarupanand and was given full rights of initiation and Bhesh by his Guru.
Swami Sarupanand took his samadhi at Meerut in 1936 and after his death, according to his wishes, his Bhesh and Sampradya gave Swami Atmavivekanand Chadar Mahanti of Garwaghat Math and made him the mahant.
Swami Atmavivekanand also had a large following and his 'Sant Mat ' fraternity which comprised of thousands of Grihastha and Virakta disciples made large offerings and gifted extensive properties to him as their religious or spiritual leader.
In 1937, Swami Atmavivekanand initiated the plaintiff Mathura Ahir as his chela and named him as Harsewanand according to the custom and usage of the 'Sant Mat ' sect.
During his lifetime, he purchased the two properties viz., house No. C 27/33, situate in Mohalla Jagatganj and house No. C 4/83, situate in Mohalla Sarai Gobardhan in the city of Varanasi by registered sale deeds dated December 3, and December 22, 1942 from out of the income of the math i.e., the offerings (Bhent) made by the devotees and formed the properties of the math.
Swami Atmavivekanand died at Varanasi on August, 23, 1949.
A Bhandara was held on October 3, 1949 and according to the wishes of Swami Atmavivekanand, the mahantas and sanyasis of the Bhesh and Sampardaya gave the Chadar Mahanti to the plaintiff and installed him as the mahant of the math in place of Swami Atmavivekanand on October 4, 1949 in accordance with the custom and usage of the Sampradaya.
The mahants and sanyasis of the 'Sant Mat ' Bhesh who had assembled for the Bhandara also executed a document to that effect acknowledging him to be the mahant.
The plaintiff having been installed as the mahant, the entire property of the Garwaghat Math along with the two houses in the city of Varanasi, devolved upon him as successor to Swami Atmavivekanand.
On August 21, 1951 the plaintiff respondent No. 1, Harsewanand, brought the suit, out of which this appeal arises, in the court of the City Munsif, Varanasi for ejectment of respondents Nos. 2 to 5 from 667 house No. C 27/33, situate in Mohalla Jagatganj, Varanasi.
It was pleaded that respondent No. 2, Avadesh Narain, defendant No. 1, had taken the house on rent from Swami Atmavivekanand, the late mahant.
It was alleged that he had unlawfully sub let the premises to the respondents Nos. 3 to 5, who were defendants Nos. 2 to 4.
The suit was contested by these respondents who denied the tenancy and inter alia pleaded that they were in occupation of the house as chelas of Swami Atmavivekanand in their own right by virtue of the licence granted to them by him.
They denied the plaintiff 's title as well as right to sue alleging that he was neither a chela of Swami Atmavivekanand nor his successor.
It was also alleged that the house in suit was the personal property of Swami Atmavivekanand and, therefore, on his death his natural son and disciple, Sri Krishna Singh, the appellant became the owner thereof.
The suit which was originally framed by the plaintiff respondent No. 1, Harsewanand, as a suit between a landlord and tenant had, therefore, to be converted into a suit for possession based on title by impleading the appellant, Sri Krishna Singh as defendant No. 5.
It is not necessary to mention in detail the other averments in the plaint, nor is it necessary to mention the various pleas raised in the written statement filed by the defendants.
It will be sufficient, however, to mention that the appellant Sri Krishna Singh in his written statement denied the existence of the math as pleaded by the plaintiff and asserted that the house in it, in any case, was not math property.
He further pleaded that the plaintiff Mathura Ahir being a Sudra, was legally incompetent to become a sanyasi, and that the plaintiff was not the mahant of the Garwaghat Math.
He further claimed that after the death of Swami Atmavivekanand, he became the owner of the house in suit by inheritance, as also of the properties alleged by the plaintiff to belong to Garwaghat Math.
All these properties, according to the appellant, were secular and personal properties of his father Baikunth Singh, who was also known as Swami Atmavivekanand.
In the trial, the issues, as finally framed by the learned Munsif were seventeen in number.
Of these, the following are relevant: (1) Whether the plaintiff is the owner of the premises in suit? (8) Whether the plaintiff was nominated as a mahant and given Chadar in accordance with the custom? Is there any custom as alleged by the plaintiff? (12) Was Swami Atmavivekanand a sanyasi and had he ceased to be a Grihasti? (13) Is the plaintiff a Sudra and not entitled to become sanyasi according to Hindu law? (14) Is the 668 plaintiff chela of Swami Atmavivekanand and entitled to succeed to properties left by him in preference to his son Sri Krishna? (15) Is the house in suit a Math property? It appears that the case came up for hearing before the learned Munsif on October 5, 1953 when the plaintiff 's counsel accompanied by his parocar made oral pleadings under O. 10, r. 1 of the Code of Civil Procedure to the effect: "The 'Sant Mat ' Sampradaya is one of the Dasnami sanyasis founded by the great Sankaracharya, and is governed by Naranjini Math Akhara.
" The learned Munsif found each and every of these issues in favour of the plaintiff and accordingly decreed the suit.
x x x x x x x x x On appeal the III Addl.
Civil Judge, Varanasi by his judgment dated January 14, 1964 reversed some of the aforesaid findings while maintaining the rest.
From the judgment of the Addl.
Civil Judge, the appellant alone preferred an appeal to the High Court which by its judgment dated November 2, 1971 on a careful marshalling of the entire evidence, in the light of well settled principles, agreeing with the learned Munsif, set aside the findings of the learned Civil Judge and decreed the plaintiff 's suit in its entirety.
A learned Single Judge, Kirty J., in the course of his judgment observed that the evidence on record sufficiently established that there had come into existence a math at Garwaghat, of which Swami Atmavivekanand was the mahant.
He referred to the overwhelming evidence led by the plaintiff showing that the building known as 'Shanti Kuti ' and certain other buildings constituted an endowment to the math itself, which was a monastic institution presided over by the mahant.
He further held that the house in dispute was not the personal property of Swami Atmavivekanand but formed an accretion to the math as it had been acquired by him from out of the offerings (Bhent) made by the disciples to him as their religious or spiritual leader for the purposes of the spiritual order of the fraternity and, therefore, the natural heirs of Swami Atmavivekanand could have no claim to the property, which must descend to the plaintiff as a successor to him.
x x x x x x x x On the question whether the plaintiff and his two predecessors, Swami Atmavivekanand and Swami Sarupanand were not legally com 669 petent to hold office of the mahant of the math in question, the learned Single Judge observed: "The finding of the court below on this point is in appellant 's favour, the reason given therefor being that the plaintiff failed to prove that he or his predecessors had performed Atma Sradh and uttered Pravesh Mantra as mandatorily prescribed by Hindu law.
The factual part of the finding, viz., the performance of the Sradh and the utterance of the Mantra, is binding in second appeal, but the conclusion drawn therefrom is one of law.
" After referring to the authorities on the subject, he observes: "A reading of the judgments in the above noted cases will show that the various observations therein in regard to performance of Atma Sradh and other rites (Prajapathiyesthi Viraja Homam etc.) and the utterance of Pravesh Mantra etc. were made with reference to particular sects or categories of sanyasis claiming to belong to a particular religious order or class of such order, or with reference to "Sanatan", i.e., orthodox, Hindu Dharma.
It is true that on cursory reading it would appear as if the observations formulate indispensable legal requirements of the Hindu law universally applicable to every (Hindu) ordained sanyasi, but, upon a careful analysis I have found that that is not so.
The law as stated therein is generally or usually, but not invariably, applicable.
" In conclusion, he observes: "In the absence of any proof that the followers of Sant Math or the tenets of that Math required of its Mahant that he must necessarily belong to the twice born class of Hindus and be a Sanyasi in accordance with all the rites and ceremonies mentioned in the aforesaid cases, I am not prepared to hold that Swami Sarupanand and Swami Atmavivekanand were legally incompetent to be Mahants of the Math or that the plaintiff is a person disqualified from assuming and holding that office." He accordingly held that the plaintiff and his predecessors, Swami Sarupanand and Swami Atmavivekanand were not legally incompetent to be the mahants of the math.
They did not inflict themselves on the religious fraternity of Sant Mat Sampradaya nor had they been foisted into the office of mahant against the will or in spite of the disapproval of the religious fraternity.
In any event, even if the 670 plaintiff was disqualified being a Sudra, he was entitled to sue as the de facto mahant.
During the pendency of the appeal, the respondent plaintiff Mahant Harsewanand having died, respondent No. 1, Mahant Harshankranand was brought on record as an heir and legal representative.
It would be convenient, at the outset, to deal with the view expressed by the High Court that the strict rule enjoined by the Smriti writers as a result of which Sudras were considered to be incapable of entering the order of yati or sanyasi, has ceased to be valid because of the fundamental rights guaranteed under Part III of the Constitution.
In our opinion, the learned Judge failed to appreciate that Part III of the Constitution does not touch upon the personal laws of the parties.
In applying the personal laws of the parties, he could not introduce his own concepts of modern times but should have enforced the law as derived from recognised and authoritative sources of Hindu law, i.e., Smritis and commentaries referred to, as interpreted in the judgments of various High Courts, except where such law is altered by any usage or custom or is modified or abrogated by statute.
On the main, in agreement with the High Court, we are inclined to take the view that though according to the orthodox Smriti writers a Sudra cannot legitimately enter into a religious Order and although the strict view does not sanction or tolerate ascetic life of the Sudras, it cannot be denied that the existing practice all over India is quite contrary to such orthodox view.
In cases, therefore, where the usage is established, according to which a Sudra can enter into a religious order in the same way as in the case of the twice born classes, such usage should be given effect to.
The first question, therefore, to consider here is: Whether there was a math in existence at Garwaghat, and if so, whether the house in suit was an accretion to the math? Math means a place for the residence of ascetics and their pupils, and the like.
Since the time of Sankaracharya, who established Hindu maths, these maths developed into institutions devoted to the teaching of different systems of Hindu religious philosophy, presided over by ascetics, who were held in great reverence as religious preceptors, and princes and noblemen endowed these institutions with large grants of property.
Dr. Bijan Kumar Mukherjea in his Tagore Law Lectures on the Hindu Law of Religious and Charitable Trusts, 4th ed.
, p. 321, succinctly states: " 'Math ' in ordinary language signifies an abode or residence of ascetics.
In legal parlance it connotes a monastic institution presided over by a superior and established for the use and benefit of ascetics 671 belonging to a particular order who generally are disciples or co disciples of the superior.
" x x x x x The property belonging to a math is in fact attached to the office of the mahant, and passed by inheritance to no one who does not fill the office.
The head of a math, as such, is not a trustee in the sense in which that term is generally understood, but in legal contemplation he has an estate for life in its permanent endowments and an absolute property in the income derived from the offerings of his followers, subject only to the burden of maintaining the institution.
He is bound to spend a large part of the income derived from the offerings of his followers on charitable or religious objects.
The words 'the burden of maintaining the institution ' must be understood to include the maintenance of the math, the support of its head and his disciples and the performance of religious and other charities in connection with it, in accordance with usage.
See: Semmantha Pandara vs Sellappa Chetty Mad.
175 Giyana Sambandha Pandara Sannadhi vs Kandasami Tambiran Mad 375; Vidya Purna Tirtha Swami vs Vidyanidhi Tirtha Swamy Mad 435; Ram Prakash Das vs Anand Das (1916) 43 I.A. 73 (PC), Vidya Varuthi Thirtha vs Babuswamy Iyer (1920 21) 48 I.A. 302; Kailasam Pillai vs Nataji Thambiran Mad, 265.
From the principles, it will be sufficiently clear that a math is an institutional sanctum presided over by a superior who combines in himself the dual office of being the religious or spiritual head of the particular cult or religious fraternity, and of the manager of the secular properties of the institution of the math.
In the instant case, the evidence on record sufficiently establishes that a math came to be established at Garwaghat and the building known as 'Bangla Kuti ' and certain other buildings, including the house in suit constituted the endowment of the math itself.
From a review of the general mass of evidence the High Court, agreeing with the learned Munsif, held that the followers of the 'Sant Mat ' fraternity are members of a religious order.
The long line of witnesses who were all disciples of Swami Sarupanand and/or Swami Atmavivekanand have clearly established that it is a religious institution of monastic nature.
It is established for the service of the 'Sant Mat ' cult, the instruction in its tenets and observance of its rites.
The Swamiji who is the Guru is the Mahant, the spiritual and religious leader of the fraternity.
According to the custom and usage of the 'Sant Mat ' Sampradaya, as pleaded by the plaintiff, the initiation of a chela by the Guru results in complete renunciation of the world, and he ceases to have all con 672 nection with his previous Ashramas before becoming a sanyasi.
For becoming a sanyasi it is not necessary that he should be of a particular Varnashram previously, i.e., even a Sudra can become a sanyasi.
The succession to the office of the Mahant is by nomination, i.e., from Guru to chela, the Guru initiates the chela after performing the necessary ceremonies.
The person initiated as a chela adopts the life of a sanyasi and is pledged to lead a life of celibacy and religious mendicancy.
The sitting mahant hands over the management of the math to one of his virtuous chelas fittest to succeed whom he nominates and whom he wishes to install as mahant after him in his place.
He makes clear this desire to the members of his Sampradaya, and also authorises the nominated chela to give Bhesh Dikshawa.
After the death of the mahant, the Bhesh and Sampradaya give Chadar Mahanti of the math to the said disciple at the time of the Bhandara.
The Courts below have concurrently found that the custom or usage, so pleaded has been established.
They further found that the plaintiff Mathura Ahir was initiated as a chela by Swami Atmavivekanand and nominated to be his successor.
They have also found that at the Bhandara held after Swami Atmavivekanand 's death, the plaintiff was installed as the Mahant of Garwaghat Math by the Mahants and Sanyasis belonging to the 'Sant Mat ' Sampradaya, according to the wishes of Swami Atmavivekanand Paramhans.
From the evidence on record, there can be no doubt that the math at Garwaghat belongs to the 'Sant Mat ' Sampradaya, which is a religious Order.
No doubt, the plaintiff Harsewanand, P.W. 15, asserts: "Followers of any religion can become a sanyasi in our cult.
The practice of becoming sanyasi has been prevalent since Satyuga.
Man 's life is divided into three Ashramas.
(Again said): there are four Ashramas viz., Brahmacharya, Grihastha, Vanaprastha and Sanyas.
Varnas are three, Dashnami Sanyasis came into existence after Shankaracharya.
They are Puri, Giri, Bharti, Vana, Tirtha, Aranya, Parvat, Sagar and Saraswati.
I am failing to recollect the name of one of them.
The Sanyasis of Sant Mat are not Dashnami Sanyasis.
Swarupanandji my Guru or I are not Dashnamis, but all these cults are related with Sant Math.
I know Niranjani and Nirvani Akharas.
They belong to Dashnami Sanyasis and Sant Mat Sanyasis.
We have connections with Nirvani and Niranjani Maths.
Some customs of the Maths of those Akharas are observed by us also." (Emphasis supplied) 673 This is, however, contrary to what he had stated in his oral pleadings under O.10, r. 1 of the Code of Civil Procedure.
The fact that the 'Sant Mat ' Sampradaya is one of the Dashnami sects cannot be doubted.
There is unimpeachable testimony of Swami Viveksukhanand, who along with Swami Atmavivekanand and others was initiated as a chela by Swami Sarupanand on the same day, at the same time.
During his cross examination, this witness states: "Sri Swarupanandji was Sadhu of Sant Sanyas Sampradai.
Sant Sanyas Sampradai has been obtaining from ancient time.
This Sampradai is of those ten Sampradai which were founded by Swami Shankracharji.
This (Sampradai) out of the Das nam is Purinama.
There is no branch in Purinama (Sampradai). .Niranjani and Nirvani Akharas are the Akharas of Giri Sampradai.
If a Sanyasi of Giri, Puri, Bharti, or of any Das Nam Sampradai abandons sanyas and re enters into the Grahast Ashram he is called a Gosain.
The rules for making disciples in Giri and Puri Sampradai for making chief disciples, and appointing successor are also one and the same.
The rules, rituals and the ceremonies which are performed at the time of installation to gaddi in both these Sampradai are also one and the same.
There is no difference in Giri and Puri Sampradai.
The rules, practices, rituals and customs followed at the time of installation to gaddi in all the ten sampradaiyas founded by Swami Shankracharyaji are one and the same. ' (Emphasis supplied) Though the math at Garwaghat established by Swami Sarupanand was of recent origin, the High Court observes that the religious order denominated as 'Sant Mat ' has had large following in Punjab and some other parts of India since more than a century.
In a sense, therefore, Swami Sarupanand himself did not for the first time evolve any new religious order.
As regards the origin of the Math, it observed: "I have, therefore, no hesitation in holding, in agreement with the finding of the trial court, that there had come into existence a Math at Garwaghat, Varanasi of which Swami Sarupanand was the Mahant.
Here I may also mention that from the evidence on record it appears that 'Sant Mat ' is not of very recent origin.
Although the evidence is somewhat scanty on the point, yet it sufficiently indicates that this Math 674 has had numerous followers in Punjab and some other parts of India since more than a century.
In a sense, therefore, Swami Sarupanand himself did not for the first time evolve any new religious order.
Here it may also be mentioned that defendants other than the appellant did not seriously dispute the plaintiff 's allegation in regard to the Math in question and the allegation that Swami Sarupanand and thereafter Swami Atmavivekanand were its Mahants.
" Referring to the nature of the property, it said: "Swami Atmavivekanand before becoming a follower of the Sant Mat was a Grihasth with a family.
From the evidence on the record it transpires that he became a devotee and a disciple of Swami Sarupanand and severed all connections with his family.
In course of time he was held in high esteem by the followers of the Sant Mat at Varanasi and other places and large offerings were made to him by the devotees.
Swami Sarupanand had nominated him to be his successor and after his death Swami Atmavivekanand did assume the office of Mahant of the math.
There is no evidence from which it can be reasonably inferred that he treated or set apart the offerings either in their entirety or some portion thereof as belonging to him personally.
On the contrary the evidence on record and the circumstances show that there was a complete blending of such offerings with the funds of the math and used for its purposes.
There is also no reliable evidence to establish that the offerings which were made to him were made not for the purposes of the spiritual order or the fraternity but for his personal aggrandizement.
Indeed, when a person renounces his family connections and takes to ascetism it would be difficult to hold that he would thereafter start amassing wealth and property for his personal benefit or for the benefit of his family with which he had severed his connection.
Unless specifically proved to the contrary, under such circumstances it must be held that the offerings made to such a person were not offerings made to him personally for his personal benefit but had been made for the benefit of the math or the religious institution itself.
In such a case, to my mind, the natural heirs of the person concerned could have no claim to the property which the person came by in his capacity as the religious or spiritual leader.
The house in suit must be held to be an accretion to the Math.
" 675 All this is borne out by the testimony of plaintiff 's witnesses.
The institution was really built up by Swami Atmavivekanand, who was held in great veneration by the followers of the sect.
He preached the tenets of 'Sant Mat ' and had a large following.
His 'Sant Mat ' fraternity comprised of thousands of Grihastha and Virakta disciples who made large offerings.
All the witnesses speak of such offerings in cash or kind or in the shape of immovable property which were endowed to the math.
There are a number of documents showing the endowment by the disciples of their properties to the math, wherein they have described themselves as 'disciples of Swami Atmavivekanand ' and he is described therein as 'Mahant of the Garwaghat Math '.
Even Avadesh Narain, a Judicial Magistrate, D.W. 1, who practised as a lawyer at Varanasi before he was appointed as a Judicial Officer, admits that Swami Atmavivekanand had a large number of disciples in Uttar Pradesh and Bihar, and that the property of 'Bangla Kuti ' might be worth lakhs of rupees.
The two houses at Varanasi, including the suit house, were purchased by Swami Atmavivekanand from out of the offerings (Bhent) made by his disciples.
We have, therefore, no hesitation in upholding the finding of the High Court as regards the existence of a math at Garwaghat and the suit property being the math property.
We may now deal with the main questions on which the decision of the appeal must turn.
It has been argued that according to the Smritis a Sudra cannot be a sanyasi and, therefore, the plaintiff could not enter the Order of a yati or sanyasi.
It has further been argued that there is no evidence on record in proof of the fact that the plaintiff and his two predecessors Swami Sarupanand and Swami Atmavivekanand had performed Atma Sradh or recited Pravesh Mantra and, therefore, they cannot be regarded as Hindu sanyasis.
It, therefore, becomes necessary to trace the origin of Hindu sanyasis belonging to the Dasnami sects founded by the great Sankaracharya, of which the 'Sant Mat ' Sampradaya appears to be a religious denomination i.e., a sub sect.
The first question is, whether a Brahman alone can become a sanyasi among Dasnamis? The second question is, what are the essential ceremonies prerequisite for the initiation of a Dasnami sanyasi? The third question is, what is the mode of succession to the office a mahant of a math or Asthal belonging to any of the Dasnami sects? It will be convenient to take up the last point first.
The law is well settled that succession to mahantship of a math or religious institution is regulated by custom or usage of the particular institution, except where a rule of succession is laid down by the founder himself who created the endowment: vide Genda Puri vs Chatar Puri [1886] I.A. 100 @ 105, Sital Das vs Sant Ram A.I.R. 676 ; Mahalingam Thambiren vs La Sri Kasivasi ; x x x x x x x x x x One who enters into a religious order severs his connection with the members of his natural family.
He is accordingly excluded from inheritance.
Entrance to a religious order, is tantamount to civil death so as to cause a complete severance of his connection with his relations, as well as with his property.
Neither he nor his natural relatives can succeed to each other 's properties.
Any property which may be subsequently acquired by persons adopting religious orders passes to their religious relations.
The persons who are excluded on this ground come under three heads, the Vanaprastha or hermit; the Sanyasi or Yati, or ascetic, and the Brahmachari, or perpetual religious student.
In order to bring a person under these heads it is necessary to show an absolute abandonment by him of all secular property, and a complete and final withdrawal from earthly affairs.
The mere fact that a persons calls himself a Byragi, or religious mendicant, or indeed that he is such, does not of itself disentitle him to succeed to property.
Nor does any Sudra come under this disqualification, unless by usage.
This civil death does not prevent the person who enters into an order from acquiring and holding private property which will devolve, not of course upon his natural relations, but according to special rules of inheritance.
But it would be otherwise if there is no civil death in the eye of the law, but only the holding by a man of certain religious opinions or professions(1).
Special rules are propounded for succession to the property of a hermit, of an ascetic, and of a processed student.
Yajnavalkya states a special rule of succession in regard to the wealth of ascetics and the like: "The heirs who take the wealth of a Vanaprastha (a hermit), of a Yati (an ascetic) and a Brahmacharin (a student) are in their order, the preceptor, the virtuous pupil, and one who is supposed brother and belonging to the same order".
The Mitakshara explains thus(2): "A spiritual brother belonging to the same hermitage (dharmabhratrekatirthi) takes the goods of the hermit (vanaprastha).
A virtuous pupil (sacchishya) takes the property of a yati (as ascetic).
The preceptor (acharya) is heir to the Brahmachari (professed student).
But on failure of these, any one belonging to the same order or hermitage takes the property; even though sons and other natural heirs exist.
" The property that is referred to is explained in Mitakshara and in the Viramitrodaya as consisting of clothes, books and other requisite 677 articles.
Practically, however, such cases seldom arise.
When a hermit or ascetic holds any appreciable extent of property, he generally holds it as the head of some math or as the manager of some religious or charitable endowment, and succession to such property is regulated by the special custom of the foundation.
Succession to the office of the Mahant or Mathadhipathi or Pandara Sannadhi is to be regulated by the custom of the particular institution.
Even where the Mahant has the power to appoint his successor, it is the custom in the various Maths that such appointments should be confirmed or recognised by the members of the religious fraternity to which the deceased belonged.
According to the text of Yajnavalkya referred to above, the property of a life long student goes to his preceptor, that of a hermit or Vanaprastha goes to his religious brother and that of a sanyasi or Yati goes to his virtuous disciple.
The principle, so far as it affects maths, is shortly this, viz., 'a virtuous pupil takes the property '.
The particular mode in which the virtuous pupil, that is, not merely a chela, or a shishya, fittest to succeed, is ascertained or selected is a matter either of express direction on the part of the founder or of custom in the case of each foundation.
There are instances of maths in which the mahantship descends from Guru to chela i.e., the existing mahant alone appoints his successor, but the general rule is that the maths of the same sect in a district, or maths having a common origin, are associated together the mahants of these acknowledging one of their member as a head who is for some reason pre eminent; and on the occasion of the death of one, the others assemble to elect a successor out of the chelas or disciples of the deceased, if possible or if there be none of them qualified then from the chelas of another mahant.(1) According to the Dharmasastras, in the strict legal sense, a Sudra cannot become a sanyasi or ascetic.
Mahamopadhya Dr. P. V. Kane in 'History of Dharmasastra ', Vol. 2, Pt. 1, p. 163, observes: "As the sudra could not be initiated into Vedic study, the only asrama out of the four that he was entitled to was that of the householder.
In the Anusasanaparva (165. 10) we read 'I am a sudra and so I have no right to resort to the four asramas '.
In the Santiparva (63. 12 14) it is said, 'in the case of a sudra who performs service (of the higher classes), who has done his duty, who has raised offspring, who has only a short span of life left or is reduced to the 10th stage (i.e. is above 90 years of age), the fruits of all 678 asramas are laid down (as obtained by him) except of the fourth '.
Medhatithi on Manu, VI.
97 explains these words as meaning that the sudra by serving brahmanas and procreating offspring as a householder acquires the merit of all asramas except moksa which is the reward of the proper observance of the duties of the fourth asrama." Although the orthodox view does not sanction or tolerate ascetic life of the Sudras, the existing practice all over India is quite contrary to such orthodox views.
In Mukherjea 's Hindu Law of Religious and Charitable Trusts, 4th ed., p. 328, it is said: ". the practice of establishing Maths which began with Brahmin ascetics gradually spread to the Sudras and in course of time it was adopted by dissenting religious sects like the Jains, Kabir Panthis, Nanak Panthis, Jangamus and others though they do not believe in the authority of the Vedas or in the tenets of orthodox Hindu religion.
" At page 338, it is observed: ". . according to orthodox Smriti writers, a Sudra cannot legitimately enter into a religious order.
Consequently, the texts of Hindu Law relating to exclusion from inheritance applicable to a yati or a sannyasi do not, in terms, apply to Sudra ascetics.
On this view, it has been held in a series of cases that a Sudra ascetic is not incapable of inheriting the property of his natural relations under the ordinary law of inheritance.
Although orthodox view does not sanction or tolerate ascetic life of the Sudras, it cannot be denied that the existing practice all over India is quite contrary to such orthodox views.
In cases, therefore, where the usage is established, according to which the property of a Sudra ascetic devolves in the same way as the property of the ascetics of the twice born classes, such usages should be given effect to." (Emphasis supplied) In the words of the Privy Council in Collector of Madura vs Moottoo Ramalinga(1), 'under the Hindu system of law, clear proof of usage will outweigh the written text of the law '.
Golapchandra Sarkar Sastri in his Hindu Law, 8th ed., at pp.
65356, in a passage based on translation of slokas from Maha Nirvana Tantra, observes that in Kali Yug, with numerous sects having their 679 peculiar rites for being ordained to a religious order, there are five castes (varnas), i.e., a fifth caste comprising of all other beings.
He further observes that sanyasam according to Vedic rites does not exit and that all the five castes can become Avadhutha Sanyasis: ". in the advanced state of the Kali age, the Brahmanas and the other (four) castes are all entitled to these two orders of life.
The Brahman, the Kshatriya, the Vaisya, the Sudra, and the general body of human beings, these five are entitled to be initiated as Sannyasis or ascetics according to Tantric system.
" The orthodox rule laid down in the Mitakshara that only the Brahman can enter the fourth Asram of life and are eligible to become sanyasis, has therefore, been commented upon by Golapchandra Sarkar Sastri at p. 662: "It has been held that a Sudra cannot become a sannyasi or ascetic.
This is undoubtedly the doctrine propounded in the Smritis.
But the learned Judges have not taken into consideration the modern usages introduced by the Vaishnava and Tantrika and other systems according to which a Sudra and even a non Hindu such as Mohamedan may become a Hindu sannyasi.
There are many religious sects of ascetics among whom caste distinction is unknown, who accordingly initiate and admit Sudras into their brotherhood if otherwise qualified.
In esoteric Hinduism also, caste is individualistic not hereditary, it being determined by qualification and not by birth.
The highest virtue taught by the Hindu religion is that a man should regard other persons and beings as his own self reproduced in them, as the same Supreme Soul pervades them all." (Emphasis supplied) Here the question arises as to what classes of Hindus should be denominated as Sudras.
It is undoubted that there were originally four classes: (1) the Brahmanas, (2) the Kshatriyas, (3) the Vaishyas, and (4) the Sudras.
The first three were the regenerate, or twice born, classes; the latter, the servile class.
The three regenerate classes exist, it is true; but it often becomes difficult to distinguish a Sudra from one of the regenerate classes.
It is pointed out by Golapchandra Sarkar Sastri at p. 113: "The Smritis, which have thrust into prominence this system, divide men into two large classes namely, the Sudras 680 and the Twice born.
The study of the sacred literature forms the principle of this distinction.
They ordain that by birth all men are alike to Sudras, and the second birth depends on the study of the sacred literature.
Thus Sankha, one of the compilers of the Dharma Shastras, declares "Brahmanas (by birth) are, however, regarded by the wise to be equal to Sudras until they are born in the Veda (i.e., learn the sacred literature), but after that (i.e., this second birth) they are deemed twice born".
Passages to the same effect are found in most of the codes, according to which the recognition of the title of the Twice born to superiority over the Sudras, depends upon acquisition of the knowledge of the Vedas.
" The learned author then goes on to say at p. 184: "According to the Smritis, every man is by birth a sudra; it is by learning the sacred literature, that a man becomes twice born.
The privilege of studying the sacred literature is, no doubt, denied to the sudras as well as to the females of the so called twice born classes.
But the status of being twice born depends on the acquisition of knowledge of the sacred literature.
Manu ordains that a twice born man shall abide with the preceptor, and study the Vedas for thirty six years or half or a quarter of that period, or until knowledge of the same is acquired.
" The consequence of omitting to do the same, according to Manu, is that a twice born man, who without studying the Vedas, applies diligent attention to anything else, soon falls even when living together with his descendants, to the condition of a Sudra.
The learned author has observed that the majority of the so called twice born classes have accordingly become long since reduced to the position of Sudras by reason of neglecting the study of the Vedas from generation to generation.
The learned Single Judge accordingly observes: "It will thus be seen that originally every person was deemed to be born a Sudra and that it was by virtue of intensive study of Vedas that a person attained the status of a twice born person.
With the passage of time running into thousands of years, it is evident that the original hall marks for classification of Sudras and twice born people gradually disappeared and degenerated into the rigid caste system based on birth.
" 681 As Dr. Mukherjea observes, the disciples of Sankara were all Brahmans and originally, according to the rule laid down in Sanyas Grahan Paddhati, the authorship of which is imputed to Sankara himself, only the twice born people can become sanyasis of the Dasnami orders.
As the four stages of life have, in the Vedas, been prescribed only for the twice born, no Sudra can, strictly speaking, become an ascetic, and that is the view entertained by the Smriti writers.(1).
According to the Mitakshara, only the Brahmans can enter the fourth Asram of life and are eligible to become sanyasis; and this view is supported by certain passages from Manu where 'Pravrajya ', i.e. exit from the house, has been spoken of or prescribed for the Brahmans alone, and a text of the Sruiti which says "the Brahmans should become ascetics".
According to Nirnaya Sindhu, which has been quoted in West and Buhler 's Digest of Hindu Law(2), a Kshatriya and a Vaishya can also enter into an order of sanyasis.
Upon a view of all these authorities, it was held by the Madras High Court in Dharampuram vs Virapandiyan(3) and the Calcutta High Court in Harish Chandra vs Atir Mahamed(4), that a Sudra can not become a sanyasi under Hindu Law, and consequently the devolution of property of a Sudra who purported to renounce the world and become an ascetic would be governed by the ordinary law of inheritance.
Asceticism in India, perhaps more than in any other country, has been under the definite and strong sanction of religion.
In the doctrine of the four asramas, asceticism was made an integral part of the orthodox Hindu life, and it became the duty of every Hindu, as advanced age overtook him homeless and a wanderer to chasten himself with austerities.
Formally this was to be done for the sake of detaching himself from earthly ties, and of realizing union with Brahman.
And a religious motive was thus supplied for that which in itself was a welcome release from responsibility, care, and the minute requirements of an elaborate social code.
In due course, with the advancement of knowledge, the shackles of the caste system were broken through and the privileges and powers of the ascetic life were extended to Sudras.
682 Hindu asceticism represented, further, a revolt from, or at least a protest against, the tyranny of caste.
In its origin probably remote from Brahmanism, and conveying the ordinary idea that bodily pain was profitable for the advancement and purification of the spirit, the ascetic life became, in association with Hinduism and under the prescriptive sanction of Hindu law itself, a refuge from the burden of caste rules and ostracisms.(1) In Encyclopaedia of Religion and Ethics, Ed.
by James Hastings, Vol.
II, p. 91, it is observed: ".
In the first instance apparently, the right and privilege of asceticism, according to Hindu custom or law, belonged to Brahmans alone; it was then extended to all the twice born, and finally all restrictions were removed, and admission into the ranks of the ascetics was accorded to men of every position and degree.
" This is based on the following passage from the Ramayana, Uttara Kanda, 74.9ff., quoted in J. Muir 's Original Sanskrit Text, i.119f: "Formerly in the krta age Brahmans alone practised tapas; none who was not a Brahman did so in that enlightened age. then came the treta age,. in which the Ksatriyas were born, distinguished still by their former tapas . .
Those Brahmanas and Ksatriyas who lived in the treta practised tapas, and the rest of mankind obedience. .
In the dvapara age tapas entered into the Vaisyas.
Thus in the course of three ages it entered into three castes; and in the three ages righteousness (dharma) was established in three castes.
But the Sudra does not attain to righteousness through the (three) ages. such observance will belong to the future race of Sudras in the kali age, but is unrighteous in the extreme if practised by that caste in the dvapara." (Manu: i. 86) It is, therefore, evident that with reluctance the right to ascetic life was extended to Sudras and in due recognition of their status, they were treated as Hindu sanyasis.
At the present time, there is no distinction or barrier; any one may become an ascetic, and the vows are not necessarily lifelong.
Some sects, however, still restrict membership to Brahmanas, or at least to men of the three higher castes.
The principle laid down by the Madras High Court in Dharmapuram vs Virapandiyan (supra) and the Calcutta High Court in 683 Harish Chandra vs Atir Mahamed (supra) regulating the mode of devolution of property of a Sudras who becomes an ascetic is, however, not applicable to after acquired property of a Hindu sanyasi.
As has been said above, when a layman becomes an ascetic, his connection with his natural family and existing property rights are extinguished.
If he acquires any property subsequent to his becoming an ascetic, such property passes on his death not to his natural but to his spiritual heirs.
It would be convenient next to deal with the question, firstly, as to whether in the 'Sant Mat ' Sampradaya which being a sect of the Dasnamis, a Sudra cannot enter the order of a yati or a sanyasi; and secondly, whether performance of Atma Sradh and the recitation of Pravesh Mantra are ceremonies essential for the initiation of a chela in the 'Sant Mat ' fraternity.
That depends on whether the matter falls to be governed by the Smritis or is regulated by the custom or usage of the 'Sant Mat ' Sampradaya which was one of the Dasnami sects.
About the eighth century A.D., Sankaracharya, the greatest Hindu scholar and philosopher of modern India, defeated the Buddhists in argument and re established Hinduism as the dominant religion of India.
Sankara was an ascetic and founded schools of ascetics.
Hindu scholars and philosophers like Mandana Misra, attempted to prove against him that such ascetism was against the law of the Hindus.
But all opposition was overborne by the commanding influence of Sankara, who established four maths or seats of religion at four ends of India the Sringeri Math on the Sringeri Hills in the south, the Sharda Math at Dwarka in the west, the Jyotir Math at Badrikashram in the north, and the Govardhan Math at Puri in the east and Mandana himself became a Sanyasi disciple under the name of Sureswara.
The monks ordained by Sankara and his disciples were called Sanyasis.
Each of the maths has a sanyasi at its head two bears the title of Sankaracharya in general.
Sankara is said to have four principal disciples who were all Brahmans, from whom the ten divisions of the Order hence named the 'ten named ' or 'Dasnami Dandis ' originated.
These are: Tirtha, 'shrine '; Ashrama, 'order '; Vana, 'wood '; Aranya, 'forest ', 'desert ', Saraswati and Bharti, 'the goddesses of learning and speech '; Puri, 'city '; Giri and Parvata, 'a hill '; and Sagra, 'the ocean '.
The orthodox Hindu recognises no other sanyasis.(1) Kabir and Nanka also established monasteries on the lines of Sankara.
Chaitanya, the pure, the subtle mystic of Naidia, the greatest exponent and exam 684 ple of Bhakti, originally belonged to one of Sankara 's orders, namely Bharati, though he violently repudiated Sankara 's pantheism, and his followers founded the class of ascetics known as Byragis, who too have their establishments.
But it is the schools of Sanyasis founded by Sankara that are now predominant and are the wealthiest, and it is of them that we should speak first.
Sankara founded his monastic system on the lines of the Buddhistic Sangharamas, which were found existing at the time.
The rules of the Hindu and the Buddhistic institutions, so far as the internal management was concerned, were very similar.
The Sangharama had a superior under whose management the establishment was and so had all the Maths of Sankara, the superiors of which were called Mahants and Acharyas, etc.
The superior of a Math had the control of all the property, for he was the Guru whose power no one could question, and the nomination of his successor ordinarily lay with him.
As a rule, the best and most erudite among the disciples, upon whom the choice of the congregation would naturally fall, was nominated and there was rarely any contention.
In course of time, however, as the wealth of the Maths increased and worldliness and all the vices of an idle luxurious life took the place of stern austerity and scholarship above that of all Buddhists and other schismatics, by which Sankara intended the Sanyasis, specially, the superiors, should be distinguished, worldly ideas became the ruling ideas of the establishments.
In imitation of the Maths of Sankara, the followers of Ramanuja also founded Maths reaching the Vishishtadwaita system in various parts of India.
The followers of Madhvacharya, the chief exponent of the Dwaita system, also founded Maths, the chief among whom are the well known eight Maths at Udipi.
Similarly, there are Maths of the followers of Ramanund and Nimbacharya among the orthodox and of Nanak and Kabir among schismatics.
There are also many Maths founded by lesser teachers.
All the strictly orthodox Maths are Maths of the three regenerate classes.
But the followers of Chaitanya in Bengal and of a teacher named Shankara in Assam have Maths or Akharas in which Sudras are admitted.
It is, however, only in Madras that the Shaivas have Sudra Maths.
The Tantras allow Sudras to become Sanyasis and probably, these are based on the Tantras.
The Sudra Maths of Dharmapuram and Tiruvaduthorai are the chief among the Sudra Maths of the Saiva Siddhantam School: Sammantha Pandara vs Sellappa Chetti,(1) G. section Pandara Sannadhi vs Kandaswami Tam 685 biran(1), Vidyapurna Tirthaswami vs Vidhyanidhi Tirthaswami(2), and Kailasam Pillai vs Nataraja Thambiran(2).
The most respectable members of this Order of Hindu ascetics known as Saiva Gosains are the spiritual descendants of Sankaracharya, the very incarnation of the strictest Brahmanism.
Saiva Gosains fell into two classes monks known as Mathadhari as contrasted with Gharbari, or laymen.
The true Dandi should, in accordance with the precepts of Manu Laws (VI.
41ff) live alone near to, but not within a city.
Of Saiva mendicants and ascetic orders, Dandis or staff bearers, occupy a place of pre eminence.
They worship Lord Siva in his form of Bhairava, the 'Terrible ' and profess to adore Nirguna and Niranjana, the deity devoid of attribute or passion.
A sub section of this Order are the Dandi Dasnamis or Dandi of ten names, so called from their assuming one of the names of Sankara 's four disciples and six of their pupils.
(4 & 5) It is customary to consider the two religious orders of Dandis and Dasnamis as forming but one division.
The classification is not, in every instance, correct but the practices of the two are, in many instances, blended and both denominations are accurately applicable to the same individual(6).
The Dandis, properly so called, are the legitimate representatives of the fourth Asrama, or mendicant life, into which the Hindu, according to the instructions of his inspired legislators, is to enter, after passing through the previous stages of student, householder and hermit.
Adopting, as a general guide, the rules laid down in the original works, the Dandi is distinguished (5 & 6) by carrying a small Dand, or wand, with several processes or projections from it, and a piece of cloth dyed with red ochre in which the Brahmanical cord is supposed to be enshrined, attached to it.
They develop within themselves a complete detachment from the things of enjoyment either of this world or the next.
Many Brahmans, even Pandits, or learned 686 Brahmans, come to them for instruction, which they impart freely, without the smallest recompense.
All classes of the community pay them the great honour, even worship them(1).
The Dandis keep themselves very distinct from the rest of the community.
They are Brahmans, and receive disciples only from the Brahmans.
They lead a very austere life.
They do not touch fire or metal, or vessels made of any sort of metal.
It is equally impossible also for them to handle money.
They shave their hair and beard.
They wear one long unsewn reddish cloth, thrown about the person.
Although they are on principle penniless, yet they do not beg.
Their dependence on the kindness and care of others is thus of the most absolute character.
Yet they are not reduced to distress or even to want; they are fed by the Brahmans, and the Gosains, another class of devotees.
They sleep on the ground, and once or twice in the day go round to collect food and alms, for which they must not ask, but contentedly receive what is given.
According to the stated rule, they must not approach a house to beg until the regular meal time is passed; what remains over is the portion of the mendicant.
A Dandi should live alone, and near to, but not within a city; but this rule is rarely observed, and in general the Dandis are found in cities collected like other mendicants in maths.
The Dandi has no particular time or mode of worship, but spends his time in meditation, or in practices corresponding to those of Yoga, and in the study of the Vedanta works, especially according to the precepts of the great Sankaracharya.
As the preceptor was an incarnation of Lord Siva, the Dandis reverence that deity; and his incarnations, in preference to the other members of the Triad, whence they are included amongst his votarics.
Prof. Wilson in his 'Hindu Religions ' observes: "Any Hindu of the first three classes may become Sannyasi or Dandi, or in these degenerate days, a Hindu of any caste may adopt the life and emblems of this order." (Emphasis supplied) The Dasnami Dandis, who are regarded as the descendents of the original members of the fraternity, are said to refer their origin to Sankaracharya.
There are but three, and part of a fourth ascetic class, or those called Tiratha or Indra, Asrama, Saraswati and Bharati who are still 687 regarded as really Sankara 's Dandis.
The rest, i.e. the remaining six and a half of the Dasnamis are considered as having fallen from the purity of practice necessary to the Dandis, are still, in general religious characters, and are usually denominated Atits.
These are the Atits or A 'Dandis viz., the Vanas, Aranyas, Puris, Giris, Parvatas, Sagaras and half the Bharatis, reputed to have fallen to some extent from orthodoxy, but are still looked upon as religious avtars.
The main distinction between the Dandis and the Atits is that the latter does not carry the staff i.e. a trishul.
They differ from the former also in their use of clothing, money, and ornaments, their methods of preparing food, and their admission of members from any order of Hindus.
Some of them lead an ascetic life, while others mix freely in the world, carry on trade and acquire property.
Most of them are celibate, but some of them marry and are often known as samyogi or gharbari Atits.
They are often collected in maths or monasteries.
They wear ochre coloured garments and carry a rosary of rudraksa seeds sacred to Lord Siva.
Their religious theories when they have any) are based on the advaita Vedants of their founder Sankaracharya(1).
There is also a sub division of the Puri division of the Dasnarni sect.
They have tenets much in common, based on the central idea that the Supreme Deity is incomprehensible or, as they say, 'unseeable '.
They denounce idolatory.
This more or less conforms to the tenets of the 'Sant Mat ' sect.
It is proved by the evidence on record that followers of this sect treat the Guru as the incarnation of God.
They have no faith in inanimate idols installed in temples nor do they worship them in their cult.
There are no caste restrictions and anyone can be admitted into the Sant Mat fraternity.
That takes us to the next question as to whether in the absence of proof of the performance of Atma Sradh and recitation of Pravesh Mantra neither the plaintiff nor his two predecessors Swami Sarupanand and Swami Atmavivekanand could be regarded as a Hindu sanyasi.
In order to prove that a person has adopted the life of a sanyasi, it must be shown that he has actually relinquished and abandoned all worldly possessions and relinquished all desire for them or that such ceremonies are performed which indicate the severance of his natural family and his secular life.
It must also be proved, in case of orthodox sanyasis, that necessary ceremonies have been performed, such as Pindadana or Birajahoma or Projapathiyesthi without which II the renunciation will not be complete.
688 Among Dasnamis, a ceremony called the Bijja Homa i.e., the Biraja Homa has been considered essential.
The recitation of the Presha Mantram or the renunciation formula is of course indispensable and has been considered essential by the different High Courts.
According to Manu giving up of all wordly property is essential.
In Sherring 's 'Hindu Tribes and Castes ', pp.
256 67, the ceremonies prescribed for the initiation of a Dasnami sanyasi are stated thus : "The ceremony observed at the creation of a Gosain is as follows: The candidate is generally a boy, but may be an adult.
At the Shiva ratri festival (in honour of Shiva) water brought from a tank, in which an image of the god has been deposited, is applied to the head of the novitiate, which is thereupon shaved.
The guru, or spiritual guide, whispers to the disciple a mantra or sacred text.
In honour of the event all the Gosains in the neighborhood assemble together, and give their new member their blessing; and a sweetmeat called laddu, made very large is distributed amongst them.
The novitiate is now regarded as a Gosain, but he does not become a perfect one until the Vijaya Hom has been performed, at which a Gosain, famous for religion and learning gives him the original mantra of Shiva.
The ceremony generally occupies three days in Banaras.
On the first day, the Gosain is again shaved, leaving a tuft on the top of the head call d in Hindi Chundi, but in Sanskrit, Shikha.
For that day he is considered to be a Brahman, and is obliged to beg at a few houses.
On the second day, he is held to be a Bramhachari, and wears coloured garments, and also the janeo or sacred cord.
On the third day, the janeo is taken from him, and the Chundi is cut off.
The Mantra of Shiva is made known to him, and also the Rudri Gayatri (not the usual one daily pronounced by Brahmans).
He is now a full Gosain or Wan parast, is removed from other persons, and abandons the secular world.
Henceforth he is bound to observe all the tenets of the Gosains.
" In Gossain Ramdhan Puri & Ors. vs Gossain Dalmir Puri(1) Mookerjee and Carnduff JJ., observed at p. 203: "Every aspirant for entrance into the order of sanyasis has to pass through a period of probation.
Upon his first arrival at the monastery his habits and character are closely 689 watched for some days, and enquiries are made into his A caste, for the sanyasis admit into their order ordinarily members of the twice born classes and very rarely take members of the fourth class.
If the novice is approved, his head is shaved, his name is changed and upon the performance of this preliminary ceremony he is regarded as a probationer for entrance into the order.
The final ceremony, however, which is called the Biraja Homa ceremony, is not performed for many months, and sometimes for many years.
During this period of apprenticeship it is open to the chela to return to his natural family, but after the performance of the final ceremony his connection with the world is deemed to have been finally severed." In support of these observations, the learned Judges relied on the note of Warden on the customs of Gossains printed as an appendix to steel`s `Law and Custom of Hindu castes '.
As regards Swami Sarupanand, the learned Munsif rightly observes that 'it would be unjust to place an unreasonable burden on the plaintiff for leading direct evidence of his initiation, as Swami Sarupanand came to Varanasi from distant land and long ago.
The truth has to be discerned out of circumstantial evidence and other materiaI on record. ' That evidence clearly shows that Swami Sarupanand was acknowledged by his numerous followers to be the head of the 'Sant Mat ' fraternity.
That Swami Sarupanand paid the debt of nature in 1936 at Meerut and that his Smadhi is situate there is not disputed.
The oral evidence lead by the plaintiff in proof of the fact that after the death of Swami, his Bhandara took place at Meerut as well as at Gar vaghat is irrebuttable.
It is common knowledge that sanyasis are not cremated but are buried, or their bodies consigned to some river, and that after their demise a Bhandara takes place.
Defendants Nos. 1 to 4 admitted in their written statement that Swami Sarupanand was a 'Paramhans ' and that a Bhandara had taken place after his death.
The prefixes 'Swami ' and 'Paramhans ' are used for sanyasis and not for men of the world.
In the case of Swami Atmavivekanand there is overwhelming evidence in proof of the fact that the requisite ceremonies of Birajahoma or Prajapathiyesthi were performed.
Swami Vivekasukhanand, who was initiated as a chela along with Swami Atmavivekanand and others speaks of the performance of BriJahoma and Prajapathiyesthi at the time of their taking sanyas and states: "I attend satsang.
I know Swami Sarupa Nandji.
He was a Sanyasi.
I am in Sanyas Ashram.
I became Sanyasi 690 about 28 29 years ago.
Four other persons had also taken Sanyas on one and the same day.
I had taken Sanyas.
Their names are Swami Atma Vivekanandji, Swami Aju niya Nandaji, Swami Abheda Nandji and Swami Purna Shabda Nandji.
Swami Atma Viveka Nandji had also taken Sanyas on that very day.
Praja Prashit. and Virja Hom Ceremonies were performed at the time of my taking sanyas.
Our heads were shaven from before that.
our Gurudeo had taken the choote.
The sacred threads were burnt in the fire.
Our white clothes were removed, and in its place we were directed to put on the clothes of the ochre colour.
Guru Maharaj had whispered the Guru Mantra into our ears.
Hom (Samigri) were sent from the Mandleshwar of Benaras, and Birja Hom was got per formed with it.
We were at that time relieved off, from all the bondages of Grahast Ashram.
These very cere monies were performed at the time, when Swami Atma Viveka Nandji took the Sanyas." (Emphasis supplied) It is necessary to mention that though this witness was examined at length, there is no question put as to the performance of Atma Sradh.
This is somewhat significant because this question was put to only one of the plaintiff 's witnesses, Mahesh Dutt Shukla, PW 13 and he replied that according to the tenets of the 'Sant Mat ' it is not necessary to perform Atma Sradh for becoming a sanyasi.
The evidence of the plaintiff 's witnesses show that the Biraja Homa ceremony is of great importance, and if the Biraja Homa was performed by Swami Atmavivekanand at the time of his initiation, it is not at all probable that Swami Sarupanand and Swami Atmavivekanand, who were men of great ability and circumspection, should have performed Biraja Homa ceremony and omitted the essential details, especially the performance of the Sradh of one 's self, that is, Atma Sradh by Swami Atmavivekanand.
If the Prajapathiyesthi or Biraja Homa ceremonies were performed, then it must necessarily give rise to the irresistible inference that Swami Atmavivekanand must have performed his Atma Sradh before he was initiated as a chela.
We are clearly of the opinion that the appellant Sri Krishna Singh, impleaded as defendant No. 5, was precluded from contending that his father Baikunth Singh, who on his initiation by Swami Sarupanand was baptised as Swami Atmavivekanand, was not a Hindu sanyasi.
On May 29, 1949 he along with his brother brought a suit for partition, being suit No. 389 of 1949 in the Court of Judicial officer, 691 Chandauli, against the other members of their family.
It was alleged in the plaint: "That the father of the plaintiffs has been a plan of religious bent of mind.
For that reason he having left the property of his share in the spurdgi and possession of his sons, plaintiffs Nos. 2 and 3, more than twenty years ago, left residing here and went away.
Thereafter he became a sanyasi.
" Since then, plaintiffs Nos. 1, 2 and 3 have been in possession and occupation of the same as of right and also by way of inheritance. "That on account of the renunciation made by the father of the plaintiffs, the plaintiffs have become the principal tenant according to law and they have been in possession and occupation of their share up to this day." (Emphasis supplied) In the aforesaid suit, the appellant Sri Krishna Singh appeared as D, PW 1 and in his deposition, Ext.
101, he stated on oath .
"The land in dispute is under my tenancy.
The name of my father stands entered in our share.
My father died two months ago.
After his becoming a Sadhu he adopted the name of Atmavivekanand.
He has taken sanyas.
He used to live at Gadwadhar Bangla Kuti." (Emphasis supplied) In para 6 of his written statement, the appellant while denying that Swami Sarupanand founded any math at Garwaghat averred: "Sri Swami Swarupa Nandji was the Guru of Sri Baikunth Singh, alias Sri Swami Atma Viveka Nandji, hence having regard to his old age and also with a view of honouring him, his name has been entered in gift deed, dated 8 3 1935.
In fact on the basis of the aforesaid deed of gift, Sri Baikunth Singh alias Sri Swami Atma Viveka Nandji acquired the property and has been in exclusive possession thereof.
" In para 7 he states: "Sri Baikunth Singh, alias Sri Swami Atma Viveka Nandji was a Grahast.
He was Chhattri Hindu by caste.
He never took Sanyas nor did he denounce the world.
The real fact is that when Sri Swarupa Nandji, who was the resident of Punjab, arrived at the house of Sri Baikunth Singh, aforesaid, situate in Mauza Khuruhja Pargana Majhuwar, 692 District Banaras, Sri Baikunth Singh was impressed by him, and under his influence became religious minded.
He called himself as Swami Atma Viveka Nandji.
He believed only in the worship and Bhakte of his Guru.
He considered his Guru as God.
He used to impart this very teaching to his disciples, and devotees.
He never renounced the Grahast Ashram.
No body ever gave him Chadar Mahanthi.
He never became the Mahanth of any Math.
Sri Sarupa Nandji was also not the Dasnami.
He never took Sanyas.
" That appears to be a case set up to defeat the plaintiff 's claim.
When he was confronted with his admission in the plaint filed in the suit for partition, he disavowed knowledge of the fact of his father Baikunth Singh having become a sanyasi.
This was nothing but a time serving statement.
In Chandra Kunwar vs Chaudhri Narpat Singh,(1) the Judicial Committee of the Privy Council observed: "The proof of this admission shifts the burden, because, as against the party making it, as Baron Parke says in Slatterie vs Pooley: "What a party himself admits to be true may reasonably be presumed to be so." No doubt, in case such as this, where the defendant is not party to the deeds and there is therefore no estoppel, the party making the admission may give evidence to rebut this presumption but unless and until that is satisfactorily done, the fact admitted must be taken to be established." It follows that admission of the fact that his father Baikunth Singh had become a sanyasi, shifted the burden on the appellant to disprove that he was Hindu sanyasi.
There is direct oral evidence of the plaintiff Harsewanand and of his witnesses PWs 2 to 5, 7 to 10, 14 and particularly that of Swami Viveksukhanand taken on commission, about the plaintiff 's initiation into the ascetic order.
All these witnesses have amply proved that the particular ceremonies including Prajapathiyesthi and Biraja Homa required in the 'Sant Mat ' fraternity were performed when the plain tiff was made a sanyasi.
It is amply proved by PWs 1 to 10 and 13 to 15 that Swami Atmavivekanand had not only initiated him as his chela but also nominated him to be the mahant and that after his death and in accordance with his wishes, he was given Chader Mahanti on the occasion of the Bhandara of Swami Atmavivekanand.
693 The document Ext.
100, prepared by the 'Sant Mat ' fraternity on this A occasion and the photograph Ext.
121, taken lends assurance to the testimony of these witnesses that the plaintiff Harsewanand was installed as the mahant of the math in accordance with the express desire of Swami Atmavivekanand.
The learned Civil Judge in his judgment observes: 'The fact of Harsewanand being a sanyasi remains undoubted '.
His finding that he was not a Hindu sanyasi was based upon the view that under Hindu law mere 'renunciation ' of the world is not sufficient.
Hence, he holds that a Sudra who renounced the world and became sanyasi cannot be said to be a Hindu sanyasi, as according to the Hindu Sastras no Sudra can become a sanyasi.
The underlying fallacy lies in his over looking that the question had to be determined not according to the orthodox view, but according to the usage or custom of the particular sect or fraternity.
It is needless to stress that a religious denomination or institution enjoys complete autonomy in the matter of laying down the rites and ceremonies which are essential.
We must accordingly hold that the plaintiff was the validly initiated 1) chela of Swami Atmavivekanand and upon his demise was duly installed as the mahant of Garwaghat Math according to the tenets of his 'Sant Mat ' Sampradaya.
There remains the question whether due to the death of the 15 plaintiff Harsewanand during the pendency of the appeal the suit brought by him abates in its entirety.
It is argued that the original plaintiff, Mathura Ahir, having filed the suit primarily to establish his personal right to the office of mahant which entitled him to possession of the property in suit, the suit abated on his death.
The cause of action on which the suit was instituted, it is urged, was personal to the plaintiff, and in order to establish that he had been duly and properly initiated as a sanyasi and installed as a mahant, he had to plead and establish all the necessary facts regarding his capacity to become a sanyasi, his nomination by his Guru.
and his ultimate election or nomination by the 'Sant Mat ' Sampradaya.
The submission is that these were facts special to the original plaintiff, and he having died, respondent No. 1, Harshankaranand cannot claim any relie unless and until he also establishes all these facts in regard to his claim to mahantship.
The original cause of action, it is said, has vanished with the death of the plaintiff and the respondent No. 1, Harshankaranand had necessarily II to plead and establish a new set of facts.
In substance, he could not prosecute the cause of action as originally framed and he could 694 not succeed without materially altering the pleadings and substituting another cause of action, which could very well form the subject matter of a separate suit.
It is argued that the nomination of a person as a mahant invests him with a 'status ' and, therefore, capacity to succeed to the office of mahant is an incident of that status.
It is said that the claim to mahantship is, therefore, a personal right which does not survive the plaintiff; any suit claiming such a status must abate on the death of the plaintiff.
Alternatively, the submission is that if the Court came to the conclusion that the plaintiff had sued in his capacity as a de facto mahant, it is obvious that the cause of action would be personal to him and would certainly not survive the plaintiff.
In that event, the , J suit must of necessity abate as a right claimed on the basis of de facto ownership cannot survive the plaintiff.
x x x x x The question whether a suit abates in its entirety or not upon the death of the plaintiff must necessarily depend on the nature of the suit.
This is not a class of case to which the maxim, actio personalis moritur cum persona applies.
The suit that the plaintiff Harsewanand brought was for possession of the suit house which belonged to Garwaghat Math, in his capacity as the mahant.
On denial of his title, he pleaded that he was initiated as a chela by his Guru Swami Atmavivekanand, the then mahant, in 1937 and nominated to be his successor and accordingly upon his demise on August 23, 1949, had been duly installed as Mahant of the Math by the 'Sant Mat ' Sampradaya, i.e., by the Mahants and Sanyasis of the Bhesh and given Chader Mahanti according to the tenets of fraternity.
It was alleged that according to the tenets of this particular sect, anyone, including a Sudra, could be a sanyasi, and further that succession to the office of mahant was from guru to chela according to the custom or usage prevailing in the sect.
One of the issues on which the parties went on trial was whether there was in existence a math at Garwaghat, and if so, whether the house in suit was an accretion thereto.
The High Court agreeing with the learned Munsif has upheld the plaintiff 's claim.
It was held that the house in suit was acquired by Swami Atmavivekanand from out of the offerings (Bhent) made by his disciples and, therefore, was not his secular property, but was an accretion to the Garwaghat Math.
It has further been held that the plaintiff Harsewanand was the validly initiated chela of Swami Atmavivekanand and was duly installed as mahant of the math after his death, by the 'Sant Mat ' fraternity according to his wishes.
The defendants have been held to be rank trespassers.
The decree under 695 appeal crystallizes the rights of the parties.
The cause of action did A not die with the plaintiff.
In the circumstances, the respondent No. 1, Harshankaranand, who now claims to be the mahant, has the right to contest the appeal as representing the math, being the de facto mahant, for preservation of its properties.
x x x x x x According to the Hindu jurisprudence, a religious institution such as a math is treated as a juristic entity with a legal personality capable of holding and acquiring property.
It therefore, follows that the suit instituted by the mahant for the time being, on its behalf, is properly constituted and cannot abate under the provisions of order 22 of the Code of Civil Procedure, on the death of the mahant pending the decision of the suit or appeal, as the real party to the suit is the institution.
The ownership is in the institution or the idol.
From its very nature a math or an idol can act and assert its rights only through human agency known as a mahant, shebait or dharmakarta or sometimes known as trustee.
Jenkins C.J. in Babajirao vs Laxmandas(1) defines the true notion of a 'math ' in the following terms: "A math, like an idol, is in Hindu Law a judicial person capable of acquiring, holding and vindicating legal rights, though of necessity it can only act in relation to those rights through the medium of some human agency.
" It follows that merely because the mahant for the time being dies and is succeeded by another mahant, the suit does not abate.
The correctness of the decision in Ramswarup Das vs Rameshwal Das(2) is thus open to question.
It does not stand to reason that when a suit is brought for possession by a mahant of an asthal or Math.
Or by a shebait of a debottar property, and the defendant is adjudged to be a trespasser, such a suit should abate with the death of the mahant or shebait.
This would imply that after a long drawn litigation, as he re, the new mahant or shebait has to be relegated to a separate suit.
The definition of legal representative as contained in s.2(11) of the Code reads: "(11) .
"legal representative" means a person who in law represents the estate of a deceased person, and includes any person who intermeddles with the estate of the deceased and where a party sues or is sued in a representative character the person on whom the estate devolves on the death of the party so suing or sued.
" 696 The general rule is that all rights of action and all demands whatsoever, existing in favour of or against a person at the time of his death survive to or against his legal representative.
In Muhammad Hussain vs Khushalo(1) Edge C.J., while delivering the judgment of the Full Bench, observed: "I have always understood the law to be that in those cases.
in which an action would abate upon the death of the plaintiff before judgment, the action would not abate if final judgment had been obtained before the death of the plaintiff, in which case the benefit of the judgment would go to his legal representative.
" That, in our opinion, lays down the correct test.
In the instant case, the appellant himself has, of course, without prejudice to his right to challenge the right of the original plaintiff, Harsewanand, to bring the suit, substituted the respondent No. 1, Harshankaranand, as his heir and legal representative, while disputing his claim that he had been appointed as the mahant, as he felt that the appeal could not proceed without substitution of his name.
In his reply, the respondent No. 1, Harshankaranand alleges that after the demise of mahant Harsewanand he was duly installed as the mahant of Garwaghat Math by the 'Sant Mat ' fraternity.
He further asserts that he was in possession and enjoyment of the math and its properties.
The fact that he is in management and control of the math properties is not in dispute.
The issue as to whether he was so installed or not or whether he has any right to the office of a mahant, cannot evidently be decided in the appeal, but nevertheless, he has a right to be substituted in place of the deceased Mahant Harsewanand as he is a legal representative within the meaning of section 2(11), as he indubitably is intermeddling with the estate.
He has, therefore, the right to come in and prosecute the appeal on behalf of the math.
In the result, the appeal must fail and is dismissed with costs.
| IN-Abs | Respondent Mathura Ahir alias Swami Harswanand, the Mahant of Garwaghat Math filed a suit for declaration of title to and possession of house No. C/27/33 situate in Mohalla Jagatgunj, Varanasi, for arrears of rent and mesne profits in respect thereof.
The said property was purchased by his Guru Atma Vivekanand Paramahans (ne Baikunth Singh) from out of the income of the Math i.e. the offerings (Bhent) made by the devotees.
The appellant who was impleaded as defendant 5 to avoid further litigation claimed that this property acquired by his late father Baikunth Singh alias Swami Atma Vivekanand, after he became a Guru and out of Math funds devolved upon him the natural son and disciple.
Since the claim went in favour of the respondent Mahant the appellant came in appeal by special leave to this Court.
The original plaintiff died during the pendency of the appeal.
The contentions of the appellant were: (i) the plaintiff Mathura Ahir being a Sudra could not be ordained to a religious order and become a Sanyast or yati and therefore installed a mahant of the Garwaghat Math, according to the tenets of the Sant Math Sampradaya, (ii) In the absence of proof of the performance of Atma Sradh and the recitation of Pravesh Mantram, neither the plaintiff nor his two predecessors Swami Sarupanand and Swami Atma Vivekanand could be regarded as Hindu Sanyasi; and (iii) the first respondent Harsawanand the original plaintiff having died during the pendency of the appeal, the appeal abated in its entirety.
Dismissing the appeal, the Court ^ HELD: 1.
A math is an institutional sanctum presided over by a superior who combines in himself the dual office of being the religious or spiritual head of the particular cult or religious fraternity and of the manager of the secular properties of the institution of the Math.
[671 D E] The property belonging to a Math is in fact attached to the office of the mahant, and passed by inheritance to no one who does not fill the office.
The 661 Head of a Math, as such, is not a trustee in the sense in which that term is generally understood, but in legal contemplation he has an estate for life in its permanent endowments and an absolute property in the income derived from the offerings of his followers, subject only to the burden of maintaining the institution.
[671 A B] In the instant case, the evidence on record sufficiently establishes that a Math came to be established at Garwaghat and the building known as "Bangla Kuti" and certain other buildings including the house in suit constituted the endowment of the math itself.
[671 E F] Sammantha Pandara vs Sellappa Chetti Mad. 175; Gyanasambhandan Pandara Sannadhi vs Kandaswami Tambiram Mad. 375; Vidya Purna Thirthaswami vs Vidyanidhi Thirtha Swami Mad.
435; Ram Prakash Das vs Anand Das (1915 16) 43 I.A. 73 (PC); Vidya Vanthi Thirtha vs Baluswami Iyer (1920 21) 48 I.A. 302; referred to.
The math at Garwaghat belongs to the 'Sant Mat ' Sampradaya, which is a religious order and the suit property is Math property.
Though the Math at Garwaghat established by Swami Sarupanand was of recent origin, the religious order denominated as 'Sant Math ' has had large following in Punjab and some other parts of India since more than a century.
In a sense, therefore, Swami Sarupanand himself did not for the first time evolve any new religious order.
[672 E, 673 F G] The institution was really built up by Swami Atma Vivekanand, who was held in great veneration by the followers of the sect.
He preached the tenets of 'Sant Mat ' and had a large following.
His 'Sant Mat ' fraternity comprised of thousands of Girhastha and Virakta disciples who made large Offerings.
Such offerings in cash or kind or in the shape of immovable property which were endowed to the Math.
Swami Atma Vivekanand was the Mahant of the Garwaghat Math.
The two houses at Varanasi including the suit house were purchased by Swami Atma Vivekanand from out of the offering (Bhent) made by his disciples.
[675A D] 3.
Succession to Mahantship of a Math or religious institution is regulated by custom or usage of the particular institution, except where a rule of succession is laid down by the founder himself who created the endowment.
[675 G H] Genda Puri vs Chatar Puri, [1886] 13 I.A.100 @ 105; Sital Das vs Sant Ram, A.I.R. 1954 SC 606; Mahalinga Thambiran vs La Sri Kasivasi, ; ; followed.
The succession to the office of the Mahant according to Sant Sampradaya is by nomination, i.e. from Guru to Chela, the Guru initiates the chela after performing the necessary ceremonies.
The person initiated as a Chela adopts the life of a sanyasi and is pledged to lead a life of celibacy and religious mendicancy.
The sitting Mahant hands over the management of the Math to one of his virtuous Chelas fittest to succeed when he nominates and when he wishes to install as Mahant after him in his place.
He makes clear this desire to the members of his Sampradaya, and also authorises the nominated chela to give Bhesh Dikshwa.
After the death of the Mahant, the Bhesh and Sampradaya give Chadar Mahanti of the math to the said disciple at the time of the Bhandara.
[672 A C] 662 5.
Asceticism in India has been under the definite and strong sanction of religion.
In the doctrine of the four asramas, asceticism was made an integral part of the orthodox Hindu life, and it became the duty of every Hindu, as advanced age overtook him, homeless and a wanderer to chasten himself from earthly ties, and of realizing union with Brahman.
And a religious motive was thus supplied for that which in itself was a welcome release from responsibility, care and the minute requirements of an elaborate social code.
In due course, with the advancement of knowledge, the shackles of the caste system were broken through and the privileges and powers of the ascetic life were extended to Sudras and in due recognition of their status, they were treated as Hindu Sanyasis.
At the present time, there is no distinction or barrier; any one may become an ascetic, and the vows are not necessarily life long.
Some sects, however, still restrict membership to Brahmans, or at least to men of the three higher castes.
[681 E H, 682 G H] 6.
One who enters into a religious order severs his connection with the members of his natural family.
He is accordingly excluded from inheritance.
Entrance to a religious order is tantamount to civil death so as to cause a complete severance of his connection with his relations, as well as with his property.
Neither he nor his natural relatives can succeed to each other 's properties.
[676 A B] Any property which may be subsequently acquired by persons adopting religious orders passes to their religious relations.
The persons who are excluded on this ground came under three heads; the Vanaprastha or hermit; the Sanyasi or Yati, or ascetic and the Brahmachari or perpetual religious student.
In order to bring a person under these heads, it is necessary to show an absolute abandonment by him of all secular property, and a complete and final withdrawal from earthly affairs.
The mere fact that a person calls himself a Byragi or religious mendicant, or indeed that he is such, does not of itself disentitle him to succeed to property.
Nor does any Sudra come under this disqualification, unless by usage.
This civil death does not prevent the person who enters into an order from acquiring and holding private property which will devolve, not of course upon his natural relations, but according to special rules of inheritance.
But it would be otherwise if there is no civil death in the eye of the law, but only the holding by a man of certain religious opinions or professions.
The after acquired property passes on his death not to his natural but to his spiritual heirs.
[676 A E, 683 A B] Dharmapuram vs Vivapandiyan, Mad. 202, Harish Chandra vs Alia Mahamed, Cal. 545, explained.
The 'Sant Mat ' sampradaya is a religious denomination i.e. a sub sect of one of the Dasnami sects founded by the Great Sankracharya.
Sankara was an ascetic and founded schools of ascetics.
Sankara established four Maths or seats of religion at four ends of India the Sringeri Math on the Sringeri Hills in the South, the Sharda Math at Dwarka in the West, the Jyotir Math at Badrikashram in the North, and the Govardhan Math at Puri in the east.
The monks ordained by Sankara and his disciples were called Sanyasis.
Each Math has a sanyasi at its head who bears the title of Sankaracharya in general.
Sankara is said to have four disciples who were all brahmans, from whom the 663 ten divisions of the order hence named as the ten named or 'dasnami Dandis ' originated.
They are: Thirtha, shrine; Ashrama, order; Vana, wood; Aranya, Forest or desert; Saraswati and Bharati, the goddesses of learning and speech; Puri, City; Giri and Parvata, a hill; and Sagara, the ocean.
[683 C G] Dandis or staff bearers occupy a place of pre eminence.
They worship Lord Siva in his form Bhairava; the 'Terrible ' and profess to adhere Nirguna and Niranjana, the deity devoid of attribute or passion.
A sub section of this order are the Dandi, Dasnamis or Dandi of ten names, so called from their assuming one of the names of Sankara 's four disciples and six of their pupils.
[658 B C] The Dandis keep themselves very distinct from the rest of the community.
They are Brahmans, and receive disciples only from the Brahmans.
They lead a very austere life.
They do not touch fire or metal or vessels made of any sort of metal.
It is equally impossible also for them to handle money.
They shave their hair and beard.
They wear one long unsewn reddish cloth, thrown about the person.
[686 A B] There are but three and part of a further ascetic class, or those called Tirtha, Asrama, Saraswati and Bharati who are still really regarded as Sankara 's disciples.
The rest i.e. the remaining six and a half of the Dasnamis who are considered as having fallen from the purity of practice necessary to the Dandis, are still, in general religious characters usually denominated and are Atits.
These are the Atits or A 'Dandis viz. the Vanas, Aranytas, Puris, Giris, Parvata, Sagaras and half the Bharatia, reputed to have fallen to some extent from orthodoxy, but are still looked upon as religious avatars.
Unlike the Dandis, the Atits do not carry the shaft i.e. a Trishul.
They differ from the former also in their use of clothing money and ornaments, their methods of preparing food and their admission of members from any order of Hindus.
Some of them lead an ascetic life, while others mix freely in the world, carry on trade and acquire property.
Most of them are celibate but some of them marry and are often known as Samyogi or Gharbari Atits.
They are collected in Maths and monastries.
They wear ochre coloured garments, and carry a rosary of rudraksha seeds sacred to Lord Siva.
Their religious theories (when they have any) are based on the advaita Vedanta of their founder Sankaracharya.
[686 H, 687 A D] There is also a sub division of the Puri division of the Dasanami Sect.
They have tenets much in common, based on the central idea that the Supreme diety is incomprehensible or 'unseeable '.
They denounce idolatory.
This more or less conforms to the tenets of the 'Sant Mat ' Sect.
[678 D E] The followers of the 'Sant Mat ' treat the Guru as the incarnation of God.
They have no faith in inanimate idols installed in temples nor do they worship them in their cult.
There are no caste restrictions and any one can be admitted into the Sant Mat fraternity.
According to the custom and usage of the Sant Mat Sampradaya, the initiation of a chela by the Guru results in complete renunciation of the world and he ceases to have all connection with his previous Ashramas before becoming a Sanyasi.
For becoming a sanyasi it is not necessary that he should be of a particular Varnashram previously, i.e. even a Sudra can become a Sanyasi.
[671 G H, 672 E] 8.
Though according to the orthodox Smriti writers a Sudra cannot legitimately enter into a religious order and although the strict view does not 664 sanction or tolerate ascetic life of the Sudras, the existing practice all over India is quite contrary to such orthodox view.
In cases, therefore, where a Sudra can enter into a religious order in the same way as in the case of the twice born classes, such usage should be given effect to.
[670E F] 9.
In order to prove that a person has adopted the life of a Sanyasi, it must be shown that he has actually relinquished and abandoned all worldly possessions and relinquished all desire for them or that such ceremonies are performed which indicate the severance of his natural family and his secular life.
It must also be proved in case of orthodox sanyasis, that necessary ceremonies have been performed such as Pindadana or Birajahoma or Prajapathiyesthi without which the renunciation will not be complete.
[687 G H] Amongst Dasnamis, a ceremony called the Bijla Homa i.e. the Biraja Homa has been considered essential.
The recitation of the Pravesha Mantram or the renunciation formula is of course indispensable.
[688 A] In the instant case: (a) there is overwhelming evidence in proof of the fact that the requisite ceremonies of Biraj homa or Prajapathiyesthi were performed in case of Swami Sarupanand and Swami Atma Vivekanand.
If the Prajapathiyesthi or Biraj Homa ceremonies were performed then it must necessarily give rise to the irresistable inference that Swami Atma Vivekanand must have performed his Atma Sradh before he was initiated as a chela; (b) The appellant was precluded from contending that his father Baikunth Singh was not a Hindu Sanyasi in view of his express admission in the plaint filed in an earlier suit.
The burden of proof shifted upon him to disprove it; (c) Swami Harsewanand (Mathura Ahir) was the validly initiated chela of Swami Atma Vivekanand and upon his demise was duly installed as the Mahant of 'Garwaghat Math ' according to the tenets of 'Sant Mat ' Sampradaya.
[689 G, H, 693 C D] 10.
The question whether a suit abates in its entirety or not upon the death of the plaintiff must necessarily depend upon the nature of the suit.
This is not a class of case to which the maxim, actio personalis moritur cum persona applies.
[694 C D] 11.
According to Hindu jurisprudence, a religious institution such as a math is created as a jurisdic entity with a legal personality capable of holding and acquiring property.
It therefore follows that the suit instituted by the mahant for the time being, on its behalf, is properly constituted and cannot abate under the provisions of Order 22 of the Code of Civil Procedure on the death of the mahant pending the decision of the suit or appeal, as the real party to the institution is the institution.
The ownership is in the institution or the idol.
From its very nature a math or an idol can act and assert its rights only through human agency known as a mahant or shebait or dharmakarta or sometimes known as trustee.
It follows that merely because the mahant for the time being dies and is succeeded by another mahant, the suit does not abate.
[695 B C, E] Ram Swarup Das vs Rameshwar Das vs ILR 29 Pat.
989, over ruled.
The general rule is that all rights of action and all demands whatsoever existing in favour of or against a person at the time of his death survive to or against his legal representative within the meaning of section 2(11) of C.P.C. [699 A,F] Muhamed Hussain vs Khushalo, ILR 9 All. 131; approved.
|
Civil Appeal No. 576 of 1970.
From the Judgment and Order dated 18 8 1969 of the Allahabad High Court in Writ Petition No. 334 of 1963.
G. N. Dixit and O. P. Rana for the Appellants.
H. K. Puri for the Respondent.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
This appeal by certificate involves the question whether section 3 of the Public Moneys (Recovery of Dues) Act, 1965 (U.P. Act No. XXV of 1965) (hereinafter referred to as 'the Act ') offends Article 14 of the Constitution and it arises in the following circumstances.
The respondent is a resident of Railwayganj, Hardoi in the State of Uttar Pradesh.
He applied to the Government of Uttar Pradesh 1017 for a loan of Rs. 15,000/ for the purpose of setting up a panel pins and wire nails industry in Hardoi.
The State Government which was interested in the industrial development of the State accordingly advanced the loan of Rs. 15,000 to the respondent under a mortgage deed dated March 10, 1960.
The respondent was permitted to repay the loan in ten half yearly instalments commencing from May 1, 1962 together with interest at the rate of 3 per cent per annum calculated from March 25, 1960.
The mortgage deed provided that the respondent should spend Rs. 7,000 out of the loan advanced on the purchase of machineries for manufacturing panel pins and wire nails and the balance of Rs. 8,000 on the construction of a building for the purpose of the said industry and for no other purpose.
The respondent also agreed to observe truly the Uttar Pradesh Rules for the Advance of Loan for Developing Cottage Industries in the Rural Area promulgated by the State Government and also to permit the Director of Industries, U.P. or any official deputed by him to inspect his accounts for the purpose of verifying whether the amount borrowed had been utilised for the specified purpose.
The respondent hypothecated under the deed his house by way of security for the loan.
Clause (8) of the mortgage deed, however, inter alia provided that if any of the instalments payable by the respondent as mentioned in the deed was not paid on the stipulated date then the entire amount due under the deed could be recovered by the State Government as arrears of land revenue.
The mortgage deed was signed by the Director of Industries, U.P. on behalf of and acting under the authority of the Governor of Uttar Pradesh and the respondent.
The respondent committed default in repayment of the loan.
The State Government was, therefore, compelled to take coercive measures to recover the balance of the amount due and payable under the deed as if it were an arrear of land revenue, by resorting to section 3 of the Act read with sections 279/281 of the U.P. Zamindari Abolition and Land Reforms Act, 1950.
At the request of the Director of Industries, U.P., the Collector Hardoi initiated steps to recover the balance of the amount due under the deed as an arrear of land revenue.
Pursuant to the order of the Collector, the Tahsildar of Hardoi issued an order of attachment dated March 12, 1968 of the house of the respondent and also issued a warrant of arrest of the respondent to recover the amount under the provisions governing the procedure prescribed for realising land revenue.
Immediately thereafter, the respondent filed a petition under Article 226 of the Constitution on the file of the High Court of Allahabad (Lucknow Bench) in writ petition No. 334 of 1968 questioning the competence of the revenue authorities to recover the 1018 the balance of the amount due under the deed as if it were an arrear of land revenue.
In that petition, the respondent contended that the Act was discriminatory and was, therefore, violative of Article 14 of the Constitution on the ground that the State Government had two remedies available to it in law one by way of a suit for recovery of the mortgage money and another under the Act which authorised it to recover the amounts due as if they were arrears of land revenue, that the remedy under the Act was more onerous than a suit so far as the respondent was concerned and that there were no guidelines in law as to the circumstances in which the State Government could resort to the provisions of the Act.
The Director of Industries, U.P. and the revenue authorities who were impleaded as respondents in the writ petition contended that the provisions of the Act did not offend Article 14 of the Constitution.
Following the decision of this Court in Northern India Caterers Private Ltd., & Anr.
vs State of Punjab & Anr.(1) the High court declared that section 3 of the Act violated Article 14 of the Constitution by providing an additional remedy to the State Government over and above the remedy by way of a suit, leaving it to the unguided discretion of the State Government to resort to one or the other and that the remedy available under the Act was more drastic or prejudicial to the party concerned than the suit.
Accordingly the High Court quashed the recovery proceedings initiated by the revenue authorities.
Aggrieved by the decision of the High Court, the Director of Industries, U.P. and the revenue authorities have come up in appeal to this Court.
The impugned Act was passed in the year 1965 to provide for speedy recovery of certain classes of dues payable to the State or to the Uttar Pradesh Financial Corporation.
The Act contains three sections.
The first section deals with the title of the Act and extent of its operation.
The second section is the definition clause Section 2 (b) of the Act defines the expression 'financial assistance ' as any financial assistance (i) for establishing, expanding or running any industrial undertaking; or (ii) for purposes of vocational training; or (iii) for the development of animal husbandry; or (iv) for purposes of any other kind of planned development; or (v) for relief against distress.
Section 3 of the Act with which we are now concerned reads as follows: "3.
Recovery of certain dues as arrears of land revenue 1019 (1) Where any person is party (a) to any agreement relating to a loan, advance or grant given to him by the State Government or the Corporation by way of financial assistance, or (b) to any agreement relating to a guarantee given by the State Government or the Corporation in respect of a loan raised by an industrial concern, or (c) to any agreement providing that any money payable thereunder to the State Government shall be recoverable as arrears of land revenue, and such person (i) makes any default in repayment of the loan or advance or any instalment thereof, or (ii) having become liable under the conditions of the grant to refund the grant or any portion thereof, makes any default in repayment of such grant or portion or instalment thereof, or (iii) otherwise fails to comply with the terms of the agreement, then, in the case of the State Government, such officer as may be authorised in this behalf by the State Government by notification in the Official Gazette and in the case of the Corporation, the Managing Director thereof, may, without prejudice to any other mode of recovery under any other law for the time being in force, send a certificate to the Collector, mentioning the sum due from such person and requesting that such sum together with costs of the proceedings be recovered as if it were an arrear of land revenue.
(2) The Collector on receiving the certificate shall proceed to recover the amount stated therein as an arrear of land revenue.
" It may be seen that section 3(1) (c) of the Act provides that where any person is a party to any agreement providing that any money payable thereunder to the State Government shall be recoverable as arrears of land revenue and such person makes any default in repayment of the loan or advance or any instalment thereof then the arrears due and payable by him may be recovered as if it were an arrear of land revenue by issuing a certificate to the Collector.
The remedy of the State Government to recover the amount by instituting a suit also remains unaffected by the Act.
1020 At the outset, it has to be stated that the decision of this Court in Northern India Caterers Private Ltd., & Anr.
(supra) is overruled by this Court in Maganlal Chhagganlal (P) Ltd. vs Municipal Corporation of Greater Bombay & Ors.(1) The question for determination in this case is whether section 3 of the impugned Act violates Article 14 of the Constitution.
In order to decide this question, it is necessary to determine the object of the Act and whether the classification made between the State on the one hand and others who have also advanced moneys under mortgage deeds bears any reasonable relation to the object of the statute.
The Act is passed with the object of providing a speedier remedy to the State Government to realize the loans advanced by it or by the Uttar Pradesh Financial Corporation.
The State Government while advancing loans does not act as an ordinary banker with a view to earning interest.
Ordinarily it advances loans in order to assist the people financially in establishing an industry in the State or for the development of agriculture, animal husbandry and for such other purposes which would advance the economic well being of the people.
The amounts so advanced are repayable in easy instalments with interest which would ordinarily be lower than the rate of interest payable on loans advanced by banking institutions which are run on commercial lines.
The loans are advanced from out of the funds of the State in which all the people of the State are vitally interested.
Moneys advanced by the State Government have got to be recovered expeditiously so that fresh advances may be made to others who have not yet received financial assistance from the State Government.
If the State Government should resort to a remedy by way of a suit on the mortgage deeds or bonds executed in its favour, the realization of the amounts due to the Government is bound to be delayed resulting in non availability of sufficient funds in the hands of the State Government for advancing fresh loans.
It is with the object of avoiding the usual delay involved in the disposal of suits in civil courts and providing for an expeditious remedy, the Act has been enacted.
In the instant case, the mortgage deed provided that the amount due thereunder could be realised as if it were an arrear of land revenue.
It cannot, therefore, be said that there is no reasonable basis for the classification made by the statute and that the classification does not have a reasonable relation to the object of the statute.
It is also argued that the impugned Act does not provide any guidelines to the authorities concerned regarding the circumstances under which the amounts could be realized by resorting to the pro 1021 cedure prescribed for recovering arrears of land revenue.
It is no doubt true that there is no express provision in the Act containing such guidelines.
That, however, in the circumstances of the case is not sufficient to hold that section 3 of the impugned Act confers arbitrary power on the State Government and makes a hostile discrimination.
Under section 3 of the Act, the Collector can proceed to realize the amount due as arrears of land revenue only on the basis of a certificate issued by an officer as may be authorised in that behalf by the State Government mentioning the sum due from any person referred to therein.
Such officer is expected ordinarily to avail himself of the speedier remedy provided under the statute.
We are of the view that the Act which is passed with the object of providing a speedier remedy itself provides sufficient guidance to the officer concerned as to when he should resort to the remedy provided by it.
As observed by this Court in Maganlal Chhgganlal (P) Ltd. 's case (supra), one expects the officer concerned to avail himself of the procedure prescribed by the Act and not to resort to the dilatory procedure of the ordinary civil court.
In that case, the legality of the provisions of the Bombay Government Premises (Eviction) Act, 1955 and the provisions contained in Chapter VA of the Bombay Municipal Corporation Act, 1888 which provided a speedier remedy to recover possession of premises belonging to the State Government and the Bombay Municipal Corporation which were in unauthorised occupation of any person was questioned on the ground that the remedies under the said provisions were more onerous than the remedy by way of a suit which was also available to the State Government and the Corporation.
While upholding the above provisions, Alagiriswami, J. who spoke for the majority observed thus: "The statute itself in the two classes of cases before us clearly lays down the purpose behind them, that is premises belonging to the Corporation and the Government should be subject to speedy procedure in the matter of evicting unauthorized persons occupying them.
This is a sufficient guidance for the authorities on whom the power has been conferred.
With such an indication clearly given in the statutes one expects the officers concerned to avail themselves of the procedures prescribed by the Acts and not resort to the dilatory procedure of the ordinary Civil Court.
Even normally one cannot imagine an officer having the choice of two procedures, one which enables him to get possession of the property quickly and the other which would be a prolonged one, to resort to the latter.
Administrative officers, no 1022 less than the courts, do not function in a vacuum.
It would be extremely unreal to hold that an administrative officer would in taking proceedings for eviction of unauthorised occupants of Government property or Municipal property resort to the procedure prescribed by the two Acts in one case and to the ordinary Civil Courts in the other.
The provisions of these two Acts cannot be struck down on the fanciful theory that power would be exercised in such an unrealistic fashion.
In considering whether the officers would be discriminating between one set of persons and another, one has got to take into account normal human behaviour and not behaviour which is abnormal.
It is not every fancied possibility of discrimination but the real risk of discrimination that we must take into account.
This is not one of those cases where discrimination is writ large on the face of the statute.
Discrimination may be possible but is very improbable.
And if there is discrimination in actual practice this Court is not powerless.
Furthermore, the fact that the Legislature considered that the ordinary procedure is insufficient or ineffective in evicting unauthorised occupants of Government and Corporation property and provided a special speedy procedure therefor is a clear guidance for the authorities charged with the duty of evicting unauthorised occupants.
We therefore, find ourselves unable to agree with the majority in the Northern India Caterers ' case.
Certain provisions similar to the Act impugned in this case enabling a State Government to recover the amounts due to it by resorting to a speedier remedy have been upheld by this Court in two cases Shri Manna Lal & Anr.
vs Collector of Jhalawar & Ors.(1) and Lachhman Das on behalf of firm Tilak Ram Ram Bux vs State of Punjab & Ors.(2).
In the case of Shri Manna Lal & Anr.
(supra) the facts were these: The Jhalawar State Bank was originally a Bank belonging to the princely State of Jhalawar.
Its assets, including moneys due to it, became vested in the United State of Rajasthan under the convenient executed by the Ruler of Jhalawar along with other Rulers by which the United State of Rajasthan was formed.
On the promulgation of the Constitution of India, the United State of Rajasthan became the State of Rajasthan in the Indian Union and all its assets including the Jhalawar State Bank and its dues vested in the State of Rajasthan.
In that case the question which arose for consideration was whether 1023 moneys which had been advanced by the Jhalawar State Bank could be recovered by taking proceedings under the Rajasthan Public Demands Recovery Act.
This Court held that the amounts could be recovered by the State of Rajasthan after the Bank had become vested in it as a public demand under the Rajasthan Public Demands Recovery Act and that the said Act did not offend Article 14 of the Constitution even though it provided a special facility to the Government as a banker for the recovery of the bank 's dues for the Government could legitimately be put in a separate class for this purpose.
In the latter case i.e. the case of Lachhman Das on behalf of Firm Tilak Ram Ram Bux (supra), the right of Patiala State Bank to recover the amounts due to it under the provisions of the Patiala Recovery of State Dues Act was questioned.
This Court held that the Bank established by a State had distinctive features which differentiated it from other Banks and formed a category in itself and the Act in setting up separate authorities for determination of disputes and in prescribing a special procedure to be followed by them for the recovery of the dues by summary process could not be considered to be discriminatory.
We are, therefore, of the view that section 3 of the Act which enables the State Government to recover the sums advanced under the circumstances mentioned therein as if they were arrears of land revenue cannot be held to be discriminatory and violative of Article 14 of the Constitution.
For the foregoing reasons, we allow the appeal, set aside the order passed by the High Court and dismiss the writ petition.
Since the High Court disposed of the case on the basis of the decision of this Court in Northern India Caterers Private Ltd. & Anr.
(supra) which has since been overruled, we make no order as to costs.
V.D.K. Appeal allowed.
| IN-Abs | A sum of Rs. 15000/ was advanced to the Respondent by the appellant for the purpose of setting up a panel pins and wire nails industry in Hardoi on the former hypothecating under the mortgage deed his house by way of security for the loan.
The respondent committed default in repayment of the loan.
The State Government was compelled to take coercive measures to recover the balance of the amount due and payable under the deed as if it were an arrear of land revenue by resorting to section 3 of the Public Moneys (Recovery of Dues) Act, 1965 read with sections 279/281 of the U.P. Zamindari Abolition and Land Reforms Act, 1950.
The respondent, therefore, filed a petition under Article 226 of the Constitution on the file of the High Court of Allahabad (Lucknow Bench) questioning the competence of the revenue authorities to recover the balance of the amount due under the deed as if it were an arrear of land revenue on the ground of violation of Article 14 of the Constitution.
Following the decision of this Court in Northern Indian Caterers P. Ltd. and Anr.
vs State of Punjab and Anr.
, ; (which held the field at that time and since overruled) the High Court declared that Section 3 of the Act violated Article 14 of the Constitution and quashed the recovery proceedings initiated by the revenue authorities.
Allowing the appeal by certificate, the Court ^ HELD: Section 3 of the Public Moneys (Recovery of Dues) Act 1965 which enables the State Government to recover the sums advanced under the circumstances mentioned therein, as if these were arrears of land revenue cannot be held to be discriminatory and violative of Article 14 of the Constitution.
[1023D E] (a) Section 3(1)(c) of the Act provides that where any person is a party to any agreement providing that any money payable thereunder to the State Government shall be recoverable as arrear of land revenue and such person makes any default in repayment of the loan or advance or any instalment thereof then the arrear due and payable by him may be recovered as if it were an arrear of land revenue by issuing a certificate to the Collector.
The remedy of the State Government to recover the amount by instituting a suit also remains unaffected by the Act.
[1019G H] (b) There is reasonable basis for the classification made by the statute and that the classification does have a reasonable relation to the object of the statute.
The Act is passed with the object of providing a speedier remedy to the State Government to realize the loans advanced by it or by the Uttar Pradesh Financial Corporation.
The State Government while advancing loans does not act as an ordinary banker with a view to earning interest.
1016 Ordinarily it advances loans in order to assist the people financially in establishing an industry in the State or for the development of agriculture, animal husbandry and for such other purposes which would advance the economic well being of the people.
The amounts so advanced are repayable in easy instalments with interest which would ordinarily be lower than the rate of interest payable on loans advanced by banking institutions which are run on commercial lines.
The loans are advanced from out of the funds of the State in which all the people of the State are vitally interested.
Moneys advanced by the State Government have got to be recovered expeditiously so that fresh advances may be made to others who have not yet received financial assistance from the State Government.
If the State Government should resort to a remedy by way of a suit on the mortgage deeds or bonds executed in its favour, the realization of the amounts due to the Government is bound to be delayed resulting in non availability of sufficient funds in the hands of the State Government for advancing fresh loans.
It is with the object of avoiding the usual delay involved in the disposal of suits in civil Courts and providing for an expeditious remedy, the Act has been enacted.
In the instant case, the mortgage deed provided that the amount due thereunder could be realised as if it were an arrear of land revenue: and [1020B G] (c) The mere fact that there is no express provision in the Act containing guidelines to the authorities concerned regarding the circumstances under which the amounts could be realized by resorting to the procedure prescribed for recovering arrears of land revenue, however, in the circumstance of the case is not sufficient to hold that section 3 of the impugned Act confers arbitrary power on the State Government and makes a hostile discrimination.
The Act which is passed with the object of providing a speedier remedy itself provides sufficient guidance to the officer concerned as to when he should resort to the remedy provided for.
[1021A C] Shri Mannalal and Anr.
vs Collector of Jhalwar and Ors, ; ; Lachhman Das on behalf of Firm Tilak Ram Bux vs State of Punjab & Ors., ; and Maganlal Chhagganlal (P) Ltd. vs Municipal Corporation of Greater Bombay and Ors., ; followed.
|
Civil Appeal No. 575 of 1970.
From the Judgment and Decree dated 17 2 1966 of the Allahabad High Court in Special Appeal No. 92 of 1960.
section section Javali and B. R. Aggarwal for the Appellant.
R. K. Garg and V. J. Francis for the Respondent.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
Hulas Chand and Bilas Chand, original owners of a certain plot of land in Saharanpur, granted a permanent lease of the land to Patel Mills Ltd., in May, 1930.
The annual rent 823 was Rs. 75/ .
The lease was empowered to use the land for any purpose whatsoever.
The rights of the lessee were expressly made transferable.
Though the lease was permanent, there was a condition that the lessor could forfeit the lease if the lessee failed to pay rent for three consecutive years.
On November 1, 1932 Hulas Chand and Bilas Chand transferred their interest to Budh Singh and Jialal.
Jugal Kishore, became entitled to the rights of Budh Singh and Jialal by purchase under sale deeds dated April 17, 1943 and May 11, 1943.
But, Shankerlal and Piareylal (present plaintiff) filed a suit for presumption against the vendors and Jugal Kishore and as a result of the decree passed in the suit, they became entitled to the lessor 's interest in the suit plot of land on August 13, 1945.
Meanwhile the lessee Patel Mills went into liquidation and Mehra was appointed voluntary liquidator of the company on May 11, 1937 by a special resolution at a meeting of the creditors of the company.
Benaras Bank Ltd., was the biggest creditor of the Company.
So the liquidator negotiated the sale of all the assets of the Company to the Benaras Bank Ltd., for a sum of Rs. 70,000/ and on February 23, 1939 executed an agreement of sale after receiving the consideration.
The lease hold interest in the suit plot was also included as one of the assets in the agreement of sale.
As a meeting held on May 4, 1939 the creditors accepted the final report of the voluntary liquidator.
The report was sent to the Registrar of Joint Stock Companies, and registered on September 9, 1939.
The company thus stood dissolved with effect from December 9, 1939.
Subsequently on March 1, 1940 the Benaras Bank Ltd, itself went into liquidation.
The Official Liquidator of the Benaras Bank Ltd. found that there was no duly executed deed of transfer executed by the voluntary liquidator of the company in favour of the Benaras Bank Ltd. in respect of the lease hold interest in the suit plot of land.
At the instance of the official liquidator of the bank, Shri Mehra the erstwhile voluntary liquidator of the company executed a deed of sale on January 28, 1941 and had it duly registered.
On March 9, 1943 the official liquidator transferred the lease hold interest in the suit plot of land to the defendant appellant.
We have mentioned that Patel Mills Ltd., stood dissolved with effect from December 9, 1939.
Budh Singh and Jialal had earlier, i.e. on April 12, 1939, accepted rent from the voluntary liquidator of the company.
After the dissolution of the company and the transfer of the lease hold interest by the voluntary liquidator to the Benaras Bank Ltd. Budh Singh and Jialal sent a notice dated January 11, 1941 to the liquidator of the Benaras Bank Ltd. through their lawyer demanding payment of arrears of rent for four years and asserting that the 15 91SCI/80 824 lease was forfeited consequent on the lessee 's failure to pay rent for a continuous period of three years.
The liquidator denied the claim of right of the lessor to forfeit the lease but admitted the claim for rent.
Rent was accordingly paid and was accepted by Budh Singh and Jialal.
Later, on March 21, 1946, Jugal Kishore who had purchased the rights of Budh Singh and Jialal also accepted rent from the official liquidator of the Benaras Bank Ltd. Shankerlal and Piarey Lal who became entitled to the lessor 's interest in the suit plot of land as a result of the decree from pre emption which they obtained against Jugal Kishore and his vendors, filed the suit out of which the appeal arises to recover possession of the land.
Their case was that the lease hold interest in the land was not validly transferred by the voluntary liquidator and therefore, the defendant acquired no right in the land.
Several defences were raised.
It was claimed that the voluntary liquidator had the authority in law to execute the deed of sale and formally complete a transaction which had already taken place.
It was also claimed that the predecessors in the interest of the plaintiffs having accepted rent from the official liquidator of the bank, the plaintiffs were estopped from contending that the transfer in favour of the bank was not valid.
Section 53A Transfer of Property Act was also invoked as a defence to the action of the plaintiffs.
It was lastly pleaded that the plaintiffs had no right to sue for possession as the lease hold interest in the land had escheated to the Government on the dissolution of the Company.
The suit was dismissed by the Trial Court.
The judgment and decree of the Trial Court were affirmed by the 1st Appellate Court and a learned single Judge of the High Court in second appeal.
The learned Single Judge found in favour of the defendant on the question of estopped, escheat and authority of the voluntary liquidator to execute the sale deed but found against the defendant on the applicability of section 53A of the Transfer of Property Act.
On appeal by the plaintiffs under clause 10 of the Letters Patent a Division Bench of the High Court reversed the judgment and decree of the Subordinate Courts and decreed the suit.
The Division Bench held that the voluntary liquidator had no authority to execute the deed of sale after the dissolution of the company and that there was neither estopped nor escheat.
The Division Bench also held that section 53A of the Transfer of Property Act did not protect the defendant.
The defendant has preferred this appeal after obtaining a certificate from the High Court under article 133(1)(b) of the Constitution.
The submissions of Shri Javali learned counsel for the appellant on the question of applicability of section 53A of the Transfer of Property 825 Act and the authority of the voluntary liquidator after the dissolution of the company to execute the deed of sale may be easily disposed of.
We do not think that section 53A of the Transfer of Property Act is attracted to the facts of the present case.
The right under section 53A is available against the transferor (effecting the incomplete transfer) and any person claiming under him.
It is difficult to understand how the successor in interest of a lessor can ever be said to a person claiming under a lessee making an incomplete transfer of the lease hold interest.
Nor do we find force in the submission of the learned counsel that the voluntary liquidator had legal authority, after dissolution of the company to execute the deed of sale so as to formally complete the transaction which had already been entered into.
Reliance was placed by the learned counsel for the appellant on the decision of Farwell, J., in Pulsford vs Demanish(1).
In that case a liquidator was guilty of gross dereliction of duty.
In the words of Farwell J., "A more gross dereliction of duty by a liquidator I have seldom heard of".
Though in possession of sufficient assets of the liquidating company to pay all its debts in full the liquidator took no steps to ascertain the creditors of the liquidating company or to see that they were paid.
Instead he sold the business and assets of the company to a purchasing company who covenanted to pay all the debts and liabilities of the liquidating company.
The purchasing company did not pay the debts.
The liquidating company was dissolved.
The creditors had no remedy by which they could recover their debts.
A creditor of the liquidating company sued the liquidator for recovery of damages.
It was held that the liquidator was guilty of negligence in the discharge of his statutory duty and was liable in damages to the unpaid creditors of the liquidating company.
What was decided in the case was not that a liquidator could represent the erstwhile company after it was dissolved but that a liquidator could be sued in damages for breach of a statutory duty which he had failed to perform while functioning as liquidator.
We do not think that this case is of any assistance to the appellant.
We are unable to appreciate how after the company was dissolved the liquidator could still claim to represent the company and execute a registered deed of sale.
Once the company was dissolved it ceased to exist and the liquidator could not represent a non existing company.
If the liquidator was to discharge any duty or perform any function on behalf of the dissolved company he should have express statutory authority.
The Companies Act 1913 contained no provision enabling the liquidator to do any act on behalf of a dissolved company.
section 209(H) of the Companies Act, 1913 enjoined the liquidator as soon as the affairs of the company were wound up to make up an account of the winding up and to call a gene 826 ral meeting of the company and a meeting of the creditors for the purpose of laying the accounts before the meetings.
The liquidator was then required to send to the Registrar a copy of the account and to make a return to him of the holding of the meetings.
The Registrar on receiving the accounts and the returns was required to register them an on the expiration of three months of registration the company was to be deemed as dissolved.
The only duty cast upon the liquidator thereafter was that under section 244(B).
It was that the liquidator should on the dissolution of the company pay into the Reserve Bank of India, to the credit of the Central Government in an account called the Companies Liquidation Account any money representing unclaimed dividend or any undistributed assets in his hands on the day of dissolution.
No other duty was stipulated to be performed by the liquidator under the provisions of the Companies Act, 1913, after the dissolution of the company.
We are, therefore, unable to agree with the submission of the learned counsel that the liquidator had the jurisdiction to execute the deed of sale dated January 28, 1941 after the company had been dissolved.
The next question which we must consider is what was the effect of the dissolution of the company on the lease hold interest which the company had in the land.
No term of the lease has been brought to our notice by which the lease would stand extinguished on the dissolution of the company.
If the company had a subsisting interest in the lease on the date of dissolution such interest must necessarily vest in the Government by escheat or as bona vacantia.
In India the law is well settled that the property of an intestate dying without leaving lawful heirs and the property of a dissolved Corporation passes to the Government by escheat or as bona vacantia.
Of course such property will be subject to trusts and charges, if any, previously effecting its vide M/s. Pierce Leslie & Co. Ltd., vs Violat Ouchterlong Wapshare & Ors.(1).
It is also to be noticed here that section 244(B) of the Companies Act 1913, as well as section 555(2) of the expressly enjoin a duty on the liquidator to deposit, on the dissolution of the company, into an account in the Reserve Bank of India known as the Companies Liquidation Account any money representing unpaid dividend or undisputed assets lying in his hands at the time of dissolution.
The learned counsel for the appellant relied upon the decisions of the Allahabad High Court in Tulshi Ram Sahu & Anr.
vs Gur Dayal Singh & Anr.(2) and Mussamat Ramman Bibi vs Mathura Prasad & Anr.(3).
Both were cases of fixed rate tenancies.
As pointed out 827 by the Full Bench in Tulsi Ram Sahu & Anr.
vs Gur Dayal Singh & Anr.,(1) one of the incidents of a fixed rate tenancy was that provided by section 18 of the Agra Tenancy Act 1901 which prescribed that a right of occupancy would stand extinguished when a fixed rate tenant died leaving no heir entitled under the Act to inherit the right of occupancy.
It followed therefrom that the land had to revert to the landlord and could not go to the Government by escheat.
On the other hand in Sonet Kooer vs Himmat Bahadur & ors.(2).
The Privy Council held that on the failure of heirs to a tenant holding land under Mukerrori Tenure there was nothing in the nature of the tenure which prevented the Crown from taking the Mukerrori by escheat, subject to the payment of rent to the Zamindar.
If the lease hold interest of the company in the land became vested in the government on the dissolution of the company it must follow that the suit at the instance of the plaintiffs was not maintainable.
The next question for consideration is whether the plaintiffs were estopped from denying the validity of the sale in favour of the Benaras Bank Ltd., and the character of the possession of the Benaras Bank.
Ltd., and its successors in interest.
As already mentioned by us Budhsingh and Jialal sent a notice dated January 11, 1941, through their lawyer demanding of the liquidator of the Benaras Bank Ltd., payment of arrears of rent for four years and asserting that the lease was forfeited consequent on the lessee 's failure to pay rent for a continuous period of three years.
The liquidator denied the claim of right of the lessor to forfeit the lease but admitted the claim for rent.
The liquidator paid the rent and it was accepted by Budh Singh and Jialal.
Later also the evidence shows that Jugal Kishore the purchaser from Budh Singh and Jialal also accepted rent from the official liquidator of the Benaras Bank Ltd. This course of conduct of Budh Singh and Jialal and their successor Jugal Kishore clearly indicates the acceptance, by them, of the position that the Benaras Bank Ltd. had succeeded to the rights of the company in the lease hold interest.
Further, the official liquidator of the Benaras Bank Ltd. said first tried to sell the lease hold interest by public auction.
When that sale did not fructify because of the failure of the highest bidder to deposit the sale price, the lease hold interest was sold to the defendant with the sanction of the Company Judge.
At no point of time did the predecessors in interest of the plaintiffs raise the slightest objection to the sale of the leas hold interest.
It was thereafter that the defendant obtained the permission 828 of the Municipal Board, Saharanpur, and raised construction on the land.
The plaintiffs themselves admittedly reside near about the land in dispute.
They did not raise any objection to the raising of the constructions.
The plaintiffs as well as the defendants appeared to proceed on the common understanding that the defendants had succeeded to the interest of Patel Mills Ltd., in the lease hold interest.
We are, therefore, of the view that the plaintiffs were estopped from contending that the defendant had no interest in land.
The amount only right of the plaintiffs was to receive the rent.
The result of our discussion is that the appeal is allowed and the suit is dismissed with costs throughout.
It is, however, made clear that the plaintiffs have the right to receive rent from the defendants.
P.B.R. Appeal allowed.
| IN-Abs | The original owners of the land in dispute granted a permanent lease of the land to a company.
The lessee could use the land for any purpose and could also transfer the leasehold interest.
Though a permanent lease the lessor could forfeit the lease if the lessee failed to pay rent for three consecutive years.
The lessors interest changed hands twice and by virtue of a decree in a suit for pre emption filed by the respondents they became entitled to such interest.
In the meanwhile the company went into voluntary liquidation and the liquidator executed an agreement of sale of all its assets including the leasehold interest in favour of a Bank which was the biggest creditor of the Company.
Immediately thereafter the Bank itself went into liquidation.
Sometime later the official liquidator of the Bank found that no deed of transfer was executed by the voluntary liquidator in favour of the Bank, the erstwhile voluntary liquidator therefore executed a deed of sale in favour of the Bank.
Thereafter the official liquidator of the Bank transferred the lease hold interest in the land to the defendant appellant.
Before the company went into liquidation the first transferee of the land accepted rent from the voluntary liquidator.
After the transfer of the leasehold interest to the Bank the second transferee demanded from the official liquidator arrears of rent for four years and claimed that the lease was forfeited by reason of the Bank 's failure to pay rent for a continuous period of three years in terms of the lease.
The official liquidator denied the right to forfeit the lease.
He, however, paid rent which was accepted by the lessors.
Even subsequently rent was accepted by the lessors.
The respondent sued to recover possession of the suit land on the ground that the lease hold interest was not validly transferred by the voluntary liquidator and that therefore neither the Bank nor the defendant acquired any right in the land.
The defendants contended that the voluntary liquidator had the authority in law to execute the deed of sale and formally complete a transaction which had already taken place, that the predecessors in interest of the plaintiff having accepted rent from the official liquidator were estopped 822 from contending that the transfer in favour of the Bank was not valid and that the lease hold interest in the land had escheated to the Government on the dissolution of the company.
The suit was dismissed by the Trial Court and the Appellate Court.
On second appeal, the High Court decreed the suit holding that the voluntary liquidator had no authority to execute the deed of sale after the dissolution of the company and that there was neither estopped nor escheat.
Allowing the appeal, ^ HELD: 1.
The High Court was right in holding that the liquidator had no jurisdiction to execute the deed of sale after the company had been dissolved.
Once the company was dissolved in accordance with the procedure laid down in the Indian Companies Act, 1913 it ceased to exist and therefore the voluntary liquidator could not represent a non existent company.
If the liquidator was to discharge any duty or perform any function on behalf of the dissolved company he should have express statutory authority to do so, which he did not have under the Act.
[826 D, 825 G] 2.
If the company had a subsisting interest in the lease on the date of dissolution, such interest must necessarily vest in the Government by escheat or bona vacantia.
It is well settled that the property of an intestate dying without leaving lawful heirs and the property of a dissolved corporation passes to the Government by escheat or bona vacantia.
If the lease hold interest of company became vested in the Government on its dissolution, a suit at the instance of the plaintiffs was not maintainable.
[826 E, 827 G] 3.
The successors in interest of the original lessors accepted rent from the official liquidator indicating that they accepted the position that the Bank had succeeded to the rights of the company in the lease hold interest.
The official liquidator sold the land to the defendant with the permission of the Company Judge only when he failed to get the highest bid in public auction.
At no point of time did the predecessors in interest of the plaintiffs raise an objection to the sale of the lease hold interest.
When the defendant obtained permission of the Municipal Board and raised constructions on the land, the plaintiffs who resided near about the land did not raise any objection to the constructions.
In the circumstances the plaintiffs were estopped from contending that the defendant had no right in the land.
Their only right is to receive rent.
[827 F 828 B]
|
Civil Appeal No. 1083 of 1977.
(Appeal by Special Leave from the Judgment and Order dated 28 1 1977 of the Punjab Haryana High Court in Civil Writ No. 5697/75) CIVIL APPEAL NO: 1616 OF 1978 (Appeal by Special Leave from the Judgment and Order dated 18 9 1978 of the Punjab & Haryana High Court in CWP No. 3849/78) CIVIL APPEAL NOS;1700 1761 OF 1978 (Appeals by Special Leave from the Judgment and Order dated 30 8 1978 of the Punjab & Haryana High Court in Civil Writ Petition Nos.
3351, 2662, 3094, 3221, 3303, 3330, 3347, 3348, 3349, 3350, 1225 3384, 3390, 3393, 3459, 3460, 3489, 3517, 3533, 3548, 3551, 3563, 3570, 3576, 3598, 3615, 3665, 3673, 3773, 3775, 3776, 3826, 3827, 3883, 4024, 4171/77, 37/78, 178, 212, 283, 335, 381, 423, 483, 577, 666, 751, 887, 976, 1021, 1058, 1104, 1164, 1280, 1469/78, 2625/77, 1556/78, 1578/78, 1635, 1859, 1980, 1997 and 2095/78.
CIVIL APPEAL NOS.
1762 1773 OF 1978.
(Appeals by Special Leave from the Judgment and Order dated 30 8 1978 of the Punjab & Haryana High Court in Civil Writ Petition Nos.
45/78, 888, 1251 1451, 1556 3300, 3330, 3293/77, 3292, 3337, 3385 and 3426/77) CIVIL APPEAL NOS.1626 1627 OF 1978.
(Appeals by Special Leave from the Judgment and Order dated 30 8 1978 of the Punjab & Haryana High Court in Civil Writ Petition Nos.
4171/77 and 1356/78) AND WRIT PETITION NOS.
4436, 4470, 4472, 4481, 4485,4564, 4420, 4450, 4460, and 4484 OF 1978 (Under Article 32 of the Constitution) For the Appellants in CA No. 1083/77:A. K. Sen Mr. Ravinder Bana, and Bhal Singh Malik For the RR.
1 2 in CA No. 1083/77: section N. Kackar, Sol.
Genl., Hardev Singh and R. section Sodhi, For the Intervener State Agricultural Market Board and Market Committee, Nai Mandi in CA No. 1083/77: V. M. Tarkunde, and section C. Patel.
For the Applicant Intervener: in CA No. 1083/77 Mrs. Urmila Kapoor.
For the Respondent No. 3 in CA No. 1083/77 H. L. Sibbal, G. G. Garv and Mr. Atma Ram.
For the Petitioner in the W.P. except in WPs.
4481, 4470, 4564 Bhal Singh Malik, B. Datta and K. K. Manchanda.
For the Petitioners in W.P. Nos.4481, 4564, and for the Appellants in CA No. 1616/78 S.K. Walia, and Mr. M.P. Jha.
For the Petitioner in W.P. No.4470/78 Sarva Mitter.
For the Respondents in WP.4430, 4472, 4481, 4485/78 and CA 1616/78 W.P.4564/78: Hardev Singh, G. C. Garg and R. section Sodhi.
For the Appellants in CA Nos.
1700 1761/78 Anil Diwan, (1703) Adarsh Kumar Goel (in all appeals) Praveen Kumar, Adv.
(1703) Miss Bina Gupta, Adv.
(1703) Madan Gopal Gupta (1703 to 1752) Sarva Mitter (1751 1761 and all other) For the Petitioners in W.P. Nos.
4420, 4450, 4460, 4484/78: A. K. Sen, (4420) Dr. L. M. Singhvi, (4460) B. Dutta, K. K. Manchanda and Bhal Singh Malik, For R. 1 in Appeal Nos.
1700 1761/78 and WP Nos.
4420, 4450, 4460 and 4484/78: 1226 P. N. Lekhi, (FP 4420) and R. N. Sachthey, For RR.
2 3 in Appeal Nos. 1760 1761/78 and WP Nos.
4420, 4450, 4460 and 4484/78:V. M. Tarkunde, (in CA 1700 and WP 4420) Gian Singh, (WPs.
4420, 4450 4460, 4484 and CAs 1760 1761) section C. Patel.
For the Appellants in CA Nos.
1626 1627/78: Mrs. Urmila Kapoor, For the Appellants in CA Nos.
1762 1773/78: K. K. Mohan.
For the other appearing RR.
in CA Nos.
1762 1763: section C. Patel, The Judgment of the Court was delivered by UNTWALIA, J.
In these groups of Civil Appeals and Writ Petitions, broadly speaking, the question which falls for determination is the validity of certain provisions of the Punjab Agricultural Produce Markets Act, 1961 (Punjab Act No. 23 of 1961).
hereinafter referred to as the Act, and the Rules framed by the State of Punjab and Haryana under the said Act as also the validity of the fixation of market fees from time to time by the various Market Committees in the States aforesaid under the direction of the Punjab State Agricultural Produce Marketing Board and the Haryana State Agricultural Produce Marketing Board.
All these cases have been heard together and are being disposed of by a common judgment.
In the erstwhile composite State of Punjab the Act was passed in the year 1961 to consolidate and amend the law relating to the better regulation of the purchase, sale, storage and processing of agricultural produce and the establishment of markets for agricultural produce in the State.
Under section 3 of the Act the State Agricultural Marketing Board was constituted for the entire area of the composite State, which later, in the year 1966 came to be bifurcated into the States of Punjab and Haryana.
Under the various provisions of the Act, which will be noticed shortly hereinafter, market areas and market yards were declared putting restrictions on the traders to carry on their trade under a licence granted by the various Market Committees established and constituted in accordance with sections 11 and 12, within the specified boundaries or areas.
The traders were required to take out licences on payment of a licence fee.
Under section 23 of the Act a Market Committee was required and authorised to levy on ad valorem basis fees on the agricultural produce bought or sold by licensees in the notified market area at a rate not exceeding the rate mentioned in section 23 from time to time for every one hundred rupees.
1227 In the composite State of Punjab and even after the bifurcation of the States for about a period of three years the maximum rate of market fee which could be levied under section 23 was 50 paise for every one hundred rupees.
Various Market Committees levied a fee of 50 paise per hundred rupees and no dealer made any murmur of grievance of it.
In the bifurcated State of Punjab by Act 25 of 1969 the rate of 50 paise was raised to Re. 1/ .
It was further raised to Rs. 1.50 by Act 28 of 1973.
Thereafter by Ordinance 4 of 1974 which was replaced by Act 13 of 1974 the rate was raised to Rs. 2.25.
Several dealers filed a number of Writ Petitions in the High Court of Punjab and Haryana challenging the increase in the rate of market fee from time to time, the last one being by Act 13 of 1974.
Similarly in the State of Haryana the rate of 50 paise was raised to Re. 1/ by Haryana Amendment Act 28 of 1969.
It was further raised to Rs. 1.50 by Act 21 of 1973.
By Ordinance 2 of 1974 which was replaced by Act 17 of 1974 in the State of Haryana the fee was raised to Rs.2/ for every one hundred rupees, as against the rise of Rs. 2.20 in the State of Punjab.
Several dealers of the State of Haryana also challenged in the High Court the levy and increase of market fee from time to time.
All the Writ Petitions were heard together.
The increase and levy of fee upto Rs. 2/ by the various Market Committees in the State of Haryana was upheld and the Writ Petitions of the Haryana dealers were dismissed while those of the Punjab dealers were allowed and the increase of rate brought about by Ordinance 4 and Act 13 of 1974 to the extent of Rs. 2.25 was struck down.
This decision of the High Court is reported in M/s. Hanuman Dall & General Mills, Hissar vs The State of Haryana and others.
The date of the decision is November 8, 1974.
In Punjab by Amendment Act 14 of 1975 section 23 of the Act was again amended authorising the imposition of market fee at a rate not exceeding Rs. 2.20 per hundred rupees.
Telegraphic instructions were issued by the Punjab Board to the various Market Committees directing them to charge Rs. 2/ only with effect from August 23, 1975 after the passing of the Act 14 of 1973 on August 8, 1975.
The increase in the rates of fee, the last one being in August, 1975, were again challenged in the High Court.
But the Full Bench which finally heard the Writ Petition upheld the increases by its judgment delivered on January 28, 1977, which is reported in Kewal Krishan Puri and another vs The State of Punjab and others.
Civil Appeal 1083 of 1977 has been preferred in this Court from the said judgment of the High Court.
1228 Both in the State of Punjab and the State of Haryana the rate of market fee was further raised from Rs. 2/ to Rs.3/ .
It was unsuccessfully challenged in the High Court.
The dealers have preferred appeals from the judgments of the High Court as also filed Writ Petitions in this Court.
In the State of Punjab the fee was raised to Rs. 3/ by Ordinance 2 of 1978 which must have been replaced by an Act.
The Ordinance was promulgated on April 28, 1978.
The Writ Petition 4436 of 1978 has been filed in this Court challenging the previous increases in the fee along with the last increase of Rs. 3/ .
The High Court upheld it by its judgment dated May 18, 1978.
Special Leave Petition (Civil) 2768 of 1978 was preferred from this judgment.
Writ Petition No. 3849 of 1978 was filed in the High Court by a large number of dealers, which was dismissed in limine by order dated September 18, 1978.
Civil Appeal 1616 of 1978 arises out of this Writ Petition.
Several other dealers have filed separate Writ Petitions also being Writ Petitions 4470, 4472, 4481, 4485 and 4564 of 1978 challenging in the increase of market fee in the State of Punjab.
In the State of Haryana the rate of fee was raised from Rs. 2/ to Rs.3/ with effect from September 5, 1977 by Ordinance 12 of 1977 replaced by Act 22 of 1977.
The Haryana State Marketing Board directed all the Market Committees in that State to collect market fee @ Rs. 3/ with effect from 5 9 1977.
A number of Writ Petitions were filed in the High Court challenging the said increase and the High Court dismissed all the Writ Petitions by its judgment dated August 30, 1978.
Civil Appeals 1700 to 1773 of 1978 and Civil Appeals 1626 and 1627 of 1978 are from the judgment of the High Court dated August 30, 1978.
The said increase has also been challenged by filing Writ Petitions in this Court and they are Writ Petitions 4420, 4450, 4460 and 4484 of 1978.
Although by now there is a catena of cases of this Court pointing out the difference between "tax" and "fee" with reference to the constitutional provisions and otherwise also, the problem before us has presented some new angles and facets.
We, therefore, think it advisable and necessary to review many of the earlier decisions to pin point the precise difference as far as practicable in order to resolve the rival contentions of the parties.
The arguments of the learned counsel for the parties whenever thought necessary would be referred to at the appropriate places hereinafter in this judgment.
Clause (2) of Article 110 and clause (2) of Article 199 of the Constitution, the former occurring in the Chapter of Parliament and the 1229 latter in relation to the State Legislature, are in identical terms as follows: "A Bill shall not be deemed to be a Money Bill by reason only that it provides. . .for the demand or payment of fees for licences or fees for services rendered. .
The Constitution, therefore, clearly draws a distinction between the imposition of a tax by a Money Bill and the impost of fees by any other kind of bill.
So also in the Seventh Schedule both in List I and in a distinction has been maintained in relation to the entires of tax and fees.
In the Union List entries 82 to 92A relate to taxes and duties and entry 96 carves out the legislative field for fees in respect of any of the matters in the said list except the fees taken in any Court.
Similarly in the State List entries relating to taxes are entries 46 to 63 and entry 66 provides for fees in respect of any of the matters in List II but not including fees taken in any Court.
Entry relating to fees in List III is entry 47.
Our Constitution, therefore, recognises a different and distinct connotation between taxes and fees.
The leading case of this Court which has been referred and followed in many subsequent decisions is the case of The Commissioner, Hindu religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt.
The point decided therein was that the provision relating to the payment of annual contribution contained in section 76(1) of the Madras Hindu Religious and Charitable Endowments Act, 1951 is a tax and not a fee and so it was beyond the legislative competence of the Madras State Legislature to enact such a provision.
The meaning given to the word "tax" by Latham C.J. of the High Court of Australia in Matthews vs Chicory Marketing Board has been quoted with approval at page 1040 and has been often repeated in many other decisions.
Generally speaking a fee is defined to be a charge for a special service rendered to individuals by some governmental agency.
A question arises "special service" rendered to whom which kind of individuals? Mr. V.M. Tarkunde who appeared for the Haryana Marketing Board stressed the argument that service rendered must be correlated to those on whom the ultimate burden of the fee falls.
In our opinion this argument is neither logical nor sound.
The impost of fee and the liability to pay it is on a particular individual or a class of individuals.
They are under the obliga 1230 tion to submit accounts, returns or the like to the authorities concerned in cases where quantification of the amount of fees depends upon the same.
They have to undergo the botherations and harassments, sometimes justifiably and sometimes even unjustifiably, in the process of discharging their liability to pay the fee.
The authorities levying the fee deal with them and realize the fee from them.
By operation of the economic laws in certain kinds of impositions of fee the burden may be passed on to different other persons one after the other.
A few lines occurring at page 119 in the judgment of the Privy Council in the case of Attorney General for British Columbia and Esquimalt and Nanaimo Railway Company and others may be quoted with advantage.
They are as follows: "It is probably true of many forms of tax which are indisputably direct that the assessee will desire, if he can, to pass the burden of the tax on to the shoulders of another but this is only an economic tendency.
The assessee 's efforts may be conscious or unconscious, successful or unsuccessful; they may be defeated in whole or in part by other economic forces.
This type of tendency appears to their Lordships to be something fundamentally different from the "passing on" which is regarded as the hall mark of an indirect tax.
" The authorities, more often than not, almost invariably, will not be able to know the individual or individuals on whom partly or wholly the ultimate burden of the fee will fall.
They are not concerned to investigate and find out the position of the ultimate burden.
It is axiomatic that the special service rendered must be to the payer of the fee.
The element of quid pro quo must be established between the payer of the fee and the authority charging it.
It may not be the exact equivalent of the fee by a mathematical precision, yet, by and large, or predominantly, the authority collecting the fee must show that the service which they are rendering in lieu of fee is for some special benefit of the payer of the fee.
It may be so intimately connected or interwoven with the service rendered to others that it may not be possible to do a complete dichotomy and analysis as to what amount of special service was rendered to the payer of the fee and what proportion went to others.
But generally and broadly speaking it must be shown with some amount of certainty, reasonableness or preponderance of probability that quite a substantial portion of the amount of fee realised is spent for the special benefit of its payers.
1231 We may now extract some very useful and leading principles from the decision of this Court in Shirur Mutt 's ; , supra) pointing out the difference between tax and fee.
At pages 1040 41 says Mukherjea J., as he then was: "The second characteristic of tax is that it is an imposition made for public purpose without reference to any special benefit to be conferred on the payer of the tax.
This is expressed by saying that the levy of tax is for the purposes of general revenue, which when collected forms part of the public revenues of the State.
As the object of a tax is not to confer any special benefit upon any particular individual, there is, as it is said, no element of quid pro quo between the tax payer and the public authority. " "a 'fee ' is generally defined to be a charge for a special service rendered to individuals by some governmental agency.
" At page 1042 the learned Judge.
enunciates "The distinction between a tax and a fee lies primarily in the fact that a tax is levied as a part of a common burden, while a fee is a payment for a special benefit or privilege Public interest seems to be at the basis of all impositions, but in a fee it is some special benefit which the individual receives.
" After pointing out the ordinarily there are two classes of cases where Government imposes 'fee ' upon persons, the first being the type of cases of the licence fees for Motor Vehicles or the like and in the other class of cases . the Government does some positive work for the benefit of persons and the money is taken as the return for the work done or services rendered" (vide page 1043), it is said further "If the money thus paid is set apart and appropriated specifically for the performance of such work and is not merged in the public revenues for the benefit of the general public, it could be counted as fees and not a tax.
There is really no generic difference between the tax and fees and as said by Seligman, the taxing power of a State may manifest itself in three different forms known respectively as special assessments, fees and taxes. "Finally at page 1044 the striking down by the High Court of the imposition of fee under section 76.
Of the Madras Act was upheld on the ground "It may be noticed, however, that the contribution that has been levied under section 76 of the Act has been made to depend upon the capacity of the payer and not upon the quantum of benefit that is supposed to be conferred on any particular religious institution.
" Benefit conferred or any particular religious institution would have been undoubtedly benefit conferred on the payer of the fee.
1232 After the decision of this Court in Shirur Mutts case (supra) section 76 of the Madras Act was amended.
The effect of the amendment came to be considered by this Court in the case of H. H. Sudhundra Thirtha Swamiar vs Commissioner for Hindu Religious & Charitable Endowments.
Mysore.(1) Pointing out the various differences between the earlier law and the amended one at pages 320 21 the imposition of fee was upheld.
In two other cases of this Court following the ratio of Shirur Mutt 's decision the imposition of fee was upheld, vide, Mahant Sri Jagannath Ramanuj Das and another vs The State of Orissa and another and Ratilal Panachand Gandhi vs The State of Bombay and other .
(3) We now proceed to consider.
some more decisions of this Court in which apparently some different phrases were used for explaining the meaning of the word 'fee ' and its distinction from 'tax '.
Both sides placed reliance upon those decisions.
But if the phrases are understood in the context they were used and with reference to the facts those cases it would be noticed that the leading principle has not basically undergone any change.
In the case of The Hingir Rampurr Coal Co. Ltd. & Ors.
vs The State of Orissa and others(4) the challenge was to the cess levied by the orissa Mining Areas Development Fund Act, 1952.
The petitioners ' stand in the first instance was that the cess levied was not a fee but a duty of excise on coal and hence beyond the competence of the State Legislature.
Alternatively they contended that even if it was a fee it was beyond the competence of the State Legislature for some If other reason not necessary to be mentioned here.
The cess imposed was upheld as a 'fee ' relatable to Entry 23 of List II read with Entry 66.
In other words it was upheld as a 'fee ' in respect of regulation of mines and mineral development.
Gajendragadkar J., as he then was, delivered the judgment on behalf of the majority and discussed the point at some length.
At page 545 are to be found a few words which go directly against the contention of Mr. Tarkunde.
Says the learned Judge: ". a fee is levied essentially for services rendered and as such there is an element of quid pro quo between the person who pays the fee and the public authority which imposes it." 1233 (Emphasis supplied).
Mr. Tarkunde, however, relied upon a passage at the same page which runs thus: "If specific services are rendered to a specific area or to a specific class of persons or trade or business in any local area, and as a condition precedent for the said services or in return for them cess is levied against the said area or the said class of persons or trade or business the cess is distinguishable from a tax and is described as a fee.
" The above passage does not mean that the service rendered is unconnected with or not meant for the payer of the fee.
As pointed out earlier, service rendered to an institution like a Math is a service rendered to the payer of the fee.
Similarly services rendered to a specific area or to a specific class of trade or business in any local area must mean, and cannot but mean, that it is for the special benefit of the person operating in that area.
The service rendered was to the mining area for the benefit of the mine owners at that area.
The area or trade does not pay the fee nor does it get the benefit in vacuum.
The fee is paid by the person who is liable to pay it and service to the payer does not mean any personal or domestic service to him but it means service in relation to the transaction, property or the institution in respect of which he is made to pay the fee.
Says the learned Judge at page 549: "It is true that when the Legislature levies a fee for rendering specific services to a specified area or to a specified class of persons or trade or business, in the last analysis such services may indirectly form part of services to the public in general.
If the special service rendered is distinctly and primarily meant for the benefit of a specified class or area the fact that in benefitting the specified class or area the State as a whole may ultimately and indirectly be benefitted would not detract from the character of the levy as a fee.
Where, however, the specific service is indistinguishable from public service, and in essence is directly a part of it, different considerations may arise.
In such a case it is necessary to enquire what is the primary object of the levy and the essential purpose which it is intended to achieve.
Its primary object and the essential purpose must be distinguished from its ultimate or incidental results or consequence .
That is the true test in determining the character of the levy." (underlining, ours) At pages 549 50 in the decision of The Hingir Rampur Coal Co. Ltd. (supra), reference has been made in passing to the decision of 1234 the Australian High Court in Patron vs Milk Board (Victoria).(1) The majority which, amongst others, included Dixon J., held the purported levy to be invalid because it was the imposition of a duty of excise, there being no element of quid qua to the person on whom the levy had been imposed.
Since a few lines from the judgment of Dixon J., occurring at pages 258 259 will be very helpful in tackling with the problem we are faced with, we may quote them.
They are as follows: "It is an exaction for the purposes of expenditure out of a Treasury fund.
The expenditure is by a government agency and the objects are governmental.
It is not a charge for service.
No doubt the administration of the Board is regarded as beneficial to what may loosely be described as the milk industry.
But the Board performs no particular service for the dairyman or the owner of a milk depot for which his contribution may be considered as a fee or recompense. . . .
On the other hand it is a trading tax.
"Customs and excise duties are, in their essence, trading taxes, and may be said to be more concerned with the commodity in respect of which the taxation is imposed than with the particular person from whom the tax is exacted": Attorney General for British Columbia vs Kingcome Navigation Co [1934] A.C. 45, at p. 59.
At page 554 is to be found the final conclusion of Gajendragadkar J., which is the crux of the matter.
It runs: Thus the scheme of the Act shows that the cess is levied against the class of persons owning mines in the notified area and it is levied to enable the State Government to render specific services to the said class by developing the notified mineral area.
There is an element of quid pro quo in the scheme, the cess collected is constituted into a specific fund and it has not become a part of the consolidated fund, its application is regulated by a statute and is con fined to its purposes, and there is a definite correlation between the impost and the purpose of the Act which is to render service to the notified area." (underlining, ours).
In the case of Corporation of Calcutta and another vs Liberty cinema(2) the respondent was charged by the Calcutta Corporation a 1235 very high licence fee assessed according to the sanctioned seating capacity of the Cinema house.
The High Court quashed the imposition.
In appeal to the Supreme Court the stand of the appellant Corporation was that the levy was a tax and section 548(2) of the Calcutta Municipal Act did not suffer from the vice of excessive delegation: while the respondent cinema contended that the levy was a fee and had to be justified as being imposed in return for services to be rendered.
Alternatively the respondent submitted that if it was a tax it was invalid as it amounted to an illegal delegation of legislative functions.
The majority view was expressed by Sarkar J., as he then was, and the impost was upheld as a tax.
In the minority opinion delivered by Ayyangar J., it was held that even in the case of a licence fee a correlation between the fee charged and the service rendered was necessary to be established.
It was, therefore, held to be a tax but invalidly imposed under a power suffering from the vice of unconstitutional legislative delegation.
In the cases before us the licence fees charged from the various traders in the market areas are not excessive and have not been attacked on any ground whatsoever.
We are.
therefore, not concerned to find out whether an element of quid pro quo is necessary in cases of all kinds of licence fees.
Some licences are imperative to be taken only by way of regulatory measure, some are in the nature of grant of exclusive right or privilege of the State, such as, excise cases noticed by this Court in the case of Har Shankar & ors.
vs The Dy.
Excise & Taxation Commr.
& Ors (1) Some may be cases of licence fees where element of qid pro quo is necessary to be established.
But what is important to be pointed out from the case of Liberty Cinema (supra) is that in the case of a fee of the kind with which we are concerned in this case the element of quid pro quo must be established.
Otherwise the imposition of fee will be bad.
In the majority opinion, it is stated at page 490: "The conclusion to which we then arrive is that the levy under s.548 is not a fee as the Act does not provide for any service to him.
No question here arises of correlating the to the person on whom it is imposed.
The work of inspection done by the Corporation which is only to see that the terms of the licence are observed by the licensee is not a service to him.
No question here arises of correlating the amount of the levy to the costs of any service.
The levy is a tax." 1236 Ayyangar J., also said at page 526 that there being no correlation between the fee charged and the service rendered the impugned levy was not authorised.
Mr. Tarkunde at one stage of the hearing endeavoured to submit, although the Solicitor General appearing for the State of Punjab and Mr. H. L. Sibbal for the Punjab Marketing Board had made no such submissions, that the impugned impost could be justified as a tax.
There was no lack of legislative competence in imposing a tax of the kind under issue.
Counsel further submitted that in almost all the cases in absence of quid pro quo the levy was held to be bad and unsustainable as a tax for want of legislative competence.
On the other hand learned counsel for the appellants and the petitioners M/s. A. K. Sen, Anil Dewan, B. section Malik and A. K. Goel pointed out that at no pointed of time the respondent sought to justify the impost as a tax obviously because it would have then violated the provisions of the Sales Tax law which did not authorise the imposition of such a tax beyond a certain percentage, and as a tax it could not be but a sales tax.
Finally this controversy was not pursued when we pointed out that at no stage the question was raised and no attempt any stage was made to justify it as a tax.
Obviously the Market Committees could not be competent under the Act to impose any tax: on the sale and purchase of the agricultural produce in the market nor did it ever purport to do so The nature of the impost and the power.
under which it was levied squarely and uniformally remained within the realm of the fee and fee of the kind which could not but sustained on the establishment of the element of quid pro quo between the authority charging the fee and its payer.
The next case to be considered is the decision of this Court in Nagar Mahapalika Varanasi vs Durga Das Bhattacharya & ors.(l) in which it was held that the annual licence fee charged from the rickshaw owners and the drivers by the Varanasi Municipal Board could be justified only on the basis of the element of quid pro quo.
The fee was held to be ultra vires and illegal because after excluding certain items of expenditure the balance did not constitute sufficient quid pro quo for the amount of the licence fee charged.
It could not be sustained as a tax.
Certain major items of expenditure incurred by the Municipal Board were attributable to the discharge of its statutory duty and, therefore, at page 386 it was said by Ramaswami J., it is manifest that the licence fee cannot be imposed for reimbursing the cost of ordinary municipal serves which the Municipal 1237 Board was bound under the statute to provide to the general public.
" The expenditure incurred by the Municipal Board for the benefit of the licensees constituted 44% of the total income of the Municipal Board and hence it was held that there was no sufficient quid pro quo established in the circumstances of the case.
In Delhi Cloth & General Mills Co. Ltd. vs Chief Commissioner Delhi & ors.(l) the High Court had found the 60% of the amount of licence fees charged from the mills was actually spent on services rendered to the factory owners.
On that basis sufficient quid pro was found to exist and the impost was upheld by this Court also.
We may, however, add that the rule of 60% cannot be of universal application.
It is not a static rule.
The cases of licence fees are, generally speaking, on some different footing.
There is a substantial element of regulatory measure involved in them.
Over and above that a good portion of the fee, may be in the neighbourhood of 60% or more, must be correlated to the service rendered to the person from whom the fee is charged.
But there may be cases where, as in the instant one, the licence fee charged by way of regulatory measure is not exorbitant or excessive.
But the other kind of fee charged has got to be justified on the ground of existence of sufficient quid pro quo between the payer of the fee and the authority charging it.
In such a case from a practical point of view it may be difficult to find out with arithmetical exactitude as to what amount of fee has gone in incurring the expenditure for the services.
But, broadly speaking, a good and substantial portion of it must be shown as being spent for the services rendered.
Now we come to the decision of this Court in Indian Mica & Micanite Industries Ltd .
vs State of Bihar & ors.(2) wherein Hegde J., speaking on behalf of a Constitution Bench of this Court, reviewed all the earlier cases and pointed out at page 323 that "While a tax invariably goes into the consolidated fund, a fee is earmarked for the specified services in a fund created for the purpose.
" Concludes the learned Judge at pages 324 25: "From the above discussion it is clear that before any levy can be upheld as a fee, it must be shown that the levy has reasonable co relationship with the services rendered by the Government.
In other words the levy must be proved to be a qui pro quo for the services rendered.
But in these matters it will be impossible to have an exact co relationship.
The co relationship expected is one of a general character and not as of arithmetical exactitude." 1238 Difference between a licence to regulate a trade, business or profess on in public interest and in a case where a Government which is the owner of a particular property may grant permit or licence to some one to exploit that property for his benefit for consideration has been pointed out at page 325.
The State of Bihar had failed to place materials in the High Court to establish the reasonable co relationship between the value of the services rendered with the fee charged.
For some special reasons the case was remanded.
But one thing may be pin pointed from a passage occurring at page 327 that the expenses of maintaining an elaborate staff by the Excise Department were not only for the purposes of ensuring that denaturing is done properly by the manufacturer but also for the purpose of seeing that the subsequent possession of denatured spirit in the hands either of a wholesale dealer or retail seller or any other licensee or permit holder is not misused by converting the denatured spirit into alcohol fit for human consumption and thereby evade payment of heavy duty.
But the appellant before the Supreme Court or other similar licensees had nothing to do with the manufacturing process.
They were only the purchasers of manufactured denatured spirit.
In that context it was said "Hence the cost of supervising the manufacturing process or any assistance rendered to the manufacturers cannot be recovered from the consumers like the appellant.
" When we come to discuss even from the admitted facts in relation to the levy of impugned market fees, we shall point out that the authorities concerned as also the High Court labour under the impression that the fee realized from the traders in the market could be spent for any purpose of development of agriculture by providing all sorts of facilities to the agriculturists including the facilities of link roads for the purpose of trans port of their agricultural produce to the markets how so ever distant these link roads may be from the market proper or any other purchasing centre in the market.
In the case of Secretary, Government of Madras, Home Department and another vs Zenith Lamp & Electrical Ltd.(1) the character of Court fees came up for consideration as to whether they are taxes or fees or whether they are sui generis.
Although after referring to the various Entries of the Seventh Schedule in the different lists it was noticed that Court fees were not taxes and they were covered by separate Entries of fees exclusively meant for Courts, yet the broad principles of the requirement of quid pro quo were made applicable in the cases of Court fees also.
Even so, Sikri C.J. speaking for the Court pointed out at page 982 "But even if the meaning is the same, 1239 what is 'fees ' in a particular case depends on the subject matter ill relation to which fees are imposed.
" The learned Chief Justice further observed at the same page "In other words, it cannot tax litigation, and make litigations pay, say for road building or education or other beneficial schemes that a State may have.
There must be a broad co relationship with the fees collected and the cost of administration of civil justice.
" If the view taken by the High Court in the market fee cases were to hold good, then pushing it to the logical conclusion one will have to say that giving all sorts of facilities to the litigants for their travel from the village homes to the Courts would also be a service of them In cases of court fees one has to take broad view of the matter to find out whether there exists a broad co relationship with the fees collected and the cause of administration of justice.
Even mixing the amount of court fee collected with the general fund will be permissible.
It may not be kept in a separate fund or earmarked separately.
The very fact that in relation to court fees there are separate Entries in the Seventh Schedule e.g. Entry 77 List I and Entry 3 of List II, indicates that even though the character of the levy is not very much different from that of the general types of fees, in the matter of approach for finding out the element of quid pro quo quite a different test has not to be applied as indeed, to some extent it has to be applied in many kinds of fees depending upon the totality of the facts and circumstances.
Each case has to be judged from a reasonable and practical point of view for finding out the element of quid pro quo.
In the case of State of Maharashtra & ors.
vs The Salvation Army, Western India Territory(1) Mathew J., speaking for the Court after resume of some earlier decisions of this Court upheld to a certain extent the fee charged under the Bombay Public Trust Act, 1950 on the ground that taking precautionary measures to see that Public Trusts are administered for the purpose intended by the authors of the Trust and exercising control and supervision with a view to preserve the trust properties from being wasted or misappropriated by trustees are certainly special services for the benefit of the trust.
Thus special benefits for the payer of the fee were established, as benefits to the trust were benefits to the trustees who are required to pay the fees out of the trust income.
But then it was further pointed out that in spite of accumulation of the surplus from 1953 onwards the authorities went on charging the fee of 2% which has assumed the character of a tax.
After giving certain guidelines the levy was declared to be without the authority of law after 31st March, 1970.
1240 Observations of one of us (Chandrachud J., as he then was), speaking for the Court in the case of Government of Andhra Pradesh & Anr.
vs Hindustan Machine Tool Ltd.(1) at page 401 are quite apposite and may be usefully quoted here: One cannot take into account the sum total of the activities of a public body like a Gram Panchayat to seek justification for the fees imposed by it.
The expenses incurred by a Gram Panchayat or a Municipality in discharging its obligatory functions, are usually met by the imposition of a variety of taxes.
For justifying the imposition of fees the public authority has to show that services are rendered or intended to be rendered individually to the particular person on whom the fee is imposed.
The Gram Panchayat here has not even prepared an estimate of what the intended services would cost it. ' The levy of house tax was held to be lawful but the levy of Permission Fee had to be struck down as being illegal.
In the instant case also it would be noticed that the Market Committees and the Market Boards assumed to themselves the liberty of utilizing and spending the realizations from market fees to a consider able extent, as if it was a tax, although in reality it was not so.
In The Municipal Council Maduri vs R. Narayanan etc.(2) endeavour was made as in the case of Nagar Mahapalika Varanasi (supra) to justify the impost by the Municipal Council as a tax.
Krishna Iyer J., speaking for the Court repelled that argument and since the impost could not to justified as fee the resolution of the Municipal Council was held to be invalid.
In the Chief Commissioner, Delhi and another vs The Delhi Cloth and General Mills Co. Ltd. and others(3) the question for consideration was whether the registration fee charged on the document satisfied the two conditions of fee which were enumerated in the fol lowing language: "(i) there must be an element of quid pro quo that is to say the authority levying the fee must render some service for the fee levied however remote the service may be; (ii) that the fee realised must be spent for the purposes of the imposition and should not form part of the general revenues of the State." 1241 The second condition was found not to be fulfilled and hence the impost was held to be bad.
We would like to point out that the first condition is rather couched in too broad and general a language.
Rendering some service, however remote the service may be, cannot strictly speaking satisfy the element of quid pro quo required to be established in cases of the impost of fee.
But then, as pointed out, in some of the cases noticed earlier the registration fee has been taken to stand on a different footing altogether.
In the case of such a fee the test of quid pro quo is not be satisfied with such direct, close or proximate co relationship as in the case of many other kinds of fees.
By and large registration fee is charged as a regulatory measure.
The history of the marketing legislation was traced by Venkatarama Aiyar J. in the case of P. P. Kutti Keya and others vs The State of Madras and others.(1) A number of Writ Petitions were disposed of by one judgment delivered on 10 7 1953.
Appeals in some of these Writ Petitions were brought to this Court in the case of M.C.V. section Arunachala Nadar etc.
vs The State of Madras & others.(2) Al though the Courts were concerned mainly with the question of the constitutional validity of the marketing law which is beyond any pale of challenge now, it would be interesting to note that the Madras High Court had taken the view that the funds raised from the merchants for construction of a market in substance amounted to an exaction of a tax.
We are not going to approve such a narrow view in relation to the application of the amounts realized by market fees, yet we are not going to make it too broad either, so as to take within its sweep any remote service which may ultimately or tangentically be of some benefit to the grain trade in the market.
Subba Rao J., as he then was, speaking for the Court in Arunachala Nadar 'section case (supra) traced the history of the marketing legislation at pages 95 96 and pointed out at page 98: "The Act, therefore, was the result of a long exploratory investigation by experts in the field, conceived and enacted to regulate the buying and selling of commercial crops by providing suitable and regulated markets by eliminating middlemen and bringing face to face to the producer and the buyer so that they may meet on equal terms, thereby eradicating or at any rate reducing the scope for exploitation in dealings.
" At page 102 is to be found some discussion with regard to the licence fees which, says the learned Judge, "do not appear to be so high as to cripple the trader 's business.
" The question of charge of the market fee apart from the licence fee did not fall for consideration in this case.
The Bombay 1242 Marketing Statute came to be considered in the case of Mohammad Hussain Gulam Mohammad and another vs The State of Bombay and another.(1) Wanchoo J., as he then was, speaking for the Court repelled the attack at page 669 on section 11 of the Bombay Act which gives power to the Market Committee subject to the provisions of the rules and subject to such maxima as may be prescribed to levy fees on the agricultural produce bought and sold by licensees in the market area.
The attack was that the impost was in the nature of sales tax.
It was repelled on the ground that: "Now there is no doubt that the market committee which is authorised to levy this fee renders services to the licensees, particularly when the market is established.
Under the circumstances it cannot be held that the fee charged for services rendered by the market committee in connection with the enforcement of the various provisions of the Act and the provisions for various facilities in the various markets established by it, is in the nature of sales tax.
It is true that the fee is calculated on the amount of produce bought and sold but that in our opinion is only a method of realising fees for the facilities provided by the Committee." Since the market was not found to have been properly established it was held that the market committee could not enforce any of the pro visions of the Act or the Rules or the bye laws.
Therefore, the question of the rate of market fee did not fall for consideration.
The Bihar Statute came up for consideration of this Court in the case of Lakhan Lal and others etc.
vs The State of Bihar and others.
Bachawat J., upheld the validity of the various actions taken by the State Government under the Act and the Rules and finally said at page 539: "But there is no material on the record to show that the Government acted unreasonably or that the market is so wide that the sale and purchase of agricultural produce within it cannot be effectively controlled by the market committee or that the growers within the area cannot conveniently bring their produce to the market yards." In contrast in the present case the whole of the State has been divided into different market areas, although the principal market yard is only one in one area with some sub market yards appertaining to it.
We do not mean to suggest in pointing out this difference that the declaration of the whole market area is unreasonable.
But the market fee has to be realized from the traders on the purchase of the agricultural produce in the market which consists of the market yards and some purchas 1243 ing centres established at some other places in the area due to the urgency or exigency of the situation.
Such a fee cannot be utilised for the purpose of rendering all sorts of facilities and services for the benefit of the agriculturists throughout the area.
It may be very necessary to render such services to the agriculturists; rather, they must be rendered.
But the laudable and in itself cannot justify the means to achieve that end if the means have got no sanction of the law.
In the Bihar case it was found at page 540: "The market committee has appointed a dispute subcommittee for quick settlement of disputes.
It has set up a market intelligence unit for collecting and publishing the daily prices and information regarding the stock, arrival and despatches of agricultural produce.
It has provided a grading unit where the techniques of grading agricultural produce is taught.
the contract form for purchase and sale is standardised.
The provisions of the Act and the Rules are enforced through inspectors and other staff appointed by the market committee.
The fees charged by the market committee are correlated to the expenses incurred by it for rendering these services.
The market fee, of 25 naya paise per Rs. 100/ worth of agricultural produce and the licence fees prescribed by Rules 71 and 73 are not excessive.
The fees collected by the market committee form part of the market committee fund which is set apart and earmarked for the purposes of the Act.
There is sufficient quid pro quo for the levies and they satisfy the test of "fee" as laid down in Commissioner Hindu Religious Endowments Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt [954] S.C.R., 1005.
" It would be noticed that even the rate of 25 paise per hundred rupees had to satisfy all these tests.
In the instant cases we are concerned with the rates of market fee which are much higher than the Bihar rate.
Correlative service also, therefore, must satisfy the tests of rendering more services in the market area.
The fund cannot be permitted to be utilised for an end, such as, augmenting the agricultural produce etc.
, if it has no reasonably direct or close connection with the services rendered to the payers of the fee.
From a conspectus of the various authorities of this Court we deduce the following principles for satisfying the tests for a valid levy of market fees on the agricultural produce bought or sold by licensees in a notified market area: (1) That the amount of fee realised must be earmarked for rendering services to the licensees in the notified 1244 market area and a good and substantial portion of it must be shown to be expanded for this purpose.
(2) That the services rendered to the licensees must be in relation to the transaction of purchase or sale of the agricultural produce.
(3) That while rendering services in the market area for the purpose of facilitating the transactions of purchase and sale with a view to achieve the objects of the marketing legislation it is not necessary to confer the whole of the benefit on the licensees but some special benefits must be conferred on them which have a direct, close and reasonable correlation between the licensees and the transactions.
(4) That while conferring some special benefits on the licensees it in permissible to render such service in the market which may be in the general interest of all concerned with the transactions taking place in the market.
(5) That spending the amount of market fees for the purpose of augmenting the agricultural produce, its facility of transport in villages and to provide other facilities meant mainly or exclusively for the benefit of the agriculturists is not permissible on the ground that such service in the long run go to increase the volume of transactions in the market ultimately benefitting the traders also.
Such an indirect and remote benefit to the traders is in no sense a special benefit to them.
(6) That the element of quid pro quo may not be possible, or even necessary, to be established with arithmetical exactitude but even broadly and reasonably it must be established by the authorities who charge the fees that the amount is being spent for rendering services to those on whom falls the burden of the fee.
(7) At least a good and substantial portion of the amount collected on account of fees, may be in the neighbourhood of two thirds or three fourths, must be shown with reasonable certainty as being spent for rendering services of the kind mentioned above.
1245 In the light of the principles culled out and enunciated above, we now proceed to examine the relevant provisions of the Act and the rules framed thereunder as in force in the States of Punjab and Haryana.
We shall examine the relevant provisions with reference to the Punjab Act and the Rules and will only refer to those of Haryana when some difference of some significance or consequence has got to be pointed out.
Under clause (f) of section 2 of the Act "dealer" is defined to mean : "any person who within the notified market area sets up, establishes or continues or allows to be continued any place for the purchase, sale, storage or processing of agricultural produce notified under sub section (l) of section 6 or purchases, sells, stores or processes such agricultural produce.
" Clause (hh) inserted by Punjab Act 4O of 1976 says: "licensee" means a person to whom a licence is granted under section 10 and the rules made under this Act and includes any person who buys or sells agricultural produce and to whom a licence is granted as Kacha Arhtia or commission agent or otherwise but does not include a person licensed under section 13.
" As per clause (i): market" means a market established and regulated under this Act for the notified market area, and includes a market proper, a principal market yard and sub market yard.
" The definition of "market proper" is to be found in clause (k) to mean: "any area including all lands with the buildings thereon, within such distance of the principal market or sub market yard, as may be notified in the official gazette by the State Government, to be a market proper.
" "Notified market area" in clause (b) means any area notified under section 6 and clause (n) provides: " "Principal market yard" and "sub market yard" mean an enclosure, building or locality declared to be a principal market yard and sub market yard under section 7.
" As already stated the State Agricultural Marketing Board is constituted under section 3 and while enumerating the powers and duties of the 1246 Board it is provided in sub section (9) that "The Board shall exercise superintendence and control over the Committees.
" The provision of "Declaration of notified market area" is to be found in section 6(1) which empowers the State Government to declare the area notified under section 5 or any portion thereof to be a notified market area for the purposes of the Act in respect of the agricultural produce notified under section 5 or any part thereof.
As already pointed out the whole of the State was intended to be divided in various market areas and was also declared as such under section 6.
Under sub section (3) of section 6 after the declaration of the notified market area no person can establish or continue any place for the purchase, sale, storage and processing of the agricultural produce except under a licence granted in accordance with the provisions of the Act, the Rules and the byelaws.
A dispute arose between the parties before us as to whether the licence is granted for the whole of the area or for particular places therein.
On examining Form in the Rules meant for grant of licence under section 10 we find that the licence is granted for one or more places of business specified in column 6 situated in a particular notified market area named at the top of the licence.
There will be no sense in specifying the place of business in the licence if the licensee is to be permitted to establish his place of business any where in a notified market area which is too big and extensive for the control and supervision of a particular market committee.
Market yards are declared under section 7 and for each notified market area there can be one principal market yard and one or more sub market yards as may be necessary.
The marginal note of section 8 is "No private market to be opened in or near places declared to be markets.
" There is some difference in the provisions of the Act as introduced by the Haryana Amendment in relation to the establishment of notified market area, declaration of market yards and the inhibition on any person to establish or continue any place for the purchase "sale, storage and processing of any agricultural produce.
" There was also a controversy before us as to the exact interpretation of the language of the two Statutes in relation to such inhibition.
But for the purposes of the cases before us it is not necessary to further encumber the judgment by attempting to reconcile by harmonious construction the various provisions of the two Acts in relation to this matter.
Suffice it to say that there is no special provision in the Statute for establishment of markets or markets proper as per the definition contained in clauses (i) and (k) of section 2 of the Act, yet it is reasonable to assume that the intention of the legislature is to constitute the market yards as the market proper and ordinarily and generally the market would be the same but may 1247 include some other places where transactions of purchase of agricultural produce by the traders from the producers has been allowed in order to avoid rush in the precincts of the market proper.
But one thing is certain that the whole of the market area in no sense can be equated with market or market proper.
No body can be allowed to establish a purchasing centre of his own at any place he likes in the market area without there being such a permission or authority from the Market Committees.
After all the whole object of the Act is the supervision and control of the transactions of purchase by the traders from the agriculturists in order to prevent exploitation of the latter by the former.
The supervision and control can be effective only in specified localities and places and not throughout the extensive market area.
We have already pointed out that there is no separate notification or declaration establishing a market or market proper.
But Rule 24(1) in both the States framed under the Act provides that: "All agricultural produce brought into the market for sale shall be sold by open auction in the principal or sub market yard.
" This also indicates that market is generally the principal and sub market yards.
The benefit of market fee, therefore, has to be correlated with the transactions taking place at the specified place in the market area and not in the whole of the area.
Sections 9 to 10A deal with the procedure of taking out licences, The State Government is empowered under section ll to establish a market committee for every notified market area and to specify its headquarters.
The question of constitution of committees is dealt within section 12.
The duties and powers of a market committee are enumerated in section 13.
It would be seen from clause (a) of subsection (l) of section 13 that it is the duty of the committee to establish a market in the notified market area "providing such facilities for persons visiting it in connection with the purchase, sale, storage, weighment and processing of agricultural produce concerned as the Board may from time to time direct." This also indicates that the Committee is primarily concerned with providing facilities in the market for persons visiting it and in connection with the transactions taking place there.
Now we come to the most important section viz section 23.
It read as follows: "A Committee shall, subject to such rules as may be made by the State Government in this behalf, levy on ad valorem basis fees on the agricultural produce bought or sold by licensees in the notified market area at a rate not exceeding three rupees for every one hundred rupees: 1248 Provided that (a) no fee shall be leviable in respect of any transaction in which delivery of the agricultural produce bought or section in which delivery is actually made." (b) a fee shall be leviable only on the parties to a transaction in which delivery is actually made.
" There is a slight variation in section 23 as amended by Haryana Act 21 of 1973.
Therein some market fee may be charged on the agricultural produce even brought for processing by licensees in the notified area.
But we are not concerned with the charge of such a fee in any of these cases.
Rule 29 of the Punjab Rules says: "Levy and collection of fees on the sale and purchase of agricultural produce.
(1) Under section 23 a Committee shall levy fees on the agricultural produce bought or sold by licensees in the notified market area at the rate to be fixed by the Board from time to time.
Provided that no such fees shall be levied on the same agricultural produce more than once in the same notified market area.
A list of such fees shall be exhibited in some conspicuous place at the office of the Committee concerned: . . . . . . . . . . (2) The responsibility of paying the fees prescribed under sub rule (l) shall be of the buyer and if he is not a licensee then of the seller who may realise the same from the buyer.
Such fees shall be leviable as soon as an agricultural produce is bought or sold by a licensee.
" The Haryana Rule is substantially the same.
Reading section 23 along with Rule 29 it would be noticed that the power of the Committee to levy fees is subject to the Rules as may be made by the State Government.
The fee is levied on ad valorem basis at a rate which cannot exceed the maximum, mentioned in section 23 by the legislature.
But the power to fix the rate from time to time within the maximum limit has been conferred on the Board and the Committee is merely bound to follow it.
One of the arguments before us on behalf of the appellants and the petitioners was that it was the Board which fixed the rate of Rs. 2/ first and thereafter Rs. 3/ 1249 per hundred rupees.
The Committee abdicated its function in this regard and, therefore, the levy of fee is contrary to the principle of law laid down by this Court in the case of State of Punjab and another vs Hari Krishan Sharma(l).
But the distinction between the said case and the present one is that under the former there was no provision in section 5(l) of the Punjab Cinemas (Regulation) Act of 1952 that the power of the licensing authority to grant licence was subject to any rule, the rule in its turn providing an over riding power in the State Government in the matter of grant of licence.
The control of the Government provided in sub section (2) was of a limited kind.
On the other hand section 23 in express language controls the power of Committee to levy fees subject to the rules.
The power given to the Board to fix the rate of market fees from time to time under rule 29 is not ultra vires the provisions of the Act, as in our opinion sub section (9) of section 3 confers power on the Board to exercise superintendence and control over the Committees, which power, in the context and the scheme of the marketing law will take within its ambit the power conferred on the Board under rule 29(1).
It is further to be pointed out that the fee levied is not on the agricultural produce in the sense of imposing any kind of tax or duty on the agricultural produce Nor is it a tax on the transaction of purchase or sale.
The levy is an impost on the buyer of the agricultural produce in the market in relation to transactions of his purchase.
The agriculturists are not required to share any portion of the burden of this fee.
In case the buyer is not a licensee then the responsibility of paying the fees is of the seller who may realise the same from the buyer.
But such a contingency cannot arise in respect of the transactions of sale by an agriculturist of his agricultural produce in the market to a dealer who must be a licensee.
Nor was any such eventuality occurring in any of the cases before us was brought to our notice.
Probably such an alternative provision was meant to be made for outside buyers who are not licensees when they buy the agricultural produce from or through the licensees.
Any way we are not concerned with that question.
Under section 27(1): "All moneys received by a Committee shall be paid into a fund to be called the Market Committee Fund and all expenditure incurred by the Committee under or for the purposes of this Act shall be defrayed out of such fund, and any surplus remaining after such expenditure has been met shall be invested in such manner as may be prescribed.
" 1250 Every Market Committee, is obliged under sub section section (2) (a) of section 27 to pay out of its fund to the Marketing Board as contribution such percentage of its income derived from licence fee, market fee and fines levied by the courts as specified in sub clause(i) and (ii).
The purpose of this contribution as mentioned in sub section 2(a) is to enable the Board to defray expenses of the office establishment of the Board and such other expenses incurred by it in the interest of Committees in general.
The income of almost all the Market Committees were several lakhs of rupees per year and, therefore, each is required to pay 30 per centum of its income to the Board by virtue of the amendment brought about by Punjab Act 4 of 1978 Under section 25 all receipts of the Board are to be credited into a fund to be called the Marketing Development Fund.
Purposes for which the Marketing Development Fund.
Purposes for which the Marketing Development Fund may be expanded are enumerated in section 26 and the purposes for which the Market Committee Funds may be expended are catalogued in section 28 We think we shall have to read both the sections in full one by one.
First we refer to section 28 which runs as follows: Subject to the provisions of section 27 the Market Committee Funds shall be expended for the following purposes: (i) acquisition of sites for the market; (ii) maintenance and improvement of the market; (iii)construction and repair of buildings which are necessary for the purposes of the market and for the health convenience and safety of the persons using it.
(iv) provision and maintenance of standard weights and measures; (v) pay.
leave allowances, gratuities, compassionate allowances and contributions towards leave allowances, compensation for injuries and death resulting form accidents while on duty, medical aid, pension or provident fund of the persons employed by the Committee.
(vi) payment of interest on loans that may be raised for purpose of the market and the provisions of a sinking fund in respect of such loans; (vii)collection and dissemination of information regarding all matters relating to crop statistics and marketing in respect of the agricultural produce concerned ' 1251 (viii)providing comforts and facilities, such as shelter, shade, parking accommodation and water for the persons, draught cattle, vehicles and pack animals coming or being brought to the market or on construction and repair of approach roads; culverts, bridges and other such purposes; (ix) expenses incurred in the maintenance of the offices and in auditing the accounts of the Committees; (x) propaganda in favour of agricultural improvements, and thrift; (xi) production and betterment of agricultural produce; (xii)meeting any legal expenses incurred by the Committee; (xiii)imparting education in marketing or agriculture; (xiv)payments of travelling and other allowances to the members and employees of the Committee, as prescribed: (xv) loans and advances to the employees; (xvi)expenses of and incidental to elections; and (xvii)with the previous sanction of the Board, any other purpose which is calculated to promote the general interests of the Committee or the notified market area or with the previous sanction of the State Government, any purpose calculated to promote the national or public interest.
" Let us first scan these clauses one by one on the footing that the Market Committee Fund will ordinarily and generally and almost wholly will be created out of the income of a particular Market Committee on account of market fees realised by it from the traders in the market.
A portion of it may be on account of fines, licence fees, from weighment, arbitration fees etc.
But those amounts compared to the huge realisations on account of market fees would be almost negligible.
By and large the purposes enumerated in clauses (i) to (ix) are relatable to the service to be rendered in the market in relation to the transactions of purchase and sale of the agricultural produce.
We shall deal with the problem of payment of interest on loans that may be raised for purposes of the market as mentioned in clause (vi) shortly hereinafter.
Apropos clause (viii) the attention of all concerned must be focussed here because the last part of this clause had led the autho 1252 rities and also the High Court to think that construction of link roads, culverts and bridges any where in a notified market area is covered by this clause.
In our opinion it is not so.
In the context of the language of all the clauses preceding clause (viii) and clause (viii) itself it is plain that what is meant by "construction and repair of approach roads; culverts, bridges" is only for the purpose of the facility of going into the market from the nearest public road.
Supposing a market has been established consisting of principal market yard or sub market yards at a particular place where there is no facility for the carts or the trucks and other vehicles to go, then approach roads, and if necessary even culverts and bridges may be constructed, or repaired out of the Market Committee Fund.
Such an expenditure within the limited limit will be with the object of facilitating the taking place of the transactions of purchase and sale in the market and will confer some special benefits to the traders apart from a share of the benefit going to the agriculturists who are not required to share any burden of the market fee.
But as we have pointed out above, if one were to give a very wide meaning to this phrase of construction and repair of approach roads, culverts and bridges to say that such construction can be permitted any where in the market area for the facility of the agriculturists which ultimately will benefit the traders also, then the whole concept of correlation of fee and its character of having an element of quid pro quo will dwindle down and become an empty formality.
Uplift of villages and helping the agriculturists by all means is the duty and the obligation of the State no doubt and it has to do it by incurring expenses out of the public exchequer consisting of the income from various kinds of taxes etc.
One may not have any serious objection to the items of expenditure mentioned in clauses (xii), (xiv), (xv) and (xvi).
But the other clauses do require some careful examination.
Obviously clause (x) and clause (xi) cannot form the items of expenditure out of the market fees.
In face of the view of the law expressed by us above the propaganda in favour of the agricultural improvement and expenditure for production and betterment of agricultural produce will be in the general interest of agriculture in the market area.
The whole of the State is divided into market areas.
So long as the concept of fee under our Constitution remains distinct and limited in contrast to tax such expenditure out of the market fee cannot be countenanced in law.
The first part of clause (xiii) may be justified in the sense of imparting education in marketing to the staff of the Market Committee.
But imparting education in agriculture in general cannot be correlated with the market fee.
The first part of clause (xvii) is too vague to merit any 1253 discussion on the language of the clause itself until and unless we are faced with concrete examples of such expenditure.
But how ill conceived the second part of clause (xvii) is, is abundantly clear from the decisions of the Punjab High Court mentioned above and to be discussed shortly hereinafter.
Is it permissible to spend the market fees realised from the traders for any purpose calculated to promote the national or public interest ? Obviously not.
No Market Committee can be permitted to utilise the fund for an ulterior purpose howsoever benevolent, laudable and charitable the object may be.
The whole concept of fee will collapse if the amount realised by market fees could be permitted to be spent in this fashion.
We may, however, mention one matter pointedly in connection with the Market Committee Fund.
Under section 32 the Committee may borrow money for carrying on the purposes for which it is established on the security of any property vested in and belonging to the Committee.
It may obtain a loan from the State Government or the Board.
In the various figures and charts submitted before us it was shown that the Market Committees had raised money by loan and other methods.
That also will form the market committee fund.
Technically and legally, therefore, one may not have any objection to the expenditure of such money for the purposes mentioned in clauses (x), (xi) (xiii) and (xvii).
As we indicated above clause (vi) provides for payment of interest on loans, but that is confined to loans that may be raised for purposes of the market and not for any other purpose, whereas, the power of the Committee to raise loans under section 32 is very wide.
The Act, however, is silent as to where from interest will be paid or the principal will be returned in regard to the amount of loan raised for a purpose other than the purpose of the market.
Since we find that the matter has proceeded at various stages in the High Court as also in this Court under a great confusion of the correct position of law, we do not propose to express any opinion in this regard at this stage.
Nor do we propose to strike any clause of section 28 as being unconstitutional merely on the ground that the expenditure authorised therein goes beyond the scope of the purpose of the utilisation of the market fees.
The authorities have to bear this in mind and on a proper occasion the matter will have to be dealt with by courts in the light of this judgment where a concrete case comes of raising of a loan, spending the money so raised which cannot be reasonably connected with the purposes for which the market fee can be spent, as to whether such a loan can be repaid or interest on it can be paid out of the realizations of the market fees.
One of the points mooted before us was as to how far the market committees can be compelled to part with 30% of their income in favour of the Marketing Board.
If so, for what purposes the Board 1254 fund, namely, the Marketing Development Fund can be expanded.
It is to be remembered that market fee is levied by each and every Market Committee separately in its own area and if a good and substantial portion of this fee has got to be expanded for rendering services in the area to the payers of the fee in relation to the transactions taking place therein, then logically speaking it flows from it that any money paid to the Board out of the collections of the market fee has also got to be expended in the very same area of the particular Market Committee.
But such a strict construction from a practical point of view is not possible.
The Board in the State is the Central Controlling and superintending authority over all the Market Committees, the primary function of which is to render service in the market.
Parting with 30% income by a Market Committee in favour of the Board is not so excessive or unreasonable so as to warrant any interference with the law in this regard on the ground of violation of the principle of quid pro quo in the utilisation of the market fee realised from the traders in the market area.
We would, however, like to emphasise that the Marketing Development Fund can only be expended for the purposes of the Market Committees in a general way, or to be more accurate, as far as practicable, for the purposes of the particular Market Committee which makes the contribution.
We shall now read section 26 of the Act providing for purposes for which the Marketing Development Fund may be expended.
It reads as follows: "The Marketing Development Fund shall be utilised for the following purposes: (i) better marketing of agricultural produce; (ii) marketing of agricultural produce on cooperative lines; (iii)collection and dissemination of market rates and news; (iv) grading and standardisation of agricultural produce; (v) general improvements in the markets or their respective notified market areas; (vi) maintenance of the office of the Board and construction and repair of its office buildings, rest house and staff quarters; 1255 (vii)giving aid to financially weak Committees in the shape of loans and grants; (viii)payment of salary, leave allowance, gratuity, compassionate allowance, compensation for, injuries or death resulting from accidents while on duty, medical aid, pension or provident fund to the persons employed by the Board and leave and pension contribution to Government servants on deputation; (ix) travelling and other allowances to the employees of the Board, its members and members of Advisory Committees; (x) propaganda, demonstration and publicity in favour of agricultural improvements; (xi) production and betterment of agricultural produce; (xii)meeting any legal expenses incurred by the Board; (xiii) imparting education in marketing or agriculture; (xiv)construction of godowns; (xv) loans and advances to the employees; (xvi)expenses incurred in auditing the accounts of the Board; and (xvii)with the previous sanction of the State Government, any other purpose which is calculated to promote the general interests of the Board and the Committee; or the national or public interest.
On a parity of the reasoning which we have applied in the case of Market Committee Fund we may point out that the Market Development Fund constituted primarily and mainly out of the contributions by the Market Committees from realisations of market fees, can also be expended for the purposes of the market in the notified market area in relation to the transactions of purchase and sale of the agricultural produce and for no other general purpose or in the general interests of the agriculture or the agriculturists.
On that basis we may, as at present advised hold as valid the purposes mentioned in clauses (i), (ii), (iii), (iv), first part of clause (v) clauses (vi), (vii), (viii), (ix), (xii), first part of clause (xiii), clauses (xiv), (xv) and (xvi).
At the same time we hold that the Marketing Development Fund constituted out of the Market fees cannot be expended for the purposes mentioned in second part of clause (v), clauses (x), (xi), second part of clause (xiii) and clause (xvii).
We do not propose to strike down these provisions as being constitutionally invalid as the purpose of the 1256 law will be served by restricting the operation of section 26 in the manner we have done.
We now proceed to examine the decisions of the High Court in the light of the principles of law enunciated above.
The first decision in the case of M/s Hanuman Dall & General Mills (supra) is the decision of a Division Bench of the High Court.
It should be recalled that by this judgment delivered on 8 11 1974 the High Court maintained the raising of the market fee from Rs. 1.50 to Rs. 2/ in Haryana but struck down the rise from Rs. 1.50 to Rs. 2.25 in Punjab.
In the cases before us a lot of new materials contained in new statements and charts were filed before us on either side.
We shall examine only a few of those materials and that too very cursorily as in our view no useful purpose will be served, nor is it possible to do so for the first time in this Court, by their thorough examination.
The very basis of the materials submitted on either side seems to be not well grounded on a correct appreciation of law.
Too many disputes of facts have been raised before us.
It is not possible to resolve all of them nor do we find that it will be useful to do that exercise.
We shall presently show that even on the materials placed before the High Court and on the findings recorded by it, many of which do not seem to be in dispute, the requirement of law is not satisfied to the extent it is essential in a case of this nature.
In the case of Hanuman Dall and General Mills (supra) the High Court examined many of the leading and important judgments of this Court which we have reviewed, earlier and also placed reliance upon an earlier Division Bench decision of the same High Court in Ram Sarup vs The Punjab State.
In para 31 of the judgment at page 12 the view of the High Court "that the amount of fees so collected are not to be spent exclusively for rendering services to the payers of the fees but can also be utilised for carrying out the purposes or objects of the Act under which they are levied," is not quite correct.
In the same paragraph the High Court felt constrained to add that the amount cannot, however, be utilised for purposes which have no connection with the main purposes of the Act for which fee is levied, nor can it be spent for carrying out the governmental functions of the State.
If many of the purposes mentioned in the Act, as we have shown above, are outside the ambit of the service element and fall within the realm of the governmental functions, then it is plain that to say by generalisation that the fee money can be spent for the purposes or objects of the Act is not quite correct.
The High Court has extracted section 1257 28 of the Act but has failed to scan the effect of the various purposes in some of the clauses.
After referring to the income and expenditure statements of Market Committee, Hissar from 1969 70 to 1973 74 the conclusion of fact drawn at page 15 is that the market fee constitutes more than 80% of the income of the Market Committee and the amount spent on "works" is nearly one half of the total expenditure.
The further finding is "the major item on which the amount has been spent under the head 'works ' consists of the amount deposited with the public works department, Hissar, as contribution for construction of village link roads." On that finding itself it is manifest that Public Works Department was carrying out the governmental functions of construction of roads including village link roads spread throughout the whole of the notified market area of Hissar.
The said link roads could not be taken to be approach roads within the meaning of clause (viii) of section 28 of the Act as seems to be the view of the High Court.
The error of law becomes writ large in the last sentence occurring in paragraph 34 of the judgment at page 15 which says: "In any case, the construction of roads within the notified market area is a work of Public importance and promotes the general interest of the committee and the notified market area which is one of the purposes enumerated in Cl.
(xvii) of Section 26 of the Act.
" The High Court further proceeds to say: "After giving my careful consideration, I am of the opinion that the expenditure on the construction of link roads for which amounts were deposited with the Public Works Department is fully justified as it is for the benefit of the growers, the licensed dealers and the general public and promotes the interests of the notified market area.
" The High Court seems to be of the view that since transportation is very essential for the development of a market and to enable the growers of the agricultural produce to bring the same to the market, the construction of link roads becomes an essential purposes of the market committees.
It may be so but the purpose cannot be allowed to be achieved at the cost of the market fee we realised from the dealers.
The High Court point out that the money cannot be spent in construction of the government activities for providing main roads in the State.
How, then, the Market Committees can be made to contribute a very big chunk of their market fee income in construction of the link roads throughout all villages ? To push the matter logically, 1258 if a link road is to be constructed from a village to the main road for enabling an agriculturist to transport his produce upto the main road then the Market Committee should be under an obligation to construct or at least to maintain the main road also in order to enable that agriculturist to react the market which may be at distance of say 20 miles from the link road.
It is plain that construction of such link road is as much a part of the governmental activity as that of the main roads.
It is interesting to find out from paragraph 36 of the judgment that the Market Committees were made to pay donations to educational institutions imparting general education.
The Market Committee, Hissar, spent Rs. 1,07,794/ on the water supply scheme for a village.
Even the High Court was constrained to disapprove of this.
It also spent a sum of Rs. 6,00,000/ for the construction of a Panchayat Bhawan.
Many other instances are mentioned in paragraph 37 of the judgment which show that the Market Committees were getting enormous income from market fees and they were made to squander away a good portion of that money unauthorisedly, although none of the purposes in itself was objectionable or bad.
Rather, they were very laudable.
But taking an overall view of the matter the High Court felt persuaded in the case of Haryana to uphold the maximum limit of Rs. 2/ by adding "no interference seems to be called for at this time.
" In the case of Punjab, however, the allegation of the petitioners before the High Court was that the market committees were collecting lakhs of rupees every month and the Marketing Board was collecting crores of rupees.
The Marketing Board was asked to contribute one crore of rupees to the Guru Gobind Singh Medical College which had been recently established at Faridkot.
A good portion of the money was already paid and the High Court was constrained to observe that "the State Government shall be well advised to compensate the Agricultural Marketing Board and the Market Committees for the misutilisation of their funds for this unauthorised purposes".
The High Court held at page 19, column 2: "In the historical background, set out above, I am convinced that the enhancement in the amount of fee from one rupee and fifty paise to two rupees and twenty five paise per one hundred rupees was not genuine and it was made with a view to enable the market committees and the Agricultural Marketing Board to reimburse themselves for the amounts which they were directed to contribute to Guru Govind Singh Medical College at Faridkot.
The Market Committees were having enough income and could meet their legitimate requirements from the amounts of fees which were being realised prior to the enhancement.
" 1259 The enhancement of fee from Re. 1/ to Rs. 1.50 was upheld but the further increase to Rs. 2.25 was knocked down.
We may note here that in the batch of appeals we heard there was no appeal from the judgment of the High Court in the case of Hanuman Dall & General Mills.
We may reasonably assume, therefore, that the dealers of Haryana were reconciled for payment of the market fees upto the maximum limit of two rupees per hundred rupees.
In the case of Punjab, as we traced the history at the very outset, the maximum fixed later was Rs. 2.20 by Act 14 of 1975.
But by telegraphic instructions issued by the Board the Market Committees were asked to charge Rs. 2/ only with effect from 23 8 1975.
This was challenged before the High Court but unsuccessfully in the case of Kewal Krishan Puri and another vs The State of Punjab and others (supra).
Civil Appeal 1083 of 1977 is from this judgment of the High Court.
The Full Bench judgment in this case also suffers more or less from the same kind of error in the approach of the legal problem as is to be found in the earlier Division Bench decision.
In paragraph 13 of the judgment at page 352 the High Court repelled the attack on clauses (x), (xi) and (xiv) of section 26 of the Act on the ground: "The broad object of the legislation like the present one is only to protect the producers of agricultural produce from being exploited by middlemen and profiteers and to enable them to secure a fair return of their produce.
The Legislation like the present one has its root in the attempt on the part of the nation to provide a fair deal to the growers of crops and also to find a market for its sale at proper rates without reasonable chances of exploitation.
If this object is kept in view, then the clauses of which the constitutionality has been challenged, would certainly fall within the ambit of Entry 28.
Clauses (x), (xiii) and (xiv) would help the growers to make improvements in the production of agricultural produce with the result that their agricultural produce would find a better market resulting in getting them high price for their agricultural produce.
" It is to be emphasised at this stage that the question is not of the legislative competence to enact those clauses, nor is there a question of the fee assuming the character of a tax and therefore, its imposition being beyond the legislative competence of the State Legislature.
The precise and the short question is whether the Market Committees and the Board can be authorised to spend the amount realised by market fees, as fee and fee alone for achieving all the objects of the Act when such expenditure cannot be justified and sustained on the well known 1260 concept of fee as pointed out by this Court in several decisions.
The impost must be correlated with the service to be rendered to the payers of the fees in the sense and to the extent we have pointed out above.
Again the High Court fell into an error in paragraph 15 of the judgment when, while upholding the construction and repair of approach roads, culverts and bridges in the larger sense of the term it said: "If the approach roads, culverts or bridges are in such a bad shape that they would become hindrance in the mobility of the produce from one part of the notified market area to the principal market yard, then the worst sufferer would be the grower for whose benefit the Act has been enacted.
" The Full Bench approved the view of the Division Bench in the earlier case as is apparent from paras 17 and 18 of the judgment at pages 352 and 353.
We have said a bit earlier that the Market Committee and the Board laboured under a mistaken notion that they could spend the income from the market fee for all good purposes and objects of the Act in the general interest of agriculture and agriculturists in the village.
We are going to extract some of the averments made in the affidavit of the Secretary of the Market Committee of Moga from the judgment of the High Court at pages 354 and 355: "Besides the above, the answering respondent has undertaken the cleaning of mandis, lining of village khals (water courses), link roads; constructions of culverts and bridges; supply of pesticides and spray pumps on subsidized basis as also the electrification of villages.
All these activities are going to cost the answering respondent an amount of several lakhs of rupees." "Para 8 of the writ petition is denied.
It is wrong to suggest that the Board and the answering respondent have already given Rs. 5 crores to the Markfed without charging any interest.
The fact of the matter is that on account of the withdrawal of the Cotton Corporation of India from the various markets, the price of cotton came down suddenly.
In order to provide and ensure a reasonable price to the farmer, the Government asked the Markfed to enter the market.
For this purpose, the Board contributed some amount of money.
So far as the answering respondent is concerned, it has not contributed any money at all.
The answering respondent believes that the Board has contributed only an amount of Rs. 1.43 crores and not 5 crores." 1261 "It may, however, be submitted that the entire money collected by the Market Committees is being used for the purposes envisaged under the Act." "The Market Committees have to provide facilities as envisaged under the Act.
The petitioners had asked for the copies of balance sheets.
The balance sheets were originally prepared when the accounts of the Committees were being audited by "the Chartered Accountants.
" Now, the accounts are being audited by the Examiner, Local Fund Accounts which is a Government Agency.
The preparation of balance sheets involved unnecessary expenditure and wastage of time and energy.
Consequently, the practice of preparing balance sheets was given up a few years back.
" These paragraphs were placed before us also from the records of Civil Appeal 1083 of 1977.
After quoting the various paragraphs from counter affidavit the High Court says in paragraph 20 of the judgment at page 355: "From the aforesaid specific averments made in the written statement, referred to above, it is clear that to carry out the purposes of the Act it had become necessary to enhance the rate of the market fee and such an enhancement stands fully justified.
" When certain documents were placed before the High Court to show that the Board was indulging in activities which had no correlation to the object to be achieved under the Act and that the enhancement of the market fee could not be justified the High Court, in the first instance, did not feel inclined to put absolute reliance upon those documents as they were filed with the replication of the petitioners.
But it did not stop there.
It proceeded further at page 356, para 22 to say, on an impression of law which we have not countenanced, that: "So far as Annexures W 11 and W 12 are concerned, any expenditure incurred by the Marketing Board on the setting up of the rice shellers or ginning factories or by the Market Committees on the construction of the link roads would not be inconsistent with the provisions of the Act and the object to be achieved under the Act.
The setting up of the rice shellers would be for the benefit of the producers and, as earlier observed, construction of the link roads also would be for their advantage.
So far as Annexure W 10 1262 is concerned, there can be no gainsaying that giving of donation for the Chief Minister 's Flood Relief Fund by the Board or the Market Committee would not be justified as the same has no correlation with the object to be achieved under the Act and in case any respect, it would certainly be unauthorised and illegal.
But, in the instant case, the petitioners have failed to show that any amount was contributed towards the Chief Minister 's Flood Relief Fund and that the enhancement in the fee had any correlation with such a contribution.
In this view of the matter, on the basis of Annexures W 10, W 11 and W 12, the enhancement in the fee to be levied by the Committees cannot be struck down.
" In several Civil Writ Petitions filed in the High Court by the dealers of the various Market Committees of Haryana the challenge, was to the raising of the rate of market fee from Rs. 2/ to Rs.3/ .
The High Court rejected all those petitions by the judgment dated 30 8 1978 which is the subject matter of appeal in Civil Appeal No. 1708 of 1978 and the analogous ones.
After referring to the earlier judgments of the Court this judgment of the Division Bench also proceeds on the same lines at it was bound to.
To a large extent we are saved from the unnecessary botheration of examining the voluminously new materials placed before us in view of the counter filed on behalf of the Haryana Marketing Board in the High Court portions of which are extracted in the judgment.
It will be useful to give the whole of the extract from the judgment of the High Court.
It runs as follows: "It is well known to every one that the recent floods in Haryana were unprecedented and created havoc in the State Almost one third of Haryana was submerged under water damaging the standing crops and uprooting the inhabitants making them homeless.
The State has to resort to quick measures, for removing the miseries of the people and to rehabilitate them . . . . . . . . . . . . . . . . . . .
The projected income from market fee in the year 1977 78 was Rs. 9 crores.
But due to the floods at the old rate of 2% it is expected to be Rs. 7.77 crores.
The Committees will only be able to achieve the projected income of 1977 78 as anticipated in the beginning of the year only if the fee is charged at enhanced rate of 3%.
Only with the projected income the Board will be able to provide the services envisaged by it to the farmers of the area.
The Board allot 1263 ted works amounting to Rs. 8.53 crores in the year 1976 77, out of which the Board will be able to complete the development works worth Rs. 5.62 crores upto 31st March, 1978, leaving a spill over of Rs. 2.91 crores for the year 1978 79.
In addition to this spill over, Board also anticipated to take new development works amounting to Rs. 3 crores during 1978 79.
The projected income during the year 1978 79 taking into account the enhanced rate of market fee will be Rs. 6.20 crores whereas the expenditure will be to the tune of Rs. 8.97 crores including the development works, miscellaneous other services and the cost of establishment.
The deficit of Rs. 2.77 crores had to be met by the Board by raising loan from other sources.
Thus even this enhanced fee will not be sufficient to meet the expenditure which the Board proposes to incur for the purposes under the Act.
Thus the enhancement of market fee from 2% to 3% is wholly reasonable and justified and has a reasonable correlation with the services rendered or to be rendered.
" Quoting passages from the earlier judgments of the High Court, it upheld the levy of the fee @ Rs. 3/ per hundred rupees and dismissed all the writ petitions.
The challenge by the dealers of the Moga Market Committee by Civil Writ Petition No. 2015 of 1978 filed in the High Court failed as per the judgment of the High Court delivered on 18 5 1978 wherein the Full Bench decision was followed.
Special Leave Petition No. 2768 of 1978 has been filed from the said judgment.
The purposes enumerated in the Full Bench decision and repeated in this judgment also for the purpose of justifying the increase in the rate of fee from Rs. 2/ to Rs. 3/ per hundred rupees are the stereo type ones including Rural Integrated Development Scheme, night shelter, link roads and bridges.
Every body seems to have allowed himself to be carried too far by the sentiment of the laudable object of the Act of doing whatever is possible to do under it for the amelioration of the conditions and the uplift of the villagers and the agriculturists.
Undoubtedly the Act is primarily meant for that purpose and to the extent it is permissible under the law to achieve that object of utilising the money collected by the market fee, it should be done.
But if the law does not permit carrying on of the sentiment too far for achieving of all the laudable objects under the Act, then primarily it becomes the duty of the Court to allow the law to have an upper hand over the sentiment and not vice versa.
We must not be misunderstood to say that we are against the sentiment expressed in the interests of the 1264 agriculturists.
Nor are we opposed in the least to the achievement of all the laudable objects envisaged under the Act.
Let them all be achieved by all means known to law by meeting the expenses after augmenting the public revenue or by diverting the expenditure from wasteful or unimportant channel to the more important one under the Act.
But surely we cannot countenance the achievement of all those objects by utilising a good and substantial portion of the market fee collections when the utilisation goes against the concept of quid pro quo which is very essential in case of fees.
As we have already stated Civil Appeal 1616 of 1978 arised from the order of the High Court dated 18 9 1978 dismissing the connected Writ Petition filed by a few hundred dealers of various Market Committees in the State of Punjab challenging the increase of the market fee from Rs. 2/ to Rs. 3/ .
Before us in the Writ Petitions not only the increase of the rate from Rs. 2/ to Rs. 3/ has been challenged but the previous increases have also been challenged.
For the reasons to be briefly stated hereinafter we do not feel persuaded to interfere with the charging of the market fee Rs. 2/ per hundred rupees by the various Market Committees in the States of Punjab and Haryana.
But surely on the facts as they are, the increase of the rate from Rs. 2/ to Rs. 3/ is not justified in law by any of the Market Committees in either of the two States.
Mr. Tarkunde drew our attention to the report of the Royal Commission submitted in 1928 and the recent Report of the National Commission on Agriculture.
It has been emphasised in those reports that in order to make the marketing system efficient and useful link and village roads should be constructed providing transport facilities for the transport of the agricultural produce to the marketing centres.
There cannot be any doubt that in any scheme of development of Agriculture and marketing in a wide sense, a chain of connections may be found between one activity or the other.
It is not only in regard to agriculture but it is so in any other kind of production, distribution and marketing.
Our attention was drawn also to the use of the word "secondary" or "indirect" in some of the decisions in relation to the element of quid pro quo.
But in our opinion there is a misconception in understanding the true scope of the matter and not drawing the dividing line at the appropriate place for determining the real controversy.
Examples of trust cases were given before us that control of the trustees is not for the personal benefit of the trustees but for the beneficiaries, although the liability to pay the fee is of the trustees.
The misconception lies in the fact that the impost of fee is not a personal impost on any person in the sense that unconnected with any undertaking or property or the like, it is just an impost on his person.
It is not so.
When the trustee is charged fee for the benefit of the 1265 religious institutions and the beneficiaries it is a benefit to the trustee.
Similarly, as pointed out in the Mining Act and the factory cases charge of fee from the mine owners in the area or the factory owners in the factory for the purpose of developing and protecting the mines and the factories is a service to the owners.
If one were to push the example of a factory beyond the limit of the conception of fee, one could say that the fee charged from the factory owners can be utilised for pushing end augmenting the output of the raw materials required in the manufacturing process in the factory, it is also a benefit to the factory owner.
Is it reasonably possible to travel as wide as that? Neither the Royal Commission nor the National Commission suggested as to how the integrated development of marketing and the agricultural produce is to be financed.
They were not concerned with that aspect of the matter.
None can have any objection to the carrying out of the integrated development but it must be carried out by legal means raising the finance in a way known to law.
The improvements, checks, controls and regulations must be carried out in the market or in its vicinity.
Much of the facilities provided in the market yards or around it will also be for the direct benefit of the producers.
But then, being intimately connected with marketing operations the benefit to the producers must be deemed to be special or direct benefit to the traders also.
Under the Marketing Rules the auction cannot be conducted by any person other than the person engaged by the Committee.
[Rule 24(5)], and weighments and measurements of agricultural produce intended for sale are to be made through licensed weighments or measures in the principal or a sub market yard [vide Rule 28(2)].
Reading these Rules in the background of the recommendations of the Commissions, and even otherwise, it is plain they are meant for the protection of the agriculturists.
But since they are intimately connected with the marketing operations, just like factory cases, they are also meant for the special benefit of the traders.
The literal meaning of the phrase "quid pro quo" is "one for the other" meaning thereby "you charge the fee for the service." Service to the mining area, factory, market or marketing operations are services to the payer of the fee.
Mr. P.N. Lekhi, learned counsel for the State of Haryana placed some new materials before us to show that big projects of development of marketing had been undertaken in India with the help of the World Bank loans.
All very good, we wish God speed to all these projects.
The only check which the law has to put is "please don 't spread your net too wide only on the traders.
Keep it within bounds so long your levy has got the character of fee.
You may raise funds by any other means known to law or to the economic world." 1266 Now we refer to some additional documents placed before us.
But before we do so we repeat what we have said above that the materials placed on either side before us is so voluminous and cumbersome that no definite finding with any accuracy could be arrived at on that basis as there seems to be disputes in regard to the nature and accuracy of many of the figures either on the receipt side or on the expenditure side.
We have, however, referred to some of the admitted facts even from the judgments of the High Court.
We may refer to a few more.
In the affidavit of Shri R. K. Singh, Director of Marketing, Punjab and Secretary of Punjab State Agricultural Board filed in the High Court giving rise to Civil Appeal No. 1083/77, which is not a new material in that sense.
It was stated in paragraph 6: "It is submitted that respondent No. 3 is duty bound to bring about general improvement of a notified market area, production and betterment of agriculture etc.
Under the Act and the answering respondent is duty bound to approve such expenditure under the Act.
It is also submitted that electricity plays a major role in the production and betterment of agriculture and for the general improvement of area.
In view of its importance respondent No. 3 sought and respondent No.2 approved the expenditure on the electrification of the villages situate within the jurisdiction of respondent No. 3.
" In the Writ Petition, respondent No. 2 was the Marketing Board and respondent No. 3 was the concerned Marketing Committee.
In the same case in the High Court additional affidavit was filed by Shri Tirath Singh, Chairman of the Punjab Board.
It is stated in paragraph 7 that apart from development works in the budget estimates in the year 1975 76, there were other development projects to be taken in hand some of which were enumerated in that paragraph.
We may take up only two or three items out of the same to show in contrast how one will be within the limits of law and the others will widely beyond it.
Item No. (iii) reads as follows: "To provide Rest Houses, Cattle Sheds, Cart Sheds, Light and Water arrangements in all the market yards.
" A good portion of these facilities will be utilised by the agriculturists who would be coming to the market yards for sale of their produce.
Yet in the view we have expressed above it will be a service to the trader directly connected with the marketing operations.
In contrast we quote items (x) and (xii): 1267 (x) Continuation of programme of link roads.
(xii) Improvement of agricultural production by providing improved seeds, green manuring seeds, plant protection equipment insecticides and pesticides.
" One has to stretch one 's imagination almost to a breaking point to say that the programme of link roads and improvement of agricultural say production by the means mentioned in item (xii) can all be carried out by the impost of fee in the market.
In a new affidavit of Shri N. section Bakshi filed in this Court in Civil Appeal 1083 of 1977 it is stated in paragraph 6 that in the entire Khanna market notified area there is one principal yard; two sub yards and only two purchase centres and no weighing bridge or any weighing facilities has been provided by the Committee.
It is stated in paragraph 7 that "amount of Rs. 3/ lacs lying with the Khanna Market Committee during March, 1978 in Banks was got deposited in the Government Treasury under the orders and directions of the Board.
" These facts are disputed.
But we are merely stating them for the future guidance of the authorities that they should proceed in the matter cautiously keeping in view the law laid down by this Court in earlier cases, such as, Salvation Army case, and in the light of this judgment.
In the additional affidavit of Shri K. K. Puri it is stated that from the information gathered it was learnt that the Punjab Board had spent about a crore of rupees by way of subsidy @ 75% for the metallic bins for the use of the villagers for their domestic use; a crore for air spray; five crores to the Punjab State Electricity Board, one crore given to MARKFED, one and a half crore to Soil Conservation Department and yet nine crores were lying surplus with the various Market Committees.
The figure may be exaggerated but are not quite groundless.
We are merely quoting them for the future caution of the authorities concerned.
Puri has further pointed out in paragraph 17 of his affidavit that in the Estimated Expenditure in the proposed Budget of the Moga Committee for the years 1976 77 and 1977 78 several lakhs of rupees were shown for insecticides and pesticides apart from other inadmissible expenses.
We may again pin point the difference.
If insecticides and pesticides are for use at the place where actually the marketing operations are carried on it would be a justifiable expenditure.
But if they are meant to be supplied to the agriculturists for use at their village homes or in their fields surely they cannot be valid expenditure out of the collections of the market fee.
Mr. Tarkunde filed an abstract of the statement of income from market fee and licence fee and expenditure incurred therefrom by 1268 the Market Committee, Hissar as worked out from Annexure R I to R V filed in the High Court.
It would be seen from this abstract that in the year 1974 75 the income from market fee was Rs. 24,08,141/ and from licence fee about Rs. 6,000/ only.
A sum of Rs. 7,89,670/ was contributed under section 27 of the Act to the Board and a sum of Rs. 14,73,732/ was spent on Works including link roads.
Similar was the position in the year 1975 76.
In 1976 77 income from licence fee was only Rs. 16,000/ and odd and incomes from market fee was Rs. 38,27,233 / .
A big chunk to the tune of Rs. 12,19,383/ went as contribution to the Board and Rs. 24,47,408/ were spent on works including link roads.
Similar abstracts were given in respect of other Market Committees showing exactly the same position.
Abstracts were also given to us by Mr. Tarkunde showing the income of the Haryana Board by contribution made by the various Market Committees and the expenditure incurred therefrom.
In the abstract statement figures of expenditure both of admissible and inadmissible items had been clubbed together.
It is, therefore, not possible to get any correct picture from these abstracts.
How admittedly the authorities concerned have travelled wide beyond limit for the application of the fee money will be apparent from the counter affidavit of the Haryana Board filed in the High Court giving rise to Civil Appeal 1700 of 1978.
In paragraph 10(i) it is stated: "The construction of link roads within the notified market area is a work of public importance and promotes the general interest of the farmers, traders and the notified market area which is one of the purposes enumerated in clause XVII of section 28 of the Act." In para 10(ii) it is admitted: "Thus the enhancement of market fee from 2% to 3% is wholly reasonable and has co relation with the services rendered or to be rendered.
65% of its income had to be rightly deposited with the P.W.D. and the Government, as the Committee had got its link roads constructed through Government Agency and is still getting so constructed.
" It is thus a clear admission that 65% of the income has gone by way of contribution to the P.W.D. fund for construction of the link roads.
It is in substance a contribution to the Public Exchequer for helping the Government Agency in performing its governmental functions and duties.
In no way such a contribution can be justified out of the mar 1269 ket fee income.
From Annexure R II appended to the aforesaid affidavit of the Board it would be seen that in the year 1974 75 a sum of Rs. 1,07,338/ was given as aid to animal husbandry for the uplift of cattle wealth and its product.
This illustrates to what extent the concept of fee in lieu of service has been stretched.
A sum of Rs. 6,00,000/ and odd was spent for improving the quality of cotton seeds for seeds purposes.
In a Gober Gas Plant Rs. 15,55,000/ were invested.
This item was sought to be explained before us by Mr. Tarkunde that this expenditure was incurred with the help of the subsidy received from the State and the Central Governments.
The scheme of the Gober Gas Plant was launched for the promotion of interest of market area.
It is not explained as to how it was connected with the marketing operations in the area and how much was the subsidy and what portion of the amount was spent out of the market fee Income.
Similarly in Annexure R III from the statement of income and expenditure of the Haryana Board for the year 1975 76 it would appear that a sum of Rs. 1,28,70,662/ was spent "on general improvement in M.C. and other notified area and construction of F.A.C.C." Apart from that the other items of expenditure are a sum of Rs. 20,00,000/ in purchase and acquisition of land for new mandies and Rs. 10,00,000/ and odd for purchase of land, construction of building for Board 's office and staff quarters in the mandies.
Again in this year a sum of Rs. 95,00,000/ and odd is shown to have been spent on Gober Gas plant.
It may be inclusive of the figure of the earlier year.
Then from Annexure R IV, the statement for the year 1976 77, it will be found that a sum of rupees one crore was given as loan to Haryana Electricity Board.
We have taken some of these items just by way of example to illustrate that the authorities took full liberty to treat the realisation from market fee as a general realisation of tax which they were free to spent in any manner they liked for the purposes of the Act, the development of the area, for giving a filling to agricultural production and so forth and so on.
The sooner the authorities are made to realise the correct position in law the better it will be for all concerned.
But taking a reasonable and practical view of the matter and on appreciation of the true picture of justifiable and legal expenditure in relation to the market fee income, even though it had to be done on the basis of some reasonable guess work, we are not inclined to disturb the raising of an imposition of the rate of market fee upto Rs. 2/ per hundred rupees by the various Market Committees and the Boards both in the State of Punjab and Haryana.
After all, considerable development work seems to have been done by many Market 1270 Committees in their respective markets.
The charging of fee @ Rs. 2/ , therefore, is justified and fit to be sustained.
We accordingly do it.
As pointed out earlier the dealers of Haryana did not feel aggrieved when the High Court maintained the raising of market fee to the extent of Rs. 2/ per hundred rupees.
We are, however, not inclined to uphold the raising of the fee from Rs. 2/ to Rs. 3/ , as on the materials placed before us it is clear that this has been done chiefly because of the wrong impression of law that the amount of market fee can be spent for any development work in the notified market area and specially for the development of agriculture and the welfare of the agriculturists.
On the basis of the facts and figures placed before us from the High Court records and also some new materials filed here we have come to the conclusion that there was no justification in raising the fee from Rs. 2/ to Rs. 3/ .
The High Court was wrong in maintaining this rise on an erroneous view of the matter.
We, therefore, allow the appeals and the writ Petitions to the extent and in the manner indicated above and direct the Market Committees and the State Marketing Boards not to realize market fee at the rate of Rs. 3/ per hundred rupees on the basis of their impugned decisions and actions which have been found to be invalid by us.
We leave the parties to bear their own costs throughout Before we part with these cases we would like to observe that in future if the market fee is sought to be raised beyond the rate of Rs. 2/ per hundred rupees, proper budgets, estimates, balance sheets showing the balance of the money in hand and in deposit, the estimated income and expenditure, etc.
should carefully be prepared in the light of this judgment.
It may be, as was submitted before us, that it is not imperative either for the Market Committees or the Board to prepare balance sheets because their accounts are audited by government auditors but for the purposes of raising the market fee any further, the balance sheets will give a true picture of the position also with the budgets and estimates.
Then, and then only there may be a legal justification for raising the rate of the market fee further to a reasonable extent.
On drawing of the correct balance sheets and framing of the correct estimates and budgets the authorities as also the State Government will be able to know the correct position and to decide reasonably as to what extent the raising of the market fee can be justified taking on overall picture of the matter and keeping in view the reason behind the restrictions of sales tax law concerning the transactions of food grains and the other agricultural produce.
N.V.K. Appeals and petitions allowed.
| IN-Abs | Punjab Agricultural Produce Markets Act, 1961 Ss. 23, 26 and 28 & Punjab Agricultural Produce (General) Rules, R 29 Marketing Development Fund & Marketing Committee Fund Utilisation of market fees Validity of purposes enumerated in clauses of Ss. 26 and 28 examined The Punjab Agricultural Produce Markets Act, 1961 which was passed by the composite State of Punjab is an Act for the better regulation of the purchase,sale, storage and processing of agricultural produce and the establishment of markets for agricultural produce in the State.
Section 3 envisages the establishment of the State Agricultural Marketing Board for the entire State and it is provided in sub sec (9) that "The Board shall exercise superintendence and control over.
the committees" Section 6(1 ) provides for "declaration of notified market area" and the State Government is empowered to declare the area notified under section S or any portion thereof to be a notified market area for the purpose of the Act in respect of the agricultural produce notified under section 5 or any part thereof.
The market areas and market yards were declared.
putting restriction on the traders to carry on their trade under a licence granted by the various Markets Committees established and constituted within the specified boundaries or areas.
After the declaration of the notified market area no person can establish or continue any place for the purchase, sale, storage and processing of the agricultural produce except under a licence granted in accordance with the provisions of the Act, the Rules and the Bye laws.
Section 23 empowers the committee to levy the fees subject to such rules as may be made by the State Government in this behalf on the agricultural produce bought or sold by licensees in the notified market area at a certain percentage.
Under section 27(1), all Moneys received by a Committee shall be paid into a fund to be called the Market Committee Fund and all expenditure incurred shall be defrayed out of such fund, while under section 25 all receipts of the Board are to be credited into a fund to be called the Marketing Development Fund and the purposes for which it may be expended are enumerated in section 26 viz. better marketing of agricultural produce on co operative lines, collection and dissemination of market rates and news.
grading and standardisation of agricultural produce etc.
Section 28 catalogues the purposes for which the Marketing Committee Fund may be utilised viz. acquisition of sites for the market.
maintenance and improvement of the market, construction and repair of buildings which are necessary for the purpose of the market etc.
In the composite State of Punjab and even after the bifurcation of the State for about a period of three years the maximum rate of market fee which could 1218 be levied by the various market communities under section 23 was 50 paise for every one hundred rupees.
the fee was thereafter raised from time to time.
A number of writ petitions were Filed in the High Court challenging the power of the Board to incease the levy of fee.
All the writ petitions were heard together and the increase Ind levy of fee upto Rs. 2/ by the various Market Committees in the State of Haryana was upheld and the writ petition of the Haryana dealers were dismissed while those of the Punjab dealers were allowed and the increase of u a e brought about by Act 13 of 1974 to the extent of Rs, 2.25 Was struck down.
[M/s. Hanuman Dall & General Mills, Hisar vs State of Haryana & others In Punjab, by amendment Act 14 of 1975, section 23 of the Act was again amended authorising the imposition of market fee at a rate not exceeding Rs. 2.20 per hundred rupee only, and this increase in the rates of fee was again challenged in the High Court and a Full Bench upheld the increase.
[Kewai Puri & Anr.
vs State of Punjab & Ors., AIR 1977 P & H 347].
This view was challenged in the appeal to this Court.
Both in the State of Punjab and the State of Haryana the rate of market fee was further raised from Rs. 2/ to Rs. 3/ .
It was unsuccessfully challenged in the High Court by the dealers of each of the States, who thereafter preferred appeals to this Court against the Judgment of the High Court and also challenged the increases in fee, in writ petitions in this Court.
In the appeals and writ petitions it was contended that the levy of the market fee realised from the buyers under section 23 of the Act could not be correlated I with the service to be rendered to the payers of the fees, and therefore cannot be justified and sustained on the well known concept of fee as pointed out by this Court in several decisions, and that the items of expenditure authorised and enumerated in sections 26 and 28 of the Act, go beyond the scope of the purpose of the utilisation of the market fees.
On the question of the validity of the fixation of market fee under section 23 of the Act from time to time and the scope and the purpose of the utilisation of such fees: ^ HELD: 1.
The impost of fee and the liability to pay it is on a particular individual or a class of individuals.
They are under the obligation to submit accounts, returns or the like to The authorities concerned in cases where quantification of the amount of fee depends upon the same.
I hey have to undergo the botherations and harassmentss, sometimes justifiably and sometimes even unjustifiably, in the process of discharging their liability to pay the fee.
The authorities levying the fee deal with them and realise the fee from them.
By operation of the economic laws in certain kinds of imposition of fee the burden may be passed on to different other persons one after the other.
[1229H 1230B] In the instant case, the Market Committees and the Market Board assumed to themselves the liberty of utilising and spending the realisations from market fees to a considerable extent.
as if it was a tax, although in reality it was not so.
[1240D] 2.
Rendering some service, however remote the service may be, cannot strictly speaking satisfy the element of quid pro required to be established in cases 1219 of the impost of fee.
Registration fee, however has to be taken to stand on a different footing altogether.
In the case of such a fee the test of quid pro quo is not to be satisfied with such direct close or proximate relationship as in the case of many other fees.
By and large registration fee is charged as a regulatory measure.
[1241B] 3.
This Court in a large number of cases had the occasion to examine the nature of fee and tax and from a conspectus of the various authorities the following, principles for satisfying the test for a valid levy of market fees on the agricultural produce bought or sold by licences in a notified market area are deducible : (i) That the amount of fee realised must be earmarked for rendering services to the licencees in the notified market area and a good and substantial portion of it must be shown to be expended for this purpose.
[1243H] (ii) That the services rendered to the licensees must be in relation to the transaction of purchase or sale of the agricultural produce.
[1244B] (iii) That while rendering services in the market area for the purpose of facilitating the transactions of purchase and sale with a view to achieve the objects of the marketing legislation it is not necessary to confer the whole of the benefit on The licensees but some special benefits must be conferred on them which `have a direct, close and reasonable correlation between the licensees and the transactions.
[1244C] (iv) That while conferring some special benefits on the licensees it is permissible to render such service in the market which may be in the general interest of all concerned with the transaction taking place in the market.
[1244D] (v) That spending the amount of market fees for the purpose of augmenting the agricultural produce.
its facility of transport in villages.
and to provide other facilities meant mainly or exclusively for the benefit of agriculturist is not permissible on the ground that such in services in the long run go to increase the volume of transaction, in the market ultimately benefiting the traders also.
Such an indirect and remote benefit to the traders is in no sense a special benefit to them.
[1244E F] (vi) That the element of quid pro quo may not be possible, or even necessary, to be established with arithmetical exactitude but even broadly and reasonably i; must be established by the authorities who charge the fees that the amount is being spent for rendering services to these on whom falls the burden of the fee.
[1244G] (vii) At least a good and substantial portion of the amount collected on account of fees, may be in the neighbourhood of two thirds or three fourths, must be shown with reasonable certainty as being spent for rendering services of the kind mentioned above.
[1244 H] The Commissioner Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt; , ; Matthews vs Chicorv Marketing Board, ; ; Attorney General for British Columbia & Esquimalt & Nanaimo Railway Co. & Ors., (1950) Appeal Cases.
87: H. H. 1220 Sudhundra Thirtha Swamiar vs Commissioner for Hindu Religious & Charitable Endowment, Mysore [1963 Suppl. 2 SCR 302; Mahant Sri Jagannath Ramanuj Das & Anr.
vs The State of Orissa & Anr., ; ; Ratilal Panachand Gandhi vs The State of Bombay and ors.
[1954] SCR 1055; The Hingir Rampur Coal Co. Ltd. & ors.
vs The State of Orissa & Ors., ; ; Parton vs Milk Board (Victoria) ; ; Corporation of Calcutta & Anr.
vs Liberty.
Cinema ; ; Har Shankar & ors.
vs The Dy.
Excise & Taxation Commr.
& ors.
; ; Nagar Mahapalika Varanasi vs Durga Das Bhattacharya & ors.; , ; The Delhi Cloth & General Mills Co. Ltd. vs Chief Commissioner Delhi & Ors.,1970] 2 SCR 348; Indian Mica & Micanite Industries Ltd. v State of Bihar & Ors. ; Secretary Government of Madras Home Department & Anr.
vs Zenith Lamp & Electrical Ltd. ; ; State of Maharashtra & Ors.
vs The Salvation Army, Western India Territory,[1975] 3 SCR 475; Govt.
of Andhra Pradesh & Anr.
vs Hindustan Machine Tools Ltd. [1975] Suppl.
SCR 394; The Municipal Council Madurai vs R. Narayanan etc.; , ; The Chief Commissioner Delhi and Anr.
vs The Delhi Cloth & General Mills Co. Ltd. & Anr.
; ; P P. Kutti Keya & Ors.
vs The State of Madras & Ors., AIR 1954 Madras, 621; MCVS Arunachala Nadar etc.
vs The State of Madras & Ors., [1959] Suppl.
1 SCR 92; Mohmmad Hussain Gulam & Anr.
vs State of Bombay & Ors.
, ; ;Lakhan Lal & Ors. etc.
vs The State of Bihar & Ors., ; ; referred to.
(i) A dispute arose between the parties as to whether the licence is granted for the whole of the area or for particular places therein.
On examining Form in the Rules meant for grant of licence under section 10, it is found that the licence is granted for one or more places of business specified in col. 6 situated in a particular notified market area named at the top of the licence.
There will be no sense in specifying the place of business in the licence if the licensee is to be permitted to establish his place of business any where in a notified market area which is too big and extensive for the control and supervision of a particular Market Committee.
Market yards are declared under section 7.
For each notified market area there can be one principal market yard and one or more sub market yards as may be necessary.
The marginal note of sec 8 is, "No private market to be opened in or near places declared to be markets." [1246D E] (ii) There is no special provision in this statute for an establishment of markets or markets proper as per the definition contained in cl.
(i) and (k) of section 2 of the Act, it is reasonable to assume that the intention of the legislature is to constitute the market yards as the market proper and ordinarily and generally the market would be the same but may include some other places where transactions of purchase of agricultural produce by the traders from the producers has been allowed in order to avoid rush in the precincts of the market proper.
But one thing is certain that the whole of the market area in no sense can be equated with market or market proper.
Nobody can be ' allowed to establish a purchasing centre of his own at any place he likes in the market area without there being such a permission or authority from The Market Committee.
After all the whole object of the Act is the supervision and control cf the transactions of purchase by the traders from the agriculturists in order to prevent exploitation of the latter by the former.
[1240H 1247A] 1221 5.
The whole object of the Act is the supervision and control of the transactions of purchase by the traders from the agriculturists in order to prevent exploitation of the latter by the former.
The supervision and control can be effective only in specified localities and places and not throughout the extensive market area.
[1247B] 6.
Rule 24(1) in both the States framed under the Act provides that "all agricultural produce brought into the market for sale shall be sold by open auction in the principal or sub market yard", which indicates that market is generally the principal and sub markets yards.
The benefit of market fee, therefore, has to be correlated with the transactions taking place at the specified place in the market area and not in the whole of the area.[1247D] 7.
The duties and powers of a market committee are enumerated in section 13 and this indicates that the Committee is primarily concerned with the establishing of a market in the notified area and with providing facilities in the market for persons visiting it and in connection with the transactions taking place there.
[1247F] 8.
Reading section 23 along with r. 29 it would be noticed that the power of the Committee to levy fees is subject to the Rules as may be made by the State Government.
The fee is levied on ad valorem basis at a rate which cannot exceed the maximum mentioned in section 23 by the legislature.
But the power to fix the rate from time to time within the maximum limit has been conferred on the Board and the Committee is merely bound to follow it.
[1248G H] 9.
Section 23 in express language controls the power of the Committee to levy fees subject to the rules.
The power given to the Board to fix the rate of market fees from time to time under rule 29 is not ultra vires the provisions of the Act, as sub sec.(a) of section 3 confers power on the Board to exercise superintendence and control over the committees, which power, in the context and the scheme of the marketing law, will take within its ambit the power conferred on the Board under rule 29(1).
[1249C] State of Punjab & Anr.
vs Hari Krishan Sharma, ; ; distinguished 10.
The fee levied is not on the agricultural produce in the sense of imposing any kind of tax or duty on the agricultural produce.
Nor is it a tax on the transaction of purchase or sale.
The levy is an impost on the buyer of the agricultural produce in the market in relation to transactions of his purchase.
The agriculturists are not required to share any portion of the burden of this fee.
In case the buyer is not a licensee then the responsibility of paying the fees is of the seller who may realise the same from the buyer.
But such a contingency cannot arise in respect of the transactions of sale by an agriculturist of his agricultural produce in the market to a dealer who must be a licensee.
Probably such an alternative provision was meant to be made for outside buyers who are not licensees when they buy the agricultural produce from or through the licensees.[1249D E] 11.
Every Market Committee is obliged under sub sec.
(2) (a) of section 27 to pay out of its funds to the Marketing Board as contribution such percentage of its income derived from licence fee, market fee and fines levied by the 1222 courts as specified in sub cl.
(i) and (ii).
The purpose of this contribution as mentioned in sub sec.(2) (a) is to enable the Board to defray expenses of the office, establishment of the Board and such other expenses incurred by it in the interest of the Committees in general.
The income of almost all the Market Committees were several lakhs of rupees per year and, therefore, each is required to pay 30 per centum of its income to the Board by virtue of the amendment brought about by Punjab Act 4 of 1978.
Under section 25 all receipts of the Board are to be credited into a fund to be called the Marketing Development Fund.
Purposes for which the Marketing Development Fund may be expended are enumerated in section 26 and the purposes for which the Market Committee Funds may be expended are catalogued in section 28[1250A C] 12.
No serious objection to the items of expenditure mentioned in clauses (xii), (xiv), (xv) and (xvi) can be taken.
Clause (x) and clause (xi) cannot form the items of expenditure of the market fees.
The whole of the State is divided into market areas.
The propaganda in favour of agricultural improvement and expenditure for production and betterment of agricultural produce will be in the general interest of agriculture in the market area.
So long as the concept of fee remains distinct and limited in contrast to tax such expenditure out of the market fee cannot be countenanced in law.
[1252F G] 13.
The first part of cl.
(xiii) may be justified in the sense of imparting education in marketing to the staff of the Market Committee.
But imparting education in agriculture in general cannot be correlated with the market fee.
[1252H] 14.
How ill conceived the second part of clause (xvii) is ? Is it permissible to spend the market fees realised from the traders for any purpose calculated to promote the national or public interest ? Obviously not.
No market Committee can be permitted to utilise the fund for an ulterior purpose howsoever benevolent, laudable and charitable the object may be.
The whole concept of fee will collapse if the amount realised by market fees could be permitted to be spent in this fashion.
[1253A B] Technically and legally, one may not have any objection to the expenditure of such money for the purposes mentioned in clauses (x), (xi), (xiii) and (xvii).
[1253D] 15.
It is not necessary to strike down any clauses of section 28 as being unconstitutional merely on the ground that the expenditure authorised therein goes beyond the scope of the purpose of the utilisation of the market fees.
The authorities have to bear this in mind and on a proper occasion the matter will have to be dealt with by courts in the light of this Judgment where a concrete case comes of raising of a loan, spending the money so raised which cannot be reasonably connected with the purposes for which the market fee can be spent, as to whether such a loan can be repaid or interest on it can be paid out of the realisations of the market fees.
[1253G] 16.
The Board in the State is the Central Controlling and superintending authority over all the Market Committees, the primary function of which is to render service in the market.
Parting with 30% income by a Market Committee in favour of the Board is not so excessive or unreasonable so as to warrant any interference with the law in this regard on the ground of violation of the principle of quid pro quo in the utilisation of the market fee realised 1223 from the traders in the market area.
Emphasised that the Marketing Development Fund can only be expended for the purposes of the Market Committees in a general way, or to be more accurate, as far as practicable, for the purposes of the particular Market Committee which makes the contribution.
[1254C D] 17.
Section 26 of the Act provides for purposes for which the Marketing Development Fund may be expended.
The Marketing Development Fund constituted primarily and mainly out of the contributions by the Market Committees from realisation of market fee can also be expended for the purposes of the market in the notified market area in relation to the transactions of purchase and sale of agricultural produce and for no other general purpose or in the general interest of the agriculture or the agriculturists.
The purposes mentioned in clauses (i), (ii), (iii), (iv), first part of clause (v), clauses (vi), (vii), (viii), (ix), (xii), first part of clause (xiii), clauses (xiv), (xv) and (xvi) held valid.
The Marketing Development Fund constituted out of the Market fees cannot be expended for the purposes mentioned in second part of clause (v), clauses (x), (xi), second part of clause (xiii) and clause (xvii).
As the purpose of the law will be served by restricting the operation of section 26, it is not necessary to strike down those provisions as being constitutionally invalid.
[1254E, 1255F 1256A] 18.
The High Court has extracted section 28 of the Act but has failed to scan the effect of the various purposes in some of the clauses.
[1256H 1257A] 19.
The High Court seems to be of the view that since transportation is very essential for the development of a market and to enable the growers of the agricultural produce to bring the same to the market, the construction of link roads becomes an essential purpose of the market committees.
It may be so but the purpose cannot be allowed to be achieved at the cost of the market fee realised from the dealers.
[1257G] 20.
The impost must be correlated with the service to be rendered to the payers of the fees in the sense and to the extent pointed out.
[1260A] 21.
Everybody seems to have allowed himself to be carried too far by the sentiment of the laudable object of the Act of doing whatever is possible to do under it for the amelioration of the conditions and the uplift of the villagers and the agriculturists.
Undoubtedly the Act is primarily meant for that purpose and to the extent it is permissible under the law to achieve that object of utilising the money collected by the market fee, it should be done.
But if the law does not permit carrying on the sentiment too far for achieving of all the laudable objects under the Act, then primarily it becomes the duty of the Court to allow the law to have an upper hand over the sentiment and not vice versa.
[1263G H] 22.
If insecticides and pesticides are for use at the place where actually the marketing operations are carried on it would be a justifiable expenditure.
But if they are meant to be supplied to the agriculturists for use at their village homes or in their fields surely they cannot be valid expenditure out of the collections of the market fee.
[1267G H] In the instant cases the authorities took full liberty to treat the realisation from market fee as a general realisation of tax which they were free to spend in any manner they liked for the purposes of the Act, the development of the area, for giving a fillip to agricultural production and so forth and so on.
The 1224 sooner the authorities are made to realise the correct position in law the better it will be for all concerned.
[1269F] 23.
Taking a reasonable and practical view of the matter and on appreciation of the true picture of justifiable and legal expenditure in relation to the market fee income, even though it had to be done on the basis of some reason able guess work, the court did not disturb the raising of an imposition of the rate of market fee upto Rs. 2/ per hundred by the various Market Committees and the Boards both in the State of Punjab and Haryana.
After all, considerable development work seems to have been done by many Market Committees in their respective markets.
The charging of fee @ Rs. 2/ therefore, is justified and fit to be sustained.
[1269G 1270A] 24.
The dealers of Haryana did not feel aggrieved when the High Court maintained the raising of the market fee to the extent of Rs. 2/ per hundred rupees.
The court did not uphold the raising of the fee from Rs.2/ to Rs. 3/ as on the materials placed before it, it is clear that this has been done chiefly because of the wrong impression of law that the amount of market fee can be spent for any development work in the notified market area and especially for the development of agriculture and the welfare of the agriculturists.
The High Court was wrong in maintaining this use on an erroneous view of the matter.[1270B C] 25.
In future if the market fee is sought to be raised beyond the rate of Rs.2/ per hundred rupees, proper budgets, estimates, balance sheets showing the balance of the money in hand and in deposit, the estimated income and expenditure, etc.
should carefully be prepared.
On drawing the correct balance sheets and framing of the correct estimates and budgets the authorities as also the State Government will be able to know the correct position and to decide reasonably as to what extent the raising of the market fee can be justified taking an over all picture of the matter and keeping in view the reason behind the restrictions of sales tax laws concerning the transactions of foodgrains and the other agricultural produce.
Then, and then only, there may be a legal justification for raising the rate of the market fee further to a reasonable extent.[1270E G]
|
ions Nos. 585, 599, 611, 622, 625, 565, 576 of 1954 and 48, 58, 415, 416 of 1955 and 10, 16, 37, 39 and 47 of 1956.
397 Under Article 32 of the Constitution of India for the enforcement of Fundamental Rights.
G.S. Pathak, Rameshwar Nath and K. R. Chowdhry, for petitioners in Petitions Nos. 10, 37 and 47 of 1956.
J.N. Bannerji and V. section Sawhney, for petitioners in Petition No. 622 of 1954.
S.P. Sinha and K. R. Chowdhry, for petitioners in Petition No. 585 of 1954.
B.B. Tawakley and K. P. Gupta, for petitioners in Petitions Nos.
565 and 576 of 1954.
K.R. Chowdhry, for petitioners in Petitions Nos. 599 and 611 of 1954 and 58, 415 and 416 of 1955 and 16 and 39 of 1956.
R.Patnaik and K. R. Chowdhry, for petitioners in Petition No. 48 of 1955.
R.Patnaik, for petitioners in Petition No. 625 of 1954.
K.L. Misra, Advocate General, U.P., K. B. Asthana and C. P. Lal, for the State of U.P. and the Cane Commissioner, U.P. in all the Petitions.
C.K. Daphtary, Solicitor General of India, and Jagdish Chandra, for the Cane Growers ' Co operative Development Unions in Petitions Nos. 585 and 625 of 1954 and 10 and 47 of 1956.
Jagdish Chandra, for the Cane Growers ' Co operative Development Unions in rest of the petitions except Petition No. 37 of 1956.
D.N. Mukerji, for Daurala Sugar Mills (respondent No. 4) in Petitions Nos.
611 of 1954, 58, 415 and 416 of 1955.
O.N. Srivastava, for Punjab Sugar Mills in Petitions Nos. 48 of 1955 and 47 of 1956.
A.S. Chawla, for respondent No. 3 in Petition No. 10 of 1956.
Ganpat Rai for respondent No. 9 in Petition No. 10 of 1956.
398 1956.
April 24.
The Judgment of the Court was delivered by BHAGWATI J.
These Petitions under article 32 of the Constitution impugn the validity of the U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 (U.P. Act XXIV of 1953) hereinafter called the impugned Act and the notifications dated 27th September, 1954 and 9th November, 1955 issued by the U.P.Government thereunder.
The petitioners are sugarcane growers in the several villages of the Districts of Meerut, Kheri, Gorakhpur and Deoria in the State of U.P. numbering 4,724 in the aggregate.
Associated with them are the President, the Vice Presidents and the Secretary of an association which is styled "the Ganna Utpadak Sangh" which is a rival body to the Co operative Development Unions established and recognised under the impugned Act.
The notification dated 27th September, 1954, issued in exercise of the powers conferred by sub section 1 (a) read with sub section 2(b) of section 16 of the impugned Act ordered that where not less than 3/4 of the cane growers of the area of operation of a Cane Growers Co operative Society are members of the Society, the occupier of the factory for which the area is assigned shall not purchase or enter into agreement to purchase cane grown by a cane grower except through such Cane Growers Co operative Society.
The notification dated 9th November, 1955 was issued in exercise of the powers conferred by section 15 of the impugned Act and reserved or assigned to the sugar factories mentioned in column 2 of the Schedule annexed thereto the cane purchasing centers (with the authorities attached to them) specified against them in column 3 for the purpose of supply of sugarcane during the crushing season 1955 56 subject to the conditions and explanations given therein.
The former relates to the agency of supply of sugarcane to the factories and the latter relates to the creation of zones for particular factories.
All the Petitions except Nos. 0 of 1956 and 37 of 1956 impugn the former notification 399 but the grounds of attack against both are common.
The impugned Act is challenged as ultra vires the powers of the State Legislature, the subject matter of the Act being within the exclusive field of Parliament and also as being repugnant to Act LXV of 1951 and Act X of 1955 passed by Parliament, and section 15 and section 16 (1) (a) and 2 (b) and the notifications issued thereunder are challenged as unconstitutional inasmuch as they infringe the fundamental rights guaranteed under article 14, article 19(1)(c), (f) and (g) and article 31 besides being in violation of article 301 of the Constitution.
All these Petitions involve common questions of law and may be disposed of by one judgment.
A short history of the legislation enacted by the Centre as well as the Province of U.P. in regard to sugar and sugarcane will be helpful for the determination of the questions arising in these Petitions.
On 8th April, 1932, the Central Legislature passed the Sugar Industry (Protection) Act, 1932 (Act XIII of 1932) to provide for the fostering and development of Sugar Industry in India in pursuance of the policy of discriminating protection of industries with due regard to the well being of the community.
As a result of the protection thus granted to the sugar industry, the number of sugar factories which was 31 prior thereto registered a rapid rise and by 1938 they were 139 in number.
There was also a large expansion in the cultivation of sugarcane and millions of cultivators in the Province of U.P. took to growing sugarcane.
In order to protect their interests and for the purpose of assuring to them a fair price for their produce, the Central Legislature enacted on 1st May, 1934 the (Act XV of 1934) to regulate the price at which sugarcane intended to be used in the manufacture of sugar might be purchased by or for factories.
Sugarcane was grown in various Provinces and the declaration of controlled areas and the fixing of minimum price for the purchase of sugarcane intended for use in any factory in any controlled area was of necessity left to the Provincial Governments and the Provincial 400 Governments were also empowered to make rules for the purpose of carrying into effect the objects of the Act including, in particular, the Organisation of growers of sugarcane into Co operative Societies for the sale of sugarcane to factories.
With the coming into operation of the Government of India Act, 1935, there was a distribution of legislative powers between the Dominion Legislature and the Provincial Legislatures and agriculture (Entry No. 20), trade and commerce within the Province (Entry No. 27) and production, supply and distribution of goods, development of industries subject to the provision in List 1 with respect to development of certain industries under Dominion control (Entry No. 29) were included in List 11, the Provincial Legislative List.
The relevant provision in List 1 was contained in Entry No. 34: "Development of industries where development under Dominion control is declared to be in the public interest".
As a result of this distribution of legislative powers, the entire subject matter of Act XV of 1934 fell within the Provincial Legislative List.
It was felt that Act XV of 1934 was not sufficiently comprehensive for dealing with the problems of the sugar industry and it was found necessary to replace it by a new measure which would provide for the better Organisation of cane supplies to sugar factories.
The Governments of U.P. and Bihar, therefore, decided in consultation with each other to introduce legislation on similar lines for both the Provinces which together accounted for nearly 85 per cent.
of production of sugar in India.
The U.P. Legislature accordingly enacted on 10th February, 1938 the U.P. Sugar Factories Control Act, 1938 (U.P. Act 1 of 1938) to provide for the licensing of the sugar factories and for regulating the supply of sugarcane intended for use in such factories and the price at which it may be purchased and for other incidental matters.
This Act provided for (a) the licensing of sugar factories, (b) the regulation of the supply of sugarcane to factories, (c) the minimum price for sugarcane, (d) the establishment of Sugar Control Board and Advisory.
Committee, and (e) a 401 tax on the sale of sugarcane intended for use in factories, and repealed Act XV of 1934.
This Act was to remain in force initially until 30th June, 1947 but the period was extended to 30th June, 1950 by U.P. Act XIII of 1947 and to 30th June, 1952 by U.P. Act XXI of 1950.
The Second World War intervened and an emergency was proclaimed by the Governor General under section 102 of the Government of India Act, 1935.
The Dominion Legislature acquired the power to make laws for the Provinces with respect to any of the matters enumerated in the Provincial Legislative List.
The result was in effect to make the Provincial Legislative List also a Concurrent Legislative List for the operation of the Dominion Legislature but if any provision of a Provincial law was repugnant to any provision of the Dominion law made in exercise of that power, the Dominion law was to prevail and the Provincial law was to be void to the extent of the repugnancy.
The proclamation of emergency was to operate until revoked by a subsequent proclamation and laws made by the Dominion Legislature as above were to have effect until the expiration of a period of six months after the proclamation had ceased to operate.
The Defence of India Act and the Rules made thereunder occupied the field, sugar was made a controlled commodity in the year 1942 and its production and distribution as well as the fixation of sugar prices were regulated by the Sugar Controller thereafter.
The proclamation of emergency was revoked on 1st April, 1946 and the laws made by the Dominion Legislature in the field of the Provincial Legislative List were to cease to have effect after 30th September, 1946.
On 26th March, 1946, the British Parliament enacted the India (Central Government and Legislature) Act, 1946 (9 & 10 Geo.
6, Chapter 39).
Section 2(1) (a) provided that notwithstanding anything in the Government of India Act, 1935, the Indian Legislature shall during the period mentioned in section 4 of the Act have power to make laws with respect to the following matters: "(a) trade and commerce (whether or not within 402 a Province) in, and the production, supply and distribution of, cotton and woollen textiles, paper (including newsprint), foodstuffs (including edible oil seeds and oils), petroleum and petroleum products, spare parts of mechanically propelled vehicles, coal, iron, steel and mica;. . " The period provided in section 4 was the period of one year beginning with the date on which the proclamation of emergency ceased to operate or, if the Governor General by a public notification directed, a period of 2 years beginning with that date.
There was a proviso to that section that if and so often as a resolution approving the extension of the said period was passed by both Houses of Parliament, the same period shall be extended for a further period of 12 months from the date on which it would otherwise expire but it was not to continue in any case for more than 5 years from the date on which the proclamation of emergency ceased to operate.
Acting under the power reserved to it under section 2(1)(a) aforesaid, the Central Legislature enacted on 19th November, 1946, the Essential Supplies (Temporary Powers) Act, 1946 (Act XXIV of 1946) to provide for the continuance during the limited period of powers to control production, supply and distribution of, and trade and commerce in, certain commodities.
Section 1(3) of the Act provided that it shall cease to have effect on the expiration of the period mentioned in section 4 of the India (Central Government and Legislature) Act, 1946.
In the absence of a notification by the Governor General, the Act remained operative until 31st March, 1947 only.
The Governor General, however, issued a notification on 3rd March, 1947 continuing its force for a period of two years from the date of the cessation of emer gency.
By virtue of this notification, the Act would have remained in force till 31st March, 1948.
On 18th July, 1947, the Indian Independence Act was passed and India became a Dominion on 15th August, 1947.
Under section 9 read with section 19(4) of the Indian Independence Act, 1947, the Governor General passed an order on 14th August, 1947 which substituted the 403 words "Dominion Legislature" for "Both Houses of Parliament" in the proviso to section 4 of India (Central Government and Legislature) Act, 1946 and also introduced a new section 4(a) by way of adaptation providing that the powers of the Dominion Legislature shall be exercised by the Constituent Assembly.
On 25th February, 1948, the Constituent Assembly passed its first Resolution extending the operation of the Act for one year up to 31st March, 1949.
On 3rd March, 1949, a second Resolution was passed by the Assembly extending the life of the Act by one year more up to 31st March, 1950.
With the advent.
of our Constitution on 26th January, 1950, Parliament was invested under article 369 with power for a period of 5 years from the commencement of the Constitution to make laws with respect to the following matters as if they were enumerated in the Concurrent List: "(a) trade and commerce within a State in, and the production, supply and distribution of foodstuffs (including edible oil seeds and oil) . . . . " The life of the Act was accordingly extended from time to time up to 26th January 1955 by Acts passed by Parliament.
Act XXIV of 1946 defined an essential commodity to mean any of the following classes of commodities: "(1) Foodstuffs . . . . " Food crops were defined as including crops of sugarcane.
Section 3 of the Act empowered the Central Government, so far as it appeared to it to be necessary or expedient for maintaining or increasing the supply of any essential commodity or for securing its equitable distribution and availability at fair prices to provide for regulating or prohibiting the production, supply and distribution thereof and trade and commerce therein.
On 7th October, 1950, the Central Government, in exercise of the powers conferred upon it by section 3 of the Act, promulgated the Sugar and Gur Control Order, 1950, inter alia empowering it to prohibit or to restrict the export of sugarcane from any area, to direct that no gur or sugar shall be 404 manufactured from sugarcane except under and in accordance with the conditions specified in the licence issued in this behalf and to prohibit or to restrict the despatch of gur or sugar from any State or any area therein.
Power was also given to fix minimum price of sugarcane and no person was to sell or agree to sell sugarcane to a producer and no producer was to purchase or agree to purchase sugarcane at a price lower than that notified thereunder.
This power of fixing the price of sugarcane was exercised by the Central Government from time to time by issuing notifications fixing the minimum prices to be paid by the producers of sugar by vacuum pan process or their agents for sugarcane purchased by them during the 1950 51 crushing season in various States including U.P.
On 31st October, 1951, Parliament enacted the Industries (Development and RegulatiOn) Act, 1951 (Act LXV of 1951) to provide for the development and regulation of certain industries.
By section 2 of the Act it was declared that it was expedient in the public interest that the Union should take under its control the industries specified in the First Schedule which included in item 8 thereof the industry engaged in the manufacture or production of sugar.
The Province of Bihar which, along with U.P. contributed to nearly 85 per cent.
of production of sugar in India had also on its Statute Book the Bihar Sugar Factories Control Act VII of 1937.
On 10th April, 1938, a joint meeting of the U.P. and the Bihar Sugar Control Boards was held at which it was resolved that a Committee be appointed to enquire into the working of the sugarcane rules and labour conditions prevailing in the sugar factories in the two Provinces.
The Governments of the U.P. and Bihar accepted this recommendation of the Sugar Control Boards and accordingly appointed the Khaitan Committee, (1) to examine the working of the sugarcane rules, (2) to look into the complaints of malpractices received from time to time in connection with the supply of sugarcane to the sugar factories, (3) to enquire into the labour conditions of the sugar factories, and (4) to suggest remedial measures for the shortcomings as 405 noted in (1), (2) and (3) above.
Shibban Lal Saxena, the present President of the Ganna Utpadak Sangh and one of the petitioners before us was also a member of that Committee.
That Committee submitted its Report in 1940 recommending inter alia abolition of the dual system of supply and creation of a strong co operative Organisation of the sugarcane growers themselves as also creation of a zonal system.
The Indian Tariff Board had also, in the meanwhile, made its Report on the sugar industry in the year 1938 commending the advantages of a zonal system.
There was further the report of the U. P. Sugar Industry Enquiry Committee, 1951 called the Swaminathan Committee, which also recommended the abolition of dual agencies of cane supplies to factories and commended the desirability of employing the agency of the Co operative Societies for the purpose.
It also recommended that the U. P. Act I of 1938 should be amended in order to make this regulation possible.
Act LXV of 1951 was brought into force with effect from 8th May, 1952.
In view of the same, certain provisions of U. P. Act I of 1938 became inoperative.
The U.P. Legislature, therefore, passed on 29th June, 1952 the U. P. Sugar Factories Control Amendment) Act) 1952, deleting those provisions and putting the amended Act permanently on the Statute Book.
The U. P. Act I of 1938, as thus amended, continued in force till, as a result of the prior enactment of Act LXV of 1951 and the report of the Indian Tariff Board on the Sugar Industry as well as the reports of the Khaitan Committee and the Swaminathan Committee mentioned above, the U. P. Legislature enacted the impugned Act.
The object of the enactment was stated to be as follows: "With the promul gation of the Industries (Development and Regulation) Act, 1951 with effect from 8th May, 1952, the regulation of the sugar industry has become exclusively a Central subject.
The State Governments are now only concerned with the supply of sugarcane to the sugar factories.
The Bill is being introduced in order to provide for a rational distribution of sugarcane to factories, for its development on organised 406 scientific lines, to protect the interests of the cane growers and of the industry and to put the new Act permanently on the Statute Book" (Vide Statement of objects and reasons published in the U. P. Gazette Extraordinary dated 15th July, 1953).
This is the impugned Act the vires of which is challenged in these Petitions.
In exercise of the rule making power conferred by section 28 of the Act, the U.P. Government made the U.P. Sugarcane (Regulation of Supply and Purchase) Rules, 1954.
The U. P. Government also, in exercise of the powers conferred by section 16 of the Act, promulgated the U.P. Sugarcane Supply and Purchase Order, 1954, which came into effect from 19th September, 1954.
All these related to the supply and purchase of sugarcane in U.P. Act LXV of 1951 was amended by Act XXVI of 1953 which, by adding Chapter III(b), invested the Central Government inter alia with power so far as it appeared to it necessary or expedient for securing the equitable distribution and availability at fair prices of any article or class of articles relatable to any scheduled industry to provide by notified order for regulation of supply and distribution thereof and trade and commerce therein.
On 1st April, 1955, Parliament enacted the (Act X of 1955) 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.
The essential commodity there was defined to mean any of the following classes of commodities: "(v) foodstuffs, including edible oilseeds, and oils; . . . . . . . . (xi) any other class of commodity which the Central Government may, by notified order declare to be an essential commodity for the purposes of this Act, being a commodity with respect to which Parliament has power to make laws by virtue of Entry 33 in List III in the Seventh Schedule to the Constitution;" Food crops were defined as inclusive of crops of sugar 407 cane.
Section 3(1) empowered the Central Government, if it was of the opinion that it was necessary or expedient to do so for maintaining or increasing the supply of any essential commodity or for securing its equitable distribution and availability at fair prices, to provide by order for regulating or prohibiting the production, supply and distribution thereof and trade and commerce therein.
Section 3(2) (b) inter alia provided for the making of such an order for bringing under cultivation any waste or arable land whether appurtenant to a building or not, for the growing thereon of foodcrops generally or of specified foodcrops.
Section 16 of the Act repealed (a) the Essential Commodities Ordinance, 1955, and (b) any other law in force in any State immediately before the commencement of the Act in so far as such law controlled or authorised the control of the production, supply and distribution of, and trade and commerce in, any essential commodity.
In exercise of the powers conferred by section 3 of the Act, the Central Government promulgated on 27th August, 1955 the Sugar Control Order, 1955 and the Sugarcane Control Order, 1955.
The latter empowered the Central Government, after consultation with such authorities, bodies or associations as it may deem fit by notification in the official Gazette from time to time, to fix the price of sugarcane and direct payment thereof and also to regulate the movement of sugar cane.
The power to regulate the movement of sugarcane comprised the power to prohibit or restrict or otherwise regulate the export of sugarcane from any area for supply to different factories and the power to direct that no gur (jaggery) or sugar shall be manufactured from sugarcane except under and in accordance with the conditions specified in a licence issued in this behalf Clause 7 of this order provided that the Sugar and Gur Control Order, 1950, published by the Government of India in the Ministry of Food and Agriculture, S.R.O. 735 dated 7th October, 1950, and any order made by a State Government or other authority regulating or prohibiting the production, supply and distribution of sugarcane and trade or 408 commerce therein were thereby repealed except as respect to things done or omitted to be done under any such order before the commencement of the order.
These are the respective Acts and Notifications passed by the Centre as well as the State of U. P. in regard to sugar and sugarcane.
Learned counsel for the petitioners urged before us: (1) that the State of U. P. had no power to enact the impugned Act as the Act is with respect to the subject of industries the control of which by the Union is declared by Parliament by law to be expedient in the public interest within the meaning of Entry 52 of List I and is, therefore, within the exclusive province of Parliament.
The impugned Act is, therefore, ultra vires the powers of the State Legislature and is a colourable exercise of legislative power by the State; (2)the impugned Act is repugnant to Act LXV of 1951 and Act X of 1955 and in the event of the Court holding that the impugned Act was within the legislative competence of the State Legislature, it is void by reason of such repugnancy; (3)the impugned Act stands repealed to the extent that it has been repealed by section 16 of Act X of 1955 and by clause 7 of the Sugarcane Control Order, 1955, made in exercise of the powers conferred by section 3 of Act X of 1955; (4)the impugned Act infringes the fundamental right guaranteed by article 14 inasmuch as very wide powers are given to the Cane Commissioner which can be used in a discriminatory manner; (5)the impugned Act and the notification dated 27th September, 1954, violate the fundamental right guaranteed under article 19(1) (e) in that the Co operative Societies are not voluntary organisations but a cane grower is compelled to become a member of the Society before he can sell his sugarcane to a factory; (6)the impugned Act and the notifications infringe the fundamental right guaranteed by article 19(1)(f) and (g) and article 31 of the Constitution; (7) the impugned Act is void in that it confers 409 very wide powers on executive officials and is a piece of delegated legislation; and (8) the impugned Act is destructive of the freedom of trade and commerce and thus is violative of article 301 of the Constitution.
(1): This contention relates to the legislative competence of the U.P. State Legislature to enact the impugned Act.
It was contended that, even though the impugned Act purported to legislate in regard to sugarcane required for use in sugar factories, it was, in pith and substance, and in its true nature and effect legislation in regard to sugar industry which had been declared by Act LXV of 1951 to be an industry the control of which by the Union was expedient in the public interest and was, therefore, within the exclusive province of Parliament under Entry 52 of List I.
The word 'industry ', it was contended, was a word of very wide import and included not only the process of manufacture or production but also all things which were necessarily incidental to it, viz., the raw materials for the industry as also the products of that industry and would, therefore, include within its connotation the production, supply and distribution of raw materials for that industry which meant sugarcane in relation to sugar industry.
It was also contended that in so far as the impugned Act purported to legislate in regard to sugarcane which was a necessary ingredient in the production of sugar it was a colourable exercise of legislative power by the State, ostensibly operating in its own field within Entry 27 of List II but really trespassing upon the field of Entry 52 of List I.
It was contended on behalf of the State on the other hand that.
, after the advent of war and the proclamation of emergency under section 102 of the Government of India Act, 1935 and by the combined operation of the India (Central Government and Legislature) Act, 1946 and article 369 of the Constitution taken along with the resolutions of the Houses of Parliament extending the life of Act XXIV of 1946 up to 26th January, 1955 and the Third Constitution Amendment Act of 1954 amending Entry 33 of List 410 III, the Central Legislature was operating all along on what became in effect the Concurrent field even in regard to sugarcane, that the investing of the Central Government with power to legislate in this sphere of the Provincial List did not deprive the Provincial Legislature of such power and that both the Central Legislature as well as the State Legislatures had legislative competence to legislate in regard to these fields which were for the purpose of legislative competence translated into Concurrent fields and that, therefore, the U.P. State Legislature was competent to enact the impugned Act which would be valid within its own sphere except for repugnancy with any of the provisions of the Central Legislature covering the same field.
The relevant Entries in the respective Lists of the Seventh Schedule to the Constitution are as follows: List I, Entry 52: Industries, the control of which by the Union is declared by Parliament by law to be expedient in the public interest.
List II, Entry 24: Industries subject to the provisions of entry 52 of List 1.
Entry 27: Production, supply and distribution of goods subject to the provisions of entry 33 of List III.
List III, Entry 33: As it stood prior to its amendment: Trade and commerce in and production, supply and distribution of, the products of industries where the control of such industries by the Union is declared by Parliament by law to be expedient in the public interest.
Entry 33 as amended by the Constitution Third Amendment Act, 1954: Trade and commerce in, and the production, supply and distribution of (a)the products of any industry where the control of such industry by the Union is declared by Parliament by law to be expedient in the public interest, and imported goods of the same kind as such products; (b) foodstuffs, including edible oilseeds and oils; 411 (c) cattle fodder, including oilcakes and other concentrates; (d) raw cotton, whether ginned or unginned, and cotton seed; and (e) raw jute.
Production, supply and distribution of goods was no doubt within the exclusive sphere of the State Legislature but it was subject to the provisions of Entry 33 of List III which gave concurrent powers of legislation to the Union as well as the States in the matter of trade and commerce in, and the production, supply and distribution of, the products of industries where the control of such industries by the Union was declared by Parliament by law to be expedient in the public interest.
The controlled industries were relegated to Entry 52 of List I which was the exclusive province of Parliament leaving the other industries within Entry 24 of List II which was the exclusive province of the State Legislature.
The products of industries which were comprised in Entry 24 of List II were dealt with by the State Legislatures which had under Entry 27 of that List power to legislate in regard to the production, supply and distribution of goods, goods according to the definition contained in article 366(12) including all raw materials, commodities and articles.
When, however it came to the products of the controlled industries comprised in Entry 52 of List 1, trade and commerce in.
, and production, supply and distribution of, these goods became the subject matter of Entry 33 of List III and both Parliament and the State Legislatures had jurisdiction to legislate in regard thereto.
The amendment of Entry 33 of List III by the Constitution.
Third Amendment Act, 1954, only enlarged the scope of that Entry without in any manner whatever detracting from the legislative competence of Parliament and the State Legislatures to legislate in regard to the same.
If the matters had stood there, the sugar industry being a controlled industry, legislation in regard to the same would have been in the exclusive province of Parliament and production, supply and distribution of the product of sugar industry, 412 viz., sugar as a finished product would have been within Entry 33 of List III: Sugarcane would certainly not have been comprised within Entry 33 of List III as it was not the product of sugar industry which was a controlled industry.
It was only after the amendment of Entry 33 of List III by the Constitution Third Amendment Act, 1954 that foodstuffs including edible oilseeds and oils came to be included within that List and it was possible to legislate in.
regard to sugarcane, having recourse to Entry 33 of List III.
Save for that, sugarcane, being goods.
fell directly within Entry 27 of List 11 and was within the exclusive jurisdiction ' of the State Legislatures.
Production, supply and distribution of sugarcane being thus within the exclusive sphere of the State Legislatures, the U. P. State Legislature would be, without anything more, competent to legislate in regard to the same and the impugned Act would be intra vires the State Legislature.
The argument, however, was that the word 'industry ' was a word of wide import and should be construed as including not only the process of manufacture or production but also activities antecedent thereto such as acquisition of raw materials and subsequent thereto such as disposal of the finished products of that industry.
The process of acquiring raw materials was an integral part of the industrial process and was, therefore, included in the connotation of the word 'industry ' and when the Central Legislature was invested with the power to legislate in regard to sugar industry which was a controlled industry by Entry 52 of List.
I, that legislative power included also the power to legislate in regard to the raw material of the sugar industry, that is sugarcane, and the production, supply and distribution of sugarcane was, by reason of its being the necessary ingredient in the process of manufacture or production of sugar, within the legislative competence of the Central Legislature.
Each entry in the Lists which is a category or head of the subject matter of legislation must be construed not in a narrow or restricted sense but as widely as possible so as to extend to all ancillary 413 or subsidiary matters which can fairly and reasonably be said to be comprehended in it (Vide The United Provinces vs Mst.
Atiqa Begum and Others(1), Thakur Jagannath Baksh Singh vs The United Provinces (2), and Megh Raj and Another vs Allah Rakhia and Others(3)), and the topic 'industries ' should, therefore, be construed to include the raw materials which are the necessary ingredients thereof and which form an integral part of the industrial process.
Our attention was drawn in this connection to the definition of 'industry ' in section 2(j) of the (Act XIV of 1947): "Industry" means any business, trade, undertaking, manufacture or calling of employers and includes any calling, service, employment, bandicraft, or industrial occupation or avocation of workmen" and also to the wide construction which was put upon the term 'industry ' in the Australian Insurance Staffs ' Federation vs The Accident Underwriters ' Association and Others(4) where it was construed to include "all forms of employment in which large number of persons are employed, the sudden cessation of whose work might prejudicially affect the orderly conduct of the ordinary operations of civil life".
A similarly wide interpretation was put on the word 'industry ' by our Court in D. N. Banerji vs P. R. Mukherjee and Others(5) where the dispute was between a Municipality and its employees.
These interpretations of the term 'industry ', however, do not help us because in defining the word 'industry ' in the , as also in putting the wide construction on the term industry ' in ; , as well as ; , they were concerned mainly with the question whether an industrial dispute arose between employers and employees.
Whether a particular concern came within the definition of an 'employer ' was determined with respect to the criterion ultimately adopted (1) , 134.
(2) , 119.
(3) (4) [19231 ; , (5) ; 414 which was that the sudden cessation of such work might prejudicially affect the orderly conduct of the ordinary operations of civil life and the withdrawal of service would be detrimental to the industrial system of the community and might result in its dislocation.
What we are concerned with here is not the wide construction to be put on the term 'in dustry ' as such but whether the raw materials of an industry which form an integral part of the process are within the topic of 'industry ' which forms the subject matter of Item 52 of List I as ancillary or subsidiary matters which can fairly or reasonably be said to be comprehended in that topic and whether the Central Legislature while legislating upon sugar industry could, acting within the sphere of Entry 52 of List 1, as well legislate upon sugarcane.
If both the Central Legislature and the Provincial Legislatures were entitled to legislate in regard to this subject of production, supply and distribution of sugarcane, there would arise no question of legislative competence of the Provincial Legislature in the matter of having enacted the impugned Act.
The conflict, if any, arose by reason of the interpretation which was sought to be put on the two Entries, Entry 52 of List I and Entry 27 of List II put in juxtaposition with each other.
It was suggested that Item 52 of List I comprised not only legislation in regard to sugar industry but also in regard to sugarcane which was an essential ingredient of the industrial process of the manufacture or production of sugar and was, therefore, ancillary to it and was covered within the topic.
If legislation with regard to sugarcane thus came within the exclusive province of the Central Legislature, the Provincial Legislature was not entitled to legislate upon the same by having resort to Entry 27 of List 11 and the impugned Act was, therefore, ultra vires the Provincial Legislature.
There was an apparent conflict between the legislative powers of the Centre and of the Provinces in this respect which conflict could not have been intended and, therefore, a reconciliation was to be attempted by reading the two provisions together and by inter 415 preting and where necessary modifying the language of one by that of the other.
Reliance was placed on the observations of the Judicial Committee in The Citizens Insurance Company of Canada vs William Parsons(1): "In these cases it is the duty of the Courts, however difficult it may be, to ascertain in what degree, and to what extent, authority to deal with matters falling within these classes of subjects exists in each legislature, and to define in the particular case before them the limits of their respective powers.
It could not have been the intention that a conflict should exist; and, in order to prevent such a result, the two sections must be read together, and the language of one interpreted, and, where necessary, modified, by that of the other.
In this way it may, in most cases, be found possible to arrive at a reasonable and practical construction of the language of the sections, so as to reconcile the respective powers which they contain, and give effect to all of them.
In performing this difficult duty, it will be a wise course for those on whom it is thrown, to decide each case which arises as best they can, without entering more largely upon an interpretation of the statute than is necessary for the decision of the particular question in hand".
and also at page 113: "It is enough for the decision of the present case to say that, in their view, its authority to legislate for the regulation of trade and commerce does not comprehend the power to regulate by legislation the contracts of a particular business or trade, such as the business of fire insurance in a single province. . " These observations were quoted with approval by Gwyer, C. J. in Re: The Central Provinces and Berar Sales of Motor Spirit and Lubricants Taxation Act, 1938 (Central Provinces and Berar Act No. XI V of 1938) (2) and it was further held that the general power ought not to be construed as to make a nullity of a particular power conferred by the same Act and operating in the same field.
The same duty of reconciling apparently conflicting provisions was reiterated in (1) [1881] L R. 7 A.C. 96,108.
(2) , 39.
416 Governor General in Council vs The Province of Madras(1): "But it appears to them that it is right first to consider whether a fair reconciliation cannot be effected by giving to the language of the Federal Legislative List a meaning which, if less wide than it might in another context bear, is yet one that can properly be given to it, and equally giving to the language of the Provincial Legislative List a meaning which it can properly bear".
Reliance was also placed on the observations of Gwyer, C. J. quoted in Subrahmanyan Chettiar vs Muthuswami Goundan(2): "As interpreted by the Judicial Committee, the British North America Act presents an exact analogy to the India Act, even to the overriding provisions in section 100(1) of the latter: "The rule of construction is that general language in the heads of section 92 yields to particular expressions in section 91, where the latter are unambiguous": per Lord Haldane in Great West Saddlery Co. vs The King(3).
The principles laid down by the Judicial Committee in a long series of decisions for the interpretation of the two sections of the British North America Act may therefore be accepted as a guide for the interpretation of similar provisions in the Government of India Act." and it was contended that Entry 27 of List II should be construed in a general manner as applying to production, supply and distribution of goods in general and Entry 52 of List I should be construed as comprehending within its scope ancillary matters in relation to the controlled industries thus excluding production, supply and distribution of goods which would be thus comprised within it as ancillary matters from the sphere of Entry 27 of List II.
If this con struction was adopted it would avoid the apparent conflict between the two Entries and would reconcile the powers of the Provincial Legislatures with those of the Central Legislature.
It was, therefore, contended that the Legislation in regard to sugarcane (1) , 191.
(2) , 201.
(3) [1921] 2 A.G. 91, 116.
417 should be considered as ancillary to the legislation in regard to sugar industry which is a controlled industry and comprised within Entry 52 of List I and should be excluded from Entry 27 of List II which should be read as covering only those categories which did not fall within Entry 52 of List I even though on a wide construction of the words "production, supply and distribution of goods" they would be capable of covering the same.
If this construction was put upon these two Entries, it would follow that the subject matter of the impugned Act was within the exclusive juris diction of Parliament being comprised in Entry 52 of List I and was ultra vires the U.P. State Legislature.
The answer of the State of U.P. was two fold: (1) after the advent of the Second World War and all throughout up to 1955 when Act X of 1955 was enacted by Parliament, the Centre was operating upon the Concurrent field of legislation and that whatever legislation in regard to sugarcane was enacted by the Centre as part of its legislative activities in regard to sugar was not under Entry 52 of List I but was in exercise of its legislative powers under Concurrent jurisdiction, and (2) that the impugned Act merely confined itself to legislation in regard to sugarcane and did not purport to legislate in regard to sugar which was exclusively dealt with by the Centre.
There was, therefore, no trespass upon the exclusive jurisdiction of the Centre and the impugned Act was within the legislative competence of the State Legislature.
As has been noted above, the entire subject matter of Act XV of 1934 came within the Provincial Legislative List on a distribution of legislative powers effected under the Government of India Act, 1935 and the U.P. Legislature enacted the U.P. Act I of 1938 covering the same field and repealing Act XV of 1934.
Entry 27 of List II related to production, supply and distribution of goods and development of industries except in regard to controlled industries, and, in so far as in 1938 sugar was not a controlled industry, the U.P. Legislature enacted provisions for the licensing of the sugar factories and for regulating the price and supply of sugarcane intended for use in 418 such factories.
With the advent of War and the proclamation of emergency under section 102 of the Government of India Act, 1935, the Centre was invested with the power to make laws for the Provinces with respect to any of the matters enumerated in the Provincial Legislative List and the Central Legislature as well as the Provincial Legislatures were thus enabled to enact measures exercising concurrent jurisdiction in regard to the topics enumerated in the Provincial Legislative List.
The emergency was about to come to an end on the 1st April, 1946 and the British Parliament, therefore, on 26th March, 1946, passed the India.
(Central Government and Legislature) Act, 1946, under which, notwithstanding anything in the Government of India Act, 1935, the Central Legislature was, for the period specified in section 4 thereof, invested with the powers to make laws with respect to (a) trade and commerce in, and the production, supply and distribution of foodstuffs, edible oilseeds and oils and this provision in effect continued the power which had been vested in the Central Legislature during the emergency under section 102 of the Government of India Act, 1935.
The period mentioned in section 4 of this Act was extended from time to time up to 31st March, 1950.
It was in pursuance of these powers that the Central Legislature enacted Act XXIV of 1946 on 16th November, 1946.
The essential commodities therein comprised inter alia foodstuffs which would include sugar as well as sugarcane and both sugar and sugarcane, therefore, came within the jurisdiction of the Centre.
Act XXIV of 1946 was continued in force up to 31st March, 1950 under the terms of section 4 of India (Central Government and Legislature) Act, 1946 by the notification of the GovernorGeneral and the resolutions passed by both the Houses of Parliament but before the expiration of this extended period the Constitution was inaugurated and under article 369 Parliament was invested with the power to make laws inter alia with respect to trade and commerce within a State and production, supply and distribution of foodstuffs, edible oilseeds 419 and oils as if they were enumerated in the concurrent list and it was by virtue of this power that Act XXIV of 1946 was extended up to 26th January, 1955 by diverse pieces of legislation enacted by Parliament.
Sugar and sugarcane thus continued within the jurisdiction of the Centre right up to 26th January, 1955.
When Entry 33 of List III was amended by the Constitution Third Amendment Act, 1954, foodstuffs including edible oilseeds and oils were included therein and both Parliament and the State Legislatures acquired concurrent jurisdiction to legislate over sugar and sugarcane Tradeand commercein, and production, supply and distribution of, sugar and sugarcane thus could be dealt with by Parliament as well as by the State Legislatures and it was in exercise of this jurisdiction that Parliament enacted Act X of 1955.
The list of essential commodities defined in section 2 of the Act comprised foodstuffs, including edible oilseeds and oils, cattlefodder, raw cotton and cotton seed and raw jute which were items (b), (c), (d) and (e) in Entry 33 of List III and the products of the controlled industries, coal, textiles, iron and steel, paper, petroleum and petroleum products and any other class of commodity which the Central Government may by notification or order declare to be an essential commodity for the purposes of the Act being a commodity with respect to which Parliament has power to make laws by virtue of Entry 33 of List III of the Seventh Schedule to the Constitution, which were amongst the products of the controlled industries specified in the First Schedule to Act LXV of 1951.
It follows that Act X of 1955 was enacted by Parliament in exercise of the legislative powers conferred upon it by Entry 33 of List III and was an exercise of concurrent jurisdiction.
It is clear, therefore, that all the Acts and the noti fications issued thereunder by the Centre in regard to sugar and sugarcane were enacted in exercise of the concurrent jurisdiction.
The exercise of such concurrent jurisdiction would not deprive the Provincial Legislatures of similar powers which they had under the Provincial Legislative List and there would, there 420 fore, be no question of legislative incompetence qua the Provincial Legislatures in regard to similar pieces of legislation enacted by the latter.
The Provincial Legislatures as well as the Central Legislature would be competent to enact such pieces of legislation and no question of legislative competence would arise.
It also follows as a necessary corollary that, even though sugar industry was a controlled industry, none of these Acts enacted by the Centre was in exercise of its jurisdiction under Entry 52 of List 1.
Industry in the wide sense of the term would be capable of comprising three different aspects: (1) raw materials which are an integral part of the in dustrial process, (2) the process of manufacture or production, and (3) the distribution of the products of the industry.
The raw materials would be goods which would be comprised in Entry 27 of List II.
The process of manufacture or production would be comprised in Entry 24 of List II except where the industry was a controlled industry when it would fall within Entry 52 of List I and the products of the industry would also be comprised in Entry 27 of List II except where they were the products of the controlled industries when they would fall within Entry 33 of List 111.
This being the position, it cannot be said that the legislation which was enacted by the Centre in regard to sugar and sugarcane could fall within Entry 52 of List I.
Before sugar industry became a controlled industry, both sugar and sugarcane fell within Entry 27 of List II but, after a declaration was made by Parliament in 1951 by Act LXV of 1951, sugar industry became a controlled industry and the product of that industry, viz., sugar was comprised in Entry 33 of List III taking it out of Entry 27 of List II. ' Even so, the Centre as well as the Provincial Legislatures had concurrent jurisdiction in regard to the same.
In no event could the legislation in regard to sugar and sugarcane be thus included within Entry 52 of List 1.
The pith and substance argument also cannot be imported here for the simple reason that, when both the Centre as well as the State Legislatures were operating in the concurrent field, 421 there was no question of any trespass upon the exclusive jurisdiction vested in the Centre under Entry 52 of List 1, the only question which survived being whether, putting both the pieces of legislation enacted by the Centre and the State Legislature together, there was any repugnancy, a contention which will be dealt with hereafter.
A more effective answer is furnished by comparison of the terms of the U.P. Act I of 1938 with those of the impugned Act.
Whereas the U.P. Act I of 1938 covered both sugarcane and sugar within its compass, the impugned Act was confined only to sugarcane, thus relegating sugar to the exclusive jurisdiction of the Centre thereby eliminating all argument with regard to the encroachment by the U.P. State Legisla ture on the field occupied by the Centre.
The U.P. Act I of 1938 provided for the establishment of a Sugar Control Board, the Sugar Commissioner, the Sugar Commission and the Cane Commissioner.
The impugned Act provided for the establishmentof a Sugarcane Board.
The Sugar Commissionerwas named as such but his functions under rules 106and 107 were confined to getting information which would lead to the regulation of the supply and purchase of sugarcane required for use in sugar factories and had nothing to do with the production or the disposal of sugar produced in the factories.
The Sugar Commission was not provided for but the Cane Commissioner was the authority invested with all the powers in regard to the supply and purchase of sugarcane.
The Inspectors appointed under the U.P. Act I of 1938 had no doubt powers to examine records maintained at the factories showing the amount of sugarcane purchased and crushed but they were there with a view to check the production or manufacture of sugar whereas the Inspectors appointed under the impugned Act were, by rule 20, to confine their activities to the regulation of the supply and purchase of sugarcane without having anything to do with the further process of the manufacture or production of sugar.
Chapter 3 of U.P. Act I of 1938, dealing with the construction and extension of sugar factories, licens 55 422 ing of factories for crushing sugarcane, fixing of the price of sugar, etc., was deleted from the impugned Act.
The power of licensing new industrial undertakings was thereafter exercised by the Centre under Act LXV of 1951 as amended by Act XXVI of 1953, vide sections 1 1 (a), 12 and 13, and the power of fixation of price of sugar was exercised by the Centre under section 3 of Act XXIV of 1946 by issuing the Sugar Control Order, 1950.
Even the power reserved to the State Government to fix minimum prices of sugarcane under Chapter V of U.P. Act I of 1938 was deleted from the impugned Act the same being exercised by the Centre under clause 3 of Sugar and Gur Control Order, 1950, issued by it in exercise of the powers conferred under section 3 of Act XXIV of 1946.
The prices fixed by the Centre were adopted by the State Government and the only thing which the State Government required under rule 94 was that the occupier of a factory or the purchasing agent should cause to be put up at each purchasing centre a notice showing the minimum price of cane fixed by the Government meanig there by the centre.
The State Government also incorporated these prices which were notified by the Centre from time to time in the forms of the agreements which were to be entered between the cane growers, the cane growers co operative societies, the factories and their purchasing agents for the supply and purchase of sugarcane as provided in the U.P. Sugarcane Supply and Purchase Order, 1954.
The only provision which was retained by the State Government in the impugned Act for the protection of the sugarcane growers was that contained in section 17 which provided for the payment of price of sugarcane by the occupier of a factory to the sugarcane growers.
It could be recovered from such occupier as if it were an arrear of land revenue.
This comparison goes to show that the impugned Act merely confined itself to the regulation of the supply and purchase of sugarcane required for use in sugar factories and did not concern itself at all with the controlling or licensing of the sugar factories, with the production or manufacture.
of sugar or with the 423 trade and commerce in, and the production, supply and distribution of, sugar.
If that was so, there was no question whatever of its trenching upon the jurisdiction of the Centre in regard to sugar industry which was a controlled industry within Entry 52 of List I and the U.P. Legislature had jurisdiction to enact the law with regard to sugarcane and had legislative competence to enact the impugned Act.
(2): It was next contended that the provisions of the impugned Act were repugnant to the provisions of Act LXV of 1951 and Act X of 1955 which were enacted by Parliament and, therefore, the law made by Parliament should prevail and the impugned Act should, to the extent of the repugnancy, be void.
Before dealing with this contention it is necessary to clear the ground by defining the exact connotation of the term "repugnancy".
Repugnancy falls to be considered when the law made by Parliament and the law made by the State Legislature occupy the same field because, if both these pieces of legislation deal with separate and distinct matters though of a cognate and allied character, repugnancy does not arise.
So far as our Constitution is concerned, repugnancy is dealt with in article 254 which provides: "254.
(1) If any provision of a law made by the Legislature of a State is repugnant to any provision of a law made by Parliament which Parliament is competent to enact, or to any provision of an existing law with respect to one of the matters enumerated in the Concurrent List, then, subject to the provisions of clause (2), the law made by Parliament, whether passed before or after the law made by the Legisla ture of such State, or, as the case may be, the existing law, shall prevail and the law made by the Legislature of the State shall, to the extent of the repugnancy, be void.
(2)Where a law made by the Legislature of a State specified in Part A or Part B of the First Schedule with respect to one of the matters enumerated in the Concurrent List contains any provision repugnant to the provisions of an earlier law made by 424 Parliament or an existing law with respect to that matter, then, the law so made by the Legislature of such State shall, if it has been reserved for the consideration of the President and has received his assent, prevail in that State: Provided that nothing in this clause shall prevent Parliament from enacting at any time any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by the Legislature of the State".
We are concerned here with the repugnancy, if any, arising by reason of both Parliament and the State Legislature having operated in the same field in respect of a matter enumerated in the Concurrent List, i.e., foodstuffs comprised in Entry 33 of List III and we are, therefore, not called upon to express any opinion on the controversy which was raised in regard to the exact scope and extent of article 254(1) in regard to "a law made by Parliament which Parliament is competent to enact", as to 'whether the legislative power of Parliament therein refers to List I) List III and the residuary power of legislation vested in Parliament under article 248 or is confined merely to the matters enumerated in the Concurrent List (Vide A.I.R. 1942 Cal.
587 contra, Per Sulaiman, J. in at p. 226).
Nicholas in his Australian Constitution, 2nd ed., p. 303, refers to three tests of inconsistency or repugnancy: (1)There may be inconsistency in the actual terms of the competing statutes (R. vs Brisbane Licensing Court; , (2)Though there may be no direct conflict, a State law may be inoperative because the Commonwealth law, or the award of the Commonwealth Court, is intended to be a complete exhaustive code (Clyde Engineering Co. Ltd. vs Cowburn, (3) Even in the absence of intention a conflict may arise when both State and Commonwealth seek to exercise their powers over the same subject matter (Victoria vs Common wealth; , ; Wenn 425 vs Attorney General (Vict.); , Isaacs, J. in Clyde Engineering Company, Limited vs Cowburn(1) laid down one test of inconsistency as conclusive: "If, however, a competent legislature expressly or implicitly evinces its intention to cover the whole field.
, that is a conclusive test of inconsistency where another Legislature assumes to enter to any extent upon the same field".
Dixon, J. elaborated this theme in Ex parte McLean(2): "When the Parliament of the Commonwealth and the Parliament of a State each legislate upon the same subject and prescribe what the rule of conduct shall be, they make laws which are inconsistent, notwithstanding that the rule of conduct is identical which each prescribes, and section 109 applies.
That this is so is settled, at least when the sanctions they impose are diverse.
But the reason is that, by prescribing the rule to be observed, the Federal statute shows an intention to cover the subject matter and provide what the law upon it shall be.
If it appeared that the Federal law was intended to be supplementary to or cumulative upon State law, then no inconsistency would be exhibited in imposing the same duties or in inflicting different penalties.
The inconsistency does not lie in the mere co existence of two laws which are susceptible of simultaneous obedience.
It depends upon the intention of the paramount Legislature to express by its enactment, completely, exhaustively, or exclusively, what shall be the law governing the particular conduct or matter to which its attention is directed.
When a Federal statute discloses such an intention, it is inconsistent with it for the law of a State to govern the same conduct or matter".
To the same effect are the observations of Evatt, J. in Stock Motor Plough Ltd. vs Forsyth(3): "It is now established, therefore, that State and Federal laws may be inconsistent, although obedience to both laws is possible.
There may even be incon (1) , 489.
(2) , 483.
(3) ; , 147.
426 sistency although each law imposes the very same duty of obedience.
These conclusions have, in the main, been reached, by ascribing "inconsistency" to a State law, not because the Federal law directly invalidates or conflicts with it, but because the Federal law is said to "cover the field".
This is a very ambiguous phrase, because subject matters of legislation bear little resemblance to geographical areas.
It is no more than a cliche for expressing the fact that, by reason of the subject matter dealt with, and the method of dealing with it, and the nature and multiplicity of the regulations prescribed, the Federal authority has adopted a plan or scheme which will be hindered and obstructed if any additional regulations whatever are prescribed upon the subject by any other authority; if, in other words, the subject is either touched or trenched upon by State authority".
The Calcutta High Court in G. P. Stewart vs B. K. Roy Chaudhury(1) bad occasion to consider the meaning of repugnancy and B. N. Rau, J. who delivered the judgment of the Court observed at page 632: "It is sometimes said that two laws cannot be said to be properly repugnant unless there is a direct conflict between them, as when one says 'do" and the other "don 't", there is no true repugnancy, according to this view, if it is possible to obey both the laws.
For reasons which we shall set forth presently, we think that this is too narrow a test: there may well be cases of repugnancy where both laws say "don 't" but in different ways.
For example, one law may say, "No person shall sell liquor by retail, that is, in quantities of less than five gallons at a time" and another law may say, "No person shall sell liquor by retail, that is, in quantities of less than ten gallons at a time".
Here, it is obviously possible to obey both laws, by obeying the more stringent of the two, namely the second one; yet it is equally obvious that the two laws are repugnant, for to the extent to which a citizen is compelled to obey one of them, the other, though not actually disobeyed, is nullified".
The learned Judge then discussed the various auth (1) A.I.R. 1939 Cal.
427 orities which laid down the test of repugnancy in Australia, Canada, and England and concluded at page 634: "The principle deducible from the English cases, as from the Canadian cases, seems therefore to be the same as that enunciated by Isaacs, J. in the Australian 44 hour case if the dominant law has expressly or impliedly evinced its intention to cover the whole field, then a subordinate law in the same field is repugnant and therefore inoperative.
Whether and to what extent in a given case, the dominant law evinces such an intention must necessarily depend on the language of the particular law".
Sulaiman, J. in Shyamakant Lal vs Rambhajan Singh(1) thus laid down the principle of construction in regard to repugnancy: "When the question is whether a Provincial legislation is repugnant to an existing Indian law, the onus of showing its repugnancy and the extent to which it is repugnant should be on the party attacking its validity.
There ought to be a presumption in favour of its validity, and every effort should be made to reconcile them and construe both so as to avoid their being repugnant to each other; and care should be taken to see whether the two do not really operate in different fields without encroachment.
Further, repugnancy must exist in fact, and not depend merely on a possibility.
Their Lordships can discover no adequate grounds for holding that there exists repugnancy between the two laws in districts of the Province of Ontario where the prohibitions of the Canadian Act are not and may never be in force: (Attorney General for Ontario vs Attorney General for the Dominion ) (2) ".
In the instant case, there.
is no question of any in consistency in the actual terms of the Acts enacted by Parliament and the impugned Act.
The only questions that arise are whether Parliament and the State Legislature sought to exercise their powers over the same subject matter or whether the laws enacted (1) , 212.
(2) , 369 70, 428 by Parliament were intended to be a complete exhaustive code or, in other words, expressly or impliedly evinced an intention to cover the whole field.
It would be necessary, therefore, to compare the provisions of Act LXV of 1951 as amended by Act XXVI of 1953, Act X of 1955 and the Sugar Control Order, 1955 issued thereunder with those of the impugned Act and U.P. Sugarcane Regulation of Supply and Purchase Order, 1954 passed thereunder.
Act LXV of 1951 was an Act to provide for the development and regulation of certain industries the control of which by the Union was declared by the Act to be expedient in the public interest and it embraced the various industries mentioned in the First Schedule to the Act.
The industry engaged in the manufacture or production of sugar was one of such industries and under the Act the Union acquired control over the same.
The Act provided for the establishment and constitution of a Central Advisory Council for the purposes of advising it on matters concerning the development and regulation of the scheduled industries.
It also provided for the establishment and constitution of Development Councils for any scheduled industry or group of scheduled industries.
It further provided for the regulation of scheduled industries by registration of existing industrial undertakings and licensing of new industrial undertakings and causing investigations to be made in the scheduled industries or industrial undertakings.
These provisions were evidently intended to control the scheduled industries and if the sugar industry was one of the scheduled industries the control there of involved the development and regulation of the sugar industry and the registration and the licensing as also investigation into the affairs of the undertakings which were engaged in the production or manufacture of sugar.
It did not involve the regulation of the supply and purchase of sugarcane which, though it formed an integral part of the process of manufacture of sugar.
was merely the raw material for the industry and as such not within the purview of the Act.
If the, Act had remained as originally enacted the 429 provisions of the Act would not have been in any manner whatever repugnant to the provisions of U.P. Act I of 1938 because both the Acts covered different fields.
Act XXVI of 1953, however, introduced certain amendments in the Act.
the relevant amendment for our purpose being section 18 G which provided as follows: "18 G. Power to control supply,distribution, price, etc., of certain articles. (1) The Central Government, so far as it appears to it necessary or expedient for securing the equitable distribution and availability at fair prices of any article or class of articles relatable to any scheduled industry, may, notwithstanding anything contained in any other provision of this Act, by notified order, provide for regulating the supply and distribution thereof and trade and commerce therein. ". . . . . . . . . . ." Explanation.
In this section, the expression 'article or class of articles ' relatable to any scheduled industry includes any article or class of articles imported into India which is of the same nature or description as the article or class of articles manufactured or produced in the scheduled industry".
Sugar industry being one of the scheduled industries, it was contended for the petitioners that sugarcane was an article relatable to the sugar industry and was, therefore, within the scope of section 18 G and the Central Government was thus authorised by notified order to provide for regulating the supply and distribution thereof and trade and commerce therein.
If that was so, it was next contended, the field of legislation in regard to sugarcane was covered by this provision of the Act and was taken away from the jurisdiction of the State Legislatures, the avowed in tention being to cover the whole field of such legislation.
It was, however, urged on behalf of the State of U. P. that articles relatable to scheduled industry comprised only those finished products which were of the same nature or description as the article or class of articles manufactured or produced in the scheduled industry and did not comprise the raw materials for 430 the scheduled industry.
Reliance was placed in support of this contention on the terms of the explanation to section 18 G as also to sections 15 and 16 of the Act where the same words "any article or class of articles relatable to that industry" were used.
In our opinion, the contention of the State is sound.
The structure of the whole Act LXV of 1951 related to the development and regulation of the scheduled industries and all the provisions which were contained in the Act including those which were introduced therein by Act XXVI of 1953 were designed for effectuating that purpose.
It is significant to note that, even in section 18 G, the regulation which was intended was that of the supply and distribution of the article or class of articles relatable to the scheduled industry and the production of those articles was not sought to be regulated at all.
The raw materials would certainly be essential ingredients in the process of manufacture or production of the articles in the scheduled industry but would not be of the same nature or description as the article or class of articles manufactured or produced therein,.
The whole object of enactment of section 18 G was to secure the equitable distribution and availability at fair prices of such articles which by rela tion thereof to the article or class of articles manu factured or produced in the scheduled industry would affect such manufacture or production or the supply and distribution thereof or trade and commerce therein.
Not only were the article or class of articles relatable to the scheduled industry which were themselves manufactured or produced in this country sought to be controlled in this manner but also the articles or class of articles imported into India which were of the same nature or description as the article or class of articles manufactured or produced in the scheduled industry, so that all these articles whether indigenous or imported would be controlled by the Central Government by regulating the supply and distribution thereof and trade and commerce therein with a view to develop and regulate and thus control the scheduled industries in the public interest.
See 431 tion 15 of the Act provided that where the Central Government was of the opinion that, in respect of any scheduled industry or industrial undertaking there had been or was likely to be a substantial fall in the volume of production in respect of any article or class of articles relatable to that industry or manufactured or produced in the industrial undertakings for which, having regard to the economic conditions prevailing, there was no justification, it may make or cause to be made full and complete investigations into the circumstances of the case.
If, after making or causing to be made any such investigations, the Central Government was satisfied that action under section 16 was desirable it was to issue such directions to the industrial undertakings concerned as may be appropriate for regulating production of any article or class of articles of any industrial undertakings or fixing the standard of production, requiring the industrial undertakings to take such steps as are considered necessary to stimulate the development of the industry to which the undertakings relate, prohibiting the industrial undertakings from resorting to any act or practice which may reduce its production capacity and economic value and controlling the prices and regulating the distribution of any article or class of articles which has been the subject matter of investigation.
If any article or class of articles relatable to that industry could thus be the subjectmatter of investigation and if appropriate directions in the manner indicated in section 16 could be given in relation thereto, it is obvious that it would not be within the province of the scheduled industry or industrial undertakings to take such steps in regard to the controlling of the prices or regulating the distribution of these articles or class of articles unless they were within the sphere of the scheduled industries or industrial undertakings.
Raw materials for the manufacture or production of the article or class of articles in the scheduled industry would certainly not be within this sphere and they would not be able to control the prices or regulate the distribution thereof within the meaning of section 16.
432 These articles or class of articles relatable to the scheduled industry, therefore, were finished products and not raw materials for the manufacture or production of the articles or class of articles in the scheduled industry.
They were finished products of a cognate character which would be manufactured or produced in the very process of manufacture or production in the course of carrying on that scheduled industry.
The raw materials would certainly not be included within this category and sugarcane which is the raw material for the manufacture or production of sugar could, therefore, not be included in the category of the articles or class of articles relatable to the sugar industry.
Section 18 G, therefore, did not cover the field of sugarcane and the Central Government was not empowered by the introduction of section 18 G by Act XXVI of 1953 to legislate in regard to sugarcane.
The field of sugarcane was not covered by Act LXV of 1951 as amended by Act XXVI of 1953 and the legislative powers of the Provincial Legislatures in regard to sugarcane were not affected by it in any manner whatever.
If the two fields were different and the Central legislation did not intend at all to cover that field, the field was clear for the operation of State legislation and there was no repugnancy at all between Act LXV of 1951 and the impugned Act.
Even assuming that sugarcane was an article or class of articles relatable to the sugar industry within the meaning of section 18 G of Act LXV of 1951, it is to be noted that no order was issued by the Central Government in exercise of the powers vested in it under that section and no question of repugnancy could ever arise because, as has been noted above, repugnancy must exist in fact and not depend merely on a possibility.
The possibility of an order under section 18 G being issued by the Central Government would not be enough.
The existence of such an order would be the essential prerequisite before any repugnancy could ever arise.
Act X of 1955 included within the definition of essential commodity food stuffs which we have seen above would include sugar as well as sugarcane.
This 433 Act was enacted by Parliament in exercise of the concurrent legislative power under Entry 33 of List III as amended by the Constitution Third Amendment Act, 1954.
Foodcrops were there defined as including crops of sugarcane and section 3(1) gave the Central Government powers to control the production, supply and distribution of essential commodities and trade and commerce therein for maintaining or increasing the supplies thereof or for securing their equitable distribution and availability at fair prices.
Section 3(2)(b) empowered the Central Government to provide inter alia for bringing under cultivation any waste or arable land whether appurtenant to a building or not for growing thereon of foodcrops generally or specified foodcrops and section 3(2)(c) gave the Central Government power for controlling the price at which any essential commodity may be bought or sold.
These provisions would certainly bring within the scope of Central legislation the regulation of the production of sugarcane as also the controlling of the price at which sugarcane may be bought or sold, and in addition to the Sugar Control Order, 1955 which was issued by the Central Government on 27th August, 1955, it also issued the Sugarcane Control Order, 1955, on the same date investing it with the power to fix the price of sugarcane and direct payment thereof as also the power to regulate the movement of sugarcane.
Parliament Was well within its powers in legislating in regard to sugarcane and the Central Government was also well within its powers in issuing the Sugarcane Control Order, 1955 in the manner it did because all this was in exercise of the concurrent power of legislation under Entry 33 of List III.
That, however, did not affect the legislative competence of the U. P. State Legislature to enact the law in regard to sugarcane and the only question which remained to be considered was whether there was any repugnancy between the provisions of the Central legislation and the U. P. State legislation in this behalf.
As we have noted above, the U. P. State Government.
did not at all provide for the fixation of minimum 434 prices for sugarcane nor did it provide for the regulation of movement of sugarcane as was done by the Central Government in clauses (3) and (4) of the Sugarcane Control Order, 1955.
The impugned Act did not make any provision for the same and the only provision in regard to the price of sugarcane which was to be found in the U. P. Sugarcane Rules, 1954, was contained in Rule 94 which provided that a notice of suitable size in clear bold lines showing the minimum price of cane fixed by the Government and the rates at which the cane is being purchased by the centre was to be put up by an occupier of a factory or the purchasing agent as the case may be at each purchasing centre.
The price of cane fixed by Government here only meant the price fixed by the appropriate Government which would be the Central Government, under clause 3 of the Sugarcane Control Order, 1955, because in fact the U. P. State Government never fixed the price of sugarcane to be purchased by the factories.
Even the provisions in behalf of the agreements contained in clauses 3 and 4 of the U. P. Sugarcane Regulation of Supply and Parchase Order, 1954, provided that the price was to be the minimum price to be notified by the Government subject to such deductions, if any, as may be notified by the Government from time to time meaning thereby the Central Government, the State Government not having made any pro vision in that behalf at any time whatever.
The provisions thus made by the Sugarcane Control Order, 1955, did not find their place either in the impugned Act or the Rules made thereunder or the U.P. Sugarcane Regulation of Supply and Purchase Order, 1954, and the provision contained in section 17 of the impugned Act in regard to the payment of sugarcane price and recovery thereof as if it was an arrear of land revenue did not find its place in the Sugarcane Control Order, 1955.
These provisions, therefore, were mutually exclusive and did not impinge upon each other there being thus no trenching upon the field of one Legislature by the other.
Our attention was drawn to the several provisions contained in the 435 Sugarcane Control Order, 1955 and the U.P. Sugarcane Regulation of Supply and Purchase Order, 1954 and the agreements annexed thereto and it was pointed out that they differed in material particulars, the provisions of the latter being more stringent than those of the former.
It is not necessary to refer to these provisions in any detail.
Suffice it to say that none of these provisions do overlap, the Centre being silent with regard to some of the provisions which have been enacted by the State and the State being silent with regard to some of the Provisions which have been enacted by the Centre.
There is no repug nancy whatever between these provisions and the impugned Act and the Rules framed thereunder as also the U.P. Sugarcane Regulation of Supply and Purchase Order, 1954 do not trench upon the field covered by Act X of 1955.
There being no repugnancy at all, therefore.
, no question arises of the operation of article 254(2) of the Constitution and no provision of the impugned Act and the Rules made thereunder is invalidated by any provision contained in Act LXV of 1951 as amended by Act XXVI of 1953 or Act X of 1955 and the Sugarcane Control Order, 1955 issued thereunder.
(3): It was then contended that the impugned Act stands repealed to the extent that it has been repealed by section 16 of Act X of 1955 and clause 7 of the Sugarcane Control Order., 1955 made in exercise of the powers conferred by section 3 of Act X of 1955.
Section 16 of Act X of 1955 reads as under: "16.
(1) The following laws are hereby repealed: (a) the Essential Commodities Ordinance, 1955; (b) any other law in force in any State immediately before the commencement of this Act in so far as such law controls or authorises the control of the production, supply and distribution of, and trade and commerce in, any essential commodity".
It is submitted that the impugned Act was "any other law" in force in the State of U. P. immediately before the commencement of Act X of 1955 and stood repealed in so far as it controlled or authorised the 436 control of production, supply and distribution of, and trade and commerce in, sugarcane which was comprised within foodstuffs an essential commodity under Act X of 1955.
Clause 7 of the Sugarcane Control Order, 1955 made in exercise of the powers conferred by section 3 of the Act provided: "7.
(1) The Sugar and Gur Control Order, 1950, published with the Government of India in the Ministry of Food and Agriculture S.R.O. No. 735, dated the 7th October, 1950, and any order made by a State Government or other authority regulating or prohibiting the production, supply and distribution of sugarcane and trade or commerce therein are hereby repealed, except as respect things done or omitted to be done under any such order before the commencement of this order".
It is submitted that the U.P. Sugarcane Regulation of Supply and Purchase Order, 1954, made by the U.P. Government in exercise of the powers conferred by section 16 of the impugned Act is repealed in so far as it regulates or prohibits the production, supply and distribution of sugarcane or trade and commerce therein.
These are provisions for the express repeal of the impugned Act and the U.P. Sugarcane Regulation of Supply and Purchase Order, 1954, and if the contention of the petitioners in this behalf were accepted it would have the effect of nullifying the provisions of the impugned Act and also the impugned notifications which have been issued in exercise of the powers conferred by sections 15 and 16 of the Act.
As regards section 16 of Act X of 1955, the validity and effect thereof depends upon the construction to be put on article 254(2) and the proviso thereto.
Article 254(2) deals with repugnancy between the provisions of a law made by the State Legislature and those of an earlier law made by Parliament or an existing law with respect to one of the matters enumerated in the Concurrent List and provides that the law so made by the State Legislature shall, if it has been reserved for the consideration of the President and has received his assent, prevail in the State.
A 437 proviso, however, has been attached thereto which says that "nothing in article 254(2) shall prevent Parliament from enacting at any time any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by the State Legislature".
Ordinarily Parliament would not have the power to repeal a law passed by the State Legislature even though it be a law with respect to one of the matters enumerated in the Concurrent List.
Section 107 of the Government of India Act, 1935 did not contain any such power.
As was observed by this Court in Zaverbhai Amaidas vs The State of Bombay(1), this provision contained in article 254(2) "is in substance, a reproduction of section 107 (2) of the Government of India Act, 1935, the concluding portion whereof being incorporated in a proviso with further additions.
Discussing the nature of the power of the Dominion Legislature, Canada, in relation to that of the Provincial Legislature, in a situation similar to that under section 107(2) of the Government of India Act, it was observed by Lord Watson in Attorney General for Ontario vs Attorney General for the Dominion(2), that though a law enacted by the Parliament of Canada and within its competence would override Provincial legislation covering 'he same field, the Dominion Parliament had no authority conferred upon it under the Constitution to enact a statute repealing directly any Provincial statute.
That would appear to have been the position under section 107(2) of the Government of India Act with reference to the subjects mentioned in the Concurrent List.
Now, by the proviso to. article 254(2) the Constitution has enlarged the powers of Parliament, and under that proviso, Parliament can do what the Central Legislature could not under section 107(2) of the Government of India Act, and enact a law addihg to, amending, varying or repealing a law of the State, when it relates to a matter mentioned in the Concurrent List.
The position then is that under the Constitution Parliament can, acting under the proviso to article 254(2), repeal a State law".
(1) [1955] 1 S.C.R. 799, 806.
(2) , 57 438 it is argued for the state of U.P. that, under the proviso to article 254(2),the power to repeal a law passed by the State Legislature is incidental to enacting a law relating to the same matter as is dealt with in the State legislation, and that a statute which merely repeals a law passed by the State Legislature without enacting substantive provisions on the subject would not be within the proviso, as it could not have been the intention of the Constitution that in a topic within the concurrent sphere of legislation there should be a vacuum.
There is considerable force in this contention, and there is much to be said for the view that a repeal simpliciter is not within the proviso.
But it is unnecessary to base our decision on this point, as the petitioners must, in our opinion, fail on another ground.
While the proviso to article 254(2) does confer on Parliament a power to repeal a law passed by the State Legislature, that power is, under the terms of the proviso, subject to certain limitations.
It is limited to enacting a law with respect to the same matter adding to, amending, varying or repealing a "law so made by the State Legiisla ture".
The law referred to here is the law mentioned in the body of article 254(2).
It is a law made by the State Legislature with reference to a matter in the Concurrent List containing provisions repugnant to an earlier law made by Parliament and with the consent of the President.
It is only such a law that could be altered, amended or repealed under the proviso.
The impugned Act is not a law relating to any matter, which is the subject of an earlier legislation by Parliament.
It is a substantive law covering a field not occupied by Parliament, and no question of its containing any provisions inconsistent with a law enacted by Parliament could therefore arise.
To such a law, the proviso has no application and section 16 (1)(b) of Act X of 1955 and clause 7(1) of the Sugarcane Control Order, 1955 must, in this view, be held to be invalid.
There is also a further objection to which clause 7 (1) of the Sugarcane Control Order, 1955 is open.
The 439 power of repeal, if any, was vested in Parliament and Parliament alone could exercise it by enacting an appropriate provision in regard thereto.
Parliament could not delegate this power of repeal to any executive authority.
Such delegation, if made, would be void and the Central Government had no power, therefore, to repeal any order made by the State Government in exercise of the powers conferred upon it by section 16 of the impugned Act.
The U.P. Sugarcane Regulation of Supply and Purchase Order, 1954, could not, therefore, be validly repealed by the Central Government as was purported to be done by clause (7) of the Sugarcane Control Order, 1955, and that repeal was of no effect with the result that the U.P. Sugarcane Regulation of Supply and Purchase Order, 1954 stood unaffected thereby.
The result, therefore, is that there was no repeal of the impugned Act or the U.P. Sugarcane Regulation of Supply and Purchase Order, 1954 by section 16 of Act X of 1955 or by clause (7) of the Sugarcane Control Order, 1955 as contended by the petitioners.
(4): It is pointed out that the Cane Commissioner declares the reserved or assigned areas for the factories, and also transfers particular areas from one factory to another.
He is also in sole charge and management of Cane Growers Co operative Societies.
It is contended that the powers thus conferred upon him are so wide that they are capable of being exercised in a discriminatory manner and therefore the impugned Act infringes the fundamental right guaranteed by article 14 of the Constitution.
Section 15 of the Act provides: "15.
(1) Without prejudice to any order made under clause (d) of sub section (2) of section 16 the Cane Commissioner may, after consulting the Factory and Canegrowers Co operative Society in the manner to be prescribed (a)reserve any area (hereinafter called the reserved area), and (b)assign any area (hereinafter called an assigned area), 440 for the purpose of the supply of cane to a factory in accordance with the provisions of section 16 during a particular crushing season and may likewise at any time cancel such order or alter the boundaries of an area so reserved or assigned.
(2) Where any area has been declared as reserved area for a factory, the occupier of such factory shall, if so directed by the Cane Commissioner, purchase all the cane grown in that area, which is offered for sale to the factory.
(3) Where any area has been declared as assigned area for a factory, the occupier of such factory shall purchase such quantity of cane grown in that area and offered for sale to the factory, as may be determined by the Cane Commissioner.
(4) An appeal shall lie to the State Government against the order of the Cane Commissioner passed under sub section (1)".
Rule 22 of the U.P. Sugarcane (Regulation of Supply and Purchase) Rules, 1954, made by the U.P. Government in exercise of the rule making power conferred by section 28 (2) of the Act however lays down the factors which are to be taken into consideration by the Cane Commissioner in reserving an area for or assigning an area to a factory or determining the quantity of cane to be purchased from an area by a factory: (a) the distance of the area from the factory, (b) facilities for transport of cane from the area, (c) the quality of cane supplied from the area to the factory in previous years, (d) previous reservation and assignment orders, (e) the quantity of cane to be crushed in the factory, (f the arrangements made by the factory in previous years for payment of cess, cane price and commission, and (g) the views of the Canegroweria ' Co operative Society of the area.
441 Chapter 11 of the Rules provides for the management of the Canegrowers ' Co operative Societies by the Cane Commissioner and their supervision by him.
Rule 63 of that chapter however provides "Rule 63.
An appeal against an order of the Cane Commissioner under the provisions of this Chapter shall lie to the State Government within one month of the date of the communication of the order to the Society or management concerned".
It will be thus seen that the powers given to the Cane Commissioner under section 15 are well defined and have got to be exercised within the limits prescribed after consulting the factories and the Canegrowers 'Co operative Societies (Vide section 15(1)) and any order made by the Cane Commissioner thereunder is liable to an appeal to the State Government at the instance of the party aggrieved (Vide section 15(4)).
The same is the position in regard to the orders made by the Cane Commissioner in the course of his management and supervision of the Canegrowers ' Co opera tive Societies and any order made by him in regard thereto is subject to appeal to the State Government at the instance of the party aggrieved (Vide Rule 63).
If this is the position, it cannot be urged that wide powers are conferred on the Cane Commissioner which can be used by him in a discriminatory manner so as to violate the fundamental right guaranteed under article 14.
Any cane grower or a Canegrowers ' Cooperative Society or the occupier of a factory can, if aggrieved, take an appeal to the State Government against any order passed by the Cane Commissioner and such provision is a sufficient safeguard provided in the Act and the Rules against any arbitrary exercise of those powers by the Cane Commissioner and takes them out of the ban of article 14.
(5): It is next contended that the impugned Act and the notification dated 27th September, 1954 violate the fundamental right guaranteed under article 19 (1) (c) which is the right to form associations or unions.
It is urged that the Cane Growers Co 442 operative Societies are not voluntary organisations but a cane grower is compelled to become a member of the Society before he can sell his sugarcane to a factory.
The right to form associations or unions is a positive right but in the positive right it is urged there is necessarily implied the negative aspect which means that a citizen has the right not to form associations or unions and cannot be compelled to become a member of an association or a union or a Cane growers ' Co operative Society before be can sell his goods to the owner of a factory.
Reliance is placed in support of this contention on the following passage in the judgment of the Madras High Court in Indian Metal and Metallurgical Corporation V. Industrial Tribunal, Madras and Another(1): "In this case, however, we are concerned with a much narrower question, namely, whether an award made by the Industrial Tribunal appointed under the and published by the Government in accordance with the provisions of the Act can direct the management of an industry to continue to carry on any business against their will.
If a citizen has got a right to carry on business, we think it follows that, he must be at liberty not to carry it on if he so chooses.
A person can no more be compelled to carry on a business than a person can be compelled to acquire or hold property. .
Mr. Bhasyam was really unable to convince us how any one can be compelled to carry on a business against his will and yet be said to enjoy a right to carry on a business".
The following passage from Strong on 'American Con stitutional Law ', page 774, taken from the judgment of Mr. Justice Murphy in West Virginia State Board vs Barnette(2) is also relied upon "The freedom of thought and of religion as guaranteed by the Constitution against State action includes both the right to speak freely and the right to refrain from speaking at all, except in so far as essential operations of government.
may require it for the (1) A.I.R. 1953 Mad. 98, 101.
(2) , 646.
443 preservation of an orderly society, as in the case of compulsion to give evidence in court".
It is urged that, if the right to carry on business carries with it by necessary implication a right not to carry on business, if the right to speak freely carries with it by necessary implication the right to refrain from speaking at all, the right to form associations or unions also carries with it by necessary implication the right not to form associations or unions.
In the first place, assuming that the right to form an association implies a right not to form an association, it does not follow that the negative right must also be regarded as a fundamental right.
The citizens of India have many rights which have not been given the sanctity of fundamental rights and there is nothing absurd or uncommon if the positive right alone is made a fundamental right.
The whole fallacy in the argument urged on behalf of the petitioners lies in this that it ignores that there is no compulsion at all on any cane grower to become a member of the Canegrowers ' Co operative Society.
The very definition of a cane grower given in the impugned Act talks of "a person who cultivates cane either by himself or by members of his family or by hired labour and who is not a member of the Canegrowers ' Co operative Society".
The Sugarcane Board is to consist of inter alia 15 members to be appointed by the State Government of whom 5 are to be the representatives of canegrowers and the Canegrowers ' Co operative Societies.
The occupier of a factory has to maintain a register of all such canegrowers and Canegrowers ' Co operative Societies as shall sell cane to that factory.
The payment of commission on purchase of cane is to be made by the occupier of a factory in both cases.
, whether the purchase is made through a Canegrowers ' Co operative Society or the purchase is made direct from the canegrowers.
The U.P. Sugarcane Regulation of Supply and Purchase Order, 1954, made in exercise of the powers conferred by section 16 of the impugned Act also talks of cane growers as well as Canegrowers ' Co operative Societies and in 444 the case of reserved areas both the cane growers and the Canegrowers ' Co operative Societies are entitled within 14 days of the issue of an order reserving.
an area for a factory to offer to supply cane grown in the reserved area to the occupier of the factory and Form B in Appendix II of that Order provides the form of agreement between the cane grower and the occupier of a factory.
The cane grower as well as the Canegrowers ' Co operative Society are both within the ken of the impugned Act and it cannot be urged that the object of the Act is to promote Canegrowers 'Co operative Societies to the prejudice of the cane grower himself.
The Canegrowers ' Co operative Societies are to be fostered if at all for furthering the interests of the cane growers and there is no conflict between the interests of the cane growers on the one hand and those of the Cane growers ' Co operative Societies on the other.
Both are equally catered for by the impugned Act but it is only when the State Government feels that there are circumstances justifying the issue of an order under which the cane grown by a cane grower shall not be purchased except through a Canegrowers ' Co operative Society, the State Government, in exercise of the power reserved under section 16(2)(b) would issue an order accordingly.
The impugned notification dated 27th September, 1954 specifies the circumstances under which such a prohibitory order can be made.
If the membership of a particular Canegrowers ' Cooperative Society is not less than 75 per cent.
of the total number of cane growers within the particular area, then and then only it is considered expedient and desirable that all the cane purchased by an occupier of a factory from that area should be purchased only through the agency of the particular Canegrowers ' Co operative Society.
It is with a view to eliminate unhealthy competition between the cane growers on the one hand and the Canegrowers ' Cooperative Societies on the other and also to prevent malpractices indulged in by the occupier of a factory for the purpose of breaking up the Canegrowers ' 445 Co operative Society that such a provision is made and a notification issued prohibiting the occupier of a factory from making any purchases from the area except through the Canegrowers ' Co operative Society.
It is a reasonable provision made for the benefit of the large number of persons forming the members of the Canegrowers ' Co operative Society and cannot be impugned as in any manner violative of any fundamental right of the petitioners.
There is also another fallacy in their argument and it lies in ignoring that no canegrower is prevented from resigning his membership of a Canegrowers ' Co operative Society.
These are voluntary organisations which a canegrower is entitled to join or not at his choice.
If he has once joined it he is also entitled to resign his membership at his choice and the only obstacle to his right of resignation, as has been laid down in the bye laws of the Society, is the fact of his being indebted to the Society, or the fact of his being a surety for debt due by another member of the Society.
Until these debts are discharged and also until the crushing season during which the Canegrowers ' Co operative Society has entered into an agreement with the occupier of a factory is over, a member of a Society cannot resign his membership.
These restrictions do not fetter his right to resign his membership of the Society.
If be became a member of the Society he is bound by the bye laws of the Society and can only resign his membership after fulfilling all the conditions which are laid down in the bye laws of the Society.
The cane grower,, moreover, is not prevented absolutely from selling his sugarcane.
The only person to whom he cannot sell his sugarcane is the owner of a factory but that does not prevent him from selling his sugarcane to any other person or for any other purpose, e.g. the manufacture or production of gur or rab or khandsari or any variety of product other than sugar.
There may be of course difficulties in the matter of his being able to sell the same in 446 that manner but that does not mean that there is an absolute restriction on his power of disposal of his goods unless and until he becomes a member of a Canegrowers ' Co operative Society.
He is at perfect liberty not to become a member of a Canegrowers ' Co operative Society if he chooses not to do so and no power on earth can compel him to become such a member.
Just as he is not bound to become a member of a Canegrowers ' Co operative Society he is equally not bound to offer his sugarcane for sale to the occupier of a factory even if he happens to be a canegrower within the area reserved for that factory.
His freedom in that behalf is absolutely unrestricted and we do not see how it can be urged that the provisions of the impugned Act and the notification dated 27th September, '1954 are violative of his fundamental right under article 19(1)(c) of the Constitu tion.
(6): It is further contended that the impugned Act and the notifications infringe the fundamental right guaranteed under article 19(1) (f) and (g) and article 31 of the Constitution.
We may refer in this context to the following passage from the judgment of this Court delivered by Mukherjea, J. (as he then was) in Messrs Dwarka Prasad Laxmi Narain vs The State of Uttar Pradesh and two others (1): "Nobody can dispute that for ensuring equitable distribution of commodities considered essential to the community and their availability at fair prices, it is quite a reasonable thing to regulate sale of these commodities through licensed vendors to whom quotas are allotted in specified quantities and who are not permitted to sell them beyond the prices that are fixed by the controlling authorities.
The power of granting or withholding licenses or of fixing the prices of the goods would necessarily have to be vested in certain public officers or bodies and they would certainly have to be left with some amount of discretion in these matters.
So far no exception can be taken; but the mischief arises when the power con (1) ; , 811. 447 ferred on such officers is an arbitrary power unregulated by any rule or principle and it is left entirely to the discretion of particular persons to do anything they like without any check or control by any higher authority.
A law or order, which confers arbitrary and uncontrolled power upon the executive in the matter of regulating trade or business in normally available commodities cannot but be held to be unreasonable.
As has been held by this court in Chintaman vs The State of Madhya Pradesh, the phrase "reasonable restriction" connotes that the limitation imposed upon a person in enjoyment of a right should not be arbitrary or of an excessive nature beyond what is required in the interest of the public.
Legislation, which arbitrarily or excessively invades the right, cannot be said to contain the quality of reasonableness, and unless it strikes a proper balance between the freedom guaranteed under article 19 (1) (g) and the social control permitted by clause (6) of article 19, it must be held to be wanting in reasonableness".
The power which is given to the Cane Commissioner under section 15 of the Act for declaring reserved or assigned areas is well defined and guided by the considerations set out in Rule 22 of Chapter 6 of the U.P. Sugarcane (Regulation of Supply and Purchase) Rules, 1954 and is further conditioned that he has to consult the factory and the Canegrowers 'Co operative Society, ,and his orders made thereunder are subject to an appeal to the State Government at the instance of the party aggrieved.
This cannot by any means be treated as an uncontrolled or an unfettered power without recourse to any higher authority in the event of his going wrong.
The power is not absolute nor is it unguided and, therefore, does not fall within the mischief of article 19(1)(f) and (g) and the notification dated 9th November, 1955 cannot be impugned on that ground.
The same is the position with regard to notification dated 27th September, 1954.
The restriction which is imposed upon the cane growers in regard to sales of their sugarcane to the occupiers of factories in areas where the membership of the 448 Canegrowers ' Co operative Society is not less than 75 per cent.
of the total cane growers within the area is a reasonable restriction in the public interest designed for safeguarding the interests of the large majority of growers of sugarcane in the area and works for the greatest good of the greatest number.
That being so, it comes well within the protection of article 19(6) and the impugned notification cannot be challenged as violative of the fundamental right guaranteed under article 19(1)(f) and (g).
If these impugned notifications are, therefore, intravires the State Legislature, they cannot be challenged also under article 31 as none of the petitioners is being deprived of his property, if any, save by authority of law.
(7): It is next contended that the impugned Act is void in that it confers very wide powers on the executive officials and is a piece of delegated legislation.
Our attention has not been drawn to any provisions of the impugned Act which would amount to a delegation of legislative power to any officials of the State Government.
The only provisions alleged to contain such delegation of legislative power are those contained in section 15 and section 16(1)(b) read with section 16 (2) (b) of the impugned Act which we have dealt with above.
They are certainly no piece of delegated legislation and the vires of the impugned Act is not affected thereby.
(8): It is lastly contended that the impugned Act is destructive of freedom of trade and commerce and is thus violative of article 301 of the Constitution.
Article 301 of the Constitution does not occur in Part III which deals with fundamental rights but it is urged that if a law was enacted in violation of the provisions of article 301 it will be no law at all and will certainly not avail the State Government.
In effect this is an argument in furtherance of the contention in regard to article 19(1)(f) and (g) dealt with above but we shall deal with it separately as it has been urged as an independent ground of attack 449 against the constitutionality of the impugned Act and the notifications issued thereunder.
It is urged that the impugned notifications are violative of the freedom of trade, commerce and intercourse embodied in article 301 of the Constitution.
The petitioners are not free to sell their sugarcane to anybody other than the occupier of a factory or even to him except through the agency of a Canegrowers ' Co operative Society and are not at all entitled to sell their sugarcane to anyone outside the State.
Assuming this is go, the short answer to this contention is furnished by the provisions of article 304 of the Constitution which provide: "304.
Notwithstanding anything in article 301 or article 303, the Legislature of a State may by law (a). . . . . . (b) impose such reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interest:. . . . " We may also refer in this context to the following passage from the judgment of their Lordships of the Privy Council in Commonwealth of Australia vs Bank of New South Wales(1) which was quoted with approval in the later Privy Council decision in Hughes and Vale Proprietary Ltd. vs State of New South Wales and Others(2): "Every case must be judged on its own facts and in its own setting of time and circumstance, and it may be that in regard to some economic activities and at some stage of social development it might be maintained that prohibition with a view to State monopoly was the only practical and reasonable manner of regulation, and that inter State trade, commerce and intercourse thus prohibited and thus monopolized remained absolutely free".
We have already stated in the earlier part of this judgment that the restrictions imposed by the alleged notifications are reasonable restrictions imposed on (1) , 311.
(2) 450 the petitioners in the public interest.
We are, therefore, of opinion that this contention also is of no avail to the petitioners.
The result, therefore, is that the impugned Act and the notifications dated 27th September, 1954 and 9th November, 1955 issued thereunder were intravires the State Legislature and are binding on the petitioners.
The Petitions must, therefore, stand dismissed.
In regard to costs we feel that the proper order for costs should be that Petitions Nos.
625 of 1954, 48 of 1955 and 47 of 1956 in which the President, the VicePresident and the Secretary respectively of the anna Utpadak Sangh are amongst the petitioners and Petition No. 37 of 1956 in which Saraya Sugar Factory is the petitioner will stand dismissed with costs, one set between all the petitions and between all the Respondents in those petitions.
The parties in the rest of the Petitions will bear and pay their own respective costs of those Petitions.
| IN-Abs | The petitioners challenged the constitutional validity of the U.P. Sugarcane (Regulation of Supply and Purchase) Act of 1953, and two notifications issued by the State Government on September 27, 1954 and November 9, 1955, the former under sub sec.
1(a) read with sub sec.
2(b) of section 16 of the impugned Act providing that where not less than three fourths of the canegrowers within the area of operation of a Canegrowers ' Co operative Society were members thereof, the occupier of the factory to which that area is assigned should not purchase or enter into an agreement to purchase cane except through that society and the latter under section 15 of the Act assigning to different sugarcane factories specified cane purchasing centers for supply to them of sugarcane for the crushing season of 1955 56.
They contended that the impugned Act was ultra vires the 394 State Legislature, the subject matter of legislation being within the exclusive jurisdiction of Parliament, and repugnant to Act LXV of 1951 and Act X of 1955 passed by Parliament and that sections 15 and 16(1)(a) and (2)(b) and the two notifications infringed their fundamental rights under articles 14, 19(1)(c), (f) and (g) and 31 and violated the provisions of article 301 of the Constitution.
Held, (1) that the impugned Act and the notifications issued thereunder were intra vires the State Legislature, did not infringe any fundamental rights of the petitioners nor violated the provisions of article 301 of the Constitution and the petitions must be dismissed; (2)that the Central Acts in respect of sugar and sugarcane and the notifications thereunder having been enacted and made by the Central Government in exercise of concurrent jurisdiction under Entry 33 of List III of the Seventh Schedule to the Constitution as amended by the Constitution (Third Amendment) Act of 1954, the State Legislature was not deprived of its jurisdiction thereunder and no question of legislative incompetence of the U.P. Legislature or its trespassing upon the exclusive jurisdiction of the centre in enacting the impugned Act could arise; (3) that the provisions of the impugned Act compared to those of the Central Acts clearly showed that the impugned Act was solely concerned with the regulation of the supply and purchase of sugarcane and in no way trenched upon the exclusive jurisdiction of the Centre with regard to sugar and the U.P. Legislature was, therefore, quite competent to enact it; (4) that no question of repugnancy under article 254 of the Constitution could arise where Parliamentary Legislation and State Legislation occupied different fields and dealt with separate and distinct matters even though of a cognate and allied character, and that where, as in the present case, there was no inconsistency in the actual terms of the acts enacted by Parliament and the State Legislature, the test of repugnancy would be whether Parliament and the State Legislature, in legislating under an entry in the Concurrent List, exercised their powers over the same subject matter or whether the laws enacted by Parliament were intended to be exhaustive so as to cover the entire field; (5) that the provisions of section 18 G of Act LXV of 1951 did not cover sugarcane nor indicate the intention of the Parliament to cover the entire field of such legislation; the expression "any article or class of articles relatable to any scheduled industry" used in sections 18 G, 15 and 16 of the Act did not refer to raw materials but only to finished products of the scheduled industries the supply and distribution of which section 18 G was intended to regulate, its whole object being the equitable distribution and availability of manufactured articles at fair prices and not to invest the Central Government with the power to legislate in regard to sugarcane; 395 (6) that even assuming that sugarcane was such an article and fell within the purview of section 18 G of the Act, no order having been issued by the Central Government thereunder, no question of repugnancy could arise, as repugnancy must exist as a fact and not as a mere possibility and the existence of such an order would be an essential pre requisite for it; (7) that as the provisions of Act X of 1955, and those ' of the impugned Act and the U.P. Sugarcane Regulation of Supply and Purchase Order, 1951, made thereunder, relating to sugarcane were mutually exclusive and did not impinge upon each other and the one legislature did not trench upon the field of the other, the Centre remaining silent where the State spoke and the State remaining silent where the Centre spoke, there could be no inconsistency between them and no provision of the impugned Act and the Rules made thereunder was invalidated by any of the provisions of Act LXV of 1951 as amended by Act XXVI of 1953 or Act X of 1955 and the Sugarcane Control Order, 1955, issued thereunder; Clyde Engineering Company, Limited vs Cowburn ([1926] , Ex Parte McLean ([1930] ; , Stock Motor Plough Ltd. vs Forsyth ([1932] ; , G. P. Stewart vs B.K. Boy Chaudhury (A.I.R. and Shyamakant Lal vs Rambhajan Singh ([1939] F.C.R. 188), referred to.
(8) that the power of repeal conferred on Parliament by the proviso to article 254(2) of the Constitution was a limited power and could be exercised only by enacting a law relating to the matter dealt with by the state law and the state law must be one of the kind indicated in the body of article 254(2) itself, and as the impugned Act did not fall within that category the proviso did not apply and the impugned Act, the notifications made thereunder and the U. P. Sugarcane Regulation of Supply and Purchase Order, 1954, stood unrepealed by section 16(1)(b) of Act X of 1955 and cl.
7(1) of the Sugarcane Control Order, 1955 made thereunder; Zaverbhai Amaidas vs The State of Bombay ([1955] 1 S.C.R. 799), referred to.
(9) that the power of repeal conferred by the proviso to article 254(2) could be exercised by Parliament alone and could not be delegated to an executive authority and, consequently, the Central Government acquired no power of repeal under cl. 7 of the Sugarcane Control Order, 1955; (10) that the contention that the impugned Act infringed the fundamental right guaranteed by article 14 inasmuch as very wide powers were given to the Cane Commissioner which could be used in a discriminatory manner was without any foundation since his powers under section 15 of the impugned Act were well defined and the Act and Rules framed thereunder gave the canegrowers or a Canegrowers ' Co operative Society or the occupier of a factory the right to appeal to the State Government against any order passed by him 396 and thus provided a sufficient safeguard against any arbitrary exercise of those powers; (11) that equally unfounded was the contention that the im pugned Act and the notification dated September 27, 1954, violated the fundamental right guaranteed by article 19(1)(c) of the Constitution.
Although the right to form an association was a fundamental right, it did not necessarily follow that its negative, i.e. the right not to form an association must also be so, as all rights which an Indian citizen had were not fundamental rights.
No canegrower was compelled to become a member of the Canegrowers ' Co operative Society or prevented from resigning therefrom or selling his crops elsewhere and, consequently, the impugned Act and the notification did not violate his fundamental right; (12) that the powers given to the Cane Commissioner by section 15 of the impugned Act to declare reserved or assigned areas were well defined and controlled by higher authorities and by no means absolute and unguided and were not, therefore, bit by article 19(1)(f) and (g) and the notification dated November 9, 1955, could not, therefore, be impugned on that ground; (13) that the restriction imposed by the notification dated September 27, 1954, on canegrowers in regard to sale of sugarcane to occupiers of factories in areas where the membership of the Canegrowers ' Co operative Society was not less than 75 per cent.
of the total number of canegrowers was a reasonable restriction in the public interest, designed for the benefit of a large majority of canegrowers, and as such came within the protection of article 19(6) and did not violate article 19(1)(f) and (g) of the Constitution; (14) that the impugned notifications, being intra vires the State Legislature, could not also be challenged under article 31 as none of the petitioners was deprived of his property, if any, save by authority of law.
Messrs Dwarka Prasad Laxmi Narain vs The State of Uttar Pradesh and two others ([1954] S.C.R. 803), referred to.
(15) Nor could it be contended that the impugned Act and the notifications contravened the provisions of article 301 of the Constitution in view of the provision of article 304(b) which made it permissible for the State Legislature to impose reasonable restrictions in the public interest.
Commonwealth of Australia vs Bank of New South Wales ([1950] A.C. 235) and Hughes and Vale Proprietary Ltd. vs State of New South Wales and others ([1955] A.C. 241), referred to.
|
Civil Appeal Nos.
626 & 629 of 1971.
From the Judgment and Order dated 5 8 1970 of the Rajasthan High Court in R.F.A. No. 31/60.
630 section T. Desai and Naunit Lal for the Appellant.
P. R. Mridul, B. P. Sharma, Krishna Bhatt and R. K. Bhatt for the Respondents.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
These two cross appeals by certificate arise out of a suit for possession of a house situate in Bikaner and for damages for use and occupation thereof filed in Civil Original Case No. 17 of 1957 on the file of the District Judge, Bikaner.
The plaintiffs in the suit are the appellants in Civil Appeal No. 626 of 1971 and the defendant is the appellant in Civil Appeal No. 629 of 1971.
The genealogy showing the relationship between the parties is given below: Sur Singh | | | | | Gad Singh Bharat Singh Bhim Singh Kan Singh | (Died in (P.I.) (Deft.) | Sept. 1955) | | | | | | | | Duley Dhaney Deep | Singh Singh Singh | | | Himmat Dalip Singh Singh (P.2.) (Died in Sept. 56) Gad Singh, Bharat Singh, Bhim Singh (plaintiff No. 1) and Kan Singh (defendant) are the sons of Sur Singh.
Bharat Singh died unmarried in September, 1955.
Gad Singh died thereafter leaving behind him three sons, Duley Singh, Dhaney Singh and Deep Singh.
Dalip Singh, the second son of plaintiff No.1 died in September, 1956.
Bharat Singh and the defendant were residing in the house which was the subject matter of the suit.
After the death of Bharat Singh, the plaintiffs Bhim Singh and Himmat Singh filed the suit out of which this appeal arises against Kan Singh, the defendant for recovery of possession of the suit house and other ancillary reliefs.
In the plaint, they 631 pleaded that the suit house belonged to them by virtue of a patta dated July 12, 1940 issued in their names; that the defendant who was the brother of plaintiff No. 1 and uncle of plaintiff No. 2 was living in a part of the house with their consent; that plaintiff No. 2 and his younger brother Dalip Singh were also living in the house till the year 1956; that the defendant had refused to receive a notice issued by them in the month of September, 1957 calling upon him to hand over possession of the house to the plaintiffs; that the defendant had done so on account of personal ill will and that the plaintiffs were, therefore, entitled to recover possession of the suit house and damages from the defendant.
These were briefly the allegations made in the plaint.
On the above basis, the plaintiffs prayed for a decree for the reliefs referred to above.
In the written statement, the defendant did not admit the existence of the patta on the basis of which the plaintiffs claimed title to the suit house.
He denied the allegation that the plaintiffs were the owners in possession of the suit house.
He claimed that he was the exclusive owner of the suit house, and in support of the said claim stated as follows: There was a partition amongst the sons of Sur Singh in the year 1929.
At that partition, Gad Singh and plaintiff No. 1 became separated and they were given all the family properties which were situated in their village, Roda.
As Bharat Singh and the defendant had been educated at the expense of the family, they were not given any share in the property.
Bharat Singh and he settled in Bikaner and lived together as members of joint Hindu family.
Bharat Singh died on September 2, 1955 leaving the defendant as a surviving coparcener.
On his death, the defendant became the owner of the properties of Bharat Singh 'as a member of joint Hindu family '.
He further pleaded that from the year 1928, Bharat Singh and he who were working as the Aid de Camp and Private Secretary respectively of the Maharaja of Bikaner were living in the suit house which then belonged to the Maharaja.
The defendant filed an application for purchasing the house.
The proceedings had not terminated when the defendant left the service of the Maharaja and went to Banaras for higher studies.
On his return from Banaras, he joined the service of the Maharaja in the civil department of Bikaner.
After a long time on account of the joint efforts of Bharat Singh and the defendant, the sale of the house was sanctioned.
Bharat Singh who was living jointly with him paid the consideration for the sale on November 4, 1939 'out of the joint income. ' Thus according to the defendant, Bharat Singh and he became its owners from the date of payment of the consideration.
He 632 further pleaded that 'if the patta of the property had been granted in the names of the plaintiffs due to some reasons, political and other surrounding circumstances and for the safety of the property, it cannot affect the right of the defendant '.
It was also stated that Bharat Singh and the defendant had not executed any sale deed in favour of the plaintiffs and so they could not become owners of the suit house.
In another part of the written statement, the defendant pleaded thus: "The plaintiffs have taken the entire ancestral property of the village.
Still they are harassing the defendant due to avarice.
The defendant and Thakur Bharat Singh had been doing Government service.
So there was always danger or removal or confiscation of the property.
Even if Thakur Bharat Singh might have written or given his consent for entering the names of the plaintiffs in the patta in this view, it is not binding.
The plaintiffs are at the most 'benami ' even though the patta which is not admitted might be proved.
" It is thus seen that the defendant put forward a two fold claim to the suit house one on the basis of the right of survivorship another on the basis of a joint purchase along with Bharat Singh.
Even though in one part of the written statement, he declined to admit the existence of the patta, in paragraph 13 of the written statement which is extracted above, he put forward the plea that the plaintiffs were at the most holding the property as benamdars.
He, however, did not claim that he was entitled to the property as an heir of Bharat Singh alongwith plaintiff No. 1.
and Gad Singh who would have inherited the estate of Bharat Singh on his death being his nearest heirs.
In the reply, the plaintiffs denied that the defendant was entitled to the suit house as a surviving coparcener on the death of Bharat Singh.
They, however, pleaded that plaintiff No. 1 had purchased the suit house out of his income; that Bharat Singh used to love plaintiff No. 2 'as his son ' and was thinking of adopting him but he died all of a sudden and that the defendant had not disclosed in his written statement the special political circumstances under which the names of the plaintiffs were entered in the patta.
They denied that the defendant had any interest in the suit house.
On the basis of the oral and documentary evidence produced before him, the learned District Judge who tried the suit held that Bharat Singh had secured the house from the Government of Bikaner for the plaintiffs with their money; that the patta of the house had been granted by the Patta Court in favour of the plaintiffs; that the plaintiffs were in possession of the suit house till September, 1956 and that the 633 defendant being their close relative was living in the house not on his own account but with the plaintiffs ' permission.
The learned District Judge also held that the defendant had failed to prove that the suit house had been acquired by him and Bharat Singh with their joint fund.
Accordingly he decreed the suit for possession of the house in favour of the plaintiffs and further directed that the defendant should pay damages for use and occupation at the rate of Rs. 50 per month from September 20, 1956 till the possession of the house was restored to them.
Aggrieved by the decree of the trial court, the defendant filed an appeal before the High Court of Rajasthan in Civil First Appeal No. 31 of 1960.
The High Court rejected the case of the plaintiffs that the consideration for the house had been paid by Bharat Singh out of the funds belonging to them and also the case of the defendant that the house had been purchased by Bharat Singh with the aid of joint family funds belonging to himself and the defendant.
The High Court held that the house had been purchased by Bharat Singh out of his own money in the names of the plaintiffs without any intention to confer any beneficial interest on them.
It further held that the suit house belonged to Bharat Singh and on his death, Gad Singh, plaintiff No. 1 and the defendant succeeded to his estate which included the suit house in equal shares.
Accordingly in substitution of the decree passed by the trial court, the High Court made a decree for joint possession in favour of plaintiff No. 1.
The rest of the claim of the plaintiffs was rejected.
Dissatisfied with the decree of the High Court, the plaintiffs and the defendant have filed these two appeals as mentioned above.
The principal issue which arises for consideration relates to the ownership of the suit house.
It is admitted on all hands that though Bharat Singh and the defendant were living in the suit house from the year 1928, it continued to be the property of the Maharaja of Bikaner till the date on which the patta (Exh. 4) was issued by the Patta Court of Bikaner and that on the issue of the patta, the State Government ceased to be its owner.
It is also not disputed that the patta constituted the title deed in respect of the suit house and it was issued in the names of the plaintiffs on receipt of a sum of Rs. 5,000.
On January 11, 1930, the defendant had made an application, a certified copy of which is marked as Exhibit A 116 to the Revenue Minister of the State of Bikaner making enquiry about the price of the suit house on coming to know that the State Government intended to sell it.
After the above application was made, the defendant left the service of the State of Bikaner and went to Banaras for studies.
Bharat Singh who was also an employee of the State Gov 634 ernment was working as the Aid de Camp of the Maharaja in 1939.
At the request of Bharat Singh, an order was made by the Maharaja on May 4, 1939 sanctioning the sale of the suit house for a sum of Rs. 5,000.
Exhibit A 118 is the certified copy of the said order.
Exhibit A 120 is a certified copy of the order of Tehsil Malmandi showing that a sum of Rs. 5,000 had been deposited on behalf of Bharat Singh towards the price of the suit house.
It also shows that Bharat Singh was asked to intimate the name of the person in whose favour the patta should be prepared.
Presumably, the patta was issued in the names of the plaintiffs as desired by Bharat Singh and Exhibit A 121 shows that it was handed over on September 30, 1940.
The patta was produced before the trial court by the plaintiffs.
By the time the patta was issued in the names of the plaintiffs, the mother of plaintiff No. 2 had died.
He was about eight years of age in 1940 and he and his younger brother, Dalip Singh were under the protection of Bharat Singh who was a bachelor.
They were staying with him in the suit house.
The defendant also was residing in it.
The plaintiffs who claimed title to the property under the patta in the course of the trial attempted to prove that the sum of Rs. 5,000 which was paid by way of consideration for the patta by Bharat Singh came out of the jewels of the mother of plaintiff No. 2 which had come into the possession of Bharat Singh on her death.
The plaintiff No. 2 who gave evidence in the trial court stated that he had not given any money to Bharat Singh for the purchase of the house but he had come to know from his father, plaintiff No. 1 that it had been purchased with his money.
Jaswant Singh (P.W. 2) and Kesri Singh (P.W. 3) to whose evidence we will make a reference in some detail at a later stage also stated that they had heard from Bharat Singh that the jewels of the mother of plaintiff No. 2 were with him suggesting that they could have been the source of the price house.
Plaintiff No. 1 who could have given evidence on the above question did not enter the witness box.
It is stated that he was a person of weak mind and after the death of Bharat Singh was behaving almost like a mad man.
The defendant stated in the course of his evidence that the mother of plaintiff No. 2 had gold jewels weighing about 3 4 tolas only.
In this state of evidence, it is difficult to hold that the plaintiffs have established that the consideration for the suit house was paid by them.
The finding of the trial court that the house had been purchased by Bharat Singh for the plaintiffs with their money cannot be upheld.
The case of the defendant that the price of the suit house was paid out of the funds belonging to him and Bharat Singh has been rejected both by the trial court and the High Court.
On going 635 through the evidence adduced by the defendant, we feel that there is no reason for us to disturb the concurrent findings arrived at by the trial court and the High Court on the above question.
We shall, therefore, proceed to decide the question of title on the basis that the consideration for the purchase of the house was paid by Bharat Singh out of his own funds.
It was contended by the learned counsel for the defendant that since the plaintiffs had failed to establish that they had contributed the price paid for the suit house, the suit should be dismissed without going into the question whether Bharat Singh had purchased the suit house with his money in the names of the plaintiffs for the benefit of plaintiff No. 2.
The plaint does not disclose the name of the person or persons who paid the sale price of the suit house.
The suit is based on the patta standing in the names of the plaintiffs.
In the written statement of the defendant, there was an allegation to the effect that even though the patta was standing in the names of the plaintiffs, they were only benamidars and the real title was with Bharat Singh and the defendant.
The particulars of the circumstances which compelled Bharat Singh or the defendant to take the patta in the names of the plaintiffs were not disclosed although it was stated that it had been done owing to some political and other surrounding circumstances and for the safety of the property.
From the evidence led by the parties, we are satisfied that they knew during the trial of the suit that the question whether the transfer effected under the patta was a benami transaction or not arose for consideration in the case.
Even in the appeal before the High Court, the main question on which arguments were addressed was whether the transaction was a benami transaction or not.
Merely because the plaintiffs attempted to prove in the trial court that the money paid for purchasing the house came out of their funds, they cannot in the circumstances of this case be prevented from claiming title to the property on the basis that even though Bharat Singh had paid the consideration therefor, plaintiff No. 2 alone was entitled to the suit house.
Reference may be made here to the decision of this Court in Bhagwati Prasad vs Shri Chandramaul(1) where the Court observed as follows: "There can be no doubt that if a party asks for a relief on a clear and specific grounds, and in the issues or at the trial, no other ground is covered either directly or by necessary implication, it would not be open to the said party to 636 attempt to sustain the same claim on a ground which is entirely new. .
But in considering the application of this doctrine to the facts of the present case, it is necessary to bear in mind the other principle that considerations of form cannot over ride the legitimate considerations of substance.
If a plea is not specifically made and yet it is covered by an issue by implication, and the parties knew that the said plea was involved in the trial, then the mere fact that the plea was not expressly taken in the pleadings would not necessarily disentitle a party from relying upon it if it is satisfactorily proved by evidence.
The general rule no doubt is that the relief should be founded on pleadings made by the parties.
But where the substantial matters relating to the title of both parties to the suit are touched, though in directly or even obscurely in the issues, and evidence has been led about them, then the argument that a particular matter was not expressly taken in the pleadings would be purely formal and technical and cannot succeed in every case.
What the Court has to consider in dealing with such an objection is: did the parties know that the matter in question was involved in the trial, and did they lead evidence about it ?" After holding that the parties to the said case were not taken by surprise, the Court granted the relief prayed for by the plaintiff on the basis that defendant was a licensee even though the plaintiff had pleaded in his plaint that the defendant was tenant.
In the above case, the Court distinguished the decision in Trojan & Co. Ltd. vs RM.
N. N. Haggappa Chettiar(1) on which much reliance was placed by the learned counsel for the defendant before us.
In the case of Trojan & Co. Ltd. (supra), this Court came to the conclusion that the alternative claim on which relief was sought was not at all within the knowledge of the parties in the course of the trial.
The case before us is not of the nature.
In Ismail Mussajee Mookerdum vs Hafiz Boo(2) the plaintiff laid claim to a property which had been transferred in her name by her mother alleging that she had paid the purchase money to her mother.
The court came to the conclusion that she had failed to prove that she had paid the consideration.
Still a decree was made in her favour holding that she had become the owner of the property by virtue of the transfer in her favour even though consideration had not been 637 paid by her since it had been established in the case that her mother intended to transfer the beneficial interest in the property in her favour.
This is borne out from the following passage at page 95: "In her evidence, which was very confused, she tried to say that she paid that purchase money to her mother.
This was clearly untrue: as both Courts have found.
The fact, therefore, remains that the properties purchased by the sale proceeds were purchased no doubt in Hafiz Boo 's name, but were purchased out of funds emanating from her mother 's estate.
This circumstance no doubt, if taken alone, affords evidence that the transaction was benami, but there is, in their Lordships ' opinion, enough in the facts of the case to negative any such inference." Moreover no plea was raised on behalf of the defendant before the High Court in this case contending that the High Court should not go into the question whether the transfer under the patta was a benami transaction or not.
We, therefore, reject the above contention and proceed to examine whether the High Court was right in arriving at the conclusion that the plaintiffs were only benamidars holding the property for the benefit of its real owner, Bharat Singh as the consideration therefor had emanated from him.
Under the English law, when real or personal property is purchased in the name of a stranger, a resulting trust will be presumed in favour of the person who is proved to have paid the purchase money in the character of the purchaser.
It is, however, open to the transferee to rebut that presumption by showing that the intention of the person who contributed the purchase money was that the transferee should himself acquire the beneficial interest in the property.
There is, however, an exception to the above rule of presumption made by the English law when the person who gets the legal title under the conveyance is either a child or the wife of the person who contributes the purchase money or his grand child, whose father is dead.
The rule applicable in such cases is known as the doctrine of advancement which requires the court to presume that the purchase is for the benefit of the person in whose favour the legal title is transferred even though the purchase money may have been contributed by the father or the husband or the grandfather, as the case may be, unless such presumption is rebutted by evidence showing that it was the intention of the person who paid the purchase money that the transferee should not become the real owner of the property in question.
The doctrine of advancement is not in vogue in India.
638 The counterpart of the English law of resulting trust referred to above is the Indian law of benami transactions.
Two kinds of benami transactions are generally recognized in India.
Where a person buys a property with his own money but in the name of another person without any intention to benefit such other person, the transaction is called benami.
In that case, the transferee holds the property for the benefit of the person who has contributed the purchase money, and he is the real owner.
The second case which is loosely termed as a benami transaction is a case where a person who is the owner of the property executes a conveyance in favour of another without the intention of transferring the title to the property thereunder.
In this case, the transferor continues to be the real owner.
The difference between the two kinds of benami transactions referred to above lies in the fact that whereas in the former case, there is an operative transfer from the transfer to the transferee though the transferee holds the property for the benefit of the person who has contributed the purchase money, in the latter case, there is no operative transfer at all and the title rests with the transferor notwithstanding the execution of the conveyance.
One common feature, however, in both these cases is that the real title is divorced from the ostensible title and they are vested in different persons.
The question whether a transaction is a benami transaction or not mainly depends upon the intention of the person who has contributed the purchase money in the former case and upon the intention of the person who has executed the conveyance in the latter case.
The principle underlying the former case is also statutorily recognized in section 82 of the which provides that where property is transferred to one person for a consideration paid or provided by another person and it appears that such other person did not intend to pay or provide such consideration for the benefit of the transferee, the transferee must hold the property for the benefit of the person paying or providing the consideration.
This view is in accord with the following observations made by this Court in Meenakshi Mills.
Madurai vs The Commissioner of Income Tax, Madras(1): "In this connection, it is necessary to note that the word 'benami ' is used to denote two classes of transactions which differ from each other in their legal character and incidents.
In one sense, it signifies a transaction which is real, as for example when A sells properties to B but the sale deed mentions X as the purchaser.
Here the sale itself is genuine, but the real purchaser is B, X being his benamidar.
This is 639 the class of transactions which is usually termed as benami.
But the word 'benami ' is also occasionally used, perhaps not quite accurately, to refer to a sham transaction, as for example, when A purports to sell his property to B without intending that his title should cease or pass to B.
The fundamental difference between these two classes of transactions is that whereas in the former there is an operative transfer resulting in the vesting of title in the transferee, in the latter there is none such, the transferor continuing to retain the title notwithstanding the execution of the transfer deed.
It is only in the former class of cases that it would be necessary, when a dispute arises as to whether the person named in the deed is the real transferee or B, to enquire into the question as to who paid the consideration for the transfer, X or B. But in the latter class of cases, when the question is whether the transfer is genuine or sham, the point for decision would be, not who paid the consideration but whether any consideration was paid." In Mohammad Sadiq Ali Khan vs Fakhr Jahan Begum & Ors.(1) the facts were these: A Mahemmodan bought an immovable property taking the conveyance in the name of his daughter who was five years of age.
The income was credited to a separate account, but it was in part applied to purposes with which she had no concern.
Upon her marriage, the deed was sent for the inspection of her father in law.
After the death of the donor it was contended that the property was part of his estate, the purchase being benami.
The Judicial Committee of the Privy Council held that there was a valid gift to the daughter because there was proof of a bona fide intention to give, and that intention was established.
In the course of the above decision, it was observed thus: "The purchase of this property was a very natural provision by Baqar Ali for the daughter of his favourite wife, and though there may be no presumption of advancement in such cases in India, very little evidence of intention would be sufficient to turn the scale.
The sending of the deed for the inspection of the lady 's father in law, which the Chief Court held to be established, was clearly a representation that the property was hers, and their Lordships agree with the learned Judges in the conclusion to which they came.
" 640 In Manmohan Dass & Ors.
vs Mr. Ramdei & Anr.
(1) Lord Macmillian speaking for the Judicial Committee observed: In order to determine the question of the validity or invalidity of the deed of gift in question it is of assistance to consider. 'the surrounding circumstances, the position of the parties and their relation to one another, the motives which could govern their actions and their subsequent conduct. ' Dalip Singh vs Nawal Kanwar 35 I.A. 104 (P.C.) always remembering that the onus of proof rests upon the party impeaching the deed.
The principle enunciated by Lord Macmillan in the case of Manmohan Dass & Ors.
(supra) has been followed by this Court in Jayadayal Poddar (deceased) through his L. Rs. & Anr.
vs Mst.
Bibi Hazara & Ors.(2) where Sarkaria, J. observed thus: "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 state of affairs is the real state of affairs.
Though the question, whether a particular sale is benami or not, is largely one of fact, and for determining this question, no absolute formulae or acid tests, uniformly applicable in all situations, can be laid down; yet in weighing the probabilities and for gathering 641 the relevant indicia, the courts are usually guided by these circumstances: (1) the source from which the purchase money came; (2) the nature and possesion 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 principle governing the determination of the question whether a transfer is a benami transaction or not may be summed up thus: (1) The burden of showing that a transfer is a benami transaction lies on the person who asserts that it is such a transaction; (2) if it is proved that the purchase money came from a person other than the person in whose favour the property is transferred, the purchase is prima facie assumed to be for the benefit of the person who supplied the purchase money, unless there is evidence to the contrary; (3) the true character of the transaction is governed by the intention of the person who has contributed the purchase money and (4) the question as to what his intention was has to be decided on the basis of the surrounding circumstances, the relationship of the parties, the motives governing their action in bringing about the transaction and their subsequent conduct etc.
Now we shall refer to the facts of the present case.
When the suit house was purchased from the Maharaja of Bikaner, Bharat Singh was a bachelor and he did not marry till his death in the year 1955.
The wife of Bhim Singh had died before 1939 leaving behind her two young children.
Plaintiff No. 2 was about eight years old in the year 1939 and his younger brother Dalip Singh was about two years old.
These two children were living with Bharat Singh.
Bhim Singh, plaintiff No. 1 was almost in indigent condition.
The defendant had by then acquired a degree in law and also had practised as a lawyer for some time.
It is stated that the defendant had again been employed in the service of the State of Bikaner.
The patta was issued in the names of plaintiffs 1 and 2 at the request of Bharat Singh.
Even though the defendant stated in the written statement that the patta had been taken in the names of the plaintiffs owing to certain political circumstances, he had not disclosed in the course of his evidence those circumstances which compelled Bharat Singh to secure the patta in the names of the plaintiffs, though at one stage, he stated that it was under his advice that Bharat Singh got the patta in the names of the plaintiffs.
Bharat 642 Singh had no motive to suppress from the knowledge of the public that he had acquired the property.
It was suggested in the course of the arguments that he had taken the patta in the names of the plaintiffs because he was in the service of the State.
We do not find any substance in this submission because the property was being purchased from the State Government itself and there was no need for him to shield his title from the knowledge of the State Government.
It appears that Bharat Singh acquired the suit house for the benefit of plaintiff No. 2 for the following circumstances: The first circumstance is that the original patta had been handed over by Bharat Singh to plaintiff No. 2 on his passing B. Sc.
Examination.
This fact is proved by the evidence of plaintiff No. 2 and it is corroborated by the fact that the patta was produced by the plaintiffs before the Court.
In the course of his evidence, the defendant no doubt stated that the patta had been stolen by plaintiff No. 2 from the suit house during the twelve days following the death of Bharat Singh when the keys of Bharat Singh 's residence had been handed over to plaintiff No. 2 by the defendant.
It is difficult to believe the above statement of the defendant because of two circumstances (i) that the defendant did not state in the written statement that the patta had been stolen by plaintiff No. 2 and (ii) that within a month or two after the death of Bharat Singh, plaintiff No. 2 wrote a letter which is marked as Exhibit A 124 to the defendant stating that the rumour which the defendant was spreading that plaintiff No. 2 had stolen some articles from the suit house was not true since whenever plaintiff No. 2 opened room or any of the almirahs of Bharat Singh in the suit house, Devi Singh the son of the defendant was keeping watch over him.
That letter has been produced by the defendant and there is no reference in it to a false rumour being spread about the theft of the patta by plaintiff No. 2.
Plaintiff No. 2 however, while asserting his claim to the suit house in the course of that letter stated that he had seen that the patta had been executed in his favour; and that the patta contained his name.
The defendant does not appear to have sent any reply to Exhibit A. 124 nor did he call upon the plaintiffs to return the patta to him.
He did not also file a complaint stating that the patta had been stolen by plaintiff No. 2.
We are of the view that there is no reason to disbelieve the evidence of plaintiff No. 2 that the patta had been handed over to him by Bharat Singh on his passing the B.Sc.
examination.
This conduct of Bharat Singh establishes that it was the intention of Bharat Singh when he secured the patta from the State Government in the names of the plaintiffs the plaintiff No. 2 whom he loved should become the owner.
It is no doubt true that the name of plaintiff No. 1 is also included in the patta.
It may have been so included by way 643 of abundant caution as plaintiff No. 2 was a minor when the patta was issued.
The above circumstance is similar to the one which persuaded their Lordships of the Privy Council in the case of Mohammad Sadiq Ali Khan (supra) to hold that the property involved in that case belonged to the person in whose favour the conveyance had been executed.
The second circumstance which supports the view that Bharat Singh intended that plaintiff No. 2 should become the owner of the suit house is proved by the declarations made by Bharat Singh regarding the title to the suit house.
Jaswant Singh (P.W. 2) was a former Prime Minister of the State of Bikaner.
His wife was a cousin of plaintiff No. 1, Bharat Singh and the defendant.
Being a close relative of Bharat Singh who was also the Aid de Camp of the Maharaja of Bikaner, he was quite intimate with Bharat Singh who used to discuss with him about his personal affairs.
P.W. 2 has stated in the course of his evidence that Bharat Singh thought it proper to purchase the house in the name of plaintiff No. 2 and that he intended to make plaintiff No. 2 his heir and successor.
He has also stated that Bharat Singh had expressed his desire to give all his property to plaintiff No. 2 by a will and that he had told Kesri Singh (P.W. 3) just a day prior to his (Bharat Singh 's) death that a will was to be executed.
This statement of Jaswant Singh (PW. 2) is corroborated by the evidence of Kesri Singh (P.W. 3) whose wife was also a cousin of Bharat Singh, plaintiff No. 1 and the defendant.
The relevant portion of the deposition of Kesri Singh (P.W. 3) reads thus: "I came from Jaipur to Bikaner by train one day before the death of Bharat Singh and when I was returning after a walk I found Bharat Singh standing at the gate of his house.
I asked Bharat Singh to accompany me to my house to have tea etc.
Bharat Singh came with me to my house.
Bharat Singh told me at my house that he was not quite all right and that he might die at any time.
He wanted to execute a will.
He further told me that his house really belonged to Himmat Singh.
It has been purchased in his name.
He wanted to give even other property to Himmat Singh.
By other property which Bharat Singh wanted to give to Himmat Singh was meant Motor car, bank balance and the presents which he had.
The house regarding which my talk took place with Bharat Singh at my house was the house in dispute.
" There is no reason to disbelieve the evidence of these two witnesses.
Their evidence is corroborated by the deposition of Dr. Himmat Singh (D.W. 6) who was the Secretary of a Club in Bikaner 644 of which Bharat Singh was a member.
He was examined by the defendant himself as his witness.
In the course of his cross examination, Dr. Himmat Singh (D.W. 6) referred to what Bharat Singh had told him a few months prior to his death.
The substance of his deposition is found in the judgment of the trial court, the relevant portion of which reads thus: "D.W. 6 Dr. Himmat Singh is the Secretary of the Sardul Club, Bikaner.
He is the Senior Eye Surgeon in the Government Hospital, Bikaner.
He has stated that Bharat Singh was the member of Sardul Club.
A sum of Rs. 425/6/ remained outstanding against him till the year 1955.
This amount was received on 28 10 1955.
He has said that he does not know who deposited this amount.
On the merits of the case, he has stated that he intimately knew Bharat Singh and members of his family.
Bhim Singh and his sons Himmat Singh and Dalip Singh used to live in this house.
Bharat Singh took this house for Bhim Singh and Himmat Singh.
Four months before his death, Bharat Singh told the witness that he had already taken the house for Bhim Singh and Himmat Singh and that whatever else would remain with him shall go to them.
Dr. Himmat Singh refutes the defendant 's stand and supports the plaintiff 's case.
" It was argued on behalf of the defendant that there is some variation between the deposition of Dr. Himmat Singh (D.W. 6) and the above passage found in the judgment of the trial court and that the evidence of D.W. 6 should not be believed as he had turned hostile.
The deposition of Dr. Himmat Singh (D.W. 6) was read out to us.
It was also brought to our notice that an application had been made by the defendant to treat D.W. 6 as hostile and that it had not been granted by the trial court.
Even though there is a slight variation between what is stated by D.W. 6 and what is contained in the judgment of the trial court with regard to certain details, we do not feel that the said variation is of any substantial nature.
The evidence of D.W. 6 suggests that Bharat Singh was of the view even during his life time that the suit house belonged to plaintiffs and not to himself.
Even though an application had been made by the defendant to treat D.W. 6 as hostile, we feel that this part of the evidence of D.W. 6 cannot be rejected on that ground since it is consistent with the evidence of Jaswant Singh (P.W. 2) and Kesri Singh (P.W. 3).
It is seen from the judgment of the High Court that the effect of the statement of Kesri Singh (P.W.3) in his deposition that Bharat Singh 645 had told him that the suit house was the property of plaintiff No. 2 has not been considered.
The High Court while dealing with the evidence of Jaswant Singh (P.W. 2) and Kesri Singh (P.W. 3) laid more emphasis on those parts of their evidence where there was a reference to the alleged utilisation of the jewels or moneys belonging to the plaintiffs by Bharat Singh for the purpose of acquiring the suit house.
The High Court has also observed in the course of its judgment that neither of them had stated that Bharat Singh had told them that he was purchasing or had purchased the suit house as a gift to Bhim Singh and Himmat Singh.
The above observation does not appear to be consistent with the evidence of Kesri Singh (P.W. 3) discussed above.
It was, however, contended on behalf of the defendant that the statement made by Bharat Singh in the year 1955 could not be accepted as evidence in proof of the nature of the transaction which had taken place in the year 1940.
It was contended that the question whether a transaction was of a benami nature or not should be decided on the basis of evidence about facts which had taken place at or about the time of the transaction and not by statements made several years after the date of the transaction.
In support of the above contention, the learned counsel for the defendant relied on the decision of the House of Lords in Shephard & Anr.
vs Cartwright & Anr.(1).
The facts of that case were these: In 1929, a father, with an associate, promoted several private companies and caused a large part of the shares, for which he subscribed, to be allotted in varying proportions to his three children, one of them being then an infant.
There was no evidence as to the circumstances in which the allotments were made.
The companies were successful and in 1934 the father and his associate promoted a public company which acquired the shares of all the companies.
The children signed the requisite documents at the request of their father without understanding what they were doing.
He received a cash consideration and at various times sold, and received the proceeds of sale of, their shares in the new company.
He subsequently placed to the credit of the children respectively in separate deposit accounts the exact amount of the cash consideration for the old shares and round sums in each case equivalent to proceeds of sale of the new shares.
Later he obtained the children 's signatures to documents, of the contents of which they were ignorant, authorising him to withdraw money from these accounts and without their knowledge he drew on the accounts, which were by the end of 1936 exhausted, part of the sums withdrawn being dealt with for the benefit of the children but a large part remaining unaccounted for.
He died in 646 1949.
In the action filed against his executors, it was contended by them that the subsequent conduct of the father showed that when the shares were got allotted by him in the names of the children in 1929, he did not intend to make them the real owners of the shares and that the presumption of advancement had been rebutted.
This contention was met by the plea that the subsequent conduct of the father in dealing with the shares as if they were his own could not be relied upon either in his favour or in favour of his representatives, executors and administrators to prove that he had no intention to create any beneficial interest in his children in the shares in question when they were obtained.
On these facts, the House of Lords held that the subsequent acts and declarations of the father could not be relied upon in his favour or in favour of his executors to rebut the presumption of advancement.
Viscount Simonds in the course of his judgment observed thus: "My Lords, I do not distinguish between the purchase of shares and the acquisition of shares upon allotment, and I think that the law is clear that on the one hand where a man purchases shares and they are registered in the name of a stranger there is a resulting trust in favour of the purchaser; on the other hand, if they are registered in the name of a child or one to whom the purchaser then stood in loco parentis, there is no such resulting trust but a presumption of advancement.
Equally it is clear that the presumption may be rebutted but should not, as Lord Eldon said, give way to slight circumstances: Finch vs Finch ; It must then be asked by what evidence can the presumption be rebutted, and it would, I think, be very unfortunate if any doubt were cast (as I think it has been by certain passages in the judgments under review) upon the well settled law on this subject.
It is, I think, correctly stated in substantially the same terms in every text book that I have consulted and supported by authority extending over a long period of time.
I will take, as an example, a passage from Snell 's Equity, 24th ed., p. 153, which is as follows: "The acts and declarations of the parties before or at the time of the purchase, or so immediately after it as to constitute a part of the transaction, are admissible in evidence either for or against the party who did the act or made the 647 declaration.
But subsequent declarations are admissible as evidence only against the party who made them, and not in his favour.
" The above passage, we are of the view, does not really assist the defendant in this case.
What was held by the House of Lords in the case of Shephard & Anr.
(supra) was that the presumption of advancement could be displaced only by a statement or conduct anterior to or contemporaneous to the purchase nor could any conduct of the children operate against them as admissions against their interest as they acted without the knowledge of the facts.
In the instant case, we are concerned with the conduct and declarations of Bharat Singh subsequent to the transaction which were against his interest.
The evidence regarding such conduct and declarations is not being used in his favour but against the legal representative of Bharat Singh i.e. the defendant who would have become entitled to claim a share in the suit house if it had formed part of his estate.
Such conduct or declaration would be admissible even according to the above decision of the House of Lords in which the statement of law in Snell 's Equity to the effect `but subsequent declarations are admissible as evidence only against the party who made them, and not in his favour ' is quoted with approval.
The declarations made by Bharat Singh would be admissible as admissions under the provisions of the Indian Evidence Act being statements made by him against his proprietary interest under section 21 and section 32(3) of the Indian Evidence Act The defendant cannot also derive any assistance from the decision of this Court in Bibi Saddiqa Fatima vs Saiyed Mohammad Mahmood Hasan(1).
The question before the Court in the case of Bibi Siddiqa Fatima (supra) was whether a property which had been purchased by a husband in his wife 's name out of the fund belonging to a waqf of which he was a Mutawalli could be claimed by the wife as her own property.
This Court held that the wife who was the ostensible owner could not be treated as a real owner having regard to the fact that the purchase money had come out of a fund belonging to a waqf over which her husband who was the Mutawalli had no uncontrolled or absolute interest.
In reaching the above conclusion, this Court observed thus : "We may again emphasize that in a case of this nature, all the aspects of the benami law including the 648 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.
" It was next contended that the defendant had spent money on the repairs and reconstruction of the building subsequent to the date of the patta and that therefore, he must be held to have acquired some interest in it.
We have gone through the evidence bearing on the above question.
We are satisfied that the defendant has not established that he had spent any money at all for construction and repairs.
Even if he has spent some money in that way with the knowledge of the actual state of affairs, it would not in law confer on the defendant any proprietary interest in the property.
It is also significant that neither Gad Singh during his life time nor his children after his death have laid any claim to a share in the suit house which they were entitled to claim alongwith the defendant if it was in fact a part of the estate of Bharat Singh.
Their conduct also probabilities the case of the plaintiffs that Bharat Singh did not intend to retain for himself any interest in the suit house.
On the material placed before us, we are satisfied that the transaction under which the patta was obtained was not a benami transaction and that Bharat Singh had acquired the suit house with his money with the intention of constituting plaintiff No. 2 as the absolute owner thereof.
Plaintiff No. 2 is, therefore, entitled to a decree for possession of the suit house.
The trial court passed a decree directing the defendant to pay damages for use and occupation in respect of the suit house at the rate of Rs. 50/ per month from September 20, 1956 till the 649 possession of the house was delivered to the plaintiffs.
The operation of the decree of the trial court was stayed by the High Court during the pendency of the appeal before it.
In view of the decree passed by the High Court, the defendant has continued to be in possession of the suit house till now.
Nearly twenty years have elapsed from the date of the institution of the suit.
In the circumstances, we are of the view that the defendant should be directed to pay mesne profits at the rate of Rs. 50/ per month till today and that an enquiry should be made by the trial court under Order 20, Rule 12 of the Code of Civil Procedure to determine the mesne profits payable by the defendant hereafter till the date of delivery of possession.
In the result, the decree passed by the High Court is set aside and a decree is passed directing the defendant to deliver possession of the suit house to plaintiff No. 2 and to pay mesne profits to him at the rate of Rs. 50/ per month from September 20, 1956 till today and also to pay future mesne profits as per decree to be passed by the trial court under Order 20, Rule 12 of the Code of Civil Procedure.
For the foregoing reasons, Civil Appeal No. 626 of 1971 is accordingly allowed with costs throughout.
Civil Appeal No. 629 of 1971 is dismissed but without costs.
C.A. 626/71 allowed.
P.B.R. C.A. 629/71 dismissed.
| IN-Abs | Plaintiff No. 1 and plaintiff No. 2 were father and son while defendant was the brother of plaintiff No. 1.
The plaintiffs in their suit against the defendant claimed that the suit house in which the defendant was living, belonged to them by virtue of a patta issued in their names.
They alleged that the deceased brother of plaintiff No. 1, who remained a bachelor till his death, loved plaintiff No. 2 as his son and had thought of adopting plaintiff No. 2 but since he died all of a sudden it could not be done.
The defendant on the other hand claimed that he and his deceased brother lived as members of a joint family after the partition of their family that as a result of the joint efforts of himself and his deceased brother the Maharaja, of Bikaner sanctioned sale of the house to them, that the purchase money was paid out of their joint income but that the patta was granted in the names of the plaintiffs due to political reasons and therefore the plaintiffs were at the most benamidars.
The trial court held that the house was acquired by the deceased brother from the Government of Bikaner for the plaintiffs and the patta was granted in favour of the plaintiffs and that they were in its possession till 1956.
It rejected the defendant 's claim that it was acquired with the joint funds of himself and his deceased brother.
On appeal the High Court held that the house had been purchased by the deceased brother out of his own money in the names of the plaintiffs without any intention to confer any beneficial interest on them and on his death plaintiff No. 1 and the defendant succeeded jointly to the estate as his heirs. ^ HELD: The transaction under which the patta was obtained was not a benami transaction.
The house was acquired by the deceased brother with his money and with the intention of constituting plaintiff No. 2 as the absolute owner thereof.
[648G] Where a person buys property with his own money but in the name of another person without any intention to benefit such other person, the transaction is called benami.
In that case the transferee holds the property for the benefit of the person who has contributed the purchase money and he is a real owner.
The second case which is loosely termed a benami transaction is a case where a person, who is the owner of the property, executes a conveyance in favour of another without the intention of transferring the title to the property thereunder.
In this case the transferor continues to be the real owner.
The difference between the two kinds of benami transactions is that whereas in the former there is an operative transfer from the transferor to the transferee, though the transferee holds the property for the benefit of the person who has 629 contributed the purchase money, in the latter there is no operative transfer at all and the title rests with the transferor notwithstanding the execution of the conveyance.
One common feature in both cases is that the real title is divorced from the ostensible title and they are vested in different persons.
The question whether a transaction is a benami transaction or not depends upon the intention of the person who has contributed the purchase money in the former case, and upon the intention of the person who has executed the conveyance in the latter case.
The principle underlying the former case is statutorily recognized in section 82 of the Indian Trust Act, 1882.
[638B E] Meenakshi Mills, Madurai vs The Commissioner of Income Tax, Madras, ; at p. 722; Mohammad Sadiq Ali Khan vs Fakhr Jahan Begam & Ors.
59 I.A. 1; Manmohan Das & Ors.
vs Mr. Ramdai & Anr.
A.I.R. 1931 P. C. 175; Jaydayal Poddar (deceased) through his L.Rs. & Anr.
vs Mst.
Bibi Hazra & Ors.
referred to. 2.
The principles governing the determination of the question whether a transfer is a benami or not are: (1) The burden of showing that a transfer is a benami transaction lies on the person who asserts that it is such a transaction; (2) if it is proved that the purchase money came from a person other than the person in whose favour the property is transferred, the purchase is prima facie assumed to be for the benefit of the person who supplied the purchase money, unless there is evidence to the contrary; (3) the true character of the transaction is governed by the intention of the person who has contributed the purchase money and (4) the question as to what his intention was, has to be decided on the basis of the surrounding circumstances, the relationship of the parties the motives governing their action in bringing about the transaction and their subsequent conduct.
[641C E] In the instant case the deceased brother was a bachelor.
On the death of the wife of plaintiff No. 1, plaintiff No. 2 and his younger brother were staying with the deceased brother.
Plaintiff No. 1 was almost in an indigent condition while defendant practised law for some time and later entered into service.
The patta for the house was issued in the name of plaintiffs nos.
1 and 2 at the request of the deceased brother for the benefit of plaintiff No. 2 and was handed over to him after he completed his education.
This conduct of the deceased brother established that it was his intention that, when he secured the patta from the State Government in the names of plaintiffs it was his intention that plaintiff No. 2 whom he loved, should become the owner.
[641F H] 3.
The declaration made by the deceased, who had contributed the purchase money subsequent to the date of purchase to the effect that the property belonged to plaintiff No. 2 was admissible in evidence either under section 32(3) or section 21 of the Indian Evidence Act to prove his intention that he intended that plaintiff No. 2 should become its owner.
[647E] Shephard & Anr.
vs Cartwright & Anr.
; , distinguished.
|
Civil Appeal No. 1897 of 1978.
From the Judgment and Order dated 19 9 1977 of the Andhra Pradesh High Court Tax Revision Petition No. 66/76.
section T. Desai, T. A. Ramachandran, Mrs. J. Ramachandran and M. N. Tandon for the Appellant.
T. section Krishnamoorthy Iyer, and B. Parthasarshi for the Respondent.
The Judgment of the Court was delivered by KOSHAL, J.
The question which falls for determination in the appeal by certificate granted by the High Court of Andhra Pradesh against its judgment dated the 19th September, 1977 is whether the appellant which is a limited company is not liable to make good to the State Sales Tax authorities the amount of sales tax leviable under section 6 of the Andhra Pradesh General Sales Tax Act (hereinafter referred to as the A. P. Act) in respect of the turn over covering the purchase by the petitioner of cotton during the period 1 4 1969 to 8 6 1969, which turn over had been exempted from sales tax by 1030 the Commercial Tax Officer, No. II, Guntur (C.T.O. for short) in his assessment order dated the 30th of April, 1971.
Two assessment orders were passed by the C.T.O. on the date last mentioned.
One of them covered the turn over of the appellant liable to tax under the Central Sales Tax Act (hereinafter referred to as the Central Act).
That turn over included a sum of Rs. 26,61,166 which represented the price realised on account of inter state sale during the period 1 4 1969 to 9 6 1969.
In respect of this amount the order made by the C.T.O. was: "The dealers have not charged and collected Central sales Tax for the period from 1 4 69 to 9 6 69.
The turnover of Rs. 26,61,166.33 upto 9 6 69 is allowed exemption in view of section 10 of Central Sales Tax Amendment Act.
" The second assessment order was passed under the A.P. Act and therein the C.T.O., while considering a sum of Rs. 54,87,879/ being the purchase value of cotton sold during the year through inter state sale, remarked that the appellant was entitled to 'exemption ' under the proviso to section 6 of the A. P. Act in respect thereof.
He finalised the assessment accordingly.
In the year 1972, clause (b) of section 15 of the Central Act was amended retrospectively so as to be effective from 1st October, 1958.
Two years later, section 6 of the A.P. Act was also amended and made effective from the same date.
On the 21st of August, 1974, the Deputy Commissioner (Commercial Taxes) hereinafter called the D.C.C.T.) issued a notice to the appellant calling upon it to show cause why the 'exemption ' granted to it by the C.T.O. should not be cancelled.
After receiving the appellant 's reply, the D.C.C.T. revised the assessment order dated 30th of April, 1971, passed under the A.P. Act and held that in view of the provisions of section 6 thereof as amended in 1974 the appellant was not entitled to any 'exemption ' in respect of the purchase price (amounting to Rs. 23,00,057/ ) of cotton sold by it in the course of interstate trade for Rs. 26,61,166/ during the period 1 4 1969 to 8 6 1969.
The order of the D.C.C.T. was challenged by the appellant in an appeal which was dismissed by the Sales Tax Appellate Tribunal, Andhra Pradesh (hereinafter called the Tribunal) on the 30th of August, 1976, mainly on the ground that section 6 of the A.P. Act did not talk of any 'exemption ' either before or after its amendment in 1974.
The appellant sought a revision of the Tribunal 's order by the High Court under section 22(1) of the A.P. Act but remained unsuccessful as the High Court was of the opinion (for 1031 which it relied upon Vadivelu Chetty vs Commercial Tax Officer, Tirupathi(1) and Daita Suryanarayana and Company vs State of Andhra Pradesh(2) that the exemption granted by the C.T.O. was 'patently wrong '.
The High Court however granted a certificate declaring the case to be a fit one for appeal to the Supreme Court under article 133(1)(c) of the Constitution of India read with section 109 of the Code of Civil Procedure.
In order to appreciate the contentions raised on behalf of the appellant it is necessary to examine the various relevant legislative provisions which are set out below: Section 10 of the Central Sales Tax (Amendment) Act, 1969 (hereinafter referred to as the 1969 Act).
Exemption from liability to pay tax in certain cases.
(1) Where any sale of goods in the course of inter state trade or commerce has been effected during the period between the 10th day of November, 1961, and the 9th day of June, 1969, and the dealer effecting such sale has not collected any tax under the principal Act on the ground that no such tax could have been levied or collected in respect of such sale or any portion of the turn over relating to such sale and no such tax could have been levied or collected if the amendments made in the principal Act by this Act had not been made, then, notwithstanding anything contained in section 9 on the said amendments, the dealer shall not be liable to pay any tax under the principal Act, as amended by this Act, in respect of such sale or such part of the turn over relating to such sale.
(2) For the purposes of sub section(1), the burden of proving that no tax was collected under the principal Act in respect of any sale referred to in sub section (1) or in respect of any portion of the turn over relating to such sale shall be on the dealer effecting such sale.
" Section 6 of the A. P. Act as on 30 4 1971 "6. Tax in respect of declared goods Notwithstanding anything contained in section 5, the sale or purchase of declared goods by a dealer shall be liable to tax at the rate, and only at the point of sale or purchase, specified against 1032 each in the Third Schedule, on his turn over of such sales or purchases for each year irrespective of the quantum of his turn over in such goods; and the tax shall be assessed, levied and collected in such manner as may be prescribed: Provided that where any such goods on which tax has been so levied are sold in the course of inter state trade or commerce, the tax so levied shall be refunded to such person, in such manner and subject to such conditions as may be prescribed.
" The proviso to section 6 of the A. P. Act as amended in 1974 retrospectively with effect from 1 10 1958. 'Provided that where any such goods on which a tax has been so levied are sold in the course of inter state trade or commerce and tax has been paid under the .
in respect of the sale of such goods in the course of inter state trade or commerce the tax so levied shall be reimbursed to the person making such sale in the course of inter state trade or commerce, in such manner and subject to such conditions as may be prescribed.
" Sub rule (1) of rule 27 A of the Rules framed under the A.P. Act as on 30 4 1971 "Where any tax has been levied and collected under section 6 in respect of the sale or purchase inside the State of any declared goods and such goods are subsequently sold in the course of inter state trade or commerce, the tax so levied and collected shall be refunded to the person in the manner and subject to the conditions specified in sub rules (2) to (4).
" Sub rule (1) of the said rule 27A After its amendment 1 8 1974 "Where any tax has been levied and collected under section 6 in respect of the sale or purchase inside the State of any declared goods and such goods are subsequently sold in the course of inter state trade or commerce, the tax so levied and collected shall be reimbursed to the person in the manner and subject to the conditions specified in sub rules (2) to (4): Provided that the refund shall not be made unless the tax payable under the is paid." 1033 Clauses (a) and (b) of section 15 of the Central Act as in force on 30 4 1971 "15.
Restrictions and conditions in regard to tax on sale or purchase of declared goods within a State Every sales tax law of a State shall, in so far as it imposes or authorises the imposition of a tax on the sale or purchase of declared goods, be subject to the following restrictions and conditions, namely: (a) the tax payable under that law in respect of any sale or purchase of such goods inside the State shall be levied only in respect of the last sale or purchase inside the State and shall not exceed two per cent of the sale or purchase price.
(b) where a tax has been levied under that law in respect of the sale or purchase inside the State of any declared goods and such goods are sold in the course of inter state trade or commerce, the tax so levied shall be refunded to such person in such manner and subject to such conditions as may be provided in any law in force in that State." Clause (b) of section 15 of the Central Act as amended in 1972 retrospectively with effect from 1 10 1958 "(b) where a tax has been levied under that law in respect of the sale or purchase inside the State of any declared goods and such goods are sold in the course of inter State trade or commerce, and tax has been paid under this Act in respect of the sale of such goods in the course of inter state trade or commerce, the tax levied under such law shall be reimbursed to the person making such sale in the course of inter state trade or commerce in such manner and subject to such conditions as may be provided in any law in force in that State.
Section 10 of the 1969 Act makes no reference at all to any tax leviable under the State Act.
It concerns itself only with the tax payable under the Central Act which it calls the 'Principal Act ' and says that a dealer shall not be liable to pay any such tax for the period between 10 11 1964 and 9 6 1969 if certain conditions are satisfied.
Much reliance has been placed by learned counsel for the appellant on this section which, in our opinion, however, is of no assistance to him.
It may be taken for granted that the appellant did not collect any tax under the Central Act on the sale of goods effected by it in 1034 the course of inter state trade during the period 1 4 1969 to 9 6 1969 on the ground that no such tax could have been levied or collected in respect of such sale, so that it becomes fully entitled to the benefit of the exemption enacted by the section; but that would only mean that Central sales tax cannot be charged from it in respect of such sale.
As it is, no demand has been made from it for any tax leviable under the Central Act in respect of such sale and we do not see how the appellant could benefit from the said section 10 in the matter of its assessment for the period in question under the A.P. Act.
All that we are concerned with is the liability of the appellant to pay tax on the purchase of cotton which it sold during that period in the course of inter state trade and that is a matter which has to be decided with reference to section 6 of the A.P. Act, rule 27 A extracted above and section 15 of the Central Act.
As on 30 4 1971 the provisions of section 6 of the A.P. Act laid down that if goods were sold in the course of inter state trade or commerce and tax had been levied on the sale or purchase there of under that Act, the dealer concerned would be entitled to refund of such tax.
As on the date of assessment therefore the appellant was within its rights to claim refund of any tax that it was liable to pay on the purchase of cotton later sold by it in the course of inter state trade; and although the section did not talk of any 'exemption ', all that the C.T.O. could have meant by granting the appellant 'exemption from the tax was that it became liable to pay a tax under the opening para of the section but as it was also entitled to a refund of such tax, the same was taken to have been paid by and refunded to it.
As the section then stood therefore the assessment order was unexceptionable.
This was also the position under clause (b) of section 15 of the Central Act the language of which is practically the same as of the proviso to section 6 of the A.P. Act.
The matter however does not end there as the amendment of section 15 of the Central Act in 1972 and that of section 6 of the A.P. Act in 1974 made a real difference which appears to us to be an insurmountable hurdle in the way of the appellant 's stand being accepted.
As already stated, both the amendments were retrospective so as to be effective from the 1st of October, 1958.
That means that the law to be applied to the assessment finalised through the two orders dated 30th of April, 1971, by the C.T.O. was that as modified by the two amendments.
Of course we are here concerned only with the order of assessment made under the A.P. Act.
That order would be good if it is in conformity with the provisions of the amended section 6 of the A.P. Act but not otherwise.
Under the amended section the liability to tax 1035 remained unchanged but the entitlement to refund was abolished and was substituted by a right to reimbursement of the tax which arose only if the concerned goods were later on sold in the course of inter state trade or commerce under the Central Act and tax under that Act was paid in respect thereof.
Such reimbursement would not be avaialable merely because the goods in question had been sold in the course of inter state trade or commerce when they were not subjected to tax under the Central Act.
Admittedly no such tax was paid by the appellant in the course of inter trade on goods regarding the purchase of which reimbursement of the tax leviable under the A.P. Act is claimed.
The proviso to section 6 as amended in 1974 therefore is of no assistance to it.
Nor does the amended clause (b) of section 15 of the Central Act come to the appellant 's aid, as the language used therein, for all practical purposes, is the same as that of the amended proviso to section 6 of the A.P. Act and clearly means that the tax under the A.P. Act would be reimbursible only to a dealer who has paid tax under the Central Act in respect of the sale of the goods in question in the course of inter state trade or commerce.
Faced with the above situation, Mr. Desai, Learned counsel for the appellant, pressed into service a novel contention to the effect that the appellant was not asking for any reimbursement or refund, that it was the D.C.C.T. who had cancelled the order of refund (inherent in the 'exemption ' granted by the C.T.O.) and that there was no provision authorising the D.C.C.T. to force the appellant to return any amount paid to it as a refund.
The argument is obviously fallacious.
The D.C.C.T. has done nothing more than to revise an order of the C.T.O. which has been varied only in so far as it was not in conformity with the law deemed to have been prevailing on the date of the assessment by virtue of the retrospective amendment of section 6 of the A.P. Act.
It is conceded by Mr. Desai that the 'exemption ' has to be regarded as a composite order of levy plus refund.
That part of it which granted a refund was illegal under the amended proviso to section 6 of the A.P. Act inasmuch as no reimbursement was due in respect of goods on which tax under the Central Act had not been paid.
The D.C.C.T. therefore had not only the power but was duty bound to strike down the order of refund as being illegal.
The order of the C.T.O. as revised by the D.C.C.T. thus is reduced to an order merely of levy of the tax due under the opening paragraph of section 6 of the A.P. Act so that the appellant becomes liable to pay such tax.
The only other argument put forward by Mr. Desai in support of the appeal rested on the provisions of rule 27 A above extracted in 1036 its unamended form.
The rule can obviously be of no help to him inasmuch as even if it can be construed as laying down something in favour of the appellant it cannot override the provisions of the Act under which it is framed.
No amount of argument would make a rule over ride or control the legislative enactment under the authority of which it comes into being and that is why the rule was amended in 1974 so as to conform to the parent statute.
It may be stated that at one stage of the argument Mr. Desai drew our attention to the fact that by reason of the amendments made in the statute law and the consequent demand by the D.C.C.T. for the refunded amount the appellant had been placed under a burden which did not fall on those who collected the Central sales tax from the purchasers and paid it to the Government because they were held entitled to refund of the tax under the A.P. Act even though they had not paid anything out of their own pocket as tax under the Central Act.
However, as he did not challenge the constitutional validity of any of the amended sections he did not pursue the matter further and we need take no further notice of it.
We might mention here that Daita Suryanarayana and Company 's case (supra) on which the High Court relied in support of the impugned judgment takes a view of the law which is in conformity with the opinion expressed above by us and we unreservedly approve of the same.
In the result the appeal fails and is dismissed but with no order as to costs.
P.B.R. Appeal dismissed.
| IN-Abs | On the ground that the dealers have not charged and collected Central Sales Tax during the period 1st April, 1969 to 9th June, 1969 the Commercial Tax Officer, allowed exemption under section 10 of the Central Sales Tax Act in respect of certain turn over of the appellant which included the price realised on account of inter state sales.
In respect of a second set of transactions which involved the purchase value of cotton sold during the year through inter state sales the Commercial Tax Officer held that the appellant was entitled to exemption under the proviso to section 6 of the A.P. General Sales Tax Act.
In 1972 section 15(b) of the Central Act was amended with retrospective effect from 1st October, 1958 and in 1974 section 6 of the State Act was amended with retrospective effect from the same date.
The Deputy Commissioner of Commercial Taxes revised the assessment order of the Commercial Tax Officer passed under the State Act on the ground that in view of the provisions of section 6 as amended in 1974 the appellant was not entitled to any exemption during the above period.
The Sales Tax Appellate Tribunal dismissed the appellant 's appeal on the view that section 6 of the State Act did not talk of any exemption either before or after its amendment in 1974.
The High Court dismissed the appellant 's appeal holding that the exemption granted by the C.T.O. was patently wrong.
Dismissing the Appeal, ^ HELD: 1.
Section 10 of the Central Act which makes no reference to any tax leviable under a State Act can be of no assistance to the appellant.
Granting that the appellant did not collect any tax under the Central Act during the period in question on the ground that no such tax could have been levied or collected so that it becomes fully entitled to the benefit of the exemption enacted by the section, that would only mean that central sales tax cannot be charged from it in respect of sales covered by the section.
No demand had been made from it for any tax leviable under the Central Act in respect of such sales and the appellant could not derive any benefit from section 10 of the Central Act in the matter of its assessment under the State Act.
[1033G H] 2.
In so far as the assessment under the State Act is concerned all that the C.T.O. could have meant by granting exemption was that the appellant became liable to pay a tax under the opening para of the section; but that since the appellant was also entitled to a refund of such tax the same was taken to have been paid by and refunded to it.
The assessment order made 1029 under the proviso to section 6 of the State Act and section 15 (b) of the Central Act as they stood then was unexceptionable.
[1034E F] 3.
Under section 6 as amended the liability to tax remained unchanged but the entitlement to refund was abolished an was substituted by a right to reimbursement of the tax which arose only if the concerned goods were later on sold in the course of inter state trade under the Central Act and tax under that Act was paid in respect thereof.
Such reimbursement would not be available merely because the goods in question had been sold in the course of inter state trade or commerce when they were not subjected to tax under the Central Act.
No such tax was paid.
The proviso to section 6 as amended in 1974 can be of no assistance to the appellant.
[1035A B] 4.
The language of clause (b) of section 15 of the Central Act is the same as that of the amended proviso to section 6 of the State Act.
It clearly means that the tax under the State Act would be reimbursible only to a dealer who has paid tax under the State Act in respect of the sale of the goods in question in the course of inter state trade or commerce.
[1035C D] 5.
The argument that the Deputy Commissioner had no power to cancel the order of refund is fallacious.
He has done nothing more than to revise an order of the C.T.O. which has been varied only in so far as it was not in conformity with the law deemed to have been prevailing on the date of the assessment by virtue of the retrospective amendment of section 6 of the State Act.
The Deputy Commissioner had not only the power but was duty bound to strike down the order of refund as being illegal.
[1035F G] 6.
Rule 27A can be of little help to the appellant inasmuch as even if it can be construed as laying down something in its favour, the rule cannot override the provisions of the Act.
[1036A] Daita Suryanarayana and Company vs State of Andhra Pradesh 39 S.T.C. 500 approved.
|
Civil Appeal Nos. 1280, 1279, 1327 1330 of 1978 and 35 of 1979.
Appeals by special leave from the Judgment and Order dated 2 8 1978 of the Andhra Pradesh High Court in Writ Petition Nos.
718, 5505, 3618, 5506, 5518, of 1975 and 604/78 and 4814/1975.
L. N. Sinha, K. Srinivasa Murthy, Naunit Lal and M. Panduranga for the Appellants in CA Nos.
1279, 1280, 1327 1330/78.
section N. Kackar, Sol.
Genl., Venkatarao and G. N. Rao for R. 1 in CA 1280, RR 1 3 in CAs.
1327 & 1329 and RR 1 & 2 in 1328 & 1330.
H. section Gururaja Rao and section Markendaya for RR 2 3 in CA 1280 and R. 4 in CA 1279.
K. M. K. Nair for R. 4 in CA 1329 section Balakrishnan for R. 8 in CA 1329 G. Narasimhulu for R. 3 in CA 1330 B. Parthasarthi for the Appellant in CA 35/79.
B. Kanta Rao for the RR 4 5 in CA 35/79.
The following Judgments were delivered CHANDRACHUD, C.J. Article 30(1) of the Constitution provides: All minorities, whether based on religion or language, shall have the right to establish and administer educational institutions of their choice.
The question which arises in these appeals is whether certain provisions of the Andhra Pradesh Recognised Private Educational Institutions Control Act, 11 of 1975, offend against the fundamental right 933 conferred on minorities by article 30 (1).
The appellants are unquestionably minority educational institutions, having been established by members of the Christian community.
My learned Brothers, Murtaza Fazal Ali and Kailasam, have examined the authorities bearing on the question before us.
The reasons which impelled me to write a separate judgment are my inability to agree wholly with the various observations made by Justice Fazal Ali and with some of the propositions which he has formulated as emerging from the decisions referred to by him, as also with the conclusion to which Justice Kailasam has come.
I do not consider it necessary to examine all the decisions of this Court in which article 30(1) has received a full and careful consideration.
These decisions are reported in Re Kerala Education Bill 1957, Rev. Sidhajbhai Sabhai vs State of Bombay Rev. Father W. Proost vs The State of Bihar State of Kerala vs Very Rev. Mother Provincial D. A. V. College vs State of Punjab The Ahmedabad St. Xaviers College Society vs State of Gujarat Gandhi Faizeam College Shahajahanpur vs University of Agra and Lilly Kurian vs Sr.
Lewina Almost each succeeding judgment has considered and analysed the previous judgment or judgments.
I regard the matter arising before us as well settled, especially after the 9 Judge Bench decision in Ahmedabad St. Xaviers College Society (supra) and the recent judgment of the Constitution Bench in Lilly Kurian, All that we have to do in this case is to apply the law laid down in these decisions.
These decisions show that while the right of the religious and linguistic minorities to establish and administer educational institutions of their choice cannot be interfered with, restrictions by way of regulations for the purpose of ensuring educational standards and maintaining the excellence thereof can be validly prescribed.
For maintaining educational standards of an institution, it is necessary to ensure that it is competently staffed.
Conditions of service which prescribe minimum qualifications for the staff, their pay scales.
their entitlement to other benefits of service and the laying down of safeguards which must be observed before they are removed or dismissed from service or their services are terminated are all permissible measures 934 of a regulatory character.
As observed by Das C.J., in Re: Kerala Education Bill, (supra) "Right to administer cannot obviously include the right to mal administer", and in the words of Shah J., in Rev. Sidhajbhai, (supra) "The right is subject to reasonable restrictions in the interest of efficiency of instruction, discipline, health, sanitation, morality, public order and the like".
Hidayatullah C.J. said in Very Rev. Mother Provincial (supra) that "Standards of education are not a part of management as such", that the "minority institutions cannot be permitted to fall below the standard of excellence expected of educational institutions" and that "the right of the State to regulate education, educational standards and the allied matters cannot be denied".
Justice Jaganmohan Reddy, in D. A. V. College (supra) reiterated while upholding clause 18 of the Guru Nanak University, Amritsar Act, 1961 that regulations governing recruitment and service conditions of teachers of minority institutions, which are made in order to ensure their efficiency and excellence do not offend against their right to administer educational institutions of their choice.
In the case of institutions that receive State aid, it is the duty and obligation of the Government which grants aid to see that public funds are usefully and properly expended.
If the expenditure incurred for paying the emoluments of the staff is subsidised or financed from out of State funds, it becomes the duty of the State to see that no one who does not possess the minimum qualifications is appointed on the staff, the pay and other emoluments of the staff are guaranteed and their service conditions secured.
Minority institutions which receive State aid cannot complain of conditions subject to which the aid is granted, so long as such conditions do not amount to discrimination against them on the ground of language or religion and so long as the aid is not made to depend upon the performance or observance of conditions which amount to deprivation of the right guaranteed by article 30(1).
There is also no doubt that minority institutions cannot be discriminated against in the matter of granting State aid.
No institution, minority or majority, has a fundamental right to recognition by the State or affiliation to the University, but since recognition and affiliation are indispensable for an effective and fruitful exercise of the fundamental right of minorities to establish and administer educational institutions of their choice, they are entitled to recognition and affiliation if they agree to accept and comply with regulatory measures which are relevant for granting recognition and affiliation, which are directed to ensuring educational excellence of 935 the institution concerned and which, largely and substantially, leave unimpaired the right of administration in regard to internal affairs of the institution.
The impugned Act, by reason of section 1 (3), applies to all private educational institutions, whether or not they are established by minorities.
The appellants ' contention is that several provisions of the Act violate the guarantee contained in article 30(1) by permitting or compelling interference with the internal administration of private educational institutions established by minorities.
The appellants are particularly aggrieved by the provisions of sections 3 to 7 of the Act, the validity whereof in challenged on the ground that they deprive the appellants of their right to administer the affairs of minority institutions by vesting the ultimate administrative control in an outside authority.
These contentions having been rejected by the High Court of Andhra Pradesh, the appellants have filed these appeals by special leave.
Section 3 (1) of the Act provides that, subject to any rule that may be made in this behalf, no teacher employed in any private educational institution shall be dismissed, removed or reduced in rank nor shall his appointment be otherwise terminated, except with the prior approval of the competent authority.
The proviso to the section says that if any educational institution contravenes the aforesaid provision, the teacher affected by the contravention shall be deemed to be in service.
Section 3 (2) requires that where the proposal to dismiss, remove or reduce in rank or otherwise terminate the appointment of any teacher employed in any private educational institution is communicated to the competent authority, that authority shall approve the proposal, if it is satisfied that there are adequate and reasonable grounds for the proposal.
For appreciating their true meaning and effect, sections 3 (1) and 3 (2) have to be read together.
The requirement of prior approval of the competent authority to an order of dismissal, removal, etc.
may not by itself be violative of article 30 (1) because it may still be possible to say, on a reasonable construction of the provision laying down that requirement, that its object is to ensure compliance with the principles of natural justice or the elimination of mala fides or victimisation of teachers.
But I find it difficult to read down section 3 (1) so as to limit its operation to these or similar considerations.
In the first place, the section does not itself limit its operation in that manner; on the contrary, it gives an unqualified mandate that no teacher shall be dismissed, removed, etc.
except with 936 the prior approval of the competent authority.
Under the proviso contravention of the section results in a total invalidation of the proposed action.
If the section is contravened the teacher shall be deemed to be in service.
Secondly, section 3 (1) not only applies to cases in which a teacher is, what is generally termed as 'punished ', by an order of dismissal, removal or reduction in rank, but it also applies to cases in which an appointment is otherwise terminated.
An order of termination simpliciter which involves no stigma or aspersion and which does not result in any evil consequences is also required to be submitted for the prior approval of the competent authority.
The argument that the principles of natural justice have not been complied with or the argument of mala fides and victimisation has seldom any relevance if the services are terminated in accordance with the terms of a contract by which the tenure of the employment is limited to a specified period.
This shows that the true object of section 3 (1) is not that which one could liberally assume by reading down the section.
Section 3 (1) is subject to any rules that may be made in behalf of the matter covered by it.
If the State Government were to frame rules governing the matter, there would have been some tangible circumstances or situations in relation to which the practical operation of section 3(1) could have been limited.
But in the absence of any rules furnishing guidelines on the subject, it is difficult to predicate that, in practice, the operation of the section will be limited to a certain class of cases only.
The absence of rules on the subject makes the unguided discretion of the competent authority the sole arbiter of the question as to which cases would fall within the section and which would fall outside it.
Any doubt as to the width of the area in which section 3(1) operates and is intended to operate, is removed by the provision contained in section 3 (2), by virtue of which the competent authority "shall" approve the proposal, "if it is satisfied that there are adequate and reasonable grounds" for the proposal.
This provision, under the guise of conferring the power of approval, confers upon the competent authority an appellate power of great magnitude.
The competent authority is made by that provision the sole judge of the propriety of the proposed order since it is for that authority to see whether there are reasonable grounds for the proposal.
The authority is indeed made a judge both of facts and law by the conferment upon it of a power to test the validity of the proposal on the vastly subjective touch stone of adequacy and reasonableness.
Section 3 (2), in my opinion, leaves no scope for reading down the provisions of section 937 3 (1).
The two sub sections together confer upon the competent authority, in the absence of proper rules, a wide and untrammeled discretion to interfere with the proposed order, whenever, in its opinion, the order, is based on grounds which do not appear to it either adequate or reasonable.
The form in which Section 3 (2) is couched is apt to mislead by creating an impression that its real object is to cast an obligation on the competent authority to approve a proposal under certain conditions.
Though the section provides that the competent authority "shall" approve the proposed order if it is satisfied that it is based on adequate and reasonable grounds, its plain and necessary implication is that it shall not approve the proposal unless it is so satisfied.
The confernment of such a power on an outside authority, the exercise of which is made to depend on purely subjective considerations arising out of the twin formula of adequacy and reasonableness, cannot but constitute an infringement of the right guaranteed by article 30 (1).
I find it difficult to save sections 3 (1) and 3 (2) by reading them down in the light of the objects and reasons of the impugned Act.
The object of the Act and the reasons that led to its passing are laudable but the Act, in its application to minority institutions, has to take care that it does not violate the fundamental right of the minorities under article 30(1).
Sections 3(1) and 3(2) are in my opinion unconstitutional in so far as they are made applicable to minority institutions since, in practice, these provisions are bound to interfere substantially with their right to administer institutions of their choice.
Similar provisions were held to be void in Very Rev. Mother Provincial, D. A. V. College and Lilly Kurian.
(supra) There is no distinction in principle between those provisions and the ones contained in sections 3 (1) and 3 (2).
For these reasons, I am in agreement with Brother Fazal Ali that Sections 3 (1) and 3 (2) of the impugned Act cannot be applied to minority institutions, since to do so will offend against Article 30 (1).
Section 3 (3) (a) provides that no teacher employed in any private educational institution shall be placed under suspension except when an inquiry into the gross misconduct of such teacher is contemplated.
Section 3 (3) (b) provides that no such suspension shall remain in force for more than a period of two months and if the inquiry is not completed within that period the teacher shall, without prejudice to the inquiry, be deemed to have been restored as 938 a teacher.
The proviso to the sub section confers upon the competent authority the power, for reasons to be recorded in writing, to extend the period of two months for a further period not exceeding two months if, in its opinion, the inquiry could not be completed within the initial period of two months for reasons directly attributable to the teacher.
With respect, I find it difficult to agree with Brother Fazal Ali that these provisions are violative of article 30 (1).
The question which one has to ask oneself is whether in the normal course of affairs, these provisions are likely to interfere with the freedom of minorities to administer and manage educational institutions of their choice.
It is undoubtedly true that no educational institution can function efficiently and effectively unless the teachers observe at least the commonly accepted norms of good behaviour.
Indisciplined teachers can hardly be expected to impress upon the students the value of discipline, which is a sine qua non of educational excellence.
They can cause incalculable harm not only to the cause of education but to the society at large by generating a wrong sense of values in the minds of young and impressionable students.
But discipline is not to be equated with dictatorial methods in the treatment of teachers.
The institutional code of discipline must therefore conform to acceptable norms of fairness and cannot be arbitrary or fanciful.
I do not think that in the name of discipline and in the purported exercise of the fundamental right of administration and management, any educational institution can be given the right to 'hire and fire ' its teachers.
After all, though the management may be left free to evolve administrative policies of an institution, educational instruction has to be imparted through the instrumentality of the teachers; and unless, they have a constant assurance of justice, security and fair play it will be impossible for them to give of their best which alone can enable the institution to attain the ideal of educational excellence.
Section 3 (3) (a) contains but an elementary guarantee of freedom from arbitrariness to the teachers.
The provision is regulatory in character since it neither denies to the management the right to proceed against an erring teacher nor indeed does it place an unreasonable restraint on its power to do so.
It assumes the right of the management to suspend a teacher but regulates that right by directing that a teacher shall not be suspended unless an inquiry into his conduct is contemplated and unless the inquiry is in respect of a charge of gross misconduct.
Fortunately, suspension of teachers is not the order of the day, for which reason I do not think that these restraints which bear a reasonable nexus with the attainment of educational excellence can be considered to be violative of the right given 939 by article 30 (1).
The limitation of the period of suspension initially to two months, which can in appropriate cases be extended by another two months, partakes of the same character as the provision contained in section 3 (3) (a).
In the generality of cases, a domestic inquiry against a teacher ought to be completed within a period of two months or say, within another two months.
A provision founded so patently on plain reason is difficult to construe as an invasion of the right to administer an institution, unless that right carried with it the right to maladminister.
I therefore agree with Brother Kailasam that sections 3 (3) (a) and 3 (3) (b) of the Act do not offend against the provisions of article 30 (1) and are valid.
Section 4 of the Act provides that any teacher employed in a private educational institution (a) who is dismissed, removed or reduced in rank or whose appointment is otherwise terminated; or (b) whose pay or allowances or any of whose conditions of service are altered or interpreted to his disadvantage, may prefer an appeal to such authority or officer as may be prescribed.
This provision in my opinion is too broadly worded to be sustained on the touchstone of the right conferred upon the minorities by article 30 (1).
In the first place, the section confers upon the Government the power to provide by rules that an appeal may lie to such authority or officer as it designates, regardless of the standing or status of that authority or officer.
Secondly, the appeal is evidently provided for on all questions of fact and law, thereby throwing open the order passed by the management to the unguided scrutiny and unlimited review of the appellate authority.
It would be doing no violence to the language of the section to interpret it to mean that, in the exercise of the appellate power, the prescribed authority or officer can substitute his own view for that of the management, even in cases in which two views are reasonably possible.
Lastly, it is strange, and perhaps an oversight may account for the lapse, that whereas a right of appeal is given to the aggrieved teacher against an order passed by the management, no corresponding right is conferred on the management against an order passed by the competent authority under section 3 (2) of the Act.
It may be recalled that by section 3 (1), no teacher can be dismissed, removed, etc.
except with the prior approval of the competent authority.
Section 3 (2) confers power on the competent authority to refuse to accord its approval if there are no adequate and reasonable ground for the proposal.
In the absence of the provision for an appeal against the order of the competent authority refusing to approve the action proposed by the management, the management is placed in a gravely disadvantageous position vis a vis 940 the teacher who is given the right of appeal by section 4.
By reason of these infirmities I agree with the conclusion of my learned Brothers that section 4 of the impugned Act is unconstitutional, as being violative of article 30 (1).
Section 5 is consequential upon section 4 and must fall with it.
Section 6 provides that where any retrenchment of a teacher is rendered necessary consequent on any order of the Government relating to education or course of instruction or to any other matter, such retrenchment may be effected with the prior approval of the competent authority.
With respect, I find myself unable to share the view of Brother Fazal Ali that retrenchment of teachers is a purely domestic affair of minority institutions and that the decisions of the management in the matter of retrenchment of teachers is beyond the scope of statutory interference by reason of article 30 (1).
Section 6 aims at affording a minimal guarantee of security of tenure to teachers by eschewing the passing of mala fide orders in the garb of retrenchment.
As I look at the section, I consider it to be implicit in its provisions that the limited jurisdiction which it confers upon the competent authority is to examine whether, in cases where the retrenchment it stated to have become necessary by reason of an order passed by the Government, it has in fact so become necessary.
It is a matter of common knowledge that Governmental orders relating to courses of instruction are used as a pretence for terminating the services of teachers.
The conferment of a guided and limited power on the competent authority for the purpose of finding out whether, in fact, a retrenchment has become necessary by reason of a Government order, cannot constitute an interference with the right of administration conferred by article 30 (1).
Section 6 is therefore valid.
I would, however, like to add that in the interests of equal justice, the legislature ought to provide for an appeal against the orders passed by the competent authority under section 6.
If and when the provision for an appeal is made, care must be taken to ensure that the appeal lies to an officer not below the prescribed rank.
Section 7 provides that the pay and allowances of a teacher shall be paid on or before such day of a month, in such manner and by or through such authority, officer or person, as may be prescribed.
I agree with my learned Brothers that this provision is regulatory in character and is, therefore, valid.
These are all the sections the validity of which was questioned in the Writ Petitions filed in the High Court.
It is therefore not neces 941 sary to consider whether the other provisions of the Act are valid or not.
I concur in the final order proposed by Brother Kailasam that we need not go into the merits of each of the Writ Petitions filed in the High Court.
Learned counsel appearing for the schools sought the decision of the High Court on the constitutional issue only.
He specifically asked the High Court not to decide each case on its merits.
That may, accordingly, be left to the High Court to decide in the light of the majority opinion rendered by us.
We have, by a majority, held that sections 3 (3) (a), 3 (3) (b), 6 and 7 are valid while sections 3 (1), 3 (2), 4 and 5 are invalid in their application to minority education institutions.
It must follow that such institutions cannot be proceeded against for violation of provisions which are not applicable to them.
In conclusion, all the Civil Appeals before us will go back to the High Court of Andhra Pradesh for final disposal on merits in the light of our decision.
There will be no order as to costs.
FAZAL ALI, J.: This batch of civil appeals by special leave is directed against the judgment of the Andhra Pradesh High Court before whom the appellants filed writ petitions under Article 226 of the Constitution challenging the constitutional validity of several sections of the Andhra Pradesh Recognised Private Educational Institutions Control Act, 1975, hereinafter referred to as the Act which contained 21 sections in five Chapters and was brought into force with effect from 5th October, 1974.
This Act was also applicable to 19 Educational Institutions situated in the State of Andhra Pradesh and the appellants being admittedly minority educational institutions within the meaning of Article 30 of the Constitution of India have challenged the vires various sections of the Act which we shall indicate later.
Some of the appeals have been filed by Christian Schools established by Roman Catholic Church and some by Christian Colleges established by the Christian community: The main grounds of challenge are that the provisions of the Act directly interfere with the internal management of the institutions and has completely curbed the constitutional freedom which has been guaranteed to them by Article 30(1) of the Constitution of India and being violative of Article 30(1) of the Constitution are ultra vires and therefore, wholly inapplicable to the appellants institutions.
It is now well settled by a long course of decisions of this Court that our Constitution which seeks to establish a secular State contains 942 sufficient checks and balances, safeguards and guarantees to protect the rights of the minorities, the establishment of educational institutions being one of them.
Article 46 which contains the constitutional directive to promote educational and economic interests of the weaker sections runs thus: "46.
Promotion of educational and economic interests of Scheduled Castes, Scheduled Tribes and other weaker sections: The State shall promote with special care the educational and economic interests of the weaker sections of the people, and, in particular, of the Scheduled Castes and the Scheduled Tribes, and shall protect them from social injustice and all forms of exploitation.
Article 30(1) confers a fundamental rights on the minorities to establish and administer educational institutions of their choice.
Article 30(2) enjoins on the State that in granting aid to the educational institutions it shall not discriminate against any educational institution on the ground that it is under the management of a minority, whether based on religion or language.
Thus, it would appear that Article 30(2) extends the guarantee contained in Article 30(1) even in the matter of receiving aid by the educational institution established by the minority community.
While adverting to this aspect of the matter this Court in Re: Kerala Education Bill, 1957 observed as follows: "Nevertheless, in determining the scope and ambit of fundamental rights relied on by or on behalf of any person or body the court may not entirely ignore these directive principles of State policy laid down in Part IV of the Constitution but should adopt the principle of harmonious construction and should attempt to give effect to both as much as possible".
Another important factor which has to be noticed is that the terms in which Article 30 is couched are absolute and unconditional as compared to Article 19 which is hedged in by reasonable restrictions which may be imposed by the State in public interest.
Thus, in a way the fundamental right contained in Article 30 is more effective and wider than the fundamental rights contained in Part III of the Constitution.
This, however, does not mean that the State is completely deprived of even the right to regulate the working of the minority institutions and to make rules in order to improve the standards 943 of education imparted therein so as to achieve excellence and efficiency in the educational standards of these institutions.
Regulatory measures cannot in any sense be regarded as placing restrictions or curbing the administrative autonomy of the institutions concerned.
But care must be taken by the State to see that in passing regulatory measures it does not transcend its limits so as to interfere with the internal administration of the management of the institutions concerned so as to violate the spirit and policy of Article 30.
The question of the scope and ambit of Article 30 of the Constitution of India was very exhaustively considered as far back as in 1959 in Re: Kerala Education Bill (Supra).
This case arose when the President of India called for the opinion of the Supreme Court on a Reference being made to it under Article 143(1) of the Constitution of India.
The Reference was heard by 7 Judges of this Court out of which 6 of them excepting Venkatarama Aiyar, J. gave a unanimous opinion regarding various clauses of the Bill.
The provisions of the Kerala Education Bill are not pari materia with the provisions of the Act with which we are concerned in this case, but this Court while delivering its opinion has laid down a number of salutary principles which throw a flood of light on the scope and interpretation of Article 30 of the Constitution of India.
I would, therefore, like to extract certain important passages from the opinion of the Court which dealt with the scope and application of Article 30.
I would, however, like to mention that some of the principles laid down by this Court in the aforesaid case may not apply to the present day conditions because there have been numerous changes in all aspects of life and even the concept of equality has undergone a revolutionary change.
But the observations made by this Court would afford a very valuable guideline to determine the question in controversy in the present case.
While indicating the width of the right conferred on the minority institutions by Article 30(1) this Court pointed out that the right to administer does not envisage a right to indulge in mal administration.
In this connection, Das, C.J. speaking for the majority observed as follows: "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 ad 944 minister 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".
Again, while sounding a note of caution to the Government that no step should be taken by it which amounts to the institution surrendering its personality merely because the institution is receiving aid from the State, said the Chief Justice thus: "No educational institution can in actual practice be carried on without aid from the State and if they will not get it unless they surrender their rights they will, by compulsion of financial necessities, be compelled to give up their rights under Article 30(1). . .
The State Legislatures cannot, it is clear, disregard or override those provisions merely by employing indirect methods of achieving exactly the same result.
Even the Legislature cannot do indirectly what it certainly cannot do directly".
Considering the provisions of the Kerala Education Bill particularly Clauses 6, 7, 9, 10, 11, 12, 14 and 15 the Court held that although these provisions constitute serious inroads on the right of administration of the institution and appear perilously near violating that right, yet in view of the peculiar facts of that case and having regard to the fact that clauses 9, 11 and 12 were designed to give protection and security to the ill paid teachers who are engaged in rendering service to the nation and protect the backward classes the Court as at present advised may treat these clauses as permissible regulations.
These observations were based on the peculiar circumstances of the provisions of the Education Bill and the objects which they sought to sub serve may not be applicable to the present case where the circumstances are quite different because admittedly most of the appellant institutions are not receiving any aid from the Government.
Even so, this Court found it impossible to support clauses 14 and 15 which according to them were totally destructive of the rights guaranteed by Article 30(1).
In this connection, the Court observed as follows: "But considering that those provisions are applicable to all educational institutions and that the impugned parts of clauses 9, 11 and 12 are designed to give protection and 945 security to the ill paid teachers who are engaged in rendering service to the nation and protect the backward classes, we are prepared, as at present advised, to treat those clauses 9, 11(2) and 12(4) as permissible regulations which the State may impose on the minorities as a condition for granting aid to their educational institutions.
We, however, find it impossible to support cls.
14 and 15 of the said Bill as mere regulations.
The provisions of those clauses may be totally destructive of the rights under Article 30(1)".
The Court had made it very clear that the observations extracted above applied to those categories of educational institutions which had sought not only recognition but also aid from the State.
In the instant case.
however, most of the appellant institutions have been established by mustering their own resources and have not been receiving substantial aid from the Government.
Similarly, the Court made it clear that although the minority institutions had no fundamental right to recognition by the State yet to deny recognition on terms which may amount to complete surrender of the management of the institution to the Government would be violative of Article 30(1) of the Constitution.
In this connection, Das, C.J. Observed as follows: "There is, no doubt, no such thing as fundamental right to recognition by the State but to deny recognition to the educational institutions except upon terms tantamount to the surrender of their Constitutional right of administration of the educational institutions of their choice is in truth and in effect to deprive them of their rights under Article 30(1).
We repeat that the legislative power is subject eto the fundamental rights and the legislature cannot indirectly take away or abridge the fundamental rights which it could not do directly and yet that will be the result if the said Bill containing any offending clause becomes law" Again dwelling on the special character of the minority institutions Das, C.J. speaking for the Court observed thus: "It is obvious that a minority community can effectively conserve its language, script or culture by and through educational institutions and, therefore, the right to establish and maintain educational institutions of its choice is a necessary concomitant to the right to conserve its distinctive language, script or culture and that is what is conferred on all minorities by Article 30(1) which has hereinbefore been quoted in full.
" 946 Describing the nature of the fundamental rights enshrined in Article 30 the Court observed as follows: "There can be no manner of doubt that our Constitution has guaranteed certain cherished rights of the minorities concerning their language, culture and religion.
These concessions must have been made to them for good and valid reasons.
Article 45, no doubt, requires the State to provide for free and compulsory education for all children, but there is nothing to prevent the State from discharging that solemn obligation through Government and aided schools and Article 45 does not require that obligation to be discharged at the expense of the minority communities.
So long as the Constitution stands as it is and is not altered, it is, we conceive, the duty of this Court to uphold the fundamental rights and thereby honour our sacred obligation to the minority communities who are of our own." Similarly, Venkatarama Aiyer, J. who gave a dissenting opinion agreed however with the scope of Article 30 as expounded by the majority opinion.
In this connection, the learned Judge observed as follows: "Article 30(1) belongs to the same category as articles 25, 26 and 29, and confers on minorities, religious or linguistic, the right to establish and maintain their own educational institutions without any interference or hindrance from the State.
The true intention of that Article is to equip minorities with a shield whereby they could defend themselves against attacks by majorities, religious or linguistic, and not to arm them with a sword whereby they could compel the majorities to grant concessions.
" Various shades and aspects of the matter were again considered by this Court in the case of Rev. Sidhajbhai Sabhai and Ors.
vs State of Bombay & Anr.
In this case it appears that the Government of Bombay issued an order directing the concerned institution which was controlled by the United Church of Northern India to reserve 80% of the seats in the training colleges run by the institution for teachers in non Government training colleges.
These teachers, were to be nominated by the Government.
Accordingly, the Educational Inspector ordered the Principal of the Training College not to admit without specific permission of the Education Department private students in excess of 20% of the total strength in each class.
The institution took 947 serious exception to this order of the Government as amounting to A direct interference in the management of the affairs of the institution.
The institution filed a writ petition under Article 32 of the Constitution before this Court which was heard by 6 Judges who after considering the facts of the case and the nature of the order passed by the Government observed as follows: "Unlike Article 19, the fundamental freedom under clause (1) of Article 30, 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(l) would to that extent be void.
This, how ever, is not to say that it is not open to the State to impose regulations upon the exercise of this right.
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".
This Court refused to uphold the order of the Government on the ground, that this was only a regulatory measure.
The Court pointed out that the regulation in order to be valid must satisfy a dual test, namely, (1) that it should be reasonable, (2) that it should be purely regulative of the educational character of the institution so as to make the institution an effective vehicle of education for the minority community.
This Court observed thus : "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 948 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 put a "teasing illusion", a promise of unreality.
Regulations which may lawfully be imposed either be 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.
" On an examination of the provisions of the impugned Act in the instant case, it is manifest that the Act contains provisions harsher and more offensive than the order passed by the Government of Bombay in the Bombay case (supra) referred to above.
In the case of Rev. Father W. Proost & Ors.
vs The State of Bihar and Ors.
Hidayathullah, C. J. speaking for the Court observed as follows: "In our opinion, the width of Article 30(1) cannot be cut down by introducing in it consideration on which Article 29(1) is based.
The latter article is a general protection 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.
The two Article create two separate rights, although it is possible that they may meet in a given case.
" The extent to which the State could interfere with the administrative autonomy of the minority institutions in view of the guarantee contained in Article 30(1) of the Constitution was again fully discussed and explained in the case of State of Kerala etc.
vs Very Rev. Mother Provincial etc.
In this case the Court was considering the 949 constitutionality of certain provisions of the Kerala University Act, 1969 which was passed with a view to reorganise the University of Kerala and establish a teaching, residential and affiliating University of private Colleges including institutions founded by the minority community.
The Court was concerned only with some of the pro visions of the aforesaid Act and struck down the offending provisions as amounting to a blatant interference with the rights guaranteed to the minorities under Article 30(1) of the Constitution.
Before analysing the facts of that case, I might indicate that in the instant case it is not disputed by the parties that all the appellants are minority institutions and had a governing body of their own.
It is also not disputed that apart from the Christians others were also admitted to the institutions and received education.
Even some of the members of the staff were also non Christians.
In the background of these facts.
I have to see how far the decision of this Court referred to above applies to the present appeals.
While explaining the scope and ambit of management or administration Hidayatullah, C.J. speaking for the Court observe as follows: "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 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 the allied matters cannot be denied.
The minority institutions cannot be allowed to fall below the standards of excellence expected of educational institutions, of under the guise of exclusive right of management, to decline to 950 follow the general pattern.
While the management must be left to them, they may be compelled to keep in step with others".
These observations, therefore, establish three important tests which would determine whether or not the action of the Government amounts to interference with the management of the institution (1) In order that the management of the institution is free from outside control, the founders must be permitted to mould the institution as they think fit; (2) no part of the management could be taken away by the Government and vested in another body without an encroachment upon the guaranteed right enshrined in Article 30(1) of the Constitution; (3) There is however an exception to.
this general rule which is that the Government or the University can adopt regulatory measures in order to improve the educational standards which concern the body politic and are dictated by considerations of the advancement of the country and its people, so that the managing institution may not under the guise of autonomy or exclusive right of management be allowed to fall below the standard of excellence that is required of educational institutions.
Having laid down these tests the Court proceeded to analyse some of the offending sections of the Kerala Act and came to the conclusion that according to some of the sections the governing body set up by education society was to consist of 11 members and the Managing Council of 21 members.
11 members of the government body were (i) the principal of the private college, (ii) the manager of the private college, (iii) a person nominated by the University in accordance with the provisions in that behalf contained in the statute (iv) a person nominated by the Government and (v) a person elected in accordance with the procedure laid down on the Act.
Sub section (2) had the effect of making these bodies into bodies corporated having perpetual succession and a common seal.
Sub section (6) laid down the powers and functions of the governing body, the removal of members thereof and the procedure to be followed by it, including the delegation of its powers to persons prescribed by the Statutes.
Sub section (7) laid down that the decision in either of the two bodies shall be taken at the meetings on the basis of simple majority of the members present and voting.
Thus, if these provisions were to apply to the minority institutions, it is manifest that it would amount to a direct interference in the internal management of the institution and would tantamount to the institution surrendering its educational personality.
In other words, the governing body appointed by the University would replace the governing body of the founders of the institutions and thus the founders 951 would have no right to administer the institution in any way they like.
A Adverting to this aspect of the matter Hidayatullah, C.J. Observed as follows : "These sections were partly declared ultra vires of Article 30(1) by the High Court as they took away from the founders the right to administer their own institution.
It is obvious that after the election of the governing body or the managing council the founders or even the community has no hand in the administration.
The two bodies are vested with the complete administration of the institutions.
These bodies have a legal personality distinct from the educational agency or the corporate management.
They are not answer able to the founders in the matter of administration The Constitution contemplates the administration to be in the hands of the particular community.
However desirable it might be to associate nominated members of the kind mentioned in sections 48 and 49 with other members , of the governing body or the managing council nominees, it is obvious that their voice must play a considerable part in management Situations might be conceived when they may have a preponderating voice.
In any event, the administration goes to a distinct corporate body which is in no way answerable to the educational agency or the corporate management.
The founders have no say in the selection of the members nominated by them.
It is, therefore, clear that by the force of sub sections (2), (4) and (6) of sections 45 and 49 the minority community loses the right to administer the institution it has founded.
Sub section (S) also compels the governing body or the managing council to follow the mandates of the University in the administration of the institution.
" Their Lordships then proceeded to consider the vires of sub sections (2) and (4) of section 56 which laid down the conditions of service of the teachers of private colleges.
Sub section (2) provided that no teacher of a private college could be dismissed, removed or reduced in rank by the governing body or managing council without the previous sanction of the Vice Chancellor or placed under suspension by the governing body or managing council for a continuous period exceeding fifteen days without such previous sanction.
Further sub section (4) provided that a teacher against whom disciplinary action is taken shall have a right of appeal to the Syndicate, and the Syndicate shall have, power to order reinstatement of the teacher in cases of wrongful removal or dismissal and to order such other reme 952 dial measures as it deems fit, and the governing body or managing council, as the case may be, shall comply with the order.
It is thus obvious that in view of the provisions of sub sections (2) and (4) of section 56 the managing body had no discretion in the matter and the right of the management was completely taken away and vested in some other body.
In the instant case, although the Act does not at all provide any rules or regulations by which the conditions of service of the teachers are to be governed yet it prohibits dismissal or removal of teachers without prior sanction of a competent authority to be declared by the Government.
Similarly, it provides for an appeal to an appellate authority without laying down any guidelines and no right of appeal is given to the management.
These provisions are contained in section 3, sub sections (2), (3) and (4) and section 4.
This Court also considered the effect of section 58 of the Kerala Act by which a teacher of a college who was elected as a member of the Legislative Assembly or Parliament could not be debarred on his election, but would be allowed to continue.
Upholding the decision of the High Court and commenting on the constitutionality of section 56 sub sections (2) and (4) and section 58 this Court observed as follows: "These provisions clearly take away the disciplinary action from the governing body and the managing council and confer it upon the University." "This enables political parties to come into the picture of the administration of minority institutions which may not like this interference.
When this is coupled with the choice of nominated members left to Government and the University by sub s.1(d) of sections 48 and 49 it is clear that there is much room for interference by persons other than those in whom the founding community would have confidence." In the end while making it clear that there was no element of malafides in the Act passed by the Legislature, the provisions of the Act unfortunately robbed the founders of their right of administration and were, therefore, hit by Article 30(1) of the Constitution.
In this connection, the Court observed as follows: "We have no doubt that the provisions of the Act were made bona fide and in the interest of education but unfortunately they do affect the administration of these institutions and rob the founders of that right which the Constitution desires should be theirs.
The provisions, even if salutary, cannot stand in the face of the constitutional guarantees".
953 In the case of D.A.V. College etc.
vs State of Punjab & Ors this Court was considering the provisions of Chapter V Clauses 2(1)(a), 17 and 18 read with clauses 1(2) and (3).
Clause 2(1) (a) provided that a college applying for admission to the privileges of the University had to send a letter of application to the Registrar and would have to satisfy the Senate (1) that the College shall have a regularly constituted governing body consisting of not more than 20 persons approved by the Senate (2) that among those persons there should be two representatives of the University and the Principal of the College Exofficio.
Clause 17 provided that any staff initially appointed shall be approved by the Vice Chancellor and any subsequent changes made must be reported to the University for approval.
It was also provided that in the case of training institutions the teacher pupil ratio shall not be less than 1:12.
The constitutional validity of these provisions was challenged before this Court on the ground that it violated Article 30(1) of the Constitution because the College was a minority institution being a College established by the Arya Samaj.
On a consideration of these provisions, this Court upheld the contention of the appellants and observed thus: "It will be observed that under clause 1(3) if the petitioners do not comply with the requirements under 1 (a) their affiliation is liable to be withdrawn.
Similarly it is stated that clause 17 also interferes with the petitioners right to administer their College as the appointment of all the staff has to be approved by the Vice Chancellor and that subsequent changes will also have to be reported to the University for Vice Chancellor 's approval.
We have already held that the Petitioners institutions are established by a religious minority and therefore under Article 30 this minority has right to administer their educational institutions according to their choice.
Clause 2(a) (a) and 17 of Chapter in V our view certainly interfere with that right.
" The matter was again fully considered by this Court by a Bench consisting of 9 Judges in all its aspects.
In the case of The Ahmedabad St. Xaviers College Society & Anr.
vs State of Gujarat & Anr and this is the leading case on the subject.
This case has been relied on by counsel for both the parties in support of their respective Contentions.
In this case it appears that certain provisions of the Gujarat University Act 1949 were challenged.
Section 5 of the Act provided 954 that no educational institution situated within the University could be associated in any way with or seek admission to any privilege of any other University save and except with the sanction of the State Government.
Section 33A(1)(a) of the Act provided that every college other than a Government college or a college maintained by the Government shall be under the management of a governing body which includes among others, the Principal of the College, a representative of the University nominated by the Vice Chancellor and (ii) in the case of selection of a member of the teaching staff of the College a selection committee would be constituted consisting of the Principal and a representative of the University nominated by the Vice Chancellor.
Subsection (3) of the section provided that the provisions of section 33A (1) shall be deemed to be a condition of affiliation of every College referred to in that sub section.
In other words, according to this provision, even the Colleges which were minority institutions would fall within the mischief of the section.
Section 39 provided that within the University area all post graduate instruction, teaching and training shall be conducted by the University or by such affiliated College or institution and in such subjects as may be prescribed by statutes.
Section 40(1) enacted that Court of the University may determine that all instructions, teaching and training in the courses of studies in respect of which the University was to hold examination shall be conducted by the University and shall be imparted by the teachers of the University.
Section 41(1) stated that all Colleges within the University area which were admitted to the privilege of the University under section 5(3) and all Colleges within the said area which may hereafter be affiliated to the University shall be constituent colleges of the University, and their relations with the University would be governed by statutes made by the University in that behalf.
As regards the conditions of service of the teachers appointed by the University section 51A(a) (b) enacts that no member of the teaching or 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 to be approved by the Vice Chancellor or any other officer of the University authorised by the Vice Chancellor in this behalf.
Section 52A(1) provided that any dispute between the governing body and any member of the teaching staff shall on a request of the governing body or of the member concerned be referred to a Tribunal or arbitration consisting of one member nominated by the governing body of the college, one member nominated by the member concerned and an umpire appointed by the Vice Chancellor.
In view of the provisions referred to above, 955 the question that felI for consideration in that case was whether these k provisions interfere with the internal management of the minority institutions so as to compel them to surrender all their administrative powers to the University or the Vice Chancellor or the officers nominated by the Vice chancellor.
There can be no doubt that if these provisions are construed against the background of the objective of the Act the idea was not to leave any controlling voice either in the courses of studies or in the matter of disciplinary action against the staff and the teacher in the management of the institution but to take over the entire management by the University authorities giving nominal representation to the management of the institution.
Before we analyse the decision in St. Xaviers case (supra) we must note that as far back as 1959 in Re Kerala education Bill this Court had clearly pointed out that while the minority institution had no constitutional right to be affiliated to any college or University the right to be affiliated flowed from the language of Article 30(1) of the Constitution and the University concerned could not either refuse affiliation or impose such conditions which may result in complete surrendering of the management of the minority institution.
Thus, the central question to be decided in this case was whether by virtue of the provisions of the Act set out above, Article 30(l) had been violated and if so to what extent.
So far as the question of affiliation was concerned the entire court held that although there was no fundamental right to affiliation but recognition or affiliation was necessary for meaningful exercise of the right to establish and administer educational institution conferred on the minority institutions under Article 30(l) of the Constitution.
In this connection, the Court observed as follows: "The consistent view of this Court has been that there is no fundamental right of a minority institution of affiliation.
An explanation has been put upon that statement of law.
It is that affiliation must be a real and meaningful exercise for minority institutions in the matter of imparting general secular education.
Any law which provides for affiliation on terms which will involve abridgement of the right of linguistic and religious minorities to administer and establish educational institutions of their choice will offend Article 30(1).
The educational institutions set up by minorities will be robbed of their utility if boys and girls cannot be trained in such institutions for University degrees.
Minorities will virtually lose their right to equip their children for ordinary careers if affiliation be on terms which wouId 956 make them surrender and lose their rights to establish and administer educational institutions of their choice under Article 30. . . . .
The establishment of a minority institution is not only ineffective but also unreal unless such institution is affiliated to a University for the purpose of conferment of degrees n on students".
Relying on the previous decision in the case of State of Kerala etc.
vs Very Rev. Mother Provincial etc.
(supra) Ray, C.J. reiterated the principles laid down by the previous case and observed as follows: "when minority applies for affiliation, it agrees to follow the uniform courses of study.
Affiliation is regulating the educational character and content of the minority institutions.
These regulations are not only reasonable in the interest of general secular education but also conduce to.
the improvement in the stature and strength of the minority institutions. . . . . . . . . . .
Affiliation mainly pertains to the academic and educational character of the institution.
Therefore, measures which will regulate the courses of study, the qualifications and appointment of teachers, the conditions of employment of teachers, the health and hygiene of students, facilities for libraries and laboratories are all comprised in matters germane to affiliation of minority institutions.
These regulatory measures for affiliation are for uniformity, efficiency and excellence in educational courses and do not violate any fundamental right of the minority institutions under Article 30".
Thus, to a limited extent affiliation of the minority institution to the University or Colleges concerned was held to be a regulatory measures provided it was aimed at improving the educational standards and laying down the conditions of employment of the teachers.
This Court repeated that the minority institutions have the right to administer the institution and shorn of some checks and balances in the shape of regulatory measures the right to administer cannot be tampered with.
In this connection, Ray, C.J. Observed as follows: "The minority institutions have the right to administer institutions.
The right implies the obligation and duty of the minority institutions to render the very best to the students.
In the rights of administration, checks and balances 957 in the shape of regulatory measures are required to ensure the appointment of good teachers and their conditions of service.
The right to administer is to be tempered with regulatory measures to facilitate smooth administration.
The best administration will reveal no trace or colour of minority.
A minority institution should shine in exemplary eclectism in the administration of the institution. . .
Regulations which will serve the interest of the students, regulations which will serve the interests of the teachers are of paramount importance in good administration.
Regulations in the interest of efficiency of teachers, discipline and fairness in administration are necessary for pre serving harmony among affiliated institutions".
C As regards the provision of the Act concerned by which the minority institution became a constituent College this was expressly struck down by this Court where Ray, C.J. speaking for the Court observed as follows: "once an affiliated college becomes a constituent college within the meaning of section 41 of the Act pursuant to a declaration under section 40 of the Act it becomes integrated to the university.
A constituent college does not retain its former individual character any longer.
The minority character of the college is lost.
Minority institutions become part and parcel of the university.
The result is that section 40 of the Act cannot have any compulsory application to minority institutions because it will take away their fundamental right to administer the educational institutions of their choice".
Explaining what the concomitants of an autonomy in administration meant Ray, C.J. observed as follows: "Autonomy in administration means right to administer effectively and to manage and conduct the affairs of the institutions.
The distinction is between a restriction on the right of administration and a regulation prescribing the manner of administration.
The right of administration is day to day administration.
The choice in the personnel of management is a part of the administration.
The university will always have a right to see that there is no maladministration.
If there is maladministration, the university will take steps to cure the same.
There may be control and check on administration in order to find out whether the 958 minority institutions are engaged in activities which are not conducive to the interest of the minority or to the requirements of the teachers and the students . . . .
The provisions contained in section 33A(1) (a) of the Act have the effect of displacing the management and entrusting it to a different agency.
The autonomy in administration is lost.
New elements in the shape of representatives of . different type are brought in.
The calm waters of an institution will not only be disturbed but also mixed.
These provisions in section 33A(1)(a) cannot therefore apply to minority institution".
It follows from what had been held in the aforesaid case was that there should be no interference in the right of day to day administration of the institution of in the choice of the personality of the managing committee or governing body of the institution.
This Court struck down section 33A(1) (a) of the Gujarat Act on the ground that the management of the college was completely displaced and was substituted by the university authorities.
In other words, the position appears to be that although the university to which the minority institution was affiliated may exercise supervision in so far as the syllabi or the courses of studies are concerned, it cannot be allowed to be associated with the managing committee or the governing body of the institution so as to have a controlling voice in the matters at issue and thereby destroy the very administrative autonomy of the minority institution.
This appears to be the main reason why Ray, C.J. was of the opinion that section 33A(1)(a) was violative of Article 30(1), and, therefore, not applicable to the minority institutions.
The Court then dealt with the provisions of sections 51A and 52A of the Gujarat Act.
Under section 51A no member of the teaching, other academic and non teaching staff of an affiliated college should be dismissed, removed or reduced in rank except after an enquiry in which he has been informed of the charges and given a reasonable opportunity of being heard and until he had been given a reasonable opportunity of making a representation on any such penalty proposed to be inflicted on him and the penalty to be inflicted on him was to be approved by the Vice Chancellor or any officer o ' the University authorised by him.
This Court held that this is a blanket power given to the Vice Chancellor without any guidance, and observed as follows: "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 f ' 959 arbitrary power on the Vice Chancellor to take away the A right of administration of the minority institutions, Section 51A of the Act cannot, therefore, apply to minority institutions.
" Dealing with the provisions contained in Section 52A of the Gujarat Act which contemplated a reference of any dispute between the governing body and any member of the teaching or academic and non teaching staff of an affiliated college which was connected with the conditions of service of such member to a. Tribunal of Arbitration consisting of one member nominated by the governing body of the college, one member nominated by the member concerned and an Umpire appointed by the Vice Chancellor, the learned Chief Justice was of the opinion that the introduction of such an arbitration to a Tribunal would start a spate of fruitless litigation and was likely to impair the excellence and efficiency maintained by the educational institution concerned.
In this connection, the learned Chief Justice observed as follows: D "These references to arbitration will introduce an area of litigious controversy inside the educational institution.
The atmosphere of the institution will be vitiated by such proceedings.
The governing body has its own disciplinary authority.
The governing body has its domestic jurisdiction.
This jurisdiction will be displaced.
A new jurisdiction will be created in administration.
The provisions contained in section 52A of the Act cannot, therefore, apply to minority institution." Jaganmohan Reddy, J. agreeing with the majority judgment delivered by the Hon 'ble Chief Justice endorsed his conclusions regarding the constitutional validity to sections 40, 41, 33A(1) (a), 33A(1) (b), 51A and 52A of the Act and observed thus: "We agree with the Judgment of Hon 'ble the Chief Justice just pronounced and with his conclusions that sections 40, 41, 33A(1) (a), 33A(1) (b), 51A and 52A of the Act violate the fundamental rights of minorities and cannot, therefore, apply to the institutions established and administered by them." Dwelling on the importance of the fundamental right enshrined in Article 30, the learned Judge held that the right under Article 30 7 138 SCT/80 960 could not be exercised in vacuo, and in this connection observed as follows: .
"The right under Article 30 cannot be exercised m vacuo.
Nor would it be right to refer to affiliation or recognition as privileges granted by the State.
In a democratic system of Government with emphasis on education and enlightenment of its citizens, there must be elements which give protection to them.
The meaningful exercise of the right under Article 30(l) would and must necessarily involve recognition of the secular education imparted by the minority institutions without which the right will be a mere husk.
This Court has so far consistently struck down all attempts to make affiliation or recognition on terms tentamount to surrender of its rights under Article 30(l) as 1, abridging or taking away those rights.
Again as without affiliation there can be no meaningful exercise of the right under Article 30(l), the affiliation to be given should be consistent with that right, nor can it indirectly try to achieve what it cannot directly do.
" Similar view was taken by Khanna, J. who also held that management of a minority institution should be kept free from governmental or other interference because the wonds "of their choice" appearing in Article 30 have special significance and would actually lose their value and utility if too much interference or unnecessary curbs are placed in the administration of the affairs of the minority institution.
The learned Judge observed thus: "Administration connotes management of the affairs of the institution.
The 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 interest of the community in general and the institution in particular will be best served.
The words "of their choice" qualify the educational institutions established and administered by the minorities need not be of some particular class; the minorities have the right and freedom to establish and administer such educational institutions as they choose".
Similarly, explaining the scope and ambit of Articles 29 and 30 the learned Judge observed as follows: "The broad approach has been to see that nothing is done to impair the rights of the minorities in the matter of their 961 educational institutions and that the width and scope of A the provisions of the Constitution dealing with those rights are not circumscribed.
The principle which can be discerned in the various decisions of this Court is that the Catholic approach which led to the drafting of the provisions relating to minority rights should not be set at naught by narrow judicial interpretation.
The minorities are as much children of the soil as the majority and the approach has been to ensure that nothing should be done as naught deprive the minorities of a sense of belonging, of a feeling of security, of a consciousness of equality and of the awareness that the conservation of their religion, culture! language and script as also the protection of their educational institutions is a fundamental right enshrined in the Constitution.
The same generous, liberal and sympathetic approach should weigh with the courts in construing Articles 29 and 30 as marked the deliberations of the Constitution makers in drafting these Articles and making them part of the fundamental rights".
The learned Judge held that although it was permissible for the authority concerned to prescribe regulations but such regulations should not impinge upon the right conferred on the minority institutions under Article 30(l).
A just balance had to be struck between the two objectives, namely, passing of regulatory measures and preserving the fundamental rights of the minority institutions.
The learned Judge observed as follows: "It is, therefore, permissible for the authority concerned to prescribe regulations which must be complied with before an institution can seek and retain affiliation and recognition.
Question can arise whether there is any limitation on the prescription of regulations for minority educational institutions.
So far as this aspect is concerned, the authority prescribing the regulations must bear in mind that the Constitution has guaranteed a fundamental right to the minorities for establishing and administering their educational institutions.
Regulations made by the authority concerned should not impinge upon that right.
Balance has, therefore, to be kept between the two objectives, that of ensuring the standard of excellence of the institution and that of preserving the right of the minorities to establish and administer their educational institutions.
Regula 962 tions which embrance and reconcile the two objectives can be considered to be reasonable." The learned Judge further held that any law which interferes with the minorities choice of a governing body would be violative of Article 30(1 ) and observed thus : "In the light of the above principles, it can be stated that a law which interferes with the minorities choice of a governing body or management council would be violative of the right guaranteed by Article 30(l).
" Criticising the constitutional validity of Section 52A of the Gujarat Act Khanna, J. shared the view taken by Ray, C.J. which has been referred to above.
The learned Judge observed as follows: "The provisions of section 52A would thus not as a spoke in the wheel of effective administration o f an educational institution.
It may also be stated that there is nothing objectionable to selecting the method of arbitration for settling major disputes connected with conditions of service of staff of educational institutions.
It may indeed be a desideratum.
What is objectionable, apart from what has been mentioned above, is the giving of the power to the Vice Chancellor to nominate the Umpire.
Normally in such disputes there would be hardly any agreement between the arbitrator nominated by the governing body of the institution and the one nominated by the concerned member of the staff.
The result would be that the power would vest for all intents and purposes in the nominee of the Vice Chancellor to decide all disputes between the governing body and the member of the staff connected with the latter conditions of service.
The governing body would thus be hardly in a position to take any effective disciplinary action against a member of the staff.
This must cause an inroad in the right of the governing body to administer the institution.
Section 52A should, therefore, be held to be violative of Article 30(l) so far as minority educational institutions are concerned.
" Similarly, while striking down sections 40 and 41 of the Gujarat Act, the learned Judge found that the affiliated colleges would become constituent colleges as a result of the provisions of these sections and held that these provisions could not apply to the minority institutions.
In this connection, Khanna, J. Observed as follows: "A provision which makes it imperative that teaching in , under graduate courses can be conducted only by the Uni 963 versity and can be imparted only by the teachers of the University plainly violates the rights of minorities to establish and administer their educational institution.
Such .
a provision must consequently be held qua minority institutions to result in contravention of Article 30(1).
I would, therefore, strike down section 40 so far as minority educational institutions are concerned as being violative of Article.
30(1)".
Mathew, J. while striking down the constitutional validity of section 33A(1) of the Gujarat Act observed as follows: "The heart of the matter is that no educational institution established by a religious or linguistic minority can claim total immunity from regulations by the legislature or the university if it wants affiliation or recognition; but the character of the permissible regulations must depend upon their purpose.
In every case, when the reasonableness of a regulation comes up for consideration before the court, the question to be asked and answered is whether the regulation is calculated to subserve or will in effect sub serve the purpose of recognition or affiliation, namely, the excellence of the institution as a vehicle for general secular education to the minority community and to other persons who report to it.
The question whether a regulation is in li: the general interest of the public has no relevance, if it does not advance the excellence of the institution as a vehicle for general secular education as, ex hypothesi, the only permissible regulations are those which secure the effectiveness of the purpose of the facility, namely, the excellence of the educational institutions in respect of their educational standards.
" Similarly, the learned Judge took strong exception to the provisions of section 33A which required that the college should have a governing body which should include persons other than those who are members of the society of Jesus, struck provisions of section 33A and observed as follows: "We think that the provisions of sub sections (1) (a) and (l)(b) of section 33A abridge the right of the religious minority to administer educational institutions of their choice.
The requirement that the college should have a governing body which shall include persons other than those who are members of the governing body of the society of Jesus 964 would take away the management of the college from the governing body constituted by the Society of Jesus and vest it in a different body.
The right to administer the educational institution established by a religious minority is vested in it.
It is in the governing body of the Society of Jesus that the religious minority which established the college has vested the right to administer the same.
The requirement that the college should have a governing body including persons other than those who constitute the governing body of the Society of Jesus has the effect of divesting that body of its exclusive right to manage the educational institution The learned Judge further pointed out that under the guise of preventing mal administration the right of the governing body to manage the affairs of the minority institution should not be take away and in the same token observed as follows: "Under the guise of preventing mal administration, the right of the governing body of the college constituted by the religious minority to administer the institution cannot be taken away.
The effect of the provision is that the religious minority virtually loses its right to administer the institution it has founded.
"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 according to their way of thinking and in accordance with their idea 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." Similarly, analysing various provisions of the Gujarat Act like sections 51A(1) (a) and 51A(l) (b) etc.
the learned Judge observed as follows: "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 965 that for terminating the services of a teacher after all 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 guide lines are provided by the legislature 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.
" Beg, J. speaking in the same strain observed as follows : "It is true that, if the object of an enactment is to compel a minority institution even indirectly, to give up the exercise of its fundamental rights, the provisions which have this effect will be void or inoperative against the minority institution.
The price of affiliation cannot be a total abandonment of the right to establish and administer a minority institution conferred by Article 30(1) of the Constitution.
This aspect of the matter, therefore, raises the question whether any of the provisions of the Act are intended to have that effect upon a minority institution.
Even if that intention is not manifest from the express terms of statutory provisions, the provisions may be vitiated if that is their necessary consequence or effect.
" Even Dwivedi, J. who had sounded a discorded note held that so far as section 33A(1) (a) was concerned it was obnoxious to Article 30(1) of the Constitution.
In the case of Gandhi Faizeam College Shahajahanpur vs University of Agra and Anr.
the majority judgment consisting of V. R. Krishna Iyer and A.C. Gupta, JJ.
Observed as follows: "What is the core of the restriction clamped down by Statute 14 A? What is the conscience and tongue of Article 30 ? If the former is incongruous with the latter, it 966 withers as void; otherwise, it prevails and binds.
That is the crux of the controversy.
" "The thrust of the case is that real regulations are desirable, necessary and constitutional but, when they operate on the 'administration ' part of the right, must be confined to chiselling into shape, not cutting down out of shape, the individual personality of the minority." Mathew, J. who gave a dissenting opinion and whose opinion follows the principles laid down by the Court in St. Xavier 's case (supra) observed as follows: "The determination of the composition of the body to administer the educational institution established by a religious minority must be left to the minority as that is the core of the right to administer.
Regulations to prevent maladministration by that body are permissible.
As the right to determine the composition of the body which will and minister the educational institution is the very essence of the right to administer guaranteed to the religious or linguistic minority under Article 30(1), any interference in that area by an outside authority cannot be anything but an abridgement of that right.
The religious or linguistic minority must be given the freedom to constitute the agency through which it proposes to administer the educational institution established by it as that is what Article 30(l) guarantees.
The right to shape its creation is one thing: the right to regulate the manner in which it would function after it has come into being is another.
Regulations arc permissible to prevent maladministration but they can only relate to the manner of administration after the body which is to administer has come into being.
" The entire case law as fully reviewed by this Court recently in the case of Lilly Kurian vs Sr.
Lewin & ors.
In this case, Sen, J. speaking for the court and after a deep dichotomy and adroit analysis of St. Xavier 's case (supra) and the case which preceded that case summed up the law thus: "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 967 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 ser vices of any members 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." "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 arc 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 (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. Xavier College 's case (supra) such a blanket power directly interferes with the disciplinary control of the managing body of a minority educational institution over its teachers".
Thus, on an exhaustive analysis of the authorities of this Court and the views taken by it from time to time during the last two decades on various aspects, shades and colours, built in safeguards, guarantees, scope and ambit of the fundamental right enshrined in Articles 30(1), the principles and propositions that emerged may be summarised as follows: 1.
That from the very language of Article 30(1) it is clear that it enshrines a fundamental right of the 968 minority institutions to manage and administer their educational institutions which is completely in consonance with the secular nature of our democracy and the Directives contained in the Constitution itself.
That although unlike Article 19 the right conferred on the minorities is absolute, unfettered and unconditional but this does not mean that this right gives a free licence for maladministration so as to defeat the avowed object of the Article, namely, to advance excellence and perfection in the field of education.
While the State or any other statutory authority has no right to interfere with the internal administration or management of the minority institution, the State can certainly take regulatory measures to promote the efficiency and excellence of educational standards and issue guidelines for the purpose of ensuring the security of the services of the teachers or other employees of the institution.
At the same time, however, the State or any University authority cannot under the cover or garb of adopting regulatory measures tend to destroy the administrative autonomy of the institution or start interfering willy nilly with the core of the management of the institution so as to render the right of the administration of the management of the institution concerned nugatory or illusory.
Such a blatant interference is clearly violative of Article 30(1) and would be wholly inapplicable to the institution concerned.
Although Article 30 does not speak of the conditions under which the minority educational institution can be affiliated to a college or University yet the section by its very nature implies that where an affiliation is asked for, the University concerned cannot refuse the same without sufficient reason or try to impose such conditions as would completely destroy the autono mous administration of the educational institution.
The induction of an outside authority however high it may be either directly or through its nominees in the governing body or the managing committee of the minority institution to conduct the affairs of the institution would be completely destructive of the fundamental right guaranteed by Article 30(1) of the 969 Constitution and would reduce the management to a helpless entity having no real say in the matter and thus destroy the very personality and individuality of the institution which is fully protected by Article 30 of the Constitution.
Perhaps there may not be any serious objection to the introduction of high authorities like the Vice Chancellor or his nominee in the administration particularly that part of it which deals with the conditions of service of the teachers yet such authorities should not be thrust so as to have a controlling voice in the matter and thus over shadow the powers of the managing committee.
Where educational institutions have set up a particular governing body or the managing committee in which all the powers vest, it is desirable that such powers should not be curbed or taken away unless the Government is satisfied that these powers are grossly abused and if allowed to continue may reduce me efficacy or the usefulness of the institution.
It is, therefore, open to the Government or the University to frame rules and regulations governing the conditions of service of teachers in order to secure their tenure of service and to appoint a high authority armed with sufficient guidance to see that the said rules are not violated or the members of the staff are not arbitrarily treated or innocently victimised.
In such a case the purpose is not to interfere with the internal administration or autonomy of the institution, but it is merely to improve the excellence and efficiency of the education because a really good education can be received only If the tone and temper of the teachers are so framed as tc make them teach the students with devotion and dedication and put them above all controversy.
But while setting up such an authority care must be taken to see that the said authority is not given blanket and uncanalised and arbitrary powers so as to act at their own sweet will ignoring the very spirit and objective of the institution.
It would be better if the authority concerned associates the members of the governing body or its nominee in its deliberation so as to instil confidence in the founders of the institution or the committees constituted by them.
970 8.
Where a minority institution is affiliated to a University the fact that it is enjoined to adopt the courses of study or the syllabi or the nature of books prescribed and tho holding of examination to test the ability of the students of the Institution concerned does not violate the freedom contained in article 30 of the Constitution.
While there could be no objection in setting up a high authority to supervise the teaching staff so as to keep a strict vigilance on their work and to ensure the security of tenure for them, but the authority concerned must be provided with proper guidelines under the restricted field which they have to cover.
Before coming to ally decision which may be binding on the managing committee, the Head of the institution or the senior members of the managing committee must be associated and they should be allowed to have a positive say in the matter.
In some cases the outside authorities enjoy absolute powers in taking decisions regarding the minority institutions without hearing them and these orders are binding on the institution.
Such a course of action is not constitutionally permissible so far as minority institution is concerned because it directly interferes with the administrative autonomy of the institution.
A provision for an appeal or revision against the order of the authority by the aggrieved member of the staff alone or the setting up of an Arbitration Tribunal is also not permissible because Ray, C.J. pointed out in St. Xaviers case (supra) that such a course of action introduces an arena of litigation and would involve the institution in unending litigation, thus imparing educational efficiency of the institution and create a new field for the teachers and thus draw them out of purely educational atmosphere of the minority institutions for which they had been established.
In other words, nothing should be done which would seek to run counter to the intentions of the founders of such institutions.
These are some of the important principles that have been clearly laid down by the Supreme Court in the cases discussed above.
I shall now endeavour to examine the provisions of the impugned Act in the light of the principles enunciated above.
I shall point out hereafter that some of the provisions of the Act are so harsh and arbitrary and 971 confer uncanalised powers on some of the authorities appointed under the Act so as to amount to a direct and thoughtless interference with the management of the institution Coming to the provisions of the Act one significant feature may be noticed here.
Unlike other Acts passed by some of the States the impugned Act, while it takes within its sweep even the minority institutions, does not at all lay down any rules, regulations governing the conditions of service of the teachers of the institution, nor does it provide any guidelines on the basis of which the rules could be made, nor does it contain a mandate directing the minority institution to frame proper rules and conditions of service of its teachers.
Mr. Lal Narayan Sinha appearing for the appellants submitted that this is a most serious lacuna in the Act which makes it completely violative of Article 30 of the Constitution and other provisions read in the light of this lacuna also lose their legal sanctity.
Section 1(3) provides that the Act applies to all private educational institutions that is to say including minority institutions.
In the instant case all the appellants are institutions established by the Christian community.
Sub section (4) of section 1 says that the Act shall be deemed to have come into force on the 5th October, 1974.
Sections 2 is the definition clause which defines various terms used in the Act and it is not germane for our purpose to deal with the various definitions which is more or less a formality.
Learned counsel appearing for the appellants has challenged the constitutional validity of sections 3, 4, 5, 6, 7, 10, 11, 12, 16 and 17 of the Act.
Section 3(1) of the Act may be extracted thus: "3(1) Subject to any rule that may be made in this behalf, no teacher employed in any private educational institution shall be dismissed removed or reduced in rank nor shall his appointment be otherwise terminated, except with the prior approval of the competent authority.; Provided that if any educational management, agency or institution contravenes the provisions of this sub section, the teachers affected shall be deemed to be in service".
A perusal of this section would clearly reveal that while no rules regulating the conditions of service of the teachers employed in private institutions had been made, the power to do so has been reserved with the Government.
The proviso enjoins that any contravention of the provisions would not affect the teachers who would be deemed to be in service.
It is manifest that in the absence of any rules the proviso would have no application.
Even if the proviso applies it would 972 amount to a serious inroad on the fundamental right of the minority institutions to administer or manage their own affairs.
Thus section 3(1) as also the proviso is clearly violative of own affairs article 30 is wholly inapplicable to the minority institutions.
Serious exception on has been taken by counsel for the appellants to sub sections (2), (3) and (4) of section 3.
Section 3(2) may be extracted thus : "3 (2) Where me proposal to dismiss, remove or reduce in rank or otherwise terminate the appointment of any teacher employed in any private educational institution is communicated to the competent authority that authority shall, if it is satisfied that there are adequate and reasonable grounds for such proposal, approve such dismissal, removal, reduction in rank or termination of appointment".
This sub section seeks to control the power of the institution concern ed in the matter of dismissal, removal or reduction in rank or termination of the appointment of any teacher employed by any private educational institution and enjoins that any action taken against the teacher will be of no consequence unless it is approved by the said competent authority.
It will be rather interesting to note that the competent authority has not been given any guidelines under which it can act.
The Solicitor General (Mr. section N. Kacker) submitted that the word 'satisfy ' as used in the section is a strong term and regulates the powers of the competent authority and the words "adequate and reasonable grounds" contain sufficient guidelines to exclude exercise of any arbitrary power.
I am, however, unable to agree with this contention.
In the first place, it was the inherent and fundamental right of the institution to deal with its employees or teachers and take necessary action against them.
If the State wanted to regulate the conditions of service of the teachers it should have taken care to make proper rules giving sufficient powers to the management in the manner in which it was to act.
Secondly, the induction of an outside authority over the head of the institution and making its decision final and binding on the institution was a blatant interference with the administrative autonomy of the institution.
Sub section (2) does not contain any provision that while giving approval the competent authority was to ascertain the views of the governing body or the managing committee so as to know their view point and the reason why action has been taken against a particular teacher or teachers.
Similarly, the words "adequate and reasonable" are too vague and do not lay down any objective standard to judge the discretion which is to be exercised by the competent authority whose order will be binding on the institution.
Thirdly, 973 while section 4 gives a right to the aggrieved teacher to file an appeal before the appellate authority, no such right has been given to the management to file an appeal against the order of the competent authority if it refuses to grant sanction to the order of the managing committee of the institution.
Thus, in my opinion, sub section (2) suffers from the Vice of excessive delegation of powers and confers undefined, uncanalised, absolute and arbitrary powers to grant or to refuse sanction to any action taken by the managing committee and almost reduces the institution to a helpless position.
Such a provision, therefore, not only interferes with the right of the management of the institution but is completely destructive of the right conferred on the institution under Article 30(1) of the Constitution.
Even C the competent authority mentioned in the sub section is merely the District Educational officer and it appears from the record that it is not a very high authority such as, the Director of Public Instruction or the Vice Chancellor which may be presumed to act objectively and reasonably.
Another material defect in section 3(2) is that no time limit has been fixed by the statute within which the competent authority is to give its approval.
If the competent authority either due to over work endeavours or some other reason chooses to sit over the matter for a pretty long time a stalemate would be created which will seriously impair the smooth running of the institution.
Indeed if sub section (2) would have been cast in a negative form so as to provide that the sanctioning authority was bound to give approval to any action taken by the institution against its teachers unless it was, after hearing the teacher and the management of the institution, satisfied that the order passed by the institution or the action taken by it was in violation of the principles of natural justice, against the statutory provisions of law or tainted with factual or legal malice no objection could be taken.
If the section would have been worded in this manner, then its validity could have been upheld on the ground that it was a sound regulatory measure which does not destroy the administrative autonomy of the institution but is meant to ensure the security of tenure of the teaching staff of the institution.
But as this is not so, the validity of the provision cannot be supported.
For these reasons, therefore, I am satisfied that subsection (2) is unconstitutional being violative of Article 30(1) of the Constitution and would have no application to any minority institution Sub section (3) of section 3 runs thus: "3 (3) (a) No teacher employed in any private educational institution shall be placed under suspension, except 974 when an inquiry into the gross misconduct of such teacher is contemplated.
(b) No such suspension shall remain in force for more than a period of two months from the date of suspension and if such inquiry is not completed within that period, such teacher shall, without prejudice to the inquiry, be deemed to have been restored as teacher.
Provided that the competent authority may, for reasons to be recorded in writing, extend the said period of two months, for a further period not exceeding two months, if, in the opinion of such competent authority, the inquiry could not be completed within the said period of two months for reasons directly attributable to such teacher".
These provisions deprive the minority institution of the power to suspend any teacher unless an inquiry into the gross misconduct of such teacher is contemplated.
One could understand if the word 'misconduct ' alone was used in sub section (3) (a) but as it is qualified by the adjective gross, it almost destroys the power of suspension which the minority institution might possess.
Even so, sub section (3) (b) makes it clear that no suspension shall remain in force for a period of more than two months from the date of suspension and if no inquiry is completed within this period, the teacher would have to be reinstated.
This is indeed a most peculiar provision and gives an unqualified right to a teacher in the matter of suspension.
Even a Government servant to whom Article 311 of the Constitution or the statutory rules apply does not enjoy such a liberal facility.
Moreover, the rules make a mockery of any order of suspension passed pending an inquiry.
It is very difficult to predicate how long an inquiry would last and yet to limit the period of suspension to two months irrespective of the nature, length and the scope of the inquiry to only two months is really to completely curb the power of suspension.
The proviso to section 3 (3) again empowers the competent authority to extend the period of suspension.
Thus the cumulative effect of sub sections (3)(a), 3(b) and the proviso is to interfere with the internal administration of the minority institution and curb the power of suspension and thus deprive the institution of the right of or taking any disciplinary action against the teacher to such an extent that the institution becomes almost a figure head.
Such a provision, therefore, cannot be upheld as it is clearly violative 975 Of Article 30(1) of the Constitution of India.
It is obvious that whenever an institution suspends a teacher, it is bound to pay subsistence allowance and any express provision like sub section (4) of section 3 is wholly unnecessary and makes a serious inroad on the internal autonomy of the institution.
Thus, in our opinion, section 3 in its entirety is ultra vires as being violative of Article 30(1) of the Constitution and is wholly inapplicable to the appellants who are admittedly minority institutions.
Section 4 of the Act may be quoted thus: "4.
Any teacher employed in any private education institution (a) who is dismissed, removed or reduced in rank or whose appointment is otherwise terminated; or (b) whose pay or allowances or any of whose conditions or service are altered or interpreted to his disadvantage, by any order; may prefer an appeal against the order to such authority or officer as may be prescribed; and different authorities or officers may be prescribed for different classes of private educational institutions.
Explanation: In this section, the expression 'order ' includes any order made on or after the date of the commencement of this Act in any disciplinary proceeding which was pending on that date".
This section gives a right of appeal to a teacher who is dismissed, removed or reduced in rank and whose services are terminated.
No guideline are provided in which manner this power is to be exercised nor does it contain any provision which may entitle the minority institution to be heard by the appellate authority.
No principles or norms are laid down on the basis of which the order passed by the institution could be examined by the appellate authority.
Even what would amount to misconduct has not been defined or qualified in sections 2, 3 or 4.
It is, therefore, difficult to understand how the appellate .
court would exercise this power in deciding whether or not the teacher was guilty of misconduct and what is the correlation between the degree of misconduct and the appropriate punishment which may have been awarded by the institution and approved by the competent authority.
The conferment of such an 8 138 SCI/80 976 absolute and unguided power on the appellate authority which if passed against the management it cannot even file a civil suit to set aside this order amounts not only to a direct interference with the right enshrined in Article 30(l) of the Constitution but makes the minority institution a limp, lifeless and powerless body incapable of effective teaching and/or attaining excellence in the standards of education.
such a course of action is bound to hurt the feelings of the founders of the institution.
For these reasons, therefore, I and of the opinion that section 4 is also ultra vires as violative of Article 30 of the Constitution and would, therefore, have no application to the minority institutions who are appellants in this case.
Section 5 merely provides for transfer of an appeal pending before any authority to the appellate authority and if section 4 falls and is inapplicable to the minority institution section 5 also follows the same fate and will not apply to the minority institution.
Section 6 runs thus: "6.
Where any retrenchment of any teacher employed in any private educational institution is rendered necessary consequent on any order of the Government relating to education or course of instruction or to any other matter, such retrenchment may be effected with the prior approval of the competent authority".
I This section deals with the contingencies under which the institution may be compelled to retrench any teacher employed in the school.
Whatever be the position in other private educational institutions so far as the minority institution is concerned, this is purely a domestic matter of the institution and cannot be interfered with by any statute.
The words "administer educational institutions of their choice" clearly indicate that the institution has an absolute right to select teachers, retain them or retrench them at its sweet will according to the norms prescribed by the institution or by the religious order which has founded the institution.
As almost all the minority institutions in the present case are not receiving any substantial aid from the Government but have established the institution by their own moneys and are bearing all the expenses themselves, it is none of the business of any outside authority to interfere with or dictate to the institution as to which member of the staff should be retrenched and which should be retained.
The provisions of section 6 directly interfere with this valuable right of the institution by providing that the retrenchment shall be made with the approval of the competent authority.
The power is uncanalised and unguided and , suffers from the same vices as has been pointed out in the case of 977 section 3 of the Act.
For these reasons, therefore, section 6 will have no application to the institution.
Section 7 may be extracted thus: "7.
l he pay and allowances of any teacher employed in any private educational institution shall be paid on or before such day of every month, in such manner and by or through such authority, officer or person, as may be prescribed".
This is purely an innocuous provision which is meant for the benefit of the institution itself by providing how the salaries of the employees of the institution should be paid and is purely a regulatory measure which does not at all touch or effect the administrative autonomy of the minority institution.
So far as sections 8 and 9 are concerned, they would obviously not apply to the minority institutions because these institutions do not receive any aid from the Government and are, therefore, not liable to maintain or furnish accounts to the University authorities or to the Government, nor the prescribed authority has any right to inspect or pass audit of the accounts kept by the institution.
For these reasons, sections 8 and 9 also do not apply to the minority institutions.
Section 10 relates to the inspection or inquiry in respect or private educational institution, its buildings, laboratories etc.
, or any other matter connected with the institution which may be necessary.
Subsections (2), (3) and (4) of section 10 provide the mode in which the inspection or inquiry is.
to be made and a report submitted to the concerned authority.
These provisions are also in the nature of sound regulatory measures and appear to be in the larger interest of the functioning of the institution itself and, therefore, do not offend Article 30 of the Constitution.
Section 11 runs thus: "11.
Every educational agency shall, within such time or within such extended time as may be fixed by the competent authority in this behalf, furnish to the competent authority such returns statistics and other information as the competent authority may, from time to time require.
" This section also contains purely a regulatory measure and is in the best interest of the institution and cannot be said to violate Article 30( 1) of the Constitution.
978 Section 12 and 13 relate to penalties for contravention of the provisions of the Act which have been held by me to be violative of Article 30 and, therefore, inapplicable to the appellants because that would amount to destroying the very foundation and personality of the minority institution.
These sections are also not applicable to the minority institution except n respect of provisions of the Act which have been upheld by me.
Section 15 contains the revisional power and provides that the Government may delegate its powers, or make rules regarding the exercise of such a power.
I have already pointed out that the setting up of a competent authority to sanction or approve the order passed by the institution in respect of a member of the staff where sufficient guidelines and grounds for approval have been prescribed is purely a regulatory measure and does not attract article 30 of the Constitution.
The conferment of a right of revision against any order of the minority institution under the Rules framed which provide sufficient guidelines and allow the minority institutions an opportunity to be heard, is an innocuous provision and does not impinge on the autonomy of the minority institution.
I am, therefore, of opinion that such a provision is in the best interests of the institution and does not in any way harm the personality of the institution or destroy the image so as to interfere with its autonomous functioning.
I, therefore, hold that section 15 is constitutionally valid and I might hasten to add that its constitutionality was not challenged before this Court.
Section 16 bars a civil court from deciding the questions which fall under this Act and section 17 contains an indemnity clause.
As I have held that almost all the operative and important provisions of this Act are ultra vires, these sections also would have no application to the minority institution.
In fact, section 16 suffers from a serious defect, viz., that if it was held by me that the provision regarding appeal to the appellate authority was valid then section 16 completely bars the right of the management to file a suit to challenge the validity of the order of the appellate authority.
To this extent, therefore, this Section makes a serious inroad on the fundamental right of the minority institution and must be held to be inapplicable to the minority institution.
I have gone through the judgment of the High Court which does not appear to have considered the various aspects and features of the matter set out by me, hor has it properly applied the propositions summarised by me as culled out from the various decisions of this 979 Court starting from 1959 (Re: Kerala Education Bill 's case) (supra) to 1979 (Lily Kurian 's case) (supra).
For these reasons, I hold the sections 3 (alongwith its sub section, 4, 5, 6, 8, 9, 12, 13, 16 and 17 are violative of Article 30 of the Constitution and have no application to the appellants which are minority institutions and which fall within the protection guaranteed by the Constitution under Article 30.
I accordingly allow all these appeals, set aside the order of the High Court and quash all the directions which may have been issued by the Government or other authorities under the Act to the appellants except such steps as are taken under those provisions of the Act which have been upheld by me, viz., sections 7, 10, 11, 14 and 15.
In the peculiar circumstances of the case, I leave the parties to bear their own costs.
KAILASAM, J.
These appeals are by special leave against the judgment of the High Court of Judicature at Andhra Pradesh.
Several writ petitions questioning the validity of certain provisions of the Andhra Pradesh Recognised Private Educational Institutions Control Act, 1975 (hereinafter called the Act) were heard.
These writ petitions were disposed of by a common judgment by the Andhra Pradesh High Court.
Aggrieved by the judgment of the High Court helding that the impugned sections of the Act is intra vires of the Constitution, not void and operative on schools and institutions of the minorities, the present appeals by special leave have been preferred.
The purpose of the legislation is set out in the Statement of objects and Reasons to the Bill.
It is stated : "Of late.
several instances have come to the notice of the State Government regarding the various irregularities committed by the managements of private educational institutions in matters relating to suspension, dismissal, removal or other wise termination, of members of the teaching staff on flimsy grounds without framing charges and without giving an opportunity to explain.
The said managements are also flouting the orders or instructions of Director of Public Instruction or the Universities or the Government in respect of such matters.
Having regard to the above circumstances, the Government have decided to regulate the service conditions of teachers employed in the private educational institutions to ensure security of service of the said teachers, and also to exercise certain control on such institutions in the matter of their accounts, etc., by undertaking suitable legislation in this regard.
" 980 The salient features of the Bill are given as under: (i) to safeguard the service conditions of teaching staff in the recognised private educational institutions in the matter of suspension, removal, dismissal and retrenchment; (ii) to make it compulsory for the private managements to obtain the prior permission of the competent authority before a teacher is visited with any of the aforesaid major penalties; (iii) to provide that the suspension of a teacher pending enquiry, should be for a period of two months only after which the teacher should be deemed to have been restored to duty, unless the competent authority extends the suspension period by another two months; thereby making it specific that in any case the teachers shall not be under suspension for more than four months; (iv) to provide that no teacher should be retrenched with out the prior permission of the competent authority; (v) to provide for payment of salaries to teachers on the specified day of the month in such manner and by or through such authorities, officer or persons, as may be laid down in the rules; (vi) to provide for conducting enquiries into the affairs of the recognised private educational institutions and also for issue of suitable directions to the managements of such institutions based on such enquiry, which shall be binding on the managements.
The writ petitions challenged the validity of sections 3 to 7 of the Act.
Sections 3 to 7 occur in Chapter II relating to terms and conditions of service of teachers.
It is necessary to set out the impugned sections : "Dismissal, removal or reduction in rank or suspension of teachers employed in private educational institutions.
Subject to any rule that may be made in this behalf, no teacher employed in any private educational institution shall he dismissed, removed or reduced in rank nor shall his appointment be other wise terminated, except with the prior approval of the competent authority.
981 Provided that if any educational management, agency or institution contravenes the provisions of this sub section, the teachers affected shall be deemed to be in service.
(2) Where the proposal to dismiss, remove or reduce in rank or otherwise terminate the appointment of any teacher employed in any private educational institution is communicated to the competent authority, that authority shall, if it is satisfied that there are adequate and reasonable grounds for such proposal, approve such dismissal, removal, reduction in rank or termination of appointment.
(3a) No teacher employed in any private educational institution shall be placed under suspension, except when an inquiry into the gross misconduct of such teacher is contemplated.
(b) No such suspension shall remain in force for more than a period of two months from the date of suspension and if such inquiry is not completed within that period, such teacher shall, without prejudice to the inquiry, be deemed to have been restored as teacher.
Provided that the competent authority may, for reasons to be recorded in writing, extend the said period of two months for a further period not exceeding two months, if, in the opinion of such competent authority, the inquiry could not be completed within the said period of two months for reasons directly attributable to such teacher.
(4) Every such teacher as is placed under suspension under subsection (3) shall be paid subsistence allowance at such rates as may be prescribed during the period of his suspension.
Appeal against orders of punishment imposed on teachers employed in private educational institutions.
Any teacher employed in any private educational institution (a) who is dismissed, removed or reduced in rank or whose appointment is otherwise terminated; or (b) whose pay or allowances or any of whose conditions of service are altered or interpreted to his disadvantage, by any order; may prefer an appeal against the order to such authority or officer as may be prescribed; and different authorities or officers may be prescribed for different classes of Private educational institutions.
Explanation In this section, the expression 'order ' includes any order made on or after the date of the commencement of this Act in any disciplinary proceeding which was pending on that date.
Special provision regarding appeal in certain past disciplinary cases.
982 5.
(1) If, before the date of the commencement of this Act, any teacher employed in any private educational institution has been dismissed or removed or reduced in rank or his appointment has been otherwise terminated and any appeal preferred before that date (a) by him against such dismissal or removal or reduction in rank or termination; or (b) by him or the educational agency against any order made before that date in the appeal referred to in clause (a); is pending on that date, such appeal shall stand transferred to the appellate authority prescribed under section 4 (2) If any such appeal as is preferred in sub section (1) has been disposed of before the date of the commencement of this Act, the order made in any such appeal shall be deemed to be an order made under this Act and shall have effect accordingly.
Retrenchment of teachers.
Where any retrenchment of any teacher employed in private educational institution is rendered necessary consequent on any order of the Government relating to education or course of instruction or to any other matter, such retrenchment may be affected with the prior approval of the competent authority.
Pay and allowances of teachers employed in private educational institution to be paid in the prescribed manner.
The pay and allowances of any teacher employed in any private educational institution shall be paid on or before such day of every month, in such manner and by or through such authority, officer or person, as may be prescribed.
" The object of the legislation in general and the impugned provisions in particular is to regulate the service conditions of the teachers and to ensure their security of service.
The main attack on the validity of the impugned sections is that the provisions are violative of the rights conferred on the minorities to establish and administer their institutions under articles 29 and 30 of the Constitution.
The plea is that their right to administer their institutions is taken away by imposing unjustified and complete control with the authorities specified in the Act.
Before considering the provisions of each of the sections impugned it is necessary to refer to the nature of the right conferred on the minorities.
The relevant article is article 30 of the Constitution and it is necessary to refer to the article and the important decisions rendered by this Court under the Article.
983 "Right of minorities to establish and administer educational institutions.
article 30.
(1) All minorities, whether based on religion or language, shall have the right to establish and administer educational institutions of their choice.
(2) The State shall not, in granting aid to educational institutions, discriminate against any educational institution on the ground that it is under the management of a minority, whether based on religion or language.
" The educational institutions established and administered by the minorities in the exercise of the rights conferred under article 30 may be classified into 3 categories (1) those which do not seek either aid or recognition from the State or affiliation from the University; (2) those which seek aid and (3) those that seek either recognition or affiliation but not aid.
We are not concerned with institutions which do not seek either aid or recognition from the State or affiliation from the University.
The institutions which require aid may again be classified into two classes namely those which are by constitution expressly made eligible for receiving grants and (2) which are not entitled to any grant by virtue of the express provisions of the Constitution.
Here again we are not concerned with the first category.
We are only concerned with the institutions which are not entitled to any grant by any express provision in the Constitution.
Articles 28(3), 29(2) and 30(2) deal with educational institutions receiving aid out of State Funds.
Certain restrictions are placed a obligations cast on institutions recognised by the State or receiving aid article 28(3) provides "No person attending any educational institutional recognised by the State or receiving aid out of State funds shall be required to take part in any religious instructions that may be imparted in such institutions or to attend any religious worship that may be conducted in such institution or in any premises attached thereto unless such person or, if such person is a minor, his guardian has given his consent thereto.
Under the sub article a person attending an institution recognised by the State or receiving aid cannot be compelled by the institution to take part in any religious instruction or to attend religious worship without his consent.
article 29(2) provides that no citizen shall be denied admission into any educational institution maintained by the State or receiving aid out of State funds on grounds only of religion, race, caste, language or any of them.
Under article 29(2) institutions receiving aid, a citizen is entitled to seek admission and the institutions is forbidden tn deny admission to a citizen on grounds of 984 religion, race, caste or language.
While article 28(3) and 29(2) impose certain restrictions on institutions receiving aid, article 30(2) forbids the State from discriminating against any educational institution in granting aid on the ground that it is under the management of a minority, whether based on religion or language.
The Constitution does not confer any right on the institution to receive any aid.
It however forbids the State in granting aid to educational institutions from discriminating an educational institution on the ground that it is under the management of a minority whether based on religion or language.
This would imply that the State has right to grant or not to grant aid.
It may be that the State is not in a position to grant aid to education institutions.
In such circumstances nobody can force the State to grant aid.
But if the State grants aid to educational institutions there should not be any discrimination.
It is open to the State to prescribe relevant conditions and insist on their being fulfilled before any institution becomes entitled to aid.
No institution which fails to conform to the requirements thus validly prescribed would be entitled to any aid.
Educational institutions receiving aid whether they are managed and administered by minority or not have to conform to the requirements prescribed by the State in order to enable the institutions to receive aid.
The requirements prescribed shall not be discriminatory on the ground that it is under the management of a minority whether based on religion or language.
The character of the minority institution should not also be destroyed.
The right of the State to ensure that its funds are properly spent cannot be denied.
In Re: Kerala Education Bill, at p. 1062 Chief Justice Das ruled that "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.
" The learned Chief Justice proceeded to observe : "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 institution to be aided.
" The scope of the reasonable regulations that can be imposed is clearly explained by the question framed by the Attorney General and the answer furnished by the Court at p. 1063.
The State cannot say "I 985 have money and I shall not give you any aid unless you surrender to me your right of administration" (emphasis supplied) The Court held that regulations prescribed under the various clauses except sub clause (5) of Cl. 3 which made the educational institution subject to clauses 14 and 15, valid.
The Kerala Education Bill which was referred to this Court for the n purpose of opinion contained several clauses.
A summary of the clauses is given in the judgment from pages 1023 to 1030 of the Reports, Clauses 6, 7 9, 10, 11, 12, 14, 15 and 20 relate to the management of aided schools.
The Court expressed its view that the provisions in clauses 7, 10, 11(1), 12(1), (2), (3) and (S) may easily be regarded as reasonable regulations or conditions for the grant of aid.
(Vide p. 1064).
Clause 7 is extracted at p. 1025.
It confers powers enumerated in the clause on the managers.
Clause 10 requires the Government to prescribe the qualifications to be possessed by persons for appointment as teachers in Government Schools and in private schools which by the definition means aided or recognised schools.
The State Public Service Commission is empowered to select candidates for appointment as D. teachers in Government and aided schools according to the procedure laid down in cl. 11.
Clause 12 prescribes the conditions of service of the teachers of aided schools obviously intended to afford some security of tenure to the teachers of aided schools.
It provides that the scales of pay applicable to the teachers of Government schools shall apply to all the teachers of aided schools whether appointed before or after the commencement OF this clause.
Rules applicable to the teachers of the Government schools arc also to apply to certain teachers of aided schools as mentioned in sub cl.
Sub cl.
(4) provided that no teachers of an aided school shall be dismissed, removed or reduced in rank or suspended by the Manager without the previous sanction of the authorised officer.
With regard to sub cl.
12(1) (2) and (3) which related to conditions of service and security of tenure, the Court held that the purpose may easily be regarded as reasonable regulations or conditions for grant of the aid.
It was submitted that clauses 9, 11(2) and (4) went beyond the permissible limit as by taking over the collections of fees, etc.
and by undertaking to pay the salaries of the teachers and other state the Government is in reality confiscating the school fund and under cl.
l l the power of management is taken away by providing that the appointment of a teacher should be out of the panel to be prepared by the Public Service Commission.
Similarly it was submitted that by requiring previous sanction by the authorised officer before dismissal, removal or reduction in rank of a teacher, the H. right to administer was taken away.
Chief Justice Das observed at p. 1064 of the Reports: "These are no doubt serious inroads on the right 986 of administration and appear perilously near violating that right.
But considering that those provisions are applicable to all educational institutions and that the impugned parts of cls. 9, 11 and 12 are designed to give protection and security to the ill paid teachers who are engaged in rendering service to the nation and protect the backward classes, we are prepared, as at present advised, to treat these clauses 9, 11(2) and 12(4) as permissible regulations which the State may impose on the minorities as a condition for granting aid to their educational institutions.
" It is clear that so far as aided institution are concerned conditions similar to those that are mentioned can be validly imposed on the institutions.
The only prohibiting is that the conditions should not be of such a nature as to deprive the character of the minority institutions in their exercise of the rights conferred on them as minority institutions.
So long as there are rules for the purpose of maintaining the excellence of educational institutions and not discriminating against the minority educational institutions they will be valid.
The decisions rendered subsequent to the Kerala Education Bill case may now be referred to see how for the views expressed had been modified.
In Rev. Sidhajbhai Sabhai & Ors.
vs State of Bombay & Anr.(1) a Bench of 6 Judges held that the order of the Government directing that 80% of seats in the training colleges should be reserved for Government nominee with a threat that if the order was disobeyed, grant and recognition would be withdrawn.
was invalid.
The Court laid down that reasonable restrictions in the interest of the efficiency of instruction, discipline, health, sanitation and the like may be imposed as those regulations will not be restrictions on the substance of the right guaranteed, for they secured the proper functioning of the institution in educational matters.
The Court held that "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 institutions, the right guaranteed by article 30(l) will be but a "teasing illusion", a promise of unreality.
Regulations 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 elective as an educational institution.
The dual test prescribed is the test of reasonableness and the test that is regulative of the educational character of the institution and is conducive to making the institution an effective vehicle of the education of the minority community or the persons who resort to it.
The requirements of reservation of 80% of the seats will 987 destroy the right to management as a minority institution and as such cannot be imposed even in the case of institutions receiving aid.
Conditions of such a nature that would result in surrender of the fundamental right to administer cannot be imposed.
After referring to the decision in the Kerala Educational Bill case, the Court observed that it did not decide that a regulation would be deemed unreasonable only if it was totally destructive of the right of the minority to administer n the educational institution.
This view was affirmed in the St. Xavier 's College case ; The test laid down requires that the regulation must be for regulating the educational institution for the minority committee as well other persons who resort to it.
(emphasis supplied) The case of Rev. Father W. Proost and ors.
vs The State of Bihar and Ors.(1) relates to affiliation.
This Court was considering the validity of section 48 A of the Bihar University Act.
Under section 48 A a University Service Commission for affiliated Colleges was established.
It was provided amongst others that subject to the approval of the University, appointments, dismissals, removals, termination of service or reduction in rank of teachers of an affiliated college not belonging to the State Government shall be made by the governing body of the College on the recommendation of the Commission.
While the petition was pending before this Court the Governor of Bihar promulgated an ordinance by inserting Sec.
48 B which exempted Colleges established and administered by the minorities from the operation of the provisions of clauses (6), (7), (8), (9), (10) and (11) of section 48 A.
After the introduction of section 48 B the petitioners before this Court claimed protection under section 48 B and submitted that affiliated Colleges established by minorities are exempt from the operation of the impugned provisions of section 48 A.
It may be noted that under section 48 B the governing body of an affiliated college established by a minority shall be entitled to make appointments, dismissals, removals, termination of service or reduction in rank of teachers or take other disciplinary action subject only to the approval of the Commission and the Syndicate of the l university.
The petitioners did not challenge the provisions which provided that appointments, dismissals, removals, termination of service and reduction in rank of teachers or other disciplinary measures will be subject to the approval of the Commission and the Syndicate of the University.
What was objected to was the provisions under section 48 A which established an University Service Commission on whose recommendations alone appointments, dismissals, removals, terminations of service or reduction in rank of teachers of an affiliated college 988 can be effected.
A provision requiring prior approval of the Commission or Syndicate was not challenged as objectionable.
In State of Kerala vs Very Rev. Mother Province(1), the constitutional validity of certain provisions were challenged on the ground that they interfered with the rights of the minority institutions.
The Kerala University Act, 1979 was passed to reorganise the University of Kerala with a view to establishing a teaching, residential and affiliating University for the Southern Districts of the State of Kerala.
Ss. 48 and 49 dealt with the Governing Bodies of private colleges.
The Educational Agency of a private College was required to set up a Governing Body for a private College or a managing council for private colleges under one corporate management.
The section provided for the composition of two bodies so as to include Principal:; and Managers of private colleges, nominees of the University and Government as well as elected representatives of teachers.
Sub section
(2) provided that the new bodies would be having corporate perpetual succession and the members would hold office for four years.
Sub section cast a duty on the new governing body or the managing council to administer the private college or colleges in accordance with the pro visions of the Act.
The provisions of section 53, sub sections
(1), (2), (3) and (9) conferred on the Syndicate of the University power to veto the decision of the Governing Council.
A right of appeal was provided for any person aggrieved.
Section 56 conferred ultimate power on the University and the Syndicate in disciplinary matters in respect of teachers.
This Court held that sub section
(2) and (4) of Ss. 48 and 49 as ultra vires.
The Court agreed that the High Court was right in declaring that sub sections
(1) and (2), (9) and of section 53, sub sections
(.2) and (4) of section 56 as ultra vires.
In D.A.V. College etc.
vs State of Punjab & ors(2) the validity of cl. 18 which required that non governmental Colleges shall comply with the requirements laid down in the ordinances governing service of teachers in non governmental Colleges as may be framed by the University was considered.
Clause 18 so far as it is applicable to the minority institutions empowered the University to prescribe by regulation governing the service of teachers which is enacted in the larger interest of the institution to ensure their efficiency and excellence.
Tho Court held: "It may for instance issue an ordinance in respect of age of superannuation or prescribe minimum qualifications for teachers to be employed by such institutions either generally or in particular sub 989 jects.
Uniformity in the conditions of service and conduct of teachers A in all non Government Colleges would make for harmony and avoid frustration.
" A reading of the decisions referred to above make it clear that while the right to establish and administer a minority institution cannot be interfered with restrictions, by way of regulations for the purpose of maintaining the educational standards of the institution can be validly imposed.
For maintaining the educational standard of the institution as a whole it is necessary to ensure that it is properly staffed.
Conditions imposing the minimum qualifications of the staff, their pay and other benefits, their service conditions, the imposition of punishment will all be covered and regulations of such a nature have been held to be valid.
In the case of institutions that receive aid it is the duty of the Government who grants aid to see that the funds are properly utilised.
As the Government pays for the staff it is their bounden duty to see that well qualified persons are selected their pay and other emoluments are guaranteed and service conditions secured.
So far as the institutions receiving aid are concerned if the regulations are made for the purpose of safeguarding the rights of the staff the validity cannot be questioned as long as the regulations do not discriminate the minority institution on the ground of religion or language.
The minority institutions have no fundamental right to demand recognition by the State or affiliation by the University but as recognition and affiliation is necessary for the effective exercise of the fundamental right of minorities to establish and administer their institutions, they are entitled to recognition and affiliation if reasonable conditions that are imposed by the Government or the University relevant for the purpose of granting recognition or affiliation are complied with.
Before granting recognition or affiliation it is necessary that the concerned Government or the University is satisfied that the institution keeps up with the required minimum standard.
As has been held by Das C.J., "Right to administer cannot obviously include the right to mal administer" and in the words of Shah, J. "The right is subject to reasonable restrictions in the interest of efficiency of instruction, discipline, health, sanitation and the like." Justice Jaganmohan Reddy has made it clear in upholding cl. 18 of the Guru Nanak University, Amritsar Act, 1961 that regulations relating to the recruitment and service conditions of the teachers of the institution are valid.
The decision of 9 Judges ' Bench in The Ahmedabad St. Xaviers College Society & Anr.
vs State of Gujarat & Anr.
( ') may now 990 be considered.
All the 9 Judges were unanimous that the right to aid or recognition was not a fundamental right but that aid or recognition cannot be offered on conditions which would involve a surrender of those rights.
But the rights of recognition and affiliation are subject to regulations which are necessary for maintenance of the educational institutions.
In the St. Xaviers College case (supra), section 33A(1) was challenged.
It provided that every college was to be under the management of a governing body which must include a representative of the University and representatives of teachers, non teaching staff and students of the college.
Eight of the nine Judges held that section 33A (1)(a) violated article 30(l) and could not be applied to minority institutions.
This Court in a subsequent decision in G.F. College Shahajahanpur vs University of Agra and Anr.(l) held that it would not be unconstitutional to direct that the Principal and the Senior Teacher appointed by the Governing body itself be taken into the managing committee.
The Court in St. Xavier 's College case also considered the validity of section 51 A(l) (a), (2) (a) and 51 A(1) (b) .
Section 51 A(1)(a) and (2)(a) provided that no member of the teaching?, other academic and non teaching staff was to be dismissed, removed or reduced in rank except after an inquiry in which he had been informed of the charges against him and had been given a reasonable opportunity of being heard and making a representation on the penalty proposed to be inflicted.
No termination of service not amounting to dismissal or removal was to be valid unless, such member had been given a reasonable opportunity of showing cause against the proposed termination.
The two clauses were held to be valid, as being reasonable.
However, the Court held that section 51 A(l)(a) and (2)(b) as violative of article 30(l).
Section 51 A(l)(b) provided that the penalty to be inflicted on him must be approved by the Vice Chancellor or any other officer of the University authorised by the Vice Chancellor in this behalf.
Similarly, section 51 A(2) (b) provided that "such termination is approved by the Vice Chancellor or any officer of the University authorised by the Vice Chancellor in this behalf." Section 51 A(1) (b) required the approval of the Vice Chancellor, or other officer authorised by him.
for the penalty to be inflicted under sub s l (a), and section 51 A(2) (b) required similar approval for the termination of service under sub section
(2) (a).
The Court also held that section 52 A which required that any dispute between the governing body and any member of the teaching, other academic and non teaching staff of an affiliated college? connected with the terms of service of such member.
must be referred to a Tribunal of Arbitration consisting of one member each appointed by the governing body and by the member of the 991 staff and an umpire appointed by the Vice Chancellor was not valid.
A Seven out of 9 Judges held that section 52 A violated article 30(l) and could not be applied to minority institution.
Minority institutions seeking affiliation will have to follow statutory measures intended to regulate the conduct of the educational institution.
Ray, C.J. p. 193 held : "With regard to affiliation a minority institution must follow the statutory measures regulating educational standards and efficiency the prescribed courses of study, courses of instructions and the principles regarding the qualification of teachers educational qualifications for entry of students into educational institutions etc.
When a minority institution applies to a University to be affiliated, it expresses its choice to participate in the system of general education and courses of instruction prescribed by that University: * * * * * * There fore, the measures which will regulate the courses of study the qualifications and appointment of teachers, the condition of employment of teachers,* * * * * * * are all comprised in matters germane to affiliation of minority institutions.
These regulatory measures for affiliation arc for uniformity efficiency and excellence in educational] courses and do not violate any fundamental right of the minority institutions under article 30" (emphasis supplied) Ray C.J. held that section 51A(1) (b) and section 51A(2) (b) is not applicable to minority institutions as they "cannot be said to be permissive regulatory measures in as much as it confers arbitrary power on the Vice Chancellor to take away the right of administration of the minority institutions .
" Agreeing with the view of the Chief Justice, regarding his conclusion about section 51A(1) (a) and (2) (b), Khanna, J. at p. 243 observed : "Although disciplinary control over the teachers of a minority educational institution would be with the governing council, regulations in my 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 safe guard the interest of teachers would result in security of tenure and thus inevitable attract competent persons for the posts of teachers.
* * * * * Regulations made for this 9 138 SCI/80 992 purpose should be considered to be ill the interests of minority educational institutions and as such they would not violate article 30(1)".
(emphasis supplied) Regarding section 51A, the learned Judge while holding that provisions under.
(a) of sub sections
(1) & (2) of section 51A which make provision R for giving a reasonable opportunity of showing cause against a penalty to be proposed on a member of the staff would be valid.
(b) of the sub section
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, interferes with the disciplinary control of the managing body over its teachers.
He was of the view that the power conferred on the Vice Chancellor or other officer is a blanket power and no guide lines were 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 by way of victimisation or other similar cause.
The conferment of such blanket power on the Vice Chancellor or other officers authorised for vetoing the disciplinary action of the managing body of a educational institutional made serious inroads on the right of the managing body to administer an educational institution.
Mathew, J. in dealing with section 51A(1)(a) and (b) at p. 273 observed: The exact scope of the power of the Vice Chancellor or of the officer 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 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." (emphasis sup plied) The learned Judge proceeded to observe: "Of course it is open to the State in the exercise of its regulatory power to require that before the service of a teacher are terminated, he should be given opportunity of being heard in his defence.
But to require that for terminating the services of a teacher after 993 an enquiry 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 legislature 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 with out 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 teacher after an enquiry".
The extracts from the judgments of Ray, J. Khanna, J. and Mathew, J. show that regulations can be made for ensuring the pro per conditions of service of the teachers and for securing fair procedure in the matter of disciplinary action against them.
Prescribing uniformity in the conditions of service and conduct of teachers in all non governmental colleges would promote harmony, avoid frustration and is permissible.
It is thus seen that the university or the authority granting recognition can prescribe the conditions of service of teachers providing them with security of service.
The rules may require that no Principal of the teaching or non teaching staff of a recognised or a approved institution shall be dismissed, removed or reduced in rank except after an enquiry in which he has been informed the charges against him and given a reasonable opportunity of being heard in respect of those charges and making representation on any penalty proposed to be inflicted on him.
The Government which grants recognition or the University which gives affiliation are entitled to sec that proper conditions of service of the teachers are ensured and fair procedure is observed by the institutions when disciplinary action is taken against them.
If the regulations require the approval by the competent authority for safeguarding the rights of the teachers and for securing the procedure there could be no objection.
Such authority can also interfere with the decision of the private institutions when the punishment is awarded mala fide or by way of victimisation or for similar causes.
In Kerala Education Bill, 1957 Cl.
14(4) provided that no teacher of an aided school shall be dismissed, removed or reduced in rank or 994 suspended by the Manager without the previous sanction of the authorised officer.
This requirement of sanction related to schools that sought aid from the Government.
While upholding the validity of cl. 14, Das C.J. Observed that there could be no doubt that these are serious inroads in the right of the administration and appear perilously near violating that right.
But considering that those provisions are applicable to all educational institutions and that the impugned parts of cls. 9, 11 and 12 are designed to give protection and security to the ill paid teachers who are engaged in rendering service to the nation and protect the backward classes we are prepared, "as at present advised to treat clauses 9, 11 (2) and 12 (4) as permissible regulations the State may impose on the minorities as a condition for granting aid to their educational institutions.
Ray C.J. in St. Xavier College case, observed that though the opinion was given in Kerala Education Bill on an order of reference under article 143 is not binding on this court in any subsequent matter wherein a concrete case the infringement of the rights under any analogous; provision may be called in question, it is entitled to great weight.
Ray C.J. proceeded to observe that nonetheless the exposition of the various facets of the rights under article 29(1) and 30 by Das, C.J. speaking for the majority, with utmost clarity, great perspicuity and wisdom has been the text from which Court has drawn its sustenance in the subsequent decisions.
To the extent that this Court has applied these principles to concrete cases there can be no question of there being any conflict with what has been observed by Das, C.J. Ray, C.J. was of the view that similar provisions were held to be invalid as they fell with section 48 and 49 of the Kerala Education Act, which was similar to cl.
12(4) was held invalid.
Mathew, J. was of the view that though in the Kerala Education Bill case, the Court upheld the provisions similar to those in section 51A(1) (b) and 51 (A) (2) (b), the subsequent decisions of this Court left no doubt that the. requirement of subsequent approval for dismissing or terminating the services of teachers would be offending article 30.
(Learned Judge referred to D.A.V. College case).
In the Kerala Education Act case (supra), the validity of sub sections 2 & 4 of section 48, section 49, section 53, Sub sections 1 9 and sub sections 2 and 4 of section 56 were challenged.
Hidayatullah, C.J. speaking for the Court observed that after the erection of the Governing Body of the Managing Council, the founders or even the minority community had no hand in the administration.
The two bodies were vested with the complete administration of the institution and were not answerable to the founders in this respect.
Sub sections
(2), (4) and (5) and (6) of sections 48 and 49 clearly 995 vest the management and administration in the hands of the two bodies with mandates from the university.
Coupled with this is the power of the Vice Chancellor and the Syndicate under sub sections (2) and (4) of section 56 to have the final say in respect of disciplinary proceedings against the teachers.
In striking down clauses (2) and (4) of section 56, the Learned Chief Justice at p. 746 stated that the result was that sub sections
(2) and (4) of section 56 are ultra vires as they fail with sections 48 and 49.
The Scheme of the Act was that a Governing Body or Managing Council was to be set up for private colleges and it was provided that the composition of the bodies were to include Principals, Managers of private Colleges and nominees of the University and Government as well as elected representatives of the teachers.
This out side body was entrusted with the administration.
These two sections 48 and 49 which provide for administration by the Governing Body or the Managing Council was held to be ultra vires.
Apart from it, the powers were conferred on the Syndicate of the University to veto the decision of the Governing Council.
Regarding disciplinary matters, section 56 conferred ultimate power on the University and the Syndicate in respect of teachers.
As the power to take disciplinary action was taken away from the Private or the Minority Institutions and conferred on the Governing Body or the Managing Council constituted under the Act and a provision was made requiring the previous sanction on the Vice Chancellor and provided an unrestricted right to the Syndicate.
It will be noted that the Chief Justice found Ss.
56(2) and (4) ultra vires as they had to fail alongwith Ss. 48 and 49 which deprived the institution of the right to manage its own affairs.
In the case of D.A.V. College vs State of Punjab (supra), cl.
17 provided that the staff initially appointed shall be approved by the Vice Chancellor and all subsequent changes shall be reported to the University for Vice Chancellor 's approval.
section 17 does not, in fact, confer on the Vice Chancellor the power to veto the disciplinary action taken by the private institution.
In St. Xavier College case, also the management of the institution was completely taken away under Ss. 40 and 41 of the Act.
The Private Institution was required to be a constituent College of the University and was to be governed by the Statutes that may be framed by the University.
31A (1) (a) set up a Governing Body which to include amongst its Principals the representatives of the University nominated by the Vice Chancellor and representatives of the reachers of the non teaching staff and students of the college.
In the circumstances, the Court held that the right to administer and to conduct the affairs of the institution, were taken away from the institution.
The 996 disciplinary proceedings which were to be conducted against the teachers was required to obtain approval of the Vice Chancellor or any other officer of the University authorised by the Vice Chancellor.
Apart from the objection to the power conferred on the Vice Chancellor to nominate any of its subordinate, the power conferred on the Vice Chancellor was found to be unconstitutional as it was a blanket power unguided and uncanalised.
In Lilly Kurian vs Sr.
Lewina and ors.
, the provisions of ordinance 33, Chapter 67 of the ordinances framed by the Syndicate of the University of Kerala, under section 19 (1) of the Kerala University Act, 1957 was challenged.
section 33 (1) provided that 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 he specified by the university.
The teacher shall have the 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.
Cl. 4 of ordinance 33 provided that the 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).
Ordinance 33(4) conferred a right of appeal on the teacher to prefer an appeal against the order of Management to the Vice Chancellor in respect of the penalties imposed on him.
Ordinances 33(1) and 33(4) were struck down by this Court on the ground that the conferment of right of appeal an outside authority like the Vice Chancellor under ordinance 33(4) took away the disciplinary power of the minority institution.
The Vice Chancellor was given power to veto the disciplinary control which amounted to clear interference with disciplinary power of the minority institution.
It was found to be a fetter on the right of administration conferred under article 30(t).
The main ground on which the powers were found to be violative of the right conferred under article 30 was that the right of appeal was provided without defining the scope of the appellate authority.
In the cases referred to, namely, Very Rev. Mother Provincial, D.A.V. College and Lilly Kurian, the powers conferred on the Vice Chancellor were held to be blanket power, unguided and uncanalised.
The back ground of the decisions was that the minority institutions were deprived of the powers of administration by forming a body which deprived the institution of all its powers.
In such circumstances, it was found that the power was uncanalised.
In the case of Rev. Father W. Proost and 997 Ors.
(supra), section 48 was enacted providing that the minority institution shall be entitled to make appointments, dismissal, removal, termination of service and reduction in rank of teachers, subject only to the approval of the Syndicate of the University, which was not challenged.
The institution claimed exemption under section 48B.
Bearing the facts of the cases set out above, we have to consider the impugned Act and determine whether the impugned provisions infringe the rights conferred on the minority institutions under article 30.
The statements of object and reasons and the salient features of the bill as stated in the objects and reasons and the impugned sections have been set out in full at the beginning of the judgment.
The main object of the legislation is to regulate the service conditions of the teachers in the private educational institutions and for ensuring the security of service of the teachers.
It is further stated that private institution were punishing teachers on flimsy grounds without framing charges and without giving an opportunity to explain.
In the preamble it is also stated that the Act is to provide for terms and conditions of service of teachers and to control of the recognised private educational institution.
section 3 of the Act provides that no teacher employed in any private educational institution shall be dismissed, removed or reduced in rank nor shall his appointment be otherwise terminated except with the prior approval of the competent authority.
section 3 (2) will have to be read alongwith section 3 (1) which provides that when a proposal to dismiss, remove or reduced in rank or otherwise terminate the appointment of any teacher employed in any private educational institution is communicated to the competent authority, the competent authority shall if it is satisfied that there are adequate and reasonable grounds for such proposal, approve such dismissal, removal, reduction in rank or termination of appointment.
The Proviso to section 3(1) states that if any educational management, agency or institution contravenes the provisions of this sub section, the teacher affected shall be deemed to be in service.
This section was challenged as conferring a power of taking disciplinary proceedings on an outside authority and as such it should be held as violative of the rights conferred on the minority institutions.
If the power of approval conferred on the competent authority is a blanket power uncanalised and without guidelines, it will have to be held as invalid.
The question, therefore, arises whether the section provides sufficient guidelines for the exercise of the power by the competent authority.
In the State of West Bengal vs Subodh Gopal Bose and ors.
it was held that the statement of objects and reasons could be referred to 998 for the limited purpose of ascertaining the conditions prevalent at the time which actuated the sponsor of the bill to introduce the same and the extent of urgency and the evil which he sought to remedy since these matters were relevant for deciding whether the restrictions were reasonable within the meaning of article 19(2) to (6).
The object and reasons for the legislation make it very clear that the legislation was intended to regulate the service conditions of teachers employed in private educational institutions and for the security of service of the said teachers.
The preamble is also an aid in construing the provisions of the Act.
The House of Lords in Att.
Gen. vs H.R.H. Prince Earnest Augustus of Hanover, held that when there is a preamble it is generally in its recitals that the mischief to be remedied and the scope of the Act are described.
It is, therefore, permissible to have recourse to it as an aid to construing the enacting provisions.
The preamble states that the Act it to provide for terms and service conditions of teachers.
If the power conferred under section 3 (1) and section 3(2) is restricted to regulating the service conditions of teachers and for ensuring their security of service, the power conferred would be valid.
It was submitted by Mr. Lal Narain Sinha the learned counsel for the appellants that the power is uncanalised because the approval can be withheld even on merits which would in fact deprive the disciplinary powers of the minority institutions.
It is a well settled rule that in interpreting the provisions of a statute, the court will presume that the legislation was intended to be intra vires and also reasonable.
The rule followed is that the section ought to be interpreted consistent with the presumption which imputes to the legislature an intention of limiting the direct operation of its enactment to the extent that is permissible.
Maxwell on interpretation of Statutes, Twelfth Edn., P. 109 under the Caption: "Restriction of operation" States: "Sometimes to keep the Act within the limits of its scope, and not to disturb the existing law beyond what the object requires, it is construed as operative between certain persons, or in certain circumstances, or for certain purposes only, even though the language expresses no such circumscription of the field of operation.
" The following passage in Bidie vs General Accident, Fire and Life Assurance Corporation was cited with approval in Kesavananda Bharti vs State of Kerala : 999 "The first thing one has to do, I venture to think, in construing words in a section of an Act of Parliament is not to take those words in vacue, so to speak, and attribute to them what is sometimes called their natural or ordinary meaning.
Few words in the English language have a natural or ordinary meaning in the sense that they must be so read that their meaning is entirely independent of their context.
The method of construing statutes that I prefer is not to take particular words and attribute to them a sort of prima facie meaning which may have to displace or modify.
It is to read the statute as a whole and ask oneself the question: "In this state, in this context, relating to this subject matter, what is the true meaning of that word ?" According to Holmes, J. in Towne vs Eigner, a word is not crystal, transparent and unchanged; it is the skin of living thought and may vary greatly in colour and content according to the circumstances and the time in which it is used.
Gwyer, J. in Central Provinces and Berar Act, held: "A grant of the power in general terms, standing by itself, would no doubt be construed in the wider sense; but it may be qualified by other express provisions in the same enactment, by the implication of the context, and even by the considerations arising out of what appears to be the general scheme of the Act." To the same effect are the observations of this Court in Kedar Nath Singh vs State of Bihar : "It is well settled that in interpreting an enactment the Court should have regard not merely to the literal meaning of the words used, but also take into consideration the antecedent history of the legislation, its purpose and the mischief it seeks to suppress.
(The Bengal Immunity Co. Ltd. vs The State of Bihar and R.M.D. Chamaurbaugwalla vs The Union of India ; cited with approval." This Court has in several cases adopted the principle of reading down the provisions of the Statute.
The reading down of a provision of a statute puts into operation the principle that so far as it is reason 1000 ably possible to do so, the legislation should be construed as being within its power.
It has the principle effect that where an Act.
is expressed in language of a generality which makes it capable, if read literally, of applying to matters beyond the relevant legislative power, the Court will construe it in a more limits sense so as to keep it within power.
Applying the principles laid down in the cases cited above, the power conferred under section 3 (1) and (2) of the impugned Act will have to be construed.
This Court has in St. Xavier 's College case (supra) held that the provisions of section 51A (1) of the impugned Act in that case which provided that no member of the other academic and non teaching staff of an affiliated college and recognised or approved institution shall be dismissed, or removed or reduced in rank except after an enquiry in which he has been informed of the charges against him and given a reasonable opportunity of being heard in respect of those charges and until he has been given a reasonable opportunity of making representation on any such penalty proposed to be inflicted on him, as a valid condition.
Mathew, J. affirmed that if the purpose of the approval is to see that the provisions of sub sec.
51 (A) (1) (a) are complied with, there can possibly be no objection in lodging the power of approval even in nominee of the Vice Chancellor.
Khanna, J. has held that if the power is confined only to cases of dismissal, removal or reduction in rank or termination of service as mala fide and by way of victimisation, the power would be valid.
Regarding the power of interference with the conclusion of a domestic tribunal in disciplinary matters, this Court has held that the decision can be interfered with if there is want of good faith or when there is victimisation or when the management has been guilty of basic error or violation of principles of natural justice or when the material findings are completely baseless or perverse (Indian Iron and Steel Co. Ltd. vs Their Workmen.
It has also been held that the authority interfering is not a Court of Appeal and cannot substitute its own judgment.
The impugned legislation was passed in the year 1975.
It must be presumed that the legislature was conscious of the limitations of the power which the competent authority can have in granting or withholding approval in the case of disciplinary proceedings conducted by private institution.
12(4) of the Kerala Education Bill (supra) was held to be valid on the ground that it was designed to give protection and security to the ill paid teachers who are engaged in rendering service to the nation and protect the backward classes.
If the power is 1001 constrused as conferring unrestricted power and if the provisions are held invalid, it will result in considerable mischief and would result in depriving the protection that is available to the poor teacher regarding their security of service.
The legislation was for the specific purpose of regulating the service conditions and providing security of service and for preventing teachers from being punished on flimsy grounds without framing charges and without giving an opportunity to explain.
lt is very different from other cases, in which the legislation was aimed at depriving the minority institutions of all its powers.
The only aim of the impugned legislation is to provide security of service.
As pointed out there are sufficient guidelines in the objects and reasons in the legislation as well as in the preamble.
In the circumstances, it is not only reasonable but proper that a restricted meaning is given to the power of prior approval conferred on the competent authority under s.3.
S.3(1) and (2) will have to be read together.
The procedure contemplated is that when the educational institution proposes to dismiss, remove or reduce in rank or otherwise terminate the appointment of any teacher it should communicate to the competent authority its proposal.
The latter part of S.3(2) mentions that the competent authority shall if it is satisfied that there are adequate and reasonable grounds for such proposal approve such dismissal, removal, reduction in rank or otherwise termination of appointment.
The approval of an order of dismissal or removal etc.
will have to be read alongwith S.3(1) which provides that no teacher shall be dismissed etc.
without the previous approval of the competent authority.
When a domestic enquiry has been conducted and the teacher is given an opportunity to rebut the charges and show cause against the punishment proposed and when fair procedure has been followed and the authority comes to the conclusion that the disciplinary action should be taken against the teacher the proposal will have to be sent to the competent authority.
The competent authority will examine the proposal alongwith the procedure adopted by the institution and such dismissal, removal or reduction in rank or termination of appointment.
s(2) requires the competent authority to approve such a proposal if it is satisfied that there are adequate and reasonable grounds for such proposal.
The two words "adequate and reasonable" in our opinion furnish sufficient guidelines.
The competent authority can interfere if there are no material at all for sustaining the order of punishment or when on the materials found the charge is completely baseless and perverse.
The word "adequate" in sub section will have to be understood as being confined to such examination of the proposal.
The word "reasonable" would indicate the power of the competent authority is confined to the power of an authority to inter 1002 fere with the enquiry and conclusions arrived at by the domestic Tribunal.
The competent authority may satisfy itself that the rules of natural Justice has been satisfied, that the teacher was given an opportunity to defend the charges against him and to show cause against the punishment proposed to be awarded to him and that a fair procedure has been observed.
The authority may also be entitled to interfere when the punishment was imposed by the institution due to mala fides or with a view to victimised him or such like grounds.
The word "reasonable" cannot be understood as conferring a power to interfere with the enquiry by the domestic tribunal as a Court of Appeal on merits.
The law relating to the circumstances under which the proceedings of the tribunal can be interfered with has been clearly laid down.
Sufficient guidelines are discernible from the Statements of objects and reason which state that the enactment was for the purpose of preventing private institutions from laking disciplinary action on flimsy grounds without framing charges and without giving an opportunity to explain and for regulating the service conditions of teachers and for ensuring their security of service.
We are satisfied that sufficient guidelines are indicated in the Act.
The words "adequate and reasonable" should be given a restricted meaning so as to validate the provisions of the section.
Thus, understood, the objection raised by Mr. Lal Narain Sinha, learned counsel for the appellant, that S.3(1) and (2) lack guidelines and have conferred a blanket power, cannot be upheld.
It was next contended by Mr. Lal Narain Sinha that no question of principles of natural justice arised when the conditions of service between the institution and the teacher are regulated by contract.
We are unable to accept this contention for the legislature is competent to enact provisions limiting the power of dismissal and removal.
The Legislature has given security of service to employees in industries and in other institutions.
It was submitted by the learned counsel that the offence of misconduct has not been classified in the Act and that no procedure for conducting disciplinary enquiry has been prescribed.
Such details are not essential.
It is within the jurisdiction of the institution to conduct an enquiry and impose punishments.
It is also the right of the competent authority to withhold approval on adequate and reasonable grounds.
The plea that the competent authority may be any petty officer cannot also be upheld as the competent authority is defined under section 2(1) as meaning any authority, officer or person authorised by notification performing the functions of competent authority under this Act.
The competent authority or officers of the educational department who are incharge of administration of educational institutions in the area, cannot be called petty officers.
1003 Section 3(3)(a) and 3(3)(b) relate to suspension of a teacher Sub.
section 3(a) requires that a teacher employed in a private institution shall not be placed under suspension.
Without an enquiry into the gross misconduct of such teacher is contemplated and sub.
s.3(b) requires that the period of suspension shall not exceed two months.
If it exceeds two months and the enquiry is not completed within that period, such teacher shall, without prejudice to the enquiry, be deemed to have been restored as teacher.
But the proviso enables the authority to extend the period of suspension for another two months if in his opinion the enquiry could not be completed within the period of two months.
ss.(a) & (b) of section 3 which relate to suspension are regulatory in nature and are intended to safeguard the teachers from being suspended for unduly long periods without there being an enquiry into gross misconduct.
We are unable to say that these provisions interfere with the right of administration of the private institutions.
S.3(4) states that every teacher placed under suspension shall be paid subsistence allowance at such rates as may be prescribed during the period of his suspension.
This sub section is purely regulatory in nature and unobjectionable.
section 4 confers a right of appeal against the order of punishment imposed on teachers employed in private educational institutions.
A teacher who is dismissed, removed or reduced in rank or whose appointment is otherwise terminated or whose pay and allowances or any of the whose conditions o service are altered or interpreted to his disadvantage may prefer an appeal to such authority as may be prescribed.
This section was challenged by Mr. L. N. Sinha, learned counsel, on the ground that the right of appeal conferred is a blanket power without any restriction.
In any event, the submission that the right of appeal is conferred only on the teacher and not on the institution.
Though no restriction are placed on the appellate power, we feel it may be possible to read down the section.
But the learned counsel is on firm ground when he submits that the right of appeal is confined only to the teachers and not available to institution.
This infirmity invalidates S.4.
Section 5 is consequential of S.4 in which power is conferred on the competent authority to hear appeal in certain past disciplinary cases.
S.5 also will have to fail alongwith S.4.
S.6 relates to retrenchment of teachers under certain conditions.
It provides that when any retrenchment is rendered necessary, consequent on any order of the Government relating to educational institutions or course of instruction or any other matter such retrenchment may be effected with the prior approval of the competent authority.
This section is also intended to provide security of service of the teachers and is regulatory in nature and 1004 the validity of which cannot be questioned.
section 7 requires the pay and allowances of any teacher employed in any private educational institution shall be paid on or before such day of every month, in such manner and by or through such authority, officer or person as may be prescribed.
This section is also regulatory in nature and is intended for securing regular payment of the teachers.
The validity of other sections was not questioned in the writ petitions, and, therefore, it is not permissible to go into it.
In the view we have taken, we do not think that we should go into the merits of each of the cases.
In C.A. No. 1280 of 1978 The All Saints High School Hyderabad vs The Govt.
of Andhra Pradesh and ors. the learned counsel appearing for the school before the High Court sought the decision only on the legal issues and the questions emanating from the provisions of the Act and specifically requested the court not to decide the merits of the case.
In some of the petition the facts have been gone into but we would refrain from going into the facts for it has to be decided as to whether the competent authority has acted within the restricted jurisdiction which have been stated with in our judgment.
If the competent authority had exceeded its jurisdiction, it would be open to the aggrieved institution to question the validity of such action.
These matters will have to be decided on merits.
In the circumstances.
we remit all the Civil Appeals to the High Court for disposal on merits in the light of this judgment.
ORDER In the view of the majority, sections 3(3) (a), 3(3) (b), 6 and 7 of the Andhra Pradesh Recognised Private Educational Institutions Control Act, 1975 are valid while sections 3(1), 3(2), 4 and 5 of the Act are invalid in their application to minority educational institutions.
It must follow that such institutions cannot be proceeded against for violation of provisions which are not applicable to them.
The matters are remanded to the High Court of Andhra Pradesh for final disposal on merits in the light of the judgments.
There will be no order as to costs.
| IN-Abs | The purported object of the Andhra Pradesh Recognised Private Educational Institutions Control Act 1975 was to regulate the service conditions of teachers in private educational institutions and for ensuring the security of service of the teachers.
Section 3(1) of the Act provides "Subject to any rule that may be made in this behalf, no teacher employed in any private educational institution shall be dismissed, removed or reduced in rank nor shall his appointment be otherwise terminated except with the prior approval of the competent authority".
The proviso to this sub section states that if any educational management etc.
contravenes the provisions of this sub section, the teacher affected shall be deemed to be in service.
Where a proposal to dismiss etc.
any teacher is communicated to the competent authority, according to sub section (2) of this section, that authority shall, if satisfied that there are adequate and reasonable grounds for such proposal, approve such dismissal, removal or reduction in rank or termination of appointment.
Clause (a) of sub section (3) of this section states that no teacher employed in any private educational institution shall be placed under suspension, except when an enquiry into the gross misconduct of such teacher is contemplated.
Clause (b) provides that no such suspension shall remain in force for more than a period of two months from the date of suspension and if such inquiry is not completed with that period, such teacher shall, without prejudice to the inquiry, be deemed to have been r restored as teacher.
The proviso states that the competent authority may, for reasons to be recorded in writing, extend the said period of two months for a further period not exceeding two months, if in his opinion, the inquiry could not be completed within the said period of two months for reasons directly attributable to each teacher.
Section 4 gives a right of appeal to teachers employed in private educational institutions against orders of punishment imposed on them.
Section 5 deals with special provisions regarding appeal in certain past disciplinary cases.
Section 6 which deals with retrenchment of teachers provides that where retrenchment of any teacher is rendered necessary consequent on any order of the Government relating to education or course of instructions or to any other matter, such retrenchment may be effected with the prior approval of the competent authority.
Section 7 provides for payment of pay and allowances to teachers in the prescribed manner.
925 The appellants who were minority educational institutions established by members of the Christian community filed writ petitions before the High Court impugning various provisions of the Act as being violative of the guarantee contained in Article 30(1) of the Constitution by permitting or compelling interference with the internal administration of their private educational institutions.
In particular they challenged the provisions of sections 3 to 7 of the Act on the ground that they deprive them of their right to administer the affairs of minority institutions by vesting the ultimate administrative control in an outside authority.
The contentions having been rejected by the High Court they filed appeals by special leave.
^ HELD s Permajority (Chandrachud, C.J., and Fazal Ali, J. Kailasam,J., dissenting.): Sub sections (1) and (2) of section 3 are invalid and cannot be applied to minority institutions.
Per majority (Chandrachud, C.J., and Kailasam J. Fazal Ali, J. dissenting).
Clauses (a) and (b) of section 3(3) do not offend against article 30(1) and are valid.
By the Court: Sections 4 & 5 are unconstitutional as being violative of article 30(1).
Per majority (Chandrachud, C.J., and Kailasam J Fazal Ali, J, dissenting).
Section 6 is valid.
By the Court: Section 7 is valid.
Per Chandrachud, C.J. Section 3(1) and 3(2) are unconstitutional in so far as they are made applicable to minority institutions since in practice these provisions are bound to interfere substantially with their right to administer institutions of their choice.
[937E] 1.
(a) Section 3(1) gives an unqualified mandate that no teacher shall be dismissed etc.
except with the prior approval of the competent authority.
Under the proviso, contravention of the section results in a total invalidation of the proposed action.
If the section is contravened the teacher shall be deemed to be in service.
Secondly, the sub section applies not only to cases in which the teacher is punished by an order of dismissal etc.
but to cases in which the appointment is otherwise terminated.
An order of termination simpliciter is also required to be submitted for the prior approval of the competent authority.
All this shows that the true object of the sub section is not that which one could liberally assume by reading down the section.
[935H; 936AB] (b) In the absence of any rules furnishing guidelines on the subject, it is difficult to predicate that in practice the operation of the section would be limited to a certain class of cases only.
The absence of rules on the subject makes the unguided discretion of the competent authority the sole arbiter of the question as to which cases would fall within the section and which would fall outside it.
[936 E F] (c) Section 3(2), under the guise on conferring the power of approval, confers upon the competent authority an appellate power of great magnitude.
That authority is made a judge both of facts and on law by the conferment upon 926 it of a power to test the validity of the proposal on the vastly subjective touchstone of adequacy and reasonableness.
The sub section leaves no scope for reading down the provision of section 3(1).
The two sub sections together confer upon the competent authority, in the absence of proper rules, a wide and untrammeled discretion to interfere with the proposed order whenever in its opinion the order is based on grounds which do not appear to it either adequate or reasonable.
[936G H; 937A] (d) Though the section provides that the competent authority "shall" approve the proposed order if it is satisfied that it is based on adequate and reasonable grounds, its plain and necessary implication is that it shall not approve the proposal unless it is satisfied.
The conferment of such a power on an outside authority, the exercise of which is made to depend purely on subjective consideration arising out of twin formula of adequacy and reasonableness, cannot but constitute an infringement of the right guaranteed by article 30(1).
[937C] State of Kerala vs Very.
Rev. Mother Provincial ; , D.A.V. College vs State of Punjab [1971] Suppl.
S.C.R. 688 and Ahmedabad st.
Xaviers College Society vs State of Gujarat ; ; referred to.
(a) Section 3(3)(a) and 3(3)(b) of the Act do not offend against the provisions of article 30(1) and are valid.
[939B C] (b) Clause (a) contains but an elementary guarantee of freedom from arbitrariness to the teachers.
The provision is regulatory in character since it neither denies to the management the right to proceed against an erring teacher nor does it place an unreasonable restraint on its power to do so.
It assumes the right of the management to suspend a teacher but regulates that right by directing that a teacher shall not be suspended unless an inquiry into his conduct is contemplated and unless the inquiry is in respect of a charge of gross misconduct.
These restraints which bear a reasonable nexus with attainment of educational excellence cannot be considered to be violative of the right given by article 30(1).
The limitation of the period of suspension initially to two months, which can in appropriate cases be extended by another two months, as provided in clause (b) and its proviso, partakes of the same character as the provisions contained in clause (a).
A provision founded so patently on plain reason is difficult to construe as an invasion of the right to administer an institution unless that right carried with it the right to maladminister.
[938 G H] 3.
Section 4 is unconstitutional as being violative of article 30(1) of the constitution.
The section confers upon the government the power to provide by rules that an appeal might lie to such authority or officer as it designates, regardless of the standing or status of that authority or officer.
Secondly an appeal is provided for on all questions of fact and law, thereby throwing open the order passed by the management to the unguided scrutiny and unlimited review of the appellate authority, which would mean that, in the exercise of the appellate power, the prescribed authority or officer can substitute his own view for that of the management even in cases in which two views are reasonably possible.
Lastly, while a right of appeal is given to the aggrieved teacher against the order passed by the management, no corresponding right is conferred on the management against the order passed by the competent authority under section 3(2) of the Act.
In the absence of a provision for appeal against the order of the competent autho 927 rity refusing to approve the action proposed by the management, the management is pleased in a gravely disadvantageous position vis a vis the teacher who is given the right of appeal by section 4.
[939D H] Section 5 must fall with section 4.
[940B] 4.
Section 6 is valid.
The section aims at affording a minimal guarantee of security of tenure to teachers by eschewing the passing of mala fide orders in the garb of retrenchment.
It is implicit in the provisions of this section that the limited jurisdiction which it confers upon the competent authority is to examine whether, in cases where the retrenchment is stated to have become necessary by reason of an order passed by the Government, it has in fact so become necessary.
The conferment of a guided and limited power on the competent authority for the purpose of finding out whether, in fact the retrenchment has become necessary by reason of a Governmental order cannot constitute an interference with the right of administration conferred by article 30(1).
[940D F] Section 7 is regulatory in its character and is valid.
[940H] Per Fazal Ali, J. On an exhaustive analysis of the authorities of this Court on the various aspects of the fundamental right enshrined in article 30(1) of the Constitution the following propositions of law emerge: (i) Article 30(1) enshrines the fundamental right of the minority institutions to manage and administer their educational institutions.
[967H] (ii) Although, the right conferred by this article is absolute, unfettered and unconditional, it does not mean that it gives a licence for maladministration so as to defeat the avowed object of the article, namely to advance excellence and perfection in the field of education.
[968B] (iii)While the State or any other statutory authority has no right to interfere with the internal administration of the minority institution, it could take regulatory measures to promote the efficiency and excellence of educational standards and issue guidelines for ensuring the security of the services of the teachers and other employees of the institution.
[968C] (iv) Under the garb of adopting regulatory measures, the State or any other authority cannot destroy the administrative autonomy of the institution or interfere with the management of the institution so as to render the right of administration of the management of the institution illusory.
[968E] (v) By its very nature article 30 implies that where an affiliation is asked for, the university cannot refuse the same without sufficient reason or try to impose such conditions as would completely destroy the autonomous administration of the educational institution.
[968G] (vi) Induction of an outside authority in the governing body of the minority institution to conduct the affairs of the institution would be completely destructive of the fundamental right under article 30(1), where a high authority like the Vice Chancellor or his 928 nominee is appointed in the administration, such authorities should not be thrust so as to have a controlling voice in the matter overshadowing the powers of the managing committee.
[968H] (vii)It is open to the Government or the University to frame rules and regulations governing the conditions of service of teachers in order to secure their tenure of service and to appoint a high authority to see that the rules are not violated or the members of the staff are not victimised.
In such cases the purpose is not to interfere with the autonomy of the institution but merely to improve the excellence and efficiency of education.
Even so, an authority should not be given a blanket uncanalised and arbitrary powers.
[969E F] (viii)Where a minority institution affiliated to a university is enjoined to adopt courses of study of the syllabi or the nature of books prescribed and the holding of examination to test the ability of the students of the institution, it does not follow that the freedom contained in article 30(1) of the Constitution is violated.
[970A] (ix) Where a high authority is appointed to exercise vigilance on the work of the teachers and to ensure security of tenure for them the authority must be given proper guidelines.
Before coming to any decision which may be binding on the managing committee the head of the institution or the senior member of the managing committee must be associated and they should be allowed to have a say in the matter.
[970C] Kerala Education Bill, 1957; , ; Sidhajbhai Sabhai and Ors.
vs State of Bombay and Anr.
; ; Rev. Father W. Proost & Ors.
vs State of Bihar ; ; State of Kerala etc.
vs Veru Rev. Mother Provincial etc.
; ; D.A.V. College etc.
vs State of Punjab & Ors.
and The Ahmedabad St. Xaviers College Society & Anr.
vs State of Gujarat ; ; referred to.
(a) Section 3 in its entirety is ultra vires as being violative of article 30(1) and is wholly inapplicable to the appellants who are minority institutions.
[975B] (b) The proviso enjoins that any contravention of the provisions would not affect the teachers who would be deemed to be in service.
It is manifest that in the absence of any rules the proviso would have no application and even if it applied it would amount to a serious inroad on the fundamental right of the minority institutions to administer or manage their own affairs.
[971H] (c) Sub section 2 of section 3 is unconstitutional as being violative of article 30(1).
It suffers from the vice of excessive delegation of powers and confers undefined, absolute and arbitrary powers to grant or to refuse sanction to any action taken by the managing committee and almost reduces the institution to a helpless position.
[973B C] (d) If the State wanted to regulate the conditions of service of the teachers, it should have taken care to make proper rules giving sufficient 929 powers to the management in the manner in which it was to act.
Induction of an outside authority into the institution and making his decision final was a blatant interference with the autonomy of the institution.
The words "adequate and reasonable" are too vague and do not lay down any objective standard to judge the discretion to be exercised by the competent authority whose order would be binding on the institution.
[972F G] (e) While section 4 gives a right of appeal to the aggrieved teacher no such right has been given to the management to file an appeal against the order of the competent authority if it refuses to grant sanction to the order of the Managing Committee of the institution.
The competent authority is only the District Educational Officer who is not a very high authority such as a Director of Public instruction or Vice Chancellor of a University.
No time limit has been fixed by the statute within which the competent authority is to give its approval.
The cumulative effect of clause (a) and (b) of section 3(3) and the proviso is to interfere with the internal administration of the minority institutions and curb the power of suspension.
It deprives the institution of the right of taking any disciplinary action against a teacher.
The adjective "gross" before the term "misconduct in clause (a) destroys the power of suspension which the minority institution possesses.
The provision contained in clause (b) of section 3(3) providing that no suspension shall remain in force for a period of more than two months from the date of suspension and if no inquiry is completed within this period the teacher would have to be reinstated, gives an unqualified right to a teacher in the matter of suspension which even a government servant does not enjoy.
[973A, 974D E] 2.
Section 4 is ultra vires and is violative of article 30 of the Constitution.
It does not contain any guidelines as to the manner in which the power could be exercised, nor does it contain any provision which may entitle the minority institution to be heard by the appellate authority.
The conferment of an absolute and unguided power on the appellate authority would amount to a direct interference with the right enshrined in article 30(1) and makes the minority institution a powerless body.
[976B; 975G] 3.
If section 4 is inapplicable to the minority institution Section 5 also follows the same fate.
[976C] 4.
Section 6 which contains an un canalised and unguided power suffers from the same vice as in the case of section 3.
The words "administer educational institutions of their choice" in article 30 clearly indicate that the institution has an absolute right to select teachers, retain them or retrench them at its sweet will according to the norms prescribed by the institution or by the religious order which has founded the institution.
[976H] 5.
Section 7 is an innocuous provision and is valid.
[977C] 6.
Sections 8, 9, 12 and 13 are inapplicable to the minority institutions.
[977D, 978B] 7.
Section 16 suffers from a serious defect namely that the provision regarding appeal to the appellate authority was valid then it completely bars the right of the management to file a suit to challenge the validity of the order of the appellant.
To this extent the section makes serious inroad on the fundamental right of the minority institutions and is inapplicable to the minority institutions.
[978G] Section 17 is inapplicable.
[978F] 930 Per Kailasam, J. 1.
A reading of the various decisions rendered by this Court on the interpretation of article 30(1) of the Constitution makes it clear that while the right to establish and administer a minority institution cannot be interfered with, restrictions by way of regulations for the purpose of maintaining the educational standards of the institution can be validly imposed.
For maintaining the educational standards of the institution as a whole, it is necessary to ensure that it is properly staffed.
Conditions imposing the minimum qualifications of the staff, their pay and other benefits, their service conditions, the imposition of punishment will all be covered and regulations of such a nature are valid.
In the case of institutions that receive aid it is the duty of the government who grants aid to see that the funds are properly utilised.
Regulations can be made by the government for ensuring the proper conditions of service of the teachers and for securing fair procedure in the matter of disciplinary action against them.
Prescribing uniformity in the conditions of service and conduct of teachers in all non governmental colleges would promote harmony, avoid frustration and, therefore, is permissible.
Rules prescribed by the university or other authority may require that no member of the teaching or non teaching staff of a recognised or approved institution shall be dismissed etc., except after a proper enquiry.
If the regulations require the approval of the competent authority for safeguarding the rights of the teachers and for securing the procedure there can be no objection.
Such authority can also interfere with the decision of the private institutions when the punishment awarded is malafide or by way of victimisation or for similar causes.
[989B; 993D G] Kerala Education Bill [1959] SCR, 995, Rev. Sidhajbhai Sabhai & Ors. ; , Rev. Father W. Proost and Ors.
vs State of Bihar & Ors.
; , State of Kerala vs Very.
Rev. Mother Provincial ; , D.A.V. College etc.
vs State of Punjab & Ors.
[1971] Suppl.
S.C.R. 688 and Ahmedabad St. Xaviers College Society and Anr.
vs State of Gujarat ; , referred to. 2.
It is not only reasonable but proper that a restricted meaning is given to the power of prior approval conferred on the competent authority under section 3 of the Act.
It is a well established principle of interpretation that the statement of objects and reasons could be referred to for the limited purpose of ascertaining the conditions prevalent at the time which actuated the sponsor of the Bill to introduce the same and the extent of urgency and the evil sought to be remedied.
Clearly the legislation was intended to regulate the service conditions of teachers employed in the private educational institutions and for the security of service of the teachers.
The power contained in section 3(1) and 3(2) is restricted to regulating the service conditions of teachers and for ensuring their security of service.
[1001C; 998A B] 3.
While interpreting a provision of law the Court will presume that the legislation was intended to be intra vires and also reasonable.
The section ought to be interpreted consistent with the presumption which imputes to the legislature an intention of limiting the direct operation of its enactment to the extent that is permissible.
A reading down of a provision of a statute puts into operation the principle that so far as it is reasonably possible to do so, the legislation should be construed as being within its power.
It has the principle effect 931 that where an Act is expressed in language of generality, which makes it capable, if read literally, of applying to matters beyond the relevant legislative powers, the Court will construe it in a more limited sense so as to keep it within power.
[998E F] The State of West Bengal vs Subhodh Gopal Bose and Ors. ; , Att.
vs HRH Prince Earnest Augstas of Hanover, , Keshavananda Bharti vs State of Kerala , 101, Towns vs Bigner 245 U.S. , 376 and Kedar Nath Singh vs State of Bihar ; ; referred to.
In the instant case it must be presumed that the legislature was conscious of the limitations of the power which the competent authority can have in granting or withholding approval in the case of disciplinary proceedings conducted by private institutions.
The object of the legislation in this case was very different from other cases in which the legislation was aimed at depriving the minority institutions of all their powers.
Its only aim is to provide security of service.
There are sufficient guidelines in the objects and reasons as well as in the preamble.
[1001 B C] 4.
(a) The contention that section 3(1) and (2) lack guidelines and have conferred a blanket power cannot be accepted.
Section 3(1) and (2) must be read together.
The words "adequate and reasonable" should be given a restricted meaning so as to validate the provisions of the section.
The approval of an order contemplated by sub section (2) will have to be read with sub section (1).
Sub section (2) required the competent authority to approve such a proposal if it is satisfied that there are adequate and reasonable grounds for such proposal.
The words "adequate and reasonable" furnish sufficient guidelines.
The competent authority can interfere if there are no materials at all for sustaining the order of punishment or when on the materials found the charge is completely baseless and preserve.
The word "adequate" will have to be understood as being confined to such examination of the proposal.
The word "reasonable" would indicate that the power of the competent authority is confined to the power of an authority to interfere with the enquiry and the conclusions arrived at by the domestic tribunal.
It cannot be understood as conferring absolute power to interfere with the enquiry by the tribunal as a Court of appeal on merits.
[1002E; 1001G H] (b) The plea that the "competent authority" may be any petty officer cannot be upheld because it is defined in section 2(1) to mean "any authority, officer or person authorised by notification performing the functions of competent authority".
The officers of the educational department who are incharge of the administration of educational institutions in the area cannot be called petty officers.
[1002H] (c) Clauses (a) and (b) of sub section (3) cannot be said to interfere with the right of administration of the private institutions.
The two clauses are regulatory in nature and are intended to safeguard the teachers from being suspended for unduly long periods without there being an enquiry into "gross mis conduct." [1003C] (d) Sub section (4) of section 3 which states that every teacher placed under suspension shall be paid subsistence allowance at such rates as may be 932 prescribed during the period of his suspension is purely regulatory in nature and, therefore, unobjectionable.
[1003D] 5.
Section 4 is invalid.
The vice contained in this section is that the right of appeal which is confined only to the teachers is not available to institutions.
[1003F] 6.
Section 5 which confers power on the competent authority to hear appeals in certain past disciplinary cases will have to fall along with section 4.
[1003G] 7.
Section 6 is also regulatory in nature and its validity cannot be questioned.
[1003H] 8.
Section 7 is regulatory in nature and is intended for securing regular payment to the teachers.
[1004A]
|
Civil Appeal No. 1415 of 1970.
From the Judgment and Order dated 30 9 69 of the Bombay High Court in S.C.A. No. 1512 of 1967.
V. M. Tarkunde, R. Satish, V. K. Pandita and E. C. Agarwala for the Appellant.
M. C. Bhandare, C. K. Ratnaparkhi and M. N. Shroff for the Respondent.
The Judgment of the Court was delivered by FAZAL ALL J.
This appeal by certificate is directed against a judgment of the Bombay High Court dated 30 9 1969 dismissing the writ petition filed by the appellant against an order of the Commissioner.
The facts of the case lie within a narrow compass and may be stated as follows: Proceedings under Maharashtra Agricultural Lands (Ceiling of Holdings) Maharashtra Act No. XXVII 1961 and (hereinafter to be referred to as the Act) which received the assent of the President on 1050 16 6 1961 were taken against the appellant in order to determine whether the return filed by the appellant under the provisions of the Act was correct or not.
In his return filed before the Deputy Collector, the appellant had shown the total lands to be 370 acres and 34 gunthas.
It was however alleged by the appellant that some time in the year 1956, there was a partition between the appellant and his nephews as a result of which his family got 202 acres of land.
The appellant had sold 51 acres of land to other persons before the Act came into force.
The appellant further alleged that he gave some lands to his adopted son in lieu of the latter 's share.
The adopted son Nemichand thereafter gave 93.25 acres of land to his mother under a civil Court decree.
All these transactions took place some time in the year 1956.
The Collector after examining the return found that the total land owned by the appellant was 118 acres 36 gunthas and the excess was only 4 acres 36 gunthas which could be taken over under the Act.
Against the order of the Deputy Collector, the Commissioner appears to have called for the records and interfered suo moto and after making some enquiry, he held that the land declared by the appellant in his return far exceeded the ceiling limit.
In computing the total lands owned by the appellant, the Commissioner appears to have taken into account even that land which had been given by Nemichand to his mother, the wife of the appellant.
Against this order of Commissioner, the appellant filed a writ petition before the High Court which was dismissed as a result of which an application was filed for grant of certificate for appeal to this Court which was granted.
Hence this Appeal.
The short point taken by Mr. V. M. Tarkunde, learned counsel for the appellant is that under the provisions of the Act, land which was received by his wife from the adopted son was her personal property and could not be included in the ceiling of the appellant and that the Commissioner therefore had no jurisdiction to add that land and treat the same as the land of the appellant and proceed to set said the order of the Deputy Collector.
The High Court in a short judgment refused to interfere mainly on the ground that the transfer of the land in favour of Nemichand, the adopted son, was held to be collusive as also the decree.
There was neither any pleading nor any case made out either before the Deputy Collector or even before the Commissioner to indicate that the transfer of the lands in favour of the adopted son and the transfer of Nemichand in favour of his mother were collusive or tainted by fraud.
In fact both these transactions took place as far back as 1956, that is to say, five years before the Act came into force.
Even the Act clearly exempts lands which may 1051 have been acquired or transferred prior to 4 8 1959.
Ss. 8, 10 and 12 which deal with the subject clearly enjoin that only those transfers would be hit by the Act which are made at any time on or after 4 8 1959.
As both the transfers mentioned above were prior to 4 8 1959, it is obvious that they fell completely outside the ambit of the provisions of the Act.
The High Court was thus not justified in presuming that the transfer made by the appellant in favour of his adopted son towards his share and the transfer by the adopted son Nemichand to his mother were either collusive or fraudulent.
There was neither any foundation in the pleadings nor any evidence to support this conjecture of the High Court.
Mr. Bhandare, learned Counsel appearing for the respondent submitted that the word 'person ' defined in Sec.
2(22) of the Act includes family and that 'family ' as defined in Sec.
2(11) of the Act includes, a Hindu undivided family, and in the case of other persons, a group or unit the members of which by custom or usage are joint in estate or possession or residence.
Reliance was also placed on Section 6 of the Act which runs thus: "Where a family unit consists of members which exceed five in number, the family unit shall be entitled to hold land exceeding the ceiling area to the extent of one fifth of the ceiling area for each member in excess of five, so however that the total holding shall not exceed twice the ceiling area, and in such case, in relation to the holding of such family unit, such area shall be deemed to be the ceiling area.
" These sections are of no assistance to the Respondent because Section 6 takes within its fold lands belonging to the owner, or his family as a single unit and is not meant to cover the separate or individual property of a member of the family which is self acquired property and cannot be clubbed together with land of owner or his family.
To begin with the Act merely intended to include land with in the ceiling limit of a person or his family which belonged to such a person or persons having different shares in that property.
That is why all transfers made prior to 1959 were expressly exempted from the operation of the Act.
The arguments advanced by the respondent appear to have found favour with the Commissioner, but it was legally erroneous as indicated above.
In these circumstances, therefore, the more important fact to be determined was whether or not any transfer that has been made by the person concerned was prior to or after 4 8 1959.
If the transfer was prior to 4 8 1959 then the provisions of the Act would not apply at all.
In the instant case, both the 1052 transfers being three years prior to the date mentioned above, the Act would not apply to the appellant, and the Commissioner and the High Court therefore erred in holding that the lands transferred by Nemichand to his mother should be included in the total area of the land owned by the appellant.
We, therefore, allow this Appeal, set aside the judgment of the High Court and also that of the Commissioner and restore the judgment of the Deputy Collector.
In the special circumstances, there shall be no orders as to costs.
The appeal is accordingly allowed.
N.K.A. Appeal allowed.
| IN-Abs | The appellant in his return filed before the Deputy Collector had shown the total lands in his possession to be 370 acres and 34 gunthas.
Proceedings under the Maharashtra Agricultural Lands (Ceiling of Holdings) Act, 1961 were taken against him in order to determine whether the return filed was correct or not.
It was alleged by the appellant that some time in the year 1956 there was a partition between the appellant and his nephews as a result of which his family got 202 acres of land.
The appellant had sold 51 acres of land to other persons before the Act came into force and that he gave some land to his adopted son in lieu of the latter 's share and that the adopted son thereafter gave 93.25 acres of land to his mother under Civil Court decree.
All these transactions took place some time in the year 1956.
The Collector after examining the return found that the total land owned by the appellant was 118 acres 36 gunthas and the excess was only 4 acres 36 gunthas which could be taken over under the Act.
The Commissioner called for the records and interfered suo moto.
After making some enquiry, he held that the land declared by the appellant in his return far exceeded the ceiling limit and in computing the total lands owned by the appellant he took into account even the lands which had been given by the adopted son to his mother, the wife of the appellant.
The appellant filed a writ petition against the order of the Commissioner in the High Court which refused to interfere on the ground that the transfer of the land in favour of the adopted sons was held to be collusive as also the decree.
In the appeal to this Court, it was contended on behalf of the appellant that under the provisions of the Act, land which was received by his wife from the adopted son was her personal property and could not be included in the ceiling of the appellant and that the Commissioner had no jurisdiction to add that land and treat the same as the land of the appellant and to set aside the order of the Deputy Collector.
On behalf of the respondent it was contended that the word 'person ' defined in section 2(22) of the Act includes family and that 'family ' as defined in section 2(11) includes, a Hindu Undivided family, and in the case of other persons, a group or unit, the members of which by custom or usage are joint in an estate or possession or residence.
Allowing the appeal.
^ HELD: 1.
The judgment of the High Court is set aside as also that of the Commissioner and that the judgment of the Deputy Collector restored.
[1052B] 1049 2.
The Act clearly exempts the land which may have been acquired or transferred prior to 4 8 1959.
Section 8, 10 and 12 which deal with the subject clearly enjoin that only those transfers would be hit by the Act which are made at any time on or after 4 8 1959.
[1051A] 3.
There was neither any pleading nor any case made out either before the Deputy Collector or even before the Commissioner to indicate that the transfer of the land in favour of the adopted son and the transfer by the adopted son in favour of his mother were collusive or tainted by fraud.
Both these transactions took place as far back as 1956 that is to say 5 years before the Act came into force.
[1050G H] 4.
The High Court was not justified in presuming that the transfer made by the appellant in favour of his adopted son towards his share and the transfer by the adopted son to his mother was either collusive or fraudulent.
There was neither any foundation in the pleadings nor any evidence to support this conjecture of the High Court.
[1051A C] 5.
Sections 2(11), 2(12) are of no assistance as Section 6 takes within its fold lands belonging to the owner, or his family as a single unit and is not meant to cover the separate or individual property of a member of the family which is self acquired property and cannot be clubbed together with the land of the owner or his family.
To begin with, the Act merely intended to include the land within the ceiling limits of a person or his family which belonged to such a person or persons having different shares in that property.
That is why all transfers made prior to 1959 were expressly exempted from the operation of the Act.
[1051E G]
|
ivil Appeal Nos.
559 560 of 1970.
Appeals by Special Leave from the Judgment and order dated 24 1 1969 of the Allahabad High Court in Special Appeal No. 511 of 1968 connected with Special Appeal No. 512 of 1968.
R. K. Garg and V. J. Francis for the Appellant.
Madan Bhatia for the Respondent.
The Judgment of the Court was delivered by UNTWALIA, J.
These two appeals by special leave have been heard together as common questions of law and fact are involved in them.
We shall state the facts of Civil Appeal No. 559 of 1970 in which the appellant is Shri Harish Chandra Nigam.
The facts of the other appeal viz.
Civil Appeal No. 560 of 1970 in which the appellant is Shri Amar Singh are almost identical except one which shall be stated hereinafter.
The plot concerned in Nigam 's appeal is plot No. 60 and in the other appeal it is plot No. 6.
Nigam made an application to the Director of Industries, Uttar Pradesh for allotment of the plot to him for industrial purposes.
By an order dated November 22, 1956 the application was "provisionally accepted subject to the final approval of Government." Finally he was informed by the Manager of Industrial Estate, Kalpi Road, Kanpur in his letter dated 31 10 1962 "that the State Government has not approved the allotment in your favour and the provisional allotment made in your favour stands cancelled.
" But it appears after the provisional allotment Nigam was put in possession of the land.
Steps were to be taken for his eviction after giving information as to the cancellation of the allotment in the letter aforesaid dated 31 10 1962.
But before these steps were taken and possession was recovered from him the District Magistrate, Kanpur requisitioned the plot under section 811 29 of the Defence of India Act, 1962; hereinafter called the Act.
This order is dated 7 12 1963.
The order reads as follows: "Whereas in my opinion it is necessary and expedient to requisition unit No. 60 in the Govt.
Industrial Estate, Kanpur specified below, of which you are the person in possession for efficient conduct of Military operations.
And whereas the powers of requisitioning under Section 29 of the Defence of India Act, 1962 (Central Act.
No. 51 of 1962) have been conferred on me by the Government of Uttar Pradesh under Notification No. 5589/18 I LA/63, dated January 14, 1963 issued by Revenue (B) Department /18 Bhardwaj, District Magistrate, Kanpur hereby requisition the aforesaid Unit and order that possession thereof be delivered by 11 12 63 to the General Manager, ordnance Factory, Kalpi Road, Kanpur, after removing therefrom any furniture or other articles.
I further order that the Tahsildar, Kanpur shall arrange for the delivery of possession of the aforesaid unit to the General Manager, ordnance Factory, Kalpi Road, Kanpur at the expiry of the period indicated above, if the possession is not delivered in compliance of the above order.
" Pursuant to the above order possession was taken from appellant Nigam on January 2, 1964 and was handed over to the General Manager, Ordnance Factory, Kanpur.
No steps were taken by the Industries department for taking formal or symbolical possession of the plot in question after it was requisitioned by the District Magistrate.
Then came the derequisitioned order passed by the District Magistrate under section 35 of the Act on 20 1 1967.
In passing it may be mentioned here that the appellant had kept his stores in two of the rooms standing in the land.
But this fact is not very material for the purpose of deciding the matter in issue before us.
The de requisition order reads as follows: "Regarding requisition of Unit No. 6 and 60 Industrial Estate for starting Astisan Training School by the Ordnance Factory, Kalpi Road, Kanpur.
ORDER Whereas the property specified in the schedule hereto appended was requisitioned by the order of the District Magistrate, Kanpur dated 7 12 1963 until further order.
812 And whereas it has now been decided that the said property shall be released from requisition with immediate effect.
Now, therefore, in exercise of the powers conferred by sub section (1) of Section 35 of the Defence of India Act, 1962 (Act No. 51 of 1962), I, section section Sidhu, District Magistrate, Kanpur being the competent authority do here by declare that the said property is released from requisition, and hereby specify the Director of Industries, Kanpur as the person to whom the possession of the said property shall be given.
Thereupon the petitioner filed a writ petition in the Allahabad High Court to issue a writ in the nature of mandamus against the respondent directing to deliver possession of the property in dispute to the appellant and not to deliver possession to any other person.
It appears, however, that possession of the property had been given to the Industries department.
The petitioner unsuccessfully prosecuted his writ petition before the learned single Judge of the High Court.
He failed in appeal also.
Hence the present appeal.
One extra fact which need be mentioned in regard to the case of Amar Singh is that after de requisition and after possession of the plot was taken by the Industries department of the Government of Uttar Pradesh the plot was allotted to Mrs. B. K. Anand, respondent No. 5 in Civil Appeal No. 560 of 1970.
The other facts of his case are identical.
Learned Counsel for the appellants submitted before us that irrespective of the disputed question of fact whether there was final allotment in favour of the appellant or not, since requisition order had been served on him and possession had been taken from him, the property and its possession on de requisition ought to have been released to him.
It could not be made in favour of the Industries department.
Learned counsel for the State, on the other hand, submitted that since the appellant had not semblance of right, title or interest left in the plot after cancellation of the provisional allotment in his favour he had no locus standi to ask for a writ of mandamus for delivery of possession of the plot to him.
Direction was given for releasing the plot in favour of the Industries department and if the appellant is so advised he may recover possession of the plot on establishment of his right, title or interest in the plot in a competent court in accordance with sub s.(2) of section 35 of the Act.
It was 813 further submitted in case of Amar Singh that the plot had been allotted to Mrs. B. K. Anand and she cannot be dispossessed now.
We shall read the two provisions first and enunciate the law engrafted in them and then proceed to pass the final orders in the two appeals as their respective facts and circumstances may warrant.
Sections 29 and 35 read as follows: "29.
(1) Notwithstanding anything contained in any other law for the time being in force, if in the opinion of the Central Government or the State Government it is necessary or expedient so to do for securing the defence of India, civil defence, public safety, maintenance of public order or efficient conduct of military operations, or for maintaining supplies and services essential to the life of the community, that Government may by order in writing requisition any immovable property and may make such further orders as appear to that Government to be necessary or expedient in connection with the requisitioning: Provided that no property or part thereof which is exclusively used by the public for religious worship shall be requisitioned.
(2) The requisition shall be effected by an order in writing addressed to the person deemed by the Central Government or the State Government, as the case may be, to be the owner or person in possession of the property, and such order shall be served in the prescribed manner on the person to whom it is addressed.
(3) Whenever any property is requisitioned under sub section (1), the period of such requisition shall not extend beyond the period for which such property is required for any of the purposes mentioned in that sub section.
(1) Where any property requisitioned under section 29 is to be released from such requisition, the Government by which or under whose authority the property was requisitioned or any person generally or specially authorised by it in this behalf may, after such inquiry, if any, as it or he may in any case, consider necessary to make or cause to be made, specify by order in writing the person to whom possession of the property shall be given and such possession shall, as far as practicable, be given to the person who 814 appears to the Government or, as the case may be, the person authorised as aforesaid, to be entitled to the possession of the property at the time such order is made.
(2) The delivery of possession of the property to the person specified in the order under sub section (1) shall be a full discharge of the Government from all liabilities in respect of the property, but shall not prejudice by any rights in respect of the property which any other person may be entitled by due process of law to enforce against the person to whom possession of the property is delivered.
" The requisition was effected by an order in writing addressed to the person in possession of the property in accordance with sub section
(2) of section 29.
He may not be the owner of the property.
But on requisition possession was taken from him.
The inquiry envisaged under sub section
(1) of section 35 is necessitated only if facts and events taking place after requisition necessitate it.
Otherwise not.
As for example, suppose, possession of a property is taken from X and after requisition he dies and dispute starts between his heirs as to who is entitled to get back the property.
A summary and prima facie inquiry may be made under sub section
(1) and property may be released in favour of the person who may be entitled to the possession of it in the opinion of the Government.
Of course such a decision would be subject to the adjudication of the rights of the parties in accordance with sub section
Facts anterior to the requisition are not necessary to be investigated for release of the property because the property has to be released in favour of the person from whom possession was taken.
If it were not so then it would be enlarging the scope of the inquiry envisaged under sub section
(1) of section 35 of the Act and the power of the Government to adjudicate upon anterior title of the various claimants to the property.
This is not the scope of the inquiry.
It is, therefore, clear to us that technically speaking on a correct interpretation of the law the property on de requisition ought to have been released in favour of the two appellants in the two appeals from whom possession was taken at the time of requisition.
But on the special facts of these two appeals we do not feel persuaded to make our unqualified or unconditional order in these appeals filed on grant of special leave under article 136 of the Constitution as justice requires only a qualified and conditional order.
It is plain on the facts placed before us that there was no final allotment of the plots in favour of the appellants.
The allotment was only provisional subject to the approval of the Government.
Possession had been given to them and before requisition the Industries 815 department had not recovered back possession of either of the two plots.
In such a situation we make the following orders in the two appeals separately.
Civil Appeal No. 559 of 1970.
The possession of plot No. 60 is directed to be delivered to appellant Nigam within a period of six months from today.
If during the said period of six months the Government takes adequate and legal steps for taking back formal possession of the plot from him, then possession need not be delivered back to Nigam.
But on their failure to do so our direction will hold good and possession of plot No. 60 will have to be given to Nigam subject to its recovery back by the Government even later.
It will be open to the aggrieved party, if necessary, to initiate a proceeding in accordance with sub section
(2) of section 35.
We allow this appeal in part to the extent and in the manner indicated above.
Civil Appeal No. 560 of 1970.
Since in this case allotment of the plot was made in favour of Mrs. B. K. Anand, we do not consider it just and expedient to direct the Government to take steps for completing the formality of taking possession and to dispossess Mrs. Anand.
On the special facts of this case we dismiss this appeal in toto.
There will be no order as to costs in either of the appeals.
V.D.K. C.A. 559/70 allowed.
C.A. 560/70 dismissed.
| IN-Abs | The appellants in both the appeals were allotted a plot each "provisionally subject to the final approval of Government" and possession thereof was also given in 1956.
Six years later by letter dated 31 10 62 they were informed that "the State Government has not approved the allotment in your favour and the provisional allotment made in your favour stands cancelled".
Steps were to be taken for the eviction as per the said letter of cancellation, but before any action was taken, the District Magistrate requisitioned the said plots for defence purposes under section 29 of the Defence of India Act, 1922.
The letters of requisition were addressed to the appellants and possession taken.
No steps were taken by the Department for taking formal or symbolical possession of the plots in question after they were requisitioned by the Magistrate.
Later on, while derequisitioning the said plots under section 35(1) of the Defence of India Act 1962, the Magistrate "specified the Director of Industries, Kanpur as the person to whom the possession of the said plots shall be given".
Possession was given accordingly and the Director of Industries in CA 560/70 in turn allotted the plot covered in it to one Mrs. B. K. Anand respondent 5 therein.
The writ Petitions filed by the appellants in the High Court challenging the said orders failed and hence the appeal by special leave.
Allowing CA 559/70 and dismissing CA 560/70, the Court, ^ HELD: The inquiry envisaged under sub section (1) of section 35 of the Defence of India Act, 1962, is necessitated only if facts and events taking place after requisition necessitate it.
Otherwise not.
As for example, suppose, possession of a property is taken from X and after requisition he dies and dispute starts between his heirs as to who is entitled to get back the property.
A summary and prima facie inquiry may be made under sub section
(1) and property may be released in favour of the person who may be entitled to the possession of it in the opinion of the Government.
Of course such a decision would be subject to the adjudication of the rights of the parties in accordance with sub section
[814 C E] Facts anterior to the requisition are not necessary to be investigated for release of the property because the property has to be released in favour of the person from whom possession was taken.
If it were not so then it would be enlarging the scope of the inquiry envisaged under sub section
(1) of section 35 of 810 the Act and the power of the Government to adjudicate upon anterior title of the various claimants to the property.
This is not the scope of the inquiry.
[814 E F] Technically speaking on a correct interpretation of the law the property on de requisition ought to have been released in favour of the two appellants in the two appeals from whom possession was taken at the time of requisition.
The requisition was effected by an order in writing addressed to the person in possession of the property in accordance with sub section
(2) of section 29.
He may not be the owner of the property.
But on requisition possession was taken from him.
[814 C D, F G] [The Court, however, passed a qualified and conditional order in terms].
|
N: Criminal Appeal No. 211 of 1974.
Appeal by special leave from the Judgment and order dated 19 4 1974 of the Delhi High Court in Crl.
A. No. 186/72.
Frank Anthony, section K Dholakia and R. C. Bhatia for the Appellant.
H. section Marwah and R. N. Sachthey for the Respondent.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
The appellant Hazari Lal was convicted by the learned Special Judge, Delhi, of offences under section 5(2) read with section 5(1) (d) of the Prevention of Corruption Act, 1947, and Section 161 of the Indian Penal Code.
On the first count he was sentenced to suffer rigorous imprisonment for a period of two years and to pay a fine of Rs. 500.
On the second count he was sentenced to suffer rigorous imprisonment for a period of two years.
The two sentences were directed to run concurrently.
The convictions and sentences were confirmed by the High Court of Delhi.
1056 The case which the prosecution set out to prove before the Trial Judge was briefly as follows: The scooter rickshaw belonging to Sri Ram (P.W.3) and driven by his driver Ram Lubhaya (P.W. 6) was involved in an accident on July 12, 1969.
The scooter rickshaw and a tonga which were involved in the accident were taken to the Police Station, Kashmere Gate by the accused, a Police constable attached to that station.
P.W. 3 obtained orders from the Magistrate for the release of his vehicle and went to the Police Station to obtain delivery of the vehicle.
The accused, who was present took him outside and told him that the vehicle would be given to him only if he paid a bribe of Rs. 60.
P.W. 3 then went away.
He went to the Anti Corruption Department and made statement to Inspector Paras Nath, P.W. 8.
After recording the statement of P.W. 3, P.W. 8 sent for two persons Davinder Kumar (P.W. 4) and Kewal Krishan.
The statement of P.W. 3 was read out to P.W. 3 in the presence of the two Panch witnesses Davinder Kumar and Kewal Krishan.
P.W. 3 then produced six currency notes of the value of Rs. 10 each.
The numbers of the notes were noted and they were treated with phenol phthelene powder.
After the usual instructions were given to P.W. 3 and the panch witnesses, the raiding party proceeded towards Kashmere Gate.
P.W. 3, P.W. 6 and Kewal Krishan went into the Police Station, while P.W. 8 and others stayed outside.
The money was handed over to the accused who took it and put it inside the right hand pocket of his trousers.
P.W. 6 and Kewal Krishan then came out and signalled to P.W. 8 whereupon P.W. 8 and the Panch witnesses went inside the Police Station.
The accused was present inside.
As soon as he saw the party led by P.W. 8 he took out the currency notes from the right side pocket of his trousers and threw them across the wall into the adjoining room.
P.W. 8 instructed some of the police officers accompanying him to rush to the adjoining room and to keep a watch over the notes which must have fallen there.
He then introduced himself to the accused and took him to the adjoining room.
Some of the notes were lying on the table of the Duty Officer in that room while others had fallen on the ground near the chair of the Duty officer.
The six notes were collected in the presence of the witnesses and their numbers were compared with the numbers noted before they proceeded on the raid.
The numbers tallied.
The accused was questioned by the Inspector and he denied that he had demanded any bribe and kept silent about the acceptance of the bribe.
Both the hands of the accused were dipped in sodium carbonate solution and the solution which was previously colourless turned pink.
The same test was repeated 1057 with the handkerchief which was taken out of the right hand side pocket of the accused and also with the trousers of the accused.
Each test resulted in the bicarbonate solution turning pink.
After completion of the investigation a charge sheet was laid against the accused being for offences under section 5(2) read with section 5(1) (d) of the Prevention of Corruption Act and section 161 of the Indian Penal Code.
All that has been mentioned in the previous paragraph was what the prosecution set out to prove before the Trial Court.
But many of the witnesses turned volte face.
P.W. 3 stated in his evidence that on the first occasion when he went to the Police Station to obtain delivery of his scooter rickshaw it was not the accused that was present but one Hawaldar.
It was the Hawaldar and not the accused that demanded the bribe of Rs. 60 from him.
According to him at the time of the raid, when he, P.W. 6 and Kewal Krishan went inside the Police Station they found the accused there and asked him to take the sum of Rs. 60 and return the scooter rickshaw.
P.W. 3 stretched his hand with the money towards the pocket of the accused 's trousers but the accused said the money might be paid to the person for whom it was meant.
He refused to receive the money and jerked P.W. 3 's hand with his hand as a result of which the notes came to be flung across the wall into the neighbouring room.
He told the Inspector that the notes had been flung across the wall and that the accused had neither demanded the amount from him nor accepted the money from him.
On the other hand the accused had refused to take the money from him.
The Inspector recovered the notes from the neighbouring room, placed them on the table and thereafter subjected the handkerchief and the pocket of the accused 's trousers to the phenol phthelene test.
The implication of this part of the evidence was that it was as a result of the handling of these articles by the Inspector that they came to have phenol phthelene powder and that was the reason why the solution turned pink.
P.W.3 was treated as hostile and cross examined by the prosecution with reference to the earlier statements made by him.
P.W. 6 followed suit and he too was declared hostile and cross examined by the prosecution with reference to his earlier statements.
Of the two panch witnesses Kewal Krishan was not examined as he had become mentally deranged before the trial of the case.
Davinder Kumar was examined as P.W. 4.
This witness supported the prosecution case in some particulars but in regard to other particulars he made statements contrary to his earlier statements.
He was also treated as hostile and cross examined by the prosecution.
In substance his chief examination was to the affect that P.W.3, P.W.6 and 1058 Kewal Krishan went inside the Police Station, while he stayed outside with the Inspector P.W. 8. P.W.3, P.W.6 and Kewal Krishan came out after sometime and stated that the accused had accepted the bribe.
The raiding party then went inside.
On seeing the Inspector the accused got suspicious and threw away the currency notes across the wall into the neighbouring room.
In examination in chief he also stated that before they proceeded to the Police Station for the raid, statement of both P.W.3 and P.W.6 had been recorded.
He stated that after the bribe was given P.W.3 also came out and signalled to P.W.8 that the bribe had been given.
Another statement made by him in chief examination was that he was unable to remember if the Inspector questioned the accused at the time of the raid.
As these statements were contrary to his earlier statements he was cross examined by the prosecution.
Paras Nath, (P.W.8) spoke to the complaint made to him by P.W.3.
, the action that he took, the raid etc.
Regarding the actual raid he stated that P.W.3, P.W.6 and Kewal Krishan first went inside the Police Station.
After sometime, P.W.6 and Kewal Krishan came out and signalled that P.W.3 had passed the bribe money and that P.W.3 and the accused were in the room.
When he went in, the accused took out the notes from the right side pocket of his trousers and threw them across the wall into the adjoining room.
He then spoke to the test made by him etc.
On this evidence both the learned Sessions Judge and the High Court found the accused guilty of the two offences with which he was charged.
Shri Frank Anthony, learned counsel for the appellant submitted that the Courts below had made free use of the statements made by the witnesses in the course of the investigation as if such statements were substantive evidence.
If those statements were excluded from consideration there would be no evidence of any demand or acceptance of bribe by the accused.
All that the prosecution would be left with would be the evidence of the Inspector and P.W.4 to the effect that the accused took out the currency notes from the right side pocket of his trousers and flung them across the wall into the adjoining room.
That evidence according to the learned counsel would not be sufficient, even if accepted, to draw the presumption under section 4(1) of the Prevention of Corruption Act.
Reliance was placed upon the decision of this Court in Sita Ram vs The State of Rajasthan,(1) and Suraj Mal vs The State (Delhi Administration (2).
1059 The learned counsel was right in his submission about the free use made by the Courts below of statements of witnesses recorded during the course of investigation.
Section 162 of the Code of Criminal Procedure imposes a bar on the use of any statement made by any person to a Police Officer in the course of investigation at any enquiry or trial in respect of any offence under investigation at the time when such statement was made, except for the purpose of contradicting the witness in the manner provided by s.145 of the Indian Evidence Act.
Where any part of such statement is so used any part thereof may also be used in the re examination of the witness for the limited purpose of explaining any matter referred to in his cross examination.
The only other exceptions to this embargo on the use of statements made in the course of an investigation, relates to the statements falling within the provisions of section 32(1) of the Indian Evidence Act or permitted to be proved under section 27 of the Indian Evidence Act.
S.145 of the Evidence Act provides that a witness may be cross examined as to previous statements made by him in writing and reduced into writing and relevant to matters in question, without such writing being shown to him or being proved but, that if it is intended to contradict him by the writing, his attention must, before the writing can be proved, be called to those parts of it which are to be used for the purpose of contradicting him.
The Courts below were clearly wrong in using as substantive evidence statements made by witnesses in the course of investigation.
Shri H. section Marwah, learned counsel for the Delhi Administration amazed us by advancing the argument that the earlier statements with which witnesses were confronted for the purpose of contradiction could be taken into consideration by the Court in view of the definition of "proved" in section 3 of the Evidence Act which is, "a fact is said to be proved when, after considering the matters before it, the Court either believes it to exist or considers its existence so probable that a prudent man, ought, in the circumstances of the particular case to act upon the supposition that it exists.
" We need say no more on the submission of Shri Marwah except that the definition of proved does not enable a Court to take into consideration matters, including statements, whose use is statutorily barred.
After excluding irrelevant material we are left with the evidence of P.W.8 and that of P.W.4 whose evidence corroborates that of P.W.8 in several material particulars.
We, however, wish to say that the evidence of P.W.8 is entirely trustworthy and there is no need to seek any corroboration.
We are not prepared to accept the submission of Shri Frank Anthony that the fact that he is the very Police Officer who laid the trap should be sufficient for us to insist upon 1060 corroboration.
We do wish to say that there is no rule of prudence which has crystallized into a rule of law, nor indeed any rule of prudence, which requires that the evidence of such officers should be treated on the same footing as evidence of accomplices and there should be insistence on corroboration.
In the facts and circumstances of a particular case a Court may be disinclined to act upon the evidence of such an officer without corroboration, but, equally, in the facts and circumstances of another case the Court may unhesitatingly accept the evidence of such an officer.
It is all a matter of appreciation of evidence and on such matters there can be no hard and fast rule, nor can there be any precedential guidance.
We are forced to say this because of late we have come across several judgments of Courts of Session and sometimes even of High Courts where reference is made to decisions of this Court on matters of appreciation of evidence and decisions of pure question of fact.
While on this subject of appreciation of evidence we may also refer to an argument of Shri Frank Anthony based on the observations of a learned single judge in Kharaiti Lal vs The State,(1) that persons holding clerical posts and the like should not be called as panch witnesses, as such witnesses could not really be called independent witnesses as they would always be under fear of disciplinary action if they did not support the prosecution case.
We do not think we can accept the submission of Shri Frank Anthony.
The respectability and the veracity of a witness is not necessarily dependent upon his status in life and we are not prepared to say that Clerks are less truthful and more amenable than their superior officers.
From the evidence of P.W.8 and that of P.W.4 we may take the following facts as established: P.W.3 made a report to P.W.8.
He produced six currency notes of the denomination of ten rupees whose numbers were noted and which were treated with phenol phthelene powder.
Thereafter the notes were handed over to P.W.3. P.W.3, P.W.6 and Kewal Krishan went inside the Police Station.
After sometime P.W.6 and Kewal Krishan came out and gave a signal.
P.W.8 then went inside the Police Station.
On seeing him the accused who was inside the Police Station with P.W.3 took out some currency notes from the right side pocket of his trousers and threw them across the partition wall into the adjoining room.
The notes which were so thrown out by the accused, were found to be the same notes which had been treated with phenol phthelene and handed over to P.W.3 before the raid.
The handkerchief which was taken out of the right side pocket of the trouser of the accused as well as the 1061 right side pocket itself were subjected to a test which showed that they too had come into contact with phenol phthelene powder.
It may be noted that the circumstance that the handkerchief (Ex.
P 4) recovered from the right side pocket of the pant on the person of the accused was subjected to the colour test which indicated the presence of phenol phthelene powder on that handkerchief was put to the appellant in his examination under section 313, Criminal Procedure Code.
Instead of giving any explanation as to how this phenol phthelene powder came on the handkerchief lying in his pocket, the appellant replied.
"I know nothing about it.
" From these facts the irresistible inference must follow, in the absence of any explanation from the accused, that currency notes were obtained by the accused from P.W.3.
It is not necessary that the passing of money should be proved by direct evidence.
It may also be proved by circumstantial evidence.
The events which followed in quick succession in the present case lead to the only inference that the money was obtained by the accused from P.W.3.
Under s.114 of the Evidence Act the Court may presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business, in their relation to facts of the particular case.
One of the illustrations to s.114 of the Evidence Act is that the Court may presume that a person who is in possession of the stolen goods soon after the theft, is either the thief or has received the goods knowing them to be stolen, unless he can account for his possession.
So too, in the facts and circumstances of the present case the Court may presume that the accused who took out the currency notes from his pocket and flung them across the wall had obtained them from P.W.3, who a few minutes earlier was shown to have been in possession of the notes.
Once we arrive at the finding that the accused had obtained the money from P.W.3, the presumption under s.4(1) of the Prevention of Corruption Act is immediately attracted.
The presumption is of course rebuttable but in the present case there is no material to rebut the presumption.
The accused was, therefore, rightly convicted by the Courts below.
We will now refer to the two decisions of this Court on which Shri Frank Anthony relied.
In Sita Ram vs The State of Rajasthan, (supra) the evidence of the complainant was rejected and it was held that there was no evidence to establish that the accused had received any gratification from any person.
On that finding the presumption under s.4(1) of the Prevention of Corruption Act was not drawn.
The question whether the rest of the evidence was sufficient to establish that the accused had obtained the money from the complainant 1062 was not considered.
All that was taken as established was the recovery of certain money from the person of the accused and it was held that mere recovery of money was not enough to entitle the drawing of the presumption under s.4(1) of the Prevention of Corruption Act.
The Court did not consider the further question whether recovery of the money alongwith other circumstances could establish that the accused had obtained gratification from any person.
In the present case we have found that the circumstances established by the prosecution entitled the Court to hold that the accused received the gratification from P.W.3.
In Suraj Mal vs The State (Delhi Administration) (supra) also it was said mere recovery of money divorced from the circumstances under which it was paid was not sufficient when the substantive evidence in the case was not reliable to prove payment of bribe or to show that the accused voluntarily accepted the money.
There can be no quarrel with that proposition but where the recovery of the money coupled with other circumstances leads to the conclusion that the accused received gratification from some person the Court would certainly be entitled to draw the presumption under s.4(1) of the Prevention of Corruption Act.
In our view both the decisions are of no avail to the appellant and as already observed by us conclusions of fact must be drawn on the facts of each case and not on the facts of other cases.
In other words there can be no precedents on questions of facts.
The appeal is, therefore, dismissed.
P.B.R. Appeal dismissed.
| IN-Abs | The accused (appellant) who was charged with offences under section 5(1) (d) of the Prevention of Corruption Act and section 161 of the Penal Code was convicted and sentenced by the Special Judge.
The convictions and sentences were confirmed by the High Court.
The prosecution alleged that the scooter rickshaw of the complainant driven by his driver was one day involved in a traffic accident and the vehicle was taken to the police station by the accused who was a police constable.
The complainant obtained orders of the Magistrate for its release but the accused declined to release the vehicle unless he was paid a sum of Rs. 60.
The complainant was not prepared to pay the sum demanded.
He then went to an Inspector of the Anti Corruption Department and lodged a complaint that the accused was demanding illegal gratification from him for the release of his scooter rickshaw which was ordered by the Magistrate to be released.
The prosecution further alleged that the Inspector called two panch witnesses and after noting down the numbers of six ten rupee currency notes given by the complainant, treated them with phenol phthalene powder and gave them to the complainant.
It was arranged that the complainant should hand over the currency notes to the accused and should thereafter make a signal at which the Inspector and panch witnesses would enter the room.
The complainant carried out the plan as arranged and gave the call on which the Inspector and panch witnesses entered the room of the accused.
On seeing the Inspector, the accused removed the currency notes from his pocket and flung them across the wall into the adjoining room.
The notes were collected and when compared with the numbers noted earlier, they tallied.
The hands of the accused were then dipped in sodium bicarbonate solution which, colourless earlier, turned pink.
Similarly the handkerchief in the right side pocket of the trousers of the accused was removed and also dipped in sodium bicarbonate solution.
That too turned pink.
Before the trial court many of the witnesses turned hostile and one of the panch witnesses became mentally deranged.
In appeal it was contended before this Court that (1) the courts below had made free use of the statements made by the witnesses in the course of investigation as if they were substantive evidence and, if they were excluded, the rest of the evidence would not be sufficient to draw the presumption under 1054 section 4(1) of the Prevention of Corruption Act, (2) the fact that the Inspector was the very police officer who laid the trap, should be sufficient to insist on corroboration of his evidence.
Dismissing the appeal, ^ HELD: 1(a) The courts below were clearly wrong in using as substantive evidence statements made by witnesses in the course of investigation.
[1059E] (b) Section 162 of the Code of Criminal Procedure imposes a bar on the use of any statement made by any person to a police officer in the course of investigation at any enquiry or trial in respect of any offence under investigation at the time when such statement was made, except for the purpose of contradicting the witnesses in the manner provided by section 145 of the Evidence Act.
Where any part of such statement is so used any part thereof may also be used in the re examination of the witness for the limited purpose of explaining any matter referred to in his cross examination.
The only other exception to this embargo on the use of statements made in the course of an investigation relates to the statements falling within the provisions of section 32(1) of the Evidence Act or permitted to be proved under section 27 of the Evidence Act.
[1059A C] (c) The contention of the prosecution that the earlier statements with which witnesses were confronted for the purpose of contradiction could be taken into consideration by the Court in view of the definition of "proved" in section 3 of the Evidence Act has no substance.
The definition of the term "proved" does not enable a Court to take into consideration matters, including statements, whose use is statutorily barred.
[1059G] 2(a) The evidence of the Inspector is entirely trustworthy and there is no need to seek any corroboration.
[1059H] (b) There is no rule of prudence which has crystalized into a rule of law, nor any rule of prudence which requires that the evidence of such police officers should be treated on the same footing as evidence of accomplices and there should be insistence on corroboration.
In the facts and circumstances of a particular case a court may be disinclined to act upon the evidence of such an officer without corroboration, but, equally in the facts and circumstances of another case the court may unhesitatingly accept the evidence of such an officer.
It is all a matter of appreciation of evidence and on such matters there can be no hard and fast rule nor can there be any precedential guidance.
[1060A B].
In the instant case the proved facts were that the complainant made a report to the Inspector, and currency notes whose numbers were noted and which were treated with phenol phthalene powder were handed over to the complainant.
The complainant went into the accused 's room and came out after a short while giving the agreed signal.
When the Inspector rushed in, the accused threw the currency notes across the wall into the adjoining room.
His hands and the handkerchief when dipped in sodium bicarbonate solution turned pink and lastly instead of giving a plausible explanation as to how the phenol phthalene powder came to his hands and the handkerchief in his pocket all that he could say was that he "knew nothing about it".
From all these facts the only inference that follows is that currency notes were obtained by the accused from the complainant.
It is not necessary that the passing of 1055 money should be proved by direct evidence, it may also be proved by circumstantial evidence.
The events which followed in quick succession in the present case led to the only inference that the money was obtained by the accused from the complainant.
Under section 114 of the Evidence Act the Court may presume the existence of any fact which is likely to have happened regard being had to the common course of natural events, human conduct and public and private business, in their relation to facts of the particular case.
One of the illustrations to this section is that the Court may presume that a person who is in possession of stolen goods soon after the theft is either the thief or has received the goods knowing them to be stolen, unless he can account for his possession.
So too in the facts and circumstances of the present case the Court may presume that the accused who took out the currency notes from his pocket and flung them across the wall had obtained them from the complainant who, a few minutes earlier, was shown to have been in possession of the notes.
Once it is found that the accused had obtained the money from the complainant the presumption under section 4 (1) of the Prevention of Corruption Act is immediately attracted.
The presumption is rebuttable, but in the present case there is no material to rebut the presumption.
The accused was, therefore, rightly convicted by the courts below.
[1061D F] Sita Ram vs The State of Rajasthan AIR 1975 SC 1432; Suraj Mal vs The State (Delhi Administration) AIR 1979 SC 1408 held inapplicable.
There is no force in the contention that persons holding clerical posts could not be called independent witnesses on the ground that they would be under fear of disciplinary action if they did not support the prosecution case.
The respectability and verasity of a witness is not necessarily dependent upon his status in life and it cannot be said that clerks are less truthful and amenable than superior officers.
[1060E]
|
ivil Appeal Nos.
216 217 of 1970.
Appeals by special leave from the Judgment and Order dated 3 12 1968 of the Bombay High Court in Second Appeal Nos.
1232 and 1214/1961.
V. section Desai, R. B. Datar and Lalit Bhardwaj and Naveen Sinha for the Appellants.
section V. Tambwaker for the Respondent.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
On April 15, 1930 Parisa Chougule, executed Exhibit 93, a deed of mortgage in favour of Ganesh, Dattatraya Kulkarni (father of the appellants) for a sum of Rs. 1600 in respect of single item of land.
On August 25, 1933, Parisa Chougule executed Exhibit 92 another deed of mortgage in favour of the same mortgagee for a sum of Rs. 1,000 in respect of ten items of land including the land previously mortgaged under Exhibit 93.
Both the mortgages were possessory mortgages but it appears from evidence that the land was leased back to the mortgagor for a stipulated rent.
Parisa Chougule died on June 15, 1934 leaving behind him three sons, Bhupal an adult and Anna and Dhanpal, minors.
On July 11, 1934, Bhupal borrowed a further sum of Rs. 131 and executed a simple mortgage Exhibit 91 in respect of the very ten 818 items of land covered by Exhibit 92.
On May 1, 1935, Bhupal purporting to act as the Manager of the joint family and the guardian of his minor brother executed a deed of sale Exhibit 90 in favour of Ganesh Dattatraya Kulkarni in respect of four out of the ten items of land mortgaged under Exhibits 93, 92 and 91.
The consideration for the sale was Rs. 3050 and was made up of the amounts of Rs. 1600 Rs. 1000 and Rs. 131/ due under three mortgages Exhibits 93, 92 and 91 respectively and a sum of Rs. 200 received in cash by Bhupal on the date of sale.
Six of the items which were mortgaged were released from the burden of the mortgages.
On September 23, 1946, Anna second son of Parisa became a major.
On August 31, 1951, Dhanpal third son of Parisa became a major.
On August 27, 1953 Anna and Dhanpal filed the suit out of which this appeal arises for a declaration that the sale deed dated May 1, 1935 was not for legal necessity and not for the benefit of the estate and therefore, not binding on them.
They also prayed that joint possession of their two third share may be given to them.
The Trial Court found that there was legal necessity for the sale to the extent of Rs. 2600 only, that the consideration of Rs. 3050 for the sale was inadequate as the lands were worth about Rs. 4000, that there was no such compelling pressure on the estate as to justify the sale and therefore, the sale was not for the benefit of the family and hence not binding on the two plaintiffs.
A decree was granted in favour of the two plaintiffs for joint possession of two third share of the lands subject to their paying a sum of Rs. 133/5 ans/4 ps.
to the second defendant.
On appeal by the second defendant the Assistant Judge, Kolhapur affirmed the finding of the Trial Court that there was legal necessity to the extent of Rs. 2600 only, that the value of the land was Rs. 4,000 and that there was no pressure on the estate justifying the sale.
The Assistant Judge found that there was no evidence to show that the defendant made any bonafide enquiry to satisfy himself that there was sufficient pressure on the family justifying the sale.
He however, held that the suit of the first plaintiff was liable to be dismissed as it was barred by limitation.
He, therefore, modified the decree of the Trial Court by granting a decree in favour of the second plaintiff only for possession of a one third share in the lands subject to payment of a sum of Rs. 866.66 ps.
to the second defendant.
The first plaintiff as well as the second defendant preferred second appeals to the High Court.
The High Court allowed the appeal filed by the first plaintiff and dismissed the appeal filed by the second defendant.
The legal representatives of the second defendant have preferred these appeals after obtaining special leave from this Court under Article 136 of the Constitution.
819 It is clear that these appeals have to be allowed.
The facts narrated above show that out of the consideration of Rs. 3050 for the sale there was undoubted legal necessity to the extent of Rs. 2600 the total amount due under the two deeds of mortgage executed by the father of the plaintiffs.
Out of the ten items of land which were mortgaged, only four were sold and the remaining six items were released from the burden of the mortgages.
The family was also relieved from the burden of paying rent to the mortgagee under the lease deed.
Surely all this was for the benefit of the family.
The value of the land sold under the deed of sale was found by the Courts below to be Rs. 4000.
Even if that be so it cannot possibly be said that the price of Rs. 3000 was grossly inadequate.
It has further to be remembered that there were continuous dealings between the family of the plaintiffs and the family of the second defendant, over a long course of years.
In those circumstances it is impossible to agree with the conclusion of the courts below that the sale was not binding on the plaintiffs.
The courts below appeared to think that notwithstanding the circumstance that there was legal necessity to a large extent it was incumbent on the second defendant to establish that he made enquiry to satisfy himself that there was sufficient pressure on the estate which justified the sale.
We are unable to see any substance in the view taken by the courts below.
When the mortgagee is himself the purchaser and when the greater portion of the consideration went in discharge of the mortgagors, we do not see how any question of enquiry regarding pressure on the estate would arise at all.
Where ancestral property is sold for the purpose of discharging debts incurred by the father and the bulk of the proceeds of the sale is so accounted, the fact that a small part of the consideration is not accounted for will not invalidate the sale.
In Gauri Shankar & Ors.
vs Jiwan Singh Ors.(1) it was found that Rs. 500 out of the price of Rs. 4000 was not fully accounted for and that there was legal necessity for the balance of Rs. 3500.
The Privy Council held that if the purchaser had acted honestly, if the existence of a family necessity for a sale was made out and the price was not unreasonably low, the purchaser was not bound to account for the application of the whole of the price.
The sale was upheld.
In Niamat Rai and Ors.
vs Din Dayal and Ors.(2) the manager of a joint family sold family property for Rs. 34,500 to satisfy pre existing debts of the extent of Rs. 38,000.
It was held that it was sufficient to sustain the sale without showing how the balance had been applied.
820 In Ram Sunder Lal & Anr.
vs Lachhmi Narain and Anr.(1).
, the vendee the sale in whose favour was questioned fourteen years after the sale, was able to prove legal necessity to the extent of Rs. 7744 out of a total price of Rs. 10,767.
The Privy Council after quoting a passage from the well known case of Hanoomanpersaud Pandey vs Mt. Babooee Munrai Koonweree,(2) upheld the sale.
The principle of these decisions has been approved by this Court in Radhakrishandas and Anr.
vs Kaluram.(3).
The learned counsel for the respondents relied upon the decision of this Court in Balmukand vs Kamla Wati & Ors.(4) That was a suit for specific performance of an agreement of sale executed by the manager of the family without even consulting the other adult members of the family.
The object of the sale was not to discharge any antecedent debts of the family nor was it for the purpose of securing any benefit to the family.
The only reason for the sale of the land was that the plaintiff wanted to consolidate his own holding.
The Court naturally found that there was neither legal necessity nor benefit to the estate by the proposed sale and the agreement therefore, could not be enforced.
We do not see what relevance this case has to the facts of the present case.
We accordingly allow the appeals and dismiss the suit with cost throughout.
N.K.A. Appeals allowed.
| IN-Abs | A mortgagor executed two deeds of mortgage in favour of the father of the appellants for Rs. 1600 and Rs. 1000 in respect of certain lands.
Both the mortgages were possessory mortgages but the land was leased back to the mortgagor for a stipulated rent.
The mortgagor died leaving behind him three sons, one adult and two minors.
The adult son borrowed a further sum of Rs. 131 by executing a simple mortgage and purporting to act as the Manager of the joint family and the guardian of his minor brothers, executed a deed of sale in favour of the father of the appellants in respect of four out of ten items of land previously mortgaged.
The consideration for the sale was Rs. 3050 which was made up of Rs. 1600.
Rs. 1000 and Rs. 131 due under three previous mortgages respectively and Rs. 200 received in cash on the date of sale.
The minor sons on becoming major filed a suit out of which this appeal arises, for a declaration that the sale deed executed was not for legal necessity, nor for the benefit of the estate and, therefore, not binding on them.
They also prayed for joint possession of their 2/3rd share.
The trial court found that there was legal necessity for the sale to the extent of Rs. 2600 only, the consideration of Rs. 3050 for the sale was inadequate as the lands were worth about Rs. 400 and that there was no compelling pressure on the estate to justify the sale and therefore the sale was not for the benefit of the family and hence not binding on the plaintiffs.
A decree was granted in their favour for joint possession of 2/3rd share of the lands subject to certain payment to the second defendant.
On appeal by the second defendant, the Assistant Judge held the suit of the first plaintiff to be barred by time and therefore modified the decree in favour of the second plaintiff.
On appeal by the first plaintiff and second defendant, the High Court allowed the appeal by the first plaintiff and dismissed the appeal filed by the second defendant.
Accepting the appeal of the legal representatives of the second defendant.
^ HELD: Out of the sale consideration of Rs. 3050 there was undoubted legal necessity to the extent of Rs. 2600 the total amount due under the two deeds of mortgage executed by the father of the plaintiffs.
Out of the ten items which were mortgaged, only four were sold and the remaining six items were released from the burden of the mortgages.
The family was also relieved from one burden of paying rent to the mortgagee under the lease.
All this 817 was for the benefit of the family.
The value of the land sold under the deed of sale was found by the Courts below to be Rs. 4000.
Even if that be so it cannot possibly be said that the price of Rs. 3000 was grossly inadequate.
Further there were continuous dealings between the family of the plaintiffs and the family of the second defendant over a long course of years.
In these circumstances it is impossible to say that the sale was not binding on the plaintiffs.
The Courts below appeared to think that notwithstanding the circumstance that there was legal necessity to a large extent it was incumbent on the second defendant to establish that he made enquiry to satisfy himself that there was sufficient pressure on the estate which justified the sale.
When the mortgagee was himself the purchaser and when the greater portion of the consideration went in discharge of the mortgages no question of enquiry regarding pressure on the estate would arise at all.
Where ancestral property is sold for the purpose of discharging debts incurred by the father and the bulk of the proceeds of the sale is so accounted, the fact that a small part of the consideration is not accounted for will not invalidate the sale.
[819 A E] Gauri Shankar & Ors.
vs Jiwan Singh & Ors.
A.I.R. 1927 P.C. 246 Niamat Rai & Ors.
vs Din Dayal & Ors.
1927 A.I.R. P.C. 121, Ram Sunder Lal & another vs Lacchmi Narain and another ; Hanooman Persaud Pandey vs Mt. Babooee Munrai Koonweree ; Radhakrishendas and another vs Kaluram A.I.R. 1967 S.C. 574, referred to.
Balmukand vs Kamla Wati & Ors.
A.I.R. 1964 S.C. 1385 held inapplicable.
|
ition (Crl.) No. 1414 of 1979.
Under Article 32 of the Constitution.
Ram Jethamalani and Harjinder Singh for the Petitioner.
U. R. Lalit, E. C. Agarwala and M. N. Shroff for the Respondent.
The Judgment of the Court was delivered by KAILASAM, J.
The petitioner is brother of Virendra Ambalal Siroya who was detained by an order of detention dated 31 8 1979 issued by Additional Secretary to the Government of India under section 3(1) of the .
The detenu was served with the grounds of detention on 5 9 1979.
The counsel for the detenu made an application on 17 9 1979 for supply of documents, and statements recorded and relied on in the grounds of detention.
Before the documents were supplied, an incomplete representation was made by the detenu on 22 9 1979.
The documents were supplied on 25 9 1979, 27 9 1979 and 3 10 1979.
The detenu again made a second representation on 5 10 1979 and requested that the order of detention may be revoked by the Central Government.
Mr. A. K. Sen, the learned counsel for the petitioner, submitted that the representation requesting the Central Government to order the revocation under section 11 of the Act was not forwarded by the detaining authority to the Central Government and as such the detention is illegal.
In the memorandum of grounds in his writ petition at paragraph XIV the detenu submitted that he made representation to the Central Government and that the Central Government had not considered the representation at all.
In paragraph XV the detenu contended that the second representation was an application for revocation under section 11 of the Act wherein he specifically requested that the Central Government should revoke the order.
The said representation was not considered by the Central Government.
It was submitted that non consideration of the representation by the Central Government vitiated the detention order.
In reply the detaining authority stated in paragraph 15 as follows: "It is submitted that the consideration of representation of the detenu by the detaining authority is perfectly valid and legal and in accordance with the law.
It is, however, denied that merely because it was not considered by the Central Government, the detention order is vitiated in any way." 1080 It is clear from the statement that the representation was not forwarded to the Central Government.
The plea on behalf of the detaining authority is that merely because the representation was not considered by the Central Government, the detention order would not be vitiated.
The representation of the detenu dated 5 10 1979 is marked as Annexure 'E '.
It states that it is a further representation in the matter of his detention.
After setting out the various grounds, the relief asked for in paragraph 5 runs as follows: "The petitioner prays that: (a) That the order of detention be revoked by the Central Government.
(b) This further representation be placed before COFEPOSA Advisory Board alongwith the earlier representation.
(c) That the Advisory Board be pleased to report to the Central Government to revoke the impugned order of detention.
" The request of the detenu is clear: He prayed for the revocation of the order of detention by the Central Government.
It is not the case of the detaining authority that he did not understand the representation as being intended for the Central Government.
On the other hand, his plea is that the mere fact that the Central Government has not considered the representation would not vitiate the order of detention.
The detaining authority is the Additional Secretary, Government of India, Ministry of Finance and it is not disputed that a communication to that Central Government can be properly addressed by sending it to the Additional Secretary, Government of India, Ministry of Finance.
It is admitted that the representation was properly addressed to the Central Government.
The Central Government is empowered to revoke the order of detention at any stage.
It was submitted that the order of revocation by the Central Government can only be passed after the order of detention in confirmed by the detaining authority and the Advisory Board.
The power conferred on the Central Government by section 11 is wide enough to enable the Central Government to revoke the detention order at any stage for the words used are a detention order may at any time be revoked or modified.
The power of the Central Government to revoke the order of detention implies that the detenu can make a representation for exercise of that power.
Any petition for revocation of an order of detention should be dealt with reasonable expedition.
In this case it is the main ground urged 1081 on behalf of the detenu that the petition of the 5th of October, 1979 was not forwarded to the Central Government and consequently no order has been passed on that petition up to date.
In the course of arguments, Mr. A. K. Sen on behalf of the detenu submitted that even the earlier representation was addressed to the Central Government which was also not forwarded.
We do not think that we should entertain this plea as it was not pleaded in the memorandum of grounds that the first representation was to the Central Government but made for the first time in the Court before us.
In any event, it is clear that a representation properly addressed by the detenu to the Central Government was not forwarded to the Central Government and as such no action had been taken up to date.
It may be permissible for the Central Government to take reasonable time for disposing any revocation petition.
But it would not be justified in ignoring the representation for revocation of the detention as a statutory duty is cast upon the Central Government.
It is necessary that the Government should apply its mind and either revoke the order of detention or dismiss the petition, declining to order for revocation.
The question that arises for consideration is, as to what will be the consequence if a properly addressed petition is not forwarded to the Central Government and as such left unattended for a period of nearly four months.
We feel that in such circumstances the detention cannot be justified as being according to the procedure.
In the circumstances we do not feel that we will be justified in sending the representation to the Central Government for disposal at this stage.
Taking all the facts and circumstances of the case, we feel that the continued detention of the detenu cannot be held to be according to procedure.
His release has already been ordered.
P.B.R. Petition allowed.
| IN-Abs | The petitioner 's brother was detained by an order of detention dated 31st August, 1979 under section 3(1) of the and the grounds of detention were served on him on 5th September, 1979.
An application was made on 17th September, 1979 for supply of documents and statements recorded and relied on in the grounds of detention.
On 22nd September, 1979 he made an incomplete representation.
The documents were supplied on 25th September, 27th September and 3rd October, 1979.
The detenu made a second representation on 5th October, 1979 requesting that the order of detention be revoked by the Central Government but no action was taken on them till the date of hearing.
In the writ petition it was alleged that the first representation as well as the second representation requesting for the revocation of the order under section 11 of the Act were not considered by the Central Government and that non consideration of the representation vitiated the detention order.
The detaining authority on the other hand contended that the mere fact that the representation was not considered by the Central Government did not vitiate the order of detention.
Allowing the petition, ^ HELD: The continued detention of the detenu cannot be held to be according to procedure.
[1081F] If a properly addressed petition is left unattended for a long period of time the detention order cannot be justified as being according to procedure.
[1081 E] The power conferred on the Central Government by section 11 of the Act is wide enough to enable that Government to revoke the detention order at any stage for the words used are a detention order may at any time be revoked or modified.
Any petition for revocation of an order of detention should be dealt with with reasonable expedition.
It may be permissible for the Central Government to take reasonable time for disposing of a petition for revocation of an order of detention but it would not be justified in ignoring the representation because a statutory duty is cast upon the Central Government.
It is necessary that the Government should apply its mind and either revoke the order of detention or dismiss the petition.
[1080G H] In the instant case the representation which was properly addressed by the detenu to the Central Government was not forwarded to that Government and 1079 as such no action had been taken till the date of hearing.
There is no justification in sending the representation to the Central Government at this very late stage.
[1081C&E]
|
N: Criminal Appeal Nos.
237 238 of 1974.
Appeal by special leave from the Judgment and Order dated 14 8 1973 of the Delhi High Court in Crl.
Revision Nos. 146 and 153 of 1971.
A. K. Sen, Gobind Das, A. N. Karkhanis, Sridharan and Mrs. section Bhandare for the Appellant.
H. section Marwah and M. N. Shroff for the Respondent.
1083 The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
Can political thesis or historical truth be so presented as to promote feelings of enmity, hatred or ill will between different religious groups or communities, is the question which we are called upon to answer in these two criminal appeals.
The appellant in the two criminal appeals is the editor, publisher and printer of a monthly magazine going by the name 'Mother India '.
He wrote two articles under the captions "A tale of two communalisms" and "Lingering disgrace of history".
On complaints filed by the Superintendent of Police, Delhi, under section 153 A of the Indian Penal Code, he was convicted in respect of each of these articles in separate cases and sentenced in each case to suffer simple imprisonment for a period of four months and to pay a fine of Rs. 1000/ by the Additional Chief Judicial Magistrate, Delhi.
On appeal the learned Sessions Judge, Delhi, confirmed the conviction in both the cases but reduced the sentence of fine to Rs. 500/ in each case.
This was confirmed by the High Court.
The appellant has preferred these appeals by Special Leave of this Court.
Shri A. K. Sen, learned counsel for the appellant submitted that if the articles were read as a whole it would be patent that the article "A tale of two communalisms" was no more than a political thesis and the second article "Lingering disgrace of history" was no more than a protest based on historical truths against the naming of roads in Delhi after Moghul emperors.
He contended that neither article contained any attack on any religion and, therefore, there was no question of promoting and attempting to promote feelings of enmity, hatred or ill will between different religious groups on grounds or religion.
The convictions under section 153 A were, therefore, wrong, he submitted.
Section 153 A(1) (a) provides, "whoever by words, either spoken or written, or by signs or by visible representations or otherwise, promotes, or attempts to promote, on grounds of religion, race, place of birth, residence, language, caste or community or any other ground whatsoever, disharmony or feelings of enmity, hatred, or ill will between different religious, racial language or regional groups or castes or communities shall be punished with imprisonment which may extend to three years, or with fine, or with both".
It is seen that section 153A(1).
(a) is not confined to the promotion of feelings of enmity etc.
on grounds of religion only as argued by Shri Sen but takes in promotion of such feelings on other grounds as well such as race, place of birth, residence, language, caste or community.
In the present case we have to consider the question whether the two articles promote on grounds of religion or community, feelings of enmity, hatred or ill will between different religious groups or communities.
1084 The first of the articles "A tale of two communalisms" does begin as a sort of political thesis.
According to the author "communalism is an instrument of political minorities".
His thesis is that militant minorities thrive on communalism.
If he wanted to develop his thesis on those lines no one could object.
But, he referred to Muslims generally as "a basically violent race" and went on to say "communalism is, therefore, an instrument of a minority with a racial tradition of rape, loot, violence and murder as is found in India with a Muslim population of 12.7%.
In Pakistan the Hindu minority is 6.6% but because its racial tradition is different it does not indulge in communal riots.
Three essentials are necessary for violent communalism.
The community must be a minority, the minority must be sizable and the minority must have a tradition of murder and violence.
We find these three essentials in the Muslim community of India".
He then stated in the article that in Pakistan and particularly in East Bengal peace loving and terror struck Hindu minority was being eliminated by periodical killing and conversions on a mass scale. "Young Hindu males were compelled to undergo vasectomy operations, young and pretty Hindu girls became the victims of Islamic beds of lust".
It is then said "It is not in the nature and religion of the Hindu of India to be intolerant and blood thirsty like the followers of Islam".
According to him the only answer to the problem of communalism was to declare India a Hindu State.
In our opinion there cannot be the slightest doubt that the article is not even thinly veiled as a political thesis; it is an undisguised attempt to promote feelings of enmity, hatred and ill will between the Hindu and the Muslim communities.
It is designed to fan the sparks of ill will and hatred on ground of community.
The reference to the alleged Muslim tradition of rape, loot, violence and murder and the alleged terror struck into the hearts of Hindu minority in a neighbouring country by periodical killings, in the context of his thesis that communalism is the instrument of a militant minority can lead to no other inference.
The second article 'Lingering disgrace of history ' is said to be a protest against the naming of Delhi roads after the Moghul emperors who according to the author were lustful perverts, rapists and murderers.
According to the learned counsel the attack was directed against the Moghul rulers and not against the Muslims of India.
It was also said that all the statements in the article about the lusts and perversions of the Moghul rulers were plain historical truths.
On a full reading of the article it reveals much more than a protest against naming Delhi roads after Moghul rapists and perverts.
At one place it is said "From Mohammed Ibn Qasim, who landed in India in June 1085 712 A.D. with 6000 Muslim cut throats, to Mohomed Ali Jinnah, who cut this ancient cradle of a peace loving human race into three bleeding bits in August, 1947, we have had 1235 years of bloodstained history in which our life has been constantly punctuated by endless raids, rapes, loot, arson and slaughter.
In all these years Hindus have given millions of men, women and children as hostages to Islam to buy some peace and preserve their own religion.
They are still doing so.
God alone knows how long this process of paying and appeasing Muslims will go on but it cannot go on for long if the family planning designs of the present secular government succeed.
Because then pretty soon there would be no Hindu left to pay.
"It is difficult to predict the future of the ancient Hindu race.
It has no future at all in Pakistan where a subtle and systematic genocide of the 10 million Hindus there has now been undertaken at State level by enforcing vasectomy operations on Hindu males and tubectomies on Hindu females, and by raping women and converting young children to Islam.
"But as long as the Hindu race lasts and survives in India its only cradle and grave in the whole world, it will be worthwhile setting before its children the ideals of its numerous Hindu heroes and nation builders rather than reminding them constantly of these Moghul brutes and tyrants who burnt Hindu homes, ravished Hindu mothers and sisters, slaughtered Hindu men and harassed and kidnapped and converted Hindu children".
After referring to various perversities and tyrannies of the Moghul rulers ending with Aurangzeb, he said: "To have a street named after this Mughal bastard in New Delhi, the capital of India, is not only a disgrace to the Hindus but a crying insult to the brave community of Sikhs.
Had the Muslims been insulted thus, they would not only have burnt every house on the road named after the tyrant but also set fire to the whole damned city.
The Muslims know how to guard their traditions".
He expressed the opinion that some of the ancient relics that reminded Hindus of their shame and disgrace made Muslims proud of the foul deeds of their ancestors.
He made an appeal that a beginning should be made to wipe out 'our thousand year old shame ' by changing the "Muslim names of roads" which 'remind us of the inhuman atrocities committed on our men, women and children '.
If the Moghuls raped, looted, killed and sinned, the author 's view appears to be that they did so as "Muslim sadists".
The author goes so far as to say that today 's Muslims are proud of the foul deeds of "their ancestors", the Moghuls being considered by the author as the progenitors 1086 of the present day Indian Muslims.
There is no question that the article is calculated to rouse feelings of enmity, hatred and ill will between Muslims and Hindus.
Whether communalism is the weapon of an aggressive and militant minority as suggested by the accused or the "shield of a nervous and fearful minority", the problem of communalism is not solved by castigating the members of the minority community as intolerant and blood thirsty and a community with a tradition of rape, loot, violence and murder.
Whether the Moghuls were rapists and murderers or not and whether the Delhi roads should be named after them or not it was wrong to present the Moghuls as the ancestors of today 's Muslims and to villify the Muslims as the proud descendants of the "foul" Moghuls.
We are convinced that both the articles do promote feelings of enmity, hatred and ill will between the Hindu and Muslim communities on grounds of community and this cannot be done in the guise of political thesis or historical truth.
The appeals are dismissed.
V.D.K. Appeals dismissed.
| IN-Abs | Dismissing the appeals, by special leave the Court, ^ HELD: Section 153A(1) is not confined to the promotion of feelings of enmity etc.
on grounds of religion only, but takes in promotion of such feelings on other grounds as well such as race, place of birth, residence, language, caste or community.
[1083G] In the instance case: Both the articles do promote feelings of enmity, hatred and ill will between the Hindu and Muslim communities.
[1086C] (i)|The first article "A tale of two Communalisms" is not even thinly veiled as a political thesis; it is an undisguised attempt to promote feelings of enmity, hatred and ill will between the Hindu and the Muslim communities.
It is designed to fan the sparks of ill will and hatred on ground of community.
The reference to the alleged Muslim tradition of rape, loot, violence and murder and the alleged terror struck into the hearts of Hindu minority in a neighbouring country by periodical killings, in the context of his thesis that communalism is the instrument of a militant minority can lead to no other inference.
[1084E F] (ii)|The second article 'Lingering disgrace of history ' goes further and is calculated to rouse feelings of enmity, hatred and ill will between Muslims and Hindus.
It was wrong to present the Moghuls as the ancestors of today 's Muslims and to willify the Muslims as the proud discendants of the "foul" Moghuls.
[1084G, 1086A, B, C] Feelings of enmity, hatred or ill will between different religious groups or communities cannot be promoted in the guise of political thesis of historical truth.
[1086C]
|
N: Criminal Appeal Nos.
93 94 of 1980.
Appeals by special leave from the Judgment and order dated 30 1 1979 of the Gujarat High Court in Criminal Revision Application No. 306/78 and 305/78.
T. U. Mehta and Vimal Dave for the Appellant.
H. R. Khanna and M. N. Shroff for the Respondent.
The following Judgments were delivered: BHAGWATI, J.
This appeal by special leave is directed against a judgment of the Gujarat High Court in suo motu revision against an order passed by the Judicial Magistrate, First Class, Balasinor convicting the appellant of the offence under section 16(1)(a)(i) read with section 7 of the and sentencing him to suffer simple imprisonment till the rising of the Court and to pay a fine of Rs. 125/ or in default to undergo simple imprisonment for 1039 a further period of 30 days.
The appellant was prosecuted in the Court of the learned Magistrate for an offence of adulteration of turmeric powder punishable under section 16(1)(a)(1) read with section 7 of the .
It appears from the record that after some evidence was led on behalf of the prosecution, plea bargaining took place between the prosecution, the defence and the learned Magistrate and on the basis of an understanding arrived at between these three parties, the appellant pleaded guilty and the learned Magistrate accepting this plea of guilty, recorded a finding of conviction against the appellant and let off the appellant with a nominal sentence of imprisonment till the rising of the Court and a small fine.
It is, of course true that there is no specific evidence to show that the plea for guilty was entered by the appellant as a result of plea bargaining, but two circumstances, viz., (1) that the appellant pleaded guilty, even though the sample was treated as cancelled by the public Analyst on account of its being broken and leaking and there was no evidence of the report of the public Analyst showing the sample as adulterated and (2) that the judgment of the learned Magistrate was given in a cyclostyled form, clearly lead to the inference that the plea of guilty was entered by the appellant in consequence of an assurance held out by the prosecution and acquiesced in by the learned Magistrate that he would be let off with a very light sentence.
It is highly regrettable that the prosecution as well as the learned Magistrate should have been a party to any such plea bargaining in a prosecution for adulteration involving the health and well being of the community.
Unfortunately, in our country adulteration has assumed alarming proportions and it is absolutely essential to wipe it out ruthlessly and completely by bringing to book offenders responsible for adulteration resulting in ruination of the health of the people.
The investigating agencies must intensify their efforts and catch hold of those who for some private economic gain are prepared to jeopardize the health of the community and indulge in mass murder and when such persons are arraigned before the Court and found guilty a really deterrent and punitive sentence must be imposed upon them.
If it comes to be known that even in respect of an offence of adulteration, it is possible to get away with a light sentence, the anti adulteration law will cease to have any meaning and validity.
It will be mocked at by the people as a futile legislative exercise.
Moreover, we find that here the learned Magistrate had got a cyclostyled form of judgment in which merely blanks were filled in by him and this is the clearest possible evidence that he was in the habit of encouraging plea bargaining and letting off the accused lightly if there was a plea of guilty, so that he may get quick disposal 1040 without any effort.
This was a highly reprehensible practice and we are glad to note that the High Court has expressed strong disapproval of it.
The Magistrate trying an accused for a serious offence like adulteration must apply his mind to the evidence recorded before him and, on the facts as they emerge from the evidence, decide whether the accused is guilty or not.
It must always be remembered by every judicial officer that administration of justice is a sacred task and according to our hoary Indian tradition, it partakes of the divine function and it is with the greatest sence of responsibility and anxiety that the judicial officer must discharge his judicial function, particularly when it concerns the liberty of a person.
The course followed by the learned Magistrate in the present case clearly showed that there was no application of mind by him to the case laid on behalf of the prosecution and he was a consenting party to the appellant being persuaded to enter the plea of guilty and, acting mechanically on the plea of guilty as extracted from the appellant, he appeased his insensitive conscience by recording a finding conviction against the appellant and let him off with a mere sentence of imprisonment till the rising of the Court and a nominal fine.
The High Court on its attention being drawn to the Order passed by the learned Magistrate initiated suo motu proceeding in revision by issuing notice to the appellant to show cause why the sentence imposed on him should not be enhanced.
The appellant appeared in answer to the notice and challenged the conviction recorded against him, but the High Court did not go into the circumstances in which the plea of guilty was entered by the appellant and relying on the plea of guilty proceeded on the basis that the appellant was rightly convicted and since the offence said to be established against the appellant, was with respect to an article of 'primary food ' punishable under section 16(1)(a) (i) of the , the High Court held that the appellant was liable to be sentenced to imprisonment for a minimum term of 3 months and a fine of not less than Rs. 500.
The High Court accordingly enhanced the sentenced imposed on the appellant to 3 months ' simple imprisonment and a fine of Rs. 500 or in default, further simple imprisonment for 30 days.
This order made by the High Court is challenged in the present appeal preferred by the appellant after obtaining special leave of this Court.
Now, it does not appear from the record whether the entire prosecution evidence was completed before the learned Magistrate before the plea of guilty was entered on behalf of the appellant, but one thing is clear that the finding conviction recorded by the learned Magistrate 1041 against the appellant was not based on the evidence led on behalf of the prosecution.
The conviction of the appellant based solely on the plea of guilty entered by him and this confession of guilt was the result of plea of bargaining between the prosecution, the defence and the learned Magistrate.
It is obvious that such conviction based on the plea of guilty entered by the appellant as a result of plea bargaining cannot be sustained.
It is to our mind contrary to public policy to allow a conviction to be recorded against an accused by inducing him to confess to a plea of guilty on an allurement being held out to him that if he enters a plea of guilty, he will be let off very lightly.
Such a procedure would be clearly unreasonable, unfair and unjust and would be violative of the new activist dimension of article 21 of the Constitution unfolded in Maneka Gandhi 's case.
It would have the effect of polluting the pure fount of justice, because it might induce an innocent accused to plead guilty to suffer a light and inconsequential punishment rather than go through a long and ardous criminal trial which, having regard to our combers and unsatisfactory system of administration of justice, is not only long drawn out and ruinous in terms of time and money, but also uncertain and unpredictable in its result and the judge also might be likely to be defected from the path of duty to do justice and he might either convict an innocent accused by accepting the plea of guilty or let off a guilty accused with a light sentence, thus, subverting the process of law and frustrating the social objective and purpose of the anti adulteration statute.
This practice would also tend to encourage corruption and collusion and as a direct consequence, contribute to the lowering of the standard of justice.
There is no doubt in our mind that the conviction of an accused based on a plea of guilty entered by him as a result of plea bargaining with the prosecution and the Magistrate must be held to be unconstitutional and illegal.
The High Court should have therefore, set aside the conviction of the appellants and sent the case back to the learned Magistrate for trial in accordance with law, ignoring the plea of guilty entered by the appellant.
The High Court was clearly in error in not doing so.
We accordingly allow the appeal, set aside the judgments of the High Court as also the Order of conviction and sentence recorded against the appellant by the learned Magistrate and remand the case to the learned Magistrate so that he may proceed with the case from the stage at which the appellant confessed to a plea of guilty.
The learned trial Magistrate will ignore the plea of guilty entered by the appellant and proceed further with the case after giving an opportunity to the prosecution to lead such additional evidence as it thinks fit and 1042 then allowing the appellant to enter upon his defence and lead such evidence in defence as he thinks proper and then dispose of the case in accordance with law.
The appellant will continue on the same bail on which he has been released by this Court by its Order dated 30th March, 1979.
BHAGWATI, J.
The facts giving arise to this appeal by special leave are almost identical with those of Criminal Appeal No. 93 of 1980 save and except that the appellant is different and for the same reasons as are given by us in our Judgment disposing of Criminal Appeal No. 93 of 1980, we allow the present appeal, set aside the judgment of the High Court as also the Order of Conviction and sentence recorded against the appellant by the learned Magistrate and remand the case to the learned Magistrate so that he may proceed with the case from the stage at which the appellant confessed to a plea of guilty.
The learned trial Magistrate will ignore the plea of guilty entered by the appellant and proceed further with the case after giving an opportunity to the prosecution to lead such additional evidence as it thinks fit and then allowing the appellant to enter upon his defence and lead such evidence in defence as he thinks proper and then dispose of the case in accordance with law.
The appellant will continue on the same bail on which he has been released by this Court by its Order dated 30th March, 1979.
N.V.K. Appeals allowed.
| IN-Abs | The appellants were prosecuted for committing offences under section 16(1)(a)(i) read with section 7 of the .
After some evidence was led on behalf of the prosecution, plea bargaining took place between the prosecution, the accused and the Magistrate.
The accused pleaded guilty which plea was accepted by the Magistrate.
The accused were accordingly convicted and sentenced to undergo imprisonment till the rising of the Court and to pay a small fine.
The High Court initiated suo motu proceeding in revision.
The accused appeared and challenged the convictions recorded against them, but the High Court did not go into the circumstances in which the plea of guilty was entered, enhanced the sentences imposed on them to three months ' simple imprisonment and fine.
Allowing the appeals, ^ HELD: 1.
A conviction based on the plea of guilty entered by the accused as a result of plea bargaining cannot be sustained.
[1041E] 2.
The High Court was clearly in error in not setting aside the conviction and sending the case back to the Magistrate for trial in accordance with law, ignoring the plea of guilty entered by the appellants.
[1041F] 3.
The Magistrate trying an accused for a serious offence like adulteration must apply his mind to the evidence recorded before him and, on the facts as they emerge from the evidence, decide whether the accused is guilty or not.
[1040B] In the instant case the Magistrate had got a cyclostyled form of judgment in which merely blanks were filled in by him.
This clearly indicates that the Magistrate was in the habit of encouraging plea bargaining and letting off the accused lightly if there was a plea of guilty, enabling quick disposal without any effort.
This was a highly reprehensible practice.
The High Court had expressed strong disapproval of it.
[1039H 1040A] 4.
(i) It is highly regrettable that the prosecution as well as the Magistrate should have been a party to any plea bargaining in a prosecution for adulteration involving the health and well being of the community.
Adulteration has 1038 assumed alarming proportions and it is essential to wipe it out ruthlessly and completely by bringing to book offenders responsible for adulteration resulting in ruination of the health of the people.
The investigating agencies must intensify their efforts and catch hold of those who for private economic gain are prepared to jeopardize the health of the community.
When such persons are arraigned before the Court and found guilty a deterrent and punitive sentence must be imposed upon them.
[1039E G] (ii) If it is possible to get away with a light sentence in respect of an offence of adulteration the anti adulteration law will cease to have any meaning and validity.
[1039H] 5.
Administration of justice is a sacred task and partakes of the divine function.
It is with the greatest sense of responsibility and anxiety that the judicial officer must discharge his judicial function, particularly when it concerns the liberty of a persons.
[1040C] 6.
It would be contrary to public policy to allow a conviction to be recorded against an accused by inducing him to confess to a plea of guilty on an allurement being held out to him that if he enters a plea of guilty, he will be let off very lightly.
Such a procedure would be clearly unreasonable, unfair and unjust and would be violative of article 21 of the Constitution.
It would have the effect of polluting the pure fount of justice because it might induce an innocent accused to plead guilty to suffer a light and inconsequential punishment rather than go through a long and ardous criminal trial.
The judge also might be likely to be defected from the path of duty to do justice and he might either convict an innocent accused by accepting the plea of guilty or let of a guilty accused with a light sentence, thus, subverting the process of low and frustrating the social objective and purpose of the anti adulteration statute.
This practice would also tend to encourage corruption and collusion and as a direct consequence, contribute to the lowering of the standard of justice.
[1041B E]
|
ON: Criminal Appeal No. 140 of 1954.
Appeal by special leave from the judgment and order dated the 23rd July 1953 of the Punjab High Court.
in Criminal Revision No. 487 of 1953 arising out of the judgment and order dated the 17th April 1953 of the Court of Sessions Judge at Hoshiarpur in Criminal Appeal No. D/I of 1953.
N. section Bindra and P. G. Gokhale, for the appellant.
A. N. Chona and K. L. Mehta for, the respondent, 71 570 1956.
May 8.
The Judgment of the Court was delivered by SINHA J.
This is an appeal by special leave from the judgment of a single Judge of the High Court of Judicature of Punjab at Simla in Criminal Revision No. 487 of 1953 dated the 23rd July 1953 acquitting the respondent, a constable in the police force of the State of an offence under section 7 of the East Punjab Essential Services (Maintenance) Act, XIII of 1947 (which hereinafter will be referred to as "the Act"), for which he had been convicted by a Magistrate of the First Class at Dharamsala by his judgment dated the 30th March 1953 and sentenced to 15 days ' rigorous imprisonment, which.
orders of conviction and sentence had been affirmed by the Sessions Judge of Hoshiarpur, Camp Dharamsala, by his judgment and order dated the 17th April 1953.
The facts leading up to this appeal may shortly be stated.
The respondent was prosecuted on a complaint filed by the Superintendent of Police, Kangra District, in the Court of the 1laqa Magistrate, Dharamsala, District Kangra, for an offence under section 7 of the Act.
The allegations against the respondent were that he joined the Police Department as a constable in Jullundur District in 1947, that in December 1952 he was transferred from Jullundur District to Kangra District and posted to Police 'Lines, Kangra, as a constable on general duty at Seraj police station; that in January 1953 he came to Police Lines, Dharamsala for monthly training (refresher course), that on the 2nd February 1953 at the time of roll call at 7 p.m. the appellant was assigned the duty as sentry No. 1 without rifle behind the Police Lines Armoury,Dharamsala,from9p.m.toll.p.m.
The respondent, though informed of the assignment of the aforesaid duty to him, refused to obey that order or to perform any other duty in the Lines.
Thereupon his name was struck off from the Duty Roster and another foot constable was duly placed in that post of duty.
On the night between the 2nd and 3rd February 1953 at 11 30 p.m. a surprise roll call of the employees of the Police Lines was duly made by means 571 of an alarm sounded with a bugle which was blown continuously for about 15 minutes.
The respondent was found absent on such a roll call and another constable was deputed to search for the respondent but he could not be found.
He appeared the next morning at about 9 30 a.m. after remaining absent from the Police Lines without offering any explana tion for his unauthorised absence.
The gravamen of the charge as laid in the petition of complaint was that he refused to carry out the order of his superior officer who had assigned a duty to him and that he remained absent from his official duty in the Police Lines without obtaining permission and without any cogent reasons, from 11 30 p.m. on the 2nd February 1953 till 9 30 a.m. on the day following.
Thus he was said to have committed an offence under section 7 of the Act.
On those allegations the respondent was placed on his trial before the Magistrate of the First Class at Dharamsala.
After recording the. prosecution evidence the learned Magistrate framed a charge under section 7 of the Act under two heads, firstly, that he had on the 2nd February 1953 at Dharamsala as a foot constable in the police force of the Kangra District had disobeyed the lawful orders given by a superior officer who had assigned to him a duty as such foot constable of a sentry without rifle in the rear of the armoury in the Police Lines from 9 p.m. to 1 1 p.m. and, secondly, that on the same date and at the same place he had absented himself from duty as a foot constable without reasonable excuse and had thus remained absent from 11 30 p.m. on the 2nd February 1953 to 9 30 a.m. of the following day.
The respondent 's defence as disclosed in his answer to questions put by the court under section 342, Criminal Procedure Code was one of denial of the charge.
His substantive defence may be stated in his own words: "On 2nd February, 1953 at 7 p.m. my duty was allotted to me and I signed at exhibit P. D./I.
I then told Raghbir Singh P.W. that according to the Civil Surgeon, Jullundur I could only be given sitting or 572 office duty.
I showed him the copy Exhibit D. E.
I also told him that the Civil Surgeon, Dharamsala, had also examined that very day on 2nd February 1953.
Thereupon Raghbir Singh P.W. cancelled my said duty.
I was lying ill in the Police Lines Barracks and did not hear the bugle In the morning of 3rd February, 1953, I came to know that my absence had been noted.
Thereupon I presented myself for duty to the Head Constable and signed at Exhibit P.E./1.
My leg was burnt in rescue work at Gujranwalla when I was in the special Police Lines".
He also examined a number of defence witnesses including the Civil Surgeon of Jullundur who deposed to having examined the respondent on the 27th February 1953 "and found that he had got extensive burn scars on the back of the right thigh and leg crossing the knee.
Hence he could not perform any strenuous duty like standing for long hours.
In my opinion he could be given some light duty in the office.
exhibit D.W.
I/D is a true copy of my medico legal report of this case".
The learned Magistrate acquitted the accused in respect of the first part of the charge relating to his alleged disobedience of the lawful orders of his superior officer to perform sentry duty.
But he convicted him of the second part of the charge, namely, absence from duty and sentenced him to 15 days ' rigorous imprisonment.
On appeal by the accused, the learned Sessions Judge affirmed the findings of the trial Magistrate and held that the appellant before him was absent from duty without permission during the night between the 2nd and 3rd February 1953.
He accordingly dismissed the appeal.
On a revisional application made by the convicted person, the learned single Judge who heard the case, came to the conclusion that the accused had not offended against any provisions of the Act.
Accordingly he acquitted him.
The ratio of his decision may be given in his own words as follows: "This Act does not appear to me to apply to the kind of act which the constable is said to have done.
He had been called to Dharamsala on a refresher 573 course and on the night in question and in the early morning he appears to have been not present at the time when he according to the prosecution should have been present.
This, in my opinion, does not attract the attention of the Essential Services Maintenance Act.
It is possible that if he is guilty be is liable to some disciplinary punishment, but his prosecution under the East Punjab Essential Services Maintenance Act is in my opinion not justified.
I hold that he has not offended against the provisions of this Act and therefore he has not committed any offence under this Act".
Against this order of acquittal the State of Punjab obtained special leave to appear to this Court, apparently because the judgment of the learned Judge of the High Court involved very important questions as to the scope and effect of the Act and the question of law decided by the High Court was of great public importance.
This case was first placed on the 11th April this year before another Bench of this Court and learned counsel for the respondent raised a preliminary objection to the maintainability of the prosecution on the ground, it was alleged, that there was no proper complaint under section 7(3) of the Act and as this question bad not been raised in any of the courts below and as counsel for the appellant was taken by surprise, the Bench granted two weeks time to enable him to satisfy the court that there was a proper compliance with the provisions of section 7(3) of the Act.
When the matter came up before us for hearing, the learned counsel for the appellant placed before us the following notification.
by the Punjab Government authorising all police officers above the rank of Deputy Superintendent of Police and the Heads of the various Government Departments to make complaints in writing to a court in respect of alleged offences against the Act: " Dated Simla 2, the 20th January, 1948.
No. 1248 H Camp 48/2075.
In exercise of the powers conferred by sub section (3) of section 7 of the East Punjab Essential Services (Maintenance) Act 574 1947 the Governor of the East Punjab is pleased to authorise all police officers of and above the rank of Deputy Superintendent of Police and the Heads of the various Government Departments to make complaints in writing to a court against persons of their respective Departments, who are alleged to have committed offences against the Act.
Nawab Singh Home Secretary to Govt.
of East Punjab".
On a reference to the notification quoted above, it is clear that the complaint filed by the Superintendent of Police Kangra District; in the court of the Ilaqa Magistrate, Dharamsala in the district of Kangra, was filed in compliance with the provisions of sub section (3) of section 7 of the Act which is in these terms: "No court shall take cognisance of any offence under this Act except upon complaint in writing made by a person authorised in this behalf by the State Government".
But it was argued on behalf of the respondent that there was nothing to show that the complaint on the basis of which the prosecution had been initiated in this case had been authorised by the State Government.
The law does not require that the particular complaint should have been authorised by the State Government.
What is required is that the complaint should have been filed by a person authorised by the State Government to do so.
The notification has authorised a Superintendent of Police to file a complaint in respect of a contravention of the provisions of the Act by a person in his department.
It is not denied that the respondent was such a person.
Hence the preliminary objection must be overruled ' Coming to the merits of the decision, it is a little surprising that the learned Judge below should have completely ignored the opening words of section 3 of the Act which completely answer the ratio of the decision under appeal.
"This Act shall apply to all employment under the State Government. . (omitting words not material for the present case).
575 The learned Judge of the High Court has quoted the provisions of sections 5 and 6 of the Act in support of his conclusion that the Act is "intended to be applied in special cases of dislocation of essential services because of extraordinary events such as strikes of because of political agitation or similar circumstances".
The relevant portion of section 5 is in these terms: "Any person engaged in any employment or class of employment to which this Act applies who(a) disobeys any lawful order given to him in the course of such employment, or (b)without reasonable excuse abandons such employment or absents himself from work, is guilty of an offence under this Act".
The opening words of section 5 have reference to the opening words of section 3 so far as an employee under the State Government is concerned.
As the learned Judge missed these opening words as indicated above, he fell into the error of supposing that a person in the position of the respondent was not intended to be governed by the Act.
It is mainfest that the learned Judge has acquitted the appellant, not on a misreading of the provisions of the Act, but by ignoring the opening words of section 3.
It must therefore be held that the judgment of the High Court cannot be sustained.
But it still remains to consider whether the orders passed by the High Court acquitting the respondent should be interfered with.
The courts below have acquitted the respondent of the first part of the charge which could have come within clause (a) of section 5 which lays down offences under the Act.
The respondent had been convicted by the first two courts of an offence referred to in the second part of the charge, namely, of his, having absented himself from duty.
Under section 22 of the , V of 1861, every police officer is to be considered to be always on duty and may at any time be employed as a police officer, and on the findings of the courts of fact that the res pondent had absented himself from the Police Lines 576 during the night between the 2nd and 3rd February 1953 he may have made himself liable to the penalty for neglect of duty under section 29 of the , or may have made himself liable to departmental punishment for absence from the police lines without permission.
But we are not concerned here with these provisions.
The respondent bad been found guilty under clause (b) of section 5, that is to say, for the offence of absenting himself from work.
Neglect of duty as contemplated by section 29 of the is quite different from abandoning an employment or of absenting oneself from work without reasonable cause which is the particular offence contemplated by clause (b) of section 5.
As already indicated, on account of the respondent 's physical infirmity or deficiency the work assigned to him had been cancelled and he was expected to be in police lines during the material time without apparently doing any "work".
It is clear from the record that he had not been assigned any "work" within the meaning of clause (b) of section 5.
Hence his absence from Police Lines during the relevant time may have amounted to neglect of duty; but, in our opinion, is not synonymous with absence from work or abandonment of employment which has been made penal under clause (b) of section 5.
For the reasons aforesaid it must be held that the respondent bad been rightly acquitted, though for wholly wrong reasons.
The appeal must therefore stand dismissed.
Appeal dissmissed.
| IN-Abs | Section 7(3) of the East Punjab Essential Services (Mainten ance) Act, 1947, provides that "no court shall take cognisance of any offence under this Act except upon complaint in writing made by a person authorised in this behalf by the State Government".
Held, that the law does not require that the particular com plaint should have been authorised by the State Government and it is sufficient if it has been filed by a person authorised by the State Government to do so.
Neglect of duty as contemplated by section 29 of the , is quite different from abandoning an employment or absenting oneself from work without reasonable cause within the meaning of section 5(b) of the East Punjab Essential Services (Maintenance) Act.
The respondent, a constable, on account of physical infirmity was not assigned any "work" in the Police Lines within the meaning of el.
(b) of section 5 of the East Punjab Essential Services (Maintenance) Act.
He absented himself from the Police Lines without permission.
Held, that his absence from Police Lines during the relevant time may have amounted to neglect of duty but he could not be convicted under section 5(b).
|
Civil Appeal No. 811 of 1979.
Appeal by special leave from the Judgment and Order dated 18 12 1970 of the Allahabad High Court in Crl.
Revision No. 170 of 1975.
O. P. Rana and M. Ramachandran for the Appellant.
Nemo for the Respondent.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
The Officer who was investigating into offences under Section 120 B, 420, 468 and 471 Indian Penal Code alleged against the respondent, Ram Babu Misra, moved the Chief Judicial Magistrate, Lucknow, to direct the accused to give his specimen writing for the purpose of comparison with certain disputed writings.
The learned Magistrate held that he had no power to do so when the case was still under investigation.
His view has been upheld by the High Court.
The State has preferred this appeal by Special Leave of this Court.
Shri O. P. Rana, learned Counsel for the appellant, contended that Section 73 of the Evidence Act conferred ample power on the Magistrate to direct the accused to give his specimen writing even during the course of investigation.
He also urged that it would be generally in the interests of the administration of justice for the Magistrate to direct the accused to give his specimen writing when the case was still under investigation, since that would enable the investigating agency not to place the accused before the Magistrate for trial or enquiry, if the disputed writing, as a result of comparison with the specimen writing, was found not to have been made by the accused.
While we agree with Mr. Rana that a direction by the Magistrate to the accused to give his specimen writing when the case is still under investigation would surely be in the interests of the administration of justice, we find ourselves unable to agree with his submission that section 73 of the Evidence Act enables the Magistrate to give such a direction even when the case is still under investigation.
1069 Section 73 of the Evidence Act is as follows: "73.
In order to ascertain whether a signature, writing or seal is that of the person by whom it purports to have been written or made, any signature, writing or seal admitted or proved to the satisfaction of the Court to have been written or made by that person may be compared with the one which is to be proved, although that signature, writing or seal has not been produced or proved for any other purpose.
The Court may direct any person present in Court to write any words or figures for the purpose of enabling the Court to compare the words or figures so written with any words or figures alleged to have been written by such person.
This section applies also, with any necessary modifications to finger impressions".
The second paragraph of section 73 enables the Court to direct any person present in Court to give specimen writings "for the purpose of enabling the Court to compare" such writings with writings alleged to have been written by such person.
The clear implication of the words "for the purpose of enabling the Court to compare" is that there is some proceeding before the Court in which or as a consequence of which it might be necessary for the Court to compare such writings.
The direction is to be given for the purpose of 'enabling the Court to compare ' and not for the purpose of enabling the investigating or other agency 'to compare '.
If the case is still under investigation there is no present proceeding before the Court in which or as a consequence of which it might be necessary to compare the writings.
The language of section 73 does not permit a Court to give a direction to the accused to give specimen writings for anticipated necessity for comparison in a proceeding which may later be instituted in the Court.
Further section 73 of the Evidence Act makes no distinction between a Civil Court and a Criminal Court.
Would it be open to a person to seek the assistance of the Civil Court for a direction to some other person to give sample writing under section 73 of the Evidence Act on the plea that it would help him to decide whether to institute a civil suit in which the question would be whether certain alleged writings are those of the other person or not ? Obviously not.
If not, why should it make any difference if the investigating agency seeks the assistance of the Court under section 73 of the Evidence Act on the plea that a case might be instituted before the Court where it would be necessary to compare the writings ? 1070 We may also refer here to Section 5 of the , which provides: "5.
If a Magistrate is satisfied that, for the purposes of any investigation or proceeding under the Code of Criminal Procedure, 1898, it is expedient to direct any person to allow his measurements or photograph to be taken, he may make an order to that effect, and in that case the person to whom the order relates shall be produced or shall attend at the time and place specified in the order and shall allow his measurements or photograph to be taken, as the case may be, by a police officer: Provided that no order shall be made directing any person to be photographed except by a Magistrate of the first class: Provided further, that no order shall be made under this section unless the person has at some time been arrested in connection with such investigation or proceeding".
Section 2(a) of the Act defines "measurements" as including "finger impressions and foot print impressions".
There are two things to be noticed here.
First, signature and writing are excluded from the range of section 5 of the and, second, 'finger impression ' are included in both section 73 of the Evidence Act and section 5 of the .
A possible view is that it was thought that section 73 of the Evidence Act would not take in the stage of investigation and so section 5 of the made special provision for that stage and even while making such provision, signature and writings were deliberately excluded.
As we said, this is a possible view but not one on which we desire to rest our conclusion.
Our conclusion rests on the language of section 73 of the Evidence Act.
Section 73 of the Evidence Act was considered by us in State (Delhi Administration) vs Pali Ram(1), where we held that a Court holding an enquiry under the Criminal Procedure Code was entitled under section 73 of the Evidence Act to direct an accused person appearing before it to give his specimen handwriting to enable the Court by which he may be tried to compare it with disputed writings.
The present question whether such a direction, under section 73 of the Evidence Act, can be given when the matter is still under investigation and there is no proceeding before the Court was expressly left open.
The question was also not considered in State of Bombay vs Kathi Kalu Oghad,(2) 1071 where the question which was actually decided was that no testimonial compulsion under article 20(3) of the Constitution was involved in a direction to give specimen signature and hand writing for the purpose of comparison.
The view expressed by us in the earlier paragraphs, on the construction of section 73, Evidence Act was the view taken by the Madras High Court in T. Subbiah vs section K. D. Ramaswamy Nadar(1), the Calcutta High Court in Farid Ahmed vs the State(2) (Mitter J., at page 32).
and Priti Ranjan Ghosh & Ors.
vs The State(3), the High Court of Punjab and Haryana in Dharamvir Singh vs State(4), the High Court of Madhya Pradesh in Brij Bhushan Raghunandan Prasad vs The State(5), the Orissa High Court in Srikant Rout vs State of Orissa(6) and the Allahabad High Court in the judgment under appeal.
A contrary view was taken by the Patna High Court in Gulzar Khan & Ors.
vs State(7) and the High Court of Andhra Pradesh in B. Rami Reddy & Ors.
vs State of Andhra Pradesh.(8) We do not agree with the latter view.
We accordingly dismiss the appeal and while doing so we would suggest the suitable legislation may be made on the analogy of section 5 of the , to provide for the investiture of Magistrates with the power to issue directions to any person, including an accused person, to give specimen signatures and writings.
section R. Appeal dismissed.
| IN-Abs | Dismissing the appeal by special leave, the Court: ^ HELD: Though a direction by the Magistrate to the accused to give his specimen writing when the case is still under investigation would surely be in the interests of the administration of justice, Section 73 of the Evidence Act does not enable the Magistrate to give such a direction when the case is still under investigation.
[1068G H] The second paragraph of Section 73 enables the Court to direct any person present in Court to give specimen writings "for the purpose of enabling the Court to compare" such writings with writings alleged to have been written by such person.
The clear implication of the words "for the purpose of enabling the Court to compare" is that there is some proceeding before the Court in which or as a consequence of which it might be necessary for the Court to compare such writings.
The direction is to be given for the purpose of 'enabling the Court to compare ' and not for the purpose of enabling the investigating or other agency 'to compare '.
If the case is still under investigation there is no present proceeding before the Court in which or as a consequence of which it might be necessary to compare the writings.
The language of Section 73 does not permit a Court to give a direction to the accused to give specimen writings for anticipated necessity for comparison in a proceeding which may later be instituted in the Court.
[1069D F] (ii) Section 73 of the Evidence Act makes no distinction between a Civil Court and a Criminal Court.
It would not be open to a person to seek the assistance of the Civil Court for a direction to some other person to give sample writing under section 73 of the Evidence Act on the plea that it would help him to decide whether to institute a civil suit in which the question would be whether certain alleged writings are those of the other person or not.
That being the position, it should not make any difference if the investigating agency seeks the assistance of the court under section 73 of the Evidence Act on the plea that a case might be instituted before the Court where it would be necessary to compare the writings.
[1069G H] State (Delhi Admn.) vs Pali Ram, ; and State of Bombay vs Kathi Kalu Oghad, ; ; distinguished.
State of Bombay vs Kathi Kalu Oghad, ; ; T. Subbaiah vs section K. D. Ramaswamy Nadar, AIR 1970 Mad. 85; Farid Ahmed vs The State, AIR 1960 Cal. 32; Priti Ranjan Ghosh and others vs The State, 77 C.W.N. 1068 865; Dharamvir Singh vs State, & Haryana); Brij Bhushan Raghunandan Pd.
vs The State, AIR 1957 M.P. 106; and Srikant Rout vs State of Orissa, 1972 (2) Cuttack Weekly Reporter 1332; approved.
Gulzar Khan and Ors.
vs State, AIR 1962 Patna 255 and B. Rami Reddy and Ors.
vs State of A.P., ; over ruled.
[The Court suggested that suitable legislation may be made on the analogy of section 5 of the Identification of Prisoners Act, to provide for the investiture of Magistrates with the power to issue directions to any person, including an accused person, to give specimen signatures and writings.]
|
: Special Leave Petition (Crl.) No. 405 of 1980.
Appeal by special leave from the judgment and Order dated 31 10 1979 of the Punjab & Haryana High Court in Crl.
Appeal No. 986/77.
N. C. Talukdar, Shrinath Singh and M. section Dhillon for the Petitioner.
The Judgment of the Court was delivered by DESAI, J.
While we decline to grant special leave in this case, an unsavoury feature of the judgment which rather stares into our 1154 face, and surfaces at regular intervals, makes it obligatory to make a few observations.
Petitioner was convicted for having committed offences under Section 161 of the I.P.C. and Section 5(2) of the Prevention of Corruption Act and was sentenced to suffer R.I. for one year on each count and on the second count, also to pay a fine of Rs. 400/ or in default to suffer further R.I. for three months by the learned Special Judge.
Both the Substantive sentences of imprisonment were directed to run concurrently.
Petitioner preferred Criminal Appeal No. 989 of 1977 against his conviction and sentence to the High Court of Punjab and Haryana at Chandigarh.
This appeal came up for final hearing before a learned single judge of the High Court on 31st October, 1979.
When the appeal was taken up for hearing, learned counsel for the petitioner appearing in the High Court did not question either the correctness or the legality of the conviction.
This is unquestionable as the High Court has observed while disposing of the appeal that "no arguments on merits are advanced".
The High Court then proceeded to consider adequacy or otherwise of sentence imposed on the appellant before it.
The High Court then proceeded to reduce the substantive sentence of the appellant of rigorous imprisonment for one year to the sentence undergone till the date of the judgment of the High Court.
While so reducing the substantive sentence the High Court noticed the following circumstances which in the opinion of the High Court were sufficient to enable it to interfere with the sentences imposed upon the present petitioner.
It would be advantageous to extract the relevant observations: "The learned counsel for the appellant has only submitted that the appellant has already been dismissed from service; that he is a family man, and that his sentence may be reduced to that already undergone.
In my view no useful purpose will be served by sending him again to jail to serve his unexpired period of sentence.
He has already lost his job.
The ends of justice will be amply met if his sentence of imprisonment is reduced to that already undergone and instead sentence of fine is enhanced from Rs. 400 to Rs. 4000 (four thousand) or in default to suffer further R.I. for one year.
I order accordingly.
" The judgment of the High Court throws no light on the question as to how much sentence the appellant had undergone by the time the 1155 High Court released him on bail while admitting his appeal.
But it cannot be more than a few days only.
Petitioner as pointed out earlier is convicted for committing offences under Section 161 IPC and 5(2) of the Prevention of Corruption Act.
Section 5(2) of the Prevention of Corruption Act reads as under: "Any public servant who commits criminal misconduct shall be punishable with imprisonment for a term which shall not be less than one year but which may extend to seven years and shall also be liable to fine: Provided that the court may, for any special reasons recorded in writing, impose a sentence of imprisonment of less than one year." (underlining ours) The language of the proviso makes it abundantly clear that court is under an obligation to impose a minimum punishment once the conviction is recorded under Section 5(2) and the minimum punishment of imprisonment is for a term not less than one year.
Undoubtedly the proviso confers power on the Court to award less than the minimum punishment, if the Court convicting and sentencing the accused, is of the opinion that for any special reasons which the court is under an obligation to record in writing, sentence of imprisonment for a term less than the minimum is called for.
Conceding that the quantum of sentence is in the discretion of the trial court, where the Legislature stepped in and circumscribed and fettered the discretion by directing imposition of a minimum sentence, the court can exercise its discretion within the limited sphere left open by legislature.
The Legislature circumscribed the discretion by requiring the court to impose minimum sentence but left it open to award less than the minimum statutorily prescribed for special reasons.
The reasons have to be special reasons.
The words 'special reasons ' in the context in which they are used could only mean special to the accused on whom sentence is being imposed.
The court has to weigh reasons advanced in respect of each individual accused whose case is taken up for awarding sentence.
The word 'special ' has to be understood in contradistinction to word 'general ' or 'ordinary '.
Now what does term 'special ' connote ? "Special" means distinguished by some unusual quality; out of the ordinary.
(See Words and Phrases, Permanent Edition, Volume 39A p. 82.) Webster defines "special" as particular; peculiar; different from others; designed for a particular purpose, occasion, or person; limited in range; confined to a definite field of action.
Thus anything which is common to a large class 1156 governed by the same statute cannot be said to be special to each of them.
It would thus unquestionably appear that "special reasons" in the context of sentencing process must be special to the accused in the case or special to the facts and the circumstances of the case in which the sentence is being awarded.
The High Court then was under an obligation to award minimum sentence unless the accused advanced special reasons, i.e. special to him in the facts and circumstances of the case and successfully invoked the discretion vested in the Court to award less than the minimum sentence prescribed by law.
The Court observes that this appellant corrupt officer whose corruption was proved to its satisfaction because the High Court declined to interfere with the conviction of the appellant for corruption and who must consequently or of necessity be dismissed from service, considered his dismissal from service as a special reason.
Frankly speaking the High Court honestly did not expect any corrupt officer to be retained in service.
Ordinarily a corrupt official whose corruption is proved to the hilt is liable to be dismissed, and therefore, this aspect is not special to the appellant.
Accordingly if an officer proved to be corrupt to the satisfaction of the court is liable to be dismissed it cannot influence the question of sentence.
Also because it would be true of all public servants dealt with under Section 5(2) of the Prevention of Corruption Act.
Another special reason that appealed to the High Court is that appellant is a 'family man '.
Possibly the High Court considered marriage and children of the appellant as special to him.
An unusually large number of the Government officers from amongst those charged with corruption and convicted for the same would be married men with family, unless they joined service before marriage and became corrupt very soon at the inception of the career.
And ordinarily speaking a family of corrupt officer in some cases if not all benefits by the corrupt activity unless shown to the contrary which is not the case.
If large number of public servants from those convicted under section 5(2) of the Prevention of Corruption Act are married men with children it passes comprehension how this fact can be styled as special to the appellant influencing his sentence.
It may be mentioned without fear of contradiction that the only two reasons, special according to the High Court for awarding less than the minimum sentence are (i) appellant has lost his job and (ii) he is a married man with children.
These two reasons would be common to ninety nine per cent of cases tried under Prevention of Corruption Act and if they can be styled as special reasons for awarding less than the 1157 minimum sentence the proviso would be rendered wholly nugatory.
The Court should not be oblivious to the fact that while conferring discretion in the matter of awarding adequate sentence within limits prescribed by the statute, the Legislature finding cases of misplaced sympathy in sentencing process fettered the Court 's discretion by prescribing a minimum sentence and making it obligatory to record special reasons for awarding less than the minimum.
If still the notice of encroachments on court 's discretion is not taken, time may not be far when the Legislature out of exasperation may resort to what it has done in Section 16 of Prevention of Food Adulteration Act where minimum sentence is prescribed and Courts ' discretion to award less in any case is wholly taken away.
In this context it would be timely to recall the warning uttered by this Court in Jagdish Prasad vs West Bengal This Court said: "Offences under the Act being anti social crimes affecting the health and well being of our people, the Legislature having regard to the trend of courts to impose in most cases only fines or where a sentence of imprisonment was passed a light sentence was awarded even in cases where a severe sentence was called for, a more drastic step was taken by it in prescribing a minimum sentence and a minimum fine to be imposed even for a first offence.
" In this case, there was no justification, much less special reasons statutorily required, for awarding less than the minimum sentence.
stricto sensu Court exceeded its jurisdiction while interfering with the quantum of sentence.
And with this observation we dismiss the special leave petition.
S.R. Petition dismissed.
| IN-Abs | Section 5(2) of the Prevention of Corruption Act, 1947 prescribes a minimum sentence of one year, in all cases of conviction under the Act, with a proviso that the Court may for any special reasons recorded in writing impose a sentence of imprisonment of less than one year.
The petitioner was convicted for having committed offences under section 161 I.P.C. and Section 5(2) of POCA and was sentenced to suffer R.I. for one year on each count and on the second count, also to pay a fine of Rs. 400/ or in default to suffer further R.I. for three months by the learned Special Judge.
Both the substantive sentences of imprisonment were directed to run concurrently.
In appeal the High Court, while maintaining the conviction, reduced the substantive sentence of rigorous imprisonment for one year to the sentence undergone till the date of the Judgment of the High Court and increased the fine to Rs. 4,000/ (Rupees four thousand) or in default to suffer further R.I. for one year.
The High Court, while so altering the sentence, took into consideration two facts, namely, (i) that the petitioner was dismissed from service and (ii) that he is a family man.
Dismissing the special leave petition of the convict against his conviction, there being no appeal by State, the Court ^ HELD: 1.
The language of the proviso to Section 5(2) of the Prevention of Corruption Act makes it abundantly clear that court is under an obligation to impose a minimum punishment once the conviction is recorded under Section 5(2) and the minimum punishment of imprisonment is for a term not less than one year.
Undoubtedly the proviso confers power on the Court to award less than the minimum punishment if the Court convicting and sentencing the accused, is of the opinion that for any special reasons which the Court is under an obligation to record in writing, sentence of imprisonment for a term less than the minimum is called for.
Conceding that the quantum of sentence is in the discretion of the trial Court, where the Legislature stepped in and circumscribed and fettered the discretion by directing imposing of a minimum sentence, the court can exercise its discretion within the limited spheres left open by legislature.
The Legislature circumscribed the discretion by requiring the Court to impose minimum sentence but left it open to award less than the minimum statutorily prescribed for special reasons.
The reasons have to be special reasons.
The words 'special reasons ' in the context in which they are 1153 used could only mean special to the accused on whom sentence is being imposed.
The Court has to weigh reasons advanced in respect of each individual accused whose case is taken up for awarding sentence.
[1155C G] In the instant case, there was no justification much less special reasons statutorily required, for awarding less than the minimum sentence.
Stricto sensu court exceeded its jurisdiction while interfering with the quantum of sentence.
[1157E] Jagdish Prasad vs West Bengal, [1972] 2 S.C.R. p. 845 @ 851, relied on.
The word "special" has to be understood in contradistinction to word "general" or "ordinary".
"Special" means distinguished by some unusual quality, out of the ordinary.
Again "special" means 'particular '; peculiar; different from others; designed for a particular purpose, occasion, or person; limited in range; confined to a definite field of action.
Thus, anything which is common to a large class governed by the same statute cannot be said to be special to each of them.
And, "special reasons" in the context of sentencing process must be special to the accused in the case or special to the facts and circumstances of the case in which the sentence is being awarded.
[1155G H, 1156A] 3.
In the instant case, the only two reasons special according to the High Court for awarding less than the minimum sentence are (i) appellant before it has lost his job and (ii) and he is a married man with children.
These two reasons would be common to ninety nine percent of cases tried under Prevention of Corruption Act and if they can be styled as "special reasons" for awarding less than the minimum sentence the proviso would be rendered wholly nugatory.
[1156G H, 1157A] Observation: The Court should not be oblivious to the fact that while conferring discretion in the matter of awarding adequate sentence within limits prescribed by the statute, the Legislature finding cases of misplaced sympathy in sentencing process fettered the Court 's discretion by prescribing a minimum sentence and making it obligatory to record special reasons for awarding less than the minimum.
If still the notice of encroachments on court 's discretion is not taken, time may not be far when the Legislature out of exasperation may resort to what it has done in Section 16 of Prevention of Food Adulteration Act where minimum sentence is prescribed and Court 's discretion to award less in any case is wholly taken away.
[1157A C]
|
etition (Crl.) No. 1323 of 1979.
(Under Article 32 of the Constitution.) Ram Jethamalani and Harjinder Singh and M. M. Lodha for the Petitioner.
U.R. Lalit, A. V. Rangam and M. N. Shroff for the Respondent.
The Judgment of the Court was delivered by KAILASAM, J.
The Petitioner Ramchandra A. Kamat has preferred this petition under article 32 of the Constitution of India praying for the issue of writ of Habeas Corpus directing his release by quashing the order of his detention dated 31 8 1979 passed by second respondent, Additional Secretary to the Government of India, Ministry of Finance.
The petitioner was directed to be detained by an order dated 31st August, 1979 under section 3(1) of the .
In pursuance of the order, the petitioner was arrested on 5 9 1979.
He was served with the grounds of detention on the same day.
The Petitioner through his advocate by a letter dated 7 9 1979 wrote to the second 1074 respondent stating that it was found that the detaining authority relied upon a number of statements of various persons including the detenu as well as documents referred to in the grounds, but the detenu was not furnished with the copies of the same.
The Advocate stated that detenu desires to make a representation against the order of detention but found that without the copies of documents referred to in the grounds of detention order it is not possible to make an effective representation.
A reply to his letter was sent to the Advocate by Mr. Thawani, Deputy Secretary to the Government of India, wherein he acknowledged the receipt of the letter of the Advocate dated 7 9 1979.
By this letter the Deputy Secretary requested the Advocate to contact the Deputy Director, Directorate of Enforcement, Bombay, who it was stated, had been suitably advised regarding supply of copies of statements and documents, relied upon in the detention order dated 31 8 1979.
It may be noted that the detaining authority, the second respondent did not acknowledge the letter from the detenu 's advocate or take any action by himself but directed the Deputy Secretary to address the communication dated 10 9 1979 referred to above.
Though the letter states that the Deputy Director, Bombay has been suitably advised regarding the request for supply of copies of statements and documents relied on in the detention order nothing further was done by the Deputy Director of Enforcement, Bombay.
On the 14th September, 1979, the advocate not having received any communication, addressed a letter to the Deputy Director enclosing a copy of the letter which he received from the Deputy Secretary and requested the Deputy Director to supply him on behalf of his client copies of the relevant statements and documents referred to and relied upon in the order of detention at an early date.
In reply to the letter of 14 9 79 by the Advocate, the Deputy Director in his communication dated 22 9 1979 requested the advocate to see the Deputy Director on 24 9 1979 at 1430 hours to take inspection of the documents.
On inspecting the documents the advocate was not satisfied and insisted on supply of copies of documents and ultimately copies were supplied on 3 days, namely, on 26 9 79, 28 9 79 and 29 9 79.
The representation was made by the detenu on 5 10 79.
It is settled law that the appropriate authority is bound to give an opportunity to the detenu to make representation and to consider the representation of the detenu as early as possible.
There should not be any delay in the matter of consideration.
The Constitutional Bench of this Court in Jayanarayan Sukul vs State of West Bengal(1) has held that the fundamental right of the detenu to have representation considered by the appropriate Govern 1075 ment will render meaningless if the Government will not deal with the matter expeditiously.
The Court observed: "It is established beyond any measure of doubt that the appropriate authority is bound to consider the representation of the detenu as early as possible.
The appropriate Government itself is bound to consider the representation as expeditiously as possible.
The reason for immediate consideration of the representation is too obvious to be stressed.
The personal liberty of a person is at stake.
Any delay would not only be an irresponsible act on the part of the appropriate authority but also unconstitutional because the Constitution enshrines the fundamental right of a detenu to have his representation considered and it is imperative that when the liberty of a person is in peril immediate action should be taken by the relevant authorities.
The same view has been expressed by this Court in a number of cases vide Seervai 's Constitutional Law of India, Vol.
I, page 542, paragraph 12.82.
The right to make a representation is a fundamental right.
The representation thus made should be considered expeditiously by the Government.
In order to make an effective representation, the detenu is entitled to obtain information relating to the grounds of detention.
When the grounds of detention are served on the detenu, he is entitled to ask for copies of the statements and documents referred to in the grounds of detention to enable him to make an effective representation.
When the detenu makes a request for such documents, they should be supplied to him expeditiously.
The detaining authority in preparing the grounds would have referred to the statements and documents relied on in the grounds of detention and would be ordinarily available with him when copies of such documents are asked for by the detenu the detaining authority should be in a position to supply them with reasonable expedition.
What is reasonable expedition will depend on the facts of each case.
It is alleged by the detenu that there had been unreasonable delay in furnishing of the statements and documents referred to in the grounds of detention.
It is the duty of the detaining authority to satisfactorily explain the delay, if any, in furnishing of these documents.
We are in this context not referring to the statements and documents not referred to in the grounds of detention for it may be that they are not in the possession of the detaining authority and that reasonable time may be required for furnishing copies of the relevant documents, which may not be in his possession.
1076 If there is undue delay in furnishing the statements and documents referred to in the grounds of detention the right to make effective representation is denied.
The detention cannot be said to be according to the procedure prescribed by law.
When the Act contemplates the furnishing of grounds of detention ordinarily within five days of the order to detention, the intention is clear that the statements and documents which are referred to in the grounds of detention and which are required by the detenu and are expected to be in possession of the detaining authority should be furnished with reasonable expedition.
It will have to be considered on the facts of the case whether there was any unexplained delay in furnishing the statements and documents relied on in the grounds of detention.
The detenu was arrested on 5 9 1979 and his advocate by a letter dated 7 9 1979 Annexure 'C ' to the writ petition wrote to the detaining authority stating that for making an effective representation, he must have copies of statements and documents referred to in the detention order.
He prayed that the copies of the statements and documents may be furnished to him.
This letter was received by the detaining authority on the 10th of September, 1979 and a communication was addressed not by the detaining authority but by Mr. Thawani, Deputy Secretary on the same date.
It is not clear whether the detaining authority applied his mind and realised the necessity for furnishing of the documents to the detenu expeditiously.
The communication was addressed by the Deputy Secretary to the Advocate of the detenu informing him that the Deputy Director of Enforcement at Bombay had been suitably advised regarding the request for supply of copies of statements and documents relied on in the detention order.
One would have expected that the detaining authority or the Deputy Secretary acting on his behalf, to have directed the Deputy Director of Enforcement, Bombay to furnish the necessary documents expeditiously to the Advocate as requested or to the detenu himself.
The direction in the communication from the Deputy Secretary was not immediately complied with.
The Advocate for the detenu wrote again on the 14th September, 1979 reminding the Deputy Director of the communications, he had received from the Deputy Secretary.
The Advocate requested that the copies of the relevant statements and documents referred to and relied upon in the detention order may be supplied to him.
This letter was replied by the Deputy Director on the 22nd September, 1979 in which the Advocate was asked to have inspection of the documents in his premises, between 1430 hours on 24 9 1979.
The copies of the statements and documents requested by the Advocate for the detenu and directed by the Deputy Secretary to be furnished to the Advocate were not furnished to him instead the Deputy Director asked the Advocate to 1077 have inspection at the Deputy Director 's office.
After inspecting the documents on 22/24/25 9 1979, he insisted of having copies which were supplied on the 26th, 27th and 28th of September, 1979.
The explanation given by the detaining authority regarding the delay in furnishing copies as seen in his counter affidavit is that the constitutional right of the petitioner to make effective representation had not been infringed.
According to the detaining authority "it was not incumbent upon the detaining authority to supply copies of all the documents relied upon in the grounds of detention to the petitioner alongwith the grounds within 5 days of detention as petitioner has contended.
In this context it would be relevant to state that the grounds were sufficiently detailed so as to enable the petitioner to make an effective representation against the detention." He further stated that all steps were taken to comply as expeditiously as possible.
It may not be necessary for the detaining authority to supply copies of all the documents relied upon in the grounds of detention at the time when the grounds are furnished to the detenu but once the detenu states that for effective representation it is necessary that he should have copies of the statements and documents referred to in the grounds of detention, it is the duty of the detaining authority to furnish them with reasonable expedition.
The detaining authority cannot decline to furnish copies of the documents on the ground that the grounds were sufficiently detailed to enable the petitioner to make an effective representation.
In this case, the detaining authority should have taken reasonable steps to provide the detenu or his advocate with the statements and documents as early as possible.
The reply to the detenu was not sent by the detaining authority and it is not clear whether he appreciated the necessity to act expeditiously.
As noted already, a communication was sent by the Deputy Secretary to the Deputy Director, who did not comply with the direction and furnish copies of the statements and documents.
After a lapse of 12 days i.e. on 22 9 1979, the Deputy Director offered inspection.
Taking into account the facts and circumstances of the case and explanation furnished by the detaining authority, we are of the view that the detaining authority failed to act with reasonable expedition in furnishing the statements and documents referred to in the grounds of detention.
On the facts of the case, therefore, we are satisfied that the detention is not in accordance with the procedure contemplated under law.
The continued detention is not warranted.
The order of his release has already been issued by this Court.
N.V.K. Petition allowed.
| IN-Abs | The petitioner was directed to be detained by an order dated August 31, 1979 under section 3(1) of the and in pursuance thereof was arrested on September 5, 1979.
He was served with the grounds of detention on the same day.
The petitioner 's advocate wrote a letter dated September 7, 1979 to the detaining authority second respondent stating that it was not possible to make an effective representation without the copies of statements and documents referred to in detention order.
The detaining authority did not take any action on the letter but forwarded it to the Deputy Secretary to the Government of India who by a communication dated September 10, 1979 acknowledged its receipt and requested the advocate to contact the Deputy Director, Directorate of Enforcement, Bombay regarding the supply of copies of statements and documents.
As no further communication was received, the advocate addressed a letter dated September 14, 1979 to the Deputy Director to supply him copies of the statements and documents.
The Deputy Director in his communication dated September 22, 1979 requested the advocate to see him on September 24, 1979 to take inspection of the documents.
On inspecting the documents the advocate was not satisfied and insisted on supply of copies of documents, which were supplied on three days, September 26, 1979, September 28, 1979 and September 29, 1979.
On October 5, 1979 the petitioner made his representation against the detention.
In the writ petition, it was contended on behalf of the petitioner that as there was unreasonable delay in furnishing of the statements and documents referred to in the grounds of detention and the right to make an effective representation was denied, the detention could not be said to be according to the procedure prescribed by law.
On behalf of the detaining authority it was contended that the constitutional right of the petitioner to make an effective representation had not been infringed and that it was not incumbent upon the detaining authority to supply copies of all documents relied upon in the grounds of detention and that the grounds of detention were sufficiently detailed so as to enable the petitioner to make an effective representation against the detention.
Allowing the petition, ^ HELD: 1.
The detaining authority failed to act with reasonable expedition in furnishing the statements and documents referred to in the grounds of detention.
The detention is therefore not in accordance with the procedure contemplated under law, and the continued detention is not warranted.
[1077G] 2.
It is settled law that the appropriate authority is bound to give an opportunity to the detenu to make representation and to consider the representation 1073 of the detenu as early as possible.
There should not be any delay in the matter of consideration.
[1074G] Jayanarayan Sukul vs State of West Bengal, ; , referred to.
(i) The right to make a representation is a fundamental right.
The representation thus made should be considered expeditiously by the Government.
In order to make an effective representation, the detenu is entitled to obtain information relating to the grounds of detention.
When the grounds of detention are served on the detenue he is entitled to ask for copies of the statements and documents referred to in the grounds of detention to enable him to make an effective representation.
When the detenu makes a request for such documents, they should be supplied to him expeditiously.
[1075E] (ii) When the Act contemplates the furnishing of grounds of detention within five days of the order of detention, the intention is clear that the statements and documents which are referred to in the grounds of detention and which are required by the detenu should be furnished with reasonable expedition.
[1076B] 4.
If there is undue delay in furnishing the statements and documents referred to in the grounds of detention the right to make an effective representation is denied.
It is the duty of the detaining authority to satisfactorily explain the delay, if any, in furnishing of the documents.
[1076A, 1075G] 5.
It may not be necessary for the detaining authority to supply copies of the documents relied upon in the grounds of detention at the time when the ground are furnished to the detenu but once the detenu states that for effective representation it is necessary that he should have copies of the statements and documents referred to in the grounds of detention it is the duty of the detaining authority to furnish them with reasonable expedition.
The detaining authority cannot decline to furnish copies of the documents on the ground that the grounds were sufficiently detailed to enable the petitioner to make an effective representation.
[1077D E]
|
Civil Appeal No. 2497 of 1969.
From the Judgment and Decree dated 14th October, 1966 of the Allahabad High Court in Special Appeal No. 441/66.
G. N. Dikshit, M. V. Goswami and O. P. Rana for the Appellant.
B. Datta for the Respondent.
132 The Judgment of the Court was delivered by UNTWALIA, J.
This is an appeal by certificate.
The Allahabad High Court decided that the date of the communication of the order will be the starting point of limitation for filing an appeal under Section 15 of the U.P. Motor Vehicles Taxation Act.
The respondent wanted exemption of tax in respect of his motor vehicle for a certain period.
He applied to the Taxation Officer, Kanpur.
The order rejecting his prayer was communicated in the letter of Taxation Officer dated October 20/24, 1964 through the Regional Transport Authority, Kanpur.
The respondent received that letter on October 29, 1964.
His appeal was within 30 days of October 29, 1964 but beyond 30 days of October 24, 1964.
If October 24, 1964 could be taken to be the date of the order then obviously the appeal was out of time.
If, however, the date of the order in Section 15 of the U.P. Motor Vehicles Taxation Act, in the context, meant the date of the communication of the order, then the appeal was within time.
Following the decision of this Court in Raja Harish Chandra Raj Singh vs The Deputy Land Acquisition Officer & Another,(1) the High Court has held in favour of the respondent hence this appeal.
In our opinion, the judgment of the High Court is right and cannot be interfered with by this Court.
Apart from the reasons given by this Court in the earlier judgment to the effect that the order must be made known either directly or constructively to the party affected by the order in order to enable him to prefer an appeal if he so likes, we may give one more reason in our judgment and that is this: It is plain that mere writing an order in the file kept in the office of the Taxation Officer is no order in the eye of law in the sense of affecting the rights of the parties for whom the order is meant.
The order must be communicated either directly or constructively in the sense of making it known, which may make it possible for the authority to say that the party affected must be deemed to have known the order.
in a given case, the date of putting the order in communication under certain circumstances may be taken to be the date of the communication of the order or the date of the order but ordinarily and generally speaking, the order would be effective against the person affected by it only when it comes to his knowledge either directly or constructively, otherwise not.
On the facts stated in the judgment of the High Court, it is clear that the respondent had no means to know about the order of the Taxation Officer rejecting his prayer until and unless he received his letter on October 29, 1964.
Within the meaning of Section 15 of the U.P. Motor Vehicles Taxation Act that was the date of the order 133 which gave the starting point for preferring an appeal within 30 days of that date.
For the reasons stated above, we hold that there is no substance in this appeal.
It is accordingly dismissed but in the circumstances without costs.
P.B.R. Appeal dismissed.
| IN-Abs | The respondent 's application under section 15 of the U.P. Motor Vehicles Taxation Act for exemption of tax in respect of his motor vehicle was rejected by the Taxation Officer by his letter dated October 20/24, 1964 and this was received by him on October 29, 1964.
The limitation for filing an appeal is 30 days.
On the question whether the period of limitation starts from the date of the order or the date of communication of the order.
Dismissing the appeal, ^ HELD: Apart from the reasons given by this Court in Raja Harish Chandra Raj Singh vs The Deputy Land Acquisition Officer & Anr. [1962] 1 SCR 676 that an order must be made known either directly or constructively to the party affected by it to enable him to prefer an appeal, mere writing of an order in the file kept in the office of the Taxation Officer is no order in the eye of law in the sense of affecting the rights of the parties for whom the order is meant.
The order must be communicated directly or constructively in the sense of making it known, which may make it possible for the authority to say that the party affected must be deemed to have known the order.
Generally speaking the order would be effective only when it comes to his knowledge directly or constructively, otherwise not.
[132E G] In the instant case the respondent had no means to know the order of the Taxation Officer until he received his letter on the 29th October 1964.
That was the date from which the starting point of limitation for preferring an appeal commenced.
|
Civil Appeal No. 2544 of 1969.
From the Judgment and Decree dated 21 12 1965 of the Kerala High Court in A.S. No. 403 of 1961.
1135 P. Govindan Nair, C. section Ananthakrishna Iyer, section Balakrishnan and Mrs. Baby Krishnan, for the Appellant.
T. section Krishnamurthy Iyer and Mrs. section Gopalakrishnan for the Respondents.
E. M. section Anam and P. N. Pura for Respondent No. 9.
The Judgment of the Court was delivered by DESAI, J.
On a certificate granted by the Full Bench of the High Court of Kerala, original plaintiff, a Hindu widow who was seeking partition of a share to which her deceased husband was entitled, having lost in both the Courts, has filed this appeal.
The High Court granted the certificate under Article 133(1)(c) of the Constitution as in its opinion the following substantial questions of law arise from the judgment rendered by it: 1.
Whether under the Mitakshara Law the parties are governed by customary law, and, in the absence of any rule of customary law on the point in question, by Mitakshara Law property can be divided, albeit by a family settlement, between two artificial units of a joint family, one comprising the sons of a father by his first wife, the first wife and his step mother, and the other comprising his son by his second wife and the second wife so as to constitute each unit into a coparcenary with rights of survivorship between its members; and 2.
Whether the use of the word 'tavazhi ' (in any case a misnomer) in describing the two units in the will, Ext.
P 1 left by the father and held to be the basis of the family settlement, is sufficient in the circumstances, to establish an intention that the members of each unit were to take the property as coparceners and not as tenants in common, the grouping into units being only for convenient enjoyment? The factual background from which, according to the High Court the aforementioned two questions emerge for consideration of this Court may be stated.
One Karappan, son of Chulliparambil Krishnan, had two wives Nani and Ponni.
Defendant 1 Krishnan, defendant 2 Shankaran, one Raman, husband of plaintiff Kallyani, and deceased Madhavan, husband of defendant 3 and father of defendants 4, 5 and 6, were his sons by first wife Nani, and one Kesavan was his son by the second wife Ponni.
He had six daughters, four by the first wife and 1136 two by the second wife.
One Valli was the second wife of his father and she had three daughters.
Karappan and his family are Ezhavas and in the matter of inheritance, succession and on the question of personal law they were governed essentially by customary law and in the absence of any specific custom they are governed by the Hindu Mitakshara Law.
Karappan executed a registered deed variously described as a will or a deed of partition or evidencing family arrangement, Ext.
P 1 dated January 25, 1910, the salient features of which may be reproduced.
After narrating his near relations including his two wives, male and female children born to each and his father 's second wife and her children, the following recitals are worthy of note: "There are as belonging to me now properties to the value of Rs. 8000/ mentioned in the sub joined schedules A and B as my tarwad properties and also my self acquired properties and properties to the value of Rs. 200/ of the C schedule which is set apart as common properties".
"Since I am seriously ill and in order that there may not arise any dispute in future in respect of properties belonging to me, I have resolved today the following with regard to the course of enjoyment of the said properties after my death".
"I myself shall have the full powers of disposition over all the properties described in A, B and C schedules during my life time and after my death, out of the properties to the value of Rs. 8000/ , Rs. 1300/ worth of properties shall vest in each of my male issues, Rs. 300/ in my first wife, Rs. 1000/ in my second wife since she is sick and Rs. 200/ in my father 's second wife".
"On the above basis I have set apart to be vested in them after my death Rs. 5200/ worth of properties to the first tavazhi male issues, Rs. 300/ to my first wife and Rs. 200/ to my father 's wife, altogether properties worth Rs. 5700/ scheduled to A schedule; Rs. 1300/ worth of properties comprising items 1 to 4 and 6 to 12 of B schedule to the second tavazhi, inclusive of an owelty of Rs. 227 as.
5 decided to be paid by the first tavazhi to the second tavazhi, and item 5 of B schedule worth Rs. 1000/ to my second wife". "And that 1/5th share of assessment of C schedule property shall be paid annually by Kesavan in the Amsom and receipt obtained".
1137 "It is also resolved that each tavazhi shall meet the travelling expenses of female issues and maintain properly the women who return on the death of their husbands, that both tavazhis shall equally maintain the children of my aunt and my sister and that since C schedule properties are partitioned now, all my male issues shall have equal rights over the property after my death".
This is a registered deed.
Soon thereafter, in February 1910, Karappan died.
Raman, the husband of the plaintiff, the third son of the first wife, died on February 20, 1936.
Plaintiff widow of Raman sued for partition and separate possession of her undivided 1/4 share in properties set out in A, B and C schedules to the plaint.
It is necessary to clarify here that there were A, B and C schedules annexed to Ext.
P 1 which, for clarity of understanding, would be referred to as the Will of the deceased though it would be presently pointed out that it is ineffective as a Will.
Schedules A and B to Ext.
P 1 specify certain properties.
Properties set out in schedule B to Ext.
P 1 except item No. 5 were awarded to Kesavan, the son by the second wife, and item No. 5 to the second wife.
Properties in schedule A to Ext.
P 1 subject to adjustment pointed out in Ext.
P 1 were given to the first wife and her sons.
Properties set out in schedule C to Ext.
P 1 were kept undivided and were the subject matter of another suit filed by the present plaintiff which has ended in a decree in her favour and which decree has become final.
On the other hand, properties set out in schedule A to the plaint are the very properties which are shown in schedule A to Ext.
In respect of properties set out in the schedule B to the plaint it is alleged that they were acquired by the joint labour of defendants 1 and 2, deceased Raman and Madhavan, and it is equally true of properties set out in schedule C to the plaint but they were separately set out because they stood in the name of the wife of defendant 1.
Plaintiff, however, claimed 1/4 of her share in all the properties set out in schedules A, B and C to the plaint.
The suit was principally resisted by defendant 1 as per his written statement dated July 12, 1958.
It was in terms contended that the properties dealt with by Ext.
P 1 were the joint family properties of Karappan and his sons and that Karappan was not entitled to and had no authority in law to execute a Will in respect of the properties.
There is an averment which may be extracted.
It reads: "Even though Karappan has no right to execute the Will accordingly, what Karappan actually did was that he parti 1138 tioned the properties between the two tavazhies in order to avoid future quarrel between the two wives and their children.
As a father he has got the right to partition his properties according to the custom of the community and according to the Mitakshara law, that Will would be valid as a deed of partition and accordingly accepting the same later, properties had been taken possession by the two tavazhies separately.
Even though the execution of such a deed was against procedure, it was in order to honour the wishes of deceased Karappan that the same was acted upon".
In respect of plaint B schedule properties, the contention was that it was acquired by the private income of the first defendant and that schedule 'C ' properties belonged to the wife of defendant 1 and that plaintiff has no share in it.
It was also contended that as the four sons by the first wife of Karappan constituted a tavazhi, it has all the incidents of a coparcenary and, therefore, succession was governed by survivorship and hence the plaintiff has no share in schedule A properties.
The trial Court framed as many as 12 issues.
The important findings of the Trial Court are that Ext.
P 1 is neither effective as a Will nor as a deed of partition.
Without specifically so saying that Ext.
P 1 would be effective as a family arrangement, it was held that Ext.
P 1 had the effect of constituting a coparcenary of four brothers, sons of first wife of Karappan and that it was their joint family property and they did not hold as tenants in common but as joint tenants and were governed by survivorship in the matter of succession.
The contention that even in such a situation the widow would be entitled to her share because of a customary right was negatived.
In respect of B and C schedule properties it was held that they belonged exclusively to defendant 1 and his wife and plaintiff cannot claim a share in them.
Consistent with these findings, the plaintiff 's suit was dismissed.
A Full Bench of the Kerala High Court heard the first appeal preferred by the plaintiff.
The High Court substantially agreed with the findings of the trial Court and specifically held that Ext.
P 1 furnished important evidence of a family arrangement accepted and acted upon by all the parties affected thereby.
It was held that as family arrangement it is binding and it indicated that the division was per branches, therefore, the four sons by the first wife of Karappan divided as one branch and one son alone by the second wife separated as a different branch and as four sons by the first wife constituted a joint family, succession would be governed by survivorship and the plaintiff is not entitled to claim any share in schedule A properties.
1139 On the question of acquisition of schedule B and C properties, the finding of the trial Court was confirmed.
It may be mentioned that plaintiff had filed another suit for partition of properties set out in C Schedule to Ext.
P 1 and that suit was decreed in plaintiff 's favour and that decree has become final.
Two questions of general importance framed by the High Court are rather involved and confusing and do not pinpoint the attention on questions of law emerging from the judgment of the High Court.
The first question that needs to be answered is whether Ext.
P 1 styled as a Will by the deceased Karappan would be effective as a Will.
If by Ext.
P 1 deceased Karappan attempted to make a Will of the ancestral property in his hand in which his sons had acquired interest by birth, obviously he had no power to make a Will in respect of such property.
P 1 does not purport to devise by Will the individual share of testator Karappan in the joint family property but he attempts to make a will of all the properties, ancestral and self acquired and even to dispose of property in which his sons had interest by birth, by will.
He has not claimed any share in the property but claimed a right to deal with ancestral property as he desired.
In Ext.
P 1 itself he describes properties set out in schedules A and B annexed to Ext.
P 1 as his tarvad properties.
Expression 'tarvad ' in Marumakkattayam Law is the name given to the joint family consisting of males and females, all descended in the female line from a common ancestress.
A tarvad may consist of two or more branches known as thavazhies; each tavazhi or branch consisting of one of the female members of the tarvad and her decendents in the female line (see Mayne 's Hindu Law and Usage, 11th Edn., pp. 792 93.) Thus when property is described as tarvad property in a broad sense it is admitted to be joint family property.
This also becomes clear from the recital in Ext.
P 1 that properties in A and B schedules were tarvad properties and property in C schedule were claimed by him as his self acquired properties and they were to be kept joint and were not sought to be dealt with by Ext.
Therefore, to the extent Ext.
P 1 purports to dispose of ancestral properties by will it would be ineffective as a will as testator Karappan had no power or authority to dispose of by will ancestral properties in his hand.
And as he has not attempted to dispose of his undivided share in the ancestral properties by Ext.
P 1 it is not necessary here to examine the question whether Mitakshara law as administered in Tamil Nadu and Kerala enables an undivided coparcener to dispose of his share in joint family property by will.
Therefore, Ext.
P 1 is not effective as a will and 1140 the respondents did not invite us to affirm their rights under Ext.
P 1 as if it is a binding will.
The next stage in the unfolding of the case is whether Ext.
P 1 is effective as a partition.
Partition is a word of technical import in Hindu law.
Partition in one sense is a severance of joint status and coparcener of a coparcenary is entitled to claim it as a matter of his individual volition.
In this narrow sense all that is necessary to constitute partition is a definite and unequivocal indication of his intention by a member of a joint family to separate himself from the family and enjoy his share in severalty.
Such an unequivocal intention to separate brings about a disruption of joint family status, at any rate, in respect of separating member or members and thereby puts an end to the coparcenary with right of survivorship and such separated member holds from the time of disruption of joint family as tenant in common.
Such partition has an impact on devolution of shares of such members.
It goes to his heirs displacing survivorship.
Such partition irrespective of whether it is accompanied or followed by division of properties by metes and bounds covers both a division of right and division of property (see Approviar vs Rama Subha Aiyar quoted with approval in Smt.
Krishnabai Bhritar Ganpatrao Deshmukh vs Appasaheb Tuljaramarao Nimbalkar & Ors.
A disruption of joint family status by a definite and unequivocal indication to separate implies separation in interest and in right, although not immediately followed by a de facto actual division of the subject matter.
This may at any time, be claimed by virtue of the separate right (see Girja Bai vs Sadashiv.
A physical and actual division of property by metes and bounds follows from disruption of status and would be termed partition in a broader sense.
There was some controversy whether a Hindu father governed by Mitakshara law has a right to partition ancestral properties without the consent of his sons.
After referring to Mitakshara, I, ii, 2, Mayne in 'Hindu Law & Usage ', 11th Edn.
p. 547, states that a Hindu father under the Mitakshara Law can effect a partition between himself and his sons as also between his sons inter se without their consent and that not only can he partition the property acquired by himself but also the ancestral property.
The relevant text may be extracted: "The father has power to effect a division not only between himself and his sons but also between the sons 1141 inter se.
The power extends not only to effecting a division by metes and bounds but also to a division of status".
Similarly, in Mulla 's Hindu Law, 14th Edn., p. 410 (para 323), it is stated that the father of a joint family has the power to divide the family property at any moment during his life time provided he gives his sons equal shares with himself, and if he does so, the effect in law is not only a separation of the father from the sons, but a separation of the sons inter se.
The consent of the sons is not necessary for the exercise of that power.
It, therefore, undoubtedly appears that Hindu father joint with his sons governed by Mitakshara law has the power to partition the joint family property at any moment during his life time.
Mr. Krishnamoorty Iyer urged that even though undoubtedly a Hindu father joint with his sons and governed by Mitakshara law has the power to partition the joint family property, this power enables him to partition the property by metes and bounds but he has no power merely to disrupt the joint family status unaccompanied by division of property by metes and bounds.
The limited question that needs answer in this case is whether a Hindu father joint with his sons governed by Mitakshara law has the power to disrupt the joint family status being a first step in the stage of dividing the property by metes and bounds.
The wider question whether a coparcener of a coparcenary governed by Mitakshara law brings about a disruption of joint family status by definite and unequivocal indication of his intention to separate himself from the family would constitute disruption of status qua the non separating members need not be examined.
A Hindu father joint with his sons and governed by Mitakshara law in contradistinction to other manager of a Hindu undivided family or an ordinary coparcener enjoys the larger power to impose a partition on his sons with himself as well as amongst his sons inter se without their consent and this larger power to divide the property by metes and bounds and to allocate the shares to each of his sons and to himself would certainly comprehend within its sweep the initial step, viz., to disrupt the joint family status which must either precede or be simultaneously taken with partition of property by metes and bounds.
This view taken in Kandaswami vs Doraiswami Ayyar; does not appear to have been departed from.
Further, the text from Mayne 's book extracted in the preceding paragraph shows that the weight of authority is against the proposition canvassed for by Mr. Iyer.
It does, therefore, appear that a Hindu father governed by 1142 Mitakshara law has power to partition the joint family property belonging to the joint family consisting of himself and his sons and that this power comprehends the power to disrupt joint family status.
The question is, has Karappan as father exercised his power to partition the joint family property by Ext.
P 1 ? Even though the father has a right to make a partition of the joint family property in his hand, he has no right to make a partition by will of joint family property amongst various members of the family except, of course, if it could be made with their consent (see Brijraj Singh vs Sheodan Singh.
Whether it is effective as family arrangement will be presently examined.
Therefore, if by Ext.
P 1 Karappan attempted to make a partition of the property by his will, Ext.
P 1 would be ineffective as a partition.
By Ext.
P 1 Karappan does not divide his property by metes and bounds vesting the share of each in presenti in each of his sons.
One thing that is not in dispute is that Karappan did not intend Ext.
P 1 to be effective from the date on which it was executed.
In his own words he states that he was seriously ill and as he would like to avoid a dispute in future in respect of his properties and, therefore, he resolved that his property shall be enjoyed after his death in the manner stated in Ext.
He reserved to himself the full powers of disposition over all the properties more particularly described in the various schedules annexed to Ext.
P 1 during his life time and whatever directions were given in Ext.
P 1 were to be effective only after his death.
At two places in terms he stated that the dispositions made by Ext.
P 1 were to be effective after his death.
It is, therefore, inescapable that Ext.
P 1 was not to be effective as a partition in broader sense, namely, dividing property by metes and bounds from the date on which it was executed.
It was to be effective from a future date and that future uncertain event was the death of Karappan and that during the time he would remain alive he would deal with the properties at his sweet will.
Further, there was no effective partition by metes and bounds by Ext.
P 1 though the shares of sons were specified as also the provision for female members was made.
If intention of the testator is to be gathered from the language of Ext.
P 1 Karappan intended it to be a will to be effective after his death.
He never intended it to be a partition in presenti.
Therefore, Ext.
P 1 cannot be effective as a deed of partition in the broader sense, i.e. partition by metes and bounds.
What then is the effective of Ext.
P 1 on the joint family of which Karappan was father cum manager ? The respondents contend that 1143 it is a family arrangement providing for carving out branchwise (shakha per wife) separation of interest in the joint family properties and as it was unreservedly accepted by all affected thereby after the death of Karappan, it is binding on all.
Appellant contends that Ext.
P 1 had the effect of disrupting the joint family status and from that date members of the joint family entitled to their shares in the joint family property, held as tenants in common and not as joint tenant with the result that inheritance by survivorship, a special feature of a Hindu coparcenary, would be displaced by Hindu law of succession, the property going to the heirs recognised by law.
Defendant 1 who contested the suit in terms stated that Ext.
P 1 was not effective as a will.
He than stated that Ext.
P 1 purports to partition the property between the two tavazhies represented by Karappan 's two wives and their respective male offspring.
It may, however, be stated that nowhere in the written statement he has put forth the contention that Ext.
P 1 evidences a family arrangement assented to by all affected thereby.
That case appears to have been made out by the High Court for the first time and since the plaintiff has been non suited on the finding that Ext.
P 1 was a family arrangement which provided for a coparcenary of four sons of the first wife of Karappan, retaining inheritance by survivorship amongst the four members it is necessary to examine the contention whether Ext.
P 1 provides for a family arrangement assented to by all concerned.
An ineffective will sometimes though not always, if otherwise consented by all adult members, may be effective as a family arrangement but as the father of a joint Hindu family has no power to impose a family arrangement under the guise of exercising the power of partition, the power which undoubtedly he has but which he has failed to effectively exercise, cannot in the absence of consent of all male members bind them as a family arrangement.
What constitutes family arrangement has been fully examined by this Court in M. N. Aryamurthy & Anr.
vs M. D. Subbaraya Setty (dead) through I.r. & Ors.
Broadly stated, it is that there must be an agreement amongst the various members of the family intended to be generally and reasonably for the benefit of the family and secondly the agreement should be with the object either of compromising doubtful or disputed rights or for preserving the family property or the place and security of the family.
Both these ingredients appear to be absent in this case.
In Brijraj Singh 's case (supra) a father purported to make a will in which he recorded a partition of the joint family property amongst his three sons.
He did not take a share for himself and simultan 1144 eously gave double share to his eldest son.
There were usual recitals of partition and allotment of shares and it was further stated that in anticipation of execution of the deed various sharers were put in possession of property allotted to each of them.
This was done two months prior to the execution of the so called will.
The document was held ineffective as a will but on evidence it was found that all concerned had acquiesced in the arrangement evidenced by the deed and the deed was intended to operate from the date of its execution and, therefore, it evidenced a family arrangement contemporaneously made and acted upon by all the parties and hence binding.
Similarly in Lakshmi Chand vs Anandi, two brothers having no male issue and constituting a joint Hindu family governed by Mitakshara, signed a document, described therein as an agreement by way of will.
The document provided in effect that if either party died without male issue, his widow should take a life interest in a moiety of the whole estate and that if both the parties died without male issue, the daughters of each, or their male issue, should divide the father 's share.
The document was registered.
A few days after its execution one brother died, and his widow was entered as owner of a moiety of the estate.
Subsequently the other brother sued for a declaration that the document was null and void.
Privy Council held that the document could not operate as will but that as a co sharer in a Mitakshara joint family with the consent of all his co sharers he could deal with the share to which he would be entitled on a partition and was binding as family arrangement.
To be effective as a family arrangement the deed must be one intended to operate from the date of its execution, a feature wanting in Ext.
P 1, and it must be assented to and acquiesced in and acted upon by all affected thereby.
At the time of execution of Ext.
P 1 there is no evidence as to who were the adult members of the family other than Karappan who consented to the alleged family arrangement.
One thing, however, may be pointed out that defendant 1 gave his age as 87 years on December 29, 1959, when his evidence commenced.
Presumably he must have been born in 1872.
But there is no evidence about the age of other children of Karappan.
The only evidence as to the consent of the male members is that after the death of Karappan all male members acted according to the wishes of Karappan as disclosed and ordained in Ext.
Assuming it to be so, Ext.
P 1 was to operate after the death of Karappan and not from the date of execution.
The High Court after referring to Brijraj Singh 's case (supra) overlooked the fact that in accepting the deed before it, the Judicial Committee was impressed by the fact that it was intended to speak from the date on which it was written and not future date, viz., 1145 death of the writer.
P 1 in terms reserves to Karappan his right to deal with the property at his sweet will and was to be operative after his death.
The High Court completely overlooked this material difference.
Assuming that Ext.
P 1 was to be treated as family arrangement after the death of Karappan, the absence of any evidence of agreement amongst family members entitled to a share, to the terms of Ext.
P 1 when it was executed, the absence of any dispute at or about the time Ext.
P 1 was executed amongst the members of the family sought to be settled by Ext.
P 1; and the absence of evidence that arrangement was necessary for the security of the family or property would wholly negative the contention that Ext.
P 1 would furnish evidence of family arrangement.
We have grave doubt whether a Hindu father can impose family arrangement sans direct evidence of consent of each of his sons, to be effective after his death.
Therefore, Ext.
P 1 does not furnish evidence of family arrangement.
Now, if Ext.
P 1 cannot be effective as a deed of partition inasmuch as it did not result in division of property by metes and bounds, its effect on continued joint family status may be examined.
If it disrupted joint family status by its very execution, there was thereafter no question of directing any family arrangement to be effective from a future date as per its terms and even though it may spell out a family arrangement what effect the disruption of joint family status would have on the mode of succession has to be ascertained.
One thing is crystal clear that Ext.
P 1 is not a deed of partition in the sense it does not purport to divide the property amongst various coparceners by metes and bounds.
However, in Hindu law qua joint family and joint family property the word 'partition ' is understood in a special sense.
If severance of joint status is brought about by a deed, a writing or an unequivocal declaration of intention to bring about such disruption, qua the joint family, it constitutes partition.
(see Raghavamma vs Chenchamma).
To constitute a partition all that is necessary is a definite and unequivocal indication of intention by a member of a joint family to separate himself from the family.
What from such intimation, indication or representation of such interest should take would depend upon the circumstances of each case.
A further requirement is that this unequivocal indication of intention to separate must be to the knowledge of the persons affected by such declaration.
A review of the decisions shows that this intention to separate may be manifested in diverse ways.
It may be by notice or by filing a suit.
Undoubtedly, indication or 1146 intimation must be to members of the joint family likely to be affected by such a declaration.
Has not Ext.
P 1 the effect of bringing about a disruption of joint family headed by Karappan and consisting of himself and his sons? The fact situation is that in Ext.
P 1 Karappan specified the share of each of his sons, the property allotted on share being valued at Rs. 1300/ each of the four by the first wife and one by the second wife, and vesting the share so specified in each of his sons.
He also specified value of the property allotted to his first wife, to his second wife and to the second wife of his father.
In the process he found that something more was given to the sons of his first wife and in order to restore the equilibrium of treating his sons equally, he directed that owelty to the tune of Rs. 227/ and odd be paid by the sons of the first wife to the sons of his second wife.
This was with a view to correcting the inequality in division of shares.
He also states that there will be two branches.
He refers to them as tavazhies and himself and his family as tarvad.
Tarvad is akin to joint family and tavazhi is a branch of the family.
The High Court, however, treated the use of the words 'tarvad ' and 'tavazhi ' and 'Karnavaran ' to be inappropriate and hence inconsequential.
Similarly, the High Court found specification of share of each of the male child as not indicative of a partition in the sense of disruption of joint family status.
Partition can be partial qua person and property but a partition which follows disruption of a joint family status will be amongst those who are entitled to a share on partition.
On death of Karappan, Kesavan, the son of the second wife obtained a physical partition of the property, took his own share and left the family.
There was first a disruption of the joint family by specifying the shares in Ext.
Till disruption of joint family status takes place no coparcener can claim what is his exact share in coparcenary property.
It is liable to increase and decrease depending upon the addition to the number or departure of a male member and inheritance by survivor ship.
But once a disruption of joint family status takes place, coparceners cease to hold the property as joint tenants but they hold as tenants in common.
Looking to the terms of Ext.
P 1 there was a disruption of joint family status, the shares were specified and vested, liabilities and obligations towards the family members were defined and imbalance out of unequal division was corrected.
This certainly has effect of bringing about disruption of joint family status and even if there was no partition by metes and bounds and the coparceners continued to remain under the same roof or enjoyed the 1147 property without division by metes and bounds, they did not hold as joint tenants unless re union is pleaded and proved.
It was, however, contended and the contention has found favour with the High Court that when Kesavan, the second wife 's son of Karappan took the properties allotted to his share and left the family, as per terms of Ext.
P 1 four sons of Nani were constituted joint tenants or members of a coparcenary.
In reaching this conclusion reliance was placed by the High Court on Palani Ammal vs Muthuvenkatachala Moniagar.
In that case, after referring to Appovier 's case, (supra) it was observed as under: "But the mere fact that the shares of the coparceners have been ascertained does not by itself necessarily lead to an inference that the family had separated.
There may be reasons other than a contemplated immediate separation for ascertaining what the shares of the coparceners on a separation would be.
It is also now beyond doubt that a member of such a joint family can separate himself from other members of the joint family and is on separation entitled to have his share in the property ascertained and partitioned off for him and that the remaining coparceners without any special agreement amongst themselves may continue to be coparceners and to enjoy as members of a joint family, what remained after such a partition of the family property.
That the remaining members continued to be joint may, if disputed, be inferred from the way in which their family business was carried on after their previous coparcener had separated from them." In Bhagwan Dayal vs Smt.
Reoti Devi, this Court examined the effect of a separation of one member of a joint family on the joint family status and on the remaining members in the light of the Privy Council decision in Palani Ammal 's case.
(supra) The relevant observation is as under: "The general principle is that every Hindu family is presumed to be joint unless the contrary is proved: but this presumption can be rebutted by direct evidence or by course of conduct.
It is also settled that there is no presumption that when one member separates from others that the latter remained united; whether the latter remain united or not must be decided on the facts of each case." 1148 In fact, Judicial Committee in Balabux vs Rukhmabai unequivocally held that there is no presumption when one coparcener separates from others that the latter remained united.
An agreement amongst them must be proved either to remain united or to reunite.
In Sengoda vs Muthu, the High Court interpreted Palani Ammals case to lay down that if a partition takes place with respect to one coparcener, the decree or the deed bringing about partition would provide a pointer as to the effect of the decree or the deed on the remaining coparceners.
In Bhagwati Prasad Shah & Ors.
Dulhin Rameshwari Juer & Anr.
, this Court pointed out that the general principle undoubtedly is that a Hindu family is presumed to be joint unless the contrary is proved but where it is admitted that one of the coparceners did separate himself from the other members of the joint family and had his share in the joint property partitioned off for him, there is no presumption that the rest of the coparceners continued to be joint.
There is no presumption on the other side too that because one member of the family separated himself there has been separation with regard to all.
It would be a question of fact to be determined in each case upon the evidence relating to the intention of the parties whether there was a separation amongst the other coparceners or they remained united.
Except that four sons by Nani remained under one roof and were joint in food and laboured together there is no evidence that they agreed to constitute a coparcenary assuming that a coparcenary a creature of law could be created by agreement.
And if Karappan specified even the share of each of his sons by Nani in Ext.
P 1, this evidence of remaining together is hardly sufficient to warrant a conclusion that these four sons constituted a coparcenary.
P 1 could not support such a conclusion and High Court was in error in spelling out such conclusion from Ext.
P 1 overlooking its specific direction of a specified share of each of his sons and liability to pay owelty.
A further submission that there was partition branchwise is unknown to Mitakshara law and is wholly untenable.
In Mayne 's Hindu Law, 11th Edn., p. 347, law as thus stated: "So long as a family remains an undivided family, two or more members of it, whether they be members of different branches or of one and the same branch of the family, can have no legal existence as a separate independent unit; but all the members of a branch, or of a sub branch, 1149 can form a distinct and separate corporate unit within the larger corporate family and hold property as such.
Such property will be joint family property of the members of the branch inter se, but will be separate property of that branch in relation to the larger family.
The principle of joint tenancy is unknown to Hindu law except in the case of the joint property of an undivided Hindu family governed by the Mitakshara law.
" In Bhagwan Dayal 's case (supra) legal position after referring to earlier decisions has been culled out as under: "Coparcenary is a creature of Hindu law and cannot be created by agreement of parties except in the case of re union.
It is a corporate body or a family unit.
The law also recognizes a branch of the family as a subordinate cooperate body.
The said family unit, whether the larger one or the subordinate one, can acquire, hold and dispose of family property subject to the limitations laid down by law.
Hindu law does not recognise some of the members of a joint family belonging to different branches, or even to a single branch, as a corporate unit.
" Now, if five sons of Karappan each constituted a branch, obviously after one son as a branch separated unless a reunion is pleaded, other four cannot constitute a corporate body like a coparcenary by agreement or even by subsequent conduct of remaining together enjoying the property together.
In Balkishen Das & Ors.
vs Ram Narain Sahu & Ors., an ikrarnama was produced which showed that defined shares in the whole estate had been allotted to the several coparceners.
There was a passage which gave liberty to any of the parties either to live together as a member of the joint family or to separate his own business.
Mahabir was given four annas share and others defined shares in the remainder.
Contention raised was that Mahabir alone separated and others remained joint.
Subsequent conduct was relied upon to substantiate the contention that they remained together.
Negativing this contention it was held that the ikrarnama effected a separation of estate even if the parties elected either to have a partition of their shares by metes and bounds, or to continue to live together and enjoy their property in common as before.
Whether they did one or the other would affect the mode of enjoyment, but not the tenure of the property or their interest in it.
The ikrarnama effected a separation in estate, its legal 1150 construction and effect could not be controlled or altered by the subsequent conduct.
Once the shares were determined and allotted, it was held consistently with Appovier 's case (supra) that this converted them from joint holders into tenants in common.
In Boddu Venkatakrishna Rao & Ors.
vs Boddu Satyavathi & Ors., the following passage in Mulla 's Transfer of Property Act (Fifth Edn.), was approved: "The principle of joint tenancy appears to be unknown to Hindu law, except in the case of coparcenary between the members of an undivided family.
" Once disruption of joint family status takes place as Lord Westbury puts it in Appovier 's case, (supra) it covers both a division of right and division of property.
If a document clearly shows the division of rights and status its legal construction and effect cannot be altered by evidence of subsequent conduct of parties.
Now, in this case Ext.
P 1 itself specifies the share of each member separately.
There is no concept known to Hindu law that there could be a branch of a family wife wise.
To illustrate, if a Hindu father has two wives and he has three male children by the first wife and two by the second, each wife constituting a branch with her children of the family is a concept foreign to Hindu law.
Therefore, tavazhi wife wise stated in Ext.
P 1 has to be ignored and the contention that there was a partition amongst wife wise branches as represented by each wife is equally untenable.
P 1 did bring about a specification of shares and once such shares were defined by the father who had the power to define and vesting the same there was a disruption of joint family.
There was thus a division of rights and division of property by allotment of shares.
The mode of enjoyment immediately changed and members of such family ceased to be coparceners holding as joint tenants but they held as tenants in common.
Subsequent conduct of some of them to stay together in the absence of any evidence of re union as understood in law is of no consequence.
In any event when Kesavan, the son of the second wife, sought and obtained physical partition of the properties allotted to him and left the family there being no evidence whether others agreed to remain united except the so called evidence of subsequent conduct, which is irrelevant or of no consequence, disruption of status was complete.
Therefore, the four sons of the first wife held the property as tenants in common.
There is evidence in the form of some documents showing that defendant 1 was described as Karnavaran of a coparcenary of the 1151 four sons of the first wife of Karappan and that the property was enjoyed as a joint family property.
In view of our conclusion that such subsequent conduct is not conclusive of any agreement to reunite, it is not necessary to examine the evidence.
In view of our conclusion that since the execution of Ext.
P 1 on January 25, 1910, or after the death of Karappan in February 1910, when Kesavan, the son of the second wife took his share of the property left the family there was a disruption of the joint family and the sons of Karappan by his first wife held the property, which remained for them after Kesavan obtained his share, not as joint tenants but as tenants in common, the plaintiff would be entitled to the share to which her deceased husband Raman was entitled.
Raman had 1/4 share in A schedule properties which the plaintiff would be entitled and therefore, there would be a preliminary decree in her favour to that effect.
Plaintiff 's claim to a share in properties set out in schedules B and C annexed to the plaint has been concurrently negatived by both the courts on the finding that they are the properties of defendant 1 and his wife and are not accretions to the property which devolved from Karappan.
This concurrent finding of fact arrived at on appreciation of evidence appears to be correct and need not be disturbed.
Therefore, plaintiff 's suit with regard to a share in B and C schedule properties has been rightly dismissed.
At the commencement of hearing of the appeal it was pointed out that original plaintiff Kallyani is dead and there is some dispute between her two daughters Yashoda and Janaki about succession to the estate of Kallyani.
Both had applied to the exclusion of each other for being substituted as legal representatives of the deceased.
For purposes of this appeal both were substituted for the deceased appellant.
It is not necessary to decide this question in this appeal because whoever of the two establishes her right to inherit the property of Kallyani would be entitled to the same but the dispute would be between Yashoda and Janaki and the other defendants have no right to be heard in that matter.
Accordingly this appeal succeeds and it is partly allowed.
The judgment and decree of the trial Court and the High Court dismissing the plaintiff 's suit in regard to A schedule property are set aside.
Plaintiff 's suit is decreed and it is declared that she has 1/4 share in properties set out in schedule A annexed to the plaint.
A preliminary decree to that effect shall be drawn.
Defendant 1 shall pay the costs of the plaintiff throughout.
S.R. Appeal allowed in part.
| IN-Abs | One Karappan son of Chulliparambil Krishnan had two wives Naini and Ponni.
Through his first wife Naini he had four sons Krishnan (D1), Shankaran (D2), Raman and the husband of plaintiff appellant Kallyani who died after him and Madhavan who predeceased him and husband of D3 and father of D4, D5 and D6 and four daughters.
He had one son by name Kesavan and two daughters, through his second wife Ponni.
One Valli was the second wife of his father and she had three daughters.
Karappan and his family are Ezhavas and in the matter of inheritance, succession and on the question of personal law they were governed essentially by customary law and in the absence of any specific custom, they are governed by the Hindu Mitakshara law.
Karappan executed a registered deed variously described as a will or a deed of partition or evidencing family arrangement, exhibit P1 dated January 25, 1910.
In this deed after narrating his near relations including his two wives male and female children born to each and his father 's second wife and her children, he described the manner in which the A, B and C scheduled properties should be taken by them, after his death.
In February 1910 Karappan died.
Raman, the husband of the plaintiff appellant, the third son of the first wife died on February 20, 1936.
Plaintiff widow of Raman sued for partition and separate possession of her undivided 1/4 share in properties set out in A, B and C schedules to the plaint.
The Trial Court held that Ext.
P1 had the effect of constituting a coparcenary of four brothers, sons of first wife of Karappan and that it was their joint family property and they did not hold as tenants in common but as joint tenants and were governed by survivorship in the matter of succession.
The contention that even in such a situation the widow would be entitled to her husband 's share because of a customary right was negatived.
In respect of B & C schedule properties, it was held that they belonged exclusively to defendant 1 and his wife and plaintiff cannot claim a share in them.
The High Court affirmed the Trial Court 's judgment and decree treating exhibit P1 as family arrangement and hence the plaintiff 's appeal by certificate.
Allowing the appeal, the Court ^ HELD: 1. Ext.
P1, styled as a will by the deceased Karappan is not effective as a will.
If by Ext.
P 1 deceased Karappan attempted to make a will of the ancestral property in his hand in which his sons had acquired 1131 interest by birth, obviously he had no power to make a will in respect of such property.
exhibit P1 does not purport to devise by will the undivided share of testator Karappan in the joint family property, but he attempts to dispose of by a will all the properties in which his sons had interest by birth.
He had not claimed any share in the property but claimed a right to deal with ancestral property as he desired.
In exhibit P1 itself he describes properties set out in schedules A and B annexed to exhibit P1 as his tarvad properties.
[1139B C] 2.
Expression "tarvad" in Marumakkattayam law is the name given to the joint family consisting of males and females, all descendants in the female line from a common ancestress.
A tarvad may consist of two or more branches known as 'Thavazhies ', each tavazhi or branch consisting of one of the female members of the tarvad and her descendants in the female line.
Thus when property is described as tarvad property in a broad sense it is admitted to be joint family.
This also becomes clear from the recital in exhibit P.1 that properties set out in A and B schedules were tarvad properties and property in C schedule were claimed by him as his self acquired properties and they were to be kept joint and were not sought to be dealt with by exhibit P1.
Therefore, to the extent exhibit P1 purports to dispose of an ancestral properties by will it would be ineffective as a will as Karappan had no power or authority to dispose of by will ancestral properties in his hand.
[1139C G] 3.
Partition is a word of technical import in Hindu law.
Partition in one sense is a severance of joint family status and coparcener of a coparcenary is entitled to claim it as a matter of his individual volition.
In this narrow sense all that is necessary to constitute partition is a definite and unequivocal indication of his intention by a member of a joint family to separate himself from the family and enjoy his share in severalty.
Such an unequivocal intention to separate brings about a disruption of joint family status, at any rate, in respect of separating member or members and thereby puts an end to the coparcenary with right of survivorship and such separated member holds from the time of disruption of joint family as tenant in common.
Such partition has an impact on devolution of shares of such members.
It goes to his heirs displacing survivorship.
Such partition irrespective of whether it is accompanied or followed by division of properties by metes and bounds covers both a division of right and division of property.
A disruption of joint family status by definite and unequivocal indication to separate implies separation in interest and in right, although not immediately followed by a de facto actual division of the subject matter.
This may at any time, be claimed by virtue of the separate right.
A physical and actual division of property by metes and bounds follows from disruption of status and would be termed partition in a broader sense.
[1140A E] 4.
A Hindu father joint with his sons governed by Mitakshara law has the power to partition the joint family property at any moment during his life time.
The consent of the sons is not necessary for the exercise of that power.
This power comprehends the power to disrupt joint family status.
[1141H, 1142A] Kandaswamy vs Doraiswamy Iyer, Mad. 317; approved.
Even though the father has a right to make a partition of the joint family property in his hand, he has no right to make a partition by will of joint family property amongst various members of the family except, of course, with their consent.
In the instant case, if by exhibit P1 Karappan attempted to make 1132 a partition of the property by his will, exhibit P1 would be ineffective as a partition.
By exhibit P1 Karappan does not divide his property by metes and bounds vesting the share of each in present in each of his sons.
[1142B C] exhibit P1 would not be effective as a partition in broader sense, namely, dividing property by metes and bounds from the date on which it was executed as it was to be effective from a future date and that future uncertain even was the death of Karappan and that during the time he would remain alive he would deal with the properties at his sweet will.
Further, there was no effective partition by metes and bounds by exhibit P1 though the shares of sons were specified as also the provision for female members was made.
If intention of the testator is to be gathered from the language of exhibit P1 Karappan intended it to be a will not a partition in presenti.
Therefore, exhibit P1 cannot be effective as a deed of partition in the broader sense i.e., partition by metes and bounds.
[1142E G] Brijraj Singh vs Sheodan Singh, 10 I.A. 161; referred.
An ineffective will sometimes though not always, if otherwise consented by all adult members, may be effective as a family arrangement but as the father of a joint Hindu family has no power to impose a family arrangement under the guise of exercising the power of partition, the power which undoubtedly he had but which he has failed to effectively exercise, it cannot in the absence of consent of all male members bind them as a family arrangement.
[1143D F] 7.
A family management must be an agreement amongst the various members of the family intended to be generally and reasonably for the benefit of the family and secondly the agreement should be with the object either of compromising doubtful or disputed rights or for preserving the family property or the place and security of the family.
In this case, both these ingredients are absent.
[1143F G] H. N. Aryamurthy & Anr.
vs N. D. Subbaraya Setty (dead) through I.rs and Ors., ; applied.
Brijraj Singh vs Sheodan Singh, 40 I.A. 161; Lakshmichand vs Anandi, 53 I.A. 123; discussed.
To be effective as a family arrangement the deed must be one intended to operate from the date of the execution, and it must be assented to and acquiesced in and acted upon by all affected party.
In the instant case, exhibit P1 in term reserves to Karappan his right to deal with the property at his sweet will and was to be operative after his death.
Moreover, at the time of the execution of exhibit P.1 there is no evidence as to who were the adult members of the family other than Karappan who consented to the alleged family arrangement.
Assuming that exhibit P1 was to be treated as family arrangement after the death of Karappan, the absence of any evidence of agreement amongst family members entitled to share, to the terms of exhibit P.1 when it was executed, the absence of any dispute at or about the time exhibit P.1 was executed amongst the members of the family sought to be settled by exhibit P.1 and the absence of evidence that arrangement was necessary for the security of the family or property would wholly negative the contention that exhibit P.1 would furnish evidence of family arrangement.
It is doubtful whether a Hindu father can 1133 impose family arrangement sans direct evidence of consent of each of his sons, to be effective after his death.
Therefore exhibit P 1 does not furnish evidence of family arrangement.
[1444E H, 1145A C] 9.
In Hindu Law qua joint family and joint family property the word partition ' is understood in a special sense.
If severance of joint family status is brought about by a deed, a writing or an unequivocal declaration of intention to bring about such disruption, qua the joint family, it constitutes partition.
To constitute a partition all that is necessary is a definite and unequivocal indication of intention by a member of a joint family to separate himself from the family What form such intimation, indication or representation of members should take would depend upon the circumstances of each case.
A further requirement is that the unequivocal indication of intention to separate must be to the knowledge of the persons affected by such declaration: This intention to separate may be manifest in diverse ways.
Undoubtedly, indication or intimation must be to members of the joint family likely to be affected by such a declaration.
[1145E H, 1146A] Raghavan vs Chenchamma, ; ; referred to.
Partition can be partial qua person and property but a partition which follows disruption of joint family status will be amongst those who are entitled to a share on partition.
Till disruption of joint family status takes place no coparcener can claim what is his exact share in coparcenary property.
It is liable to increase and decrease depending upon the addition to the number or departure of a male member and inheritance by survivorship.
But once a disruption of joint family status takes place, coparceners cease to hold the property as joint tenants but they hold as tenants in common.
[1146E G] In the instant case, on death of Karappan, Kesavan the son of the second wife obtained a physical partition of the property took his owon share and left the family, there was first a disruption of the joint family status.
Looking to the terms of exhibit P 1 there was a disruption of joint family status as the share of each son was specified and vested, liabilities and obligations towards the family members were defined and imbalance out of unequal division was corrected.
This certainly has the effect of bringing about disruption of joint family status and even if there was no partition by metes and bounds and the coparceners continued to remain under the same roof or enjoyed the property without division by metes and bounds, they did not hold as joint tenants unless re union is pleaded and proved.
[1146G H, 1147A] 11.
There is no presumption when one coparcener separates from other that the latter remained united.
An agreement amongst them must be proved either to remain united or to re unite.
A Hindu family is presumed to be joint unless the contrary is proved but where it is admitted that one of the coparceners did separate himself from the other members of the joint family and had his share in the joint property partitioned off for him, there is no presumption that the rest of the coparceners continued to be joint.
There is no presumption on the other side too that because one member of the family separated himself there has been separation with regard to all.
It would be a question of fact to be determined in each case upon the evidence relating to the intention of the parties whether there was a separation amongst the other coparceners or they remained united.
Except that four sons by Naini remained 1134 under one roof and were joint in food laboured together there is no evidence that they agreed to constitute a coparcenary assuming that a coparcenary a creature of law could be created by agreement.
And if Karappan specified even the share of each of his sons by Naini in exhibit P 1, this evidence of remaining together is hardly sufficient to warrant a conclusion that these four sons constituted a coparcenary.
exhibit P 1, could not support such a conclusion and the High Court was in error in spelling out such conclusion from exhibit P 1 overlooking its specific direction of a specified share of each of his sons and liability to pay owelty.
[1148B F] Palani Ammal vs Muthuvenkatachala Mariagon, 52 I.A. 83; Bhagwan Dayal vs Mrs. Reoti Devi, ; ; Balabax vs Rukhmabai ILR 3C IA. 130; Sengoda vs Muthu, I.L.R. ; referred to.
Bhagwati Prasad Shah and Ors.
vs Pulhin Rameshwari Juer and Anr., , followed.
Partition branchwise is unknown to Mitakshara Law.
In the instant case, if five sons of Karappan each constituted a branch obviously after one son as a branch separated unless a reunion is pleaded, other four cannot constitute a corporate body like a coparcenary by agreement or even by subsequent conduct of remaining together enjoying the property together.
[1148F, 1149E] Balakishan Das and Ors.
vs Ram Narain Sahu and Ors., 30 I.A. 139; bhagwan Dayal vs Mrs. Reoti Bai, [1962] 3 S.C.R. 440; Boddu Venkatakrishna Rao and Ors.
vs Boddu Satyavathi and Ors., ; ; referred to.
Once disruption of joint family status takes place, it covers both a division of right and division of property.
If a document clearly shows the division of rights and status its legal construction and effect cannot be altered by evidence of subsequent conduct of parties.
[1150C] 14.
There is no concept known to Hindu Law that there would be a branch of a family wife wise.
[1150D] In this case exhibit P 1 itself specifies the share of each member separately.
Therefore, tavazhi wife wise stated in exhibit P 1 has to be ignored.
Ex P 1 did bring about a specification of shares and once such shares were defined by the father who had the power to define and vesting the same there was a disruption of joint family.
There was thus a division of rights and division of property by allotment of shares.
The mode of enjoyment immediately changed and members of such family ceased to be coparceners holding as joint tenants but they held as tenants in common.
The plaintiff would be entitled to the share to which her deceased husband Raman was entitled.
Raman had 1/4th share in 'A ' schedule properties which the plaintiff would be entitled.
[1150D, E F, 1151C]
|
ivil Appeal Nos.
281 285 of 1970.
From the Judgment and Order dated 25/28 4 1969 of the Gujarat High Court in SCA Nos.
1520, 850, 1079, and 1117 of 1967 and 201 of 1968.
section T. Desai, P. H. Parekh, C. B. Singh and M. N. Shroff for the Appellants.
Mrs. E. Udayarathnam for respondent No. 1 in CA 284/70.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
These five appeals by certificate are preferred by the State of Gujarat against the common judgment dated April 25/28, 1969 delivered in five petitions under Article 226 of the Constitution on the file of the High Court of Gujarat in which the constitutional validity of the Resolution of the Government of Gujarat bearing No. L.B.B. 3964/101585 C dated December 28, 1966 issuing directions regarding the procedure to be followed in the disposal of 'bhatha lands ' with effect from January 1, 1967 inter alia providing for showing preference to Harijans, adivasis, backward class persons and co operative farming societies consisting of landless labourers or small holders in the matter of cultivation rights over bhatha land was challenged.
The expression 'bhatha land ' means land which forms part of the bed of a river on which vegetables, melon, cucumber etc.
can be grown during the lean period after the rainy season is over when the level of the water in the river is quite low.
The cultivation of this land is possible only till the next rainy season and when the river swells during the rainy season, the said land again gets submerged under the river water.
The occupancy rights over such land 1186 cannot ordinarily be granted on a permanent basis as in the case of other cultivable lands in view of the land getting submerged under river water every year for 4 5 months.
The lands in question are situated in the Bombay area of the State of Gujarat.
Till the year 1951, the cultivation rights over bhatha lands in the area in question were being disposed of by public auction and the successful bidders were being treated as lessees of the lands for short periods.
In the year 1951, the State Government ordered that the leasehold rights over bhatha lands should be disposed of by selection in the following order of priority: 1.
Bona fide agriculturists who had cultivated the land personally for five years or more.
Adjacent land holders who, in the Collector 's opinion, had insufficient land for maintenance of their families.
Co operative farming societies and 4.
Priority holders under the Waste Land Rules.
The above order was cancelled and superseded by the Government Resolution dated September 19, 1962 which provided that on the expiry of the then existing leases, not held by co operative farming societies, bhatha lands should be disposed of on the basis of five years ' lease by public auction.
Experience showed that only the moneyed people were able to purchase the lease hold rights at the public auction and persons belonging to Scheduled Castes, Scheduled Tribes and other weaker sections of society were not even able to participate in such auctions.
In the year 1964 however, lease hold rights over bhatha lands were disposed of on eksal basis by public auction.
The question relating to the procedure to be followed in the disposal of the lease hold rights over bhatha lands was discussed at the meeting of the Collectors held in 1965 66 and after taking into consideration all relevant matters and the suggestions made at the above said meeting, the State Government passed the following Resolution in supersession of all existing orders: "Government of Gujarat Revenue Department No. L.B.B. 3964/101585 C Sachivalaya, Ahmedabad 15 Date: 28 12 1966 RESOLUTION OF GOVERNMENT In cancellation of all existing orders in regard to disposal of Bet and Bhatha land by auction, Government is pleased to direct that 1187 existing procedure of disposal of Bhatha land by auction should be discontinued from 1st January, 1967 and such land should be disposed of according to instructions detailed below: 1.
The existing lease held by co operative society should be renewed on their expiry only to the members of co operative society.
Individually held land less than 16 acres excluding the bet bhatha land and the total holding of the number including the land to be granted is not more than the member or members 16 acres.
If condition (1) is fulfilled the lease in favour of the co operative societies should be renewed for a further period of 10 years on payment of revised rent which should be fixed on the basis of the factors enumerated hereinafter instruction number (6) below.
As regards Bhatha lands which have been leased in favour of individuals such lease should not be renewed but on the expiry of such lease the lands should be disposed of to priority holders as enumerated in instruction No. 5 on payment of rent to be determined on the basis of factors enumerated in instruction No. 6.
There will be no objection to renew the lease in favour of such individual if he is otherwise eligible as per principles fixed in this G.R. 4.
As regards new Bet Bhatha lands which are to be disposed of for the first time they should also be granted to priority holders as mentioned in instruction No. 5, on the basis of rent charged for similar lands which have been disposed of as per instructions contained in the G.R. or which have been disposed of in the past by auction.
The priority for disposal of Bet Bhatha land should be as under: 1.
Bona fide agriculturists of the village who are holding land less than 5 acres.
Preference in this case will be given to Harijan adivasi and backward class people.
Holders of the land adjoining the Bet Bhatha land holding land less than 16 acres and who in the opinion of Collector have a genuine need of additional lands for maintenance of their families.
Inter se preference in this case also will be as per (1) above.
Co operative farming societies of Harijans, adivasi and backward class persons.
1188 4.
Co operative farming societies consisting of landless labourers or small holders.
Any of the priority holders under the waste land rules.
The individuals as well as co operatives of the village in which the Bet Bhatha lands are situated will have their first priority while the individuals and co operative societies of neighbouring villages within a radius of 5 miles shall be given priority in the order of nearness from village where the Bet Bhatha Lands are situated.
If there are claims of two equal priority holders for the same land the disposal will be by lots.
" Thereafter twenty two members belonging to Waghari Harijan community were granted lease hold rights in respect of a bhatha land for a period of ten years pursuant to the above Government Resolution by the Collector of Ahmedabad on July 18, 1967.
The relevant part of the aforesaid order of the Collector dated July 18, 1967 reads as follows: No. C.B.A.R.E.V. 165 District Collector 's Office Ahmedabad 18 7 67 . . .
ORDER It is hereby ordered that under mentioned twenty two members of Waghari Harijan Ganotia Samuha Kheti Mandali (unlimited) Santhal, have been granted lands for cultivation, out of the Government BHATHA LANDS, for the period of ten years each member not to have more than four acres of land, on the conditions hereinafter mentioned. . .
Names of members of the Waghari Harijan Ganotia Samuha Kheti Mandali (unlimited) . . .
TERMS 1.
These lands are granted on the condition that Waghari Harijan Ganotia Samuha Kheti Mandali (unlimited) must get itself registered within one year.
Either the individual or a co operative society shall not be granted BET BHATHA LANDS at more than one place.
1189 3.
Within the period of fifteen days from the date of the harvest of the crop from BET BHATHA lands shall be paid up.
Rules regarding suspension or remission of land revenue shall not be applicable to the realization of this rent.
The land shall be cultivated personally by the grantee, unless under exceptional circumstances.
The decision of the Collector regarding the existence of such exceptional circumstances shall be final on this condition.
Lease shall be terminated, without granting any compensation.
Rent shall be fixed and payable according to sections 6 and 7 of Government Resolution Revenue Department No. L.B.B. 3964 101585 G dated 28 12 1966.
All conditions mentioned in PATTA shall be complied with. 7.
The Collector shall be authorised to revoke the lease deed before the expiration of the period of the lease.
Unless lease deeds are executed, the occupation of the land shall be treated as unauthorised one.
Besides conditions mentioned above, all conditions mentioned in Government Resolution Revenue Department No. L.B.B. 3964 101585 G dated 28 12 1966 shall be applicable to this grant.
This grant shall be valid for the period of ten years from the year 1967 68.
This grant expires on 31 5 1977.
Lease deed to be executed and kept in record.
Sd/ Niranjan Singh, Collector, Ahmedabad." Aggrieved by the above grant, the petitioners in Special Civil Application No. 1079 of 1967 which was one of the writ petitions out of which these appeals arise questioned the validity of the Government Resolution dated December 28, 1966 and the order of the Collector granting the lease dated July 18, 1967 in favour of the said twenty two persons.
In the other four petitions also, the said Resolution and certain grants made by the Collector were questioned.
The petitioners in all the petitions alleged that some of them were in possession of portions of the lands which had been disposed of by the order of the Collector by virtue of the eksal tenures created in their favour under auctions held in or about the year 1964 and they could not be dispossessed without following the procedure prescribed by 1190 section 79 A read with section 202 of the Bombay Land Revenue Code, 1879 (hereinafter referred to as 'the Code ').
One of them alleged that he was a permanent tenant of a portion of the land.
They contended that the Government Resolution dated December 28, 1966 and the grants made by the Collector on the basis of the said Resolution were liable to be struck down on the ground that they were violative of Article 14 of the Constitution.
Their main grievance was that they had been arbitrarily deprived of an opportunity to offer bids at public auctions and to acquire lease hold rights.
They prayed for the issue of a writ in the nature of mandamus directing the State Government and the Revenue authorities not to dispossess them on the basis of the impugned Resolution of the Government and the orders of the Collector.
The State Government and the other respondents in the writ petitions resisted the petitions.
After hearing the parties, the High Court quashed the Government Resolution and the grants made by the Collector holding that they were ultra vires the scheme of the Code and were also violative of Article 14 of the Constitution.
The State Government was directed not to take into consideration the Government circular issued pursuant to the impugned Resolution while considering the question of renewal of leases or disposal of bhatha lands in question and not to dispossess the writ petitioners except in due course of law.
The State Government has questioned the order made by the High Court in these appeals.
Before going into the question relating to the validity of the impugned Resolution and the grants made by the Collector, it is necessary to deal with the question whether any of the writ petitioners were in possession of the lands in question.
The allegation made by them in this regard was denied by the State Government.
In the course of the counter affidavits filed before the High Court, it was pleaded on behalf of the State Government that none of the writ petitioners was in possession of any portion of the lands in question on the date of the petition that some of them who continued to remain in possession of certain portions of the land after the expiry of the eksal leases were dispossessed in accordance with law and that the land had been handed over to the grantees as per kabza receipts.
Dealing with the question of possession, the High Court observed in the course of its order as follows: "The petitioners claim in these petitions that they were cultivating these lands as tenants, except the petitioner in Sp.
C.A. No. 1079/1967 who claims to be a permanent tenant.
The case of the petitioners was that at the relevant time they had been given Eksali (of one year) leases on the 1191 expiry of which their right of renewal was completely taken away by the aforesaid circular.
The circular had completely fettered the discretion of the competent authorities under the Bombay Land Revenue Code, 1879, hereinafter referred to as 'the Code ' and had created an absolute rule excluding the petitioners so much so that they could not even now give a bid at any public auction for these lands.
Even though in Sp.
C.A. No. 1079/67 the case of the petitioner was of a lease in perpetuity the State had controverted this allegation and no such grant was produced.
The case of the State was that the petitioner was in illegal possession after the Eksali lease in 1964.
Therefore, even that case also stands on the same footing.
In view of the said disputed questions of facts which cannot be resolved by us, the petitioner, therefore, challenged the impugned circular on the grounds (1) that it is ultra vires the Code, especially as it creates an absolute rule excluding the petitioners who would have been entitled under the provisions of the Land Revenue Code to get these leases by bidding at the public auction as per the relevant rules.
The impugned order in this connection violates the policy of the Code which is to augment the Government revenue and which does not contain any policy of excluding any person from the disposal of these unalienated Government lands, (2) the petitioners, further challenge the impugned order on the ground that it is discriminatory and violates Article 14 and the inequality is writ large on the face of the entire order especially the so called reservations in favour of Harijans, adivasis and backward class people are so excessive that all the 100 per cent lands would get reserved for them under this policy of priority and the petitioners would be completely excluded.
" There is no reference to the question of possession of the land by the respondents in any other part of the judgment of the High Court.
From the portion of the judgment extracted above, it is seen that the High Court did not record any firm finding on the question of possession of any part of the land by any of the writ petitioners.
It, therefore, follows that the direction issued by the High Court to the State Government and the Revenue authorities not to dispossess the writ petitioners except in due course of law becomes unsustainable.
What remains to be considered in these appeals is whether the impugned Resolution and the orders of the Collector are valid or not.
1192 There is no dispute that the writ petitioners were not eligible under the impugned Resolution for any grant being made in preference to the grantees in these cases and if the impugned Resolution is valid, the grants made by the Collector become unassailable.
It is on account of the above position the writ petitioner challenged the validity of the Resolution passed by the Government on December 28, 1966.
The High Court quashed the said Resolution on two grounds: (1) that the act of the State Government in passing the Resolution amounted to a fraud on the statute as the power of the State under the Code which was a taxation measure had been utilized for a collateral purpose of achieving a welfare scheme and (2) that the Resolution was violative of Article 14 of the Constitution as there was no rational nexus between the object to be achieved by the Code viz realization of land revenue and the classification of persons eligible for the grant of lease hold rights in respect of bhatha lands into several groups.
On the first ground, the High Court observed as follows: "The Code in terms directs the statutory authority, the Collector to make disposal exercising his judicial discretion, of course, subject to the statutory rules or even subject to the orders of the Government which have statutory force.
The whole purpose and object of the Land Revenue Code is never to exclude any citizen, and such exclusion by way of an absolute rules leaving no discretion even to the statutory authority would be completely beyond the scope of a regulatory measure.
This would be prescribing the end and not prescribing means to an end.
The end has been laid down by the Legislature in this case and it is one of augmenting the land revenue, and for the purpose of revenue administration under this Code, if any disposal is made, the disposal would be ordinarily to augment land revenue.
It may be that in exceptional cases, the authority may give remission as in famine years or on other grounds which are specified under the scheme of the Code or the Rules.
The end which is envisaged to be achieved by the Code is one of getting revenue augmented which is the obvious end of any taxation measure.
The end which the impugned regulation seeks to achieve is totally a different end.
" From a reading of the above observations of the High Court, it becomes obvious that the High Court felt that the Resolution which had been passed with a view to showing preference to members belonging to Scheduled Castes, Scheduled Tribes and backward classes, landless persons who belonged to the weaker sections of 1193 society and members of co operative farming societies did not subserve the object of the Code i.e. realization of maximum revenue.
The High Court also felt that there was no scope for the passing of any order or resolution in the nature of a welfare measure while administering the provisions of the code.
In order to examine the correctness of the above view of the High Court, it is necessary to refer to some of the relevant provisions of the Code.
The Preamble of the Code provides that it had been passed as it was found expedient to consolidate and amend the law relating to Revenue officers and to the assessment and recovery of Land Revenue and to other matters connected with the Land Revenue Administration.
Chapters II and III of the Code deal with constitution powers officers provision relating to the security to be furnished by certain Revenue officers and the liability of principals and sureties.
Chapter V of the Code is entitled 'Of Lands and Land Revenue ' and contains sections 37 to 59.
Section 37 of the Code declares that 'all public roads, loans and paths, the bridges, ditches, dikes, and fences, on, or beside, the same, the bed of the sea and of harbours and creeks below high watermark, and of rivers, streams, nallas, lakes, and tanks, and all canals, and water courses, and all standing and flowing water, and all lands wherever situated, which are not the property of individuals, or of aggregates of persons legally capable of holding property, and except in so far as any right of such persons may be established, in or over the same, and except as may be otherwise provided in any law for the time being in force are and are hereby declared to be, with all rights, in or over the same, or appertaining thereto, the property of the Government and it shall be lawful for the Collector subject to the order of the State Government, to dispose of them in such manner as he may deem fit, or as may be authorised by general rules sanctioned by the Government concerned, subject always to the rights of way, and all other rights of the public or of individual legally subsisting. ' The aforesaid section 37 of the Code vests the rights in all properties referred to therein the State Government and provides that it is lawful for the Collector subject to the orders of the State Government to dispose of them in such manner as he may deem fit or as may be authorised by the general rules sanctioned by the Government.
The State Government is thus constituted the proprietor of the several items referred to therein.
While the Collector has been given the power of disposal of the land belonging to the Government, he can do so only in accordance with the other provisions of the Code and the Rules made thereunder and subject to any order or resolution passed by the State Government.
The power of the State Government to make orders under section 37(1) of the Code is not in the 1194 nature of appellate or revisional powers which are dealt with separately under sections 203 and 211 of the Code but is in the nature of an administrative power enabling the State Government to regulate the power of the Collector.
Section 38 of the Code authorises the survey officers whilst survey operations are proceeding under Chapter VIII of the Code and at any other time the Collector to set apart lands which belonged to the State Government and not in the lawful occupation of any person or aggregate of persons, in unalienated villages or unalienated portions of villages, for free pasturage for the village cattle, for forest reserves, or for any other public or municipal purpose; and lands assigned specially for any such purpose shall not be otherwise used without the sanction of the Collector.
Section 39 of the Code restricts the right of grazzing on free pasturage lands to the cattle of the village or villages to which such lands belong or have been assigned.
Section 44 of the Code recognizes the existence of certain privileges of villagers or of certain classes of persons to cut fire wood or timber for domestic or other purposes even in the case of villages or lands in which the rights of the Government to the trees have been reserved under section 40 of the Code.
Section 48 of the Code sets out the manner of assessment and alteration of assessment of any land.
It provides that the land revenue leviable on any land shall be assessed with reference to the use of the land (a) for the purpose of agriculture, (b) for the purpose of building and (c) for a purpose other than agriculture or building.
Sub section (3) of section 48 of the Code empowers the Collector or a survey officer, subject to any rules made in this behalf, to prohibit the use for certain purposes of any land liable to the payment of land revenue and to summarily evict any holder who uses or attempts to use the same for any such prohibited purpose.
Chapter VIII lays down the procedure to be followed in the course of survey and settlement proceedings thus ensuring that there is an equitable classification of lands for purposes of levy of just assessment in the light of the relevant economic factors.
The principles underlying the said procedure prohibit the levy of oppressive or excessive revenue.
There is no scope for levy of extortionate revenue which may be termed as rackrent.
Chapter VI of the Code deals with the provisions relating to the grant, use and relinquishment of land.
Section 62 of the Code which lays down the conditions subject to which unoccupied land may be granted provides that the Collector may, subject to such rules as may from time to time be made by the State Government, require the payment of a price for unalienated land or to sell the same by auction or to annex such conditions as he may deem fit.
Rule 37 of the 1195 Bombay Land Revenue Rules, 1921 (hereinafter referred to as 'the Rules ') which are promulgated by the State Government in exercise of its powers under sections 213 and 214 of the Code provides that any unoccupied survey number not assigned for any special purpose may, at the Collector 's discretion, be granted for agricultural purposes to such person as the Collector 's deems fit, either upon payment of a price fixed by the Collector, or without charge, or may be put up to public auction.
When land is granted under section 62 read with Rule 37, the grantee acquires a heritable and transferable occupancy right over the land granted, subject to the lawful conditions imposed under the grant.
The proviso to section 68 of the Code, however, provides that notwithstanding any provision in the Code, it shall not be unlawful for the Collector at any time to grant permission to any person to occupy any unalienated unoccupied land for such period and on such conditions as he may, subject to rules made by the State Government in that behalf prescribe and in any such case the occupancy shall be held only for the period and subject to the conditions so prescribed.
Rule 32 of the Rules provides that land may be given free of price and free of revenue, whether in perpetuity or for a term, for any of the purposes specified in column 1 referred to in the table given below that rule viz. for sites for the construction at the cost of a municipality, a panchayat or other local bodies of schools or colleges etc., for sites used or to be used in connection with any scheme under the Community Development Programme, for sites used or to be used as market yards under the management of market committees established under the Gujarat Agricultural Produce Markets Act, 1963 etc.
Rule 35 of the Rules empowers the Collector to exempt from payment of land revenue without any limit lands used for sites of hospitals, dispensaries, schools etc.
Under Rule 41 of the Rules, land situated in the bed of a river and not included in a survey number can, save as otherwise provided in sections 46 and 64, ordinarily be leased annually by auction to the highest bidder for the term of one year or such further period as the Collector may think fit and the accepted bid should be deemed to be the land revenue chargeable on such land.
The language of this rule also enables the State Government to dispose of such lands in any other equitable way.
This Rule, however, does not apply to a land which is situated in the bed of a river and which is included in a survey number.
Rule 42 of the Rules empowers the Collector to dispose of unoccupied land required or suitable for building sites or other non agricultural purpose either by public auction or in his discretion by private arrangement either upon payment of a price fixed by him, or without charge, as he deems fit.
1196 These and the other provisions of the Code and the Rules made thereunder show that it is open to the Collector to dispose of unoccupied lands belonging to the Government either for cultivation or for any other purpose in favour of individuals or aggregate of individuals either free of charge or at an upset price to be fixed by him or by public auction.
A historical review of the several Government orders passed under the Code shows that lands belonging to Government had been set apart free of charge for several public purposes such as free pasturage, burial grounds, roads, religious institutions, village sites, cattle stands, dhobies ' ghats, potters ' grounds, threshing floors etc.
Land revenue was remitted when there were drought conditions.
Forfeited holdings were often given back to defaulters who had not paid land revenue once again on payment of arrears out of compassion.
Tagavi loans were given by Government to occupants to improve lands.
Some of the Government orders relating to grants of lands to private individuals may be stated here by way of illustration.
An order passed by the Government of Bombay in the year 1931 authorised grant of lands to kolis and other wild tribes in jungle tracts without payment of any occupancy price.
Another order passed in 1924 directed that grants of waste lands to members belonging depressed classes should be liberally made.
An order of the year 1925 for grants of lands to co operative societies free of charge.
Liberal grants of lands were made to military pensioners at concessional rates.
All these orders were passed during the British rule by the State Government in exercise of its powers under the Code.
The dominant purpose of the Code, therefore, appears to be public welfare, even though land revenue which was recoverable under the Code constituted an important source of revenue of the State Government.
After India became independent, land reforms measures had to be introduced by the States in India to prevent concentration of land in a few hands and to impose ceiling on the extent of land that could be held by an individual or a family, to take possession of land from individuals or families which was in excess of the ceiling so imposed and to distribute such excess land amongst persons belonging to Scheduled Castes, Scheduled Tribes and other weaker sections of society.
All these laws were made in order to implement the Directive Principles of State Policy contained in Articles 38, 39 and 46 of the Constitution by strengthening agrarian economy.
Never before was there a greater need as during the post Constitution period for administering land revenue laws in an equitable manner so that the economic interests of the weaker sections of the society and in particular of members belonging to the Scheduled Castes and Scheduled Tribes are protected 1197 and promoted.
It has to be mentioned here that there is no provision in the Code or the Rules made thereunder which prohibits disposal of occupancy rights or lease hold rights in respect of unoccupied lands in any manner other than public auction.
When it is felt that it is necessary to acquire excessive lands in the hands of private individuals for distribution amongst the landless and other deserving persons, it is equally necessary to observe the same rule while distributing the land which belongs to the State Government.
In view of the foregoing, we are of the view that the conclusion reached by the High Court that the basic scheme of the Code was the realization of land revenue by disposing of unoccupied lands by public auction alone appears to be baseless.
We, therefore, find it difficult to agree that the impugned Resolution which provides for the disposal of bhatha lands amongst bonafide agriculturists, harijans, adivasis and backward class people and other persons mentioned therein without resorting to public auction but by having recourse to the procedure set out in it is contrary to the letter and the spirit of the code.
We, therefore, set aside the finding of the High Court on the above question.
We shall now proceed to examine the question whether the impugned Resolution is violative of Article 14 of the Constitution.
The grievance of the writ petitioners was that they were denied the opportunity to acquire the lease hold rights at the public auction as a consequence of the policy of disposal of bhatha lands contained in the Resolution.
The finding of the High Court on the above question appears to have been influenced by its view on the object with which the Code was enacted and this becomes obvious from the following observation of the High Court: "As we have already pointed out, the object sought to be achieved is completely a collateral object and the criteria which are adopted for the alleged classification viz. the membership of the co operative society and the persons being Harijans, Adivasis or backward class people have no rational nexus whatever to the object of augmenting land revenue, which would be the implicit object underlying the entire Code, including this statutory power of disposal of the said lands for the benefit of the public.
The Code never contemplated any exclusion of persons when such statutory power was sought to be exercised by the State by any statutory order.
Therefore, this statutory order clearly violates Article 14 of the Constitution and even on that ground it must be struck down.
" For the purpose of determining the question whether the impugned Resolution is violative of Article 14 of the Constitution or not, it is 1198 necessary to examine whether the classification adopted by the State Government is based upon some intelligible differentia which distinguishes individuals and co operative societies in whose favour grants of lease hold rights in bhatha lands are required to be made by the Collector from others and whether the said classification bears any reasonable relation to the object underlying the Code.
The High Court has proceeded on the basis that the classification made by the Resolution does not have any rational relation to the object of the Code which according to it was realization of revenue and nothing more than that.
We have explained earlier that the object of the Code is to make provision for an equitable distribution of available land amongst persons who are in need of it.
As mentioned earlier, the State Government is under an obligation to ensure that the ownership and the control of material resources of the community are so distributed as best to subserve the common good and the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment.
In India which is predominantly an agricultural country, land forms the most important means of production.
It is well known that unemployment among the masses is on the increase because employment opportunities are not increasing at the same rate at which the population is increasing.
Consequently we find in India to day a large number of landless persons and persons with uneconomic holdings in villages who are either unemployed or under employed.
It is also equally well known that persons belonging to Scheduled Castes and Scheduled Tribes form the bulk of such landless persons or owners of uneconomic holdings who are in need of special care.
It is also the settled policy of the State Governments to encourage co operative movement, which is embarked upon with a view to preventing exploitation of economically weaker sections of society by others.
The State Government in the instant case appears to have passed the impugned Resolution in order to grant leases in respect of bhatha lands in favour of landless persons or persons having very small extents of land or persons belonging to Scheduled Castes, Scheduled Tribes and backward classes and members of co operative societies at a reasonable rent without being put to the necessity of offering bids at a public auction where it is well known that only moneyed persons can become successful bidders.
The impugned Resolution lays down the procedure to be followed in the disposal of lease hold rights in respect of bhatha lands.
It does not relate to all unoccupied lands available in the State of Gujarat.
The total extent of bhatha lands available in the State of Gujarat when compared with other available unoccupied lands may be a very small extent.
The writ petitioners on whom the burden of proving that the impugned 1199 Resolution is discriminatory have not furnished any information about the extent of Bhatha lands available for disposal.
Clauses (1) and (2) of the Resolution provide that the existing leases held by cooperative societies should be renewed on their expiry only in favour of the members of such co operative societies subject to certain conditions for a further period of ten years on payment of revised rent which should be fixed on the basis of the factors referred to therein.
Clause (3) of the Resolution provides that leases of bhatha lands granted in favour of individuals should not be renewed on their expiry but they should be disposed of in favour of bonafide agriculturists who belong to the weaker sections of society and co operative farming societies on the basis of priority set out in clause (5) thereof.
The rent payable by them should again be determined in accordance with the instructions given in the Resolution.
The Resolution is designed to bring about distribution of agricultural lands as best to subserve the common good thus eliminating concentration of wealth and means of production to the common detriment.
It helps persons, who are in need of lands for their bare maintenance and who have otherwise no chance of getting them, to acquire lands at a low rate of rent.
The classification made in the impugned Resolution of persons or co operative societies who are eligible to secure grants of lease hold rights, according to us, bears a reasonable relation to the object with which the Code is enacted.
It cannot be characterised as arbitrary.
We do not find that there is any infirmity in the above classification.
The Resolution aims at bringing about social and economic justice and assists people who are not strong enough to secure lease hold rights of a public auction for purposes of cultivation.
The leases to be granted are not for any unlimited period.
At the end of the period prescribed in the leases, it will be open to the Collector to dispose them of afresh.
In the above circumstances, we hold that the High Court was in error in holding that the Resolution was violative of Article 14 of the Constitution.
For the foregoing reasons, we allow these appeals, set aside the common judgment and order passed by the High Court and dismiss the writ petitions.
We feel that in the circumstances of the case, the State Government should pay the costs of respondent No. 1 in Civil Appeal No. 284 of 1970.
We order accordingly.
The other parties shall bear their own costs.
N.V.K. Appeals allowed.
| IN-Abs | The expression "bhatha land" means land which forms part of the bed of a river on which vegetables, melon, cucumber etc.
can be grown during the lean period after the rainy season is over, when the level of the water in the river is quite low.
The cultivation of such land is possible only till the next rainy season as the land gets submerged under the river water.
The occupancy rights over such land cannot ordinarily be granted on a permanent basis as in the case of cultivable lands, in view of the fact that the land gets submerged under the river water every year for 4 5 months.
Till the year 1951 the cultivation rights over 'bhatha lands ' were disposed of by public auction and the successful bidders were treated as lessors of the lands for short periods.
In the year, 1951 the State Government ordered that the leasehold rights over 'bhatha lands ' should be disposed of by selection, the order of priority being (1) bona fide agriculturists who had cultivated the land personally for five years or more, (2) adjacent land holders who had insufficient land for maintenance of their families, (3) cooperative farming societies and (4) priority holders under the Waste Land Rules.
This order was however cancelled and superseded by the Government Resolution dated September 19, 1962 which provided that on the expiry of the then existing leases, not held by cooperative farming societies, bhatha land should be disposed of on the basis of five years ' lease by public auction.
Experience showed that only the moneyed people were able to purchase the leasehold rights at the public auction and persons belonging to Scheduled Castes and Scheduled Tribes and the other weaker sections of society were not even able to participate in such auctions.
Consequently, in the year 1964 leasehold rights over bhatha lands were disposed of on ekasal basis by public auctions.
The question relating to the disposal of leasehold rights over bhatha lands was discussed at the meeting of the District Collectors held in 1965 1966 and in pursuance to the suggestions made at the meeting and after considering all relevant matters the State Government by a Resolution dated 28th December, 1966, directed that the existing procedure for disposal of bhatha lands by auction be discontinued with effect from January 1, 1967 and the disposal of such lands were ordered to be in the following priority: (1) bona fide agriculturists of the village who were holding land less than 5 acres, preference being given to harijans, adivasi and backward class people (2) holders of the land adjoining the 1183 bhatha land holding less than 16 acres and having genuine need of additional land for maintenance of their families; (3) cooperative farming societies of harijans, adivasi and backward classes people, (4) cooperative farming societies consisting of landless labourers or small holders and (5) any of the priority holders under the Waste Land Rules.
In pursuance to the aforesaid Resolution, the Collector by his Order dated July 18, 1967, granted 22 members belonging to Waghari Harijan Community leasehold rights in respect of bhatha lands for a period of 10 years.
The respondents questioned the validity of the Government Resolution dated December 28, 1966 and the Order of the Collector dated July 18, 1967 granting the lease, in their writ petitions.
They alleged that some of them were in possession of portions of the land of which they had been dispossessed by the Order of the Collector by virtue of the eksal tenures created in their favour in the auctions held in or about the year 1964 and that they could not be dispossessed without following the procedure prescribed by section 79(A) read with section 202 of the Bombay Land Revenue Code, 1879.
They also contended that the Government Resolution dated December 28, 1966 and the grants made by the Collector on the basis of the said Resolution were liable to be struck down on the ground that they were violative of Article 14 of the Constitution and that they had been arbitrarily deprived of an opportunity to offer bids at public auctions and to acquire leashold rights.
The State Government contested the petitions on the ground that none of the respondents was in possession of the lands in question on the date of the writ petitions and that some of them who continued to remain in possession of certain portions of the land after the expiry of the eksal lease were dispossessed in accordance with law and that the lands have been handed over to the grantees as per the Kabza receipts.
The Resolution dated December 28, 1966, was passed in order to grant lease in respect of bhatha lands in favour of the landless persons or persons having small extent of lands or persons belonging to Scheduled Castes, Scheduled Tribes and backward classes and members of cooperative societies at reasonable rent without being put to the necessity of offering bids at public auctions, where only moneyed persons could become successful bidders.
The High Court quashed the Resolution on two grounds: (1) That the act of the State Government in passing the Resolution amounted to a fraud on the Statute as the power of the State under the Code which was a taxation measure had been utilized for a collateral purpose of achieving a welfare scheme and (2) that the Resolution was violative of Article 14 of the Constitution as there was no rational nexus between the object to be achieved by the Code viz. realisation of land revenue and the classification of persons eligible for the grant of lease hold rights in respect of bhatha lands into several groups.
It further directed the State Government not to take into consideration the Government 's circular issued pursuant to the impugned Resolution while considering the question of renewal of leases or disposal of bhatha lands and not to dispossess the writ petitioners except in due course of law.
Allowing the appeals, ^ HELD: 1(i) The Preamble of the Code provides that it had been passed as it was found expedient to consolidate and amend the law relating to Revenue 1184 Officers and to the assessment and recovery of Land Revenue and to other matters connected with Land Revenue Administration.
[1193B].
(ii) The other provisions of the Code and the Rules made thereunder show that it is open to the Collector to dispose of unoccupied lands belonging to the Government either for cultivation or for any other purpose in favour of individuals or aggregate of individuals either free of charge or at an upset price to be fixed by him or by public auction.
A review of the several Government orders passed under the Code shows that lands belonging to Government had been set apart free of charge for several public purposes such as free pasturage, burial grounds, roads, religious institutions, dhobies ' ghats, potters ' grounds, threshing floors etc.
Land revenue was remitted when there were drought conditions.
Forfeited holdings were often given back to defaulters who had not paid land revenue once again, on payment of arrears out of compassion.
Tagavi loans were given by Government to occupants to improve lands.
The dominant purpose of the Code, therefore appears to be public welfare, even though land revenue which was recoverable under the Code constituted an important source of revenue of the State Government.
[1196A E] (iii) After India became independent, land reform measures had to be introduced by the States in India to prevent concentration of land in a few hands and to impose ceiling on the extent of land that could be held by an individual or a family, to take possession of land from individuals or families which was in excess of the ceiling so imposed and to distribute such excess land amongst persons belonging to Scheduled Castes, Scheduled Tribes and other weaker sections of society.
All these laws were made in order to implement the Directive Principles of State Policy contained in Articles 38, 39 and 46 of the constitution by strengthening agrarian economy.
Never before was there a greater need as during the post Constitution period for administering land revenue laws in an equitable manner so that the economic interests of the weaker sections of the society and in particular of members belonging to Scheduled Castes and Scheduled Tribes are protected and promoted.
[1196F H] (iv) There is no provision in the Code or the Rules made thereunder which prohibits disposal of occupancy rights or leasehold rights in respect of unoccupied lands in any manner other than public auction.
[1197A] (v) The conclusion reached by the High Court that the basic scheme of the Code was the realization of land revenue by disposing of unoccupied lands by public auction alone appears to be baseless.
[1197B] (vi) The finding of the High Court that the impugned Resolution which provides for the disposal of bhabha lands amongst bona fide agriculturists, harijans, adivasis and backward class people and other persons mentioned therein without resorting to public auction but by having recourse to the procedure set out in it is contrary to the latter and the spirit of the Code is set aside.
[1197C] 2(i) The Resolution is designed to bring about distribution of agricultural lands as best to subserve the common good thus eliminating concentration of wealth and means of production to the common detriment.
It helps persons, who are in need of lands for their bare maintenance and who have otherwise no chance of getting them, to acquire lands at a low rate of rent.
[1199D] 1185 (ii) The classification made in the impugned Resolution of persons or cooperative societies who are eligible to secure grants of leasehold rights, bears a reasonable relation to the object with which the Code is enacted.
It cannot be characterised as arbitrary.
There is no infirmity in the above classification.
The Resolution aims at bringing about social and economic justice and assists people who are not strong enough to secure leasehold rights at a public auction for purposes of cultivation.
The leases to be granted are not for any unlimited period.
[1199E] (iii) The High Court was in error in holding that the Resolution was violative of Article 14 of the Constitution.
[1199F] 3.
The High Court did not record any firm finding on the question of possession of any part of the land by any of the writ petitioners.
The direction issued by the High Court to the State Government and the Revenue authorities not to dispossess the writ petitions except in due course of law therefore becomes unsustainable.
[1191H]
|
Civil Appeal No. 2844 of 1979.
Appeal by Special Leave from the Judgment and Order dated 17 8 1979 of the Allahabad High Court in Civil Revision No. 1273 of 1976.
Pramod Swarup for the Appellant.
N. K. Agarwal for the Respondent (Amicus Curiae).
The Judgment of the Court was delivered by PATHAK, J.
This appeal by special leave and the four associated special leave petitions question the dismissal by the High Court of Allahabad of five revision petitions filed under Section 115, Code of Civil Procedure, on the ground that they are not maintainable.
Although the five cases before us must be considered in the context of their individual facts, it is desirable to appreciate the relevant jurisdictional structure of revisional power enjoyed by the High Court from time to time.
In 1970, the provisions of section 115, Code of Civil Procedure, read : "115.
Revision : The High Court may call for the record of any case which has been decided by any court subordinate to such High Court, and in which no appeal lies thereto, and if such court subordinate appears : (a) to have exercised a jurisdiction not vested in it by law, or (b) to have exercised a jurisdiction so vested, or 35 (c) to have acted in the exercise of its jurisdiction illegally with material irregularity, the High Court may make such order in the case as it deems fit.
" A schematic analysis of the judicial hierarchy within a State indicates that the High Court, as the apex court in the hierarchy, has been entrusted, not only with the supreme appellate power exercised within the State but also, by virtue of section 115, the power to remove, in order to prevent a miscarriage of justice, any jurisdictional error committed by a subordinate court in those cases where the error cannot be corrected by resort to its appellate jurisdiction.
The two salient features of revisional jurisdiction under section 115 are, on the one hand, the closely limited grounds on which the court is permitted to interfere and on the other, the wide expanse of discretion available to the court, when it decides to interfere, in making an appropriate order.
The intent is that so serious an error as one of jurisdiction, if committed by a subordinate court, should not remain uncorrected, and should be removed and the record healed of the infirmity by an order shaped to re instate the proceeding within the proper jurisdictional confines of the subordinate court.
It is a power of superintendence, and fittingly it has been conferred in terms enabling the High Court to exercise it, not only when moved by an aggrieved person, but also suo motu.
While considering the nature and scope of the revisional jurisdiction, it is necessary however, to advert to prime circumstance that in civil cases the jurisdiction has been entrusted to the highest court of the State, demonstrating that broadly the order under section 115 is to be regarded, in the absence of anything else, as a final order within the State judiciary.
From its inception there was increasing resort to the revisional jurisdiction of the High Court under section 115.
Over the years the volume of litigation reached an insupportable point in the pending docket of the Court.
To alleviate the burden, a pattern of decentralisation of revisional power was adopted and section 115 was amended by successive State amendments, each attempting to close the gap left by its predecessor.
In its meandering course from stage to stage, this is how section 115 read : 1.
From 7th April, 1970 : By virtue of section 3, U.P. Civil Laws (Amendment) Act, 1970, section 115 was amended and the result was that : (i) The High Court had exclusive jurisdiction under section 115 in a case arising out of an original suit of the value of Rs. 20,000 and above; and 36 (ii) The High Court and the District Court had jurisdiction under section 115 concurrently in other cases.
From 20th September, 1972: section 6, U.P. Civil Laws (Amendment) Act, 1972 amended section 115 further with effect from 20th September, 1972.
Later, section 115 was amended by section 2, U.P. Civil Laws (Amendment) Act, 1973 in its application to Uttar Pradesh, retrospectively with effect from 20th September, 1972.
In consequence: (i) The High Court possessed exclusive jurisdiction under section 115 in cases arising out of original suits of the value of Rs. 20,000 and above, including such suits instituted before 20th September, 1972: (ii) The District Court possessed exclusive jurisdiction under section 115 in any other case, including a case arising out of an original suit instituted before 20th September, 1972.
Provided that in respect of cases decided before 20th September, 1972 and also all cases arising out of original suits of any valuation, decided by the District Court, the High Court alone was competent to exercise revisional power under section 115.
section 2(e), U.P. President 's Acts (Re enactment with Modifications) Act, 1974 repealed the U.P. Civil Laws (Amendment) Act, 1973, and re enacted it with certain modifications which, however, for the purposes of the present case are immaterial.
From 1st February, 1977: section 43, Code of Civil Procedure (Amendment) Act, 1976 was enacted by Parliament and amended section 115 with effect from 1st February, 1977 making substantial changes therein.
Section 97(1) of the Amendment Act provided that any amendment made, or provision inserted, in the Code of Civil Procedure by a State Legislature before the 1st February, 1978 would stand repealed except insofar as such amendment or provision was consistent with the Code as amended by the said Amendment Act.
As the Code now amended provided for revisional jurisdiction in the High Court alone, the scheme embodied in section 115 by the successive U.P. Amendment Acts was plainly inconsistent with the Code as now amended, and therefore stood repealed, the position reverting to what it was under the original section 115 before its amendment by the U.P. Civil Laws (Amendment) Act, 1970.
But section 97(2) provided that section 115 as now amended by the Amendment Act, 1976 would not apply to nor affect any proceeding for revision which had been admitted, after 37 preliminary hearing, before 1st February, 1977 and every such proceeding for revision would be disposed of as if section 43 had not come into force.
The proviso was without prejudice to the generality of the provisions of section 6, .
In the result : (i) The High Court had exclusive jurisdiction under section 115 in a revision petition filed on and after that date, irrespective of the valuation of the suit out of which the case arose : (ii) A revision petition under section 115 which had been admitted, after preliminary hearing, before 1st February, 1977 would continue to be governed by section 115 as it stood before that date.
From 1st August, 1978: Finally section 3, Code of Civil Procedure (Uttar Pradesh Amendment), Act, 1978, which was deemed to have come into force on 1st August, 1978, amended section 115 again and restored the bifurcation of revisional jurisdiction between the High Court and the District Court.
Accordingly now: (i) The High Court alone had jurisdiction under section 115 in cases arising out of original suits or other proceedings of the value of Rs. 20,000 and above, including such suits or other proceedings instituted before 1st August, 1978; (ii) The District Court alone has jurisdiction under section 115 in any other case, including a case arising out of an original suit or other proceedings instituted before 1st August, 1978; (iii) The High Court has jurisdiction under section 115 in respect of cases, arising out of original suits or other proceedings of any valuation, decided by the District Court.
(iv) A revision proceeding pending immediately before 1st August, 1978 of the nature in which a District Court would exercise revisional power under section 115 as amended by the Amendment, Act, 1978 if pending : (a) in the District Court, would be decided by that court as if the Amendment Act of 1978 were in force at all material times ; (b) in the High Court, would be decided by the High Court as if the Amendment Act of 1978 had not come into force.
The submissions made by learned counsel before us cover a wide field, but in the main, two questions arise : (1) Whether the High Court possesses revisional jurisdiction under section 115, Code of Civil Procedure in respect of an order of the District Court under section 115 disposing of a revision petition ? 38 (2) Whether the High Court possesses revisional jurisdiction under section 115 against an order of the District Court under section 25, Provincial Small Cause Courts Act disposing of a revision petition ? As regards the first question, it will be noticed that a revisional power was formerly entrusted exclusively to the highest court in the state, the High Court.
The State amendments now divided it between the High Court and the District Court.
The amendment effect by the U.P. Civil Laws (Amendment) Act, 1970 conferred exclusive jurisdiction under section 115 in the High Court in cases arising out of original suits of the value of Rs. 20,000/ and above, and in other cases the revisional jurisdiction was concurrently shared between the High Court and the District Court.
It was apparently supposed that the average litigant would prefer the less expensive and more convenient forum of the District Court.
The measure, it seems, did not bring the relief expected, and the State Legislature found it necessary, by enacting the U.P. Civil Laws (Amendment) Act, 1972 to make a clear cut division of jurisdiction between the High Court and the District Court, resulting in exclusive revisional jurisdiction to the High Court in cases arising out of original suits of the value of Rs. 20,000/ and above, and exclusive jurisdiction under section 115 to the District Court in other cases.
There was a sharp bifurcation of revisional jurisdiction, and the High Court and District Court now enjoyed mutually exclusive revisional powers.
A controversy arose whether a revisional order under section 115 made by the District Court was final or was itself amendable to the revisional power of the High Court under the same section.
The point was considered by a full Bench of the High Court in Har Parasad Singh and others vs Ram Swarup and others and it was held that no such revision petition was maintainable before the High Court.
Further State amendments were made to section 115 without materially disturbing the division of power.
But a proviso added to section 115 by the U.P. Civil Laws (Amendment) Act, 1973, followed by the U.P. President 's Acts (Re enactment with Modifications) Act, 1974 stated : "Provided that in respect of cases decided before the 20th day of September, 1972, and also all cases arising out of original suits of any valuation decided by the District Court, the High Court alone shall be competent to make an order under this section.
" The proviso reopened the controversy whether a revision petition lay to the High Court against a revisional order passed by the Dis 39 trict Court, and on a difference of opinion between two learned judges a third learned judge of the Allahabad High Court now held in Phool Wati and others vs Gur Sahai that a revision petition would lie.
The Code of Civil Procedure (Amendment) Act, 1976, however, superseded the scheme of bifurcation of revisional jurisdiction with effect from 1st February, 1977 and, with certain modification the position reverted to what it was under the original section 115.
In other words, the entire sphere of revisional jurisdiction was restored to the High Court, no such power being now vested in the District Court.
An exception was made where a revision petition under section 115 had been admitted, after preliminary hearing, before Ist February, 1977; it would continue to be governed by section 115 as it stood before that date.
The situation lasted only briefly, for on 1st August, 1978 the Code of Civil Procedure (Uttar Pradesh Amendment) Act, 1978 substantially restored the status quo ante.
The controversy whether it is open to the High Court to exercise revisional power in respect of a revisional order under section 115 of the District Court presents little difficulty.
The basis for determining that question flows from the principle incorporated in the bifurcation of the revisional jurisdiction.
And legislative history comes to our aid.
The consistent object behind the successive amendments was to divide the work load of revision petitions between the High Court and the District Court and decentralise that jurisdiction.
That purpose was sought to be achieved by classifying all cases into two mutually exclusive categories depending on the valuation of the suit out of which they arose.
In determining whether the Legislature intended a further revision petition to the High Court, regard must be had to the principle that the construction given to a statute should be such as would advance the object of the legislation and suppress the mischief sought to be cured by it.
It seems to us that to recognise a revisional power in the High Court over a revisional order passed by the District Judge would plainly defeat the object of the legislative scheme.
The intent behind the bifurcation of jurisdiction to reduce the number of revision petitions filed in the High Court would be frustrated.
The scheme would, in large measure, lose its meaning.
If a revision petition is permitted to the High Court against the revisional order of the District Court arising out of a suit of a value less than Rs. 20,000/ , a fundamental contradiction would be allowed to invade and destroy the division of revisional power between the High Court and the District Court, for 40 the High Court would then enjoy jurisdictional power in respect of an order arising out of a suit of a valuation below Rs. 20,000/ .
That was never intended at all.
In Phoolwati (supra), considerable importance was attached to the proviso introduced in section 115 by the U.P. Civil Laws Amendment Act, 1973.
The proviso declared that "in respect of. all cases arising out of original suits of any valuation decided by the District Court, the High Court alone shall be competent to make an order under this section".
What it said was that no matter what the valuation of the original suit, be it Rs. 20,000/ and above or below Rs. 20,000/ , if a case arising out of such suit was decided by the District Court, the case would be amenable to the revisional power of the High Court.
We are already familiar with the category of cases where the High Court wields revisional jurisdiction over cases arising out of original suits of a value of Rs. 20,000/ or more.
That is the category already covered by the substantive provision in section 115.
The other category covered by the proviso would include those instances, for example where an original suit although of a value making it triable by a court subordinate is transferred to the District Court for trial.
Orders passed by the District Court in such a suit could constitute a case decided by it and amenable to the revisional power of the High Court.
What must be noted is that the test incorporated in the proviso is the fact that the case has been decided by the District Court.
The valuation of the suit is irrelevant.
But the proviso cannot be construed to include the case of a revisional order passed by the District Court for that would be in direct conflict with the fundamental structure itself of section 115 evidencing that a mutually exclusive jurisdiction has been assigned to the High Court and the District Court within its terms.
A proviso cannot be permitted by construction to defeat the basic intent expressed in the substantive provision.
Har Prasad Singh (supra) and Phoolwati (supra) were considered by a Full Bench of the High Court in M/s Jupiter Fund (Pvt.) Ltd. vs Dwarka Diesh Dayal and others and in our judgment the High Court rightly laid down there that the phrase "case arising out of an original suit" occurring in section 115 does not cover orders passed in revision.
We are of opinion on the first question that the High Court is not vested with revisional jurisdiction under section 115, Code of Civil Procedure over a revisional order made by the District Court under that section.
41 We shall now advert to the second question, whether a revisional order of the District Court under section 25, Provincial Small Cause Courts Act, is amenable to the revisional jurisdiction of the High Court under section 115, Code of Civil Procedure.
Section 25 originally provided: "25.
The High Court, for the purpose of satisfying itself that a decree or order made in any case decided by a Court of Small Causes was according to law, may call for the case and pass such order with respect thereto as it thinks fit.
" Section 25 was amended in its application to the State of Uttar Pradesh from time to time.
The first amendment substituted the District Judge for the High Court, so that the District Judge became the repository of revisional power instead of the High Court.
A further amendment, made in 1972, added a proviso, which declared that in relation to any case decided by a District Judge or Additional District Judge exercising the jurisdiction of a Judge of Small Causes the power of revision under section 25 would vest in the High Court.
The question before us arises in those cases only where the District Judge has exercised revisional power under section 25.
Is an order so made open to revision by the High Court under section 115, Code of Civil Procedure ? An examination of the several provisions of the Provincial Small Cause Courts Act indicates that it is a self sufficient code so far as the present enquiry is concerned.
For the purpose of correcting decrees or orders made by a Court of Small Causes the Act provides for an appeal and a revision in cases falling under section 24 and section 25 respectively.
Cases in which the District Judge and the High Court respectively exercise revisional power, revisional powers are specifically mentioned.
A complete set of superior remedies has been incorporated in the Act.
Moreover, section 27 of the Act provides: "27.
Finality of decrees and orders.
Save as provided by this Act, a decree or order made under the foregoing provisions of this Act by a Court of Small Causes shall be final.
" The Legislature clearly intended that a decree or order made by a Court of Small Causes should be final subject only to correction by the remedies provided under the Provincial Small Cause Courts Act.
It is a point for consideration that had section 25, in its application to the State of Uttar Pradesh continued in its original form the High Court would have exercised the revisional power under section 25, and no question could have arisen of invoking the revisional power of the High Court under section 115 of the Code.
All the indications point to the conclusion that a case falling within the 42 Provincial Small Cause Courts Act was never intended to be subject to the remedies provided by the Code of Civil Procedure.
By way of abundant caution section 7 of the Code made express provision barring the application of sections 96 to 112 and 115 of the Code to courts constituted under the Provincial Small Cause Courts Act.
Section 7 of the Code merely embodies the general principle against resort to remedies outside the Provincial Small Cause Courts Act.
Although the court of the District Judge is not a court constituted under the Act the general principle continues to take effect.
No change in the principle was brought about merely because revisional power under section 25, before the proviso was added, was now entrusted to the District Judge.
It must be remembered that the legislative intention behind the amendment was to relieve the High Court of the burden of exercising revisional jurisdiction in respect of cases decided under the Provincial Small Cause Courts Act.
We are of firm opinion that the central principle continues to hold, notwithstanding the amendment effected in section 25, that the hierarchy of remedies enacted in the Provincial Small Cause Courts Act represents a complete and final order of remedies, and it is not possible to proceed outside the Act to avail of a superior remedy provided by another statute.
These considerations were apparently not present before the High Court of Allahabad when it held in Bimla Rani Kohli vs M/s. Bandu Motor Finance (P) Ltd. that a revisional order of the District Judge under section 25, Provincial Small Cause Courts Act could be revised by the High Court under section 115, Code of Civil Procedure.
In our opinion, the view taken by the High Court is not correct.
Accordingly, we hold that an order passed under section 25, Provincial Small Cause Courts Act by a District Court is not amenable to the revisional jurisdiction of the High Court under section 115, Code of Civil Procedure.
In Civil Appeal No. 2844 of 1979, S.L.P. No. 9104 of 1979, S.L.P. No. 9142 of 1979 and S.L.P. No. 9752 of 1979, the High Court has rejected revision petitions filed under section 115, Code of Civil Procedure, against the revisional orders of the District Court under section 25, Provincial Small Cause Courts Act.
On the opinion reached by us that a revision petition under section 115 is not maintainable against a revisional order under section 25, the appeal and the associated special leave petitions must be dismissed.
43 S.L.P. No. 9031 of 1979 arises out of an application for an ad interim injunction made in a pending suit.
Since then the suit has been dismissed, and an appeal against the decree is pending.
As the suit itself has been disposed of, all proceedings for grant of interim relief must be regarded as having lapsed.
The Special Leave Petition has become infructuous and must be dismissed accordingly.
It has been urged by the appellant in Vishesh Kumar vs Shanti Prasad (Civil Appeal No. 2844 of 1979) that in case this Court is of the opinion that a revision petition under section 115, Code of Civil Procedure, is not maintainable, the case should be remitted to the High Court for consideration as a petition under Article 227 of the Constitution.
We are unable to accept that prayer.
A revision petition under section 115 is a separate and distinct proceeding from a petition under Article 227 of the Constitution, and one cannot be identified with the other.
In the result, the appeal and the special leave petitions are dismissed.
There will be no order as to cost.
P.B.R. Appeal and Petitions dismissed.
| IN-Abs | Section 115 of the Code of Civil Procedure confers on the High Court of a State power to remove any jurisdictional error committed by a subordinate court in cases where the error cannot be corrected by resort to its appellate jurisdiction.
From its inception there was increasing resort to the revisional jurisdiction of the High Court under section 115.
To alleviate the burden of arrears and reduce the volume of litigation which had reached an insupportable point, section 115 was amended by successive state amendments, each amendment attempting to close the gap left by its predecessor.
The amendments conferred revisional jurisdiction both on the High Court and the District Court each enjoying mutually exclusive revisional powers.
The consistent object behind the successive amendments was to divide the work load of revision petitions between the High Court and the District Court and decentralise the jurisdiction.
A proviso was added to section 115 by the U.P. Civil Laws Amendment Act, 1973 declaring that "in respect of cases. .arising out of original suits of any valuation decided by the District Court the High Court alone shall be competent to make an order under this section.
" The Code of Civil Procedure (Amendment) Act, 1976 superseded the scheme of bifurcation of revisional jurisdiction with effect from 1st February 1977.
With certain modifications the position reverted to what it was under the original section 115.
An exception was made where a revision petition under section 115 had been admitted after preliminary hearing before 1st February 1977; it would continue to be governed by section 115 as it stood before that date.
But the Code of Civil Procedure (U.P. Amendment) Act 1978 substantially restored the status quo ante.
Section 25 of the Provincial Small Cause Courts Act was amended from time to time in its application to the State of U.P.
The first amendment substituted the District Judge for the High Court.
A further amendment made in 1972 added a proviso which declared that in relation to any case decided by a District Judge or Additional District Judge exercising jurisdiction of a Judge of Small Causes Court the power of revision under section 25 would vest in the High Court.
33 The two questions that fell for consideration were : (i) whether the High Court possesses the revisional jurisdiction under section 115 of the Code of Civil Procedure in respect of an order of the District Court under s.115 disposing of a revision petition and (ii) whether the High Court possesses revisional jurisdiction under section 115 against an order of District Court under section 25 Provincial Small Cause Courts Act disposing of a revision petition, ^ HELD : The High Court is not vested with revisional jurisdiction under section 115 Code of Civil Procedure over the revisional order made by the District Court under that section.
[40 H] (a) To recognise a revisional power in the High Court over the revisional order passed by the District Court would plainly defeat the object of the legislative scheme.
The intent behind the bifurcation of jurisdiction to reduce the number of revision petitions filed in the High Court would be frustrated.
The scheme would lose its meaning.
If a revision petition is permitted to the High Court against the revisional order of the District Court arising out of a suit of a value less than Rs. 20,000 a fundamental contradiction would be allowed to invade and destroy the division of revisional power between the High Court and the District Court, for the High Court would then enjoy jurisdictional power in respect of an order arising out of a suit of a valuation of below Rs. 20,000/ [39 G H] (b) What the proviso introduced in section 115 by the Civil Laws Amendment Act, 1973, stated was that no matter what the valuation of the original suit, if a case arising out of such suit was decided by the District Court, the case would be amenable to the revisional power of the High Court.
What is covered by the substantive provision are cases arising out of original suits of a value of Rs. 20,000/ or more.
The other category covered by the proviso would include those instances where an original suit, although of a value making it triable by a court subordinate, is transferred to the District Court for trial.
Orders passed by the District Court in such a suit could constitute a case decided by it and amenable to the revisional power of the High Court.
The test incorporated in the proviso is the fact that the case has been decided by the District Court.
The valuation of the suit is irrelevant.
The proviso cannot be construed to include the case of a revisional order passed by the District Court for that would be in direct conflict with the fundamental structure itself of section 115.
A proviso cannot be permitted by construction to defeat the basic intent expressed in the substantive provision.
[40 C F] M/s. Jupiter Fund (Pvt.) Ltd. vs Dwarka Diesh Dayal and others approved.
(a) An order passed under section 25 of the Provincial Small Cause Courts Act by a District Court is not amenable to the revisional jurisdiction of the High Court under section 115 of the C.P.C. [42 F] (b) An examination of the several provisions of the Provincial Small Cause Courts Act indicates that it is a self sufficient code so far as the present enquiry is concerned.
The Legislature clearly intended that a decree or order made by a Court of Small Causes should be final subject only to correction by the remedies provided under the Provincial Small Cause Courts Act.
All the indications contained in the Act point to the conclusion that a case falling 34 within the Provincial Small Cause Courts Act was never intended to be subject to the remedies provided by the Code of Civil Procedure.
By way of abundant caution, section 7 of the Code made express provision barring the application of sections 96 to 112 and 115 of the Code to courts constituted under the Provincial Small Cause Courts Act.
Section 7 of the Code merely embodies the general principle against resort to remedies outside the Provincial Small Cause Courts Act.
Although the court of the District Judge is not a court constituted under the Act the general principle continues to take effects No change in the principle was brought about merely because revisional power under section 25, before the proviso was added, was now entrusted to the District Judge.
The legislative intention behind the amendment was to relieve the High Court of the burden of exercising revisional jurisdiction in respect of cases decided under the Provincial Small Cause Courts Act.
Therefore the central principle continues to hold, notwithstanding the amendment effected in section 25, that the hierarchy of remedies enacted in the Provincial Small Cause Courts Act represents a complete and final order of remedies, and it is not possible to proceed outside the Act to avail of a superior remedy provided by another statute.
[4] E 42 A D] Bimla Rani Kohli vs M/s. Bandu Motor Finance Pvt.
Ltd. A.I.R. 1972 All. 342; over ruled.
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Special Leave Petition Nos. 937 939 of 1980.
From the Judgment and Order dated 1 8 1979 of the Madras High Court in A.A.O. Nos. 815 817 of 1977.
T. A. Ramachandran and K. Ramkumar for the Petitioner.
The Order of the Court was delivered by KRISHNA IYER, J. Sri Ramachandran, ably assisted by Sri K. Ram Kumar, presented the case of the petitioner for special leave, as persuasively as the facts permit but while we were impressed with the 102 industry and advocacy of counsel, we heartily dismiss this petition.
Why heartily? Because the High Court, if at all, has erred in favour of the petitioner, not against him.
The Facts: A stage carriage belonging to the petitioner was on a trip when, after nightfall, the bus hit an over hanging high tension wire resulting in 26 casualties of which 8 proved instantaneously fatal.
A criminal case ensued but the accused driver was acquitted on the score that the tragedy that happened was an act of God! The Accidents Claims Tribunal, which tried the claims for compensation under the Motor Vehicles Act, came to the conclusion, affirmed by the High Court, that, despite the screams of the passengers about the dangerous over hanging wire ahead, the rash driver sped towards the lethal spot.
Some lost their lives instantly; several lost their limbs likewise.
The High Court, after examining the materials, concluded: "We therefore sustain the finding of the Tribunal that the accident had taken place due to the rashness and negligence of R.W. 1 (driver) and consequently the appellant is vicariously liable to pay compensation to the claimant.
" The plea that the criminal case had ended in acquittal and that, therefore, the civil suit must follow suit, was rejected and rightly.
The requirement of culpable rashness under section 304A I.P.C. is more drastic than negligence sufficient under the law of tort to create liability.
The quantum of compensation was moderately fixed and although there was, perhaps a case for enhancement, the High Court dismissed the cross claims also.
Being questions of fact, we are obviously unwilling to re open the holdings on culpability and compensation.
Road accidents are one of the top killers in our country, specially when truck and bus drivers operate nocturnally.
This proverbial recklessness often persuades the courts, as has been observed by us earlier in other cases, to draw an initial presumption in several cases based on the doctrine of res ipsa loquitur.
Accidents Tribunals must take special care to see that innocent victims do not suffer and drivers and owners do not escape liability merely because of some doubt here or some obscurity there.
Save in plain cases, culpability must be inferred from the circumstances where it is fairly reasonable.
The court should not succumb to niceties, technicalities and mystic maybes.
We are emphasising this aspect because we are often distressed by transport operators getting away with it thanks to judicial laxity, despite the fact that they do not exercise sufficient disciplinary control over the drivers in the matter of careful driving.
The heavy economic 103 impact of culpable driving of public transport must bring owner and driver to their responsibility to their 'neighbour '.
Indeed, the State must seriously consider no fault liability by legislation.
A second aspect which pains us is the inadequacy of the compensation or undue parsimony practised by tribunals.
We must remember that judicial tribunals are State organs and Article 41 of the Constitution lays the jurisprudential foundation for state relief against accidental disablement of citizens.
There is no justification for niggardliness in compensation.
A third factor which is harrowing is the enormous delay in disposal of accident cases resulting in compensation, even if awarded, being postponed by several years.
The States must appoint sufficient number of tribunals and the High Courts should insist upon quick disposals so that the trauma and tragedy already sustained may not be magnified by the injustice of delayed justice.
Many States are unjustly indifferent in this regard.
We have been taken through a few intricate legal submissions by counsel but we decline to interfere under Article 136 of the Constitution especially where human misery is pitted against operational negligence.
P.B.R. Petition dismissed.
| IN-Abs | The petitioner 's bus driven by a driver hit an over hanging high tension wire resulting in the death of some passengers and loss of limb to several others.
The driver was acquitted on the ground that the tragedy was an act of God.
The Accidents Tribunal held that despite the screams of the passenger about the dangerous over hanging wire ahead the rash driver sped towards the spot which resulted in the accident.
The High Court affirmed the finding of the Tribunal that the accident had taken place due to rashness and negligence of the driver and consequently the petitioner was vicariously liable to pay compensation to the claimant.
Dismissing the petition, ^ HELD: 1.
The plea that the criminal case had ended in acquittal and that therefore the civil suit must follow suit was rightly rejected by the Tribunal and the High Court.
[102 E] 2.
The requirement of culpable rashness under section 304A I.P.C. is more drastic than negligence sufficient under the law of tort to create liability.
[102 E] The Accident Tribunal must take special care to see that innocent victims do not suffer and drivers and owners do not escape liability merely because of some doubt here or some obscurity there.
Save in plain cases, culpability must be inferred from the circumstances where it is fairly reasonable.
The court should not succumb to niceties and technicalities.
[102 G]
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Civil Appeal No. 2057 of 1979.
Appeal by Special Leave from the Judgment and Order dated 11 1 1979 of the Delhi High Court in L.P.A. No. 46/73.
S.R. Srivastava for the Appellant and Dr. N.C. Shinghal (in person) P.P. Rao, and Miss A. Subhashini for Respondents 1 & 2.
B.R. Aggarwal for Respondent No. 15.
The Judgment of the Court was delivered by DESAI, J.
A highly qualified ophthalmic surgeon feeling aggrieved that he has not been justly treated in the matter of promotion to a post in Supertime Grade II seeks redress of his grievance praying for a mandamus that he may be deemed to have been promoted from February 18, 1971, failing which more out of frustration and less by any justification he seeks quashing of the promotion of respondents 4 to 24 though convinced that even if the Court were to accede to his request he is in no way likely to be benefited by this bizarre exercise.
51 First to the fact situation.
The Union of India has framed Central Government Health Scheme and in implementation thereof has set up various institutions for medical relief and medical education.
A Central Health Service became a necessity for effectively implementing the scheme.
With a view to constituting the Service, Central Health Service Rules 1963 ( '1963 Rules ' for short), were framed and brought into operation on May 15, 1963.
The Rules envisaged categorisation of personnel manning the Service into five different categories, to wit, category 'A ' supertime scale Rs. 1600 2000, category 'B ' supertime scale Rs. 1300 1600, category 'C ' senior scale Rs. 675 1300, category 'D ' junior scale Rs. 425 950 and category 'E ' class II scale Rs. 325 800.
On account of various imponderables the Service could not be constituted and 1963 Rules were amended by Central Health Service (Amendment) Rules, 1966, ( '1966 Rules ' for short).
Initial constitution of Service was to be on and from September, 9, 1966.
1966 Rules contemplated again the division of Service into four categories, namely, category I comprising supertime grade I Rs. 1800 2250; supertime grade II Rs. 1300 1800; category II consists of Specialists ' grade Rs. 600 1300; category III includes General Duty Officers grade I Rs. 450 1250; and category IV comprises General Duty Officers grade II Rs. 350 900.
1966 Rules provided the method of initial constitution of the Service.
Rules 7A(1) and 7A(2) provided for absorbing departmental candidates holding posts in categories 'A ' and 'B ' under 1963 Rules in posts in supertime grade I and supertime grade II respectively of reorganised Service under the 1966 Rules.
Those in service on September 9, 1966, and holding post in categories 'C ', 'D ' and 'E ' were absorbed either in the Specialists ' grade or General Duty Officers, grade as the case may be.
For the purposes of constitution and absorption of departmental candidates on the date of initial constitution of re organised service a Selection Committee was set up and absorption was made in accordance with the recommendations of the Committee This process of absorption was over in March 1967, but the constitution of the Service was deemed to be effective from September 9, 1966.
There were some promotions to supertime grade II up to 1971 but as they are not the subject matter of dispute in this appeal they may be ignored.
There was also direct recruitment to the Service between 1966 and 1971.
Between February 1971 to July 17, 1978, when the appellant came to be promoted to supertime grade II, respondents 4 to 24 were promoted on different dates to supertime grade II, The promotion of respondents 4 to 24 is challenged by the appellant on diverse grounds 52 but the principal contention is that their promotions are in contravention of rule 8 of 1966 Rules.
Rule 8 provides for future maintenance of the Service.
Relevant for the present appeal is rule 8(3) which provides for recruitment to supertime grade II both by promotion and nomination by direct recruitment.
As the appellant claims promotion to supertime grade II from February 18, 1971, and simultaneously questions promotion of respondents 4 to 24 to supertime grade II on various dates after February 18, 1971, and before July 17, 1978, when he was actually promoted, on a certain interpretation of the relevant rule, it may be here extracted: xx xx xx "8.
Future maintenance of the service After appointments have been made to the Service under rule 7 and rule 7A, future vacancies shall be filled in the following manner, namely: xx xx xx (3) Supertime Grade I (a) Fifty percent of the vacancies in Supertime Grade II shall be filled by promotion of: (i) General Duty officers, Grade I, with not less than ten years of service in that category; or (ii) Specialists ' Grade officers with not less than eight years of service in that category; in the ratio of 2:3 on the recommendation of a Departmental Promotion Committee on the basis of merit and seniority of the officer 's concerned; Provided that no person shall be eligible for appointment to any such post unless he possesses the qualifications and experience requisite for appointment to such post.
Provided that where the case of an officer appointed to any post in the grade of General Duty Officer, Grade I or the Specialists ' Grade, as the case may be, is considered for the purposes of promotion to any posts in Supertime Grade II under this sub rule, the cases of all persons senior to such officer in the grades of General Duty Officer, Grade I or Specialists ' Grade, as the case may be, shall also be considered, notwithstanding that they may not have rendered 10 years or 8 years of service, respectively, in those grades".
To appreciate the contention of the appellant as to how he claims promotion to supertime grade II on February 8, 1971, it may be noted 53 that effective from that date the Central Government converted one post from amongst unspecified specialists ' Grade posts in supertime Grade II in Ophthalmology Speciality at Willingdon Hospital and transferred Dr. B.S. Jain, respondent 3, who was then working as Chief Ophthalmologist cum Associate Professor of Ophthalmology, Himachal Pradesh Medical College, Simla, and offered the vacancy in super time grade II caused by the transfer of respondent 3, to appellant who was next in seniority by way of promotion on ad hoc basis as per memorandum dated December 7, 1970.
Appellant responded to this offer as per his letter dated December 9, 1970, wherein after putting forward various personal inconveniences and a possible loss in emoluments even on promotion, he concluded his response to the offer as under: "In view of my personal problems and in the public interest I most humbly request that this promotion may kindly be granted to me while in Delhi.
" Thereafter the Government offered the post to Dr. Radha Natarajan but she declined the offer.
Subsequently the Government offered the post to Dr. M.C. Sharma who accepted the same but he was not appointed and ultimately Dr. G.C. Sood was promoted to supertime grade II post and was appointed at Simla.
Appellant contends that when a post in Ophthalmology at Willingdon Hospital was created on February 1, 1971, by conversion of one post from amongst unspecified Specialists ' grade posts in supertime grade II that post could only have been filled in by promotion from amongst those holding the post in Specialists ' grade in ophthalmology speciality and he being the seniormost and otherwise qualified, he should have been promoted from that date.
Simultaneously he contends that filling in the post so created in supertime grade II at Willingdon Hospital by transfer of respondent 3 Dr. B.S. Jain was in violation of the statutory rule and hence invalid.
He also contends that as he was not qualified to hold the post of Chief Ophthalmologist cum Associate Professor of Ophthalmology, Himachal Pradesh Medical College, Simla, because it was a teaching post and he lacked teaching experience which was an essential qualification, the offer of that post to him was merely an eye wash and he could not have accepted the same.
It is necessary to examine three different limbs of the submission separately.
Rule 5 of 1966 Rules provides for authorised strength of the Service.
The authorised strength of the various categories of the service on the date of commencement of 1966 Rules shall be as specified in the first schedule.
Part A of the first schedule deals with supertime 54 grade I and Part B deals with supertime grade II.
Part C deals with Specialists ' grade.
The vertical promotional channel is from specialists ' grade and General Duty Officers Grade I to supertime grade II and from thereon to supertime grade I.
On the date of initial constitution of Service there were 275 permanent and 102 temporary, in all 377 posts in specialists ' grade.
Out of this strength of posts in specialists ' grade, 28 posts were upgraded to supertime grade II, 19 being classified as unspecified specialists ' posts and 9 unspecified posts.
To that extent the permanent strength of posts in specialists ' grade was reduced by 28 so as to leave it at 247.
There is no dispute that 19 unspecified Specialists ' posts and 9 unspecified posts were upgraded to supertime grade II.
The controversy is how these posts were to be filled in.
Appellant contends that as these 28 posts were in Specialists ' grade and the strength of Specialists ' grade posts was reduced by 28, whenever any post out of these 28 posts added to supertime grade II is required to be filled in, it can only be filled in by promotion from amongst those originally belonging to specialists ' grade, i.e. category 'C ' under 1963 Rules.
Simultaneously he contends that as these unspecified specialists ' grade posts and unspecified posts, 28 in number, can be filled in from those belonging to specialists ' grade, ipso facto they can only be filled in by promotion and not either by direct nomination or by transfer.
In support of this submission reliance is also placed on an affidavit filed on behalf of Union of India in a petition filed by Dr. B.S. Jain wherein it was in terms stated that these 28 posts could only be filled in by promotion and in no other manner.
The raison d 'etre for upgrading the 28 posts from specialists ' grade to supertime grade II yet dividing them in two separate categories each having its own nomenclature, viz., 19 posts designated as unspecified Specialists ' grade posts and 9 designated as unspecified posts is not difficult to discern.
Unlike other professions, medical profession has developed branchwise expert specialised knowledge referable generally to number of parts in which human anatomy is divisible.
General medicine and general surgery are two broad genus but under each one of them there are numerous specialities and there is intensive study and research in speciality for being qualified for the speciality.
Being an expert in any one speciality simultaneously results in being excluded from other specialities even though the specialities may be species of a genus like general medicine or general surgery.
Again, in each speciality there will be a post of a Lecturer, an Assistant Professor, an Associate Professor and a Professor with a vertical movement by way of promotion.
In a non teaching hospital there will be posts like Junior Surgeon, 55 Senior Surgeon, Head of the Department and so on.
In a profession so compartmentalised specialitywise, ex hypothesi it is difficult to provide for promotional avenue by way of a general seniority list integrating different specialities categorywise, cadrewise or gradewise.
If such a general seniority list including persons belonging to different specialities albeit in the same grade is drawn up for purposes of promotion it might lead to a startling result because the need may be of a promotional post in a speciality and the man at top of the seniority list may not belong to that speciality but may belong to a different speciality and if any promotion was to be given to him to a post in a speciality for which he is neither qualified nor eligible it would be impossible to give vertical promotions by referring to such general seniority list.
If the promotion is to a post generally called administrative post in a hospital a general seniority list including experts belonging to different specialities may be helpful but when promotions are to be given to posts in different specialities a general seniority list is not only unhelpful but may really impede the process of promotion.
Again, demands of different specialities for additional strength may differ from hospital to hospital, from area to area and even from time to time.
In order to meet such unforeseen eventualities the rules provide for an addition to the strength of supertime grade II by keeping 19 posts designated as unspecified Specialists ' grade posts and 9 unspecified posts in a pool.
Whenever a demand came for providing a higher post in supertime grade II in any particular speciality ordinarily where the strength of the service is prescribed a post will have to be created which any one familiar with bureaucratic jagornot would immediately realise how time consuming it is.
Anticipating such a situation and to meet with the demands of specialities within a reasonable time it was provided that there would be a pool of 19 unspecified Specialists ' posts in supertime grade II and 9 unspecified posts also in supertime grade II.
This would facilitate conversion from the pool of unspecified Specialists ' posts of an unspecified Specialists ' post to a specified Specialist post in a speciality where a need has been felt.
Once the need is felt and a post is converted from an unspecified post to a specified post in supertime grade II it becomes an addition to the strength of that speciality and the post can be filled in, in accordance with the relevant rule.
But it is implicit in this arrangement that the person to be appointed to such a post would be one who is eligible to be appointed to that speciality and not some one who is on top of the general seniority list in Specialists ' grade or general duty officers ' grade from which promotion is to be made.
If promotion has to be made from a general seniority list which includes all Specialists in the Specialists ' grade the one at the top may be a Cardiologist and the post may be converted into Anesthesiology and it 56 does not require long persuasive argument to hold that a Cardiologist cannot be appointed as an Anaesthetic.
It is, therefore, crystal clear that when a post from amongst unspecified Specialists ' posts is converted to a specified post which means specified in the speciality in which a need has been felt from amongst those in the specialists ' grade belonging to that speciality and in order of their inter se seniority a promotion could be given.
This position is inescapable and it is difficult to comprehend a position contrary to this.
In fact, this situation has been expressly recognised by this Court in Union of India & Ors.
vs section B. Kohli & Another, wherein it was held that for being appointed as a Professor in a particular speciality in that case Orthopaedics, the condition that a person must have a post graduate degree in Orthopaedics would not result in any classification without reference to the objectives sought to be achieved and this would not result in any discrimination nor would it be violative of Article 16.
In passing a contention of the appellant that all 28 posts which were deducted from the strength of permanent posts in Specialists ' grade and added to supertime grade II must on that account alone be filled in by promotion from those belonging to the specialists ' grade only may be examined.
There is no merit in this contention.
If there was any substance in this contention there was no reason to provide for two different designations and divide the 28 posts in two different nomenclatures.
28 posts are made up of 19 posts designated as unspecified Specialists ' posts and 9 unspecified posts.
Undoubtedly 19 posts which were designated as unspecified Specialists ' post must be filled in from amongst those belonging to the Specialists ' grade but that itself also shows that the remaining 9 unspecified posts can be filled in from amongst those who may be promoted from 'General Duty Officers grade I because General Duty Officers grade I are also promotable to supertime grade II.
The nomenclature unspecified Specialists ' post and unspecified post provides an effective answer and indicates that while in the case of the former promotion must be given from Specialists in respect of the latter General Duty Officers Grade I would be eligible for promotion.
Merely because all 28 posts were deducted from the strength of posts in Specialists ' grade it could not be said that all 28 posts would be available for promotion to those belonging to Specialists ' grade only.
The language employed in rule 5 also points in this direction.
There is, therefore, no substance in the contention that all 28 posts must be filled in by promotion from amongst those who belong to Specialists ' grade only.
57 The last limb of the argument is that the 19 unspecified Specialists ' posts in supertime grade II can only be filled in by promotion and not in any other manner and particularly not by transfer.
The provocation for this submission is posting of Dr. B. section Jain in supertime grade II post created at Willingdon Hospital in February 1971.
Undoubtedly one unspecified Specialists ' grade post was converted and was designated as specified post in supertime grade II in Ophthalmology speciality at Willingdon Hospital in February 1971.
Appellant says that once an unspecified Specialists ' grade post was converted into a specified post and that as it was assigned to Ophthalmology speciality, he being the seniormost Ophthalmologist and qualified for the post, that post could only be filled in by promotion and he should have been promoted and the posting of Dr. B. section Jain by transfer to that post was illegal and invalid.
Rule 8 provides for future maintenance of the Service.
Rule 8(3) provides for 50% of the vacancies in supertime grade II to be filled in by promotion of General Duty Officers Grade I and Specialists ' grade officers in the ratio of 2:3 and the remaining 50% of the vacancies to be filled in by direct recruitment in the manner specified in the second schedule.
Now, once an unspecified specialists ' grade post in supertime grade II is converted and made a specified post in a speciality it is an addition to the strength of the speciality and the filling in of such post shall be governed by rule 8 (3).
Undoubtedly if it is to be filled in by promotion, that would only be from amongst those belonging to Specialists ' grade officers as the converted post was unspecified Specialists ' post.
But to say that it can be filled in only by promotion is to ignore the mandate of statutory rule 8(3) which provides for filling in posts in supertime grade II by either promotion or nomination in the ratio therein prescribed.
Once there is a post in supertime grade II which is to be filled in subsequent to the initial constitution of the Service, rule 8 (3) will be attracted in all its rigour.
And it should not be overlooked that rule 8 (3) provides for filling in of posts in supertime grade II by promotion as well as by direct recruitment in the ratio of 1:1.
On a true interpretation of the 1966 Rules in general and rule 8 (3) in particular it could not be, gainsaid that whenever an unspecified Specialists ' post is converted into a specified post and assigned to a speciality it can be filled in either by promotion or by direct recruitment as the situation warrants according to the rule and as determined by the quota rule.
But it was very strenuously contended that the Central Government in implementing the rule has understood and in fact implemented the rule to this effect that whenever an unspecified Specialist 's post is converted as a specified post and assigned to a speciality it can only be filled in by promotion.
Reliance was placed upon an affidavit made on behalf of the Central Government in a writ 58 petition filed by Dr. B. section Jain in Delhi High Court.
In the counter affidavit on behalf of the Central Government a stand was taken that the 19 unspecified Specialists ' posts were meant only for promoting category 'C ' clinical Specialists to supertime grade II.
In Union of India vs Bhim Singh & Ors., the Court refers to the stand taken on behalf of the Union of India in that case as under: "Learned counsel for the appellant (Union of India) submits that these posts were included in supertime grade II not with reference to the actual number of officers who had completed 8 years of service or more on a particular date but only with a view to providing opportunities of promotion to the former Category 'C ' officers holding clinical Specialist posts".
It does appear that such a stand was taken on behalf of the Union of India but simultaneously it may be noted that the Court has not accepted the stand.
And it would be too late in the day to say that on such a stand of the Union of India, if it runs counter to the rule explicit in meaning, any argument can be founded or any relief can be claimed unless estoppel is urged.
And no such estoppel is claimed In P. C. Sethi & Ors.
vs Union of India & Ors., the petitioners urged that the view put forward on their behalf had been admitted by the Government in its affidavit filed in connection with certain earlier proceedings of similar nature and other admissions in Parliament on behalf of the Government.
Negativing this contention this Court held that such admissions, if any, which are mere expression of opinion limited to the context and not specific assurances, are not binding on the Government to create and estoppel.
Similar view was also expressed in J. K. Steel Ltd. vs Union of India where following the earlier decision of this Court in Commissioner of Income tax, Madras vs K. Srinivasan and K. Gopalan, it was observed that the interpretation placed by the Department on various sub sections in the instructions issued by the Department cannot be considered to be proper guide in a matter wherein the construction of a statute is involved.
Therefore, it cannot be said that 19 unspecified Specialists ' posts could only be filled in by promotion and such an interpretation or stand would run counter to the express provision contained in rule 8(3) which is statutory.
Even if such be the stand of the Central Government it will have to be negatived and was in fact negatived in the case of Dr. B. section Jain.
59 Incidentally it would be incongruous to hold that when a post is created in a certain grade, category or cadre and it is to be filled in, some one who is already in that grade, category or cadre cannot be transferred to that post and the post so vacated by him can be filled in, in the manner prescribed.
Even if there was some substance, though there is none, in the contention on behalf of the appellant that whenever unspecified Specialists ' post is converted into a specified post it can only be filled in by promotion yet when some one who is already in that grade is transferred to the newly created post and the post vacated by such transferred employee is offered by way of promotion which in fact was done in this case there is any violation of the rule.
As pointed out earlier, when a post is created it is an addition to the strength of that particular category and the additional strength has to be filled in the manner prescribed in the rule and that no sanctity attached to the place where the post is created but the sanctity attaches to the number of posts and the manner of filling them.
Now, Dr. B. section Jain was already holding the post in supertime grade II at Simla when a post in supertime grade II in Ophthalmology was created at Willingdon Hospital from amongst unspecified Specialists ' posts.
Even if this additional post has to be filled in by promotion as contended by the appellant, it is not open to him to urge that the post at Willingdon Hospital alone must have been filled in by Promotion.
Dr. B. section Jain was transferred to the post created at Willingdon Hospital and the post vacated by him which was in supertime grade II was offered to the appellant as and by way of promotion.
Therefore, even if the contention of appellant is to be accepted, there is no violation of rule 8(3).
Equally it is also not correct to contend that Dr. B. section Jain could not have been transferred to the post created at Willingdon Hospital.
Transfers in posts which are in the same grade or are considered equivalent can be affected on administrative exigencies.
Once a new post is created and it is an increase in the strength of the Cadre in which the post is created, every one in that cadre is eligible to fill in that post and transfer is permissible.
Transfer of Dr. B. section Jain is, therefore, beyond question.
In E. P. Royappa vs State of Tamil Nadu & Anr., it is observed that the services of cadre officers are utilised in different posts of equal status and responsibility because of exigencies of administration and employing the best available talent in suitable post.
There is no hostile discrimination in transfer from one post to other when the posts are of equal status and responsibility.
Therefore, it is futile to urge that filling in the post created at Willingdon Hospital in supertime grade II by transfer of Dr. B. section Jain, a person already promoted to supertime grade II was invalid 60 in as much as the post was not filled in by promotion or direct recruitment but by transfer.
The next contention is that the refusal of the appellant to accept the post at Simla offered to him will not debar him from promotion because the appellant was not qualified for the post at Simla.
If an employee eligible for promotion is offered a higher post by way of promotion, his refusal to accept the same would enable the employer, the Central Government in this case, to fill in the post by offering it to a junior to the Government servant refusing to accept the post and in so acting there will be no violation of article 16.
Further, the Government servant who refuses to accept the promotional post offered to him for his own reasons cannot then be heard to complain that he must be given promotional post from the date on which the avenue for promotion opened to him.
Appellant being conscious of this position tried to circumvent it by saying that the Post at Simla offered to him by way of promotion in super time grade II was a teaching post for which he was not qualified and, therefore, his refusal to accept the same cannot come in his way from claiming promotion from the very date on which he refused to accept the promotion to a post for which he was not qualified.
Appellant went so far as to suggest that the Government action in offering him the post at Simla was actuated by malice in that while making a show of offering him a promotional post it so deliberately acted as would impel the appellant to refuse the same.
Says the appellant that one post from the pool of unspecified specialists, posts was converted to a specified post in Ophthalmology and was sanctioned at Willingdon Hospital which is not a teaching hospital and, therefore, the appellant was fully qualified for being promoted to that post.
Instead of acting in this straight forward manner the Government transferred Dr. B. section Jain from Simla to the post newly created at Willingdon Hospital and purported to offer the Simla post to the appellant for which appellant was not qualified and thus deliberately thwarted the promotional opportunity of the appellant and that this smacks of malice.
To substantiate this submission the appellant points out that the designation of the post at Simla was Chief Ophthalmoligist cum Associate Professor of Ophthalmology, Himachal Pradesh Medical College, Simla.
This according to the appellate was a teaching post and the qualification prescribed by the regulation framed by the Medical Council of India requires as an essential qualification a teaching experience as Reader or Assistant Professor in Ophthalmology for five years in a Medical College after requisite post graduate qualification.
It was further stated that the appellant had no teaching qualification though he started teaching at the Safdarjang Hospital when he was recognised as a post graduate teacher in Ophthalmology but 61 his teaching experience extended to barely two weeks.
It was also said that essential teaching experience prescribed by the Medical Council of India under its regulation is not relaxable and that, therefore, appellant was not qualified for the post of Associate Professor which was offered to him.
In S.B. Kohli 's case (Supra) this Court did observe that a discretion to relax teaching experience qualification is conferred only on the U.P.S.C. in cases of direct recruitment and not to the Departmental Promotion Committee in case of promotion.
That being the intent of the law it is to be given effect to.
This observation is in a slightly different context but one may safely proceed on the assumption that essential teaching qualification for the post of an Associate Professor prescribed by Medical Council of India is not relaxable.
Therefore it can be said with some justification that the appellant who did not have the requisite teaching experience was not qualified for the post of Associate Professor.
But this want of qualification impelling refusal to accept promotion appears to be an afterthought on his part.
When the promotional post was offered to him as per letter dated December 7, 1970, appellant did not reply by saying that he was not qualified for the post.
In his reply dated December 9, 1970, to the offer made by the Government appellant pointed out that he was involved in some litigation with regard to his house and that his stand for eviction would be weakened by his transfer.
He then proceeded to point out that he was suffering from chronic bronchitis and that the climate at Simla may not suit him.
He also pointed out the adverse effect of climate on the health of his wife.
He then proceeded to point out that apart from his personal problems he was engaged in the Safdarjang Hospital for teaching of post graduate students and, therefore, he requested the Government "the post of Chief Ophthalmologist cum Associate Professor of Ophthalmology may kindly be bestowed on me at Safdarjang Hospital where there is essential need for such a post".
Could this be the stand of a person offered a promotional post honestly believing that he was not qualified for the same? The post offered to him was of Chief Ophthalmologist cum Associate Professor.
Appellant believes and now says that he was not qualified for the same if the post was at Simla but if the same post was created at Delhi with the same designation with the same responsibility for teaching and that too at the post graduate level he considered himself to be fully qualified for the same and requested the Government to bestow that post on him.
He then proceeds to point out his merits and puts forth his disinclination for being promoted to the post at Simla.
In the face of his bold statement that he is prepared to be appointed as Chief Ophthalmologist continuing to do teaching work at the post graduate level at the Safdarjang Hospital, he now wants to assert that he was not qualified for the post.
This convenient after 62 thought cannot decry the fact that the appellant declined to accept the post at Simla not because he believed he was not qualified for the post but because he was not inclined to leave Delhi, may be for reasons which may be true and compelling for him.
This becomes explicit from a further averment in paragraph 7 of his reply wherein he pointed out to the Central Government that even though he was selected by the U.P. Government for the post of Chief Medical officer, Gandhi Memorial Eye Hospital, Aligarh, on a fabulous salary of Rs. 3,000/ p.m. and which offer was transmitted to him through the Government so as to enable the Government to release him and although the Government was considering his release on deputation for the post but he himself declined the offer because of domestic problems.
There is thus no room for doubt that the appellant considers himself qualified for any post in Delhi and was under no circumstances willing to leave Delhi and his disinclination to accept any post at Simla stemmed not from his honest belief that he was not qualified for the post but because he was not inclined to leave Delhi.
Undoubtedly it may be that under the regulation stricto sensu he may not be qualified for the post of Associate Professor because he did not possess the requisite teaching experience.
But an ad hoc arrangement could have been made and it was open to the central Government, if the appellant had accepted the post, to move the Medical Council of India to permit the Central Government to appoint the appellant at Simla.
Some way could have been found but the door was bolted by the appellant himself declining the offer for reasons other than his qualification which he may have found compelling.
In this background it is difficult to accept the submission of the appellant that the offer made by the Government was an eye wash or a make believe and, therefore, his refusal to accept the offer of promotion would not postpone his promotion.
Incidentally it would be advantageous to take note of the fact at this stage that the appellant was promoted to supertime grade II on July 17, 1978 and between February 1971 when he declined to accept promotion and July 1978 when he was in fact promoted, no one junior to him in the speciality to which he belongs was ever promoted overriding his claim to supertime grade II.
Therefore, if since his refusal to accept promotion at Simla appellant was never superseded by any one junior to him in his speciality it is difficult to entertain the contention that in refusing promotion to him when some posts were converted from unspecified Specialists ' posts into different specialities and were filled in by those who were qualified to be promoted in the respective speciality in which the post was created he could be said to have been superseded in violation of article 16.
And in this view of the matter nothing more need be examined but as certain other contentions were advanced 63 which even if accepted would not in any case benefit the appellant, it appears to us an exercise in futility but we would rather dispose them of than gloss over them.
In the High Court appellant canvassed twofold contention that between 1966 and 1971, i.e. after the initial constitution of service and before the proposal offering promotion to the appellant at Simla was made 25 promotions were given to supertime grade II to persons who were ineligible for the same and secondly after February 1971 and before July 1978 when he was actually promoted to supertime grade II, 29 promotions were given to supertime grade II some of whom are respondents 4 to 24 and that their promotion was in contravention of rule 8(3) of the Rules and, therefore, invalid.
Before this Court the first limb of the argument, namely, invalidating promotions between 1966 and 1971 to supertime grade II was not canvassed.
It was the second limb of the argument that was pressed into service.
None of those who were promoted between February 1971 and July 1978 belonged to the speciality to which appellant belongs.
Each of them belonged to a different speciality and admittedly appellant was not qualified for being promoted to any supertime grade II post in the speciality in which each one of them was promoted.
When this aspect became clear a question was posed to the appellant how he would be benefited even if his contention were to prevail that none of them was eligible for promotion to supertime grade II and, therefore, the promotion of each of them deserved to be quashed.
The answer was that there is a common seniority list of persons belonging to supertime grade II and promotion to supertime grade I is by seniority and that promotion of respondents 4 to 24, if quashed, would push the appellant higher up in seniority above them and would enhance his chances of promotion to supertime grade I. Remote chances of promotion could hardly be said to be condition of service which if impaired would be violative of article 16.
Even assuming that a remote chance of promotion if adversely affected would give a cause of action, it was made clear that the appellant is retiring on superannuation in the last quarter of this year and that even if he is assigned a deemed date of promotion somewhere in February 1971 yet there are number of persons above him in supertime grade II who were promoted between 1966 and 1971 and appellant has not even a remote chance of promotion.
Appellant at that stage reacted by saying that even if it be true, yet the promotions of respondents 4 to 24 ought to be quashed because when he with respondents 4 to 24 and others belonging to supertime grade II attend a meeting convened to discuss some administrative matter or for holding charge of higher post temporarily vacant they claim seniority over him and his dignity is impaired.
This calls for no comment save 64 and except saying that the approach appears to be more emotional rather than realistic.
However, the contention may be examined on merit.
Promotion of respondents 4 to 24 was questioned on the ground that each of them was ineligible for promotion to supertime grade II on the date on which each of them was promoted in view of the provision contained in rule 8(3).
Rule 8(3) has been extracted herein before.
The contention is that since the initial constitution of service on September 9, 1966, any future promotion to supertime grade II from departmental candidates could be from amongst those who qualify for the same as provided for in rule 8(3).
Apart from academic qualification, the experience qualification prescribed is that, the General Duty Officers grade I and Specialists ' grade officers should have put in 10 years and 8 years of service respectively in that category.
Appellant contents that service in the category means service in that category which was constituted under the 1966 amendment rules.
Rule 2(c) defines category to mean a group of posts specified in column 2 of the table under rule 4.
Rule 4 provides for classification, categories and scales of pay.
It provides that there shall be four categories in the service and each category shall consist of the grade specified in column 2 of the table appended to the rule.
The four categories are: first category which includes supertime grade I and supertime grade II posts.
Category two is Specialists ' grade posts, category three comprises General Duty officers, grade I and category four includes General Duty Officers grade II.
It was contended that the service to be rendered for the qualifying period must be in the category and, therefore, a general Duty Officer grade I can only become eligible for promotion after he renders 10 years of service in that category which came into existence on September 9,1966, and this would apply mutatis mutandis to the Specialists ' grade officers who must put in 8 years of service in the category which came into existence on September 9, 1966.
If this contention were to prevail, apart from anything else, appellant himself would not have been qualified for promotion to supertime grade II in February 1971 from which date he claims as being eligible for promotion to supertime grade II because he had not put in 8 years of service in the category of specialists ' grade officers formed on September 9, 1966.
That apart, it is impossible to overlook the history of the Service.
The rules were initially framed in 1963.
At that time the service was sought to be classified in 5 categories styled category 'A ' to category 'E '.
Expression 'category ' in 1963 Rules was defined to mean a group of posts carrying the same scale of pay.
Another salient feature of which notice should be taken is that save and except upward revision in scale, category I under the 1966 amendment Rules includes cate 65 gories 'A ' and 'B ' under 1963 Rules.
Category 'C ' has been designated as Specialists ' grade, i.e. category II under the 1966 Rules.
Category 'D ' is equated with General Duty Officers grade I styled category III and category 'E ' is equated with General Duty officers grade II, i.e. category IV.
Expression 'service in the category ' has to be understood in this historical background.
It is difficult to entertain the contention that the past service of Specialists ' category 'C ' officers got wholly wiped out merely because the nomenclature of category 'C ' Specialists officers was changed to Specialists ' grade officers replacing the expression 'category C ' by category II.
And that would apply mutatis mutandis to General Duty Officers grade I and grade II.
The change in the definition of the expression 'category ' appears to be instructive in that by the change service in the post is emphasised and the question of the grade of pay is relegated into background.
And this change appears to be with a purpose inasmuch as when certain qualifying service is prescribed for being eligible for promotion in a category the emphasis is on service rendered in a post irrespective of the grade.
A specialists ' grade officer belonging to category II was a specialists ' grade officer in category C. He was even then eligible for promotion to supertime grade II.
Was it ever intended that a Specialists ' grade officer belonging to category 'C ' under 1963 Rules who had put in more than 8 years of service but who was not promoted prior to September 9, 1966, the date of initial constitution of service, or on the date of initial constitution of service, would be ineligible for promotion for a period of 8 years simply because the designation of the category changed? Was it intended that there should be a complete hiatus for a period of 8 years in promoting Specialists ' grade officers to supertime grade II and for a period of 10 years in case of General Duty Officers grade I.
There is no warrant for such an inference from the Rules.
Such an intention cannot be attributed to the framers of the Rules nor is it possible to accept the submission of the appellant that the posts could have been filled in by direct recruitment because where candidates eligible for promotion were not available it was open to resort to direct recruitment as provided in the Rules.
It is a well recognised canon of construction that the construction which makes the Rules otiose or unworkable should be avoided where two constructions are possible and the Court should lean in favour of the construction which would make the rule workable and further the purpose for which the rule is intended.
While prescribing experience qualification in 1966 Amendment Rules, the framers of the Rules could not have intended to ignore wholly the past service.
A specialist who was in category 'C ' was included in category II with the designation specialists ' grade officer.
Similarly, General Duty Officer grade I in category 'D ' acquired the same nomenclature General Duty Officer grade I in cate 66 gory III.
There was an upward revision of pay scales of both the categories.
Should the change in designation be understood to mean that the past service rendered as Specialist or as General Duty Officer is wholly wiped out for any future promotion ? Even after change of designation it is not suggested that the duties underwent any change.
Same duty was performed a day prior to September 9, 1966, and the day thereafter by both the categories in the respective posts.
In this background the High Court was right in holding that the word 'category ' used in rule 8(3)(a) has to be understood to mean the post included in that category and consequently service in that category would mean service in a post included in that category.
The appellant contended that this construction would run counter to the posting of former categories 'D ' and 'E ' officers on probation on September 9, 1966, in specialists ' grade and General Duty Officers grade I.
In this connection it must be recalled that on initial constitution of Service some persons who were in the category of General Duty Officers were absorbed and appointed in Specialists ' grade and vice versa was true of some persons.
It is equally true that Officers belonging to categories 'D ' and E ' were considered in a category lower to category 'C '.
It is equally possible, therefore, that on September 9, 1966, i.e. the date of initial constitution of Service some of the officers belonging to categories 'D ' and 'E ' who were absorbed in categories II and III respectively may have been put on probation but for qualifying service for upward promotion service rendered as probationer is not to be ignored.
Viewed from either angle it is crystal clear that service rendered in equivalent post prior to the date of initial constitution of Service could be taken into account in calculating qualifying service for next promotion.
This was the stand taken by the Government in the affidavit filed in Civil Writ No. 1155/71 filed by Dr. Chandra Mohan in the High Court of Delhi and that appears to be consistent with the construction of rule 8(3).
The contention, therefore, that executive instruction cannot run counter to the statutory rule must be rejected as untenable in the facts of this case.
It was next contended that the Government was guilty of legal malice in that in February 1971 on a need being felt, a post in supertime grade II in Ophthalmology speciality was sanctioned at Willingdon Hospital and filled in by transfer of Dr. B.S. Jain overlooking and ignoring the rightful claim of appellant and on transfer of Dr. B.S. Jain on March 7, 1972, to Safdarjang Hospital, the post was also transferred to Safdarjang Hospital.
In this connection appellant also pointed out that there is material on record to show that the Superintendent of Willingdon Hospital felt an acute need for a post in super 67 time grade II in Ophthalmology speciality and yet it was not created while on the other hand in order to accommodate some favourites like respondents, 4, 5,8,9,12,13 and 15 some posts in different specialities where they could be accommodated were created without the need for the same.
There is evidence to the effect that appellant had sent a proposal duly recommended by Medical Superintendent of Safdarjang Hospital to the authorities for creating a supertime grade II post in Eye Department in May 1971 as per letter dated May 3, 1971.
There is also material to show that some ad hoc appointments were made in supertime grade II.
It is, however, not possible to strike down those appointments on the ground that some posts were created in supertime grade II though not needed wherein some of the respondents were promoted or that there was no justification for creation of posts or for making ad hoc appointments.
It should be distinctly understood that not a single post was created in Ophthalmology speciality to which appellant could have been appointed.
The need for the post of the requirements of the hospital, or the need for an ad hoc or additional appointment is a matter which the Government is competent to decide and in the absence of requisite material the Court cannot interpose its own decision on the necessity of creation or abolition of posts.
Whether a particular post is necessary is a matter depending upon the exigencies of the situation and administrative necessity.
The Government is a better Judge of the interests of the general public for whose service the hospitals are set up.
And whether a hospital catering to the needs of general public providing medical relief in different specialities has need for a particular post in a particular speciality would be better judged by the Government running the hospital.
If Government is a better judge it must have the power to create or abolish the posts depending upon the needs of the hospital and the requirements of general public.
Creation and abolition of posts is a matter of Government policy and every sovereign Government has this power in the interest and necessity of internal administration.
The creation or abolition of post is dictated by policy decision, exigencies of circumstances and administrative necessity.
The creation, the continuance and the abolition of post are all decided by the Government in the interest of administration and general public (see M. Ramanatha Pillai vs The State of Kerala and Anr).
The Court would be the least competent in the face of scanty material to decide whether the Government acted honestly in creating a post or refusing to create a post or its decision suffers from malafide, legal or factual.
In this background it is difficult to entertain the contention of the appellant that posts were created to accommodate some specific individuals ignoring the requirements of the hospital or the interests of the general public at large.
68 It was next contended that respondent 9, Dr. K.P. Mathur and respondent 23, Dr. A. R. Majumdar should have been considered ineligible for promotion because both of them were adversely commented upon by the Madras High Court as being negligent in discharge of duties and the Government had to pay a sum of Rs. 10,000/ as compensation by way of damages for their negligence.
He sought inspection of some files to substantiate this allegation.
Unfortunately though respondents 9 and 23 were made parties they did not appear to controvert this fact.
But it appears from the record that they were promoted after they were selected by the Departmental Promotion Committee and the promotion was approved by U.P.S.C. Appellant contended that this averment on his part has remained uncontroverted and it must be taken as having been admitted and proved.
It may be mentioned that in the petition filed by the appellant in the Delhi High Court this allegation was not specifically averred.
In a subsequent affidavit filed by him this allegation was put forth.
If respondents 9 and 23 had not appeared in the High Court the appellant should have shown that this subsequent affidavit was served upon them, and in that event alone some adverse inference may be drawn against them.
It may be that the Government may not be interested in either denying or admitting this averment which directly and adversely affects respondents 9 and 23.
However, in view of the fact that they were selected by the Departmental Promotion Committee and the promotion was approved by the U.P.S.C. it is difficult to entertain the contention at the hand of the appellant who is not in any way going to be benefited by the invalidation of their promotion.
It was incidentally urged that promotions given to respondents 9,12,13 and 15 must be set aside because they belonged to former category 'D ' and were given promotions against 19 unspecified posts in contravention of the affidavit of the Government.
As stated earlier, there were some specialists in category 'D ' also.
At the time of initial constitution of service those who qualified for being appointed General Duty Officers from category 'D ' were absorbed in category III and those who were eligible for being absorbed in Specialists ' grade were so absorbed.
After absorption they belonged to the respective category.
Thereafter on conversion of posts from the pool of 19 unspecified specialists ' posts they were promoted as being found qualified for the same and for the post to which each one of them was promoted appellant was not qualified and, therefore, the contention that the promotion of the aforementioned four respondents should be set aside has no merit in it.
Having examined the challenge to the promotion of respondents 4 to 24 on merits, it must be made clear that the appellant is least 69 qualified to question their promotions.
Each one of them was promoted to a post in supertime grade II in a speciality other than ophthalmology and appellant admittedly was not qualified for any of these posts.
Even if their promotions are struck down appellant will not get any post vacated by them.
Incidentally High Court also upheld their promotions observing that by the time the petition was heard each one of them had requisite service qualification and, therefore, the promotions could not be struck down.
Once the challenge on merits fails the second string to the bow need not be examined.
Having said all this, appellant is least competent to challenge their promotions.
In a slightly comparable situation this Court in Chitra Ghosh and Anr.
vs Union of India and Ors.
observed as under: "The other question which was canvassed before the High Court and which has been pressed before us relates to the merits of the nominations made to the reserved seats.
It seems to us that the appellants do not have any right to challenge the nominations made by the Central Government.
They do not compete for the reserved seats and have no locus standi in the matter of nomination to such seats.
The assumption that if nominations to reserved seats are not in accordance with the rules all such seats as have not been properly filled up would be thrown open to the general pool is wholly unfounded.
" It was last urged that the High Court has set aside the promotion of respondent 18, Dr. P. C. Sen who was promoted in 1971 and, therefore, there was an opening in supertime grade II in September 1971 and appellant should be considered eligible for promotion to the post from that date and that this Court should consider appellant 's eligibility for promotion from September 1971 and if found eligible, should grant the same.
Dr. P.C. Sen was General Duty Officer grade I and he was posted as Director of Health Services, Manipur.
Appellant contends that he was in Specialists ' grade and was senior to Dr. Sen and was not unqualified for the post of Director of Health Services, Manipur, but the post was not offered to him and, therefore, he must be considered eligible for promotion from the date on which Dr. P.C. Sen was promoted.
The High Court in L.P.A. 46/74 filed by the appellant has set aside the promotion of Dr. P.C. Sen as also of Dr. Jasbir Kaur but the High Court has not thought fit to direct the Government by a mandamus to consider eligibility of the appellant for the post of Director of Health Services, Manipur.
There is no material before us whether the appellant was qualified for the post.
If he was eligible it would be for the Government to consider how it should deal with the post.
We 70 are, however, surprised that the appellant who was not prepared to go to Simla in February 1971 would have been willing to go to Manipur in September 1971.
In our opinion it would be giving him an unfair advantage now by giving a technical benefit of a situation whereby promotion of Dr. Sen has been invalidated by the High Court.
Neither Dr. Sen nor the Government have preferred appeal against the judgment by which the promotions of Dr. P.C. Sen and Dr. Jasbir Kaur were invalidated by the High Court.
But the matter must remain at that stage and there is no justification for giving a direction that the appellant should be considered for the post which is deemed to have fallen vacant in September 1971 on the invalidation of promotion of Dr. P.C. Sen.
In this connection it may be pointed out that some time after the hearing was over in this Court learned counsel for the appellant has circulated a letter that the High Court has set aside the promotion of respondent 7, Dr. Ramesh Prasad Singh as also of respondent 21, Dr. Brij Gopal Misra.
It is undoubtedly true that the learned single Judge who heard the petition initially had set aside the promotion of Dr. Brij Gopal Misra to the post of Regional Deputy Director, N.M.E.P., Hyderabad.
But neither from the judgment of the learned single Judge nor from the judgment of the Division Bench it is possible to ascertain that the promotion of Dr. Ramesh Prasad Singh has been invalidated.
No direction in that behalf can be given.
Before we conclude it may be pointed out that on the conclusion of hearing of this appeal in order to heal the wound caused by impaired dignity of the appellant as herein before mentioned, a suggestion was made to the Government to see if the present appellant could be accommodated in some way where he may not feel the humiliation which he claims he suffers.
Mr. P. Parameswara Rao, learned counsel for the Government promised to discuss the matter with the Government and ultimately on March 7.
1980, the Central Government offered the post of Director and Head of the Department for a programme concerned with vision impairment and amelioration thereof.
In that post the appellant would be the Head of the Department and would continue to be in supertime grade II.
This offer did not appeal to the appellant and the matter was left at that.
There is no substance in any of the contentions urged on behalf of the appellant and, therefore, this appeal fails and it is dismissed with no order as to costs.
V.D. Appeal dismissed.
| IN-Abs | The Union of India has enacted Central Government Health Scheme and in implementation thereof has set up various institutions for medical relief and medical education.
A Central Health Service became a necessity for effectively implementing the scheme.
With a view to constituting the service, Central Health Service Rules, 1963 were framed and brought into operation on May 15, 1963.
The Rules envisaged categorisation of personnel manning the service into five different categories, to wit, category 'A ' supertime scale Rs. 1600 2000; Category 'B ' supertime scale Rs. 1300 1600; Category 'C ' Senior scale Rs. 675 1300, Category 'D ' Junior scale Rs. 425 950; and Category 'E ' class II scale Rs. 325 800.
On account of various imponderables the service could not be constituted and 1963 Rules were amended by Central Health Service (Amendment) Rules, 1966.
Initial constitution of service was to be on and from September 9, 1966.
1966 Rules contemplated again the division of service into four categories, namely, Category I comprising supertime scale Grade I Rs. 1800 2250; supertime scale grade II Rs. 1300 1800, Category II consists of Specialists ' grade Rs. 600 1300; Category III includes General Duty officers Grade I Rs. 450 1250.
and Category IV comprises General Duty officers Grade II Rs. 350 900.
1966 Rules provided the method for initial constitution of the service.
Rules 7A(1) and 7A(2) provided for absorbing departmental candidates holding posts in categories 'A ' and 'B ' under 1963 Rules in supertime Grade I and supertime Grade II respectively of reorganized service under the 1966 Rules.
Those in service on September 9, 1966 and holding posts in Categories 'C ', 'D ' and 'E ' were either absorbed in specialists ' grade or General Duty Officers Grade as the case may be.
For the purposes of selection and absorption of departmental candidates on the date of initial constitution of reorganised service, a Selection Committee was set up and absorption was made in accordance with the recommendation of the Committee.
This process of absorption was over in March 1967, but the constitution of the service was deemed to be effective from September 9, 1966.
Rule 2(c) defines category to mean a group of posts specified in column 2 of the table under Rule 4.
Rule 4 provides for classification categories and scales of pay.
Rule 5 of Rules 1966 provides for authorised strength of the service.
Rule 8 prescribes the manner in which future vacancies, after appointments have been made to the Service under Rule 7 and 7A shall be filled in Supertime Grade II.
45 The authorised strength of the various categories of the service on the date of commencement of 1966 Rules shall be as specified in the First Schedule.
The vertical promotional channel is from Specialists ' grade and General Duty officers Grade I to supertime Grade II and from thereon to Supertime Grade I. On the date of initial constitution of service there were 275 permanent and 102 temporary, in all 377 posts in Specialists ' grade.
Out of this strength of posts in specialists ' grade 28 posts were upgraded to supertime Grade II, 19 being classified as unspecified specialists ' posts and 9 unspecified posts.
The Central Government converted one post from amongst the 19 unspecified specialists ' grade posts in Supertime Grade II in Ophthalmology speciality in Willingdon Hospital and transferred one Dr. B. section Jain, respondent 3, who was then working as Chief opthalmologist cum Associate Professor of Ophthalmology, Himachal Pradesh Medical College, Simla, and offered the vacancy to in Supertime Grade II caused by the transfer of respondent 3 to appellant who was next in seniority by way of promotion on ad hoc basis as per Memorandum dated December 7, 1970.
As the appellant was prepared to accept only if the posting was at Delhi and not in Simla, one Dr. G. C. Sood was promoted to supertime Grade II post and was appointed at Simla.
The appellant, thereafter filed a writ petition praying for Mandamus that he may be deemed to have been promoted from February 18, 1971, the date when Dr. Jain was posted at Willingdon Hospital.
The appellant also questioned the promotions of respondents 4 to 24 to supertime grade II on various dates after February 18, 1971 and before July 17, 1978 when he was actually promoted on a certain interpretation of Rule 8(3) of the Central Health Service Rules 1963.
The High Court dismissed the writ petition.
A Letters Patent Appeal was partly allowed.
Hence the appeal by special leave.
The appellant contended that: (a) the promotions of Respondents 4 to 24 are in contravention of Rule 8 of 1966 Rules; and (b) when a post in Ophthalmology at Willingdon Hospital was created on February 1, 1971, by conversion of one post from amongst unspecified specialists ' grade posts in supertime Grade II, the post could only have been filed in by promotion from amongst those holding the post in specialists ' grade in Ophthalmology speciality and he being the senior most and otherwise qualified, he should have been promoted from that date; (c) filling in the post at Willingdon Hospital by transfer of respondent 3 was in violation of the statutory rule and hence invalid; (d) the offer of the post to him at Simla was an eye wash and malafide as he lacked teaching experience and the post is a teaching post; (e) "service in that category" means service in that category which was constituted under the 1966 amendment Rules and (f) rule 8(3) does not permit inter se transfers in posts which are in the same category.
Dismissing the appeal, the Court ^ HELD : 1.
Unlike other professions, medical profession has developed branchwise expert specialised knowledge referable generally to number of parts in which human anatomy is divisible.
General medicine and general surgery are two broad genus but under each one of them there are numerous specialities and there is intensive study and research in speciality for being qualified for the speciality.
Being an expert in any one speciality simultaneously results in being 46 excluded from other specialities even though the specialities may be species of a genus like general medicine or general surgery.
Again, in each speciality there will be a post of a Lecturer, an Assistant Professor, an Associate Professor and a Professor with a vertical movement by way of promotion.
In a nonteaching hospital there will be posts like Junior Surgeon, Senior Surgeon, Head of the Department and so on.
In a profession so compartmentalised speciality wise ex hypothesi it is difficult to provide for promotional avenue by way of a general seniority list integrating different specialities categorywise, cadrewise or gradewise.
If such a general seniority list including persons belonging to different specialities albeit in the same grade is drawn up for purposes of promotion it might lead to a startling result because the need may be of a promotional post in a speciality and the man at top of the seniority list may not belong to that speciality and the man at top of the seniority list may not belong to that speciality but may belong to a different speciality and if any promotion was to be given to him to a post in a speciality for which he is neither qualified nor eligible it would be impossible to give vertical promotions by referring to such general seniority list.
If the promotion is to a post generally called administrative post in a hospital a general seniority list including experts belonging to different specialities may be helpful but when promotions are to be given to posts in different specialities a general seniority list is not only unhelpful but may really impede the process of promotion.
Again, demands of different specialities for additional strength may differ from hospital to hospital, from area to area and even from time to time.
In order to meet such unforeseen eventualities the rules provide for an addition to the strength of supertime grade II by keeping 19 posts designated as unspecified Specialists ' grade, posts and 9 unspecified posts in a pool.
Whenever a demand came for providing a higher post in supertime grade II in any particular speciality ordinarily where the strength of the service is prescribed a post will have to be created which any one familiar with bureaucratic jaggornot would immediately realise how time consuming it is.
Anticipating such a situation and to meet with the demands of specialities within a reasonable time it was provided that there would be a pool of 19 unspecified specialists ' posts in supertime grade II and 9 unspecified posts also in supertime grade II.
This would facilitate conversion from the pool of unspecified Specialists ' posts of an unspecified Specialists ' post to a specified specialist post in a speciality where a need has been felt.
Once the need is felt and a post is converted from an unspecified post to a specified post in supertime grade II it becomes an addition to the strength of that speciality and the post can be filled in, in accordance with the relevant rule.
But it is implicit in this arrangement that the person to be appointed to such a post would be one who is eligible to be appointed to that speciality and not some one who is on top of the general seniority list in Specialists ' grade or general duty officers ' grade from which promotion is to be made.
If promotion has to be made from a general seniority list which includes all Specialists in the Specialists ' grade the one at the top may be Cardiologist and the post may be converted into Anesthesiology.
Certainly a Cardiologist cannot be appointed as an Anaesthetic.
Therefore when a post from amongst unspecified Specialists ' posts is converted to a specified post which means specified in the speciality in which a need has been felt from amongst those in the Specialists ' grade belonging to that speciality and in order of their inter se seniority a promotion could be given.
[54 FH, 55A H 56A B] Union of India and Ors.
vs D. B. Kohli and Anr., ; followed.
Merely because all 28 posts were deducted from the strength of posts in Specialists ' grade it could not be said that all 28 posts would be available for promotion to those belonging to Specialists ' grade only.
The language employed in rule 5 also points in this direction.
All the 28 posts need not necessarily be filled in by promotion from amongst those who belong to Specialists grade only.
Hence with the division of 28 posts in two different designations and dividing the 28 posts in two different nomenclatures.
28 posts are made up of 19 posts designated as unspecified Specialists posts and 9 unspecified posts.
Undoubtedly 19 posts which were designated as unspecified Specialists ' post must be filled in from amongst those belonging to the Specialists ' grade but that itself also shows that the remaining 9 unspecified posts can be filled in from amongst those who may be promoted from General Duty Officers grade I because General Duty Officers grade I are also promotable to supertime grade II.
The nomenclature unspecified Specialists ' post and unspecified post provides an effective answer and indicates that while in the case of the former promotion must be given from Specialists in respect of the latter General Duty officers Grade I would equally be eligible for promotion.
[56 D H] 3.
To interpret that 19 unspecified Specialists ' posts could only by filled in by promotion would run counter to the express provision contained in Rule 8(3) which is statutory.
Rule 8 of the Central Health Service Rules, provides for future maintenance of the service.
Rule 8(3) provides for 50% of the vacancies in supertime grade II to be filled in by promotion of General Duty Officers Grade I and Specialists ' grade officers in the ratio of 2 : 3 and the remaining 50% of the vacancies to be filled in by direct recruitment in the manner specified in the second schedule.
Now, once an unspecified Specialists ' grade post in supertime grade II is converted and made a specified post in a speciality it is an addition to the strength of the speciality and the filling in of such post shall be governed by rule 8(3).
Undoubtedly if it is to be filled in by promotion, that would only be from amongst those belonging to Specialists ' grade officers as the converted post was unspecified Specialists ' post.
But to say that it can be filled in only by promotion is to ignore the mandate of statutory rule 8(3) which provides for filling in posts in supertime grade II by either promotion or nomination in the ratio therein prescribed.
Once there is a post in supertime grade II which is to be filled in subsequent to the initial constitution of the service, rule 8(3) will be attracted in all its rigour.
[57 B E] Further Rule 8(3) provides for filling in posts in supertime grade II by promotion as well as by direct recruitment in the ratio of 1 : 1.
On a true interpretation of the 1966 Rules in general and rule 8(3) in particular it could not be gainsaid that whenever an unspecified Specialists ' post is converted into a specified post and assigned to a speciality it can be filled in either by promotion or by direct recruitment as the situation warrants according to the rule and as determined by the quota rule.
[57 E G] No argument can be founded or any relief can be claimed merely on a stand taken by the Union of India in their counter affidavit in an earlier writ petition, unless estoppel is claimed or urged.
Even if such be the stand of the Central Government it will have to be negatived and was in fact negatived in the case of Dr. B. section Jain.
[58C D] Union of India vs Bhim Singh, [1971] 2 SLR p. 111 @ 124; P. C. Sethi and Ors.
vs Union of India and Ors.
; at 210; J. K. Steel Ltd. vs 48 Union of India; , @ 498; Commissioner of Income Tax vs K. Srinivasan and K. Gopalan [1953] S.C.R. 486; applied.
When a post is created it is an addition to the strength of that particular category and the additional strength has to be filled in the manner prescribed in the rule and that no sanctity attaches to the place where the post is created but the sanctity attaches to the number of posts and the manner of filling them.
[59 B C] Transfers in posts which are in the same grade or are considered equivalent can be effected on administrative exigencies.
Once a new post is created and it is an increase in the strength of the cadre in which the post is created, every one in that cadre is eligible to fill in that post and transfer is permissible.
There is no violation of Rule 8(3) and transfer of Dr. B. section Jain was valid.
[59 E F] E. P. Royappa vs State of Tamil Nadu and Anr., ; at 363.
If an employee eligible for promotion is offered a higher post by way of promotion, his refusal to accept the same would enable the employer, the Central Government in this case, to fill in the post by offering it to a junior to the Government servant refusing to accept the post and in so acting there will be no violation of Art, 16.
Further, the Government servant who refuses to accept the promotional post offered to him for his own reason cannot then be heard to complain that he must be given promotional post from the date on which the avenue for promotion opened to him.
[60 B C] Undoubtedly, it may be that under the Medical Council Regulations stricto sensu, the appellant may not be qualified for the post of Associate Professor because he did not possess the requisite teaching experience.
But an ad hoc arrangement could have been made and it was open to the Central Government, if the appellant had accepted the post, to move the Medical Council of India to permit the Central Government to appoint the appellant at Simla.
Some way could have been found but the door was bolted by the appellant himself deciding the offer for reasons other than his qualification which he may have found compelling.
The offer made to him by the Government was not eye wash or make believe.
His refusal to accept the offer of promotion would postpone his promotion.
Further, since his refusal to accept the promotion at Simla and till July 1978, the appellant was never superseded by any one junior to him in his speciality it is difficult to entertain the contention that in refusing promotion to him when some posts were converted from unspecified Specialists ' posts into different specialities and were filled in by those who were qualified to be promoted in the respective speciality in which the post was created he could be said to have been superseded in violation of article 16.
[62 D H] 6.
Remote chances of promotion could hardly be said to be condition of service which if impaired would be violative of article 16.
Even assuming that a remote chance of promotion in adversely affected would give a cause of action, in view of appellants ' impending retirement on superannuation the argument would be of no avail to him.
[63 F G] 7.
The word 'category ' used in Rule 8(3) has to be understood to mean the post included in that category and consequently service in that category would mean service in a post included in that category.
[66 B C] 49 It is a well recognised canon of construction that the construction which makes the Rule otiose or unworkable should be avoided where two constructions are possible and the Court should lean in favour of the construction which would make the rule workable and further the purpose for which the rule is intended.
While prescribing experience qualification in 1966 Amendment Rules, the framers of the Rules could not have intended to ignore wholly the past service.
A Specialist who was in category 'C ' was included in category II with the designation Specialists ' grade officer.
Similarly, General Duty Officer grade I in category 'D ' acquired the same nomenclature General Duty Officer grade I in category III.
There was an upward revision of pay scales of both the categories.
The change in designation should not be understood to mean that the service rendered as specialist or as General Duty Officer is wholly wiped out for any future promotion.
Even after change of designation the duties never underwent any change.
Same duty was performed a day prior to September 9, 1966 and the day thereafter by both the categories in the respective posts.
Further this change was with a purpose in as much as when certain qualifying service is prescribed for being eligible for promotion in a category the emphasis is on service rendered in a post irrespective of the grade.
A Specialists ' grade officer belonging to category II was a Specialists ' grade officer in category C. He was even then eligible for promotion to supertime grade II.
It was never intended that a Specialists grade officer belonging to category 'C ' under 1963 Rules who had put in more than 8 years of service but who was not promoted prior to September 9, 1966, the date of initial constitution of service, or on the date of initial constitution of service, would be ineligible for promotion for a period of 8 years simply because the designation of the category changed.
It was never intended that there should be a complete hiatus for a period of 8 years in promoting Specialists ' grade officers to supertime grade II and for a period of 10 years in case of General Duty Officers grade I.
There is no warrant for such an inference from the Rules.
[65 A H, 66 A C] 8.
The contention that executive instruction cannot run counter to the statutory rule is untenable in the facts of this case.
Service rendered in equivalent post prior to the date of initial constitution of service could be taken into account in calculating qualifying service for next promotion.
[66 E F] 9.
The need for the post or the requirements of the hospital or the need for an ad hoc or additional appointment is a matter which the Government is competent to decide and in the absence of requisite material the Court cannot interpose its own decision on the necessity of creation or abolition of posts.
Whether a particular post is necessary is a matter depending upon the exigencies of the situation and administrative necessity.
The Government is a better judge of the interests of the general public for whose service the hospitable are set up.
And whether a hospital catering to the needs of general public providing medical relief in different specialities has need for a particular post in a particular speciality would be better judged by the Government running the hospital.
If Government is a better judge it must have the power to create or abolish the posts depending upon the needs of the hospital and the requirements of general public.
[67 C E] Creation and abolition of posts is a matter of Government policy and every sovereign Government has this power in the interest and necessity of internal administration.
The creation or abolition of post is dictated by police decision, 50 exigencies of circumstances and administrative necessity.
The creation, the continuance and the abolition of post are all decided by the Government in the interest of administration and general public.
The Court would be the last competent in the face of scanty material to decide whether the Government acted honestly in creating a post or refusing to create a post or its decision suffers from mala fide, legal or factual.
In this background it is difficult to entertain the contention of the appellant that posts were created to accommodate some specific individuals ignoring the requirements of the hospital or the interests of the general public at large.
[67 F H] M. Ramanatha Pillai vs State of Kerala and Anr., at 520; followed.
No adverse inference could be drawn against a party unless they appear before the Court and they are served with necessary papers.
[68 C D] In the present case, Respondents 9 and 23 had not appeared in the High Court and there is no evidence that the subsequent affidavit of the appellant was served on them.
It may be that the Government may not be interested in either denying or admitting this averment which directly and adversely affects respondents 9 and 23.
However, in view of the fact that they were selected by the Departmental Promotion Committee and the promotion was approved by the U.P.S.C. it is difficult to entertain the contention at the hand of the appellant who is not in any way going to be benefited by the invalidation of their promotion.
[68 B, D, E] 11.
Once the challenge on merits fails in a case, the second string to the bow need not be examined.
The appellant here, is least competent to challenge the promotions of Respondents 4 to 24.
[69 B C] Chitra Ghosh and Anr.
vs Union of India and Ors.
; @ 420.
|
N: Criminal Appeal No. 335 of 1974.
Appeal by special leave from the Judgment and Order dated 1 11 1973 of the Bombay High Court in Criminal Appeal No. 113 of 1972.
O. P. Rana and M. N. Shroff for the Appellant.
V. N. Ganpule and V. B. Joshi for the Respondents.
The following Judgments were delivered: SARKARIA, J.
This appeal by special leave preferred by the State of Maharashtra, is directed against a judgment dated November 1, 1973, of the Bombay High Court.
Mohd. Yakub respondent 1, Shaikh Jamadar Mithubhai respondent 2, and Issak Hasanali Shaikh respondent 3, were tried in the court of the Judicial Magistrate First Class, Bassein, Bombay, in respect of three sets of offences punishable under section 135 read with section 135 (2) of the .
The first charge was the violation of sections 12(1), 23(1) and 23 (d) of the Foreign Exchange Regulation Act, 1947, the second was violation of Exports (Council) Order No. 1 of 1968 E.T.C. dated March 8, 1968; and the third was the contravention of the provisions of Sections 7, 8, 33 and 34 of the .
They were also charged for violation of the Exports (Control) Order No. 1/68 E.T.C. dated March 8, 1968 issued under sections 3 and 4 of the Imports and Exports (Control) Act, 1947 punishable under section 5 of the said 1161 Act.
The gist of the charges was that the respondents attempted to smuggle out of India 43 silver ingots, weighing 1312.410 kgs., worth about Rs. 8 lakhs, in violation of the Foreign Exchange Regulation Act, the Imports & Exports (Control) Act, 1947, and the .
The facts of the case were as follows: On receiving some secret information that silver would be transported in Jeep No. MRC 9930 and Truck No. BMS 796 from Bombay to a coastal place near Bassein, Shri Wagh, Superintendent of Central Excise along with Inspector Dharap and the staff proceeded in two vehicles to keep a watch on the night of September 14, 1968 at Shirsat Naka on the National Highway No. 8, Bombay City.
At about mid night, the aforesaid jeep was seen coming from Bombay followed by a truck.
These two vehicles were proceeding towards Bassein.
The officers followed the truck and the jeep which, after travelling some distance from Shirsat Naka, came to a fork in the road and thereafter, instead of taking the road leading to Bassein, proceeded on the new National Highway leading to Kaman village and Ghodbunder Creek.
Ultimately, the jeep and truck halted near a bridge at Kaman creek whereafter the accused removed some small and heavy bundles from the truck and placed them aside on the ground.
The Customs Officers rushed to the spot and accosted the persons present there.
At the same time, the sound of the engine of a mechanised sea craft from the side of the creek was heard by the officers.
The officers surrounded the vehicles and found four silver ingots near the footpath leading to the creek.
Respondent 1 was the driver and the sole occupant of the jeep, while the other two respondents were the driver and cleaner of the truck.
The officers sent for Kana and Sathe, both residents of Bassein.
In their presence, respondent 1 was questioned about his identity.
He falsely gave his name and address as Mohamad Yusuf s/o Sayyad Ibrahim residing at Kamathipura.
From the personal search of respondent 1, a pistol, knife and currency notes of Rs. 2,133/ were found.
Fifteen silver ingots concealed in a shawl were found in the rear side of the jeep and twenty four silver ingots were found lying under saw dust bags in the truck.
The truck and the jeep together with the accused respondents and the silver ingots were taken to Shirsat Naka where a detailed panchanama was drawn up.
Respondent 1 had no licence for keeping a pistol.
Consequently the matter was reported to Police Station Bassein, for prosecuting the respondent under the Arms Act.
1162 The respondents and the vehicles and the silver ingots were taken to Bombay on September 15, 1968.
The statements of the respondents under section 108 of the were recorded by Shri Wagh, Superintendent of Central Excise.
The Collector, Central Excise, by his order dated May 28, 1969, confiscated the silver ingots.
After obtaining the requisite sanction, the Assistant Collector, Central Excise made a complaint against all the three accused in the court of the Judicial Magistrate, Bassein for trial in respect of the aforesaid offences.
The plea of the accused was of plain denial of the prosecution case.
They stated that they were not aware of the alleged silver and that they had just been employed for carrying the jeep and the truck to another destination.
They alleged that they were driven to the creek by the police.
The trial Magistrate convicted the accused of the aforesaid offences and sentenced accused 1 to two years ' rigorous imprisonment and a fine of Rs. 2,000 and, in default, to suffer further six months ' rigorous imprisonment.
Accused 2 and 3 were to suffer six months ' rigorous imprisonment and to pay a fine of Rs. 500 and, in default, to suffer two months ' rigorous imprisonment.
The accused preferred three appeals in the court of the Additional Sessions Judge, Thana, who, by his common judgment dated September 30, 1973, allowed the appeals and acquitted them on the ground that the facts proved by the prosecution fell short of establishing that the accused had 'attempted ' to export silver in contravention of the law, because the facts proved showed no more than that the accused had only made 'preparations ' for bringing this silver to the creek and "had not yet committed any act amounting to a direct movement towards the commission of the offence".
In his view, until silver was put in the boat for the purpose of taking out of the country with intent to export it, the matter would be merely in the stage of 'preparation ' falling short of an 'attempt ' to export it.
Since 'preparation ' to commit the offence of exporting silver was not punishable under the , he acquitted the accused.
Against this acquittal, the State of Maharashtra carried an appeal to the High Court, which, by its judgment dated November 1, 1973, dismissed the appeal and upheld the acquittal of the accused respondents.
Hence, this appeal.
1163 In the instant case, the trial court and the Sessions Judge con currently held that the following circumstances had been established by the prosecution: (a) The officers (Shri Wagh and party) had received definite information that silver would be carried in a truck and a jeep from Bombay to Bassein for exporting from the country and for this purpose they kept a watch at Shirsat Naka and then followed the jeep and the truck at some distance.
(b) Accused 1 was driving the jeep, while accused 2 was driving the truck and accused 3 was cleaner on it.
(c) Fifteen silver ingots were found concealed in the jeep and 24 silver ingots were found hidden in the truck.
(d) The jeep and the truck were parked near the Kaman creek from where they could be easily loaded in some sea craft.
(e) Four silver ingots from the vehicle had been actually unloaded and were found lying by the side of the road near the foot path leading to the sea.
(f) On being questioned accused 1 gave his false name and address.
(g) The accused were not dealers in silver.
The trial Magistrate further held that just, when the officers surrounded these vehicles and caught the accused, the sound of the engine of a mechanised vessel was heard from the creek.
The first appellate court did not discount this fact, but held that this circumstance did not have any probative value.
The question, therefore, is whether from the facts and circumstances, enumerated above, it could be inferred beyond reasonable doubt that the respondents had attempted to export the silver in contravention of law from India ? At the outset, it may be noted that the Evidence Act does not insist on absolute proof for the simple reason that perfect proof in this imperfect world is seldom to be found.
That is why under Section 3 of the Evidence Act, a fact is said to be 'proved ' when, after considering the matters before it, the Court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition 1164 that it exists.
This definition of 'proved ' does not draw any distinction between circumstantial and other evidence.
Thus, if the circumstances listed above establish such a high decree of probability that a prudent man ought to act on the supposition that the appellant was attempting to export silver from India in contravention of the law, that will be sufficient proof of that fact in issue.
Well then, what is an "attempt" ? Kenny in his 'Outlines of Criminal Law ' defined "attempt" to commit a crime as the "last proximate act which a person does towards the commission of an offence, the consummation of the offence being hindered by circumstances beyond his control.
" This definition is too narrow.
What constitutes an "attempt" is a mixed question of law and fact, depending largely on the circumstances of the particular case.
"Attempt" defies a precise and exact definition.
Broadly speaking, all crimes which consist of the commission of affirmative acts are preceded by some covert or overt conduct which may be divided into three stages.
The first stage exists when the culprit first entertains the idea or intention to commit an offence.
In the second stage, he makes preparations to commit it.
The third stage is reached when the culprit takes deliberate overt steps to commit the offence.
Such overt act or step in order to be 'criminal ' need not be the penultimate act towards the commission of the offence.
It is sufficient if such act or acts were deliberately done, and manifest a clear intention to commit the offence aimed, being reasonably proximate to the consummation of the offence.
As pointed out in Abhayanand Mishra vs State of Bihar(1) there is a distinction between 'preparation ' and 'attempt '.
Attempt begins where preparation ends.
In sum, a person commits the offence of 'attempt to commit a particular offence ' when (i) he intends to commit that particular offence; and (ii) he, having made preparations and with the intention to commit the offence, does an act towards its commission; such an act need not be the penultimate act towards the commission of that offence but must be an act during the course of committing that offence.
Now, let us apply the above principles to the facts of the case in hand.
The intention of the accused to export the silver from India by sea was clear from the circumstances enumerated above.
They were taking the silver ingots concealed in the two vehicles under cover of darkness.
They had reached close to the sea shore and had started unloading the silver there near a creek from which the sound of the engine of a sea craft was also heard.
Beyond the stage of preparation, most of the steps necessary in the course of export by 1165 sea, had been taken.
The only step that remained to be taken towards the export of the silver was to load it on a sea craft for moving out of the territorial waters of India.
But for the intervention of the officers of law, the unlawful export of silver would have been consummated.
The calendestine disappearance of the sea craft when the officers intercepted and rounded up the vehicles and the accused at the creek, reinforces the inference that the accused had deliberately attempted to export silver by sea in contravention of law.
It is important to bear in mind that the penal provisions with which we are concerned have been enacted to suppress the evil of smuggling precious metal out of India.
Smuggling is an antisocial activity which adversely affects the public revenues, the earning of foreign exchange, the financial stability and the economy of the country.
A narrow interpretation of the word "attempt" therefore, in these penal provisions which will impair their efficacy as instruments for combating this baneful activity has to be eschewed.
These provisions should be construed in a manner which would suppress the mischief, promote their object, prevent their subtle evasion and foil their artful circumvention.
Thus, construed, the expression "attempt" within the meaning of these penal provisions is wide enough to take in its fold any one or series of acts committed, beyond the stage of preparation in moving the contraband goods deliberately to the place of embarkation, such act or acts being reasonably proximate to the completion of the unlawful export.
The inference arising out of the facts and circumstances established by the prosecution, unerringly pointed to the conclusion, that the accused had committed the offence of attempting to export silver out of India by sea, in contravention of law.
For reasons aforesaid, we are of opinion that the High Court was in error in holding that the circumstances established by the prosecution fell short of constituting the offence of an 'attempt ' to export unlawfully, silver out of India.
We, therefore, allow this appeal, set aside the acquittal of the accused respondents and convict them under Section 135(a) of the read with Section 5 of the Imports and Exports Control Act, 1947 and the Order issued thereunder, and sentence them as under: Accused respondent 1, Mohd. Yakub is sentenced to suffer one year 's rigorous imprisonment with a fine of Rs. 2,000 and, in default, to suffer six months ' further rigorous imprisonment.
Accused respondents 2 and 3, namely, Sheikh Jamadar Mithubhai and Issak Hasanali Shaikh are each sentenced to six months ' rigorous imprisonment 1166 with a fine of Rs. 500 and, in default to suffer two months ' further rigorous imprisonment.
CHINNAPPA REDDY, J. I concur in the conclusion of my brother Sarkaria, J. in whose Judgment the relevant facts have been set out with clarity and particularity.
I wish to add a few paragraphs on the nature of the actus reus to be proved on a charge of an attempt to commit an offence.
The question is what is the difference between preparation and perpetration? An attempt to define 'attempt ' has to be a frustrating exercise.
Nonetheless a search to discover the characteristics of an attempt, if not an apt definition of attempt, has to be made.
In England Parke B described the characteristics of an 'attempt ' in Reg.
vs Eagleton,(1) as follows: "the mere intention to commit a misdemeanor is not criminal.
Some act is required, and we do not think that all acts towards committing a misdemeanor indictable.
Acts remotely leading towards the commission of the offence are not to be considered as attempts to commit but acts immediately connected with it are. . " The dictum of Parke B is considered as the locus classicus on the subject and the test of 'proximity ' suggested by it has been accepted and applied by English Courts, though with occasional but audible murmur about the difficulty in determining whether an act is immediate or remote.
Vide Lord Goddard C.J. in Gardner vs Akeroyed.(2) ". it is sometimes difficult to determine whether an act is immediately or remotely connected with the crime of which it is alleged to be an attempt".
Parke B. himself appeared to have thought that the last possible act before the achievement of the end constituted the attempt.
This was indicated by him in the very case of Reg.
vs Eagleton (supra) where he further observed: ". . . . and if, in this case . . any further step on the part of the defendent had been necessary to obtain payment. . we should have thought that the obtaining credit. . would not have been sufficiently proximate to the obtaining the money.
But, on the statement in this case, no other act on the part of the 1167 defendant would have been required.
It was the last act, depending on himself towards the payment of the money, and therefore it ought to be considered as an attempt".
As a general principle the test of 'the last possible act before the achievement of the end ' would be entirely unacceptable.
If that principle be correct, a person who has cocked his gun at another and is about to pull the trigger but is prevented from doing so by the intervention of someone or something cannot be convicted of attempt to murder.
Another popular formulation of what constitutes 'attempt ' is that of Stephen in his Digest of the Criminal Law where he said: "An attempt to commit a crime is an act done with intent to commit that crime and forming part of a series of acts, which would constitute its actual commission if it were not interrupted.
The point at which such a series of acts begins cannot be defined; but depends upon the circumstances of each particular case".
While the first sentence is an attempt at defining 'attempt ', the second sentence is a confession of inability to define.
The attempt at definition fails precisely at the point where it should be helpful.
See the observations of Parker C.J. in Davey vs Lee(1) and of Prof. Glanville Williams in his essay on 'Police Control of intending criminals ' in 1955 Criminal Law Review.
Another attempt at definition was made by Professor Turner in , and this was substantially reproduced in Archbald 's Criminal Pleading, Evidence and Practice (36th Edn.).
Archbald 's reproduction was quoted with approval in Davey vs Lee(1) and was as follows: '. . . the actus reus necessary to constitute an attempt is complete if the prisoner does an act which is a step towards the commission of a specific crime, which is immediately and not merely remotely connected with the commission of it, and the doing of which cannot reasonably be regarded as having any other purpose than the commission of the specific crime".
We must at once say that it was not noticed in Archbald 's (36th Edn.) nor was it brought to the notice of the Divisional Court which decided Davey vs Lee (supra) that Prof. Turner was himself not satisfied with the definition propounded by him and felt compelled to 1168 modify it, as he thought that to require that the act could not reasonably be regarded as having any other purpose then the commission of the specific crime went too far and it should be sufficient "to show prima facie ' the offender 's intention to commit the crime which he is charged with attempting".
Editing 12th edition of Russell on Crime and 18th edition of Kenny 's Outlines of Criminal Law, Professor Turner explained his modified definition as follows: "It is therefore suggested that a practical test for the actus reus in attempt is that the prosecution must prove that the steps taken by the accused must have reached the point when they themselves clearly indicate that was the end towards which they were directed.
In other words the steps taken must themselves be sufficient to show, prima facie, the offender 's intention to commit the crime which he is charged with attempting.
That there may be abundant other evidence to establish his mens rea (such as a confession) is irrelevant to the question of whether he had done enough to constitute the actus reus".(1) We must say here that we are unable to see any justification for excluding evidence aliunde on the question of mens rea in considering what constitutes the actus reus.
That would be placing the actus reus in too narrow a pigeon hole.
In Haughten vs Smith,(2) Hailsham L. C. quoted Parke B from the Eagleton case (supra) and Lord Parker, C.J. from Davey vs Lee (supra) and proceeded to mention three propositions as emerging from the two definitions: "(1) There is a distinction between the intention to commit a crime and an attempt to commit it. . (2) In addition to the intention, or mens rea, there must be an overt act of such a kind that it is intended to form and does form part of a series of acts which would constitute the actual commission of the offence if it were not interrupted. (3) The act relied on as constituting the attempt must not be an act merely preparatory to commit the completed offence, but must bear a relationship to the completion of the offence referred to in Reg.
vs Eagleton, as being 'proximate ' to the completion of the offence in 1169 Davey vs Lee , 370, as being 'immediately and not merely remotely connected ' with the completed offence. " In Director of Public Prosecutions vs Stonehouse,(1) Lord Diplock and Viscount Dilhorne, appeared to accept the 'proximity ' test of Parke B, while Lord Edmund Davies accepted the statement of Lord Hailsham as to what were the true ingredients of a criminal attempt.
Whatever test was applied, it was held that the facts clearly disclosed and attempt in that case.
In India, while attempts to commit certain specified offences have themselves been made specific offences (e.g. 307, 308 Indian Penal Code etc.), an attempt to commit an offence punishable under the Penal Code, generally, is dealt with under section 511 Indian Penal Code.
But the expression 'attempt ' has not been defined anywhere.
In Abhayanand Mishra vs The State of Bihar,(2) Raghubar Dayal and Subba Rao, JJ., disapproved of the test of 'last act which if uninterrupted and successful would constitute a criminal offence ' and summarised their views as follows: "A person commits the offence of 'attempt to commit a particular offence ' when (i) he intends to commit that particular offence; and (ii) he, having made preparations and with the intention to commit the offence, does an act towards its commission; such an act need not be the penultimate act towards the commission of that offence but must be an act during the course of committing that offence".
In Malkiat Singh & Anr vs State of Punjab,(3) a truck which was carrying paddy, was stopped at Samalkha 32 miles from Delhi and about 15 miles from the Delhi Punjab boundary.
The question was whether the accused were attempting to export paddy from Punjab to Delhi.
It was held that on the facts of the case, the offence of attempt had not been committed.
Ramaswamy.
J., observed: "The test for determining whether the act of the appellants constituted an attempt or preparation is whether the overt acts already done are such that if the offender changes his mind and does not proceed further in its progress, the acts already done would be completely harmless.
In the present case it is quite possible that the appellants may have 1170 been warned that they had no licence to carry the paddy and they may have changed their mind at any place between Samalkha barrier and the Delhi Punjab boundary and not have proceeded further in their journey".
We think that the test propounded by the first sentence should be understood with reference to the facts of the case.
The offence alleged to be contemplated was so far removed from completion in that case that the offender had yet ample time and opportunity to change his mind and proceed no further, his earlier acts being completely harmless.
That was what the Court meant, and the reference to 'the appellants ' in the sentence where the test is propounded makes it clear that the test is propounded with reference to the particular facts of the case and not as a general rule.
Otherwise, in every case where an accused is interrupted at the last minute from completing the offence, he may always say that when he was interrupted he was about to change his mind.
Let me now state the result of the search and research: In order to constitute 'an attempt ', first, there must be an intention to commit a particular offence, second, some act must have been done which would necessarily have to be done towards the commission of the offence, and, third, such act must be 'proximate ' to the intended result.
The measure of proximity is not in relation to time and action but in relation to intention.
In other words, the act must reveal, with reasonable certainty, in conjunction with other facts and circumstances and not necessarily in isolation, an intention, as distinguished from a mere desire or object, to commit the particular offence, though the act by itself may be merely suggestive or indicative of such intention; but, that it must be, that is, it must be indicative or suggestive of the intention.
For instance, in the instant case, had the truck been stopped and searched at the very commencement of the journey or even at Shirsad Naka, the discovery of silver ingots in the truck might at the worst lead to the inference that the accused had prepared or were preparing for the commission of the offence.
It could be said that the accused were transporting or attempting to transport the silver somewhere but it would not necessarily suggest or indicate that the intention was to export silver.
The fact that the truck was driven upto a lonely creek from where the silver could be transferred into a sea faring vessel was suggestive or indicative though not conclusive, that the accused wanted to export the silver.
It might have been open to the accused to plead that the silver was 1171 not to be exported but only to be transported in the course of intercoastal trade.
But, the circumstance that all this was done in a clandestine fashion, at dead of night, revealed, with reasonable certainty, the intention of the accused that the silver was to be exported.
In the result I agree with the order proposed by Sarkaria, J. P.B.R. Appeal allowed.
| IN-Abs | The respondents were charged with the offence of attempting to smuggle out of India 43 silver ingots in violation of the Foreign Exchange Regulation Act, 1947, Imports and Exports (Control) Act, 1947 and the .
The prosecution alleged that on the night of the occurrence the respondents carried in a truck and a jeep silver ingots some of which were concealed in a shawl, and some others hidden in saw dust bags from Bombay to a lonely creek nearby and that when the ingots were unloaded near the creek the sound of the engine of a mechanised sea craft from the side of the creek was heard by the Customs officials and that therefore they were guilty of attempting to smuggle silver out of India.
The respondents pleaded that they were not aware of the presence of silver ingots in the vehicles, that they were only employed for driving the jeep and the truck to another destination and that the police stopped them en route and had driven them to the creek.
The Trial Court convicted and sentenced them to various terms of imprisonment and fine.
On appeal, the Sessions Judge acquitted all the respondents taking the view that the facts proved showed no more than that the accused had only made "preparations" for bringing the silver to the creek and "had not committed any act amounting to a direct movement towards the commission of the offence" and that until the silver was put in the boat with intent to export, it would merely be in the stage of preparation falling short of an "attempt" to export in contravention of the law.
The High Court dismissed the State 's appeal.
Allowing the appeal to this Court, ^ HELD: Per Sarkaria, J.: (Chinnappa Reddy, J. concurring) 1.
The High Court was in error in holding that the circumstances established by the prosecution fell short of constituting the offence of an "attempt" to export unlawfully silver out of India.
[1165F] 2.
The expression "attempt" within the meaning of the penal provisions is wide enough to take in its fold any one or series of acts committed beyond the stage of preparation in moving contraband goods deliberately to the place of embarkation, such act or acts being reasonably proximate to the completion of the unlawful export.
[1165E].
1159 3.
The definition of 'proved ' contained in section 3 of the Evidence Act does not draw any distinction between circumstantial and other evidence.
If the circumstances establish such a high degree of probability that a prudent man ought to act on the supposition that the accused was attempting to export silver from India in contravention of the law, that would be sufficient proof of that fact in issue.
[116A B] 4(a) What constitutes an "attempt" is a mixed question of law and fact, depending largely on the circumstances of the particular case.
"Attempt" defies a precise and exact definition.
Brodly speaking, all crimes which consist of the commission of affirmative acts are preceded by some covert or overt conduct which may be divided into three stages: the first stage exists when the culprit first entertains the idea or intention to commit an offence; in the second stage he makes preparations to commit it; and the third stage is reached when the culprit takes deliberate overt steps to commit the offence.
Such overt act or step, in order to be criminal, need not be the penultimate act towards the commission of the offence.
It is sufficient if such act or acts were deliberately done and manifest a clear intention to commit the offence aimed, being reasonably proximate to the consummation of the offence.
[1164C E] Abhayanand Mishra vs State of Bihar, [1962] 2 S.C.R. 241, followed.
(b) There is a distinction between "preparation" and "attempt".
Attempt begins where preparation ends.
In sum, a person commits the offence of 'attempt to commit a particular offence ' when (i) he intends to commit that particular offence and (ii) he, having made preparations and with the intention to commit the offence, does an act towards its commission; such an act need not be the penultimate act towards the commission of that offence but must be an act during the course of committing that offence.
[1164E F] In the instant case the respondents carried silver ingots in the two vehicles to the sea shore and started unloading them near a creek from which the sound of the engine of a sea craft was heard.
In short they did all that was necessary to export the silver ingots by sea and the only step that remained was to load them on the sea craft for moving out of the territorial waters of the country.
But for the intervention of the Customs officials, the unlawful export would have been consummated.
The disappearance of the sea craft reinforces the inference that the accused had deliberately attempted to export silver by sea in contravention of law.
[1164G H] Chinnappa Reddy, J (concurring).
In order to constitute an "attempt" first there must be an intention to commit a particular offence, second, some act must have been done which would necessarily have to be done towards the commission of the offence and third such act must be 'proximate ' to the intended result.
The measure of proximity is not in relation to time and action but in relation to intention.
In other words, the act must reveal with reasonable certainty, in conjunction with other facts and circumstances and not necessarily in isolation, an intention as distinguished from a mere desire or object to commit the particular offence, though the act by itself may be merely suggestive or indicative of such intention.
[1170E F] In the instant case had the truck been stopped and searched at the very commencement of the journey or even on the way much before its destination the discovery of silver ingots in the truck might at the worst lead to the inference 1160 that the accused had prepared or were preparing for the commission of the offence.
It could be said that the accused were transporting or attempting to transport the silver somewhere but it would not necessarily suggest or indicate that the intention was to export silver.
The fact that the truck was driven up to a lonely creek from where the silver could be transferred into a sea faring vessel was suggestive or indicative, though not conclusive, that the accused wanted to export the silver.
It might have been open to the accused to plead that the silver was not to be exported but only to be transported in the course of inter coastal trade.
But the circumstance that all this was done in a clandestine fashion, at dead of night revealed, with reasonable certainty, the intention of the accused that the silver was to be exported.
[1170G H] Reg vs Eagleton ; Gardner vs Akeroyd ; Davey vs Lee ; Haughten vs Smith [1975] A.C. 476, 492; Director of Public Prosecutions vs Stonehouse , referred to.
Abhavanand Mishra vs The State of Bihar ; @ 253, applied.
Malkiat Singh & Anr.
vs State of Punjab @ 667, distinguished.
|
ON: Criminal Appeal No. 152 of 1954.
Appeal by Special Leave from the Judgment and Order dated the 20th October 1953 of the Bombay High Court in Criminal Appeal No. 652 of 1953 arising out of the Judgment and Order dated the 9th April 1953 of the Court of Presidency Magistrate.
19th Court, Bombay in Criminal Case No. 12164/P of 1949.
H.J. Umrigar and R. A. Govind for the appellant.
Porus A. Mehta and R. H. Dhebar for P. G. Gokhale for the respondent.
May 4.
The Judgment of the Court was delivered by SINHA J.
This is an appeal by special leave directed against the concurrent orders and judgments of the courts below convicting the appellant, under section 409, Indian Penal Code and sentencing him to rigorous imprisonment for three months and a fine of Rs. 201 or in default, further six weeks rigorous imprisonment.
, As the appellant had been convicted and sentenced for a similar offence in another case tried by the same Presidency Magistrate, 19th Court, Esplanade, Bombay, he directed the sentence in this case to run concurrently with the sentence in the other case.
The charge against the accused in the, trial court is in these terms: "The Accused is charged under section 409 of the Indian Penal Code for committing criminal breach of trust in respect of property to wit 3% Government Promissory Loan Notes 1966 68 of the face value of Rs. 50,000 and 2 1/4% Government Promissory Notes 1961 of the face value of Rs. 25,000 in or about February to May 1949 entrusted to him in his capacity as Managing Director of the Exchange Bank of 486 India and Africa Ltd, and belonging to the Cambay Hindu Merchants Co operative Bank. (Detailed charge is separately framed)".
The appellant at all material times was the Managing Director of the Exchange Bank of India and Africa Ltd., with its head office at Bombay, which hereinafter will be referred to as the Exchange Bank.
He held a power of attorney to act as the Managing Director on behalf of the Directors of the Company.
By that power the accused was invested with the authority to borrow money on behalf of the Bank.
In 1944 the Cambay Hindu Merchants Co operative Bank at Cambay, which hereinafter will be referred to as the Co operative Bank., had opened a current account with the Exchange Bank.
On instructions from the Co operative Bank, the Exchange Bank purchased in August 1946 securities worth Rs. 25,000 in its own name with money belonging to the Co operative Bank and the securities were kept with the Exchange Bank as a cover for overdraft.
In March 1948 two further lots of Government security of Rs. 25,000 each of the value of Rs. 50,000 were purchased likewise and left with the Exchange Bank for the same purpose.
On the 14th May 1948 the two banks entered into a contract evidenced by three documents to be noticed in detail hereinafter.
Shortly stated, the Exchange Bank agreed to grant the Co operative Bank credit for overdraft up to a limit of Rs. 66,150 and as a security for the overdraft the Government securities of the value of Rs. 75,000 already in the custody of the Exchange Bank was pledged to the latter.
These securities of the face value of Rs. 75,000 will hereinafter be referred to as "the securities".
But it appears that the Co operative Bank had no occasion to operate on the overdraft account until the 28th February 1949 when the crucial event happened, namely the Exchange Bank finding itself in an embarrassed financial position took a loan from the Canara Bank of one lakh of rupees by pledging the securities as also other securities with which we are not concerned in this case.
On the 24th April 1949 the Exchange Bank paid off the dues of the 487 Canara Bank by taking a fresh loan of the same amount of one lakh from Messrs Merwanji Dalal & Co. and pledging the same securities as ' had been pledged to the Canara Bank.
On the 28th April 1949 Messrs Merwanji Dalal & Co. demanded back their money by the forenoon of the day following.
As the Exchange Bank could not pay the amount as demanded, the pledgees aforesaid sold those securities including the securities belonging to the Co operative Bank, for realising their dues, on the 3rd May 1949.
In the meantime, in answer to a letter from the Co operative Bank to the Exchange Bank asking for a certificate for the securities held by the latter on behalf of the former in the overdraft account, the Exchange Bank issued the certificate dated the 1st April 1949 to the effect that at the close of business on the 31st March 1949 it held Government of India securities of the total value of Rs. 75,000 as security against the overdraft facilities granted to the Co operative Bank and that there was no overdraft against the said securities on that date.
Subsequently, on the 29th April 1949 the Co operative Bank wrote to the Exchange Bank asking the latter to hand over securities of the face value of ' Rs. 50,000 to the Central Bank.
The Central Bank also on behalf of the Co operative Bank made a similar demand and as the Exchange Bank did not comply with that requisition, the Central Bank informed the Co operative Bank by a letter dated the 3rd May 1949 that the securities had not been banded over to the Central Bank as directed by the Co operative Bank.
The Co operative Bank then wrote to the Reserve Bank for stoppage of the securities of the value of Rs. 25,000.
It became clear by then that the Exchange Bank was not in a position to return the securities to the owners, that is to say, the Co operative Bank.
In spite of the best efforts of the appellant as the Managing Director of the Exchange Bank, to stave off the crisis by borrowing money from different sources, the run on the bank became so great that the directors applied for and obtained from the Com 488 pany Judge of the Bombay High Court a moratorium of 15 days.
On the 18th May 1949 a provisional liquidator was appointed in respect of the Exchange Bank on a creditor 's application and on the ' 24th June 1949 the Official Liquidator was appointed to wind up the bank.
On the 25th June 1949 one M. N. Raijee as agent of the Official Liquidator lodged information with the police charging the appellant with breach of trust in respect of a number of securities including the securities belonging.
to the Co operative Bank.
On the 31st October 1949 a charge sheet was submitted by the police under section 409, Indian Penal Code against the appellant in respect of the securities of the face value of Rs. 75,000 belonging to the Cooperative Bank.
On the 4th April 1952 the charge as quoted above was framed against the appellant.
The delay of about two and a half years in placing the appellant on trial is attributable to the fact that at the request of the accused the trial in respect of this charge was stayed pending the disposal of the other case against him.
At the trial the prosecution examined the Manager of the Co operative Bank as P.W. 1.
He proved the transactions between that Bank and the Exchange Bank.
The second witness for the prosecution was a partner in the firm of Messrs Merwanji Bomanji Dalal during the material time.
He proved the transaction of the loan by his firm to the Exchange Bank of one lakh of rupees on the pledge of the securities belonging to the Co operative Bank, as also other securities.
He deposed to the fact that it was the appellant who finalised the transaction on behalf of the Exchange Bank.
He also proved that in default of payment by the Exchange Bank on demand by his firm, it sold the securities including the securities in question and realised the dues from the Bank from the sale proceeds of securities of the value of one lakh of rupees.
The third witness for the prosecution was ' the Chief Accountant of the Exchange Bank who functioned as such till the 2nd May 1949 when the Bank closed down.
He also had a power of attorney from the Bank to act jointly with another person 489 with a similar power of attorney.
According to this witness, the appellant as the Managing Director exercised the powers of borrowing, raising money, purchasing, selling and pledging of bonds.
, scrips and other forms of securities on behalf of the Bank and its constituents during the relevant period.
and that no one else exercised those powers.
He also testified to the fact that there was a crisis in the affairs of the Bank from about the middle of February 1949 and that there was a rush on the Bank which continued till it closed down.
He also proved the fact that during the material time the Co operative Bank had a credit balance in its favour and that there was no overdraft by that Bank from the Exchange Bank.
He proved Exhibits E, F and G which are the documents evidencing the contract between the two banks in respect of the pledge of the security.
He corroborated the previous witness that it was the appellant who negotiated and finalised the loan of one lakh of rupees from the Canara Bank and that the securities in question along with others had been pledged to the Canara Bank.
It was he who had endorsed the securities to the Canara Bank.
He stated that the Exchange Bank had submitted to the Canara Bank a declaration to the effect that the said securities belonged absolutely to the Exchange Bank.
As there was a heavy rush of depositors on the bank,the loan from the Canara Bank was taken to satisfy the demand of the depositors.
The most important witness examined on behalf of the prosecution is P.W. 4, Ganpati Venkatrao Kini.
He was an accountant in the Exchange Bank during the relevant period.
He was also working with the Official Liquidator of the Bank after its liquidation was ordered by court.
Like the previous witness, he also had a power of attorney to act only in conjunction with another per son holding a similar power.
He supports the previous witness in saying that the power of borrowing money or of purchasing, selling or pledging or repledging securities was exercised by the appellant and by no other person on all material dates.
He also corroborates the previous witness and ' states that 490 there was a crisis in the bank from about the middle of February 1949 and that there was a heavy rush on the bank from that time till it closed down.
He also proves Exs.
E, F and G and states that from the 14th May 1948 when these documents were executed between the two banks till the 2nd May 1949 when the Exchange Bank closed its doors there was no overdraft by the Co operative Bank which always had a credit balance.
He also gives the details of the transaction of the loan of one lakh between the Exchange Bank and the Canara Bank and the details of the securities pledged by way of security for that loan.
He makes the following very significant statement: "I had handed over the two securities belonging to the Cambay Co operative Bank to the accused for being handed over to the Canara Bank against the loan.
The accused actually asked me for these securities and I handed them to the accused".
To a court question as to why he did not bring it to the notice of the appellant that the securities in question belonged to the Co operative Bank and not to the Exchange Bank, his answer is in these words. "In fact, the accused himself told me to bring securities pleged by the Cambay Co operative Bank with the Exchanage Bank".
He also proves exhibit L, which is a very important document in this case and proves that it was signed by the accused.
He further states that the declaration in that document that the securities rep I resented the Exchange Bank 's investments was not correct.
He also makes detailed statements as to the different kinds of interest which the appellant had in the Exchange Bank.
He was drawing Rs. 2,500 as monthly salary as the Managing Director.
He was also drawing a salary of Rs. 1,000 from the Union Life Assurance Co. Ltd., is its Managing Director.
The Insurance Company and its branches had a current account with the Exchange Bank and had advanced to the latter six to seven lakhs of rupees as "call deposits".
The appellant was also connected with Messrs L. A, 491 Stronach Ltd., Advertising Agents, which had been given overdraft facilities by the Exchange Bank.
The appellant was also getting Rs. 2,000 per month as salary from the aforesaid Advertising Agents.
The appellant and his wife were the principal shareholders in Akhaney & Sons Ltd., who were the Secretaries and Treasurers of the Indian Overseas Airlines.
The Exchange Bank had advanced to the aforesaid Indian Overseas Airlines a loan of one crore and ten lakhs of rupees and Messrs Akhaney & Sons Ltd. aforesaid were getting a remuneration of Rs. 2,500 per month from the Indian Overseas Airlines Ltd. It would thus appear that the appellant along with his wife in one way or another was getting about Rs. 8,000 per mensem as remuneration from the different companies referred to above which were closely associated with one another from the financial point of view and that the, appellant was the chief person concerned with them and the connecting link between them.
It was naturally his interest to see that the Exchange Bank continued its existence as long as could be arranged even by borrowing large sums of money when there was already a run on the bank.
It is in the background of all these facts and circumstances that the appellant 'sacts of commission and omission had to be judged.
The other four witnesses, P.Ws. 5 to 8 are more or less formal witnesses in the sense that they have proved certain documents and letters which need not be noticed.
The evidence of P.W. 2 had to be set aside as he was not available for cross examination after charge, being out of the country.
The appellant 's defence is disclosed in a long written statement running into twenty paragraphs and seven closely typed pages submitted on the 3rd October 1952.
Shortly stated, it is to the effect that the charge framed against him is bad in law and extremely vague; that the vagueness of the charge had "considerably handicapped" his defence, that the prosecution had not been fair in that it had not exa mined the first informant, M. N. Raiji, that if he had been examined 'by the prosecution, the appellant would have shown from the records in his possession 64 492 that the Co operative Bank had not suffered any loss and that the Bank in the hands of the Liquidator had more than sufficient funds to pay the dues of the former; that the prosecution bad not been launched with the sanction of the Company Judge who was in seisin of the liquidation proceedings in respect of the Exchange Bank and that therefore the provisions of sections 179 and 237 of the Indian Companies Act had not been complied with; that the securities in question had not been entrusted to the appellant but to the Exchange Bank, ' if at all there was any entrustment, and that as a matter of fact and law, the Ex change Bank had not been entrusted with the securities, that the Exchange Bank "Court legally deal with the securities in any manner it liked", as provided in the documents, Exs.
E, F and G, between the two banks; that the sub pledging of the securities with the Canara Bank or with Messrs Merwanji Bomanji Dalal was "perfectly.
within the four corners of the law", and that the essential ingredients of an offence under section 409, Indian Penal Code had not been made out.
Grievance was also sought to be made of the fact that Inspector Milburn who had investigated the case had not been called as a. prosecution witness, with the result that the appellant had been deprived of the right of challenging the prosecution evidence with reference to the police diary.
The learned Magistrate after a very fair and full examination of the evidence in the case and the points raised by the appellant in his defence came to the conclusion that the appellant was guilty of the offence of criminal breach of trust under section 409, Indian Penal Code and passed a lenient sentence, as stated above, *in view of the, consideration that "not a pie went to the pocket of the accused", and that "the accused had not taken up any dishonest defence".
The learned Magistrate held that the charge as framed was not vague in view of the provisions of section 222, Criminal Procedure Code, with special reference to the terms of sub section (2) of that section.
On the question of the non examination of the first informant, M. N. Raiji, and of the investigating police officer, 493 the learned Magistrate observed that they were formal witnesses inasmuch as the facts of the case were not in dispute.
Furthermore, the court observed that if the accused or his lawyer who defended him at the later stage of the prosecution, had applied to the ' court for their being examined, they could have been called as witnesses and subjected to cross examination by the accused.
But no such, application had been made.
As regards want of sanction of the Company Judge, he held that section 179 of the lndian Companies Act had no application to the facts of the present case, as it was not a prosecution under the Companies Act and that therefore no such sanction as is contemplated by that section was necessary.
Dealing with the appellant 's contention that there was no entrustment within the meaning of section 405, Indian Penal Code the learned Magistrate observed that the accused held delegated powers from the Board of Directors and he held the property in trust on behalf of the Directors of the Exchange Bank.
He further held that the contract of pledge dated the 14th May 1948 between the two banks did not vest any right in the Exchange Bank absolutely to deal with the securities and that at any rate, the Exchange Bank could not deal with the securities so long as the Cooperative Bank had not taken an overdraft from the former.
In dealing with the question whether the appellant had dealt with the securities dishonestly, he held that in all the circumstances of the case there was no doubt that wrongful loss was caused to the Co operative Bank and wrongful gain not to the accused personally but to the Exchange Bank which he represented during the transactions in question.
On appeal to the Bombay High Court, a Division Bench of that court dismissed the appeal.
substantially agreeing with the findings of the trial court.
Dealing with a new point raised before the appeal court, namely, that the appellant was under a mistake of fact or law as to the indebtedness of the Cooperative Bank to the Exchange Bank or as to its powers to deal with the security, the High Court held 494 that there was no possibility of the appellant having made any mistake of fact in good faith.
The court also pointed out that the appellant himself had not raised this plea of mistake either about the facts of the case or about any doubtful question of law.
The court also pointed out the declarations made by the appellant on behalf of the Exchange Bank that the securities belonged absolutely to the bank and represented its investments statements which he knew were false.
While dealing with the appeal on the question of sentence, the High Court pointed out that there was good evidence to support the inference that the appellant had been actuated by motives of personal benefit also.
In that view of the matter the High Court maintained the conviction and the sentence passed by the trial Magistrate.
The appellant then moved the High Court for a certificate that the case was a fit one for appeal to this Court.
The cer tificate was refused by that court.
Thereafter the.
appellant moved this Court and obtained special leave to appeal.
In support of the appeal the learned counsel for the appellant has raised a number of questions of law and at the forefront of his argument contended that both in law and on a proper construction of the contract between the two banks the appellant was fully entitled to pledge the securities as long as the overdraft agreement subsisted, irrespective of whether or not there was an actual overdraft by the Co operative Bank on the date of the pledge, that is to say, on the 28th February 1949.
Examining the position with reference to the contract between the two banks, we find that Exhibits E, F and G, all dated the 14th May 1948, are parts of the same transaction and evidence the terms of the contract between them.
exhibit E is a promissory note executed by the Co operative Bank in favour of the Exchange Bank for the sum of Rs. 66,150 with interest at three per cent.
per annum with half yearly rests.
exhibit F is a letter addressed by the Cooperative Bank to the Exchange Bank enclosing exhibit E, and exhibit G is the bond pledging all marketable 495 securities and goods to the Exchange Bank in consideration of its promise to grant credit for overdraft limited to the amount aforesaid in favour of the Cooperative Bank from time to time with interest at three per cent.
per annum as aforesaid.
The significant portion of the bond is in these terms: ". . . . . and we agree and undertake that in the event of our failure to maintain the margin on the said movable property marketable securities and goods in the manner hereinafter provided or failing repayment on demand to you by us of the amount of such advance or credit with interest cost charges and expenses as aforesaid you shall be entitled, but not bound, to sell or otherwise dispose of all or any of the said movable property marketable securities and goods by public auction or private contract in such manner and upon such terms and subject to such conditions as you may think fit without any reference to us or obtaining our consent, and the proceeds of such sale or disposal shall be applied first in payment of all costs charges and expenses of and incident to such sale or disposal and the enforcement of the pledge and charge in your favour hereby created, secondly in repaying the amount of such advance or credit with interest as aforesaid and all costs charges and expenses incurred by you in relation thereto not otherwise met including loss in exchange (if any) and all other debts and monies however due to you by us and lastly in payment to us of the surplus if any thereafter remaining, declaring as it is hereby expressly provided agreed and declared that this shall be continuing security to cover the amount of any advance or credit which you have allowed to us Or may from time to time allow us with interest costs, charges and expenses and all other debts and monies due as aforesaid. . . . " Reading Exhibits E, F and G together, it is clear that the securities of the face value of Rs. 75,000 were pledged to the Exchange Bank as security for overdraft up to the limit of Rs. 66,150 for which the Cooperative Bank had given the promissory note to the Exchange Bank.
It was further stipulated that in 496 the event of the pledgor making a default in payment on demand of the amount advanced by way of overdraft with outstanding interest it may be realised by the Exchange Bank by sale of those securities and after satisfying the pledgee 's dues against the pledgor, if there was any outstanding amount the surplus of the sale proceeds shall be paid back to the pledgor.
Thus it is clear that according to the terms of the contract the Exchange Bank was not entitled, as contended on behalf of the appellant, to sell the securities even though there may not have been any outstanding dues from the Co operative Bank.
The securities were to be kept by the Exchange Bank charged with the payment of such amount as may from time to time have been advanced or be advanced under the overdraft arrangement.
But that charge was not an absolute one without reference to the state of accounts between the two banks; in other words, there would be a charge only when there was an adverse balance against the Co operative Bank.
We know that at all material times the Co operative Bank had not drawn any sum from the Exchange Bank in pursuance of the agreement referred to above.
The right of the Exchange Bank to deal with the securities under the agreement would arise only on the happening of certain events, namely, that the pledgor either had failed to maintain the proper margin or had made a default in repayment of the outstanding amount on demand by the Exchange Bank.
So long as those contingencies did not arise, and it is nobody 's case that any of those contingencies had arisen, the pledgee bank had no right to deal with the securities by way of pledge, sub pledge or assignment.
In this connection our attention was invited to the provisions of section 179 of the Indian Contract Act in support of the contention that as the securities had been agreed between the two banks to be a cover for overdraft not exceeding Rs. 66,150, up to that amount the pledgee bank bad an interest in those securities which it could have dealt with.
It was further argued that as there was nothing to show that the appellant had dealt with the securities for 497 a larger amount than that, he could not be said to have contravened the terms of the contract.
In our opinion, there is no substance in this contention.
Section 179 predicates that the pledgor has a limited interest which he can deal with and his transaction to that extent would be valid.
If the Co operative Bank had as a matter of fact operated upon the overdraft account and bad drawn any sum with in the limit aforesaid, the Exchange Bank would have an interest pro tanto in those securities and might then have been entitled to pledge or sub pledge the securities with a third party.
But so long as there was no overdraft by the pledgor, the pledgee bad no such interest as it could in its turn pledge or sub pledge to a third party.
Furthermore, it is clear from the narrative of events given above that the appellant dealt with the securities with third parties on the footing, after an express declaration had been made by him, that those securities were the absolute property of the Exchange Bank.
We are not here concerned with the question of the extent of interest acquired by such third party.
We are only concerned with determining the legal position as between the two banks the Exchange Bank being represented by its Managing Director, the appellant.
Hence there is no difficulty in holding that on the terms of the contract between the two banks the appellant was not entitled to transfer any interest in those securities and if be did so he did it in contravention of the terms of the contract.
We will now deal with the legal position, apart from the terms of the contract.
On the facts stated above the Exchange Bank had become the bailee in respect of the securities.
The securities had been delivered by the Co operative Bank to the Exchange Bank for the express purpose, as disclosed in the contract set out above, that they shall be disposed of in ,accordance with the terms contained in Exhibit G set out above.
By the very fact of the delivery of the securities to the bailee the latter became a trustee in terms of the contract, not for all purposes, but only for the, limited purpose indicated by the agreement 498 between the parties.
The pledgor has in the present case only transferred his possession of the property to the pledgee who has a special interest in the property of enforcing his charge for payment of an overdraft, if any, whereas the property continues to be owned by the pledgor.
The special interest of the pledgee comes to an end as soon as the debt for which it was pledged is discharged.
It is open to the pledgor to redeem the pledge by full payment of the amount for which the pledge had been made at any time if there is no fixed period for redemption, or at any time after the date fixed and such a right of redemption continues until the thing pledged is lawfully sold.
Hence the Co operative Bank in this case could have asked for a return of the securities at any time, because there never was any overdraft.
As the pledge had been terminated neither by redemption,, nor by a lawful sale on the happening of such contingencies as the parties contemplated in their agreement or the law allowed, the securities continued to be the property of the Co operative Bank and the Exchange Bank, or the appellant as its Managing Director., bad no right to deal with them.
It was next contended, alternatively, that assuming that the Exchange Bank had dealt with the securities in contravention of the terms of the agreement, the appellant had, as representing the bank, only committed a breach of contract, the remedy for which was a suit for damages and not a criminal prosecution.
This argument assumes that the same set of facts cannot give rise both to a civil liability and a criminal prosecution.
It is manifest that such an argument in its bald form cannot be acceptable.
If there is no mens rea, or if the other essential ingredients of an offence are lacking, the same facts may not sustain a criminal prosecution, though a civil action may lie.
We have therefore to examine whether or not there was mens rea in this case or whether the necessary element of a criminal.
offence have been made out.
It has been contended that no offence under section 409, Indian Penal Code has been brought home to the appellant for the reasons, (1) that there 499 was no entrustment, (2) that there was no mens rea, and (3) that there was no dishonesty on the part of the appellant.
For an offence under section 409, Indian Penal Code, the first essential ingredient to be proved is that.
the property was entrusted.
It has been argued that in this case there was no such entrustment as is contemplated by that section; and that the securities were pledged with the Exchange Bank by the Co operative Bank which was in the position of a debtor to the former. 'The contention is that the parties never contemplated the creation of a trust in the strict sense of the term.
But when section 405 which defines "criminal breach of trust" speaks of a person being in any manner entrusted with property, it does not contemplate the creation of a trust with all the technicalities of the law of trust.
It contemplates the creation of a relationship whereby the owner of property makes it over to another person to be retained by him until a certain contingency arises or to be disposed of by him on the happening of a certain event.
The person who transfers,, possession of the property to the second party still remains the legal owner of the property and the person in whose favour possession is so transferred has only the custody of the property to be kept or disposed of by him for the benefit of the other party, the person so put in possession only obtaining a special interest by way of a claim for money advanced or spent upon the safe keeping of the thing or such other incidental expenses as may have been incurred by him.
In the present case the Co operative Bank entrusted the Exchange Bank with the securities for the purpose of keeping them as a security for the overdrafts if and when taken by the former.
In law those securities continued to be the property of the Co operative Bank and as it never borrowed any money from the Exchange Bank, the latter had no interest in those,securities which it could transfer in any way to a third party so far as the two banks are concerned.
The entrustment was to the Exchange Bank itself But it being a non natural person, its business had to be transacted by someone who was authorised 500 to do so on its behalf The appellant held the power of attorney on behalf of the directors of the bank to transact business on behalf of the bank.
In that capacity the appellant had dominion over the securities.
Hence the appellant can be said either to have been entrusted with the property in a derivative 'sense or to have dominion over the securities as a banker , and thus in either case, the first essential condition for the application of section 409, Indian Penal Code is fulfilled.
On the question of mens rea, it has to be determined whether or not the appellant dishonestly disposed of those securities in violation of any of the terms of the agreement aforesaid.
As already indicated, the appellant did dispose of these securities in violation of the terms of the contract between the two banks.
But still the question remains whether he did so dishonestly; in other words, whether when disposing of those securities the appellant had the intention of causing wrongful gain to the Exchange Bank or wrongful loss to the Co operative Bank.
In our opinion, he intended both and, as.
a matter of fact, he caused wrongful loss to the pledgor bank and wrongful gain to the pledgee bank. 'The Exchange Bank raised money on those securities which it was not entitled to do and the Co operative Bank was deprived of those securities, even though not for all times.
It is settled law that a deprivation even for a, short period is within the meaning of the expression.
If he disposed of those securities with the intention of causing wrongful loss to the one and wrongful gain to the other, there can be no question but that the ap pellant had the necessary mens rea.
It was next argued that assuming that the essential ingredients of an offence under section 409, Indian Penal Code had been made out, the appellant may have made a mistake of fact in assuming that the Co operative Bank was indebted to the Exchange Bank or may have made a mistake of law in mistakenly believing that the Exchange Bank had the right as the pledgee to sub pledge those securities for raising money for its own purposes.
We know as a fact that 501 the Co operative Bank had not taken any overdraft from the Exchange Bank.
But it was argued that it had not been proved that the appellant had that knowledge.
The appellant in his long written statement has not tried to take shelter behind any such mistake.
He was in full control of the bank accounts and as pointed out by the courts below, it is impossible to believe that in the circumstances in which the bank had found itself and when the appellant was hard put to it to collect all the bank 's resources to stave off the severe crisis through which it was passing, the appellant would not have known the fact that the Co operative Bank did not owe his bank any money by way of overdraft.
Hence, in our opinion, there is no room for the supposition that the appellant was not aware of the true state of accounts bet ween the two banks.
But then it was argued that the appellant may have made a mistake of law in thinking that he was justified by law in dealing with those securities.
The attempt is to bring the case within one of the general exceptions contained in Chapter IV of the Indian Penal Code and set out in section 79 in these terms "Nothing is an offence which is done by any person who is justified by law, or who by reason of a mistake of fact and not by reason of a mistake of law in good faith, believes himself to be justified by law, in doing it".
In considering a matter of this kind the attitude of the accused is an important consideration.
We note that here the appellant made no attempt in the trial court to set up such a defence.
If he had ever said that he made a mistake of fact after exercising due care and caution that there was an overdraft against the Co operative Bank in favour of the Exchange Bank, he may have been able to take advantage of the exception.
But as in this case there was no mistake of fact and as the court was in a position to find that the appellant must have known that there was no such overdraft, there is no room for the application of section 79 quoted above.
The appellant cannot avail himself of the exception of section 79 simply by 502 saying that he believed that in law he was entitled to deal with the securities as the property of the Exchange Bank, as he attempted to do in his written statement.
If he had further proved that he believed in good faith that the Co operative Bank was indebted to his bank, his belief that he was justified by law in dealing with the securities as the property of the bank may have helped to bring him within the exception.
But as there was no mistake about the basic fact, the provisions of section 79, Indian Penal Code are not attracted to this case.
It now remains to deal with certain objections relating to the illegality or irregularity in the procedure followed in the trial of this case.
It was argued that this prosecution was incompetent for the reason that no sanction of the Company Judge had been obtained under section 179 of the Indian Companies Act.
The relevant portion of section 179 is as follows: "The official liquidator shall have power, with the sanction of the Court to do the following things: (a) to institute or defend any suit or prosecution, or other legal proceeding, civil or criminal, in the name and on behalf of the company;. . . . " In terms the section lays down the powers of the official liquidator.
Such a liquidator has to function under the directions of the court which is in charge of the liquidation proceedings.
One of his, powers is to institute prosecutions in the name and on behalf of the company under liquidation with the sanction of the court.
This section does not purport to impose any limitations on the powers of a criminal court to entertain a criminal prosecution launched in the ordinary course under the provisions of the Code of Criminal Procedure.
Where a prosecution has to be launched in the name of, or on behalf of, the company, it naturally becomes the concern of the Judge to see whether or not it was worthwhile to incur expenses on behalf of the company and therefore, the section requires the sanction of the Judge before the liquidator can undertake the prosecution or defence in the name of and on behalf of the company.
The 503 present case is not a prosecution in the name or on behalf of the company; nor is the official liquidator interested in prosecuting the case.
The prosecution was started on a charge sheet submitted by the police, though the first information report had been lodged by an official under the official liquidator.
This was not a prosecution initiated or instituted by the official liquidator.
This is not a case which can come even by analogy within the rule laid down by the Federal Court in the case of Basdeo Agarwalla vs King Emperor(1), that a prosecution launched without the previous sanction of the Government within the meaning of clause 16 of the Drugs Control Order, 1943, was completely null and void.
In that case their Lordships of the Federal Court had to consider the effect of the following words of clause 16 aforesaid: "No prosecution for any contravention of the provisions of this Order shall be instituted without the previous sanction of the Provincial Government. .".
It will be noticed that section 179 of the Companies Act does not contain any words similar in effect to those quoted above.
Where the legislature intended to place a limitation on the powers of the court to take cognisance of an offence unless certain conditions were fulfilled, like the provisions of sections 196 and 197, Criminal Procedure Code, it has used words such as these: "No court shall take cognisance There is nothing in section 179 of the Companies Act which can be construed as restricting the powers of the court to take cognisance of an offence or the powers of the police to initiate prosecution or even of a private citizen to move the machinery of the criminal courts to bring an offender like the appellant to justice.
For a prosecution for breach of trust even by a director of a company no such condition precedent as the previous sanction of any authority is contemplated by law, unless it is a prosecution in the name and on behalf of the company by the official liquidator who has to incur expenses out of the funds of the company.
Section 179 is an (1) 504 enabling provision to enable the liquidator to do certain things with the sanction of the court.
It does not control the general law of the land.
It was next contended that the charge as framed by the trial court was illegal and vague and had caused material prejudice to the appellant.
The charge as framed has already been set out.
The learned trial magistrate had stated at the end that a detailed charge was to be separately framed.
But no such charge is before us and the appeal has proceeded on the assumption that no such detailed charge was as a matter of fact framed by the trial court.
The question therefore is whether the charge, such as it is, complies with the requirements of the law.
It has been argued on behalf of the appellant that the charge is materially defective in so far as the nature of the breach of trust, the facts constituting the breach, the exact date and manner of the breach have not been set out.
The charge as framed fulfils the requirements of section 221, Criminal Procedure Code, because it has mentioned the name of the offence, namely, criminal breach of trust and specified section 409, Indian Penal Code, which impliedly gives notice to the accused of every legal condition required by law to be fulfilled in order to constitute the offence of criminal breach of trust.
It has also fulfilled the requirements of section 222(1) of the Code in so far as it has specified the securities in respect of which and the Co operative Bank against which a criminal breach of trust had been committed.
Those particulars, in our opinion, were sufficient to give the accused notice of the matter with which he was charged.
The trial court has made reference to the provisions of sub section (2) of section 222.
But it was in error in relying upon those provisions which relate to the offence of criminal breach of trust or dishonest misappropriation of money, which was not the present case.
It is true that the manner of the commission of the offence as required by section 223 of the Code has not been set out.
But that has to be set out only when the nature of the case is such that the particulars required by sections 221 and 222 had not given the accused suffi 505 cient notice of the matter with which he is charged.
In our opinion, though the charge could have been more detailed as was intended by the learned Magistrate, as framed, it gives the accused sufficient notice of the nature of the offence alleged against him.
Even assuming that there were certain omissions in the charge, they cannot be regarded as material unless in terms of section 225 of the Code it is shown by the accused that he had in fact been misled by such omission or that there had been a failure of justice as a result of such error or omission. 'The illustrations under that section show that each case has got to be judged on its own particular facts and there cannot be any general presumption that every error or omission in a charge has materially affected a trial or occasioned a failure of justice.
In this case from the long written statement filed on behalf of the appellant it is clear that he was aware of the gravamen of the charge against him and that he tried to meet it in all its bearings.
We are not therefore impressed by, the argument advanced on his behalf that the omissions in the charge are material and that the case should be tried over again on a fresh charge.
The learned Judges of the High Court constituting the Division Bench which heard the appeal have written separate but concurring judgments, but they did not notice any argument, having been advanced before them on the question of the illegality or irregularity in the charge.
That also would show that the appellant did not make it a grievance at the time of the argument of the appeal, though a ground had been taken in the memorandum of appeal that the charge as framed was vague and defective and as such bad in law.
In our opinion, this is not a case in which it can be said that the omission in the charge has materially affected the trial of the case or prejudiced the appellant in his defence or has occasioned a failure of justice.
As all the grounds raised in support of the appeal fail, it is accordingly dismissed.
| IN-Abs | The appellant was the Managing Director of a bank and held a power of attorney to act on behalf of its Directors and authorising him to borrow money on behalf of the bank.
Certain Government Promissory Notes were pledged with the bank by another bank to cover an overdraft account up to a specified amount.
There was, however, no overdraft by the pledgor.
The pledgee bank was in a precarious financial condition.
The appellant pledged the securities with a third party to get a loan for the bank 's use and on its failure 484 to repay the same on demand, the creditors sold the securities for realising their dues.
The pledgee bank was thus no longer in a position to return the securities on demand made by the pledgor.
Information.
was lodged with the police at the instance of the Official Liquidator appointed to wind up the bank and the appellant was put up for trial under section 409 of the Indian Penal Code.
Held, that the appellant was guilty of the offence charged and the appeal must be dismissed.
Held further, that in the absence of any overdraft by the pledgor, the pledgee bank acquired no interest in the securities which it could deal with and section 179 of the Contract Act had no application.
That the delivery of the securities by the pledgor made the pledgee a trustee for him and he remained the owner subject to any especial interest created in favour of the pledgee by the agreement and in a case, such as the present, where there was no question of redeeming the securities by the pledgor, there having been no overdraft, or sale by the pledgee in enforcement of any especial interest, as none had accrued to it, the pledgee bank had no right to deal with the securities.
That the question whether the remedy of the pledgor was by way of a suit for damages for breach of contract or by way of a criminal prosecution would depend on whether or not there was mens rea and.
other elements constituting the offence.
That although the offence of criminal breach of trust presupposes an entrustment, such entrustment need not conform to all the technicalities of the law of trust, and, consequently, in a case such as the present where the accused had the necessary power and exercised dominion over the securities and caused wrongful loss to the pledgor and wrongful gain to the pledgee by dealing with the securities, he was guilty of the offence.
That the provisions of section 79 of the Indian Penal Code were of no avail to him as it was never pleaded in his written statement nor found by the courts below that he Was unaware of the fact that there had been no overdraft at all.
That no sanction under section 179 of the Companies Act was re quired for the prosecution.
The provisions of that section were of a permissive character enabling the court Liquidator to do certain things with the permission of the court and did not in any way control the general law so as to restrict the power of the court to take cognisance of an offence or of the Police to initiate a prosecution or even of a private citizen to move the machinery of the criminal courts to bring an offender to justice.
Basdeo Agarwalla vs King Emperor, ([1946] F.C.R. 93), distinguished and held inapplicable.
That the charge framed against the accused fulfilled the requirements of sections 221 and 222(1) of the Code of Criminal Procedure and 485 as the particulars mentioned in the charge were sufficient to give him notice of the matter he was being charged with it was not necessary to set out also the manner of the commission of the offence as required by section 223 of the Code.
|
: Special Leave Petition (Crl.) No. 679/1980.
F From the Judgment and order dated 6 12 1979 of the Punjab & Haryana High Court in Crl.
A. No. 880/78.
A. N. Mulla, T. L. Garg and N. D. Garg for the Petitioner.
The order of the Court was delivered by KRISHNA IYER, J., The criminal scenario with a tragic crescendo which has been unfurled in this Special Leave Petition starts with ' a bunch of 'suspects ' being brought up to the police post which was in charge of the petitioner, an Assistant Sub Inspector.
A case of theft in some officers house had been reported to the police the previous night and so as part of the investigation the suspects were picked up and suffered as part of the process of 'investigation ' severe flagellation.
Chhabila, one of those so tortured, succumbed to his injuries.
This 278 triggered off investigation into the murderous conduct of the investigator, the petitioner, and another.
Medical examination revealed the cruel cause of death as asphyxiation.
One of the injuries which, according to the doctor, made the deceased unconscious was torture on both the soles of the foot of the victim.
A trial for murder fol.
lowed, a conviction under section 302 was enter and eventually the High Court confirmed the conviction and sentence of life imprisonment so far as the petitioner was concerned.
A false explanation of suicidal hanging was set up by the police officer accused but this was rejected and eventually on a study of the circumstances and the incontrovertible facts of flagellation and asphyxiation within police premises and the testimony of eyewitnesses about nocturnal detention within the police station and beating up of the victim, the courts below concurrently found the guilt of the petitioner proved beyond reasonable doubt.
Strenuous submissions have been made to us by Shri Mulla to discredit the prosecution version of murder but we are not in the least convinced that there is any error in the appreciation or the conclusion.
We are deeply disturbed by the diabolical recurrence of police torture resulting in a terrible scarce in the minds of common citizens that their lives and liberty are under a new peril when the guardians of the law gore human rights to death.
The vulnerability of human rights assumes a traumatic, torture some poignancy when violent violation is perpetrated by the police arm of the State whose function is to protect the citizen and not to commit gruesome offences against them as has happened in this case, Police lock up if reports in newspapers have a streak of credence, are becoming more and more awesome cells.
This development is disastrous to our human rights awareness and humanist constitutional order.
The State, at the highest administrative and political levels, we hope, will organise special strategies to prevent and punish brutality by police methodology.
Otherwise, the credibility of the rule of law in our Republic vis a vis the people of the country will deteriorate.
We conclude with the disconcerting note sounded by Abraham Lincoln: "If you once forfeit the confidence of your fellow citizens you can never regain their respect and esteem.
It is true that you can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time.
279 These observations have become necessary to impress upon ' the State police echelons the urgency of stamping out the vice of 'third degree ' from the investigative armoury of the police.
P. B. R. Petition dismissed.
| IN-Abs | The prosecution alleged that the petitioner, an Assistant Sub Inspector of Police, subjected one of the suspects in a theft case to severe flagellation which resulted in the death of the suspect.
Medical examination of the deceased revealed that death was due to asphyxiation.
On a study of the circumstances and the incontrovertible facts of flagellation and asphyxiation within police premises and the testimony of eye witnesses, the trial court found the petitioner guilty of the offence with which he was charged and sentenced him to imprisonment for life.
His explanation that death was due to suicidal hanging was rejected by the trial court as well as by the High Court.
Dismissing the petition, ^ HELD: There was no error either in the appreciation of evidence or the conclusion reached by the courts below.
[278 D] [It is disturbing to find diabolical recurrence of police tortures resulting in a terrible scare in the minds of common citizens that their lives and liberty are under a new peril when the guardians of the law gore human rights to death.
Police lock ups are becoming more and more awesome cells.
This development is disastrous to the human rights awareness and the humanist constitutional order.] [278 E]
|
Civil Appeal Nos.
708 to 710 Of 1978.
Appeals by Special Leave from the Judgment and order dated 18 2 1978 of the Bombay High Court in Special Civil Application Nos.
2564/74, 5997/78 and 5999/78.
V.M. Tarkunde, C.K Ratnaparkhi, V.N. Ganpule, Mrs. Veena Devi Khanna and Miss Manik Tarkunde for the Appellants in all the appeals.
Soli J. Sorabjee, S.K Mehta, P.N. Puri and E.M.S. Anam for the Respondents 1 to 6 in CAs 708 to 710/1978.
P.H. Parekh, C.B. Singh, B.L. Verma, Miss V. Caprihan, Hemant Sharma and Raian Karanjawala for the Respondent No. 5 in CA 710/78.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
The respondents in Civil Appeal No. 708 of 1978, Mamanchand Ratilal Agarwal and others, who are the landlords of premises bearing door No. 16 in Nawa Bazar Area Kirkee Cantonment, filed civil suit No. 1730 of 1964 against the appellant tenant for recovery of possession and arrears of rent under the provisions of the Bombay Rents, Hotel and Lodging House Rate Control Act, 1947.
The suit was decreed.
There was an appeal by the tenant.
It resulted in a compromise decree dated July 12, 1967 by which some time was given to the tenant to vacate the premises.
As the tenant failed to vacate the premises within the time given to him, the landlords were compelled to take out execution.
On April 29, 1969, in the case of Indu Bhusan Bose vs Rama Sundari Devi & Anr this Court held that Parliament alone had and the State Legislature did not have the necessary competence to make a law in any regard to the "regulation of house accommodation in Cantonment . areas".
The expression "regulation of house accommodation" was interpreted as not to be confined to allotment only but as extending to other incidents, such as termination of existing tenancies and eviction of persons in possession of house accommodation etc.
To get over the situation created by Indu Bhusan Bose vs Rama Sundari Devi & Anr.
on December 29, 1969, the Central Government issued a notification under Section 3 of the , extending the provisions of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, to the Kirkee and other Cantonment areas.
On June 2, 1972, the Parliament also 228 enacted Act 22 of 1972 amending the Cantonments (Extension of Rent Control Law;) Act, 1957, purporting to enable the Central Government to make the rent control laws in the several States applicable to Cantonment areas from dates anterior to the dates of notification and further purporting to validate certain pre existing decrees.
In the meanwhile taking advantage of the decision in the case of Indu Bhusan vs Rama Sundari Devi & Anr.
(supra), the appellant tenant filed Miscellaneous Application No. 597 of 1970 for a declaration that the decree obtained against him was a nullity and incapable of being executed.
This application was allowed by the Court on November 15, 1971.
But, after the enactment of Act 22 of 1972, on January 11, 1973, the landlords filed Darkhast No. 104 of 1973 to execute the decree in their favour.
The tenant raised various objections.
One of the objections was that subsequent to the compromise decree there was a fresh agreement of lease between the landlords and himself.
This was denied by the landlords.
Another objection was that the provisions of the Amending Act 22 of 1972 were not extensive enough to save the decree dated July 12, 1967.
The third objection was that in any case the decision in miscellaneous application No. 597 of 1970 holding the decree to be a nullity operated as res judicata between the parties.
The first of the objections was left open by all the Courts for future adjudication.
The second and third objections alone were considered, for the time being.
In the judgment under appeal, the High Court over ruled the second and third objections of the tenant and hence this appeal by special leave.
The first question for our consideration is whether the compromise decree dated July 12, 1967 is saved by Amending Act 22 of 1972? Before the decision of this Court in Indu Bhusan Bose vs Rama Sundari Devi & Anr. (supra), there was a conflict of views on the question whether Entry 3 of List I of Schedule VII to the Constitution which enabled Parliament to legislate in regard to "the regulation of housing accommodation (including the control of rents)" in Cantonment areas was wide enough to include the subject of relationship of landlord and tenant of buildings situated in Cantonment areas.
The High Courts of Bombay, Nagpur and Patna had taken the view that regulation of the relationship of landlord and tenant did not fall within Entry 2 of List I of the Seventh Schedule to the Govt.
Of India Act, 1935 (which corresponded to Entry 3 of List I of Seventh Schedule to the Constitution and that the Provincial Legislature was competent to legislate even in regard to the regulation of the relationship between landlord and tenant in Cantonment areas by virtue of Entry 21 of List II of the 229 Seventh Schedule to the Govt.
Of India Act, 1935(which corresponded to Entry 18 of the List II of the Seventh Schedule to the Constitution).
On the other hand the High Courts of Calcutta and Rajasthan held that the power of the State Legislature to legislate in respect of landlord and tenant of buildings was to be found not in Entry 18 of List II but in Entries 6, 7 and 13 of List III of the Seventh Schedule to the Constitution and that such power was circumscribed by the exclusive power of Parliament to legislate on the same subject under Entry 3 of List I. The view expressed by the Calcutta and Rajasthan High Courts was accepted as correct by this Court in Indu Bhusan Bose vs Rama Sundari Devi & Anr.
(supra), But even before the decision of this Court in Indu Bhusan Bose vs Rama Sundari Devi & Anr.
(supra), Parliament appeared to take view of the Calcutta and Rajasthan High Courts as the correct view and proceeded to enact the , by Section 3 of which the Central Government was enabled, by notification in the official Gazette, to extend to any Cantonment with such restrictions and modifications as it thought fit.
Any enactment relating to the control of rent and regulation of house accommodation which was in force on the date of the notification in the State in which the Cantonment was situated.
Though this Act came into force on December 18, 1957, no notification was issued extending the provisions of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, to Kirkee and other Cantonment areas within the State of Bombay until 1969.
Apparently such a notification was thought unnecessary in view of the fact that the Bombay Act was supposed to operate within the said Cantonment areas because of the consistent view taken by the Bombay High Court, regarding the applicability of the Bombay Act to such areas.
But the position was upset as a result of the decision of this Court in Indu Bhusan Bose vs Rama Sundari Devi & Anr.
(supra).
Thereafter it became necessary that a notification under section 3 of the Cantonment (Extension of Rent Control Laws) Act, 1957, should be issued.
It was accordingly done on December 29, 1969.
But it was soon realised that the entire problem was not thereby solved since all such notification as the one issued on December 29, 1969 could only be prospective and could not save decree which had already been passed.
Amending Act 22 of 1972 was, therefore, enacted for the express purpose of saving decrees which had already been passed.
The statement of objects and reasons of the amending act stated: ". .
But these notifications could be issued only prospectively and could not save the decrees already passed.
A number of representations had been received 230 from and on behalf of tenants and tenants ' associations, ventilating their grievances in this regard.
It was accordingly proposed to amend section 3 to empower the Government to extend to any Cantonment any enactment relating to the control of rent and regulation of house accommodation in force in the State in which the Cantonment was situated either from the commencement of such enactment or from 26 1 1950, the date when the Constitution came into force, whichever was later, and to save decrees already passed under the enactment deemed to have been in force in the Cantonment before such extension.
" By section 2 of the Amending Act of 1972 the Principal Act of 1957 was itself deemed to have come into force on January 26, 1950.
Original section 3 was renumbered as sub. section 1 and the words "on the date of the notification" were omitted and "were deemed always to have been omitted".
New sub. sections 2, 3 and 4 were introduced and they are as follows: "(2) The extension of and enactment under sub section (1) may be made from such earlier or future date as the Central Government may think fit: Provided that no such extension shall be made from a date earlier than (a) the commencement of such enactment, or (b) the establishment of the cantonment, or (c) the commencement of this Act, whichever is later.
(3) Where any enactment in force in any State relating to the control of rent and regulation of house accommodation is extended to a cantonment from a date earlier than the date on which such extension is made (hereafter referred to as the "earlier date"), such enactment, as in force on such earlier date, shall apply to such cantonment, and where any such enactment, has been amended at any time after the earlier date but before the commencement of the Cantonments (Extension of Rent Control Laws Amendment Act 1971, such enactment, as amended, shall apply to the cantonment on and from the date on which the enactment by which such amendment was made, came into force.
(4) Where, before the extension to a cantonment of any enactments, relating to the control of rent and regula 231 tion of house accommodation therein (hereafter referred to as the "Rent Control Act"): (i) any decree or order for the regulation of, or for eviction from, any house accommodation in that cantonment, or (ii) any order in the proceedings for the execution of such decree or order, or (iii) any order relating to the control of rent or other incident of such house accommodation, was made by any court, tribunal or other authority in accordance with any law for the control of rent and regulation of house accommodation for the time being in force in the State in which such cantonment is situated, such decree or order shall, on and from the date on which the Rent Control Act is extended to that cantonment, be deemed to have been made under the corresponding provisions of the Rent Control Act, as extended to that cantonment, as if the said Rent Control Act, as so extended, were in force in that Cantonment, on the date on which such decree or order was made".
The effect of the provisions of the Amending Act appear to us lo be very clear.
Under section 3 of the unamended Act, a notification could be issued extending a State Legislation to a Cantonment area with effect from the date of the notification.
As a result of the introduction of sub. section 2 of section 3 the notification can be given effect from an anterior date or a future date, but it cannot be made effective from a date earlier than the commencement of the State Legislation or the establishment of the Cantonment or the commencement of the Cantonment (Extension of Rent Control Laws) Act, 1957.
section
3 is merely consequential to sub.
section
2 in that it provides that a State Legislation when extended to a Cantonment area from an anterior date, such legislation is to stand extended with all the amendments to such State Legislation made after such anterior date but before the commencement of the 1972 Amending Act, the amendments being applicable as and when they come into force.
Sub .s. 4 makes provision for the saving of decrees or orders for the regulation of or for eviction from any house accommodation in a Cantonment made before the extension of the State Legislation to the Cantonment provided certain conditions are fulfilled.
One condition is that the decree or order must have been made by any Court, Tribunal or other authority in accordance with a law for the control of rent and regula 232 tion of house accommodation for the time being in force in the State in which such Cantonment is situated.
In other words the decree or order must have been made by the wrong application of the State legislation to the Cantonment area.
If a decree or order has been made by such wrong application of the State Legislation to the Cantonment area, it shall be deemed, with effect from the date of the notification, to have been properly made under the relevant provisions of the State Legislation.
Shri V.M. Tarkunde, learned Counsel for the appellant urged that sub. section
4 had to be read in the context of sub. section 2 and 3 and that it was to be applied only to cases where a notification issued under sub. section 1 was given retrospective effect under the provisions of sub. section 2.
We see no justification for confining the applicability of sub. section 4 to cases where notifications are issued with retrospective effect under sub.
section
Sub. section 4 in terms is not as confined.
It applies to all cases of decrees or orders made before the extension of a State Legislation to a Cantonment area irrespective of the question whether such extension is retrospective or not.
The essential condition to be fulfilled is that the decree or order must have been made as if the State Legislation was already in force, although, strictly speaking, it was not so in force.
In our view sub.
section
4 is wide enough to save all decrees and orders made by the wrong application of a State rent control and house accommodation legislation to a Cantonment area, though such State Legislation could not in law have been applied to Cantonment areas at the time of the passing of the decrees or order.
We, therefore, hold that the decree obtained by the respondents is saved by the provisions of section 3, 4 sub. section 4 of the Cantonment (Extension of Rent Control Laws) Act of 1957.
as amended by Act 22 of 1972.
The second submission of the learned counsel for the appellant was that the decision of the executing Court in Miscellaneous Application No. 597 of 1970 declaring the decree to be a nullity separated as res judicata between the parties.
The learned counsel relied upon the following observations of this Court in Mathura Prasad Bajoo Jaiswal & ors.
vs Dessibai N.B. Jeejeebhoy(1) "The matter in issue, if it is one purely of act, decided in the earlier proceeding by a competent court must in a subsequent litigation between the same parties be regarded as finally decided and cannot be reopened.
A mixed question of law and fact determined in the earlier proceeding between the same parties may not, for the reason, be questioned in a subsequent proceeding between 233 the same parties.
But, where the decision is on a question of law, i.e. the interpretation of a statute, it will be res judicata in a subsequent proceeding between the same parties where the cause of action is the same, for the expression 'the matter in issue ' in section 11 Code of Civil Procedure means the right litigated between the parties i.e. the facts on which the right is claimed or denied and the law applicable to the determination of that issue.
Where, however, the question is one purely of law and it relates to the jurisdiction of the Court or a decision of the Court sanctioning something which is illegal, by resort to the rule of res judicata a party affected by the decision will not be precluded from challenging the validity of that order under the rule of ( ' res judicata, for a rule of procedure cannot supersede the law of the land.
In the very observations relied upon by the learned counsel for the appellant the last sentence is clearly against the appellant.
The matter becomes clear if certain observations made earlier in the very judgment are considered.
They are: "A question relating to the Jurisdiction of a Court cannot be deemed to have been finally determined by an erroneous decision of the Court.
If by an erroneous interpretation of the statute the Court holds that it has no jurisdiction, the question would not, lin our judgment, operate as res judicata.
Similarly by an erroneous decision if the Court assumes jurisdiction which it does not possess under the statute, the question cannot operate as res judicata between the same parties, whether the cause of action in the subsequent litigation is the same or otherwise".
In that case the appellant who had a lease of an open land for construction of buildings had applied for determination of standard rent under the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947.
The application was rejected on the ground that the Act did not apply to open land let for construction.
The view was confirmed by the High Court.
Later in another case, the view taken by the High Court was over ruled by the Supreme Court and it was held that the Act applied to open land let out for construction The appellant once again filed an application for determination of standard rent.
The lower Courts and the High Court held that the previous decision operated as res judicata between the parties.
The Supreme Court reversed the view of the lower courts and the High Court.
It 16 189SCI/80 234 was held that the earlier decision that the Civil Judge had no jurisdiction to entertain the application for determination of standard rent ? was wrong in view of the judgment of the Supreme Court.
If the decision in the previous proceeding was to be regarded as res judicata it would assume the status of a special rule of law applicable to the parties relating to the jurisdiction of the Court in derogation of the rule declared by the legislature.
The situation in the present case is analogous.
The executing Court had refused to exercise jurisdiction and to execute the decree on the ground that the decree was a nullity as the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, had no application to buildings in Cantonment areas.
That defect having been removed and all decrees obtained on the basis that the Bombay rent law applied to the Kirkee Cantonment area having been validated by Act 22 of 1972, it cannot be said that the earlier decision holding that the decree was a nullity operated as res judicata.
As pointed out by this Court in Mathura Prasad Bajoo Jaiswal & Ors.
I vs Dassibai N.B. Jeejeebhoy (supra) if the earlier decision in the Miscellaneous Application is to be regarded as res judicata it would assume the status of a special rule of jurisdiction applicable to the parties in derogation of the law declared by the legislature.
We, therefore, see no substance in the second submission.
Civil Appeal No. 708 of 1978 is accordingly dismissed with costs.
In Civil Appeal No. 709 of 1978, the only question is about the validity of a decree obtained before the date of the notification issued under section 3 of the .
In view of what we have said above, this question has to be decided against the appellant.
This appeal is also dismissed with costs.
In Civil Appeal No. 718 of 1978, special leave was granted under a misapprehension that the appeal raised the same questions as were raised in Civil Appeal No. 708 of 1978.
It is now stated that it is not so.
This appeal is also dismissed with costs.
S.R. Appeals dismissed.
| IN-Abs | The respondents in Civil Appeal No. 708/78 Mamanchand Ratilal Agarwal and others, who are the landlords of premises bearing door No. 16 in Nawa Bazar Area Kirkee Cantonment, filed a civil suit No. 17,0 of 1964 against the Appellant tenant for recovery of possession and arrears of rent under the provisions of Bombay Rents, Hotel and Lodging House Rates Control Act, 1947.
The suit was decreed.
There was an appeal by the tenant.
It resulted in a com promise decree dated July 12, 1967 by which some time was given to the tenant to vacate the premises.
On April 29, 1969, in the case of Indu Bhushan Bose vs Rama Sundari Devi and Anr.
; , this Court held that Parliament alone had and the State Legislature did not have the necessary competence to make a law in regard to the "regulation of house accommodation in Cantonment Areas.
" The expression "regulation of house accommodation" was interpreted as not to be confined to allotment only but as extending to other incidents, such as termination of existing tenancies and eviction of persons in possession of house accommodation etc.
To get over the situation created by the said decision, on December 29, 1969, the Central Government issued a notification under section 3 of the Cantonment (Extension of Rent Control Laws) Act, 1957 extending the pro visions of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, to the Kirkee and other cantonment areas.
In June 2, 1972, the Parliament also enacted Act 22 of 1972 amending the Cantonment (Extension of Rent Control laws) Act 1957, purporting to enable the Central Government to make the Rent Control Laws in the several States applicable to Cantonment areas from dates anterior to the dates of notification and further purporting to validate certain pre existing decrees.
In the meanwhile, taking advantage of the decision in the case of Indu Bhushan Bose vs Rama Sundari Devi and Anr., the appellant tenant filed Miscellaneous Application No. 597/70 for a declaration that the decree obtained against him was a nullity and incapable of being executed.
This application was allowed by the Court on November, 19, 1971.
But, after the enactment of Act 22 of 1972, on January 11, 1973 the landlords filed Darkhast No. 104 of 1973 to execute the decree in their favour.
The appellant tenant raised three objections, namely, (i) subsequent to the compromise decree there was a 225 fresh agreement of lease between the landlords and himself; (ii) the provisions of the amending Act 22 of 1972 were not extensive enough to save the decree dated July 12, 1967; ,(iii) in any case, the decision in Miscellaneous Application No. 597/70 holding the decree to be a nullity operated as res judicata between the parties.
The first objection was left open by all the Courts for future adjudication, as the landlord denied the existence of any fresh agreement.
The second and third objections alone were considered.
In the judgment under appeal, the High Court overruled them and hence this appeal by special leave and two other similar appeals.
Dismissing the appeals the Court, ^ HELD: 1.
In Indu Bhushan Bose vs Rama Sundari and Anr., [1970 ] 1 S.C.R. 443, the Supreme Court agreed with the view of the Calcutta and Rajasthan High Courts and held that the power of the State Legislature to legislate in respect of landlord and tenant of buildings was to be found not in Entry 18 of the List II, but in Entries 6, 7 and 13 of List III of the Seventh Schedule to the Constitution and that such power was circumscribed by the exclusive power of Parliament to legislate on the same subject under Entry 3 of List I.
But even before this decision Parliament took the view of the Calcutta Rajasthan High, Courts as the correct view and proceeded to enact the Cantonment (Extension of Rent control Laws) Act, 1957, by section 3 of which the Central Government was enabled, by notification in the official Gazette to extend to any cantonment with such restrictions and modifications as it thought fit, any enactment relating to the control of rent and regulation of house accommodation which was in force on the date of the notification in the State in which the Cantonment was situated.
Though this Act came into force on December 18, 1957, no notification was issued extending the provisions of the Bombay Rents Hotel and Lodging House Rates Control Act, 1947, to Kirkee and other Cantonment areas within the State of Bombay until 1969.
Apparently such a notification was thought unnecessary in view of the fact that the Bombay Act was supposed to operate within the said Cantonment areas because of the consistent view taken by the Bombay High Court regarding the applicability of the Bombay Act to such areas.
In view of the Supreme Court decision in Indu Bhushan 's case, it became necessary that a notification under section 3 of the Cantonment (Extension of Rent Control Laws) Act, 1957, should be issued.
It was accordingly done on December 29, 1969.
But it was realised that the entire problem was not thereby solved since all such notifications as the one issued on December 29, 1969 could only be prospective and could not save decrees which had already been passed.
Therefore, Amending Act 22 of 1972 was enacted for the express purpose of saving decree which had already been passed.
By section 2 of the Amending Act of 1972 the Principal Act of 1957 was itself deemed to have come into force on January 26, 1950.
Original Section 3 was renumbered as subsection 1 and the words "on the date of the notification" were omitted and "were deemed always to have been omitted." [229 B G & 230 C D] 2.
Under section 3 of the unamended Act, 1957, a notification could be issued extending a State Legislation to a Cantonment area with effect from the date of notification.
As a result of the introduction of sub section 2 of section 3 the notification can be given effect from an anterior date or a future late but it cannot be made effective from a date earlier than the commencement 226 of the State Legislation or the establishment of the Cantonment or the commencement of the Cantonment (Extension of Rent Control Laws) Act, 1957.
Sub section 3 is merely consequential to sub section 2, in that it provides that a State Legislation when extended to a Cantonment area with effect from the date of the notification from an anterior date, such legislation is to stand extended with all the amendments to such State Legislation made after such anterior date but before the commencement of the 1972 Amending Act, the amendments being applicable as and when they come into force.
Sub section
4 makes provision for the saving of decrees or orders for the regulation of or for eviction from any house accommodation in a Cantonment made before the extension of the State Legislation to the Cantonment provided certain conditions are fulfilled.
One condition is that the decree or order must have been made by any Court, Tribunal or other authority in accordance with a law for the control of rent and regulation of house accommodation for the time being in force in the State in which such Cantonment is situated.
In other words the decree or order must have been made by the wrong application of the State Legislation to the Cantonment area.
If a decree or order has been made by such wrong application of the State Legislation to the Cantonment area it shall be deemed, with enact from the date of the notification to have been properly made under the relevant provisions of the State Legislation.
1231 A H, 232 A BI 3.
The applicability of sub section 4 cannot be confined to cases where notifications are issued with retrospective effect under sub section 2.
Sub section 4 is not so confined.
It applies to all cases of decrees or orders made before the extension of a State Legislation to a Cantonment area irrespective of the question whether such extension is retrospective or not.
The essential condition to be fulfilled is that the decree or order must have been made as if the State Legislation was already in force, although.
strictly speaking, it was not so in force.
Subsection 4 is wide enough to save all decrees and orders made by the wrong application of State rent control and house accommodation legislation to a Cantonment area, though such State Legislation could not in law have been applied to cantonment areas at the time of the passing of the decrees or order.
The decree obtained by the respondent is saved by the pro visions of section 3, sub section 4 of the Cantonment (Extension of Rent Control Laws) Act 22 of 1957, as amended by Act 22 of 1972.
[232 E F] 4.
If the decision in the previous proceeding was to be regarded as res judicata it would assume the status of a special rule of law applicable to the parties relating to the jurisdiction of the Court in derogation of the rule declared by the legislature.
[234 A] In the present case, the executing Court had refused to exercise jurisdiction and to execute the decree on the ground that the decree was a nullity as the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, had no application to buildings in Cantonment areas.
That defect having been re moved and all decrees obtained on the basis that the Bombay rent law applied to the Kirkee Cantonment area having been validated by Act 22 of 1972, it cannot be said that the earlier decision holding that the decree was a nullity operated as res judicata.
[234 B D] Mathura Prasad Bajoo Jaiswal and ors.
vs Dessibai N. B. Jeejeebhoy, (@) 836: followed.
|
Civil Appeal No. 512 of 1979.
Appeal from the Judgment and order dated 18 5 1965 of the Allahabad High Court in Civil Writ No. 2945 of 1964.
Danial Latifi and Mrs. Urmila Sirur for the Appellant.
Nemo for the Respondent.
The Judgment of the Court was delivered by D GUPTA, J.
A notice issued under section 7 of the (hereinafter called the Act) gives rise to this appeal brought on a certificate granted by the Allahabad High Court on August 18, 1969 under Article 133(1)(a) of the Constitution of India.
Sub section (1) of section 7 states: E "Where the Custodian is of opinion that any property is evacuee property within the meaning of this Act, he may, after causing notice thereof to be given in such manner as may be prescribed to the persons interested, and after holding such inquiry into the matter as the circumstances of the case permit, pass an order declaring any such property to be evacuee property.
" Rule 6 of the Administration of Evacuee Property (Central) Rules, 1950 (hereinafter called the Rules) which lays down the manner of inquiry under section 7 provides in sub rule (1) that where the Custodian is satisfied from information in his possession or otherwise that any property or an interest therein is prima facie evacuee property, he shall cause a notice to be served in the prescribed form on the person claiming title to such property or interest and on any other person or persons whom he considers to be interested in the property.
Sub rule (2) of rule 6 says that the notice "shall, as far as practicable, mention the grounds on which the property is sought to be declared evacuee property and shall specify the provision of the Act under which the person claiming any title to, or interest in, such property is alleged 17 189 SCI/80 250 to be an evacuee".
"Evacuee" has been defined in section 2(d) of the Act to include several categories of persons, but for the purpose of this case it is necessary to refer only to first three of them.
The relevant part of the definition is as follows: "2(d) "evacuee" means any person, (i) who, on account of the setting up of the Dominions of India and Pakistan or on account of civil disturbances or the fear of such disturbances, leaves or has, on or after the 1st day of March, 1947, left, any place in a State for any place outside the territories now forming part of India, or (ii) who is resident in any place now forming part of Pakistan and who for that reason is unable to occupy, supervise or manage in person his property in any part of the territories to which this Act extends, or whose property in any part of the said territories has ceased to be occupied, super vised or managed by any person or is being occupied, supervised or managed by an unauthorised person, or (iii) who has, after the 14th day of August, 1947, obtained, otherwise than by way of purchase or exchange, any right to, interest in or benefit from any property which is treated as evacuee or abandoned property under any law for the time being in force in Pakistan.
" The appellant was declared an evacuee by the Assistant Custodian (Judicial), Deoria.
Having failed to have the declaration set aside by the appellate and the revisional authorities under the Act, the appellant moved the High Court by a writ petition challenging the notice under s section 7 and the subsequent proceedings based on it.
This appeal is from the order of the High Court dismissing the writ petition in limine.
The notice in question was issued by the Assistant Custodian, Evacuee Property, Deoria, to the appellant and his brother Bashir Ahmad on March 11, 1954 stating that there was "credible information in possession of the Custodian" that they were evacuees under clause (iii) of section 2(d) of the Act and calling upon them to show cause why orders should not be passed declaring them evacuees and their property as evacuee property.
The notice purports to have been issued in accordance with rule 6 which requires a statement of the tactual grounds on which the notice is based.
The notice in this case 251 appears to be merely a copy of the prescribed form without particulars.
The ground stated in the notice reproduces only what the form contains and that is as follows: "Acquisition of any rights to, interest in or benefit from any evacuee or abandoned property in Pakistan, otherwise than by way of purchase or exchange." By this order dated December 14, 1955, the Assistant Custodian (Judicial), Deoria, declared the appellant and his brother evacuees under clauses (i), (ii) & (iii) of section 2(d) though in the notice issued it was alleged that the information in possession of the Custodian was that they were evacuees under clause (iii) only.
An appeal preferred under section 24 of the Act was dismissed by the Authorised Deputy Custodian on August 30, 1963 who upheld the order of the Assistant Custodian (Judicial).
The Authorised Deputy Custodian, however, found that the ground based on clause (iii) of section 2(d) of the Act was "very vague" and that the notice was "defective to that extent".
It has been stated already that the notice issued under rule 6(1) was based only on that ground and clauses (i) and (ii) of section 2(d) were not mentioned at all in that notice.
The Assistant Custodian General, Evacuee Property, U.P. to whom the appellant and his brother preferred a revision found no merit in the applicants ' case.
The Court dismissed in limine the writ petition made by the appellant and his brother Bashir Ahmad on the view that the order of the Assistant Custodian General did not suffer from any error.
Bashir Ahmad died after the High Court had disposed of the writ petition, and the appeal before us is by Nasir Ahmad alone.
It is necessary to state a few more facts.
It appears that several years before the present notice under section 7 of the Act was issued, on November 22, 1949 when the Administration of Evacuee Property ordinance, 1949, replaced by the Act in 1950 was in force, a notice was issued to the appellant and his brothers including Bashir Ahmad by Deputy Custodian of Evacuee Property, Deoria, Uttar Pradesh, .
alleging that they were transferring their movable and immovable ; properties to Pakistan and stating that for this reason they were being considered as evacuees and their property was being treated as evacuee property.
The notice invited objections from them, if any, within 30 days.
At the instance of District Magistrate, Deoria, a similar notice was issued to the appellant and his brothers by the authority in District Chapra in the State of Bihar where also they had some properties, asking them to show cause why they should not be declared or intending evacuees.
The Act had then come into force and this notice was issued under section 19 of the Act.
Section 19 provided 252 for issue of notice to a person before declaring him an "intending evacuees".
The Act as originally passed contained in clause (e) of section.
2 a definition of "intending evacuee" as meaning a person who had transferred after August 14, 1947 any of his assets to Pakistan.
Section 19 was repealed and clause (e) of section 2 was deleted in 1953.
On enquiry it was found that there was no reliable evidence to justify a declaration that the appellant and his brothers were intending evacuees and the Deputy Custodian, Chapra, dropped the proceeding on May 24, 1952.
On November 29, 1952 the Deputy Custodian, Deoria, also dropped the proceeding started upon the notice issued by him, but on the same day he initiated a proceeding under section 7 of the Act against the appellant and his brother Bashir Ahmad that ended in the declaration challenged in this appeal.
The facts stated above clearly show that the notice and the declaration that followed are both invalid.
The notice called upon the appellant and his brother to show cause why they should not be declared evacuees under clause (iii) of section 2(d) of the Act and the ground mentioned in the notice was also based on that clause, yet the Assistant Custodian found that they were evacuees under clauses (i) and (ii) as well.
The Authorised Deputy Custodian held that the ground given in the notice in support of the case based on clause (iii) was vague and the notice was defective so far as that ground was concerned, but that was the only case the appellant was called upon to answer.
The foundation of a proceeding under section 7 is a valid notice and an inquiry which travels beyond the bounds of the notice is impermissible and without jurisdiction to that extent.
Therefore the declaration that the appellant was an evacuee under clauses (i) and (ii) of section 2(d) of the Act must be held invalid.
Under rule 6 the notice under section 7 must be issued in the prescribed form and contain the grounds on which the property is sought to be declared evacuee property.
As stated earlier, the notice that was issued in this case merely reproduced the form without mentioning the particulars on which the case against the appellant was based.
It was.
essential to state the particulars to enable the appellant to answer the case against him.
Clearly therefore the notice did not comply with rule 6 and could not provide a foundation for the proceedings that followed.
What is said in the preceding paragraph makes it plain that the authority concerned did not apply his mind to the relevant material before issuing the notice.
The same thing is apparent from another fact.
It has been stated that on November 29, 1952 the Deputy Custodian, Deoria, dropped the proceeding seeking to declare the appellant 253 an intending evacuee and that on the same day he directed the initiation of a proceeding under section 7.
Section 7 required the Custodian to form an opinion that the property in question is evacuee property within the meaning of the Act before any action under that section is taken.
Also, under rule 6 the Custodian has to be satisfied from information in his possession or otherwise that the property is prima facie evacuee property before a notice is issued.
On November 29, 1952 no evidence was found to support a declaration that the appellant was an intending evacuee.
There is no material on record to suggest that on that very day the authority had before him any evidence to justify the initiation of a proceeding to declare the appellant an evacuee and his property as evacuee property.
The notice under section 7 thus appears to have been issued without any basis.
The Assistant Custodian General who found no merit in the revisional application preferred by the appellant overlooked these aspects of the case.
We are therefore unable to agree with the High Court that the Assistant Custodian General 's order did not suffer from any error.
We allow this appeal and quash the notice issued to the appellant on March 11, 1954 and all subsequent proceedings based on it.
The respondents have not appeared to contest the appeal; there will be no order as to costs.
P.B.R. Appeal allowed .
| IN-Abs | A notice under section 7 of the , was Issued by the Assistant Custodian of Evacuee Property to the appellant and his brother (since deceased) stating that there was "credible information in possession of the Custodian" that they were evacuees under clause (iii) of section 2(d) of the Act and calling upon them to show cause why they would not be declared evacuees and their property as evacuee property The Assistant Custodian eventually declared the appellant and his brother as evacuees under clauses (i), (ii) & (iii) of section 2(d) of the Act.
The Authorised Deputy Custodian, although he dismissed the appellant ' appeal under section 24 of the Act, pointed out that the ground based on clause (iii) of section 2(d) was "very vague" and that the notice was "defective to that extent".
The Assistant Custodian General Evacuee Property dismissed the appellant 's review petition and the High Court dismissed the writ petition in limine.
Allowing the appeal, ^ HELD: The notice and the declaration that followed stating that the appellant was an evacuee under clauses (i) and (ii) of section 2(d) of the Act are invalid.
[252E, F] 1.
The notice called upon the appellant and his brother to show cause why they should not be declared evacuees under clause (iii) of section 2(d) and the ground mentioned in the notice was also based on that clause, yet the Assistant Custodian found that they were evacuees under clauses (i) and (ii) as well.
The Authorised Deputy Custodian held that the ground given in the notice in support of the case based on clause (iii) was vague and the notice was defective so far as that ground was concerned, but that was the only case the appellant was called upon to answer.
The foundation of a proceeding under section 7 is a valid notice and an inquiry which travels beyond the bounds of the notice is impermissible and without jurisdiction to that extent.
[252D E 2.
From the facts stated above, it would appear that the Authority concerned did not apply his mind to the relevant material before issuing the notice.
The same thing is apparent from another fact.
On November 29, 1952 the Deputy Custodian dropped the proceeding seeking to declare the appellant an intending evacuee and that on the same day directed initiation of a proceeding under section 7.
Section 7 required the Custodian to form an opinion that the property in question was evacuee property within the meaning of the Act 249 before any action under that section was taken.
Under rule 6 of the Administration of Evacuee Property (Central) Rules 1950 the Custodian had to be satisfied from information in his possession or otherwise that the property was prima facie evacuee property before a notice was issued.
On November 29, 1952 no evidence was found to support a declaration that the appellant was an intending evacuee.
There was no material on record to suggest on that very day the authority had before him any evidence to justify initiation of a proceeding to declare the appellant an evacuee and his property as evacuee property.
The notice under section 7 appears to have been issued without any basis.
The Assistant Custodian General, who found no merit in the reversional application preferred by the appellant, overlooked these aspects of the case.
[252H, 253 A B]
|
ISDICTION: Writ Petition Nos.
147 to 151 of 1976.
(Under Article 32 of the Constitution) WITH SPECIAL LEAVE PETITION (CIVIL) No.7905 OF 1979 From the Judgment and Order dated 29 8 1978 of the Allahabad High Court, in S.A. No. 887/70.
M.C. Bhandare, Mrs. section Bhandare and T. Sreedharan for the Petitioners.
L.N. Sinha, Attorney General, Mr. M.K. Banerjee, Addl.
Solicitor General, R.B. Datar, A.K. Ganguli, R.N. Sachthey and Miss A. Subhashini for RR 1 and 2.
F.S. Nariman, Anil B. Dawan, P.H. Parekh, C.B. Singh and R. Karanjwala for RR 1 & 19.
S.C. Gupta and Ramesh Chand for RR 14.
Madan Bhatia and D. Goburdhan for RR 20.
Y.S. Chitale, V.M. Tarkunde, and A.N. Karkhanis for RR 28 and 31.
S.D. Gupta in person for impleading RR in WP 147/76.
Girdharee Singh and S.K. Jain for the Intervener.
147 The Judgment of the Court was delivered by, CHINNAPPA REDDY, J.
Several hundred Railway Engineers who should have been busy elsewhere, building bridges, laying or doubling tracks and so on have found themselves in the corridors of this Court in pursuit of the leaves of career.
Quite a contingent was present in Court anxiously watching the proceedings and listening with expect attention to every word that fell from counsel and judge.
One could not help wondering whether this multitiered. 'multi varne ' Service system was itself not productive of a career neurosis, destructive of the very efficiency which is sought to achieve.
In this case, as in most other service matters that reach this Court, the question which arise for consideration relate to classification, confirmation, seniority, promotion etc., questions which appear to agitate the minds of the members of all services.
Administrators seeking to find solutions to some of the problems very soon discover that their solutions are no more than illusions and have created other problems.
First one party and then another party, all seek the protection of the Court.
The Court is no expert administrator.
Lacking expertise, lacking the administrator 's access to information, there are obvious limitations to what the Court may be.
The Court may at best attempt to solve some basic legal issues.
That the Court strives to do without disturbing the administrative equilibrium.
The service with which we are concerned in this Case is the Indian Railway Service of Engineers, Class I.
While the petitioners claim that they were appointed to this service after selection by the Union Public Service Commission, the respondents allege that the petitioners were appointed as temporary Engineers only, constituting a special class and service by themselves, and were not appointed to the Indian Railway Service of Engineers Class I at all.
It appears that from the time of the first Five Year Plan onwards several important assignments such as the construction of major bridges, new lines, doubling of electrification of existing lines etc. were taken up by the Civil Engineering Department of the Indian Railways.
It became necessary to create a number of temporary posts of Class I (Indian Railway Service of Engineers) and Class II Engineers to carry out these works.
In 1955 it was estimated that about 200 additional Engineers would be necessary within the next two years to deal with the planning, surveying, estimating and construction of the multitude of the proposed development works.
It was not thought possible to 148 meet the additional personnel requirements from existing sources, which were direct recruitment to Class I on the basis of the results of a competitive examination and promotion to Class II from Class III.
Though the conversion of some of the temporary posts into permanent ones might meet part of the requirement, it was thought, recruitment through normal channel to such posts would necessarily have to be spread over a period of years so as to avoid 'bunching of officers within particular age group '.
It was, therefore, decided to recruit, in the first instance, fifty temporary Engineers immediately.
Their scale of pay was to be the same as that of the Indian Railway Service of Engineers.
The age limit was to be 25 to 35 years so as to attract Engineers with practical experience.
The appointments were to be normally made on the minimum of the time scale but persons with previous experience could be fitted into the scale at a higher stage.
As the posts were to be temporary, it was decided that an incentive should be given to attract suitable candidates by reserving a proportion of the permanent vacancies in the Indian Railway Service of Engineers each year for being filled by such temporary Engineers.
Six vacancies in the Indian Railway Service of Engineers were to be so earmarked annually to start with.
The quota could be increased later.
On permanent appointment to the Indian Railway Service of Engineers seniority would count from the date of such appointment.
Proposals on these lines were conveyed by the Railway Board to the Union Public Service Commission on February 21, 1955 with a request to take steps for the early recruitment of temporary Engineers.
A formal requisition in the prescribed form was also sent to the Union Public Service Commission.
In this form, the post was designated as "Assistant Engineer", the number of posts was mentioned as 50, and, the class of service to which the post belonged was mentioned as "Gazetted Railway Service".
Against the heading "whether permanent or temporary", the posts were mentioned as "temporary".
Against the column "if the post is temporary, please state : (a) when it was sanctioned; (b) the period for which it has been sanctioned and (c) irrespective of the period of sanction how long it is expected to last and whether it is expected to be retained on a permanent basis eventually", it was mentioned that the posts would be sanctioned shortly in connection with a number of projects, that the period would be two years in the first instance but was likely to be extended upto five years and that the employment might continue indefinitely but on a temporary basis.
It was specified that the candidates would be eligible to be considered for absorption in permanent vacancies at the rate of six per year.
The scale was mentioned as Rs. 350 350 380 380 30 590 E.B. 30 770 40 850, this being the Junior Scale of pay of Indian Railway Service of Engineers Class I.
It was 149 said that higher initial salary was permissible according to experience and qualifications.
The academic qualifications were to be the same as for regular recruitment to Indian Railway Service of Engineers.
Against the heading prospects of promotion to higher post it was stated that they might be considered for promotion to senior scale posts in the grade of Rs. 600 40 1000 50/2 1150 according to the exigencies of service.
Similar proposals and "indents" for recruitment of temporary officers to six other departments of the Railways were also simultaneously made.
Pursuant to the requisition by the Railway Board, the Union Public Service Commission issued an advertisement inviting applications for "50 posts of Assistant Engineers, Ministry of Railways, Service Class I (Gazetted), posts temporary for two years in the first instance but likely to continue".
The minimum educational qualification was stated to be a Degree in Civil Engineering, but an additional qualification of 'about 3 years experience as a Civil Engineer ' was also prescribed.
The qualification was relaxable at the discretion of the commission in the case of candidates otherwise well qualified.
It was mentioned in the advertisement that the candidates would be eligible 'for being considered for absorption in permanent vacancies at the rate of six per year ' and might be considered 'for promotion to senior grade posts in the scale of Rs. 600 40 1100 50/2 1150 according to the exigencies of service '.
It appears that the reference to Class I in the advertisement was considered by the Railway Board to be a mistake.
The Railway Board, therefore, addressed a letter dated October 31, 1955 to the Union Public Service Commission pointing out that in their requisition they had indicated "Gazetted Railway Service" as the service to which recruitment was to be made and that it was not intended that it should be either Class I or Class II.
It was also mentioned that statements had been made on the floor of the Lok Sabha and Rajya Sabha that the posts were "temporary" and "neither in Class I nor in Class II".
The Commission was accordingly requested to issue a suitable correction slip.
Thereafter, in the subsequent advertisements issued by the Union Public Service Commission there was no reference to Class I.
It was merely mentioned that applications were invited for specified number of posts of "Assistant Engineers (Civil), Ministry of Railways, posts temporary but likely to continue".
The petitioners in the various Writ Petitions who submitted their applications in response to such advertisements, were selected by the Union Public Service Commission, at various times between 1955 150 and 1964 and were offered appointments as 'Temporary Assistant Engineers ' by the Railway Board.
Everyone of them was told that the appointment would be on a temporary basis in the scale of Rs. 350 350 380 380 30 590 E.B. 30 770 40 850.
They were also expressly told that the posts to which they were appointed would be neither in Class I nor in Class II, service though they were eligible, on completion of three years service, to be considered alongwith other temporary Assistant Engineers for absorption in Class I (Junior Scale) against vacancies ear marked from time to time for the absorption of temporary Assistant Engineers in the Indian Railway Service of Engineers Cadre upto a maximum of six per year.
They were also expressly informed that in the event of their being selected in Class I Service their seniority would count from the date of their permanent appointment to Class I Service.
They were required to execute service agreements "as applicable to temporary officers".
It was also stipulated that in all matters not specifically referred to in the order of appointment, the person appointed would be governed by the provisions of the Indian Railway Establishment Code and the extant orders issued from time to time.
The petitioners accepted the terms offered to them and joined duty in the posts to which they were appointed.
The agreements which the petitioners and others like them were required to execute and which they presumably did execute (were in a standard form known as 'Agreement for Temporary Assistant Officers of the Indian Railways '.
Paragraph 2 of the standard form and agreement specified that the appointment was in a gazetted post C which is neither in Class I nor in Class II service) on scale Rs. 350 350 380 380 30 590 E.B. 770 40 850.
Paragraph 5 mentioned that the person appointed would be eligible along with other temporary Assistant Officers "for being considered for absorption in the permanent vacancies in the Class I (junior scale) of the. . department upto a maximum number of vacancies in a year as may be fixed by the Government" and that in the event of his being selected for that service his seniority would count from the date of confirmation.
Paragraph 6 recited that he would be considered for appointment to a Senior Scale post.
The agreement provided that in respect of matters for which no provision was made in it, the provisions of the Indian Railway Establishment Code from time to time in force or rules made thereunder shall apply to the extent they were applicable to temporary Assistant officers.
It was further provided that the decision of the Government as to their applicability, interpretation and effect shall be final.
It should be mentioned here that though there was no previous Presidential sanction for making appointments to posts which were 151 neither in Class I nor in Class II but merely in 'gazetted service ', the matter was rectified and Presidential sanction was subsequently obtained in November, 1956.
This was communicated by the Railway Board to the General Managers of all Indian Railways by letter No. E 55RC 16 (Pt.
A) dated November, 22, 1956.
It was also decided by the President that the Railway Board of the competent authority to appoint Temporary Assistant Officers in the various departments of the Railways.
This was mentioned by the Board in letter No. E. (GF P) 56RC 16 Pt.
A dated 18 12 57 addressed to the General Managers of all Indian Railways.
Between the years 1955 and 1964 as many as 553 temporary Assistant Engineers were appointed after selection by the Union Public Service Commission.
Though in their orders of appointment as temporary Assistant Engineers, the petitioners and others were told that six of them would be absorbed into the Indian Railway Service of Engineers Class I every year, the quota was increased to eight per year in 1957 and fifteen per year in 1961.
In 1960 the quota was fixed at "60% of the actual intake of Probationers from the CES etc.
examinations".
Again in 1975 the quota was increased to 25 per year.
The net result was that all but a 107 temporary Assistant Engineers were left unabsorbed by the time of the filing of the Writ Petitions and they too were finally absorbed in 1979 by what was described to us as a 'blanket order '.
We were informed that the validity of the absorption on this mass scale is under challenge in some Writ Petitions filed by members of the Indian Railway Service of Engineers, Class I.
At this juncture we also find it necessary to mention that the Railway Board decided, on September 17, 1965, that the temporary officers so absorbed into the Indian Railway Service of Engineers should also be given weightage in seniority "on the basis of half the total number of years of continuous service in working posts on Railways prior to their permanent absorption into Class I, subject to a maximum weightage of five years".
This, of course, was the result of representations made by the temporary officers.
This too we are told is under challenge.
The petitioners have filed these Writ Petitions in a representative capacity purporting to represent all temporary Assistant Engineers appointed on the recommendation of the Union Public Service Commission, claiming that, in law, they could only be and were appointed to the Indian Railway Service of Engineers Class I right from the beginning and that the Railway Board was wrong in treating them as belonging to neither Class I nor Class II.
They claim that they were appointed to temporary posts in the cadre of Indian Railway Service 152 of Engineers Class I and that their seniority had to be reckoned on the basis of their length of continuous service, though they concede that in any given year those appointed on the basis of the results of the competitive examination might be placed above those appointed on the basis of the selection by the Union Public Service Commission.
They contend that the Railway Board had no authority to create an unclassified service, as it were, outside the provisions of the Indian Railway Establishment Code.
Notwithstanding the requisitions issued by the Railway Board, the advertisements issued by the Union Public Service Commission and the letters of appointment issued to the petitioners, they contend that they were appointed to the cadre of Indian Railway Service of Engineers Class I and to no other service.
They contend that they were recruited to Class I service under rule 130(d) of the Indian Railway Establishment Code which provides for "occasional admission of other qualified persons on the recommendations of the Union Public Service Commission".
They question the vires of the note to Rule 106 which was added by way of amendment in 1956 and which provided that 'temporary Assistant Officers would not be classified either as Class I or as Class II '.
The petitioners claim that the distinction made by the Railway Administration between Assistant Officers recruited on the basis of the results of the competitive examination and the temporary Assistant Officers recruited on the recommendation of the Union Public Service Commission was discriminatory and offended Articles 14 and 16.
They contend that all Assistant Officers formed one class under the Indian Railway Establishment Code.
The further classification of Assistant Officers into those that were recruited on the basis of a competitive examination and those that were recruited on the recommendation of the Union Public Service Commission was a "micro classification" not permissible under the law.
They point out that the minimum academic qualifications and the scales of pay of the Permanent and the Temporary Engineers (for the sake of brevity the Assistant Officers appointed on the basis of the results of the competitive examination may hereafter be described as permanent Engineers while those appointed on the basis of the recommendation of the Union Public Service Commission may be described as Temporary Engineers) were identical, the duties and functions were the same and they occupied interchangeable posts.
They further allege that, in any case, the right of absorption of six temporary Engineers only every year into the Indian Railway Service of Engineers were arbitrary and inequitous.
It had resulted in such gross injustice that two decades of service of several of the petitioners.
was to be counted for nothing.
153 11.
Before proceeding to consider the various contentions raised on behalf of the petitioners it is necessary to make a brief reference to the history, service and legal, of one of the many petitioners.
Shri Katyani Dayal was working as an Assistant Engineer in the service of the Punjab Government from 1952 onwards.
He was one of those who was selected by the Union Public Service Commission and appointed as a temporary Engineer in 1958.
He was drawing pay in the junior scale.
He crossed the Efficiency Bar in 1966 and according to him he was thereafter entitled to be considered for promotion to the senior scale to the post of District Officers.
He founded his claim on r. 133(3) (c) on the basis that he was an Assistant Officer within the meaning of that expression as then defined by r. 102(3).
As he was not so promoted and as it was proposed, on the basis of some circulars, to promote permanent Engineers of four years standing, he filed a Writ Petition in the High Court of Allahabad claiming that he was entitled to be considered for promotion to officiating post of District Officer.
The Railway Board opposed the claim of Katyani Dayal on the ground that he was a temporary Assistant Engineer and not an Assistant Officer and therefore, not entitled to be promoted in terms of r. 133(3)(c).
The Railway Board 's contention was over ruled by a learned Single Judge of the High Court and a direction was given to the Railway Administration to consider the claim of the petitioner for appointment in officiating vacancies to the posts of District Officers as soon as vacancies arose.
The Railway Administration was directed to ignore the circulars which gave preference to Class I junior scale officers of four years standing or more as against temporary Assistant Engineers.
An appeal filed by the Railway Administration under the Letters Patent was dismissed by a Division Bench of the High Court.
Though the Division Bench dismissed the appeal on August 1, 1974, the Railway Administration did not implement the judgment but instead on December 12, 1975 amended rule 102(3), 133(3)(c) and (f) and introduced new rule 102(17) so as to expressly exclude temporary Assistant Officer [newly defined by r. 102(7) from the category of Assistant Officer and thus make him ineligible for promotion to the senior scale under r. 133 (3)(c) and (f)].
It appears that the status of the temporary Assistant Engineers recruited on the recommendation of the Union Public Service Commission has been the subject matter of the decisions of several High Courts.
Some of them have been placed before us.
The relevant provisions of the Indian Railway Establishment Code may now be referred to.
154 14.
Rule 102(3) originally defined an Assistant Officer to mean 'a Gazetted Railway Servant drawing pay on the scale applicable to Junior Scale Officers ', but 'was not to include a Class II Officer '.
By an amendment made on December 31, 1975, the expression was redefined and an 'Assistant Officer ' now 'means a Gazetted Class I Railway Servant drawing pay in the junior scale.
It does not include a Class II Officer or a temporary Assistant Officer who is not classified either as Class I or Class II '.
Prior to December 31, 1975 "Temporary Assistant Officer" was not defined but by an amendment dated December 31, 1975 "Temporary Assistant Officer" has been defined and now means "a gazetted Railway servant drawing pay on the scale applicable to junior Scale Officers but not classified either as Class I or as Class II Officer".
Rule 102(13) defines a 'Railway, Servant ' as meaning a person who is a member of a service or who holds a post under the administrative control of the Railway Board, including a person who holds a post in the Railway Board.
Rules 105 and 106 to the extent they are relevant are as follows: "105.
For the purpose of the rules in this Volume the railway services shall be classified as follows: Gazetted (1) The Railway Services, Class I. (2) The Railway Services, Class II.
Non gazetted.
(3) The Railway Services, Class III.
(4) The Railway Services, Class IV.
(5) The Workshop Staff.
Establishments and categories (including probationers), falling under the services mentioned in rule 105, are shown below Class I (1) Posts in the Railway Board; 155 (2) Directors, Joint Directors, Deputy Directors, Assistant Directors, Railway Board and Research, Designs and Standards Organisation; Secretary, Deputy Secretary, Under Secretary and Section Officers, Grade II, Railway Board.
(3) Indian Railway Service of Engineers; (4) Indian Railway Accounts Service; (5) Indian Railway Traffic Services; (6) Indian Railway Service of Mechanical Engineers; (7) Indian Railway Service of Electrical Engineers; (8) Indian Railway Service of Signal Engineers; (9) Indian Railway Medical Service; (10) Indian Railway Stores Service; (11) Senior Revenue Establishment, Indian Railways, comprising such specialist and Miscellaneous posts as have been included in Class I e.g., Chemist and Metallurgists (Senior Scale) and Chief Cashiers (Senior Scale).
Class II Gazetted posts not included in Class I. Note.
Temporary Assistant Officers will not be classified either as Class I or Class II.
Class III * * * * * Class IV * * * * * It must be mentioned here that this Note to rule 106 was not there originally but was added in 1956.
Rule 107 provides that the prescribed scale of pay admissible to Railway servants belonging to Railway Service Class I and Class II shall be as specified in appendix XIV.
156 Rule 108 may also be extracted here and it is as follows: "108.
Sanctioned strength of cadres.
Subject to any statutory provision in this regard, the strength, including both the number and character of posts of the Railway Services, Class I and II, shall be determined by the Railway Board, General Managers of Indian Railways may create temporary posts in the Railway Services, Class I and Class II, subject to such limits as may be laid down by the Railway Board.
Provided the total number of sanctioned gazetted post in any grade (Heads of Departments, Deputy Heads of Departments, District Officers, Assistant Officers are Class II Officers) of the service concerned is not exceeded, General Managers are empowered to vary solely in the public interest having regard to changes in the work and responsibilities of the posts, concerned (and not in the interest of individual officers), the distribution of posts within that grade for a period not exceeding 12 months".
Rule 109 to the extent it is relevant in this case is as follows: "109.
The cadres of the services and departments included in Railway Services, Classes I and II (other than the Medical Department and specialists posts) on Indian Railways shall be fixed in accordance with the principles stated below : (1) Separate cadres shall be maintained for each Indian Railway.
(2) The number of permanent working posts, that is, posts required for ordinary duty on the railway, shall be first determined for each service or department and divided into the following grades : (i) Administrative, (ii) District Officers, 157 (iii)Assistant Officers and Class II Services.
(b) * * * * (c) The number of posts to be allotted to the Assistant Officers ' grade shall be calculated with reference to the total number of Administrative and District Officers ' Posts, and shall be so fixed as to allow of a continuous flow of promotion from the Assistant Officers ' grade to the higher grade after a given period of service.
For this purpose, all the administrative posts, including the general administrative posts, shall be taken into account.
(d) The rest of the posts included in (a) (iii) shall be allotted to the Class II Service.
(e) The total number of posts thus arrived at for each grade in a department shall form the permanent duty strength of each service or department.
(3) * * * * (4) * * * * Rule 112 provides that the number of posts sanctioned in each grade in a department shall in no case be exceeded without the sanction of the authority competent to create a post, either permanent or temporary in the grade.
Rule 116 prescribes that except as provided in r. 133(4) officiating promotion to the Assistant Officer 's grade or to a higher grade of gazetted Railway Servants from Class II service or from the non gazetted establishment is not permissible.
Rule 118(1) provides that the number of Gazetted Railway servants on duty in a department shall not exceed the permanent duty strength sanctioned for that department.
Rule 125 prescribes that all appointments to a Railway Service Class II shall be made by the President on the recommendation of the Union Public Service Commission from time to time in accordance with the rules framed by them.
158 Rule 129 provides that the rate of normal recruitment shall be determined by the President with reference to the sanctioned strength of a service or Department.
Rule 130 is important and may be fully extracted here.
It is as follows: "130.
Method of recruitment.
Recruitment to Class I service in the various departments of Railways shall be made through (a) competitive examination held in India by the Union Public Service Commission; (b) promotion of specially qualified gazetted railway servants of the Class II Service including officiating gazetted railway servants of the service or department; (c) in the case of Transportation (Power) and Mechanical Engineering Department, by appointment of candidates as Special Class Apprentices; and (d) occasional admission of other qualified persons on the recommendation of the Union Public Service Commission.
The quota reserved for permanent promotion from Class II to Class I has been fixed at 33 1/3% of the vacancies in the Junior Scale, Class I (Senior Scale in the case of Medical Department).
Rule 131 provides that Probationers to the Railway Service Class I shall be required to undergo a period of training as may be prescribed by the President.
Rule 132 provides for recruitment to Railway Service Class II.
Rule 133 deals with promotions to gazetted posts.
We are concerned with rule 133(3)(c) and (f) which to the extent relevant were previously as follows: "133.
Promotions to gazetted posts. (1) * * * * (2) * * * * 159 (3) The General Manager may appoint (a) * * * * (b) * * * * (c) An Assistant Officer to officiate as District Officer, provided that such a gazetted railway servant who has not passed the efficiency bar may be so appointed only, if (i) a gazetted railway servant who has passed the efficiency bar is not available; or (ii) the vacancy is not expected to exceed three months; (d)(e) * * * (f) substantively, an Assistant Officer to the District grade provided such promotions are made in strict order of seniority subject further to the condition that no officer shall be so promoted unless he has rendered not less than ten years of total service and has been declared fit to cross the efficiency bar in the junior scale.
The period of 10 years of total service will also include the two years of training in the case of direct recruits.
In respect of promoted gazetted railway servants all those placed in the Seniority list above the last direct recruit who fulfils the above condition will receive confirmation in their turn.
" These provisions were also amended on December 31, 1975, and they are now as follows : "(c) an Assistant Officer to officiate in the Senior Scale provided that such an Assistant Officer who has not passed the efficiency bar may be so appointed only, if an Assistant Officer, who has passed the efficiency bar is not available; (d) * * * * 160 (f) substantively, an Assistant Officer to the Senior Scale, provided such promotions are made in strict order of seniority subject further to the condition that no officer shall be so promoted unless he has rendered not less than eight years of total service and has been declared fit to cross the efficiency bar in the junior scale.
The period of eight years of total service will also include the two years of training in the case of direct recruits.
In respect of promoted gazetted railway servants all those placed in the seniority list above the last direct recruit who fulfils the above condition will receive a confirmation in their turn".
Rule 139 makes provision for the making of recruitment rules and the note to rule 139 provides that in the case of recruitment to gazetted posts, the rules should be published in the Gazette of India in the section allotted to Statutory Rules and Orders.
Rule 144 obliges every railway servant to execute an agreement with the President of India at the time of his substantive appointment and further provides that those appointed for a limited period may also be required to execute such agreements.
Rule 2003(3) defines cadre as meaning 'the strength of a service or a part of a service sanctioned as a separate unit '.
Rule 2003(22) defines a permanent post as meaning a post carrying a definite rate of pay sanctioned without limit of time.
Rule 2003(29) defines a temporary post as meaning a post carrying a definite rate of pay sanctioned for a limited time.
Rule 2003(30) defines a tenure post as meaning a permanent post which an individual Railway servant may not hold for more than a limited period.
Rule 2003(31) defines time scale of pay and whole of it may be extracted here: "(31) (a) Time scale pay means pay which subject to any conditions prescribes in these rules, rises by periodical increments from a minimum to a maximum.
It includes the slabs of pay formerly known as progressive.
(b) Time scales are said to be identical if the minimum, the maximum, the period of increment and the rate of increment of the time scales are identical 161 (c) A post is said to be on the same, time scale as another post on a time scale if the two time scales are identical and the posts fall within a cadre, or a class in a cadre, such cadre or class having been created in order to fill all posts involving duties of approximately the same character or degree of responsibility, in a service or establishment or group of establishments; so that the pay of the holder of any particular post is determined by his position in the cadre or class, and not by the fact that he holds that post".
The earlier narrated facts show that for quite several years it was distinctly understood by the appointing authority as well as the persons appointed that those who were appointed as Temporary Assistant Engineers on the basis of the selection made by the Union Public Service Commission did not belong either to Class I or to Class II of the Indian Railway Service of Engineers.
It was understood that they would be eligible for being considered for absorption in the Indian Railway Service of Engineers Class I in an annual quota reserved for such absorption and that their seniority would be reckoned thereafter from the date of their confirmation in Class I.
It was also understood that they would be eligible for being considered for promotion to officiating posts in the senior scale.
This position in regard to their status was made clear, without the possibility of a shadow of doubt, in the letters of appointment issued to them and the agreements which they were required to execute.
Considerable argument as advanced on the question whether a service not contemplated by the Indian Railway Establishment Code could be created and whether appointments of Gazetted Railway servants not falling in Class I or Class II and therefore falling outside the provisions of the Indian Railway Establishment Code could be made.
The submission was that the Indian Railway Establishment Code did not contemplate a class of service which did not belong either to Class I or Class II, and that every gazetted railway servant had to belong either to Class I or Class II and the question whether the posts to which appointments were made belonged to Class I or not had to be determined with reference to the minimum educational qualifications prescribed for the post, the scales of pay, the functions and duties etc.
It was submitted that notwithstanding the clear assertion in the letters of appointment and the agreements, the petitioners must, in law, be considered to have been appointed to the Indian Railway Service of Engineers Class I and to no other service.
article 53 of the Constitution vests the executive power of the Union in the President, to be exercised by him either directly or through 162 officers subordinate to him, in accordance with the Constitution.
article 73(1)(a) stipulates that the executive power of the Union shall extent "to the matters with respect to which Parliament has power to make laws". "Union Public Service and all India Services" are included in item 70 of the Union List (List I of the Seventh Schedule) enumerating the matters with respect to which Parliament has the exclusive power to make laws.
The proviso to article 309 of the Constitution makes it competent for the President or such person as he may direct in the case of services and posts in connection with the affairs of the Union, to make rules regulating the recruitment, and the conditions of service of persons appointed, to such services and posts until provision in that behalf is made by or under an Act of the Parliament to regulate the recruitment and conditions of service of persons appointed to public services and posts in connection with the affairs of the Union.
The inevitable sequitur from these Constitutional provisions is that the President, acting directly or through Officers subordinate to him, is free to constitute a service (with as many cadres as he chooses), to create posts without constituting a service or to create posts outside (the cadres of) the constituted service.
The President (or the person directed by him) may, or, again if he so chooses he may not, make rules regulating the recruitment and conditions of service of persons appointed to such service or posts.
He is also free to make or not to make appointments to such services or posts.
Nor is it obligatory for him to make rules of recruitment etc.
before a service may be constituted or a post created or filled.
But if there is an Act of Parliament or a rule under the proviso to article 309 on the matter, the executive power, under Articles 53 and 73, may not be exercised in a manner in consistent with or contrary to such Act or rule (vide B. N. Nagarajan & Ors.
vs State of Mysore & Ors., State of Kerala vs M. K. Krishan Nair & Ors., etc.
So, the previous existence of the Indian Railway Service of Engineers and the rules made for recruitment to that service do not bar the constitution of another service or the creation of posts outside the cadres of the Indian Railway Service of Engineers.
That, precisely, was what was done in 1956 and subsequent years upto 1965.
The administrative expedience and exigence of the time required the creation of temporary posts outside the cadres of the Indian Railway 163 Service of Engineers.
The circumstances and the reasons necessitating the creation of these posts of Temporary Engineers were fully set out in the 'letters of indent ' addressed by the Railway Board to the Union Public Service Commission, the details of which have already been mentioned by us in paragraph 4 supra.
The posts so created were not to be confused with the posts in the cadre of the Indian Railway Service of Engineers Class I notwithstanding that the scale of pay and the duties were to be the same.
That the posts were not to be treated as in Class I or in Class II of the Indian Railway Service of Engineers was expressly mentioned and clarified in the requisitions made by the Railway Board to the Union Public Service Commission and the correspondence which ensued between the Railway Board and the Union Public Service Commission.
It was also made clear in the letters of appointment and the agreements required to be executed by the persons appointed.
Though to start with there was no Presidential sanction for the creation of the posts of Temporary Assistant Officers in the various Departments of Indian Railways, which were neither in Class I nor in Class II but merely in gazetted service, the matter was soon rectified by the grant of Presidential sanction for the posts in November 1956 and by the President further specifying the Railway Board as the authority competent to make appointments of such temporary Assistant Officers.
This is apparent from the letter No. E 55RC 16(Pt.
A) dated November 22, 1956 and letter No. 5 (GF P)56 RC 16/Pt.
A dated December 12, 1956 to which we have referred in paragraph 8 supra.
The posts of Temporary Assistant Officers were thus created, and appointments made, under valid authority and outside the existing cadres of the Indian Railway Service of Engineers.
The letters of "indent", the advertisements, the letters of appointment and the agreements show that the temporary Assistant Officers appointed in this fashion after selection by the Union Public Service Commission were to be a source of recruitment to the Indian Railway Service of Engineers Class I.
It was so understood from the inception by the persons appointed as well as the Railway Administration.
In fact subsequent absorptions into the Indian Railway Service of Engineers was the sugar, if one may use such an expression, held cut to those seeking appointment as temporary Assistant Officers.
Year by year a few Temporary Assistant Officers were indeed absorbed into the Indian Railway Service of Engineers after selection by a Departmental Promotion Committee and be it noted, not automatically on the basis of seniority.
If Temporary Assistant Officers were to be a source of recruitment to the Indian Railway Service of Engineers Class I, we do not see how any temporary Assistant Officer could possibly be under 164 any misapprehension that he was appointed to the Indian Railway Service of Engineers Class I or could claim that he was appointed to such service.
It is not possible to accept the submission that they must be considered to have been appointed under r. 130(d) of the Indian Railway Establishment Code which provides for occasional admission of other qualified persons on the recommendation of the Union Public Service Commission merely because they were selected for appointment by the Union Public Service Commission, their scale of pay was the same as that of the Class I Junior Scale Officers of the Indian Railway Service of Engineers and their duties were the same.
There were special reasons for recruiting Temporary Assistant Officers outside the cadres of the Indian Railway Service of Engineers and when it was admittedly and avowedly so done, and when right through such officers were merely treated as a source of recruitment to the Indian Railway Service of Engineers, it would not be permissible for us to hold that the Temporary Assistant Officers were recruited to the cadre of the Indian Railway Service of Engineers Class I. 20.
One of the submissions of the petitioners was that whatever the Railway Board might be asserting now or might have asserted even from the inception, factually, the Temporary Assistant Officers were appointed to temporary posts borne on the cadre of Indian Railway Service of Engineers Class I and not to any ex cadre posts.
It was submitted that the posts to which appointments were made were not temporary posts in the sense that they were posts of short duration; they were posts, which admittedly were likely to continue indefinitely and even made permanent.
The appointments could, therefore, have only been made to temporary posts borne on the cadre of the Indian Railway Service of Engineers.
We do not think that there is any substance in these submissions.
It is no doubt true that a cadre may consist of permanent as well as temporary posts and there may be permanent vacancies in permanent as well as temporary posts borne on the cadre.
But it does not follow that appointments stated to be made to posts outside the vary service and therefore necessarily outside the cadre must be considered to be made to temporary posts borne on the cadre merely because the posts were likely to continue indefinitely and did so continue.
We do not see how we can ignore the very purpose of scheme of recruitment of Temporary Assistant Officer which was to recruit Temporary Assistant Officers outside the existing Service and cadres to meet the anticipated requirements of certain special objects.
Even in the requisition made in the prescribed form by the Railway Board to the Union Public Service Commission it was men 165 tioned "the posts will be sanctioned shortly in connection with a number of projects".
It was not mentioned that the posts were already borne on the cadre of the Indian Railway Service of Engineers.
Our attention was invited to the Annual Administrative Reports where, it was said, no distinction was made between classified and unclassified service.
We do not think that these reports are of the slightest help.
The reports merely refer to appointments, temporary as well as permanent, made in the gazetted service by direct recruitment.
Gazetted Railway services must include both the Indian Railway Service of Engineers and the Gazetted Railway Service constituted by the temporary Assistant Officers.
Therefore, by merely taking into account the number of Temporary Assistant Officers for the purpose of calculating the total number of persons appointed to Gazetted Railway Service it cannot conceivably be said that Temporary Assistant Officers were appointed to cadre posts in the Indian Railway Service of Engineers.
Our attention was also invited to the classified lists of Officers published by the Railway Board.
This list takes the case of the petitioners no further.
There is nothing in the list to indicate that persons who were appointed as Temporary Assistant Officers were appointed to posts borne on the cadre of Indian Railway Service of Engineers.
On the other hand under the column "Date of appointment to Class" no entry is made against the names of any of the Temporary Assistant Officers who had not yet been absorbed into the Indian Railway Service of Engineers.
We were also referred to the reports of the Administrative Reforms Commission where it is said "In the Railways there is a sizeable number of unclassified posts equivalent to Junior Class I and only a small number of them are taken each year into the regular service".
This statement does not support the case of the petitioners that they were appointed to posts borne on the cadre of Indian Railway Service of Engineers.
Far from it.
Passages from the reports of the Central Pay Commission were also read out to us to emphasize that the posts have continued over the years indefinitely.
If posts were initially created and sanctioned for short periods, we do not see how the subsequent continuance of the posts indefinitely would make persons appointed to the posts members of the regular service, namely, the Indian Railway Service of Engineers Class I. 21.
Considerable argument was advanced on the question of the 'status ' and the effect of the 'note ' found below rule 106.
It was said that the note did not form part of the rules made by the President under the proviso to Article 309 of the Constitution and therefore it could not amend the other statutory rules.
The note was neither declaratory nor explanatory and was of no affect whatever.
We think that the argument regarding the 'status ' and the effect of the note is of no real 166 relevance.
The note merely states an existing fact known to all concerned.
It was known that posts of Temporary Assistant Officers in gazetted railway service who were not to be classified 'either as Class I or as Class II ' had been sanctioned by the President who had designated the Railway Board as the authority competent to make appointments to those posts.
The note below rule 106 merely stated this fact.
With or without the note, the Temporary Assistant Officers would still not be classified either as Class I or Class II.
Their classification outside Class I and Class II was not dependant on the note but on the Presidential action in regard to the creation of the posts.
This is perhaps an appropriate stage for referring to the amendments, introduced in 1975, to the Indian Railway Establishment Code.
The expression 'Temporary Assistant Officers ', which was not previously defined in the Railway Establishment Code, was sought to be defined by new clause 17 of R. 102 to mean "a Gazetted Railway Servant drawing pay on the scale applicable to Junior Scale Offices but not classified either as Class I or as Class II Officer".
The expression Assistant Officer was redefined so as not to include a Temporary Assistant Officer who was not 'classified either as Class I or as Class II '.
Apart from the principal submission that the 1975 amendments were violative of articles 14 and 16 of the Constitution, it was submitted that the amendments were prospective in nature and did not affect the petitioners all of whom had been appointed as Temporary Assistant Officers long prior to the 1975 amendment.
We do not think that the amendments have any effect one way or the other on the status of the Temporary Assistant Officers.
What was always well known to the Temporary Assistant Officers and the Railway Board and what was the inevitable result of the Presidential sanction for the creation of posts which were not to be classified either as Class I or Class II, was made explicit in the Indian Railway Establishment code also by the introduction of these amendments.
This became necessary because in the Writ Petition filed by Katyani Dayal, the Allahabad High Court, while appearing to hold that Temporary Assistant Officers belonged neither to Class I nor to Class II service, held that they came within the then existing definition of 'Assistant Officer ' so as to entitle them for promotion under r. 133 of the Indian Railway Establishment Code.
We are afraid it was the use of the expression 'Temporary Assistant Officer ' that has led to considerable confusion.
The expression 'Temporary Assistant Officer ' was coined to describe the new post created for the first time in 1955.
The expression was not used to signify officers temporarily holding the posts of Assistant Officers in the several established Railway Services.
For instance a Class II Assistant Engineer 167 who is temporarily promoted to hold the post of an Assistant Engineer Class I may be described as a Temporary Assistant Officer but he certainly would not be a 'Temporary Assistant Officer ' appointed to any of the posts specially created by the President which were neither in Class I nor in Class II.
The word 'Temporary ' in the expression 'Temporary Assistant Officer ' was not used to qualify the words Assistant Officer.
The whole of the expression was intended to describe the particular post, which was neither in Class I nor Class II, which was created in 1955.
There would not have been any confusion and it would have been much happier if instead of the expression Temporary Assistant Officer some other expression such as Special Assistant Officer or Special Assistant Engineer had been chosen.
We are of the view that the Allahabad High Court was not justified in looking at the amended definition of 'Assistant Officer ' in isolation and concluding that the expression 'Assistant Officer ' included Temporary Assistant Officer because Temporary Assistant Officer was also a gazetted Railway servant who drew the junior scale of pay.
The definition of Assistant Officer was not to be read in isolation in that manner.
It should have been read conjunctively with Rules 105, 106 and 108.
A reference to Rule 105 would show that for the purposes of the rules in the Indian Railway Establishment Code, Railway services were to be classified into Class I, Class II, Class III, Class IV and Workshop staff.
Rule 106 specified the appointment and categories falling under the services mentioned in Rule 105.
Rule 108 required the Railway Board to fix the strength of the Railway Services ' Class I and Class II.
There could therefore, be no question of an officer not falling within the class, category or cadre specified in rules 105, 106 and 108 claiming to be an 'Assistant Officer ' within the meaning of that expression.
A person recruited to the post of 'Temporary Assistant Officer ' not classified as Class I or Class II Officer could not claim to belong to the Class, category or cadre specified in Rules 105, 106 and 108 and was, therefore, not an Assistant Officer within the meaning of that expression even before the 1975 amendment.
We now come to the principal submission made to us namely that the classification of Temporary Assistant Officers separately from the Indian Railway Service of Engineers Class I was discriminatory and had no nexus to the object to be achieved namely efficiency of service and was, therefore, violative of Articles 14 and 16 of the Constitution.
It was argued that the minimum academic qualification for the posts of 'Temporary Assistant Officer ' was the same as that prescribed for entry into the Indian Railway Service of Engineers Class I, the scale of pay of 'Temporary Assistant Officer ' was the same as hat of a Class I Officer of Junior Scale, the functions and duties were 168 similar and on all matters not expressly provided, the Temporary Assistant Officers like Class I officers were to be governed by the provisions of the Railway Establishment Code and the Rules made thereunder.
There was so much identity on all vital and important matters that the classification of 'Temporary Assistant Officers ' outside the Indian Railway Service of Engineers Class I was arbitrary.
It led to all manner of discrimination in the matter of advancement in service, seniority, promotion etc.
The unfairness of it all was sought to be graphically demonstrated by pointing out how after twenty years of service Temporary Assistant Officers continued to be Temporary Assistant Officers while Class I officers recruited much later were placed much higher than them in order of seniority and had risen to much higher positions in the service.
Another limb of the argument on the question of discrimination was that all Assistant Officers whether they were permanent Assistant Officers or Temporary Assistant Officers constituted a single cadre and it was not permissible to further classify them on the basis of the manner of their recruitment, namely, by competitive examination or by selection by the Union Public Service Commission.
Part of this submission has already been met by us and we have shown how Temporary Assistant Officers are not Assistant Officers within the meaning of that expression in the Indian Railway Establishment Code.
It is true that the minimum educational qualification for the post of Temporary Assistant Officer was the same as that for recruitment to the Indian Railway Service of Engineers Class I.
It is true that the scale of pay is the same, and the functions and duties are the same.
It is also true that except to the extent provided, the Temporary Assistant Officers were also subject to the provisions of the Indian Railway Establishment Code and the rules made thereunder.
But, there are certain fundamental differences between two classes which cannot be ignored and which demand attention.
To begin with, the object of recruitment to the Indian Railway Service of Engineers is to provide Officers of the highest quality to meet the requirements of all posts in the service including Senior Administrative posts.
Rule 109(2)(c) of the Indian Railway Establishment Code, extracted earlier expressly provides that the number of posts to be allotted to the Assistant Officers ' grade shall be calculated with reference to the total number of administrative and District Officers ' posts, and shall be so fixed as to allow of a continuous flow of promotion from the Assistant Officers ' grade to the higher grades after a given period of service.
For this purpose all the administrative posts including the general Administrative posts are required to be taken into account.
On the 169 other hand the object of recruiting Temporary Assistant Officers was to meet specific requirements of various projects with a prospect of promotion in a temporary capacity to a senior scale post and absorption into the Indian Railway Service of Engineers Class I. They were not to be members of the Indian Railway Service of Engineers but were to be a source of recruitment to the Indian Railway Service of Engineers.
Thus the very appointments of Temporary Assistant Officers were to temporary posts outside the cadre and outside the recruitment rules of the Indian Railway Service of Engineers Class I and the very nature of this tenure was precarious, whereas Class I Officers recruited on the basis of a result of competitive examination were appointed to cadre posts strictly in accordance with the recruitment rules.
Next and equally important, is the fundamental qualitative differences, linked with the method of recruitment.
True, the minimum educational qualification is the same.
But, those who are recruited directly to the Indian Railway Service of Engineers Class I are subjected to stiff and competitive, written and personality tests.
Only the very best can aspire to come out successful.
The Temporary Assistant Officers were not subjected either to a written or to a personality test but were selected on the basis of an interview by the Union Public Service Commission.
In addition to the minimum educational qualification, three years ' experience as a Civil Engineer was also prescribed.
Thus while brilliance was the beacon light which beckoned those aspiring to become members of the Indian Railway Service of Engineers Class I, it was replaced by experience in the case of those wanting to be Temporary Assistant Officers.
Again the appointing authority in the case of Indian Railway Service of Engineers Class I is the President while the appointing authority in the case of Temporary Assistant Officers was the Railway Board, no doubt, pursuant to the authority given by the President.
Different courses of training were prescribed for the Indian Railway Service of Engineers and the Temporary Assistant Officers.
For the Indian Railway Service of Engineers the training is an intensive and comprehensive one designed to equip them for higher posts in the Department too, while the training for Temporary Assistant Engineers was a brief six months ' training intended merely to equip them for carrying out the specific jobs.
In the matter of terms and conditions of service, while the provisions of the Indian Railway Establishment Code are fully applicable to the Indian Railway Service of Engineers Class I, those provisions are applicable to "Temporary Assistant Officers" to the extent there is no specific provision in their letter of appointment and agreement.
170 26.
Keeping in mind these similarities and dissimilarities, let us examine the legal position.
We cannot do better than to refer to the decisions cited at the Bar, not all, but a few illustrative cases.
In State of Punjab vs Joginder Singh, the question arose whether the constitution by the State of two Services consisting of employees doing the same work but with different scales of pay or subject to different conditions of service such as promotional opportunities was violative of Articles 14 and 16 of the Constitution.
The argument based on the postulate that equal work must receive equal pay was repelled by quoting the following observations from an earlier decision of the Court in Kishori Mohanlal vs Union of India.
: "The only other contention raised in that there is discrimination between Class I and Class II officers inasmuch as though they do the same kind of work their pay scales are different.
This, it is said, violates article 14 of the Constitution.
If this contention had any validity, there could be no incremental scales of pay fixed dependant on the duration of an officer 's service.
The abstract doctrine of equal pay for equal work has nothing to do with article 14.
The contention that article 14 of the Constitution has been violated therefore, also fails.
" The second postulate that if there was equality in pay and work there must be equal conditions of service was rejected as unsound.
It was observed (at p. 191 192): "If, for instance, an existing service is recruited on the basis of a certain qualification, the creation of another service for doing the same work, it might be in the same way but with better prospects of promotion cannot be said to be unconstitutional, and the fact that the rules framed permit free transfers of personnel of the two groups to places held by the other would not make any difference.
We are not basing this answer on any theory that if a government servant enters into any contract regulating the conditions of his service he cannot call in aid the constitutional guarantees because he is bound by his contract.
But this conclusion rests on different and wider public grounds, viz., that the government which is carrying on the administration has necessarily to have a choice in the constitution of the services to man the administration and that the limitations imposed by the constitution are not 171 such as to preclude the creation of such services.
Besides, there might, for instance, be temporary recruitment to meet an exigency or an emergency which is not expected to last for any appreciable period of time.
To deny to the government the power to recruit temporary staff drawing the same pay and doing the same work as other permanent incumbents within the cadre strength but governed by different rules and conditions of service, it might be including promotions, would be to impose restraints on the manner of administration which we believe was not intended by the constitution. ' Examining the facts of the case before them the Court noticed that the two services started as independent services, the qualifications prescribed for entry into each were different, the method of recruitment and the machinery for recruitment were different and they continued as different services and were never interpreted into one service.
The Court said (at p. 193): "If they were distinct services, there was no question of inter se seniority between members of the two services, nor of any comparison between the two in the matter of promotion for founding an argument based upon article 14 or article 16(1).
They started dissimilarity and they continued dissimilarly and any dissimilarity in their treatment would not be a denial of equal opportunity, for it is common ground that within each group there is no denial of that freedom guaranteed by the two Articles".
In State of Jammu & Kashmir vs Triloki Nath Khosa & Ors.
a rule which provided that only those Assistant Engineers who possessed a degree in Engineering would be eligible for promotion as Executive Engineer and which totally denied any opportunity for promotion to Assistant Engineers who were Diploma holders was challenged as infringing the fundamental rights guaranteed by Articles 14 and 16 of the Constitution.
Under the rules, recruitment to the cadre of Assistant Engineer was to be made by direct recruitment of Degree holders in Civil Engineering or by transfer of degree or diploma holders who had served as Supervisors for a period of not less than five years.
The argument was that degree holders and diploma holders having been integrated into a common class of Assistant Engineers, there was no justification for the classification for promotion to the post of Executive Engineer.
The Court upheld the rule and held that the classification of Assistant Engineers into degree holders 172 and Diploma holders could not be said to rest on any unreal or unreasonable basis.
Classification made with a view to achieving administrative efficiency in the Engineering Service was clearly co related to higher educational qualifications since higher educational qualifications was atleast presumptive evidence of higher mental equipment.
Educational qualification was always recognised as a safe criteria for determining the validity of classification.
The earlier decisions of the Court in Roshan Lal Tandon vs Union of India, and Moryan Coutindo & Ors.
vs Collector of Customs, Bombay & Ors., were distinguished on the ground that they were cases where direct recruits and promotes who were fused into a common stream of service were sought to be treated differently by reference to the consideration that they were recruited from different sources whereas in the case before the Court the classification rested fairly and squarely on the consideration of educational qualifications.
It was pointed out that the earlier cases did not rule out a classification on a basis other than that they were drawn from different sources.
However, while upholding the validity of the rule Chandrachud, J., and Krishna Iyer, J., uttered words of caution and it is upon these words of caution that the petitioners rely.
Chandrachud, J., said (at p. 790): "But we hope that this judgment will not be construed as a charter for making minute and microcosmic classifications.
Excellence is, or ought to be, the goal of all good government and excellence and equality are not friendly bed fellows.
A pragmatic approach has therefore to be adopted in order to harmonize the requirements of public services with the aspirations of public servants.
But let us not evolve through imperceptible extensions, a theory of classification which may subvert, perhaps submerge, the previous guarantee of quality.
The eminent spirit of an ideal society is equality and so we must not be left to ask in wonderment.
What after all in the operational residue of equality and equal opportunity?" Krishna Iyer, J., said (at p. 792): "Mini classifications based on micro distinctions are false to our egalitarian faith and only substantial and straightforward classifications plainly promoting relevant goals can have constitutional validity.
To overdo classification is to undo equality".
173 29.
In Mohammed Shujat Ali & Ors. etc.
vs Union of India & Ors. etc.
one of the questions which arose for consideration was whether the distinction made between Graduate Supervisors and non Graduate Supervisors and the allocation, to these categories, of three and one vacancies respectively out of every four vacancies in the next higher promotional posts was violative of Articles 14 and 16 of the Constitution.
After quoting with approval the observations of Chandrachud, J., and Krishna Iyer, J., in State of J. & K vs Trilokinath Khosa (supra).
Bhagwati J., observed (at p. 481): "To permit discrimination based on educational attainments not obliged by the nature of the duties of the higher post is to stifle the social thrust of the equality clause.
A rule of promotion which, while conceding that non graduate Supervisors are also fit to be promoted as Assistant Engineers, reserves a higher quota of vacancies for promotion for graduate supervisors as against non graduate Supervisors, would clearly be calculated to destroy the guarantee of equal opportunity".
After saying so much the Court, however, upheld the rule which made the differentiation between Graduate and non Graduate Supervisors on the ground that the differentiation had not been made for the first time by the impugned rule and graduate Supervisors had always been treated as a distinct and separate class and the two were never integrated into one class.
Since the two categories of Supervisors were never fused into one class, it was held, there was no question of unconstitutional discrimination on the ground of differential treatment being given to them.
In section B. Patwardhan & Ors.
vs State of Maharashtra & Ors.
the question concerned a formula of seniority.
Direct recruits and promotees, though drawn from two different sources, constituted, in that case, a single integrated cadre.
They discharged identical functions, bore similar responsibilities and acquired an equal amount of experience in their respective assignments.
Yet, the formula provided that probationers recruited during any year shall in a bunch be treated as senior to promotees confirmed in that year.
While the formula gave to the direct recruits the benefit of even the one year 's period of training and another year 's period of probation for the purposes of seniority, it denied to promotees the benefit of their long and valuable experience.
There was no intelligible ground for the differentiation, bearing nexus with efficiency in public service.
174 'Confirmation was one of the inglorious uncertainties of government service depending neither on efficiency of the incumbent nor on the availability of substantive vacancies, and it was on confirmation that the promotees seniority was made to depend.
The formula was struck down by the Court.
Reliance was placed on the decision of the Court in A. K. Subraman vs Union of India, where it had been held, while interpreting rules relating to Central Engineering Service Class that though in cases where recruitment was made from different sources a quota system could be validly applied, the quota rule was to be enforced at the time of initial recruitment to the post of officiating Executive Engineer and not at the time of their confirmation.
The Court had further observed that there was a well recognised distinction between promotion and confirmation and that the tests to be applied for the purpose of promotion were entirely different from those that had to be applied at the time of confirmation.
In H. section Verma & Ors.
vs Secretary, Ministry of Shipping & Transport & Ors.(2), the facts were somewhat peculiar.
Certain persons were directly recruited to the Engineering Service of the Ministry of Shipping and Transport (Roads Wing) as a result of a written competitive examination.
Certain other persons were also directly recruited but by interview through the Union Public Service Commission, although such a method of selection was not contemplated by the rules.
In 1966 a rule was added providing for selection by interview through the Union Public Service Commission.
The 1966 rule was held not to be retrospective in some Writ Petitions filed in the Delhi High Court by the persons who had been recruited as a result of written competitive examination.
The High Court while holding that the amendment was not retrospective did not hold that those appointed prior to 1966 by the interview method were not regularly appointed.
Instead, the High Court held that they were appointed and promoted to ex cadre posts.
In 1973 a notification was issued by the Government to the effect that the Officers appointed by the interview method must be deemed to have been industed into the service as temporary officers in 1966.
Later in 1976 the Government decided to set up two Services to be called the Central Engineering Service (Roads).
Group 'A ', comprising of Officers appointed by the method of examination and the other the Central Engineering Pool, Group 'A ', comprising of officers appointed by the method of interview.
Officers of both the services were eligible to be promoted to certain posts called "isolated posts".
Appointments to the 'isolated posts ' were to be made by selection or promotion, as the case may be, on the recommendation of a Departmental Pro 175 motion Committee from an integrated list of officers to be drawn up on the basis of the length of their continuous service in their respective grades.
The officers appointed by the method of interview assailed the rules contending that though they were appointed to their posts long before the officers appointed by the method of competitive examination, they would rank much below the latter in the list of seniority and would consequently be denied promotional opportunities to higher posts.
Having regard to the very complicated nature of the facts, the Court after discussion with the learned counsel appearing for the various parties and the Government made an order, which they thought was best and just in all the circumstances of the case.
While issuing the directions certain observations were made.
It was said (at p. 427): ".
We are unable to suggest the contention that persons holding similar posts and having similar responsibilities to discharge can be classified into different categories for the mere reason that some of them were recruited directly by the interview method and some were recruited directly on the result of a competitive examination.
Were it permissible to make such classifications, ingenuity may suggest the nature of curriculum in different years as the basis of classification.
If subjection to different kinds of tests as a condition of eligibility produces qualitative difference in the ability of persons recruited to similar posts, it may perhaps become necessary to limit the promotional opportunities, in regard to the relatively higher posts, to those whose abilities are remarkably higher.
But, it is nobody 's case and the Government has made no grievance that the petitioners who were appointed by the interview method are in any way inferior in ability, efficiency or educational qualifications to those who were appointed after a written competitive examination.
In the matter of experience too, the petitioners are in no way inferior to the contesting respondents".
The Court however, took care to add: "Though classification which proceeds merely on the basis that certain persons were recruited after going through one test and certain others after going through another test would be unscientific, it cannot be said on the facts of the instant case that there can be no valid basis or justification for classifying the various officers of the Roads Wing into separate categories.
As we have stated earlier, 176 the appointments of some of the petitioners and some of the respondents were made in violation of the rules which were in force at the relevant time.
It is in respect of that class of persons that the Delhi High Court was driven to hold that they must be deemed to have been appointed to ex cadre posts. .
But, the fact remains that persons who were appointed contrary to the rules but to ex cadre posts were taken initially for purposes of certain projects to which we have already referred.
Their precarious tenure was continued from time to time but that will not furnish justification for treating them on the same footing as others whose appointments were made strictly in accordance with the rules and who were appointed to posts borne on the cadre of the Central Engineering Service.
A division of these two classes of officers into separate categories will remove possible injustice to those who were appointed to cadre posts in that their promotional opportunities will not be blocked or hindered by ex cadre officers who were recruited on a large scale to meet an urgent necessity.
Such a classification will also minimise the injustice which would otherwise have been caused to those who were appointed to ex cadre posts".
We have referred, without comment, to a few earlier decisions of this Court and quoted the observations of learned Judges therein.
These decisions and the observations extracted therefrom illustrate and emphasise that there are and there can be no absolutes when we consider claims to justice on complaints of inequality.
The Marxian ultimate of a classless society, however laudable that may be, is evidently not what is sought to be achieved by Articles 14 and 16 of the Constitution.
The goal is a limited one.
It is equality among comparables.
A necessary, but not necessarily cynical, implication of equality among comparable is the permissibility of reasonable classification, having nexus with the object to be achieved.
So, it was said that if two services started and continued dissimilarly, though they apparently discharged similar duties, they were not comparable services so as to furnish a basis for the claim to equality (State of Punjab vs Joginder Singh) (supra).
But, if in the same service there were two sources of recruitment to the same posts, a classification based solely on source of recruitment was not permissible (Roshan Lal Tandon vs Union of India, and Mervyn Coutinda & Ors.
vs Collector of Customs, Bombay & Ors.) (supra).
This was also the principle of the decision in section B. Patwardhan & Ors.
vs State of Maharashtra & Ors.
(supra).
Even so, Chandrachud, J., Krishna Iyer, 177 J., and Bhagwati, J., had to recognise, even if reluctantly, that even among the members of the same service, a classification based otherwise than on mere source of recruitment such as educational qualification was at times permissible.
But necessary words of caution against making 'minute and micro cosmic ' classifications were uttered.
(State of Jammu & Kashmir vs Trilokinath Khosa, (Supra) and Mohammad Shujat Ali & Ors. etc.
vs Union of India & Ors. etc.
(supra).
Chandrachud, J., however drew the line when among members of the same service a classification was sought to be made between those who had been recruited on the basis of results of a competitive examination and those who had come in by the method of interview.
But, here again he felt constrained to say that those who were appointed to ex cadre posts outside the rules and whose tenure was therefore precarious could not claim to be treated on the same footing as those who were appointed strictly in accordance with the rules and to posts borne on the cadre of the service (H. section Verma & Anr.
vs Secretary, Ministry of Shipping & Transport & Ors.) (supra).
If we now look at the facts of the case before us, we find that the service comprising the Temporary Assistant Officers and the Indian Railway Service of Engineers Class I started separately and never became one.
The objects of their recruitment were different as explained earlier, the methods of recruitment were dissimilar and the appointing authority was not the same.
The training that was imparted was also unlike.
The very tenure of the Temporary Assistant Officers was precarious and their immediate aspiration was only to be absorbed into the Indian Railway Service of Engineers class I.
These distinctive features marked out the Temporary Assistant Officers as a Class apart from the Indian Railway Service of Engineers Class I and therefore there was no question of entitlement of equal rights with the latter.
Of course, once they were absorbed into the Indian Railway Service of Engineers they would be entitled not to be treated differently thereafter.
Their seniority would ordinarily be reckoned from the date of their absorption into the Indian Railway Service of Engineers, as promised in their letters of appointment.
No doubt these officers merited something more than the 'long wait ' at the portals of the Indian Railway Service of Engineers.
The Railway Board however, appears to have tried to make the 'long wait ' a little less tedious by giving them weightage of half of their length of service as Temporary Assistant Officers, subject to a maximum of five years.
We wish to say nothing about the validity of such weightage as we understand it is in question elsewhere.
Though we are denying the claim of the petitioners to equality because of the history, origin, and structure of the Services and the 178 existing legal position in relation thereto, we do not wish to be understood as saying that there is any thing 'doctrinaire ' in the principles of 'equal pay for equal work ' and 'equal status for equal pay and equal work '.
They are not goals to be scoffed at.
It may be that in the present societal context the goals appear to be distant.
But they are goals worthy of attainment and let us hope, with no overtones of cynicism, that these goals will be achieved in the not too distant future.
All the Writ Petitions and applications for the grant of Special Leave are dismissed but without any order as to costs.
S.R. Petitions dismissed.
| IN-Abs | Several assignments such as the construction of major bridges, new lines, doubling of and electrification of existing lines etc.
were taken up the Engineering Department of the Indian Railways and to carry out these works, a number of temporary posts of Class I (Indian Railway Service of Engineers) and Class II engineers were created.
It was not thought possible to meet additional personnel requirements from existing sources, i.e. direct recruitment to Class I by competitive examination and promotion to class II from class III.
Instead, under a special scheme the various writ petitioners were appointed at various times between 1955 and 1964 as temporary Assistant Engineers by the Railway Board.
Everyone of them was told that the appointment, would be on a temporary basis, that the post to which they were appointed would be neither in Class I nor in Class II service though they were eligible, on completion of three year 's service, to be considered along with other temporary Assistant Engineers for absorption in Class I (Junior Scale) against vacancies ear marked from time to time for such absorption in the Indian Railway Service of Engineers cadre upto a maximum of six per year, and that in the event of their being selected in Class I Service their seniority would count from the date of the permanent appointment to Class I service.
They were required to execute service agreements "as applicable to temporary officers".
The petitioners accepted the terms offered to them and joined duty in the post to which they were appointed.
The petitioners also executed agreements in a standard form known as "Agreement for Temporary Assistant Officers of the Indian Railways".
140 Though in their orders of appointment as temporary Assistant Engineers the petitioners and others were told that six of them would be absorbed into the Indian Railway Service of Engineers Class I every year, the quota was increased to eight per year in 1957 and fifteen per year in 1961.
In 1960, the quota was fixed at 60 per cent of the actual intake of probationers from the CES etc.
examinations.
Again in 1975 the quota was increased to 25 per year.
The net result was that all but a 107 temporary Assistant Engineers were left unabsorbed by the time of the filing of the writ petitions and they too were finally absorbed in 1979 by a blanket order.
On September 17, 1965, the Railway Board decided that the temporary officers so absorbed into the Railway Service of Engineers should be given weightage in seniority "on the basis of half the total number of years of continuous service in working posts on Railways prior to their permanent absorption into Class I, subject to maximum weightage of five years.
" One of the writ petitioners, Katyani Dayal field a writ petition in the Allahabad High Court claiming promotion to the Senior scale post of District Officer.
He found his claim on Rule 133(3)(c) of the Railway Establishment Code on the basis that he was an Assistant Officer within the meaning of that expression as then defined by Rule 102(3).
The High Court allowed the writ petition and gave a direction to the Railway Administration to consider the claim of the petitioner for appointment in officiating vacancies to the post of District Officer as soon as vacancies arose, ignoring the circulars which gave preference to Class I junior scale officers of four years standing or more as against temporary Assistant Engineers.
An appeal filed by the Railway Administration under the Letters Patent was dismissed by a Division Bench of the High Court.
Though the Division Bench dismissed the appeal on August 1, 1974, the Railway Administration did not implement the judgment but instead on December 12, 1975 amended the Rule 102(3), 133(3)(c) and (f) and introduced new rule 102(17) so as to expressly exclude temporary Assistant Officers (newly defined by Rule 102 (7), from the category of Assistant Officers and thus make them ineligible for promotion to the senior scale under Rule 133(3)(c) and (f).
The petitioners, therefore, have filed these writ petitions in a representative capacity purporting to represent all temporary Assistant Engineers appointed on the recommendation of the Union Public Service Commission, claiming that, in law they could only be and were appointed to the Indian Railway Service of Engineers Class I right from the beginning and that the Railway Board was wrong in treating them as belonging to neither Class I nor Class II.
They claimed that they were appointed to temporary posts in the cadre of Indian Railway Service of Engineers Class I and that their seniority had to be reckoned on the basis of their length of continuous service, though they 141 conceded that in any given year those appointed on the basis of the results of the competitive examination might be placed above those appointed on the basis of the selection by the Union Public Service Commission.
Dismissing the petitions the Court ^ HELD: (1) articles 53, 73(1)(a) and 309, make it clear that the President, acting directly or through officers subordinate to him is free to constitute a service (with as many cadres as he chooses), to create posts without constituting a service or to create posts outside (the cadres of) the constituted service.
The President (or the person directed by him) may, or, again, if he so chooses he may not make rules regulating the recruitment and conditions of service of persons appointed to such service or posts.
He is also free to make or not to make appointments to such services or posts.
Nor is it obligatory for him to make rules of recruitment etc.
before a service may be constituted or a post created or filled.
But, if there is an Act of Parliament or a rule under the proviso to Article 309 on the matter, the executive power under Articles 53 and 73, may not be exercised in a manner inconsistent with or contrary to such Act or rule.
[162D F] B.N. Nagarajan vs State of Mysore, [1966] SCR 682 @ 686; State of Kerala vs M.K. Krishnan Nair and ors.
; , at 874; referred to.
(2) The previous existence of the Indian Railway Service of Engineers and the rules made for recruitment to that service do not bar the constitution of another service or the creation of posts outside the cadres of the Indian Railway Service of Engineers.
Though to start with there was no Presidential sanction for the creation of the posts of Temporary Assistant Officers in the various departments of Indian Railways, which were neither in Class I nor in Class II but merely in gazetted service, the matter was soon rectified by the grant of Presidential sanction for the posts in November 1956, and by the President further specifying the Railway Board as the authority competent to make appointment of such temporary Assistant Officers.
The posts of Temporary Assistant Officers were thus created and appointments made, under valid authority and outside the existing cadres of the Indian Railway Service of Engineers.
The letters of "indent", the advertisements, the letters of appointment and the agreements show that the temporary Assistant Officers appointed in this fashion after selection by the Union Public Service Commission were to be a source of recruitment to the Indian Railway Service of Engineers Class I.
If Temporary Assistant Officers were to be a source of recruitment to the Indian Railway Service of Engineers Class, no temporary Assistant Officer could possibly be under any misapprehension that he was 142 appointed to the Indian Railway Service of Engineers Class I or could claim that he was appointed to such service.
[162G H, 163G H, 164A] The petitioners cannot be considered to have been appointed under rule 130(d) of the Indian Railway Establishment Code which provides for occasional admission of other qualified persons on the recommendation of the Union Public Service Commission merely because they were selected for appointment by the Union Public Service Commission, their scale of pay was the same as that of the Class I Junior Scale Officers of the Indian Railway Service of Engineers and their duties were the same.
[164A C] (3) It is no doubt true that a cadre may consist of permanent vacancies in permanent as well as temporary posts borne on the cadre.
But it does not follow that appointments stated to be made to posts outside the very service and therefore necessarily outside the cadre must be considered to be made to temporary posts borne on the cadre merely because the posts were likely to continue indefinitely and did so continue.
[164 F G] The Annual Administrative Reports merely refer to appointments, temporary as well as permanent, made in the gazetted service by direct recruitment.
Gazetted Railway services must include both the Indian Railway Service of Engineers and the Gazetted Railway Service constituted by the temporary Assistant Officers.
Therefore, by merely taking into account the number of Temporary Assistant Officers for the purpose of calculating the total number of persons appointed to Gazetted Railway Service it cannot conceivably be said that Temporary Assistant Officers were appointed to cadre posts in the Indian Railway Service of Engineers.
Even the classified lists of Gazetted officers do not indicate that persons who were appointed as Temporary Assistant Officers were appointed to posts borne on the cadre of Indian Railway Service of Engineers.
On the other hand under the column "Date of appointment to Class" no entry is made against the names of any of the Temporary Assistant Officers who had not yet been absorbed into the Indian Railway Service of Engineers.
[165 B C, D E] If posts were initially created and sanctioned, the subsequent continuance of the posts indefinitely would not make persons appointed to the posts members of the Railway Service, namely, the Indian Railway Service of Engineers Class I. [165 F G] (4) The note below Rule 106 of the Railway Establishment Code merely states an existing fact known to all concerned, namely, that posts of Temporary Assistant Officers in gazetted railway service who were not to be classified 'either as Class I or as Class II ' had been sanctioned by the President 143 who had designated the Railway Board as the authority competent to make appointments to those posts.
With or without the note, the Temporary Assistant Officers would still not be classified either as Class I or Class II.
Their classification outside Class I and Class II was not dependant on the note but on the Presidential sanction in regard to the creation of the posts.
[166 A B] (5) Temporary Assistant Officers are not Assistant Officers within the meaning of that expression in the Indian Railway Establishment Code.
The expression "Temporary Assistant Officer", which was not previously defined in the Railway Establishment Code, was sought to be defined by new clause 17 of R.102 to mean "a Gazetted Railway Servant drawing pay on the scale applicable to junior Scale Officers but not classified either as Class I or as Class II Officers.
The expression Assistant Officer was redefined so as not to include a Temporary Assistant Officer who was not 'classified ' either as Class I or as Class II.
[166 C D] The amendments do not have any effect one way or the other on the status of the Temporary Assistant Officers.
What was always well known to the Temporary Assistant Officers and the Railway Board and what was the inevitable result of the Presidential sanction for the creation of posts which were not to be classified either as Class I or Class II, was made explicit in the Indian Railway Establishment Code also by the introduction of these amendments.
This became necessary because in the Writ Petition filed by Katyani Dayal, the Allahabad High Court, while appearing to hold that Temporary Assistant Officers belonged neither to Class I nor to Class II service, held that they came within the then existing definition of 'Assistant Officer ' so as to entitle them for promotion under r. 133 of the Indian Railway Establishment Code.
[166E G] The definition of Assistant Officer was not to be read in isolation but should have been read conjunctively with Rules 105, 106 and 108.
A reference to Rule 105 would show that for the purposes of the rules in the Indian Railway Establishment Code, Railway services were to be classified into Class I, Class II, Class III, Class IV and workshop staff.
Rule 106 specified the appointments and categories falling under the services mentioned in Rule 105.
Rule 108 required the Railway Board to fix the strength of the Railway Services, Class I and II.
There could therefore, be no question of an officer not falling within the class, category or cadres specified in rules 105, 106 and 108 claiming to be an 'Assistant Officer ' within the meaning of that expression.
A person recruited to the post of Temporary Assistant Officer not classified as Class I or Class II Officer could not claim to belong to the Class, category or cadre spe 144 cified in Rules 105, 106 and 108 and was, therefore, not an Assistant Officers within the meaning of that expression even before the 1975 amendment.
[167 D F] (6) There are and there can be no absolutes when the Court considers claims to justice on complaints of inequality.
The Marxian of a classless society, however laudable that may be, is evidently not what is sought to be achieved by articles 14 and 16 of the Constitution.
The goal is a limited one.
It is equality among comparables.
A necessary, but not necessarily cynical, implication of equality among comparables is the permissibility of reasonable classification, having nexus with the object to be achieved.
If two services started and continued dissimilarly, though they apparently discharged similar duties, they were not comparable services so as to furnish a basis for the claim to equality.
But if in the same service there were two sources of recruitment to the same service, a classification based solely on source of recruitment was not permissible.
[176 E G] State of Punjab vs Joginder Singh, [1963] Supp.
2 SCR 169, 191, 192; Roshan Lal Tandon vs Union of India, ; and Mervyn Coutindo & Ors.
vs Collector of Customs, Bombay and Ors.
, ; ; referred to.
(7) Those who were appointed to ex cadre posts outside the rules and whose tenure was therefore precarious could not claim to be treated on the same footing as those who were appointed strictly in accordance with the rules and posts borne on the cadre of the service.
[177 F G] H.S. Varma & Ors.
vs Secretary, Ministry of Shipping and Transport & Ors.
; @ 427, 428; referred to.
(8) The classification of Temporary Assistant Officers separately from the Indian Railway Service of Engineers Class I is neither discriminatory nor is violative of Articles 14 and 16 of the Constitution for the reason that it had no nexus to the object to be achieved namely efficiency of service.
[167 G H] The service comprising the Temporary Assistant Officers and the Indian Railway Service of Engineers Class I started separately and never became one.
The objects of their recruitment were different, the methods of recruitment were dissimilar and the appointing authority was not the same.
The training that was imparted was also unlike.
The very tenure of the Temporary Assistant Officers was precarious and their immediate aspiration was only to be absorbed into the Indian Railway Services of Engineers Class I.
These distinctive features marked out the Temporary Assistant Officers as a Class apart from the Indian 145 Railway Service of Engineers Class I and therefore there was no question of entitlement of equal rights with the latter.
Of course, once they were absorbed into the Indian Railway Service of Engineers they would be entitled not to be treated differently thereafter.
Their seniority would ordinarily be reckoned from the date of their absorption into the Indian Railway Service of Engineers, as promised in their letters of appointment.
No doubt these Officers merited something more than the 'long wait ' at the portals of the Indian Railway Service of Engineers.
The Railway Board however, appears to have tried to make the long wait a little less tedious by giving them weightage of half of their length of service as Temporary Assistant Officers, subject to maximum of five years [177D G] Equally important, is the fundamental qualitative difference, linked with the method of recruitment.
True, the minimum educational qualification is the same.
But, those who are recruited directly to the Indian Railway Service of Engineers Class I are subjected to stiff and competative, written and personality tests.
Only the very best can aspire to come out successful.
The Temporary Assistant Officers were not subjected either to a written or to a personality test but were selected on the basis of an interview by the Union Public Service Commission.
In addition to the minimum educational qualification, three years ' experience as a Civil Engineer was also prescribed.
Thus while brilliance was the beacon light which beckoned those aspiring to become members of the Indian Railway Service of Engineers Class I, it was replaced by experience in the case of those wanting to be Temporary Assistant Officers.
Again the appointing authority in the case of Indian Railway Service of Engineers Class I is the President while the appointing authority in the case of Temporary Assistant Officers was the Railway Board, no doubt, pursuant to the authority given by the President.
Different courses of training were prescribed for the Indian Railway Service of Engineers and the Temporary Assistant Officers.
For the Indian Railway Service of Engineers the training is an intensive and comprehensive one designed to equip them for higher posts in the Department too; while the training for Temporary Assistant Engineers was a brief six months ' training intended merely to equip them for carrying out the specific jobs.
In the matter of terms and conditions of service, while the provisions of the Indian Railway Establishment Code are fully applicable to the Indian Railway Service of Engineers Class I, those provisions are applicable to 'Temporary Assistant Officers ' to the extent there is no specific provision in their letter of appointment and agreement.
[169 C H] State of Punjab vs Joginder Singh, [1963] Supp.
2 SCR 169, @ 191, 192, Kishori Mohanlal vs Union of India, A.I.R. , Jammu & Kashmir vs Triloki Nath Khosa and Ors., ; @ 790, 792 Roshan Lal Tandon vs Union of India, ; ; Mervyn Coutindo and Ors.
vs 146 Collector of Customs, Bombay and Ors.
, ; , Mohammad Sujat Ali and Ors.
vs Union of India and Ors.
; , @ 481, S.B. Patwardhan and Ors.
vs State of Maharashtra and Ors.
; ; A. K. Subraman vs Union of India, [1975] 2 SCR 979 and M.S. Verma and Ors.
vs Secty.
Ministry of Shipping & Transport and Ors.
, ; @ 427, 428; discussed.
Observation: There is nothing 'doctrinaire ' in the principle of "equal pay for equal work" and "equal status for equal pay and equal work".
They are not goals to be scoffed at.
It may be that in the present societal context, the goals may appear to be distant.
But they are goals worthy of attainment and would be achieved in the not too distant future.
[178 A B]
|
Civil Appeal No. 290 of 1979.
Appeal by Special Leave from the Judgment and Order dated 25th January 1979 of the Delhi High Court in S.A.O. No. 73/78.
Hardev Singh and R. section Sodhi for the Appellant.
Y. section Chitaley and K. C. Dua for the Respondent.
The Judgment of the Court was delivered by KRISHNA IYER, J.
This appeal is symptomatic of a social pathology which afflicts the Justice System at every level with none concerned to cure it.
The extraordinary scarcity of accommodation in our country has produced the legislative and legislative phenomena of tenants ' protection laws and interminable 'eviction ' cases.
The situation cries for a social audit of the explosive expansion of ruinous and pathetic 283 'rent control litigation ' and an urgent yet dynamic policy of promoting house construction for the lower brackets of Indian humanity.
A landlady let out her premises to another day several years ago (1968) for a term and, thereafter, from time to time, continued the possession of the tenant on fresh lease and increase in rent.
Every time there was homage to the law by grant of sanction by the Rent Controller under Section 21 of the Delhi Rent Control Act, 1958.
(the Act, for short), as if the letting were of a residential accommodation.
It is apparent that all these years an elitist 'residential school ' is being run in the premises and that is the purpose expressly recited in all but the last lease deed of December 1975.
This lease recites blandly that 'the lessee requires a suitable accommodation for residential purposes '.
The period of the lease having expired the landlady applied for summary eviction by application for execution a novel procedure enjoyed by the landlords of this capital city which relieves them of the need even to file a suit for eviction.
The tenant, whose expensive and lucrative school was about to be uprooted for want of habitation, hunted for a legal plea to resist the threat of dispossession.
Technicality is the unfailing resource of an Indian litigant and the ingenious defence, among others, was set up that because the application for eviction did not mention that the letting was 'in writing ' it was fatally flawsome.
Better pleas which merited serious consideration were over ruled but this little infirmity in the pleading loomed large in the eyes of the Rent Controller who, for that reason alone, rejected the relief.
The inevitable appeal to the Tribunal followed.
An application for amendment of the pleading, by way of abundant caution, to make good the verbal deficiency was also made.
Furious forensic battles raged and the appellate tribunal as well as the High Court allowed the appeals and the amendments, over ruling the further plea of limitation for the application as on the date of the amendment.
The worsted tenant has secured leave to appeal and there is an application for revocation of leave.
We have been addressed two main arguments plus other points of lesser moment.
The first is that the application for execution is defective because in the narration of facts the lease is mentioned but the words 'in writing ' are not stated.
It is further contended that by the time these words were supplied by amendment of the application, the period of limitation (six months) had elapsed and that bar prevented entertainment of the proceedings.
284 Pleadings are not statutes and legalism is not verbalism.
Common sense should not be kept in cold storage when pleadings are construed.
It is too plain for words that the petition for eviction referred to the lease between the parties which undoubtedly was in writing.
The application, read as a whole, did imply that and we are clear that law should not be stultified by courts by sanctifying little omissions as fatal flaws.
The application for vacant possession suffered from no verbal lacunae and there was no need to amend at all.
Parties win or lose on substantial questions, not 'technical tortures ' and courts cannot be 'abettors '.
The further arguments on limitation when a vital fact creative of a cause of action is brought in by amendment after expiry of limitation is an important question which need not be considered in the view we have taken on the adequacy of the pleading.
The next issue is of importance not merely for this lis but also for the sensitive application of Sec. 21 in its social perspective.
The notorious rack renting and impotence of legislation against unreasonable eviction in the capital city of Delhi (and elsewhere) compels us to take a close look at the facile provision in Sec. 21, its social purpose and functional distortion, its potential for subversion of the statutory scheme unless, by interpretation, it is canalised and the 'mischief rule ' in Hyden 's case applied.
After all, for the common man, law in action is what the court says it is.
To maintain the integrity of the law the court must 'suit the action to the word, the world to the action, and so we have to fathom, from the language employed and the economic, milieu, what the meaning of Sec.
21 is and save it from possible exploitation by unscrupulous landlords for whom 'fair is foul, and foul is fair '.
Rent control legislation in Delhi, as elsewhere in the country, is broadly intended 'to provide for the control of rents and evictions and of rates of hotels and lodging houses and for the lease of vacant premises to Government, in certain areas in the Union Territory of Delhi.
This is understandable where the city population swells and the city accommodation stagnates, the people suffocate for space and landlords 'make hay ' playing the game of 'each according to his ability to grab '.
Parliament has built into the Act restriction on eviction.
14 (1) starts off: "Notwithstanding anything to the contrary in any other law or contract, no order or decree for the recovery of posses 285 sion of any premises shall be made by any court or Controller in favour of the landlord against a tenant: Provided that the Controller may, on an application made to him in the prescribed manner, make an order for the recovery of possession of the premises on one or more of the following grounds only, namely: . . . . . . . .
The scheme of embargo on eviction makes a pragmatic swerve by the time we reach Sec.
We can correctly visualise the scope and sweep of this provision only in its proper social setting.
It carves out a category for special treatment.
While no landlord can evict without compliance with Sections 14, 19 and 20; does a liberal eviction policy underlie Sec.
21 ? Apparently contrary but actually not once we understand the raison d 'etre of the section.
Parliament was presumably keen on maximising accommodation available for letting, realising the scarcity crises.
One source of such spare accommodation which is usually shy is potentially vacant building or part thereof which the landlord is able to let out for a strictly limited period provided he has some credible assurance that when he needs he will get it back.
If an officer is going on other assignment for a particular period, or the owner has official quarters so that he can let out if he is confident that on his retirement he will be able to re occupy, such accommodation may add to the total lease worthy houses.
The problem is felt most for residential uses.
But no one will part with possession because the lessee will become a statutory tenant and, even if bona fide requirement is made out, the litigative tiers are so many and the law 's delays so tantalising that no realist in his sense will trust the sweet promises of a tenant that he will return the building after the stipulated period.
So the law has to make itself credit worthy.
The long distance between institution of recovery proceedings and actual dispossession runs often into a decade or more a factor of despair which can be obviated only by a special procedure.
Section 21 is the answer.
The law seeks to persuade the owner of premises available for letting for a particular or limited period by giving him the special assurance that at the expiry of that period the appointed agency will place the landlord in vacant possession.
As stated earlier, the critical need was for residential, not nonresidential housing.
Therefore, Section 21 confines this special remedy to letting for residential uses only.
Parliament had the wholsome fear that if the section were not controlled by many conditions it might open the flood gates for wholesale circumvention of the rent control legislation by ingenious landlords exploiting the 286 agonising need of houseless denizens.
Against this back drop, let us read Section 21 and highlight the essential conditions written into the provision: "21.
Where a landlord does not require the whole or any part of any premises for a particular period, and the landlord, after obtaining the permission of the Controller in the prescribed manner, lets the whole of the premises or part thereof as resident for such period as may be agreed to in writing between the landlord and the tenant and the tenant does not, on the expiry of the said period, vacate such premises, then, notwithstanding anything contained in Section 14 or in any other law, the Controller may, on an application made to him in this behalf by the landlord within such time as may be prescribed, place the landlord in vacant possession of the premises or part thereof by evicting the tenant and every other person who may be in occupation of such premises.
" We must notice that Section 21 runs counter to the general scheme and, therefore, must be restricted severely to its narrow sphere.
Secondly, we must place accent on every condition which attracts the Section and if any one of them is absent the Section cannot apply and, therefore, cannot arm the landlord with a resistless eviction process.
Thirdly, we must realise that the whole effect of Section 14 can be subverted by ritualistic enforcement of the conditions of sanction under Sec.
21 or mechanical grant of sanction therein.
Section 21 overrides Section 14 precisely because it is otherwise hedged in with drastic limitations and safeguards itself against landlords ' abuses.
What, then, are those conditions and safeguards? The first condition is that the landlord does not require the demised premises "for a particular period" only.
This means that he must indicate to the authority before which sanction is sought for letting what is the particular period for which he can spare the accommodation.
The Controller must be satisfied that the landlord means what he says and it is not a case of his not requiring the property indefinitely as distinguished from a specific or particular limited period of say one year, two years or five years.
If a man has a house available for letting for an indefinite period and he so lets it, even if he specifies as a pretense, a period or term in the lease, Section 21 cannot be attracted.
On the other hand, if he gives a special reason why he can let out only for a limited period and requires the building at the end of that period, 287 such as that he expects to retire by then or that he is going on a short assignment or on deputation and needs the house when be returns home it is good compliance.
The second condition is that the letting must be made for a residential purpose.
The house must be made over "as a residence".
If it is let out for a commercial purpose, Section 21 will not apply, whether the ritual of a sanction under that provision has been gone through or not.
Thirdly, the Controller 's permission is obligatory where he specifies the particular period for which he gives permission and further qualifies the permission for use as a residence.
The Controller exercises an important regulatory function on behalf of the community.
The fact that a landlord and a potential tenant together apply, setting out the formal ingredients of Section 21, does not relieve the Controller from being vigilant to inquire and satisfy himself about the requisites of the landlord 's nonrequirement "for a particular period" and the letting itself being "as a residence".
A fraud on the statute cannot be permitted especially because of the grave mischief that may be perpetrated in such event.
It is easy to envisage the terrible blow to the rent control law if Section 21 were freely permitted to subvert the scheme of Section 14.
Every landlord will insist ' on a tenant going through the formal exercise of Section 21, making ideal averments in terms of that Section.
The consequence will be that both the Civil Procedure Code which prescribes suits for recovery of possession and the Delhi Rent Control Act which prescribes grounds for eviction will be eclipsed by the pervasive operation of Section 21.
Neither grounds for eviction nor suits for eviction will thereafter be needed, and if the landlord moves the court for a mere warrant to place the landlord, through the court process, in vacant possession of the premises, he gets it.
No court fee, no decree, no execution petition, no termination of tenancy wish for possession and the court is at your command.
Such a horrendous situation will be the negation of the rule of law in this area.
So it is that we deem it necessary to lay down the law as implied in Section 21 When an application under Section 21 is filed by the landlord and/or tenant, the Controller must satisfy himself by such inquiry as he may make, about the compulsive requirements of that provision.
If he makes a mindless order, the Court, when challenged at the time of execution, will go into the question as to whether the twin conditions for sanction have really been fulfilled.
Of course, there will be a presumption in favour of the sanction being regular, but it will still be open to a party to make out his case that in fact and in truth the 288 conditions which make for a valid sanction were not present.
We do not agree with the statement of the law by the Delhi High Court striking a contrary note.
In this context, we may make special reference to Kasturi Lal 's case, a decision of the Delhi High Court reported in 1976 R.C.J.p.
It is true as Misra, J. in that case, following earlier decisions has observed that the provisions of Section 21 are designed to meet the problem of shortage of housing in Delhi.
If the landlord does not need the premises for a limited period, section 21 permits him to lease it out during that period.
Without the facility of section 21 the landlord might have preferred to keep the premises vacant, but that does not mean that the law surrenders itself to this landlord and releases him from all conditions.
That is why the need for sanction and the mandatory conditions for such sanction are specified in the section.
It is altogether wrong to import the idea that the tenant having taken advantage of induction into the premises pursuant to the permission, he cannot challenge the legality of the permission.
As between unequals the law steps in and as against statutes there is no estoppel, especially where collusion and fraud are made out and high purpose is involved.
The doctrine of estoppel cannot be invoked to render valid a proceeding which the legislature has, on grounds of public policy, subjected to mandatory conditions which are shown to be absent: "Where a statute, enacted for the benefit of a section of the public, imposes a duty of a positive kind the person charged with the performance of the duty cannot by estoppel be prevented from exercising his statutory powers.
A petitioner in a divorce suit cannot obtain relief simply because the respondent is estopped from denying the charges, as the court has a statutory duty to inquire into the truth of a petition".
It is an old maxim that estoppels are odious, although considerable inroad into this maxim has been made by modern law.
Even so, "a judgment obtained by fraud or collusion, even it seems a judgment of the House of Lords, may be treated as a nullity." (See Halsbury 's Laws of England, Vol.
16 fourth edition para 1553).
The point is that the sanction granted under section 21, if it has been procured by fraud or collusion, cannot withstand invalidity because, otherwise, high public policy will be given as hostage to successful collusion.
289 Law that non performs stultifies the rule of law and so it is that we stress the need for strict compliance.
Or else, the sanction is non est.
Collusion between the strong and the weak cannot confer validity where the mandatory prescriptions of the law are breached or betrayed.
We have said enough to make the point that it is open to the tenant in the present case to plead and prove that the sanction under Section 21 is invalid, and if it is void the executing court is not debarred from holding so.
We, therefore, hold on the first point that no question of amendment arises in the present case and the application before the Controller did not suffer from any deficiency.
On the second point we hold that it is perfectly open to the Controller to examine whether the sanction under Section 21 is a make believe, vitiated by fraud and collusion.
We make it clear that the Controller is concerned with delivery of possession at the expiry of the lease of 1975 and he will, therefore, examine the position with reference to that lease only.
The appellant tenant urged a further contention that because there was fraud the court could not assist the party in fraud even if both sides were involved in the fraud.
He invoked the doctrine of inpari delicto potior est conditio defendantis.
We are not inclined to examine these contentions but leave it open to the executing court to go into such pleas as are permissible at the execution stage.
Beyond that he has no jurisdiction but within that he has a duty to decide.
On these findings we dismiss the appeal but direct the Controller to go into the question of the validity of the sanction and such other objections as may be available in the light of our observations recorded above.
The first point raised is untenable and we should have directed costs while dismissing the appeal.
The second point raised is of great public moment and the appellant has broadly succeeded on that question.
The result is that the community has benefited by our declaration of the law and the parties must, therefore bear their respective costs throughout.
S.R. Appeal dismissed.
| IN-Abs | Dismissing the appeal by special leave, the Court HELD: Section 21 of the Delhi Rent Control Act, 1958 carves out a category for special treatment.
While no landlord can evict without compliance with sections 14, 19 and 20 of the Act, a liberal eviction policy cannot be said to under lie in section 21.
Parliament was presumably keen on maximising accommodation available for letting, realising the scarcity crisis.
One source of such spare accommodation which is usually shy is potentially vacant building or part thereof which the landlord is able to let out for a strictly limited period provided he has some credible assurance that when he needs he will get it back.
The law seeks to persuade the owner of the premises available for letting for a particular period by giving him a special assurance that at the expiry of that period the appointed agency will place the landlord in vacant possession.
And, Section 21 confines the special remedy to letting for residential uses only.
Parliament had the wholesome fear that if the section were not controlled by many conditions it might open the floodgates for wholesale circumvention of the rent control legislations by ingenious landlords exploiting the agonising need of houseless denizens.
[285B D, G H, 286A] 2.
Section 21 over rides section 14 precisely because it is otherwise hedged in with drastic limitations and safeguards itself against landlords ' abuses.
The first condition is that the landlord does not require the demised premises "for a particular period" only.
This means that he must indicate to the authority before which sanction is sought for letting what is the particular period for which he can spare the accommodation.
The Controller exercises an important regulatory function on behalf of the community.
The fact that a landlord and a potential tenant together apply, setting out the formal ingredients of Section 21, does not relieve the Controller from being vigilant to inquire and satisfy himself about the requisites of the landlord 's non requirement "for a particular period" and the letting itself being "as a resident".
A fraud on the statute cannot be permitted especially because of the grave mischief that may be perpetrated in such event.
[286E, H, 287A D] 3.
There would be a terrible blow to the rent control law if section 21 were freely permitted to subvert the scheme of Section 14.
Every landlord will insist on a tenant going through the formal exercise of Section 21, making ideal averments in terms of that Section.
The consequence will be that both the Civil Procedure Code which prescribes suits for recovery of possession and the Delhi Rent Control Act which prescribes grounds for eviction will be eclipsed by the pervasive operation of Section 21.
Neither grounds for eviction nor suits for eviction will thereafter be needed, and if the landlord moves the Court 282 for a mere warrant to place the landlord, through the Court process, in vacant possession of the premises, he gets it.
No court fee, no decree, no execution petition, no termination of tenancy wish for possession and the court is at your command.
Such a horrendous situation will be the negation of the rule of law in this area.
[287 D F] 4.
When an application under Section 21 is filed by the landlord and/or tenant the Controller must satisfy himself by such inquiry as he may make, about the compulsive requirements of that provision.
If he makes a mindless order, the Court, when challenged at the time of execution will go into the question as to whether the twin conditions for sanction have really been fulfilled.
Of course, there will be a presumption in favour of the sanction being regular, but it will still be open to a party to make out his case that in fact and in truth the conditions which make for a valid sanction were not present.
[287 G H, 288A] 5.
The sanction granted under section 21, if it has been procured by fraud and collusion cannot withstand invalidity because, otherwise, high public policy will be given as hostage to successful collusion.
The doctrine of estoppel cannot be invoked to render valid a proceeding which the legislature has, on grounds of public policy subjected to mandatory conditions which are shown to be absent.
As between unequals the law steps in and as against statutes there is no estoppel, especially where collusion and fraud are made out and high purpose is involved.
[288D E, G H] 6.
Law that non performs stultifies the rule of law and hence the need for strict compliance.
Or else, the sanction is non est.
Collusion between the strong and the weak cannot confer validity where the mandatory prescriptions of the law are breached or betrayed.
[289A]
|
: Special Leave Petition (Crl.) 2599 of 1979.
From the Judgment and Order dated 9 7 1979 of the Punjab and Haryana High Court in Crl.
A. 1228/1976.
section K Sabharwal and R.C. Kohli for the petitioner.
The order of the Court was delivered by, KRISHNA IYER, J, A rapist if the concurrent findings of the courts below were correct has chosen to seek special leave to challenge his crime and punishment, and his counsel has attacked the verdict of culpability as wholly unfounded.
Indeed, it is redundant, and absent exceptional circumstances, out of bounds, for this Court, exercising its jurisdiction under article 136, to launch upon an exploration and re appreciation of the evidence, its strengths and weaknesses with a view to sit in judgment over the holdings of the High Court in affirmance of those of the trial Court.
Briefly, we will touch upon one or two circumstances without claiming to be exhaustive in any manner.
One Shashi Bala of Ambala was sleeping, with her mother and other children, outside her house in hot July (1975).
The petitioner, in the company of another (acquitted accused), carried her away under intimidation to a neighbouring godown belonging to one Tilak Raj (another acquitted accused) and in that secluded venue committed rape on the young women.
After subjecting her to these beasteal acts of lust, Shashi Bala, who by then was nearly unconscious, was put back in her cot from where she had been removed.
In the morning, the mother of the victim found blood on the daughter 's salwar and thereupon she complainingly narrated the criminal assault of the previous night.
On the return of the father, P.W. 7, who had been away, the victim went, in his company, to the police station, lodged a report which was followed by investigation and charge sheet.
The Court, after a trial, convicted the present petitioner but, on grounds of benefit of doubt, acquitted the rest.
Medical evidence showed that the raped girl was below 16 years of age.
We are not too happy about the acquittal but since the State has not chosen to come up in appeal against the acquittal, we do not probe the matter further.
Counsel for the petitioner persistently urged that the evidence of the prosecutrix, without substantial corroboration, was inadequate to rest a conviction under section 376 I.P.C. He relied on observations of this Court in Gurucharan Singh vs State of Haryana for the pro 307 position that although a prosecutrix is not an accomplice, her evidence, as a rule of prudence, is viewed by courts unfavourably unless reinforced by corroboration "so as to satisfy its conscience that she is telling the truth and that the present accused of rape on her has not been falsely implicated".
It is true that old English cases, followed in British Indian courts, had led to a tendency on the part of judge made law that the advisability of corroboration should be present to the mind of the Judge "except where the circumstance make it safe to dispense with it".
Case law, even in those days, had clearly spelt out the following propositions: "The tender years of the child, coupled with other circumstances appearing in the case, such, for example as its demeanour, unlikelihood of tutoring and so forth, may render corroboration unnecessary but that is a question of fact in every case.
The only rule of law is that this rule of prudence must be present to the mind of the judge or the jury as the case may be and be understood and appreciated by him or them.
There is no rule of practice that there must, in every case, be corroboration before a conviction can be allowed, to stand." "It would be impossible, indeed it would be dangerous to formulate the kind of evidence which should, or would, be regarded as corroboration.
Its nature and extent must necessarily vary with circumstances of each case and also according to the particular circumstances of the offence charged.
" Observations on probative force of circumstances are not universal laws of nature but guidelines and good counsel.
We must bear in mind human psychology and behavioural probability when assessing the testimonial potency of the victim 's version.
What girl would foist a rape charge on a stranger unless a remarkable set of facts or clearest motives were made out? The inherent bashfulness, the innocent naivete and the feminine tendency to conceal the outrage of masculine sexual aggression are factors which are relevant to improbabilise the hypothesis of false implication.
The injury on the person of the victim, especially her private parts, has corroborative value.
Her complaint to her parents and the presence of blood on her clothes are also testimony which warrants credence.
More than all, it baffles belief in human nature that a girl sleeping with her mother and other children in the open will come by blood on her garments and injury in her private parts unless she has been subjected to the torture of rape.
And if rape has been committed, 308 as counsel more or less conceded, why, of all persons in the world, should the victim hunt up the petitioner and point at him the accusing finger? To forsake these vital considerations and go by obsolescent demands for substantial corroboration is to sacrifice commonsense in favour of an artificial concoction called 'Judicial ' probability.
Indeed, the court loses its credibility if it rebels against realism.
The law court is not an unnatural world.
We are not satisfied that merely because the trial court has ultra cautiously acquitted someone, the higher court must, for that reason, acquit everyone, Reflecting on this case we feel convinced that a socially sensitised judge is a better statutory armour against gender outrage than long clauses of a complex section with all the protections writ into it.
N.V.K. Petition dismissed.
| IN-Abs | The prosecution alleged that a girl below 16 years of age was sleeping outside her house with her family and that the petitioner in the company of another (acquitted accused) carried her away under intimidation to a neighbouring godown belonging to another acquitted accused and in that secluded venue committed rape on the young woman and afterwards put her back on her cot.
The trial court convicted the petitioner but on grounds of benefit of doubt acquitted the other accused.
The High Court affirmed this order.
In the special leave petition to this Court, it was contended on behalf of the petitioner that the evidence of the prosecutrix without substantial corroboration, was inadequate to rest a conviction under section 376 IPC.
Dismissing the special leave petition, ^ HELD 1.
To forsake vital consideration and go by obsolete demands for substantial corroboration is to sacrifice commonsense in favour of an artificial concoction called 'judicial ' probability.
[308A] 2.
Human psychology and behavioural probability must be borne in mind when assessing the testimonial potency of the victim 's version.
What girl would foster rape charges on a stranger unless a remarkable set of facts or cleanest motives are made out? The inherent bashfulness, the innocent naivete and the feminine tendency to conceal the outrage of masculine sexual aggression are factors which are relevant to improbabilise the hypothesis of false implication.
The injury on the person of the victim has corroborative value.
[307G] 3.
The court loses its credibility if it rebels against realism.
The law court is not an unnatural world.
[308 B] 4.
Merely because the trial court has ultra cautiously acquitted someone, the higher court must, for that reason, cannot acquit everyone.
[308C] 5.
A socially sensitized judge is a better statutory armour against gender outrage than long clauses of a complex section with all the protections writ into it.
[308C] 6.
Observation on probative force of circumstances are not universal laws of nature but guidelines and good counsel.
[307 F] Gurcharan Singh vs State of Haryana ; referred to. 306
|
Civil Appeal No. 424 of 1979 Appeal by Special Leave from the Judgment and order dated 23 8 1978 of the Allahabad High Court in Second Appeal No. 34/78.
D. R. Gupta and B.V. Desai for the Appellant.
B. R. Agarwala for the Respondents.
The Judgment of the Court was delivered by SARKARlA, J.
This appeal by special leave is directed against a judgment, dated August 23, 1978, whereby a learned Single Judge of the Allahabad High Court dismissed the appeal of the appellant herein.
It arises out of these circumstances.
The plaintiff, Dr. Rajendra Prakash Sharma, is the appellant before us.
He filed a suit in the court of the Civil Judge, Bulandshahar, alleging that the house in dispute was owned by one Qazi Abdul Rashid, son of Qazi Abdul Razak.
Qazi Abdul Rashid had let out this house to Dr. Bhu Deo Sharma, father of the appel 211 lant, who was paying rent for the same to Qazi Abdul Rashid.
He further alleged that the said Abdul Rashid had migrated to Pakistan and the house in dispute was declared evacuee property under the then existing law.
Later on, it was put to auction on January 29, 1969 under Section 20 of the Displaced Persons (Compensation & Rehabilitation) Act, 1954, and was purchased by the plaintiff for a consideration of Rs. 1,000/ , and the appellant was declared purchaser of this property with effect from April, 1, 1969.
Sale Certificate, dated March 19, 1969, was also issued in his favour.
He further pleaded that the defendants respondents had also filed Suit No. 67 of 1970 for ejectment and arrears of rent against the appellant 's father, Bhu Deo Sharma.
The suit was decreed on May 10, 1971, and that in pursuance of that decree they were trying to dispossess the plaintiff appellant He further stated that since he was not impleaded in the ejectment suit, he was not bound by that decree.
On these facts, the plaintiff appellant claimed a declaration of his title to the property in question and further prayed for a perpetual injunction restraining the defendants from dispossessing him in execution of the Ir said decree obtained by the defendants in Suit No. 67 of 1970.
The defendants resisted the suit.
They denied that the property in dispute was ever declared evacuee property or that it was ever acquired under the provisions of the Act of 1954.
They asserted that the appropriate authorities never passed any order under Section 7 of the declaring this property to be evacuee property.
The contesting defendant, Gyan Chandra, further pleaded that Qazi Abdul Rashid had only 1/16th share in the house in question which was purchased by the defendants father (since deceased) and, therefore, the defendants are exclusive owners of the house.
Gyan Chandra further alleged that Qazi Abdul Rashid had migrated to Pakistan in the year 1967, long after he had transferred his interest and share in the house in question; that Dr. Bhu Deo Sharma, father of the appellant had in collusion with the Custodian Department, prepared fictitious proceedings relating to the sale of the house in question; that the Custodian Department had no jurisdiction to declare the property in suit as evacuee property, much less could they sell it under the Act of 1954.
According to the defendant, the auction if any held, was a nullity having been brought about by misrepresentation and fraud.
The trial court held that Qazi Abdul Rashid was not the owner of the house in question; that the entire proceedings taken by the Custodian Department were illegal and without jurisdiction and the plaintiff did not acquire any title by virtue of the sale held by the Authorities 212 under the Displaced Persons Compensation and Rehabilitation) Act (No. 44 of 1954) (for short, called the 1954 Act).
In the result, the trial court dismissed the plaintiff 's suit.
On appeal, the Additional District Judge, Bulandshahar affirmed the findings of the trial court.
He held that the jurisdiction of the civil n court was not barred by section 46 of the Administration of Evacuee Property Act (No. 31 of 1950) (hereinafter called the 1950 Act) to go into the question whether or not the matter had been adjudicated upon by the Authorities under that Act.
It found that no inquiry, as contemplated under Section 7 of Act 31 of 1950 was held and no Notification was issued by the Authorities under that Act, declaring the suit property to be evacuee property.
It held that Abdul Rashid had no title or interest, whatever, in the house in question after July 31, 1953, when, in accordance with the decree of the Civil Court in the partition Suit No. 289 of 1953, PhoolChand had deposited Rs. 343/ regarding the value of 1/6th share of Abdul Rashid in this property.
on the deposit of that amount, Phool Chand and his sons had become sole ' owners of the property in question and the plaintiff 's father became their tenant of the suit property.
It was in that capacity that a decree for ejectment was passed against him and in favour of the respondents.
In the result, it was held that since the property had never been declared evacuee property after following the prescribed procedure under the Act and the Rules framed thereunder, the rights of the defendants respondents remained unaffected by the ' auction held by the Custodian Department and the consequent issue of the sale certificate in favour of the plaintiff appellant.
The High Court affirmed the concurrent findings of the two courts below and dismissed the Second Appeal preferred by the plaintiff.
It agreed with the lower appellate court that the auction in favour of the plaintiff appellant was a nullity and wholly without jurisdiction and did not confer any rights on him because the suit property had never been declared as evacuee property in accordance with law.
It also held that Abdul Rashid was in India much after the repeal of the U.P. Ordinance 1 of 1949 and consequently there was no question of the property vesting automatically in the Custodian under the aforesaid ordinance.
The High Court, however, granted six months ' time to the plaintiff appellant to deliver vacant possession of the suit house to the defendants respondents without the intervention of the court.
After obtaining special leave under Article 136 of the Constitution, the aggrieved plaintiff has now come in appeal before this Court.
213 The main contention of the learned counsel for the appellant is two fold: (a) In view of Section 46 of the 1950 Act, the Civil Court had no jurisdiction to adjudicate upon the question whether; the suit property or any right or interred therein is or is not evacuee property.
(Reliance for this contention has been placed on the decision of this Court in Custodian of Evacuee Property, Punjab and ors.
vs Jafran Begum.
(b) The sale of the suit property has been effected in favour of the appellant under Section 20 of the 1954 Act, after it had been acquired by the Central Government under Section 12 of that Act, free from all encumbrances, and formed part of the compensation pool.
It will therefore, be presumed that prior to its acquisition under Section 12 of the 1954 Act, it was evacuee property vesting in the custodian.
The orders of its acquisition passed under Section 12 and its sale under Section 20 of the 1954 Act had become final and conclusive.
The respondent could not be allowed to go behind those orders and question their finality on the ground that the property has never been evacuee property vesting in the custodian, because Section 27 of 1954 Act bars the jurisdiction of the Civil Court to go into this question.
The only remedy of the defendants respondents is to claim compensation under the 1954 Act.
Reference in this connection ' has been made to N. section Gujral vs Custodian of Evacuee Property and Anr.
Before dealing with these contentions, some basic facts concurrently found by all the courts below may be noticed.
Qazi Abdul Rashid obtained a money decree in suit No. 523 of 1935 against one Ami Chand S/o Phool Chand and brother of present respondents (original defendants 1 to 4).
In execution of that decree, he purchased with the permission of the court, the share of Ami Chand in 1937.
At that time, apparition suit No. 3 of 1931 amongst the family members of the said Ami Chand was pending in the Court of the Civil Judge, Bulandshahr.
Qazi Abdul Rashid did not join as a party in the said partition suit.
However, he instituted Suit No. 452 of 1949 against the said Phool Chand and others in the court of the Munsif, Khurja for partition and separate possession of his share.
The suit was contested.
The Munsif decreed the suit holding that Qazi Abdul Rashid had 1/16th share in the house in question and one other shop.
Applying the provisions of Section 4 of the Partition Act, the Munsif evaluated Qazi Abdul Rashid 's 1/16th share in the suit house at Rs. 343/ and directed the sale of that share.
214 Feeling aggrieved by the said decree, Qazi Abdul Rashid preferred Civil Appeal No. 289 of 1953.
The First Appellate Court by its judgment, dated December 20, 1954 (exhibit A 2), partly allowed the appeal and modified the decree of the trial court in so far as it related to the shop.
But it upheld the decree of the trial court in so far as it related to the house now in question, whereby Phool Chand defendant was required to deposit Rs. 343/ as the value of Qazi Abdul Rashid 's share.
In accordance with the decree affirmed by the First Appellate Court, Phool Chand on July 31, 1953 deposited Rs. 343/ (vide exhibit A 1) to the credit of Qazi Abdul Rashid, the then plaintiff in the Court.
Qazi Abdul Rashid being aggrieved by the decree of the First Appellate Court, preferred Second Appeal No. 235 of 1955 in the High Court.
The High Court dismissed this appeal as abated by an order, dated February 25, 1959 (exhibit A l), due to the failure of Qazi Abdul Rashid to take proper steps for substitution of the legal representatives of the then respondents 7 and 11, who had died during the pendency of the appeal.
During the pendency of the said litigation, Phool Chand and his two sons, Gyan Chand and Raghbur Sharan, instituted Suit No. 323 of 1953 in the court of the Munsif, Khurja for the recovery of the damages for use and occupation of the house in dispute against Qazi Abdul Rashid.
By a judgment dated September 30, 1959 (exhibit A 4) the trial court decreed that suit against Qazi Abdul Rashid.
Aggrieved by that judgment and decree, Qazi Abdul Rashid preferred Civil Appeal No. 461 of 1959 which was partly allowed by the First Appellate Court on December 21, 1960.
The trial court further found and this finding has been upheld by the First Appellate Court and the High Court that Abdul Rashid definitely remained in India at least till 1963, if not till 1965.
Upto 1963, he was directly receiving rent from his tenant, the father of the present plaintiff appellant, in respect of the suit house.
This was held primarily on the basis of documentary evidence (exhibit A 14/A).
In view of the fact that Qazi Abdul Rashid remained in India I continuously upto 1963, no question of automatic vesting under the I U.P. Ordinance No. 1 of 1949, could arise.
That ordinance was not applicable to him at all.
For our purpose, only the 1950 Act and the 1954 Act are relevant.
It will, therefore, be worthwhile to notice, very briefly, the material provisions of these statutes.
215 Clause (d) of Section 2 of the 1950 Act defines "evacuee;" this A definition so far as material, reads: "Evacuee means any persons (i) who on account of the setting up of the Dominions of India and Pakistan or on account of civil disturbances or the fear of such disturbances, leaves or has, on or after the 1st day of March, 1947, left any place in a State for any place outside the territories now forming part of India, or (ii) who is a resident in any place now forming part of Pakistan and who for that reason is unable to occupy, supervise or manage in person his property in any part of the territories to which this Act extends, or whose property in any part of the said territories has ceased to be occupied, supervised or managed by any person or is being occupied, supervised or managed by an unauthorised person, or. " (iii) to (iv) are not relevant for this case.
Clause (h) defines "evacuee property" to mean "any property of an 1 evacuee (whether held by him as owner or as a trustee or as a beneficiary or as a tenant or in any other capacity) and includes any property which has been obtained by any person from an evacuee after the 14th day of August 1947, by any mode of transfer which is not effective by reason of the provisions contained in Section 40 :) but does not include . . " Sub section (1) of Section 7 requires that where the Custodian is of opinion that any property is evacuee property within the meaning of this Act, he may after causing notice thereof to be given in such manner as may be prescribed to the persons interested, and after holding such inquiry into the matter as the circumstances of the case permit, pass an order declaring any such property to be evacuee property.
Sub section (3) of the Section peremptorily requires the Custodian to notify from time to time by publication in the official Gazette or in such other manner as may be prescribed all p properties declared by him to be evacuee properties under Sub section (1).
Rule 6 of the Rules framed under the 1950 Act requires that the notice to be served under Section 7(1) on persons interested in the property proposed to be declared evacuee property shall be in Form I. Section 8 provides, "Any property declared to be evacuee property under Section 7 shall be deem d to have vested in the Custodian for the State (a) in the case of the property of an evacuee as defined in sub clause (i) of clause (d) of Section 2, from the date on which 216 he leaves or left any place in a State for any place outside the territories now forming part of India; (b) in the case of the property of an evacuee as defined in sub clause (ii) of clause (d) of Section 2, from the 15th day of August, 1947; and (c) in the case of any other property, from the date of the notice given under sub section (I) of Section 7 in respect thereof.
(The rest is not material).
" From a conjoint reading of Sections 7 and 8, it is clear that the making of a declaration after inquiry under Section 7, that the property is 'evacuee property ' is a sine qua non for giving the Custodian dominion over the property.
If no proceeding is taken under Section 7, there can be no vesting of the property in the Custodian.
(See observations in Fazalbhoy vs Official Trustee of Maharashtra.
The other point to be noted is that in the case of an `evacuee ' falling under sub clause(i) of the definition of `evacuee ' that is one, who on account of the things mentioned in that sub clause, leaves India or has left India on or after August 14, 1947, the vesting will date from the date he leaves India for any outside destination.
Tn the instant case, Qazi Abdul Rashid left India to settle in Pakistan long after August 14, 1947 (in 1963).
Section 9 gives power to the Custodian to take possession of evacuee property which vests in him under Section 8.
Then, there is Section 7A which was inserted by the Administration of Evacuee property (Amendment) Act, 1954 (42 of 1954) with effect from May 7, 1954.
"Notwithstanding anything contained in this Act, no property shall be declared to; be evacuee property on or after the 7th day of May 1954:" This is made subject to two Provisions.
Clause (a) of the First Proviso saves from the application of this Section any property in respect of which proceeding are pending on the 7th day of May, 1954 for declaring such property to be evacuee property.
Clause (b) of the Proviso saves from the bar of this Section property of any person who became an evacuee on or after the Ist day of March, 1947, and who on the 7th day of May, 1954 was resident in Pakistan.
The second Proviso lays down that no notice under Section 7 for declaring any property to be evacuee property with reference to Clause (b) of the preceding Proviso shall be issued after the expiry of six months from the commencement of the Administration of Evacuee 217 Property (Amendment Act, 1954).
Then, there are three Explanations, which are not material for our purpose.
It is clear from the facts concurrently found in the instant case that Qazi Abdul Rashid was throughout residing in India and personally managing the suit property and collecting its rent till 1963.
He migrated or went away from India for good sometime in 1963 or thereafter.
Therefore, if the Custodian had not taken any proceedings under Section 7 of the 1950 Act to declare the suit property as evacuee property before the 7th day of May 1954, and no such proceedings were pending on May 7, 1954, the property of Qazi Abdul Rashid could not be declared evacuee property under the Act, the power of the Custodian to do so having been terminated by Section 7A.
It was for the plaintiff appellant to show by producing relevant notifications or other documentary evidence that the Custodian had taken proceedings and declared the suit property to be evacuee property in accordance with the provisions of Section 7 or that such proceedings had been initiated earlier and were pending on the 7th day of May, 1954.
Despite ample opportunity granted to the plaintiff, he did not produce any such documentary evidence in the courts below.
All that he showed was that the Rehabilitation Authorities had, purporting to act under the 1954 Act, sold the suit property to him and issued the sale certificate in his favour on April 1, 1969.
Section 24 gives a person aggrieved of an order made under Section 7 by the Custodian a right of appeal.
Section 27 confers power of revision on the Custodian General to revise suo motu or on the application made to him, any order passed by the Custodian if it is rot found to be legal or proper.
Sections 28 and 46 bar the jurisdiction of courts.
Section 28 reads thus: "Save as otherwise expressly provided in this Chapter, every order made by the Custodian General, Custodian, Additional Custodian, Authorised Deputy Custodian, Deputy Custodian or Assistant Custodian shall be final and shall not be called in question in any Court by way of appeal or revision or in any original suit, application or execution proceeding.
" Section 46 of the 1950 Act provides: "Save as otherwise expressly provided in this Act, no civil or revenue court shall have jurisdiction (a) to entertain or adjudicate upon any question whether any property or any right to or interest in any property is or is not evacuee property; or 218 (c) to question the legality of any action taken by the Custodian General or the Custodian under this Act, or (d) in respect of any matter which the Custodian General or the Custodian is empowered by or under this Act to determine." The scope of Sections 28 and 46 of the 1950 Act came up for consideration before this Court in Jafran Begum 's case (ibid).
The facts of that case were that a person who was in possession of a house in India, migrated to Pakistan.
Notice was issued to his son under s.7 of the , and after hearing him the Deputy Custodian declared the house to be evacuee property.
Jafran Begum, who was the mother of the evacuee and on whom the notice under s.7 of the Act was not served, started proceedings before the Custodian, claiming that the owner of the house had executed a will bequeathing the property to her and so the property could not be declared evacuee property.
That application was dismissed by the Custodian.
When she failed before the authorities constituted under the Act, she filed a suit in the civil court basing her case on the will and prayed for a permanent injunction restraining the authorities from evicting her from the house.
On the question of jurisdiction being raised, the High Court held that determination of a complicated question of law relating to title by authorities under the 1950 Act was not final and could be reopened in the civil court, and Section 46 did not bar the civil court 's jurisdiction to entertain such a question.
After examining the scheme of the 1951) Act, Wanchoo, .J., speaking for the Bench constituted by three learned Judges, laid down the law, thus: "(Where) the question whether certain properties are evacuee properties has been decided under section 7 etc., whether that decision is based on issues of fact or issues of law, jurisdiction of courts is clearly, barred under section 46(a).
It is difficult to see how a distinction can be drawn between decisions under section 7 based on questions of fact and decisions based on questions of law.
The decision is made final whether based on issues of law or of fact by section 28 and section 46 bars the jurisdiction of civil and revenue courts in matters which are decided under S.7 whatever may be the basis of decision, whether issues of factor of law and whether simple or complicated." (Emphasis supplied) 219 ".
S.46 is a complete bar to the jurisdiction of civil or revenue courts in any matter which can be decided under section 7.
This conclusion is reinforced by the provision contained in section 4(1) of the Act which provides that the Act overrides other laws and would thus override section 9 of the Code of Civil Procedure on a combined reading of Ss.4, 28 and 46.
(But). section 46 or section 28 cannot bar the jurisdiction of the High Court under article 226 of the Constitution.
" (Emphasis supplied) From the crucial words underlined in the above extract, it is clear that even according to the rule of the above decision section 46 will not bar the jurisdiction of the civil court where the Custodian has never declared the property as evacuee property after taking proceedings under Section 7 of the l 950 Act.
A Full Bench of the Allahabad High Court in Khalil Ahmed Khan vs Malka Mehar Nigar Begum(1), held that where the matter as to whether a property is evacuee property or not, has never been adjudicated upon by the Custodian himself but he merely takes action on the basis of the judgment of the court of first instance, without deciding the matter for himself, that judgment being subject to correction by the court of appeal does not become final merely because the Custodian had taken action on the basis thereof.
In such a case, the jurisdiction of the civil court of appeal to determine the correctness of an adjudication already made by the civil court is not barred.
This decision was noticed by this Court in Jafran Begum (ibid), and it was observed that to some extent, "this case is in line with the view we have taken.
" The matter can be looked at from another angle also.
Clauses (a), (c) and (d) of section 46 postulate that at the time when the question whether or not a property is evacuee property comes for adjudication the power of the Custodian General or the Custodian under this Act of 1950 to determine that question is subsisting.
That is to say, if at the point of time when the question arises, the power of the authorities constituted under this Act to adjudicate that question stands terminated or extinguished by the operation of Section 7A of 1954, none of the clauses (a), (c) and (d) of section 46 will bar the jurisdiction of the civil court to determine that question which had not been decided by the custodian during the period, he had the power to determine it.
Section 28 has no application to the facts of the instant case because no order made by any of the authorities mentioned in that section is 220 being called in question.
Section 46, also, does not come in the way because no proceedings under section 7 of the 1950 Act to declare the suit house as evacuee property were taken by the Custodian against Qazi Abdul Rashid.
No notification under sub section (3) of section 7 published in the official Gazette has been placed on the record.
Nor was it shown that any proceedings initiated under section 7 of the Act to declare it evacuee property were pending on May 7, 1954, and the question of saving those proceedings under the proviso to section 7A does not arise.
Qazi Abdul Rashid was throughout a resident of India till 1963 and was personally managing the suit house and collecting rent of it from the tenant.
After May 7, 1954, therefore, the Custodian had no jurisdiction under the 1950 Act to declare the suit house as evacuee property.
The jurisdiction of the courts below to go into this question was thus not barred by anything in sections 28 and 46 of the 1950 Act.
We, therefore, negative the first contention of the appellant.
Now let us have a look into the relevant provisions of the 1954 Act.
Section 2(c) of the 1954 Act defines "evacuee property" to mean any property which has been declared or is deemed to have been declared as evacuee property under the .
At this place, it may be recalled that the second part of the definition which contains a deeming provision has no application to the facts of the instant case because Qazi Abdul Rashid was throughout residing in India till his migration to Pakistan in 1963.
That is to say, he had not become an evacuee before the repeal of the U.P. Ordinance No. 1 of 1949.
This ordinance is not relevant for the purposes of the present case.
The first part of the definition, also, is not applicable because the suit house has never been declared as evacuee property under the 1950 Act.
The next provision is to be found in section 12, which reads as follows: "section 12.
Power to acquire evacuee property for rehabilitation of displaced persons. (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 221 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 property shall vest absolutely in the Central Government free from all encumbrances.
(3) It shall be lawful for the Central Government, if it so considers necessary, to issue from time to time the notifications referred to in sub section (1) in respect of (a) all evacuee property generally; or (b) any class of evacuee property; or (c) all evacuee property situated in a specified area; or (d) any particular evacuee property.
(4) All evacuee property acquired under this section shall form part of the compensation pool.
" It may be noted that the necessary prerequisite for acquiring property under Section 12 is that it must be 'evacuee property ' as defined in section 2(c) of the 1954 Act.
In the absence of this essential prerequisite, the Central Government is not competent to acquire that property under this section for throwing it into the compensation pool.
This prerequisite or condition precedent, as already noticed, was lacking in the instant case.
No notifications published in the official Gazette either under sub section (I) or sub section (3) of section 12 appear to have been brought on the record of this case.
Our attention was not drawn to any such notifications.
Then, there is section 20 which confers power on the managing officer to transfer any property out of the compensation pool by sale or in any other manner indicated in clauses (b) to (e) of that section.
Again, the necessary prerequisite for sale is that the property must have been declared under section 7 of the 1950 Act to be evacuee property by the Custodian or it must be evacuee property under the 222 deeming provisions of any law which may be applicable to the case of the evacuee.
In other words, only that property which was evacuee property could be acquired under section 12 and form part of the compensation pool which satisfies the definition of "evacuee property" given in section 2(c) of the 1954 Act.
If the property was never evacuee property, as defined in section 2(c), it does not legally form part of the compensation pool and, therefore, cannot be disposed of under Section 20 or the Rules framed under this statute.
Then, there are Sections 22, 23 and 24.
Section 22 gives a right of appeal to a person aggrieved by an order of the Settlement officer or a managing officer, to the Settlement Commissioner.
Any person aggrieved by the order of the Settlement Commissioner/Additional Settlement Commissioner/Assistant Settlement Commissioner or a managing officer has been given a right to prefer an appeal to the Chief Settlement Commissioner under Section 23.
But no appeal is competent from any order passed in appeal under Section 22.
Section 24 confers the power of revision on the Chief Settlement Commissioner to revise any order of the authorities mentioned in that Section, including that of the managing officer.
Some argument was made by the learned counsel for the appellant that the only remedy of the respondents was to prefer an appeal or revision under the aforesaid provisions of this Act and that, since 1.
they did not avail of the same under Section 27, the sale made by the managing officer in favour of the plaintiff appellant has become final and cannot be questioned in any court.
Section 27 reads thus: "27.
Finality of orders.
Save as otherwise expressly provided in this Act, every order made by any officer or authority under this Act, including a managing corporation, 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 proceeding.
" It will be seen that Section 27 is not attracted because the plaintiff, who filed the original suit and is now coming before us by way of appeal, is not questioning the finality of the order of the sale alleged to have been made by the managing officer.
It is the defendant respondents who are resisting the plaintiff 's claim on the ground that the sale is a nullity.
It could not be made under this Act of 1954 for the reason that it was never declared evacuee property under Section 7 of the Act and thus never formed part of the compensation pool.
The words "under this Act" occurring in Section 27 are significant They show that those orders which are not made by any officer or 223 authority in accordance with the provisions of this Act, but outside the provisions of this Act in excess of jurisdiction, can be called in question in the civil court.
It may be noted that the language of Section 27 is not as wide as that of Section 46 of the 1950 Act.
The facts of N.S. Gujral (ibid) were entirely different.
There, an Indian citizen held a money decree against a person who, subsequent to the passing of the decree, turned an evacuee.
It was held that at no time, the decree holder had any right whatsoever in the property which vested in the Central Government on the issue of the notification under Section 12.
It was further held that though the decree holder cannot claim to proceed against the property in suit ' or its income after the date on which it vested in the Central Government by virtue of the notification under Section 12, he can ask the Custodian to pay him out of the moneys ' lying with him on the date ' of such vesting if he can satisfy him in the manner provided in Section 10(2)(n) read with Section 10(1) of the 1950 Act.
The ratio of that decision has no application to the facts of the pr The second contention, also, being meritless, is over ruled.
For the foregoing reasons, the appeal fails and is dismissed with costs.
Before parting with this judgment, we may note here that at the conclusion of final arguments in this Court, counsel for the appellant represented that his client was making all efforts to search out and produce the Gazette Notification, whereby the suit property was declared and notified as evacuee property by the Custodian under subsection (3) of Section 7 of the 1950 Act.
He wanted some time.
We therefore, reserved this judgement to give the plaintiff appellant a last chance to produce such a notification of which the Court could take judicial notice.
But, he has failed to produce any such Gazette Notification.
Instead, he has produced, what purports to be, a copy of an order, dated January 5, 1951, of the Assistant Custodian.
This is not a copy of any Gazette Notification of which judicial notice, without formal proof, could be taken.
We, therefore, do not find any good ground to reopen the case and decline the appellant 's request for permitting him to produce additional evidence at this very late stage.
N V K. Appeal dismissed.
| IN-Abs | The appellant field a suit in the civil court alleging that the house in dispute was owned by one Abdul Rashid and that he had let out the house to his father who was paying rent to him, that Abdul Rashid had migrated to Pakistan and the house was declared evacuee property.
Later, the house was put to auction on January 29, 1969 under section 20 of the , was purchased by him and that the sale certificate was also issued.
He further pleaded that the respondents defendants had also filed suit No. 67 of 1970 for ejected and arrears of rent against his father, that the suit was decreed on May 10, 1971, and that in pursuance of that decree they tried to dispossess him, and as he was not impleaded in the ejected suit, he was not bound by that decree.
The appellant claimed a declaration of his title to the property and prayed for perpetual injunction restraining the defendants respondents from dispossessing 13: him in execution of the ejected decree.
The respondents resisted the suit, denied that the property in dispute was ever declared evacuee property or that it was ever acquired under the provisions of the Act of 1954, and asserted that the appropriate authorities never passed any order under section 7 of the declaring the property to be evacuee property.
The 1st defendant further pleaded that Abdul Rashid had only 1/6th share in the house in question which was purchased by his father and therefore the respondents are exclusive owners of the House.
The said Abdul Rashid had migrated to Pakistan in the year 1967 long after he had transferred his interest and share in the house in question and that the father of the appellant had in collusion with the Custodian Department prepared fictitious proceedings relating to the sale of the house in question, that the Custodian Department had no jurisdiction to declare the property was evacuee property, much less could they sell it under the Act of 1954, and that the auction if any held, was nullity having been brought about by misrepresentation and fraud.
The trial court held that Abdul Rashid was not the owner of the house in question, that the entire proceedings taken by the Custodian Department were illegal and without jurisdiction and the plaintiff did not acquire any title by virtue of the sale held by the Authorities under the of 1954, and accordingly dismissed the suit.
208 On appeal, the Additional District Judge, affirmed the findings of the trial court and held that the jurisdiction of the Civil Court was not burred by section 46 of the and that it could go into the question whether or not the matter had been adjudicated upon by the authorities under that Act.
It found that no inquiry, as contemplated under section 7 of the 1950 Act was held and no Notification was issued by the Authorities under that Act, declaring the suit property to be evacuee property.
It further held that Abdul Rashid had no title or interest, whatever, in the house in question after July 31, 1953, when, in accordance with the decree of the Civil Court in partition Suit No. 289 of 1953, Phool Chand had deposited the value of 1/6th share of Abdul Rashid in this property.
The High Court dismissed the Second Appeal preferred by the appellant affirming the concurrent findings of the court below.
It also held that Abdul Rashid was in India much after the repeal of UP ordinance No. 1 of 1949 and consequently there was no question of the property vesting automatically in the Custodian under the aforesaid ordinance.
In the appeal to this court it was contended on behalf of the appellants: (1) in view of the decision in Custodian of Evacuee Property, Punjab & Ors vs Jatran ; and section 46 of the 1950 Act, the Civil Court had no jurisdiction to adjudicate upon the question whether the suit property or any right or interest therein is or is not evacuee property, (2) the sale of the suit property had been effected in favour of the appellant under section 20 of the 1954, Act, after it had been acquired by the Central Government under section 12 of that Act, free from all encumbrance and formed part of the compensation pool, (3) the order of its acquisition passed under section 12, and its sale under section 20 of the 1954 Act had become final and conclusive, the respondents could not be allowed to go behind those orders and question their finality on the ground that the property has never been evacuee property vesting in the Custodian, because section 27 of the 1954 Act bars the jurisdiction of the Civil Court to go into this question Dismissing the appeal, ^ HELD: 1 (i) Section 46 will not bar the jurisdiction of the Civil Court where the Custodian has never declared the property as evacuee property after taking proceedings under section 7 of the 1950 Act.
[219 C] Custodian of Evacuee Property, Punjab & ors.
vs Jafran Begum ; referred to and explained.
(ii) Form a conjoint reading of section 7 & 8 of the 1950 Act it is clear that the making of a declaration after inquiry under section 7 that the property is 'evacuee property ' is a sine qua non for giving the Custodian dominion over the property.
If no proceeding is taken under section 7, there CHD be no vesting of the property in the Custodian.
[216 C] Fazalbhoy vs Official, Trustee of Maharashtra [1979] 2 S.C.R. 699 at p. 712 referred to.
In the instant case Abdul Rashid was throughout residing in India and personally managing the suit property And collecting its rent till 1963.
He migrated or went away from India for good some time in 1963 or thereafter.
Therefore, if the Custodian had not taken any proceedings under section 7 209 of the 1950 Act to declare the suit property as evacuee property before the 7th day of May, 1954, and no such proceedings were pending on May 7, 1954, the property of Abdul Rashid could not be declared evacuee property under the Act, the poor of the Custodian to do so having been terminated by section 7A. [217 B C] (iii) It was for the plaintiff appellant to show by producing relevant notifications or other documentary evidence that the Custodian had taken proceedings and declared the suit property to be evacuee property in Accordance with the provisions of section 7 or that such proceedings had been initiated earlier and were pending on the 7th day of May, 1954.
Despite ample opportunity granted to the plaintiff he did not produce any such documentary evidence in the courts below.
All that he showed was that Rehabilitation Authorities had purporting to act under the 1954 Act sold the suit property to him and issued the sale certificate in his favour on April 1st, 1969.
[217 D] (iv) Clauses (a), (c) and (d) of section 46 postulate that at the time when the question whether or not a property is evacuee property comes for adjudication the power of the Custodian General or the Custodian under this Act of 1950 to determine the question is subsisting.
That is to say, if at the point of time when the question arises, the power of the authorities constituted under this Act to adjudicate that question stands terminated or extinguished by the operation of section 7A of the 1954 Act, none of the clauses (a), (c) and (d) of section 46 will bar the jurisdiction of the Civil Court to determine that question, which had not been decided by the Custodian during the period he had the power to determine it.
[219 P G] (v) Section 28 has no application to the facts of the instant case because no order made by any of the authorities mentioned in that section is being called in question.
Section 46, also, does not come in the way because no proceedings under section 7 of the 1950 Act to declare the suit house ns evacuee property can be taken by the Custodian against Abdul Rashid.
[219 H220 A] (vi) No notification under Sub section (3) of section 7 published in the official Gazette has been placed on the record Nor was it shown that any proceedings initiated under section 7 of the Act to declare it evacuee property were pending on MAY 7, 1954, and the question of saving those proceeding under the Proviso to section 7A does not arise.
[220 Bl In the instant case Qazi Abdul Rashid was throughout resident of India till 1963 and was personally managing the suit house and collecting rent of it from the tenant.
After May 7, 1954, therefore, the Custodian had no jurisdiction under the 1950 Act to declare the suit house as evacuee property.
The jurisdiction of the Courts below to go into this question was thus not barred by anything in sections 28 and 46 of the 1950 Act.
[220 C] 2(i) Section 20 of the 1954 Act confers powers on the managing officer to transfer any property out of the compensation pool by sale or in any other manner indicated in clauses (b) to (e) of that Section.
The necessary prerequisite for sale is that the property must have been declared under section 7 of the 1950 Act to be evacuee property by the Custodian or it must be evacuee property under the deeming provisions of any law which may be applicable to the case of the evacuee.
In other words, only that property could be acquired 210 under section 12 and form part of the compensation pool which satisfies the definition of "evacuee property" even in section 2(c) of the 1954 Act.
If the property was never evacuee property, as defined in section 2(c), it does not legally form part of the compensation pool and, therefore, cannot be disposed of under section 20 or the Rules framed under this statue.
[220 C, 221 H 222 B] (ii) The necessary prerequisite for acquiring property under section 12 is that it must be 'evacuee property ' as defined in section 2(c) of the 1954 Act.
In the absence of this essential prerequisite the Central Government is not competent to acquire, that property under this section for throwing it into the compensation pool.
This prerequisite or condition precedent, was lacking in the instant case.
No notification published in the official Gazette either under sub section (1) or sub section (3) of section 12 appears to have been brought on the record of this case, nor attention drawn to any such notifications.
[221 F G] 3.
Section 27 of the 1954 Act is not ' attracted because the plaintiff, who filed the original suit and is now appellant in this appeal, is not questioning the finality of the order of the sale alleged to have been made by the managing officer.
It is the defendant respondents who are resisting the plaintiff 's claim on the ground that the sale is a nullity.
It could not be made under this Act of 1954 for the reason that it was never declared evacuee property under section 7 of the Act and thus never formed part of the compensation pool.
The words "under this Act" occurring in section 27 are significant.
They show that those orders which are not made by any officer or authority in accordance with the provisions of this Act, but outside the provisions of this Act in excess of jurisdiction, can be called in question in the civil court.
The language of section 27 is not as wide as that of section 46 of the 1950 Act.
[222 G 223 A] 4.
As Qazi Abdul Rashid remained in India continuously upto 1963, no question of automatic vesting under the U.P. Ordinance No. 1 of 1949 could arise.
That ordinance was not applicable to him at all.
[214 H]
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